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Service Marketing Innovations - some general concepts

Term Paper 2010 11 Pages

Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media

Excerpt

Table of contents

1 Introduction

2 Service Marketing- Some concepts

3 Discussion of the papers’ methodology
3.1 Ferguson et al. (2010) “Customer sociability and the total service experience: Antecedents of positive word-of-mouth intentions”
3.2 Ferguson et al. (2006a) “Loyalty and Positive Word-of-Mouth: Patients and Hospital Personnel as Advocates of a Customer-Centric Health Care Organization"
3.3 Ferguson et al. (2006b) “Service climate and organizational commitment: The importance of customer linkages”

4 Bibliography

1 Introduction

Terms like service quality, customer satisfaction and customer loyalty are often associated with competitive advantage, sustainability and long term profitability. Most people would agree that satisfied customers are the best candidates to evolve into loyal customers. However, even if customers are satisfied with the service there is still the possibility that they will switch to competitors if they expect a better service, a better quality or a higher value there. Nevertheless it is certainly that satisfaction is considered as a key factor to build up customer loyalty, because you can have satisfaction without loyalty, but it is difficult to have loyalty without satisfaction. Loyal customers mean a continuous and stable base of customers. Trying to obtain loyalty becomes inevitable for firms. There are many good reasons for this. The acquisition of new customers is expensive and therefore keeping customers loyal allows firms to amortize those costs. Furthermore loyal customers are often willingly to pay premium prices. They know the business and the services and therefore require less information themselves and moreover, as the most effective marketing channel, they serve as an information source for other customers on behalf of the firm.[1] It is surely a fact that people tend to tell their experiences to other persons, run so-called word of mouth (WOM). Several researchers found that consumers engage in about twice as much WOM when they are dissatisfied in contrast to when they are satisfied, so that positive experiences are spread to nearly five persons whereas negative experience will be passed to over 9 persons.[2]

There are various research articles and studies which determine the relations and interactions between satisfaction, quality, loyalty and WOM. In a given service context these are the cornerstones of service marketing. In the following, I will present some of these concepts and predominantly link them to three articles of Ferguson et al.[3]

2 Service Marketing- Some concepts

In order to achieve customer satisfaction and loyalty, putting customer focus at the heart of every activity is indispensible. Satisfied customers epitomize the foundation of an organization’s profitability as satisfaction is positively linked with repeat purchase intention, positive WOM and loyalty.

Whether one deals with tangible products and/or intangible services the individual assessment of the service experience, which determines one’s pleasure or displeasure about the service, depends on the personal perception of value. This customer value is “the fundamental basis for all marketing activity”[4] and is co-created in the service experience. Therefore value is uniquely and experientially defined by the customer in with the meaning of Service Dominant Logic.[5] Holbrook (1994) states the customer perceived value as an” interactive relativistic preference experience”. It is interactive since it involves an interaction between the customer and the offering, relativistic because it changes with the person itself, culture, time and context and it is preferential and experiential because service has to be experienced to allow and evaluation depending on one’s preferences and personal judgment.

As we proclaimed in the course, service quality and satisfaction are indications of customer-perceived value and eventually of customer loyalty.[6] And loyalty on its part is disclosed by re-purchase and re-patronization and as well as WOM recommendations. Ferguson et al. (2006a) address in their empirical paper the relative importance of satisfaction and service quality to WOM of both patients and hospital personnel since under the terms of Service Dominant Logic customers and employees play a significant role. Before looking at the findings of the sample and thus the interrelation between the determinants I will explain the main theoretical concepts.

Similar to many researchers, Kotler (2000) specifies satisfaction as the feeling of pleasure or disappointment emerging from comparing the perceived performance of a product (or service) with the expected performance. In that respect satisfaction is usually considered as a post-consumption evaluation of a service.[7]

The concept of service quality introduced by the authors in the paper (Ferguson et al. 2006a) was also a part of the course matter. Accordingly, customers’ perceptions of service quality are subjective evaluations of a service experience compared to their expectations of the service. In respect of identifying and assessing service quality and correcting potential problems the so-called Gap Model dominates the research. The core idea in this model is that service quality is a function of gaps between expectations and perceptions. The model clearly points out the two different kinds of gaps in service marketing, namely the service provider gap (internal) and the customer gap (external) and serves as code of practice to meet customer expectations consistently.[8] Furthermore we get to know the five key dimension of service quality. Herein reliability is defined as the ability to deliver the promised service dependably and accurately. Responsiveness can be described as the willingness to help customers and provide prompt service. This dimension stresses service personnel’s attitude to be thoughtful to customer requests, questions and complaints. Assurance focuses on the ability to arouse trust and confidence. Empathy underlines the treatment of customers as individuals. Finally, tangibles targets on the physical services of personnel.[9]

[...]


[1] Kunz H. (1996), 15ff.

[2] Charlett et al. (1995), 2.

[3] a) Ferguson et al. (2006a); b) Ferguson et al. (2006b); Ferguson et al. (2010).

[4] Holbrook (1994), 22.

[5] Subject matter (June 2010), Module A: Understanding the Service-Dominant-Logic.

[6] Module C : Ensuring customer loyalty and recovering from service failures.

[7] Ferguson et al. (2006a), 66 (adapted from Oliver 1997).

[8] Module D: Analyzing service processes.

[9] Module C: Ensuring customer loyalty and recovering from service failures.

Details

Pages
11
Year
2010
ISBN (eBook)
9783640798704
ISBN (Book)
9783640798520
File size
657 KB
Language
English
Catalog Number
v164261
Institution / College
RWTH Aachen University
Grade
1,0
Tags
Service Marketing Service Experience Customer Co-Creation Service Dominant-logic customer satisfaction customer loyalty

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Title: Service Marketing Innovations - some general concepts