ASSIGNMENT DRIVE SPRING 2014
PROGRAM MBADS (SEM 4/SEM 6) MBAFLEX/ MBAN2 (SEM 4) PGDROMN (SEM 2)
SUBJECT CODE & NAME
ML0015-Services Marketing and Customer Relationship Management
BK ID B 1808 CREDIT & MARKS 4 Credits, 60 marks
Q. No 1. “Positioning a service in the marketplace is much like positioning a
product”. Explain Service positioning and its purpose with the help of an example.
(Explanation of service positioning Explanation of purposes Example) 2+6+2=10
Answer: Positioning a service in the marketplace is much like positioning a product.
The market for a product or service needs to be segmented so that the marketing activities
can be designed accordingly. To position a service successfully, the service provider should first
look for an answer to the following question—why would the customer prefer our service to that
of competition? If the service provider is unable to answer this question in a clear and definite
manner, then the positioning strategy needs to be looked at again.
To spread awareness about the differential advantage, the service provider has to resort to
more direct interaction with the target market. If this is done successfully, the positioning of the
service will be well etched in the minds of the target market through word-of-mouth promotion.
Therefore, providing differential advantage and communicating the differential advantage are
essential for positioning.
Purpose of positioning:
1. A company must establish a position in the minds of its targeted customers.
2. The position must be singular, providing one simple and consistent message.
3. The position must set a company apart from its competitors.
4. A company cannot be all things to all people; it must focus its efforts.
Example:
Let us understand this with the help of examples. For instance, the fashion industry is one
which is highly volatile. By definition, trends are meant to have short shelf-lives. While the idea
is to position a particular brand within the existing market, the challenge is to simultaneously
set it apart from the rest. Designer wear in popular view is not just about expensive clothing but
is also about lifestyle. On the one hand, apparels designed by fashion designers are expensive
and complement definitions of luxury. Brands such as Pantaloons and Van Heusen are
positioned in such a manner that they target the professional class. The same strategy cannot be
applied to high end designer consumers. Another example of positioning can be seen in the
automobile industry. Maruti is by and large considered synonymous with average working
Indian who aspires to gain economic mobility. Brand positioning for this has been done keeping
in mind service stations and resale outlets or used car dealers. This approach is radically
different from the any approach that any luxury car will use. Positioning can be on the basis of
different service criteria:
•Based on price
•Based on endurance
•Based on quality
•Based on gender
•Based on income
•Based on service availability/ location
2. Elaborate GAP analysis in detail. 10
Answer: An approach towards achieving conformance in services is to identify various gaps
that occur during the service process. Zeithaml, Berry and Parasuraman came up with four such
gaps that occur during service processing within the organization. They all lead to the most
severe gap, that is, the gap between what the customers expected out of a service and what,
according to the customers’ perceptions, was eventually delivered. Later market analysts
modified this gap model and added three more gaps that can possibly occur during a service
process.
Step 1
Step 2
Step 3
Standards
Knowledge Gap
Gap
Delivery Gap
Step 5
Step 6
Step 4
Internal
Communication
Perception Interpretation
Gap
Gap
Gap
Step 7
Service Gap
Figure 3.1 Gap Analysis
Step 1. Knowledge Gap: This gap may occur at the beginning of the service process, when
marketers assess what the customers’ needs and expectations are from a particular service. The
gap happens when there is disparity between the customers’ needs/ expectations and what the
marketers believe them to be.
Step2. Standards Gap: The next step of the service process is management’s definition of
what the target segment needs and expects. This translates into setting down standards to
ensure that the service delivery meets those expectations. The gap occurs when there is a
disparity between the management’s perceptions and the actual delivery standards that are
established by the service provider.
Step 3. Delivery Gap: The next step for the service provider is to strive to deliver the service
according to its set delivery standards. The delivery gap takes place when the actual
performance ability of the service provider does not match the standards set down for service
delivery.
Step 4. Internal Communications Gap: The next step is for the marketing team to
formulate marketing and promotional campaigns. They promote the service on the basis of
specific features, quality level and so on. The internal communication gap takes place when the
campaigns overpromise. In other words, the promotional campaigns covey more in terms of
features, quality, and performance than what the service provider can actually deliver.
Step 5. Perceptions Gap: The next step entails the delivery of the service to the customers.
The possible gap that may occur at this stage is in terms of what is actually delivered and how
customers perceive what is delivered.
Step 6. Interpretation Gap: In advance of delivery, the service providers try to communicate
certain promises to the customers. The interpretation gap happens when what the service
provider promises is interpreted differently by the customers.
Step 7. Service Gap: It is the most severe gap that undermines the entire service process. In a
way, it is a culmination of the other six kinds of gaps. When there is a disparity between what
the customer expected from the service and how he or she perceived the eventual service
delivery.
3. “Interaction plays a lead role in building customer relationships”. Explain CIM
in this context.
(Explanation of CIM Explanation of Methods) 5+5=10
Answer: Interaction plays a lead role in building customer relationships. CIM represents the
intensive interaction between customers and the organization, which is supported
by technology-enabled mechanisms such as the Internet. In view of the technological growth,
the interaction management is facilitated by communication in terms of media, message, speed,
accuracy, distance, content, reach, repetition, etc.
There are several methods that can be followed for CIM:
•Active method of CIM: This method is proactive in nature. Under this method, the
organization anticipates the possible expectations of customers, and plans for effective
interaction accordingly. It is a more direct method designed in tune with the anticipated
behavioral pattern of customers.
•Receptive method of CIM: This method is reactive in nature. Under this method,
organization reacts suitably after studying the expectations, perceptions, and behavioral
patterns and the customer interaction is tuned suitably.
•Indirect method of CIM: This method is based on organization’s own observations. CIM is
designed after the organization’s own observations in terms of several signals such as trend of
sales volume, number and types of complaints received, and the like.
Organizations may adopt any one or a suitable combination of any of the three methods
that will initiate close customer contacts. Effective customer contact is possible through CIM,
that is, by properly integrating, routing, queuing, scheduling, and monitoring several aspects
related to customer contacts. All these would provide a strong base for effective customer
relationship building.
4 What are the various types of conflicts in marketing services?
(Explanation of types) 10
Answer: Types of conflicts in marketing services:
Person/role conflicts
In certain circumstances, boundary-spanners (personnel who interact with clients directly) feel
conflicted between their work and between their self-opinions. In a country such as United
States, where high emphasis is given on equality and individual identities, service workers might
feel a conflict in their roles that they have to play while performing their jobs, as they are asked
to work by the motto ‘The customer is always right-even when he or she is wrong’. At times there
is an argument between the requirements of role, which is to be performed, and the esteem of
employee.
Organization/client conflict
The kinds of arguments that a front-line employee may find themselves in are arguments among
their superiors, peers or among individual customers. Service employees are typically rewarded
for adopting certain standards, rules, and patterns. Ideally, these sets of rules are customer
oriented. Whenever they are not or whenever any customer makes excessive demands, the
employee has to make a choice between whether to follow the rules or whether to satisfy the
customer’s demands. The conflict reaches its peak when the employee feels that the policy being
followed by the firm is wrong and he/she must take an individual decision about what to do—
whether to say yes to the client and risk his job or accept and follow the policies blindly. These
arguments become more intense when the earnings of service employees depend on tips or
commissions from the customers.
Inter-client conflict
In case of assisting customers one at a time, the representative might satisfy one customer
by giving them extra time and attention and acting in a flexible manner towards the customer’s
demands. But, at the same time, the other customers who are waiting become distressed, as
their needs are not being met in a timely manner. Irrespective of the time issue, different
customers might prefer different modes of delivery of service. If you have to attend to one
customer who likes interpersonal interaction and a way of familiarity in comparison with
another customer who does not prefer too much personal interaction, it might also at some
point lead to arguments among employees.
Quality/productivity trade-offs
Front-line service employees are mostly told to be both efficient and effective: they are
anticipated to be both cost-effective and fruitful in whatever they do. A doctor is most of the
times expected to deliver thoughtful, individualized services to his patients while at the same
time he is expected to serve a lot of patients within fixed time duration.
Aligning capacity to match demand
The productive capacity of personnel and equipment is a reliable method of determining output
of service organization. Changing output patters as per demand requirements is a reflection of
the organization’s elasticity.
5 Elaborate the important steps that service providers should bear in mind while
implementing one to one marketing.
(Explanation) 10
Answer: There are four important steps that service providers should bear in mind while
implementing one-to-one marketing. They are as follows:
•Identifying customers: A fair number of customers must be identified by an organization as
target customers. It is equally crucial to understand them and their needs in as much detail as
possible. The portfolio should ideally contain more than the name and address, it must also
include information regarding their preferences, likes, dislikes etc. In other words, a snapshot
will not suffice; a company must strive to know its customer well if it wants to establish a long
profitable relationship.
•Differentiating the customers: Customers are different in two ways. They represent different
levels of value to the company and they have different needs as well. Once each customer’s needs
and values have been established, it is possible to tailor the company’s behaviour to each
customer in order to reflect those values and needs.
•Interacting with customers: It is important to be both cost-efficient and effective when the
company is interacting with its customers. Cost- efficiency improves by directing customer
interaction towards more automated channels. Providing information on its website would be
more economical than supporting a call centre. Effectiveness improves by generating timely,
relevant information which provides either better insight into a customer’s needs or a more
accurate picture of customer’s value to the company. Every interaction with a customer should
take place in the context of all previous interactions with that customer. A conversation should
always aim to pick up the threads of the last conversation.
•Customizing the company’s behaviour: In the final step, to lock a customer into a learning
relationship, some aspects have to synchronize with the customer’s individually expressed
needs. This could either mean mass customizing a product that has been manufactured or it
could also include reshaping some aspects of the service that is part of the product. This may
include the way in which the invoice is prepared.
6 Write short notes on:
a) E-CRM
b) Customer Retention
(a) Meaning, opportunities and benefits b) Meaning and Strategies) 5 +5 =10
Answer: a) The basic idea of e-CRM comes from e-commerce. Typically an e-CRM would
provide customers with a self-service browser based window on which they may have greater
autonomy to surf different schemes and offers. Additionally, an e-CRM will also be able to
generate a history of purchases, e-mails where they will get updates and such like. In other
words, e-CRM has been designed to monitor all forms of managing relationships with customers
using IT or information technology. The main objective of e-CRM is to integrate data by using
internal organization resources and external marketing strategies to understand and carry out
customer needs and requirements.
Opportunities and benefits:
(i)Improving Relationship with Customers: One of the most difficult things to get from
customers is trust. Not only is it hard to obtain, it is equally difficult to sustain. Traditionally, all
it entailed was the practice of getting to know the preferences of customers. However, this was
not without the awareness of increased competition and demands. It has now become important
to initiate new programs and methodologies in order to forge better one-on-one ties with
customers. E-CRM enables companies to generate trust, acquire co-operation and then assure
satisfaction with customers.
(ii)Propensity o Deliver Personalized Services: Attaining personalization or familiarity with
customers is not an easy task and even if attained, difficult to sustained. However, if achieved, it
can yield massive positive results for the enterprise. Another feature of forging familiarity is that
each system or program will unique in nature. But, if a company can manage to strike the
balance, efficacy and efficiency can both be ensured.
(iii)Quality of Delivery and Service: Quality is crucial in determining customer retention and
loyalty. Service delivery is one of the foremost criteria in determining the selection of service
providers by customers. There are five dimensions to service quality. These are:
(a)Dependability
(b)Responsiveness
(c)Assurance
(d)Reliability
(e)Assurance
(iv)Transaction and Processing Speed: The internet has enabled rapid changes within the
commercial domain wherein more and more companies are able to gather maximum
information within a short span of time. Enterprises will now, with the help of CRMs, be able to
lessen the time taken for answering customer queries, acknowledge orders as well as respond to
delivery orders. With this, one gains time which in turn results in higher efficiency.
(v)Convenience: Convenience based services are most easily seen in banks where customers are at
liberty to choose whichever policy or scheme applies best to them. In this process, they go
through as little stress as possible.
b) Customer Retention:
Customer retention is the process of keeping customers in the customer inventory for an
unending period by meeting the needs and exceeding the expectations of those customers. It is
an approach that is used in converting a casual customer into a committed loyal customer.
Retention Strategies
1. Creating buzz around your business is one of the most beneficial ways of retaining customers.
People always want to be associated with a company or product that others are talking about,
both offline as well as online.
2. Build your special momentum of trust. Customer retention is not an instant process that will
start yielding results instantly. Consistency, repetition as well as authenticity help in building a
momentum of trust.
3. Staff retention as important as customer retention. In all probability, the way you treat your staff
is the way your staff treats customers. Companies must strive to retain their best employers in
order to retain their best customers.
4. Change your sales pitch to how may I serve you? It has been observed that companies that
usually give, get. Customers ought to be looked upon as value adding agents.
5. The objective should be to educate customers instead of trying to make a sale. Successful
customer retention is contingent on how well a brand is able to gauge customers.