Background On The Business
Discuss about the application of the theories of services marketing.
7-Eleven is an organization founded in Dallas, in 1927. This is the period when the southland ice company began to sell staples such as eggs in the region, as well as milk and bread in its different locations, for the convenience of its consumers. [1]The organization was focused on consumer convenience, especially the provision of commodities in hours when consumers cannot access them from other organizations at different times. The organization further extended its operations to 24 hours in a day, and seven days a week, to capture the target market. 7-Eleven continued to grow to more distinguished convenience stores in locations within which it operated especially during the nights and on weekends. [2]The organization was also keen to distinguish itself from the traditional supermarkets especially through its embracement of extended working hours. International expansion strategy was also further looked into by the entity, which made it a more famous entity in the region, and different parts of the world including Canada, Korea, Thailand, and Taiwan in the modern business platform.
7-Eleven has more than 36400 stores outside the United States and continues to boast of more profits. [3]In the year 1980, the organization went ahead to open its first store in Taiwan, and the location maximized its chances of being noticed by most drivers and the pedestrians in the region. The product assortment strategy was adopted by 7-Eleven and managed to occupy one of the best locations. However, the poor performance which was registered by the organization, especially during its introduction to Taiwan, made the management to reconsider its reformation towards the initially adopted strategies for the sake of enhanced performance. Just like any other organization, 7-Eleven is focused on profitability, which is coupled with the maximization of margins, profitability, sales and the reduction of turnover rates. [4]The management considers the positive relationship between turnover rates and profitability; higher the turnover rate, the higher the profit Margins, Which Have Helped The Organization To Move Forward Since Its Inception.
Taiwan is the primary target market of 7-Eleven. Taiwan has a population of 639 individuals per square kilometer, which is the second highest population. [5]This, in turn, leads to the creation of excellent potential for convenience and growth, especially in most of the major cities. In the year 1990 for example, 7-Eleven was ranked as the giant in the Taiwanese convenience store industry, considering its accumulation of revenue amounting to $0.36 billion per annum. A lot of competition faced the organization especially in the convenience store market in Taiwan, which were located in the streets in different cities. [6]The most intense competition was experienced in most markets where the organization operated. The Taiwan market is the most convenient and significant target for the organization, as well as all other markets the entity is looking forward to venturing into, on the international platform.
Target Market
The most significant strategic initiative was adopted by the organization in efforts to increase efficiency and profitability, which is working with China Trust Bank, to set up ATM stores. [7]The primary aim is to allow all consumers to withdraw and deposit their cash, as well as make purchases most conveniently. With this service at and, consumers will be able to make payments for all their bills including electricity and gas in all the nearby 7-eleven stores. The entire transformation of 7-Eleven stores from a traditional convenience store to a fully equipped service center was not a simple exercise. However, the success of the store in the competitive market is driven by the ability to build more efficient operating system. The organization has a beneficial position in the market, owing to the competition in the service sector, which needs to be neutralized through the provision of variety and quality in the long run.
Improvement of distribution efficiencies, among other developments, has helped the organization acquire increased preference from consumers in the market. [8]Initially, shop assistants in the different locations were expected to deal with more than 32 deliveries from different providers in a single day. [9]This, in turn, led to the creation of a lot of disturbance doing the service delivery process, especially since assistants could not receive goods and service consumers at the same time. To improve its market position and image, in general, the organization decided to increase its number of distribution stores in the region, which made it more useful. The efficiency of the entity stores are compared to those of other organizations makes it more advantageous in the market, which should not be shunned.
[10]Three fundamental theories and principles govern the field of service marketing, which ought not to be shunned, and have also been implemented in 7-Eleven.
Most organizations which offer services end up using similar marketing methods which are also used by the organizations that sell physical commodities. For example, advertising which is common works quite well with all organizations regardless of what is being sold. However, there is a need to put into consideration the fact that services are intangible, and cannot be treated like other physical goods in the market. This, in turn, makes the promotion of services more difficult depending on prevailing situations. [11]Testimonials from past consumers make most businesses succeed based on post-purchase behaviors exhibited by different consumers. In most cases, consumers are keen on the legitimacy of services provided and the quality which they get from different service providers. [12]According to the post-purchase behavior theorem which is exhibited by most consumers, the most critical aspect when it comes to the designing of an effective endorsement which should reach a broad market share is the use of target markets that can be identified by a variety of consumers. A testimonial from a senior citizen for instance or a well-recognized individual in the marketing field will mean more based on the specific demographic which is focused on.
Marketing Conditions And Positioning
[13]Organizations have a mandate to select the best and most relevant prices for the services they offer in the market. In this case, the 7-Eleven stores had a responsibility to know the costs and desired profit margins for the different services which are offered across the multiple locations. [14]The perceived price theory states that if the cost of the services offered is placed in such a way that it exceeds the competitors’ prices, the consumers might in the short run, believe that the commodities offered are superior to those in the market. On the other hand, if the service price is placed below that of the competitors, consumers attracted will believe that competitors offer the same essential quality, and will end up exclusively shopping on the price rather than other marketing aspects. 7-Eleven therefore, should focus on such pricing analogies, and put into consideration consumer perceptions based on the services provided by the organization in different locations.
Viral marketing is the most recent development in services marketing. [15]This theory focuses a lot on the effects technology has on the marketing field in service provision. Social networking is a new communication form, which involves discussions through email and social media platforms. [16]Electronic means need to, therefore, be adopted about this theory, for the sole purpose of increased development in service provision and quality. 7-Eleven needs to step up, to ensure that social networking sites are operational and that consumers will then be responsible for taking their services viral. 7-Eleven has adopted one of the most useful electronic communication and marketing aspects which are used in Japan. The multimedia inspired Japan stores are user-friendly and have led to increased sales and profitability in the region. [17]The stores provide self-service, and interaction between consumers and automated organization sites have also been introduced. The ‘ibon’ has, in turn, led to the creation of numerous opportunities for the organization, which have, in turn, broadened the scope of operations in the entity. Several industry players have since become interested in services offered, especially industry players such as movie theatres, public transportation companies, and travel agencies. This theory has profoundly helped in the transformation of 7-Eleven into a self-service center, from a convenience store.
Promotion of new services is the most important practice embraced by the organization, especially considering the need to uphold profitability in the long term. [18]After the introduction of new infrastructure in the organization, the shop assistants were graded as being ready to perform the new services in the organization. Another challenge which has been highlighted in the case study has to do with the persuasion of consumers, to use the new service. This practice is for the good of the organization, and helped source an increased consumer margin, as compared to other organizations. [19]Other relevant and best practices implemented at 7-Eleven include; listening to consumers, promptly dealing with arising legal issues as a result of the newly introduced services, dealing with the franchise resistance before the image of the organization was compromised, as well as looking into HR issues before they got out of hand. The most detrimental practice which needs to be foregone is related to exploitation of personnel. [20]The shop assistants, for example, cannot be expected to deliver the same quality of output, within same time frames despite the workload and the fatigue in the job. Such unachievable and impractical targets ought to be dealt with, for a favorable environment to be created in the workplace, and to also comply with the service marketing theories.
Services Marketing Principles And Theories
Challenges are bound to be present, especially while developing and implementing the new service model and strategies at 7-Eleven. [21]Critical obstacles faced by the organization should have been resolved more effectively, during the journey of transformation. For instance, according to the case study, shocking the right strategic partners is the best initiative in most organizations. There is a need to ensure that initial considerations have all been made, in respect to deciding who the organization should partner with. Based on this problem, the first recommendation is associated with the need to establish the potential individuals with a leading effect, who will help steer the change process. [22]Secondly, the issue of franchise resistance should not be left to escalate and cost the organization in the long run.
Considering the business model of payment service relied on by 7-Eleven as an organization, franchisees did not receive any payment for the collection services. Such issues could cost the organization a lot of goodwill, which need to be handled in the best manner. The most effective recommendation which should be implemented involves dealing with individual suppliers and communicating a hierarchical model for proper communication purposes. [23]There is also a need to ensure that consumers do not just walk to the stores to get their bills paid, but more convenience needs to be offered. [24]Long queues will then be avoided, especially where the unity of command is relied on, and more so, where every individual is aware of their specific roles within 7-Eleven.
Thirdly, it is important to note that human resource problems are inevitable in every entity. The integration of new services with the existing operations led to more problems at 7-Eleven. With this model, according to the case study, all shop assistants were required to perform existing tasks within the same amount of time. The main problem was related to the fact that convincing the assistants was a hard task, especially about dealing with operational changes and the implementation of the same. [25]There is a need to ensure that the change process is initiated before the introduction of new models and strategies within the entity. [26]A change process will ensure that all employees in the organization are highly sensitized based on the specific procedures and changes which will be introduced within the organization. This way, no one will end up feeling left out, nor neglected as a result of the specific changes which have been introduced within the organization. The end goal should be to ensure that personnel does not feel intimidated, through communication to avoid human resource problems.
Armstrong, Gary, et al. Marketing: an introduction. Pearson Education, 2015.
Baker, Melissa A., and Vincent P. Magnini. “The evolution of services marketing, hospitality marketing and building the constituency model for hospitality marketing.” International Journal of Contemporary Hospitality Management 28.8 (2016): 1510-1534.
Berry, Leonard L. “Revisiting “big ideas in services marketing” 30 years later.” Journal of Services Marketing 30.1 (2016): 3-6.
Chesney, Thomas, et al. “Information richness and trust in v-commerce: Implications for services marketing.” Journal of Services Marketing 31.3 (2017): 295-307.
Gordon, Ross, Nadia Zainuddin, and Christopher Magee. “Unlocking the potential of branding in social marketing services: utilising brand personality and brand personality appeal.” Journal of Services Marketing 30.1 (2016): 48-62.
Grigoryants, I. A., E. Yu Bobkova, and A. A. Zharkova. “Marketing Analysis Of Consumer Behavior In The Medical Services Market Of Samara Region.” ????? ?????????? 6.2-3 (2017): 81-91.
Jauhari, Vinnie. Services Marketing: Text and Cases. Oxford University Press, 2017.
Lovelock, Christopher, and Paul Patterson. Services marketing. Pearson Australia, 2015. Srinivasan, R. Services marketing: the Indian context. PHI Learning Pvt. Ltd., 2014.
Nasution, Reza Ashari, et al. “The customer experience framework as baseline for strategy and implementation in services marketing.” Procedia-Social and Behavioral Sciences148 (2014): 254-261.
Oflac, Bengu Sevil, et al. “Services Marketing Mix Efforts of a Global Services Brand: The Case of DHL Logistics.” Procedia Economics and Finance 23 (2015): 1079-1083.
Puttonen, V. “Nine ‘tricks’ in financial services marketing.” The Routledge Companion to Financial Services Marketing (2015): 471-481.
Rosenbaum, Mark S., Mauricio Losada Otalora, and Germán Contreras Ramírez. “Promoting Problem-Based Learning in Retailing and Services Marketing Course Curricula With Reality Television.” Journal of Education for Business 90.4 (2015): 182-191.
Sheth, Jagdish. “Revitalizing relationship marketing.” Journal of Services Marketing 31.1 (2017): 6-10.
Tu, C.-C., Yu, T., Patterson, P. G. & Liang, H.-M. “From convenience store to community service centre: The transformation of Taiwan 7-Eleven”. In C. Lovelock, P. Patterson & J. Wirtz, Services marketing: An Asia-pacific and Australian perspective (6th ed., pp. 439 443). Frenchs Forest, NSW: Pearson. (2015).
Upshaw, Danny, Marcia Hardy, and Doug Amyx. “Retailing And Services Marketing.” The Association Of Collegiate Marketing Educators (2016): 51.
Wirtz, Jochen, and Christopher Lovelock. “Services marketing: people, technology, strategy.” (2016).
Wirtz, Jochen, and Christopher Lovelock. “Services marketing.” People, technology, strategy. Eighth edition. New Jersey, London, Singapore, Beijing, Shanghai, Hong Kong, Taipei, Chennai, Tokyo: World Scientific. Google Scholar(2016).
Armstrong, Gary, et al. Marketing: an introduction. Pearson Education, 2015.
Tu, C.-C., Yu, T., Patterson, P. G. & Liang, H.-M. “From convenience store to community service centre: The transformation of Taiwan 7-Eleven”. In C. Lovelock, P. Patterson & J. Wirtz, Services marketing: An Asia-pacific and Australian perspective (6th ed., pp. 439 443). Frenchs Forest, NSW: Pearson. (2015).
Wirtz, Jochen, and Christopher Lovelock. “Services marketing.” People, technology, strategy. Eighth edition. New Jersey, London, Singapore, Beijing, Shanghai, Hong Kong, Taipei, Chennai, Tokyo: World Scientific. Google Scholar(2016)
Chesney, Thomas, et al. “Information richness and trust in v-commerce: Implications for services marketing.” Journal of Services Marketing 31.3 (2017): 295-307.
[Grigoryants, I. A., E. Yu Bobkova, and A. A. Zharkova. “Marketing Analysis Of Consumer Behavior In The Medical Services Market Of Samara Region.” ????? ?????????? 6.2-3 (2017): 81-91.
Tu, C.-C., Yu, T., Patterson, P. G. & Liang, H.-M. “From convenience store to community service centre: The transformation of Taiwan 7-Eleven”. In C. Lovelock, P. Patterson &
Upshaw, Danny, Marcia Hardy, and Doug Amyx. “Retailing And Services Marketing.” TheAssociation Of Collegiate Marketing Educators (2016): 51.
Rosenbaum, Mark S., Mauricio Losada Otalora, and Germán Contreras Ramírez. “Promoting Problem-Based Learning in Retailing and Services Marketing Course Curricula With Reality Television.” Journal of Education for Business 90.4 (2015): 182-191.
Puttonen, V. “Nine ‘tricks’ in financial services marketing.” The Routledge Companion toFinancial Services Marketing (2015): 471-481.
Oflac, Bengu Sevil, et al. “Services Marketing Mix Efforts of a Global Services Brand: The Case of DHL Logistics.” Procedia Economics and Finance 23 (2015): 1079-1083.
Nasution, Reza Ashari, et al. “The customer experience framework as baseline for strategy and implementation in services marketing.” Procedia-Social and Behavioral Sciences148 (2014): 254-261.
Lovelock, Christopher, and Paul Patterson. Services marketing. Pearson Australia, 2015.Srinivasan, R. Services marketing: the Indian context. PHI Learning Pvt. Ltd., 2014.
Jauhari, Vinnie. Services Marketing: Text and Cases. Oxford University Press, 2017.
Grigoryants, I. A., E. Yu Bobkova, and A. A. Zharkova. “Marketing Analysis Of ConsumerBehavior In The Medical Services Market Of Samara Region.” ????? ?????????? 6.2-3 (2017): 81-91.
Gordon, Ross, Nadia Zainuddin, and Christopher Magee. “Unlocking the potential of branding in social marketing services: utilising brand personality and brand personality appeal.” Journal of Services Marketing 30.1 (2016): 48-62.
Chesney, Thomas, et al. “Information richness and trust in v-commerce: Implications for services marketing.” Journal of Services Marketing 31.3 (2017): 295-307.
Berry, Leonard L. “Revisiting “big ideas in services marketing” 30 years later.” Journal of Services Marketing 30.1 (2016): 3-6.
Baker, Melissa A., and Vincent P. Magnini. “The evolution of services marketing, hospitality marketing and building the constituency model for hospitality marketing.” International Journal of Contemporary Hospitality Management 28.8 (2016): 1510-1534.
Wirtz, Jochen, and Christopher Lovelock. “Services marketing.” People, technology, strategy. Eighth edition. New Jersey, London, Singapore, Beijing, Shanghai, Hong Kong, Taipei, Chennai, Tokyo: World Scientific. Google Scholar(2016).
Wirtz, Jochen, and Christopher Lovelock. “Services marketing: people, technology, strategy.” (2016).
Marketing Course Curricula With Reality Television.” Journal of Education for Business 90.4 (2015): 182-191.
Baker, Melissa A., and Vincent P. Magnini. “The evolution of services marketing, hospitality marketing and building the constituency model for hospitality marketing.” International Journal of Contemporary Hospitality Management 28.8 (2016): 1510-1534.
Grigoryants, I. A., E. Yu Bobkova, and A. A. Zharkova. “Marketing Analysis Of Consume Behavior In The Medical Services Market Of Samara Region.” ????? ?????????? 6.2-3 (2017): 81-91.
Nasution, Reza Ashari, et al. “The customer experience framework as baseline for strategy and implementation in services marketing.” Procedia-Social and Behavioral Sciences148 (2014): 254-261.
Tu, C.-C., Yu, T., Patterson, P. G. & Liang, H.-M. “From convenience store to community service centre: The transformation of Taiwan 7-Eleven”. In C. Lovelock, P. Patterson & J. Wirtz, Services marketing: An Asia-pacific and Australian perspective (6th ed., pp. 439 443). Frenchs Forest, NSW: Pearson. (2015).
Nasution, Reza Ashari, et al. “The customer experience framework as baseline for strategy and implementation in services marketing.” Procedia-Social and Behavioral Sciences148 (2014): 254-261
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