Service Firm Audit Report: Australian Grand Prix Corporation Analysis

This report presents a service firm audit of the Australian Grand Prix Corporation (AGPC), focusing on its corporate hospitality services. The report begins with a company background, outlining the AGPC's history and operations, including the staging of the Formula 1 Australian Grand Prix and the Australian Motorcycle Grand Prix. The core of the report centers on the analysis of physical evidence, specifically addressing issues related to furniture quality, fit-out, and the creation of a high-end atmosphere. The audit identifies challenges in expectation management, cost control, and the limitations imposed by the lack of physical products in marketing the service. To address these issues, the report applies service marketing theories, including Mehrabian-Russel Stimulus-Response Model and Bitner’s Servicescape Model, to create a high-end environment and manage customer expectations. The report recommends using endorsements, word-of-mouth marketing, and personal selling to improve the AGPC's reputation and service delivery, ultimately enhancing customer experience and driving positive outcomes. The conclusion emphasizes the importance of creating a high-end environment, leveraging endorsements, and utilizing personal selling to manage customer expectations and improve the AGPC's service quality.

Australian Grand Prix Corporation 1
AUSTRALIAN GRAND PRIX CORPORATION
By (Student’s Name)
Professor’s Name
College
Course
Date

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Australian Grand Prix Corporation
1. Company Background
The AGPC was founded in 1928. It is accountable for staging yearly Formula 1™
AGP at Albert Park in Melbourne every March alongside the Australian Motorcycle Grand
Prix every October at Phillip Island. It remains a spectacular sporting events in Australia and
the best car race in Australia. The Corporation boasts an extensive range of supporting
events, parties, concerts, and kids’ activities. The Grand Prix meets the needs of motorsport
lovers and family looking for a great day out. The Corporation is presently under contract to
host Formula One till the year 2023. The Grand Prix remains the 2nd oldest thriving motor-
racing contest in Australia following the Alpine rally initially held in the year 1921. Before
being included in the World Championship, the Grand Prix was held at the multiple of venues
in each Australian state. It was turned to part of Formula 1 World Championship in the year
1985.
2. Physical Evidence
(1) Audit findings (problems, issues)
Physical evidence is the environment in which the Grand Prix is delivered and where
the Corporation and its customer interact, and any tangible constituent which enhances
service communication or performance. From the Firm Audit Analysis finding, the main
issues with physical evidence for corporate hospitality are linked to furniture quality and the
fit out. Generally, the AGPC also faces issues or challenges in the expectation management
of its broad array of customers, creation of a high-end atmosphere, as well as controlling the
costs. Due to the lack of physical products, the AGPC cannot use the conventional theories of
marketing to promote the services.
(2) Potential theories

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Services marketing theories can be employed to improve and fix the problems. Both
Mehrabian-Russel Stimulus-Response Model alongside Bitner’s Servicescape Model are
relevant to this case. For example, Bitner’s Servicescape Model will help create a high-end
atmosphere in AGPC by identifying the primary dimension of its service environment like
ambient condition, functionality/space, alongside signs, artefacts as well as symbol hence
ensuring that they are integrated well to trigger positive customer’s perception for positive
customer responses. On the other hand, the Mehrabian-Russel Stimulus-Response Model will
assist AGPC to solve the problem by focusing on the feelings of the customers to drive their
responses to the service environment. This will help AGPC create a high-end environment
which is pleasant and arousal (Möller and Parvinen 2015).
AGPC can also benefit from endorsement. The AGPC needs to use the testimonials
from the previous celebrity or client to assure the consumers that it is trustworthy and
provides a valuable service (Escalas and Bettman 2015). This will help reassure the sports
lovers that the furniture and the fit out are of high quality and that each customer’s
expectation is at the centre of the Corporation. This can be done in the Official Facebook
accounts of the Corporation where these endorsees give the company positive reviews on
their furniture quality and fit out experiences and how their expectations were met. The
AGPC need to design a practical endorsement by using a testimonial from an individual with
whom its target consumer can quickly identify. For instance, a testimonial from a celebrity
will mean more to sports lovers.
AGPC can also use the word-of-mouth to solve the issues with furniture quality, fit
out, creating a high-end atmosphere and even managing costs. For instance, the Corporation
can develop a stellar image or reputation which encourages its customer’s referrals (Keller
and Fay 2016). This is because its consumers will always benefit from referrals
recommended by friends and will subsequently search for its credential with the consumer-

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protection organization. Thus, the AGPC should offer high-quality furniture, fit out, and
high-end atmosphere and superior customer service to lay a groundwork for word-of-mouth
marketing. This will make it a well-liked Corporation thus boosting referrals received by
encouraging customers to recommend it and offer tickets discounts or finder’s fee as a
financial incentive (Vargo and Lusch 2017).
The Corporation can significantly benefit from personal selling which is the
essential service marketing tool. This will be achieved by training salespeople who will then
offer expert-level guidance to its consumers presenting the service in the best feasible light
(Fixson and Jobber 2015). It works by having consumers ask questions and finding out how
AGPC can manage and meet their expectations and needs in terms of fit out, furniture and
high-end atmosphere. The salespeople will emphasize on tailoring the service to fit the
individual needs of various target customers.
(3) Recommendation
AGPC should focus on creating a high-end environment that generates positive
customer responses to manage the expectations of its customers. The insights from the two
Models discussed above should form the basis for creating such an environment. Also, AGPC
needs to use endorsement for people to comment on its Facebook or Instagram account to
boost its reputation which will then make word-of-mouth to be effective (Baker and Saren
2016). Personnel selling will also significantly help AGPC to get immediate feedback and
persuade its clients directly.

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References
Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage, 12(1), pp. 12-
45.
Escalas, J.E. and Bettman, J.R., 2015. Managing brand meaning through celebrity
endorsement. In Brand meaning management (pp. 29-52). Emerald Group Publishing
Limited.
Fixson, S. and Jobber, D., 2015. Personal Selling. Wiley Encyclopedia of Management, pp.1-
2.
Keller, E. and Fay, B., 2016. How to use influencers to drive a word-of-mouth strategy. Warc
Best Practice, pp.1-8.
Möller, K. and Parvinen, P., 2015. An impact-oriented implementation approach in business
marketing research: Introduction to the Special Issue on “Implementing Strategies and
Theories of B2B Marketing and Sales Management”. Industrial Marketing Management, 45,
pp.3-11.
Vargo, S.L. and Lusch, R.F., 2017. Service-dominant logic 2025. International Journal of
Research in Marketing, 34(1), pp.46-67.