An Assessment of Service Marketing Strategies: Woolworths Limited

This report provides a comprehensive analysis of Woolworths Limited as a service organization, focusing on its service marketing strategies. It begins with an executive summary and introduction to Woolworths as a major retail chain in Australia and New Zealand. The report then delves into the servic...Read More

Services Marketing
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Executive Summary
Service organisations deliver intangible services to the customers. That is they provide
certain kinds of experiences to the customer. In the modern marketing practices, retail
organisations are a part of service industry because they provide one stop purchase
experience to customers. The following study tries to assess various aspects of service
delivery as addressed by a service organisation. This study takes Woolworth Limited as
a case study and tries to analyse various aspects of a service organisation.
At the onset, this study introduces Woolworth limited as a retail service organisation. In
continuation it investigates the blue print of the organisation and enumerates various
elements like customer action, front line and back stage functions. Further, the study
tries to understand the front line and back line functions of Woolworth. In continuation,
the firm addresses the various interaction points of the company and customers which
are also known as moments of truth.
Furthermore, the study tries to investigate the determinants of satisfaction and
measurement of service quality of Woolworths Limited. Lastly, the study assesses the
meaning of service failure and services recovery strategy. The study also enumerates a
plan for Woolworth for executing service reviver strategies in case of service failure.
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Contents
Executive Summary......................................................................................................... 2
Introduction...................................................................................................................... 4
Blueprint of Woolworths as a Service Organisation.........................................................4
Front stage and back stage functions of Woolworth........................................................5
Moments of truth for Woolworth.......................................................................................6
Determinants of Satisfaction/ Dissatisfaction and measurement of service quality and
quality gaps......................................................................................................................7
Service Recovery Strategy Plan...................................................................................... 9
Conclusion..................................................................................................................... 10
References.....................................................................................................................11
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Introduction
Woolworths Limited is one of the largest companies of Australia with extensive retail
interests in both Australia and New Zealand (Woolworth, 2017). It is also one of the
largest super market chains in Australia. Woolworth specialises in selling grocery and
packaged food items. Woolworth was founded in 1923 and has it’s headquarter in Bella
Vista (Woolworth, 2017). As a service organisation the firm assists customers to choose
among a range of products under one roof. It also offers take away and packaged food
items. The company has stores in more than 800 locations (Woolworth, 2017).
Woolworth is into both online and physical retailing and provides shopping experience
to its customers.
Blueprint of Woolworths as a Service Organisation
A blueprint is a map of the operational system of a service organisation which
accurately helps all the people involved in service delivery to act as per requirement
(Bateson, 2010). A service blue print or map depicts the service process, physical
evidence of service and point of customer contact (Fisk, 2013). The blue print helps in
efficient service delivery. Woolworth is a retail chain and sells its procured products both
through offline and online medium (Woolworth, 2017). The firm procures finished
products from suppliers and then assembles them in its stores or places their images on
its website so that customers can choose from the products (Woolworth, 2017).
Following is a service blue print of Woolworth
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Service Blueprint
Figure: 1 Source: Made by Author (2017) Based on (Bateson, 2010)
Following discussion gives an idea of the elements of service blueprint of Woolworth
Customer action—in a service blue print, customer actions involves all the interactions,
steps and choices that the customer makes while purchasing a service (Bateson, 2010).
Customer actions for Woolworth involve physical interaction with the frontline staff in the
retail outlet and interaction over the website with customer service if the customer
desires it (Woolworth, 2017). Other actions which the customer makes are choosing the
product, paying for it, generating queries, giving feedback and purchasing the product
Onstage employee actions- These are the actions performed by the contact
employees which are visible to the customers (Hoffman & Bateson, 2010). Inside the
store contact employees perform functions like helping the customers with product
features, payment and delivery (Lovelock, 2012). While online shopping the customer
service employees help solve customer queries and assist them in any other purchase
related issue
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Service
Mapping
Process
Procuring from
suppliers and
delivering to
customers
Evidence
Physical delivery of
products and the
billing information
Point of contact
In store contact or
contact via website

Backstage employee actions- These actions involve all the behind the scene activities
that take place to assist the purchase and sale process (Fisk, 2013). In Woolworth, back
stage activities involve displaying and organising the products, procuring products to
manage inventory and categorising various products (Fisk, 2013). During online
purchase it involves managing the website, managing product delivery and website
display.
Support process- Theses activities involve all the internal procedural steps that are
taken to help the contact employees so that efficient delivery can be made (Mudie,
2013). At Woolworth all the employees who manage customer support, infrastructure
and packaging are part of the support services.
Therefore, these elements of the blueprint give a clear idea to all employees about their
role and responsibility.
Front stage and back stage functions of Woolworth
Front stage functions of a service organisation involve the visible actions that are taken
by the organisation like delivery, managing cash counter, helping customers with choice
etc. (Wirtz, 2012). Following are the front stage functions of Woolworth Limited.
Employees managing self-services counters- Woolworth sells packaged food from
self-service counters (Woolworth, 2017). However, there is staff to asset the customers
if they need any assistance or have any query,
Employees managing the payment counter and delivery: these employees to take
payment from customers for their purchases (Woolworth, 2017). These employees also
manage product barcodes and data entry and help packing the products for delivery,
Customer support, complaint and query desk: These employees address quarries or
complaints that customers have (Woolworth, 2017). During online purchase the
customer support staff assists customers in online shopping.
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Back stage functions amount to all the behind the scenes activities which are
undertaken by the employees so that customer gets the products they require (Looy,
2013). Following are the back stage functions undertaken at Woolworth
Procurement- Procurement is done periodically to maintain the line of inventory
(Woolworth, 2017). Inventory management is done in a way that the stores have a
steady flow of all the products (Bateson, 2010) .Shortfalls and excess stocking is
avoided,
Managing and organising the in-store products: this function is undertaken by
employees who manage and organise the products in various categories so that
customers find it easy to locate these products (Buhamra, 2013)
Managing IT services- This function helps in managing payments, security and other
digital systems with the store so that all operations are undertaken smoothly (Goworek,
2015). The service delivery process proceeds smoothly because of this function.
Managing store infrastructure- These employees manage repair and maintained of
the store, electricity and other infrastructural aspects (Fernie, 2014). These back stage
functions help the front stage in smooth and timely service delivery. Therefore both front
and back stage functions are essential for service delivery
Moments of truth for Woolworth
In marketing moment of truth is the point where customer interacts with a brand, product
or a service to form a new impression about the service or brand or to change a pre-
existing impression (Rust, 2014). Over the years marketing thinkers have coined
various types of moment of truth.
First moment of truth is the first interaction of the customer with the service or the brand
(Looy, 2013). This can be in store interaction or virtual interaction. Second moment of
truth occurs when customer experiences the product or service (Rust, 2014) Third
moment of truth occurs when customer reacts or gives feedback (Bateson, 2010). At
this stage customer becomes brand aware and forms an actual impression about the
brand, service or the product.
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One of the world’s largest companies Google also coined another moment of truth
which it termed as zero moments of truth (Solis, 2014). This moment of truth relates to
all the online research done about a product, brand or service before purchasing it
(Solis, 2014). Online research is a very important impression forming exercise for the
customer
Woolworth limited as a service organisation and a famous retailer also faces these
moments of truth. Woolworth faces moment of truth when customer comes in contact
with their retail services (Hoffman & Bateson, 2010). This happens when customer visits
the store or opens their website to check their products.
First moment of truth occurs when a customer visits a Woolworth store or Woolworth
website for the first time (Solis, 2014). Impression is formed based on products, store
layout and assistance services provided.
Second moment of truth occurs on purchase of product (Rust, 2014). As Woolworth is a
grocery and packaged food retailer, impression is formed about the company products
based on quality and freshness of the food product purchased.
The third moment of truth for Woolworth occurs when customer reacts to the product
post purchase (Solis, 2014). The reaction can be positive or negative depending upon
whether the customer liked store services and products. Customer may react positively
of he liked the services and products. Customer may react negatively if he finds store
assistance and delivery unsatisfactory (Rust, 2014). Positive reaction may lead to
repurchase while negative reaction may lead to no further purchase from Woolworth.
Zero moment of truth occurs when customer does online research on Woolworth. At the
stage impressions are formed based on information on the internet (Solis, 2014).
Therefore, it is important that Woolworth keeps a track of online information available
about it.
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Determinants of Satisfaction/ Dissatisfaction and measurement of service quality
and quality gaps
Customer satisfaction is measures as a percentage of customers whose experience
with the firm and its products and services exceeds or equals their expectation
(Lovelock, 2012). If this percentage is high customers are considered to be satisfied.
Customer satisfaction is correlated with expectation fulfilment (Lovelock, 2012). If
customer gets services and products as per his expectation then he will feel satisfied
(Sood, 2017). Other than expectation there are various other factors which determine
the satisfaction or dissatisfaction of a customer with a product service or a brand
(Lovelock, 2012). Following are the determinates of the satisfaction of customers with
Woolworth
Service quality- Quality is a very important aspect of service and product selling
(Kandampully, 2011). If the product and the services do not deliver the quality that is
promised by the seller then the repeat buy chances become less (Kandampully, 2011).
Additionally, negative word of mouth publicity is also generated. For Woolworth,
customers will be happy with quality if in store assistance is of high level, payment and
delivery is smooth and delay free and the products sold are fresh and good quality.
Virtual and digital customer contact- The modern business has become greatly
digitised and has become connected with the customer through ecommerce
(Heinemann, 2010). Therefore, it is important that customer finds information and
transaction facility online. Online access creates customer convenience and in turn
generates customer satisfaction (Heinemann, 2010). Woolworth has an operation web
portal and online shopping and home delivery facility (Woolworth, 2017). The website is
user friendly and keeps customer convenience in mind. Therefore, through its online
shopping endeavour Woolworth can create better customer satisfaction levels.
Store atmospherics and layout- In service delivery, ambiance and the environment of
service delivery plays a major role in generating customer satisfaction (Kandampully,
2011). Ambiance means the lighting, sound and noise level of the store or the
environment. In Woolworth the store space is more so that there is no crowding and
customer can purchase the products conveniently (Woolworth, 2017). Additionally,
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noise and sound are kept at a minimum level. Lighting is adequate (Woolworth, 2017).
Additionally, there are multiple payment counters to minimise wait time. This adds to
customer satisfaction level.
Truth and honesty- Being honest with the customer is very important in service
delivery (Lovelock, 2012). If a company hides certain facts or does not reveal all facts
about a certain deal, customer feels dissatisfied (Kandampully, 2011). Therefore, while
making any service promise it is important to tell the entire truth about the product and
service to the customer (Kandampully, 2011). Woolworth makes sure there are true
details about all products listed (Woolworth, 2017). Also, various policies, deals and
discounts are listed truthfully in pamphlets and notices in the store. This helps in
ensuring higher level of customer satisfaction
Service quality is the measurement of effectiveness of service delivery (Lovelock,
2012). It is a comparison of actual service delivered with customer expectation. Service
organisation is considered to have high quality if its service delivery maintains or
exceeds the expectations of the customers (Kandampully, 2011). If quality is less than
expectations it is called a service gap (Lovelock, 2012). Following are some measures
of service quality or service gaps given in servqual model theory which Woolworth can
assess its service quality
Tangibles- Customers will feel that the service is as per their expectations if there is an
appearance of physical evidence, equipment or personnel related to the service
(Lovelock, 2012). For example, at Woolworth if the contact employees will assist the
customers well and payments will be executed smoothly the service quality will be
considered Hugh by customers
Reliability- If the service provider is able to deliver the service that he promised, the
service is considered of good quality (Lovelock, 2012). Woolworth is able to deliver as
per it promises hence it is a reliable firm
Assurance- The knowledge and politeness that the front line employees show to the
customers, determines the perception of quality (Lovelock, 2012). At Woolworth
employees are polite and well trained; therefore, customers consider it a quality store.
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Empathy- It is the measure of individual attention given to customers (Lovelock, 2012).
At Woolworth, staff tries to give individual attention to the customers. Therefore, many
customers perceive the firm’s services as high quality.
Responsiveness- Responsiveness is the speed with which service is offered
(Lovelock, 2012). At Woolworth there are many payment counters to make payment
easy and fast (Woolworth, 2017). Also, there is personal attention given to customers so
that that they can make a choice.
Therefore, based on these elements, service quality of Woolworth is high
Service Recovery Strategy Plan
Service delivery is highly dependent on human and technical capital (Bateson, 2010).
Therefore, technological or human error can lead to service failure. Woolworth can also
face service failure on account of technological and human error. At certain times
customer service system breaks down due to fault in information technology system or
due to lack of knowledge or work stress of front line employees (Hoffman & Bateson,
2010). Such issues are critical because they can lead to loss of customers.
Service recovery strategies are aimed at addressing customers who have issues and
finding ways and solutions to such issues (Fitzsimmons, 2011). Service recovery is a
systematic process of taking action to resolve the problem that the customers have.
For Woolworth like any other service organisation critical service failure occurs at the
point of customer interaction when the company is not able to assist the customer either
with purchase or with payment (Cook, 2012 ). A firm should try to avoid service failure
but because of its dependency on human capital and technology service, failure can
happen (Cook, 2012 ). However, firms should have in place service recovery strategy
plan to manage and contain the damage done by service failure.
Following is a service recovery strategy plan for Woolworth-
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Service Recovery Strategy Plan
Strategy Actions Time Desired
Outcome
To encourage
customers to register
their complaints and
to track these
complaints
continuously.
 Creating
feedback section
in the store and
on the web portal
 Looking into each
complaint
 Tracking the
issue and
resolving it and it
is unresolvable
explain to the
customer the
cause and
politely
apologising
Within 7 days of
receiving the
complaint
Customer’s
anger and
frustration may
reduce and he
may not
consider
switching to the
competitor.
Giving quick and
correct information to
customer
 Resolving
complaints on a
priority basis
 Replying to each
customer query
 Being honest and
truthful on status
of resolution of
Within 7 days of
receiving the
complain
Honesty and
truthfulness is
liked by all.
Customer may
feel better
about the
company after
getting honest
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the complaint and quick
response.
To learn from the
service failure and
implement corrective
actions
 Impart more
employee training
so that similar
issue does not
arise again
 Improving
technology to
reduce failure
 Giving adequate
and truthful
information to
customer
Continuous This will help in
reducing
chances of
service failure
the next time.
Table1: Source: Made by Author (2017) Based on (Cook, 2012 )
Service failure can lead to loss of customer loyalty and brand trust. Therefore, an
organisation like Woolworth must implement proper strategies to take corrective actions.
Conclusion
Services contain intangible elects. Therefore to maintain smooth service deliver an
organisation like Woolworth needs an effective blueprint. Additionally, proper emphasis
on determinants of customer satisfaction and service quality can help the firm in
achieving high service quality. Through effective planning, better quality and effective
service recovery can be achieved.
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References
Bateson, J. E. G., (2010) Services Marketing. NewYork: South-Western Cengage
Learning,.
Buhamra, C., (2013) Retail Marketing Management: Concepts, Guidelines, and
Practices. Bloomington: AuthorHouse.
Cook, S., (2012 ) Complaint Management Excellence: Creating Customer Loyalty
through Service Recovery. London: Kogan Page Publishers.
Fernie, J., (2014) Logistics and Retail Management: Emerging Issues and New
Challenges in the Retail Supply Chain. London: Kogan Page Publishers.
Fisk, R. P., (2013) Services Marketing Interactive Approach. NewYork: Cengage
Learning.
Fitzsimmons, J. A., (2011) Service Management: Operations, Strategy, Information
Technology. Boston: McGraw-Hill.
Goworek, H., (2015) Retail Marketing Management: Principles and Practice. Essex:
Pearson Education Limited.
Heinemann, G., (2010) New Online Retailing: Innovation and Transformation. New
York: Springer Science & Business Media.
Hoffman, K. & Bateson, J., (2010) Services Marketing: Concepts, Strategies, & Cases.
London: Cengage Learning.
Kandampully, J., (2011) Service Management: The New Paradigm in Retailing.
NewYork: Springer Science & Business Media.
Looy, P. E. L. V., (2013) Service Management: An integrated approach. Harlow:
Pearson Education Limited.
Lovelock, C., (2012) Services Marketing : People, Technology, Strategy. New Delhi:
Pearson Education India.
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Mudie, P., (2013) Services Marketing Management. New York: Routledge.
Rust, R., (2014) Handbook of Service Marketing Research. Cheltenham: Edward Elgar
Publishing.
Solis, B., (2014) What's the Future of Business?: Changing the Way Businesses Create
Experiences. New Jersey: John Wiley & Sons.
Sood, (2017) Strategic Marketing Management and Tactics in the Service Industry.
Harshey: ICI Global.
Wirtz, J., (2012) Essentials of Services Marketing. New Jersey: FT Press.
Woolworth, (2017) Home. [Online]
Available at: https://www.woolworthsgroup.com.au/
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