2. how companies can apply the principles of services marketing (such as levels of product and service value) to achieve greater success
1. Starbucks is both a service and product company at the same time. The nature of the business operation that the company runs qualifies it to be both. By being a service it entails most work being done by its employees for the benefits of the customer. Starbucks is known around the globe due to the nature of service that people receive. When customer queue to buy coffee, they are not buying the brand but rather the quality of the service that they receive. This means that the element of customer care from the way the coffee is brewed to her it is sold to the customer defines the service that the firm offers. Since the company offers. Thus the services that the company offers are the ones that connect the consumer to the service brand. The services that the customer receives like the coffee, Starbucks express and the wireless internet are services that connect the customer to the brand that the company runs but they do not allow the customer to own them. Further, services are based on the relationshop that the customer receives when engaging with the company (Johnston & Clark 2008, p. 12). This can be seen through the innovations that the company has taken like the Starbucks express, starbucks cards and the wireless internet. All these are used used to increase customer satisfaction and create a better relationship.
According to Moeller (2010, p. 361) products are defined by variability. This is because despte the fact that the coffee and other products that the compay offers are made the same way. There is no guarnatee that the product will remain the same since the Starbucks coffee itlself has been evolving and the customer is not sure if the coffee will taste the same forever. This variability element makes Starbucks a product comoany rather than a service company. On the other hand, the element of sepratbility allows people to walk with the coffee that they buy from one location to another and they are not forced to take it from one place. When one buys the coffee, the element of ownership applies since the individual can transfer the coffee from one person to another. Products are owned by the purchaser once an exchange has been made.
When Starbucks produces its coffee, it seeks to fulfilla need or want for the customer. People line up in the morning at Starbucks shops because they want to satisfy their need to drink coffee. This means that they are loyal to the brand and can compare the quality that they get with others. This means that the customer can feel the impact of the product immediately when they use it (Axelsson 2008, p. 5). When one has a need for coffee and they drink it, they feel the satisfaction as they sip the coffeee slowly. Therefore, Starbucks falls in the category of both a service and a product since it offers both tangible and intangible elements to its customers.
2. Edvardsson, et al. (2008, p. 85) states that service marketing is business to customer and business to business services through a marketing mix to ensure that organizations excel. The strategy has been changing due to the way marketers are currently approaching the concept and the role of consumers in achieving service delivery. One way in which service marketing principles can be used to improve the organization is through proper use of the service marketing mix. Today, the mix has seven P’s including people, process and physical evidence. Since the nature of customers has been changing, marketers need to ensure that the people they work with as a service providers have the relevant knowledge and performance to deliver the required services (Lovelock, et al. 2011, p. 14). With the advent of information technology, customers can access information anywhere that allows them to understand the nature of the product that they receive from the organization. Lastly, Tan & McAloone (2006, P. 3) adds that physical evidence is a customer testimonial that allows businesses to maintain existing customers and get new customers. This is the expectations that customers have over a particular product that they purchase. This is the strategy that is used to retain customers since when they go to a competitor and they fail to get the physical evidence then they come back. For example, Starbucks sells only the finest coffee brewing machine. Then as time went on they added service tangibility by using brand name, packaging and styling that makes the customers feel comfortable with the brand.
The principle of staying current requires organizations to keep with the trends that exist in the market. As technology changes, new innovations come up that define the way business has to be carries out. This is an evolutionary requirement that each organization needs to work on to ensure that it meets the current trends in the market (Bianchi, 2011, p. 286 (Edvardsson, et al., 2008)). For example, to catch up with other businesses, Starbucks is offering its customers the Starbucks express component that allows them to order pre-order and prepay for the beverages that they want and at the same time the Starbucks cards through the expresso machine to speed up service delivery and payment.
According to Alipour & Darabi (2011, p. 3)When the four initial P’s are integrated with people, process and physical environment, then the customer experience becomes the center of the service marketing strategy that the company adopts. Since service marketing focusses on ensuring that the customer understands the benefits that they receive from the product. Then the benefit that service marketing offers the organization is a repeat customer who prefers the products and service they receive to those of other competitors. Therefore, service marketing has to ensure that new ways are used to give the customer evidence of the products that they will receive when engaging with the company. For example, for Starbucks, customers understand that it is the definition of the finest coffee that they can ever get. What service marketing requires is to build on the evidence that has existed all the time that the company has been in business.
References
Alipour, M. & Darabi, E., 2011. The role of service marketing ,ix and its impactt on marketing audit in engineering and technical service corporations. Global Journal of Mnagaement and Business Research, 11(6).
Axelsson, K., 2008. Exploring Relationships between Products Characteristics and B2C Interaction in Electronic Commerce. Journal of Theoretical and Applied Electronic Commerce Resear, 3(2), pp. 1-17.
Bianchi, C., 2011. Inward internationalization of consumer services: lessons from Australian firms. Journal of Services Marketing, 25(4), pp. 282-293.
Edvardsson, B., Holmlund, M. & Strandvi, T., 2008. Initiation of business relationships in service-dominat settings. Industrial Marketing Management, 13(1), pp. 80-97.
Johnston, R. & Clark, G., 2008. Service Operations Management: Improving Service Delivery. s.l.:Prentice Hall.
Lovelock, C. H., Vandermerwe, S., Lewis, B. & Fernie, S., 2011. Services Marketing. Edinburg Business School: Heriot-Watt University.
Moeller, S., 2010. Characteristics of services – a new approach uncovers their value. Journal of Services Marketing , 24(5), pp. 359-368.
Tan, A. & McAloone, T., 2006. Characteristics of strategies in product/service-system development. Dubrovnik - Croatia, s.n.