Lufthansa Service Essay: Tangible And Intangible Aspects.

Service Offerings and Constituents of Lufthansa

Question:

Discuss about the Research in Sustainable Supply Chain Management.

Service offerings define the set of service commitment, which refers to the service offering’s level of service in terms of price, availability and scope. Service offerings are derived from the business services, which are customized towards the specific needs of the customers (Sakao, Rönnbäck and Sandström 2013). While considering the constituents of service offerings of Lufthansa, it can be said that the organization provides all young flights for the safety of the customers. The customers can avail most secure, reliable and highly designed carrier al lowest cost. Furthermore, the organization has also redesigned the economic class of their fleet for provide more convenient seating arrangement to the customers. The attentive care of the cabin crew of Lufthansa is also highly demanding, which makes the service offerings of the organization much more attractive to the customers (Lufthansa.com 2017). Apart from that, the tailored line and support from the experienced technicians also provides reliable and comfortable flight journey to the customers.

According to Rapaccini (2015), tangible aspect of service indicates the physical products, which the customers can touch and feel before purchasing them. On the other hand, Chou, Chen and Conley (2015) opined that intangible services indicate the service offerings, which the customers cannot touch, but feel before, during and after opting for them. In case of Lufthansa, the organization provides delicious foods and drinks to the customers within the flights during their journey. The seats and cushions of the flight are also highly comfortable to the customers, which are tangible in nature. Furthermore, the newspapers, magazines and storybooks provided to the customers are also tangible in nature. On the other hand, while considering the intangible service offerings of Lufthansa, there are wide varieties of intangible service, which attracts the customers. The young and highly designed fleets are quite impressive to the customers. On the other hand, the attentive care of the talented cabin crew also attract the customers towards repeatedly opting for the service of Lufthansa (Kindström and Kowalkowski 2014). Furthermore, attractively designed and comfortable seats of the flights also form the part of intangible aspect of Lufthansa.

The main aspect, which distinguishes the service from the physical products, is the physical existence. According to Gummesson (2014), physical products have their real and physical existence, whereas, services do have any physical existence. Moreover, customers can touch and feel the physical products, but they cannot touch the services. While considering the physical products of Lufthansa, it can be seen that the customers can touch the foods and beverages provided to them. However, the customers cannot tough the interior design of the flights or attentive care of the cabin crew, but they can enjoy the service. On the other hand, Kauppinen-Räisänen and Grönroos (2015) opined that physical products like foods and cushions and seats can be depreciated, but the services like attentive care of cabin crew cannot be depreciated. Furthermore, the physical products can be liquidated easily, but the service cannot be liquidated easily.

Tangible and Intangible Aspects of Lufthansa's Service Offerings

Business people always want relaxing journey during their traveling on air. According to Sakao, Rönnbäck and Sandström (2013), business travelers want convenient and relaxing arrangement of the fleets. Therefore, they always consider convenience criteria before choosing an airline for their business travel. However, Kindström and Kowalkowski (2014) opined that business people also provide extreme significance to the economic value of their travelling. Moreover, for business travelers, every business activity must be within the budget of business process. Business travel is also within the activities of business processes. Therefore, the customers always consider price criteria before choosing any aircraft for their business travel. Moreover, the customers mostly want to choose low cost carrier for the purpose of their business travel. Furthermore, Gummesson (2014) opined that the business people often require to be connected with their business clients over the phone even within the flights. In such situation, the customers want high performing Wi-Fi within the flights during their business travel. Furthermore, the customers also consider the quality of service and airline safety for enjoying their business travel.

While taking into account the relative intangibility of airline services, the airline customers would first consider convenience of the service. Moreover, the customers would consider the quality of service, time schedule and availability of routes of the aircrafts. On other hand, Rapaccini (2015) stated that the customers would also consider the level of care provided by the cabin crew within flights for having relaxing air journey. Apart from that, the decoration within the flights also provides a feeling of sophistication to the customers. Highly attractive inner design of flights always attracts the customers in choosing a particular air carrier. Furthermore, the customers always expect highly relaxing journey on their air journey. Therefore, the customers always consider the amusement services with the flights before choosing any air carrier.

Marketing of physical products is aligned with promoting and selling a specific product in a specific market. On the other hand, service marketing refers to the marketing of economic activities of a particular service for adequate consideration (Gummesson 2014). The marketing strategies of physical products can be formed through 4’Ps of marketing like product, price, place and promotion. On the other hand, marketing strategies of service must be formed with 7 P’s like product, price, place, promotion, people, process and physical evidence. The marketing of physical products is always dependent on value of the products. However, the marketing of service is always dependent on both the value of service as well as the relationship of the customers with the service providers.

Factors that Influence Business Travellers' Choice of Airline

Service providers should adopt 7 Ps marketing strategies for promoting its services in the market. Moreover, the service providers should provide unique service offerings to the customers for creating unique customer value. Furthermore, the service providers should always assess the affordability of the customers to which they provide their service offerings. While considering the case of Lufthansa, it offers unique aircraft service with affordable price for creating competitive advantage in the market (Rapaccini 2015). Moreover, the service providers should select most effective promotional tools for conveying the important service offerings to wide customer groups. Lufthansa uses both digital and social media marketing for promoting its service offerings. Furthermore, the service providers should also crucially select place for easy availability of the services to the customers. The service providers should hire talented staffs and process for providing services to the customers effectively. The attentive care of the cabin crew of Lufthansa create a unique competitive advantage for the organization (Kindström and Kowalkowski 2014). On the hand, the physical evidence of the service provider should also be attractive to the customers for leading high level of competitive advantage.

One of the most important factors of competitive advantage of Dell is its supply chain management. Dell uses build-to-order-strategy for its inventory management, where every single PC of the organization is associated with every single end user. Moreover, the organization starts for manufacture a PC only after getting an order placed by an end user. In such custom made system, the customers can incorporate their own preferences on their PCs after requesting to the technicians. In this way, such custom made system adds value the customers and assists in gaining competitive advantage over the rivals.

Dell operates its supply chain based on non-store based distribution channels. Dell uses direct model in its distribution channels, where Dell model sells its PCs to its customers directly without using retail channels (Dell.com 2017). Moreover, Brandenburg et al. (2014) opined that Dell uses unique supply chain strategy namely build-to-order-strategy. As per this strategy, Dells start to manufacture PCs only after an order placed from a customer. The organization sends the configuration details of the PCs to the manufacturing floor, only after getting the order placed by the customers. After all these, the final assembly of the PC is started. Such supply and distribution channel is extremely important to the customers, as they can get quick response to their demand change. Moreover, every single PC of Dell is associated every single name of customers. In this way, they technicians can easily identify the name and details of the initial requirements of the PCs after a request of changing demands in the PCs (Pagell and Shevchenko 2014). It can help the organization towards providing unique value to the customers through customizing and fulfilling their required demands.

Marketing Strategies for Service Providers

In store based distribution channels, the inventory stores are wide and the manufactured products are stored until those are sold to the customers. Therefore, in store based distribution channels, organizations have to bear huge expenses in terms of huge inventory cost. On the other hand, in non-store based distribution channels, the products are manufactured only after getting an order placed by the customers (Seuring 2013). Therefore, in non-store based distribution channel, organizations need not to bear huge amount of inventory cost. In this way, non-store based distribution channel reduces overall organizational cost.

The sales, manufacturing and distribution model of Dell provides maximum possible number of variables under its control. Moreover, the model controls the inventory operation having huge control on it by reducing overall inventory cost. Apart from that, the direct manufacturing and sales option has built direct interaction with the customers, which has ultimately enhanced the satisfaction level of the customers (Beske and Seuring 2014). The constant flow of communication with the customers meets their customized needs, which has built high level of competitive advantage for Dell. Moreover, Dell has been in a position to grow during the recent economic downturn.

In sales, manufacturing and distribution model of Dell, the organization may not have ready supply of inventory to sell. It eliminates the chance for the customers to go to the store and buy stored products in the inventory (Brandenburg et al. 2014). Therefore, it decreases the overall profitability of the organization. The build-to-order strategy takes longer hours for fulfilling the customers’ orders. Therefore, it increases the waiting time of the customers.

The direct sales strategy can provide sustained competitive advantage to Dell through direct communication with the customers. Moreover, the organization can also incorporate customized value to their PCs through direct communication with the customers. Such unique and customized value can add to the sustained competitive edge of Dell. On the other hand, build-to-order strategy reduces overall organizational cost of Dell for which it can offer low price for their PCs for gaining competitive advantage an increasingly competitive and mature market place (Pagell and Shevchenko 2014). The Dell model can also get sustained competitive advantage through product diversification on computer printers, handheld computers and MP3 players.

Direct selling strategy can provide the opportunity of direct communication with the customers. However, it often limits the sales volume and profitability of the organization having limited sales to direct customers. Therefore, the organization should adopt retail channels for enhancing its value delivery network. It will enhance the product accessibility of the Dell, which will actually enhance the sales and profit volume of (Dell Beske and Seuring 2014).

Reference List

Beske, P. and Seuring, S., 2014. Putting sustainability into supply chain management. Supply Chain Management: an international journal, 19(3), pp.322-331.

Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), pp.299-312.

Chou, C.J., Chen, C.W. and Conley, C., 2015. Creating Sustainable Value Through Service Offerings. Research-Technology Management, 58(2), pp.48-55.

Dell.com, D. 2017. Supply Chain. [online] Dell.com. Available at: https://www.dell.com/learn/us/en/uscorp1/cr-social-responsibility?s=corp [Accessed 2 Nov. 2017].

Gummesson, E., 2014. Productivity, quality and relationship marketing in service operations: A revisit in a new service paradigm. International Journal of Contemporary Hospitality Management, 26(5), pp.656-662.

Kauppinen-Räisänen, H. and Grönroos, C., 2015. Are service marketing models really used in modern practice?. Journal of Service Management, 26(3), pp.346-371.

Kindström, D. and Kowalkowski, C., 2014. Service innovation in product-centric firms: A multidimensional business model perspective. Journal of Business & Industrial Marketing, 29(2), pp.96-111.

Lufthansa.com. 2017. Cite a Website - Cite This For Me. [online] Available at: https://www.lufthansa.com/online/portal/lh/ca/homepage [Accessed 2 Nov. 2017].

Pagell, M. and Shevchenko, A., 2014. Why research in sustainable supply chain management should have no future. Journal of supply chain management, 50(1), pp.44-55.

Rapaccini, M., 2015. Pricing strategies of service offerings in manufacturing companies: a literature review and empirical investigation. Production Planning & Control, 26(14-15), pp.1247-1263.

Sakao, T., Rönnbäck, A.Ö. and Sandström, G.Ö., 2013. Uncovering benefits and risks of integrated product service offerings—Using a case of technology encapsulation. Journal of systems science and systems engineering, 22(4), pp.421-439.

Seuring, S., 2013. A review of modeling approaches for sustainable supply chain management. Decision support systems, 54(4), pp.1513-1520.