The Service Encounter
Write a report on Maketing of Services.
In different economies of world, organisations exist with the view of consummating the demand of the society. They deliver the demand with either by providing a product or rendering services. Although, both of the offering gives satisfaction to the people but there is a slight difference between the two. Products are the tangible substances that can be utilised by the consumer as and when required them as the products can be preserved for a long time.
Services, on the hand can be described as the intangible experience received by the customers. The satisfaction received on performing a process or activities and does not always require sale of product to fulfil the demand of the ultimate customers. Once the services are rendered they cannot be returned or saved or stored as if they go waste if not consumed. While consuming the services there is no ownership that is being transferred, in this the consumers pay to get facilities which can be experienced at a point of time and no tangible article could be taken along with them. As the providing services are a process or series of activities whose outcome is experience keeping it in stock is not viable act. Human beings are versatile in nature; performing the same activity will vary the outcome depending on individuals and also the consumers taking the same service will have different utility level received (Lovelock, & Patterson, 2015). This feature forms the heterogeneous nature of services.
Anything out of the two that an organisation has to offer needs to be marketed. Marketing is the set of planned actions taken by the organisations to connect, communicate, convey and create the value of the offering within the targeted audiences (Armstrong, Kotler, Harker, & Brennan, 2015). This is an ongoing process through which the company stay in touch with the audience while communicating about the product or services. In the successive content elaboration about the marketing of services and the elements contributing in the process has discussed. The services industry favoured for the same is aviation, Qantas Airways Australia as it is one of the leading airlines of the country.
Service encounter means interaction between the employees and the targeted consumer. It can also describe as the feedback received from the customers, which can be utilised in a positive way to enhance the value of the service provided by the organisation while conveying the truth about the service to the customer and receiving words from the customers about the experience.
Industry Analysis
Industry Analysis
Founded on 16 November 1920 by Hudson Fysh, Paul McGinness and Fergus McMaster as Queensland and Northern Territory Aerial Services Limited in Winton, Queensland Qantas is the largest airlines by fleet size of Australia and one of the oldest airline positioned 3rd worldwide. As the slogan “The Spirit of Australia”, it serves both international and national passenger travelling in and out of Australia with 85 destinations. The main hub of the airline is at Sydney Airport. Further the airlines owns Jetstar Airways and other subsidiary airlines under the name Qantas link banner and Jet connect, all serving both international and national (domestic) passenger (Qantas, 2018). The airlines have strong outreach globally including Australia, Asia, New Zealand and also United Kingdom. The Qantas Airlines have two major competencies of focusing on the providing the best services to the customers, which justify the created value and the worldwide connectivity. Being in the sector of rendering services where the success of the organizations depends on the customer’s satisfaction, policies taken in consideration by the Qantas Airlines Australia are as follows:
- Code of Conduct and Ethics
- Business Resilience Policy
- Contract Engagement, Review and Execution Policy
- Cyber Security Policy
- Environment Policy
- Group Finance Policy
- Legal Matter Policy
- Risk Management Policy
- Safety and Health Policy; and
- Security Policy
The organization insures to present the best to stand true the customers and maintain the goodwill of being the largest and the 3rd largest airlines of world .Customer satisfaction remains the priority of the organization and treated in the best possible way. These have been formed keeping in the demand of the sector the organization is dealing with (Boshyk, 2016). No process can be undertaken by the organization which goes against the above policies and hence those actions to be considered as illegal or offensive in nature and legal actions as punishment will be taken against the person liable for the deeds.
Competitor Analysis
With increase in demand of the customers, the competition in aviation industry has shown an increasing from past few years. With reference to appendices 1, Qantas Airlines Australia operates globally this increases the number of competitors to be faced both domestically and internationally by the airline. Some of the competitors are:
- Virgin Australia
- Singapore Airlines Limited
- Delta Airlines
- Malaysia airlines
- American Airlines
- United Airlines
- British Airways
- JetBlue Airlines and many more.
Above are a few competitor’s list of Qantas, as the roots of the airline is spread worldwide the list of the competitors will be long. The competitors usually opt for the low-cost approach, in which they provide facilities to the customers at a lower price than the leading airlines of the aviation industry (Moreno, Ramon, & Pedreño, 2015). It is the quality of services offered to the customers that makes an airline grow and earn profit. Similarly, the competitors to match the standard of Qantas attempt to render the same kind of services to the targeted customers. Using the technique same as Qantas the rivals too, focuses on expanding their outreach by increasing the number of destinations travelled at a lower price. This helps the airlines to create a brand image by serving to different countries along with the other airlines (Mohd, Idris, & Momani, 2013). The aviation industry is majorly based on updated technology and services to be offered, thus airlines offer the facilities which are performed by the best candidate with the most suitable potential. Opponents have started implementing policies with changed criteria in selection and hiring, and other management policies as well. In order to earn the maximum profit airlines are now focusing on customer satisfaction more, as they are the major factor of success and failure of the organisation in the aviation industry.
Competitor Analysis
Key components of the Services
Customers
In service sector, customers are treated as the king of the market. It is because of the need and demand of the consumers that the service comes in existence. The targeted audience for the airlines industry includes people of all ages. Travelling through airplanes is now one of the first choices of people for going to place in less consumed time and with comfort. The services rendered are formulated on the different basis of necessity of the people. As the airlines work globally, nature of services are affected by keeping in mind the cross culture. Facilities like providing food, items are available on the basis of the cross cultured customer thus both kind of vegetarian and non-vegetarian food items are available. Similarly magazines and music accessible are in different languages depending on the countries they are destined to. The aim of the service industry is to keep the customers happy and retain and attract more clients through generating value from the work (Belobaba, Odoni, & Barnhart, 2015).
Service Staff
The organisation exists to fulfil the demand of the customers, the linking element between the desired customers and the organisations are the service staff or the human resource. The service staffs consist of the potential candidates that the organisation hires for performing the ultimate target. In the long run to stay in the market, finding the appropriate human resource is the crucial part as it is them who have to carry out the strategies, converting the planned actions into being. Without the staff there is no live to the business (Marketing Mix, 2018). In the airline the pilots, airhostess, aviation engineers, crew members, security and many more are the service staff which through their efforts aids the organisation to meet up the demand of the consumer (Chernev, 2018). The staffs before hiring need to pursue the desired knowledge and qualification for the applying for the post. Only the best calibre is selected so that the best efforts can be rendered to get the outmost outcomes through customer satisfaction. A customer and the growing pace of the organisation are the result of the effective and efficiently working of the staff.
Physical Environment
Environment or the surroundings are influential while setting up of any organisation. The organisation is established in the society and utilises the resources that the surrounding holds (Boehe, & Cruz, 2010). Thus the organisation is under obligation to cater valuable returns to them. In the case above taken, cross culture is the influential factor that can either be converted into an advantage or disadvantage for the company. Every country is constituted with different sets of rules and regulations, laws structure, climatic conditions and even time. When catering to passengers globally, a deep and thorough analysis of the environment is to be conducted so that accordingly the flights and working can be managed without any major issues and disturbance. Also the way of greetings differs from place to place, the staff to be trained with fulfilling requirements and meet the unseen or unpredictable situations to deal with (De Mooij, 2015). All the factors need to be considered as the passengers life is responsibility of the airlines while rendering services.
Key components of the Services
Performance
Performance is the actions of carrying out a process or series of steps to achieve a goal. It can be defined as the individuals efforts summed up together for attaining one target. Performance is one of those crucial elements of services as this displays the true viability of the planned structure. To make Qantas spread and one of the largest among airlines, the execution of the strategies and policies in the correct direction made them be so. No business or organisation can achieve success if they tend to perform poor irrespective of updated technology and formulated impactful policies for execution (Grant, 2016). With reference to Qantas, not delaying the flights, providing high quality food, maintaining hygiene, solving queries (if any) of the passengers, being polite while communicating, taking up the responsibility of safety and regularly keeping a check about any unpredictable situation. It was because of the high quality standard performance that Qantas never faced major accidents in the past experience and still tend to retain those standards. They assist passengers creating a memorable experience to be felt.
Design of the ultimate customer experience
The airlines focus more on the customer satisfaction. To match the demand of the customer and the services offered by the airlines needs to fill up the gap in between. Qantas provides services with lower price rate and thus is only able to meet up the lower and middle class people expectations. Although, they provide services for the premium class as well but the upper class can get the worthy services in other airlines. To bridge this gap the airline should consider the requirements of the upper class to serve them with the wished value services. By the existing wages Qantas is not being able to meet the premium class standard value through the prevailing facilities during the flight travel (Qantas, 2018). The airline shall increase the wage so that much higher standard services can be provided.
Distribution strategy
The airlines have to reach a large wide area as the passengers are spread throughout the global. To resolve the problem of reaching out the potential and targeted customers they have clubbed with the agents, hospitality sector and travel agents as well. Passengers in today’s time prefer to book a trip with the agent who guides them with the stay and travelling agent as well. The agents are trusted by the customers for suggesting the best travel package. By clubbing with the different sector and agents they create sales for all. And another way is the social media, majority of the population are engaged and active on the social media, this is the one of the fastest reaching out ways to the potential and targeted customers with the current offers and discounts offered by the organisation (Hill, & Gandhi, 2015). This way the organisation increases their approach with the customers.
Pricing strategy
The aviation industry displayed a rapid growth from past few decades. Rise in the population and preference for travelling from airways have raised the competition between the airlines. The passengers have more options to opt for according to their budget. Everyone either be a buyer or the organisation looks for less investment and more benefits. Being the leading they follow a policy which is affordable for all type of people (Chiu, Liu, & Tu, 2016). To retain the trust and attract more potential passengers, organisation follows a refund strategy to keep the loyalty of the customers. In addition, for the loyal customers there are many timely offers which the airline provides that avoids the customers to switch to the other competitors in the market as the competitors too gives similar facilities to stay in the long run with the leading airlines of the market.
Operating in peak demand/productive capacity
The peak demands of the people are met through expansion of destinations. More flights are allocated internationally and a slow in the domestic flights has been noticed. Multiplying the number of flights act as the tool in managing the peak demand of the customers (Kimes, & Wirtz, 2015). The main organisation has many subsidiaries which help in managing the demand of the market. The organisation focuses more on the lower the cost and increasing the profitability just any other business organisations but due to being world’s 2nd oldest airlines Qantas have been able to conquer a huge segment of the market capital. Expanding globally has presented the organisation to grow the segment in various economies of the world. When serving in different parts of the world the staff members are also wide in number. With the help of the staff now the organisation can cater to all types of the audience whether business class or travellers (Qantas, 2018).
Leadership style
A leader is the one who influence the team to perform in a better way. Motivation is key to success and positive working environment in the organisation. As the basic idea of these organisations is to render services, a correct guidance is much needed of all. The type of the leadership style that is to be followed to by the airlines shall be servant leadership. As the concentration of the business on then customer, this is the suitable for service sector. Servant leaderships centre on the organisation and the customers. It promotes the executive to take initiative by entirely focusing on the need of the market and situation in an ethical manner. The leader motivates the employees in every possible way to be proactive in working and decision making. For airlines, this is a vital step preferring the organisational goal (Selladurai, 2014)
Customer Management Strategy
Objectives
Customer management strategy is created with the view to manage relationships with customers, managing the available and potential opportunities and, creating the new opportunity of the organisations. Organisations through customer’s pleasure create sales for them. Establishing fruitful relationship with consumers is mandatory for the service sector as the fruitful and healthy relationships will only lead the business’s life in the near future and help in stay and create a strong base for the sustainability view. When the an organisation will initiate maintaining good relationship with consumer a direct feedback from them will elaborate more opportunities door that can be grabbed by the organisation to be more favourable to preserve and capture more of the potential consumers. For a growing industry, being foresighted is essential for the futuristic development approach towards success of the organisation (Schmidt, Spann, & Zeithammer, 2014). Considering only present growth will result in slower development hence both present and future should be the objective to flourish and commence strategies. The CMS presents the blueprint about the clear nature of customers, analysis of the customers, and assistance in formulating strategies through which the prevailing value received from the service can be increased. A proper path to be followed can be attained once the knowledge about the customers, opportunities and key managerial areas are acknowledged. To outstand the competitors unique selling price (USP) is generated on the basis of the above analysis of market and opportunities.
Service recovery strategy
No business comes with the promise of smooth working all time. There are times when due to some circumstances organisations are not able to serve the promised serve. Failure of plans is normal and expected factor while running business. Before starting of the organisation, the founder is well known with risk factors attached with the working.
Service recovery strategies are the step or precautions initiated by the company at the time of circumstances of failure services. These actions are taken so as to keep the faith of the customers and avoid letting the consumer change their mindset towards the company. Organisations never want the customers to dissatisfied, especially in the service industry. A dissatisfied customer gives a negative influence and impression on the other customers and feedback about the organisation ((Migacz, Zou, & Petrick, 2018).
In airlines industry, service recovery strategy plan will enhance the relationship between the customer and the organisation making the trust bond strong, and will lesser the dissatisfactions of the customers. The problems which are faced leading to dissatisfaction of the customers are errors on website, issue with quality, booking services, prices, aircraft maintenance and many more. The airlines are expected to explore the areas which can cause problems to the customers. Once identified a quick action to be taken to know the actual issue and causes of it along with a genuine apology for the inconvenience of the customer. Solution to satisfy the customer should be implemented and employees shall be provided with training to deal with the unseen or case of failure of service (Qantas, 2018).
Customer loyalty procedure
Customer loyalty programs have now started being a part of every organisation. It is a practice designed to retain the long rum potential consumers by giving them offers and rewards for their loyalty for an organisation. Airlines utilize the customer’s data to structure the customer loyalty on an individual base. This although requires huge amount of investment but is implemented to increase the direct connect with the customer accordance to their preference. Establishing direct contact with customers boost up the relationship between the two party, resulting in development of a good brand image for the organisation. The loyalty program is beneficial to both organisation and the customers.
An effective loyalty program is the one which is capable of engaging the customers booking behaviour being favourable to the organisation (Pritchard, & Howard, 2015). Being able to maintain and retain the trust of the travellers makes them a loyal customer automatically. When the organisation is committed towards the services provided to the travellers they generate a virtual bond which is useful for adding more loyal customers. The offering to the loyal customers can be in two forms, one being presented the gifts, discounts, free vouchers, collection of points which provides them remuneration and secondly by offering shares to the customers. Both the ways organisation and customers, enjoy advantages at their point.
Conclusion
Irrespective of the nature of the business the organisation needs to follow up the marketing tool to match up the targeted audience. Be it any place, commodity or service without marketing there is no success of the business even if the best suitable plans are implemented to perform the task. The product or service designed is worthless until the value is not conveying well to the customers who are spread all over the world. Particularly the service sectors have more responsibility of reaching out the customers in appropriate way at the correct time.
The aforesaid report examines and analysis the aviation industry providing travelling facilities to the traveller via air. According to appendices 2, being one of the widely utilised industries, any single airline does not dominate the market but yet by the quality of services rendered by them, they are leading among the competitors. Services are basically the experience felt by the customer, a satisfied customer will be that person whose demand matches with service inherited and a dissatisfied customer will customer will be the one whose expectations did not meet the reality. The leading airways company Qantas Airways Australia, marketing of the services through any channel whether social media or direct contact played a major role behind the success of the company. To meet the competition and the requirements of the travellers it has always made the customers their centre and priority of working. With the together effort of the employees in the direction of the main objective of the organisation, it is able to retain the customers to be loyal customers. The approach used to present the travellers low priced service with no compromise with the standards assisted the airline to retain the loyalty of the consumers towards them. Not just lower price but adding more number of destinations and flights according with the mutual customer preference was the good initiative taken the airways. Qantas airways has always been justified to the motive of ‘customer is our first priority’, which helped the airlines to capture the major market of different economies. Hence, it is concluded that the approach adopted are simple and determined and should be followed by the other airways as well.
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