The History Of Service Management Marketing Essay

Conduct a critique of the following service management ideas, theories, concepts and techniques, specifically with reference to their purpose, application and limitations and with regard to how these service management ideas, theories and techniques may contribute to the development of a successful business:

Definition: ‘The nature of the business – the service in mind that the organisation wishes to create. The service concept helps the organisation focus on the value that it can provide to new and existing customers’

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2.1 The Purpose of the service concept

The service concept can be defined into 4 parts (as defined by Clark et al. (2000), and Johnston and Clark (2001):

The organising idea: The essence of the service bought, or used, by the customer.

The service experience: The customer’s direct experience of the service process, which concerns the way the service provider deals with the customer.

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The service outcome: The result for the customer of the service (in particular the benefit provided, the resulting emotions and assessment of value for money)

The value of the service: the benefits the customer perceives as inherent in the service weighed against the cost of the service.

The purpose of the service concept is for a company to help provide a concept for its employees and customers with what they selling and buying, respectively. It should give the employees (e.g. Managers and their staff) a focus on what service they are providing and how to provide it to the customers.

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By defining the service concept, companies are able to deliver a higher level of service to its customer. Also, the service concept can become an important in the development of a business and further re-designing the service, to better suit their customer’s requirements. It is also an important element between the business strategy and delivery of its service products e.g. between a Regional Manager deciding the strategy and the floor staff implanting the service, with the strategy. An important point to make is that the service concept can help show the customers the benefits of the service to them, both tangible and intangible, which in turn can indicate the overall value of the service possibly provided to them.

2.2 Application

I am going to apply the service concept to Subway.

The organising idea – Providing its customers with sandwiches and meals, with a quick service and value for money.

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The service experience – Multiple choices of meals, multiple food outlets, long queue/waiting times around meals times e.g. lunchtime, efficient service

The service outcome – Healthy food, positive feeling of fulfilment, value for money

Value of the service – Quick service, with a cheap meal for the customer

2.3 Limitations

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One limitations of the applying the service concept within a business is that different sectors or departments of the business will have different and conflicting views, especially on how to make improvements. For example, a financial executive of McDonalds might suggest that to cut costs that they should cut down on staff. However, the managers of the actual stores might go against that suggestion, and say that the service to the customer would suffer if they had less staff. Different departments of the business are concerned about different issues and as a result applying a service concept that everyone is happy with is not possible.

Another limitation of the service concept theory is that it include service strategy issues e.g. the positioning of the business in the market with its competitors and type of customers that the business has. This can have a big effect on how a business decides on its strategy, and sometimes cannot be applied to all businesses.

One more limitation is that the service concept theory is based on (or parts of) a business being profitable, which is not always the case with all business. For example, with a car hire company, the sales sector is based on how many revenue and profit is made, whereas the warranty/repair sector is a cost-based, and cannot be measured on the performance on how much profit is made. To add this point, not all businesses are about making profit. Some businesses/organisations are about non-profit, so it can be hard to measure the successful of the change is the service concept, if the measures were based on profit.

Concept Profiling Tool

3.1 Purpose of Concept Profiling Tool

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Service concept profiling as a strategic tool can be used to:

Help create and give organisational structure

Help (assess) the significance of a potential change of the service

To push for strategic advantage

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The purpose of service concept profiling is to apply service concept to the business and help improve its services e.g. It can help managers and executives view their business in a new way to be stand out from it competitors. Through service concept profiling, a business can examine its current service(s) that it offers and look at the possible options for changes and see what improvements can be made, or redesign the service.

Once the service concept has been agreed, it can help provide all departments/sectors of a business guidance on what the service is offering, and how to make those improvements to provide the customers of the business with a better service. An important part with applying the service concept is implementing the strategy into the service delivery e.g. interaction with the customer. Lastly, assessments and evaluation are needed to put in place to measure the successfulness of the new service concept compared to previous results.

Application

Limitations

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One limitation of the service concept profiling tool is that just a diagnostic tool. One issue is that it doesn’t take into the macroeconomic environment. For example, one part of the macroeconomic environment is legal factors. A service company like Starbucks might find it hard to use and adapt a new service concept, which involves needing to employee more staff, if new laws have been passed which have raised the minimum wage, it can affect the costs of the these new staff, and ultimately affect whether it possible to apply the service concept profiling tool, with the extra costs.

The SERVQUAL Model

4.1 The purpose of the SERVQUAL Model

The purpose of the SERVQUAL model is a method for measuring service quality. It is a strategic tool, which helps discover if there is any gaps between the perceptions of the service offered, by the business, and that of the customer idea or views of the service.

Below is the SERVQUAL Model:

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4.2 Application

4.3 Limitations

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