MKT203: Service Marketing - Service Failure Analysis and Recovery

This report presents an analysis of a personal experience involving a service failure related to a set-top box purchase. The report begins with a clear description of the incident, followed by an analysis of the root causes of the failure using relevant service marketing theories, including the identification of service delivery system failures, customer needs, and the attribution of responsibility. The analysis explores the Lucas, Stability, and Controllability aspects of the failure. The report then proposes a comprehensive service recovery program, including compensatory, unresponsive, restoration, apologetic, and reimbursement strategies. Recommendations are provided to maintain customer loyalty and retention, emphasizing the importance of understanding customer needs, providing error-free transactions, and training staff. The report concludes by highlighting the impact of service failures on both customers and organizations, and the significance of trust in service delivery.

Services Marketing
Student Name
Institute and Affiliation
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Table of Contents
Introduction:....................................................................................................................................3
Analysis:..........................................................................................................................................3
Root cause analysis in theoretical perspective:...............................................................................4
Service recovery programme:..........................................................................................................5
Recommendation:............................................................................................................................6
Conclusion:......................................................................................................................................7
References:......................................................................................................................................8
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Introduction:
Service marketing falls under the marketing strategies and it is broad category. Service
marketing is the most common approach which is mostly used by all the organisations
(Subashini and Kavitha, 2011). Service can be provided through two methods (Alston, 2007).
These are business to customer (B2C) and Business to business (B2B). Present research based on
the personal experience of service failure in recent time. Hence, the researcher has chosen recent
service failure of purchasing a cable set-top-box. The researcher has bought a set-top box of
cable but after a few days it was not working well but the service provider fails to provide
required service. The entire scenario will be analysed along with service marketing theories and
practices.
Analysis:
Clear description of the service delivery failure incident:
The researcher has purchased a set-top-box from local cable operators. The product was working
properly but after few days it had been showing a message at the centre of the TV. The research
thought it was disturbance of TV but after checking properly it was found that the message was
showing through Set-top-box. Hence, the researcher called the technician of cable operators and
they took away the product by saying that it would be returned within next 3 hours. After three
hours when it was still not returned the researcher asked the service provider (cable operator) to
know the situation of the product but got to know that it would take more time. Then the
researcher requested to provide alternative product which could help to see the programme of the
TV. Service provider assured that they would provide alternative product within next one hour.
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The researcher waited entire day but got no alternative product and service provider did not
picked up call.
This is entire service failure incident which the researcher has experienced. The service failure is
really major issue for the customer and this type of incidents creates a big impact upon the
company service capability (Demydov, Strykhalyuk, Shpur, Mohamed and Klymash, 2015). It
was the responsibility of the service provider to look after the customer’s satisfaction and their
needs carefully.
Root cause analysis in theoretical perspective:
There are four types of service delivery failure. These are service delivery system failure,
customer requests and needs, unsolicited employee actions, and problematic customers (Conoley
and Gutkin, 2017). Customers who have encountered service failure may dissatisfy with
organisational outcomes.
 Company service delivery system failure denotes the service is unreasonably slow or
unavailability of service.
 Customer needs and requests refer to the preferences of the customer or customers
special needs
 Unsolicited employee action denotes unusual action or cultural norms
 Problematic customers refers breaking the rules of the company or physical or verbal
abuse
Root Cause analysis:
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According to the theory it has been identified that there are three types of service failure
attribution (Sengupta, Balaji and Krishnan, 2015). These are Lucas, Stability and Controllability.
Lucas: This denotes to the people who are responsible for the service failure. It can be service
provider, customer or external force. This source has the main responsibility for the failure of the
service. In this case service provider has the main responsibility to provide the best service to its
customers. They might have neglected the researcher’s request and need for on time service and
this helped to occur the service failure incident. Hence, the operator had to provide the proposed
service to the researcher on time. The service provider needs to provide the customer
(researcher) an alternative product which can be helpful for both of them.
Stability: It refers to the probability of the incident again (Tummers, Bekkers, Vink and
Musheno, 2015). If the incident is one time then it is Unstable and when the chances and the
cause of failure likely to be happen again then it is called Stable. Undoubtedly it is true that this
type of incident is the big threat for the organisation. The cable service operator needs to be very
careful about the service which they are providing to the customers. In this case, the cable
service provider should manage the incident and prefers unstability of such incidents.
Controllability: This refers to the responsible party’s control over the cause of the failure. In
present case the cable operator does not has the control over cause of the failure. The description
of the present case showcased that the service provider was not aware about their faults.
Through the root-cause analysis it has been identified that the cable operator has not any control
over the provided service and hence they are not aware about the value about the customer
satisfaction and dissatisfaction.
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Service recovery programme:
The service recovery strategy helps to restore the satisfaction of the customers and customer
retention. Successful service recovery strategy can help to lead satisfaction of the customers.
There are several recovery strategies. These are compensatory strategies, unresponsive strategies,
restoration strategies, apologetic strategies and reimbursement strategies.
Compensatory strategies: Compensation is the common strategy which recovers a service
failure and it can be viewed as restoring equity (Bitner, Booms and Mohr, 1994). It can be
coupons, refunds and discounts and these are always necessary for the recovery strategy. There
are some debates about the compensation strategy as the equity theory observes customers who
are over-rewarded can be less satisfied than those who receive equitable rewards and they feel
guilty. In this case the service provider (cable operator) can provide compensation to customer
(the researcher) through new set-top-box.
Unresponsive strategies: Unresponsive strategies denote the service provider’s careless
behaviour to the customers. As per the present case, the service provider can overlook the
requirement of the researcher’s need but this will not be helpful for the service recovery strategy.
Restoration strategies: Restoration strategy is helpful for the service provider (Parasuraman,
Zeithaml and Berry, 1985). In present case, the researcher should get the proper response from
the cable operator. It is very necessary for the service failure to restore the issue and achieve
customer satisfaction.
Apologetic strategies: Apologetic strategy help the firm to recover the service failure and it is
the most suitable strategy. For present case, the service should be apologised for their provided
service to the customer (the researcher).
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Reimbursement strategies: Reimbursement strategy is also helpful for the recovery of the
service delivery failure. It can be useful for the present case also.
Recommendation:
Service delivery failure is most sensitive issue for the organisation and it can decrease the
reputation of the organisation. For the betterment of the service deliver it is necessary the
organisation should understand the need of the customers. They should provide proper service
according to the customer’s needs and satisfaction. Studies show that error free transaction is the
most necessary part of the organisation for their delivery of services. Service delivery directly
linked to the customers’ satisfaction and choices. Customers always go for the desired product
and services and when they found such incidents or issues then their level of satisfaction goes
down and they think twice before any purchase.
Thus it is necessary for the organisation to provide compensation or apologies to the customers
who have encountered this type of service failure. They should arrange necessary steps to
recover the situation. Apart from that polite behaviour and training of the staffs are also
necessary for the betterment of service. Employees or staffs are most integral part of the
organisation and they are the first part of the organisation who deals with the customers. Hence,
it is necessary to train them properly so that they show polite behaviour to the customers. Apart
from that Word of mouth is also necessary for the service delivery. Word of mouth helps to
provide good behaviour and it will develop the increase the customer base. All the above
recommendation is necessary for the service provider of present case.
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Conclusion:
Throughout the analysis it has been identified that service delivery failure can affect not only
customers but also the organisation also. The service delivery failure is the most sensible issue
which can lead the organisation to decrease its fame and trust. Hence, trust is the most important
part for the service delivery of the organisation. All the above analysis and recommendation
helps to show the better approaches for the better service delivery.
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References:
Alston, M., (2007). Globalisation, rural restructuring and health service delivery in Australia:
policy failure and the role of social work?. Health & Social Care in the Community, 15(3),
pp.195-202.
Bitner, M., Booms, B. and Mohr, L. (1994). Critical Service Encounters: The Employee's
Viewpoint. Journal of Marketing, 58(4), p.95.
Conoley, J.C. and Gutkin, T.B., (2017). 14 School Psychology: A Reconceptualization of
Service Delivery Realities. The delivery of psychological services in schools: Concepts,
processes, and issues.
Demydov, I.V., Strykhalyuk, B.M., Shpur, O.M., Mohamed, M.E.H. and Klymash, Y.V., (2015).
The structural-functional synthesis of cloud service delivery platform after service availability
and performance criteria. Системи обробки інформації, (1), pp.144-159.
Parasuraman, A., Zeithaml, V. and Berry, L. (1985). A Conceptual Model of Service Quality and
Its Implications for Future Research. Journal of Marketing, 49(4), p.41.
Sengupta, A.S., Balaji, M.S. and Krishnan, B.C., (2015). How customers cope with service
failure? A study of brand reputation and customer satisfaction. Journal of Business
Research, 68(3), pp.665-674.
Subashini, S. and Kavitha, V., (2011). A survey on security issues in service delivery models of
cloud computing. Journal of network and computer applications, 34(1), pp.1-11.
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Tummers, L.L., Bekkers, V., Vink, E. and Musheno, M., (2015). Coping during public service
delivery: A conceptualization and systematic review of the literature. Journal of Public
Administration Research and Theory, 25(4), pp.1099-1126.
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