CREATING A DISTINCTIVE SERVICE STRATEGY - Principles of service marketing management

Once a company has decided which market segment(s) to target, the next task is to establish an overall strategic direction a service strategy in order to achieve and maintain a distinctive competitive position. Leonard Berry emphasizes the importance of these service strategies:

All great service companies have a clear, compelling service strategy. They have a "reason for being" that energizes the organization and defines the word "service.” A service strategy captures what gives the service value to customers. To forge a path to great service, a company's leaders must define correctly that which makes the service compelling. They must set in motion and sustain a vision of service excellence, a set of guideposts that point to the future and show the ways

A company's service strategy can usually be expressed in a few sentences or words that guide and energize its employees. The best service strategies address basic human needs that don't change much over time. For example, Taco Bell's service strategy is to offer the best value fast meal whenever and wherever customers are hungry. While this statement sounds simple enough, it actually symbolizes a major change in the way the company defines itself and its operations.

Club Med's basic service concept could be described as "a fully paid vacation package where you make your arrangements and pay the bill in advance in return for a well-managed program in which you don't need to worry much about money, transportation, food, activities or clothes."

Dial-a-Mattress appeals to its target market's need for both convenience and risk reduction by selling brand-name bedding like Sealy, Serta, or Simmons over the telephone 24 hours a day, 7 days a week. Orders are delivered as soon as the customer wants them, and old mattresses are removed at no extra cost.

The company's core service strategy makes buying a mattress so simple that new customers are often amazed. Founder and CEO Napoleon Barragan explains, "Buying a mattress is not a pleasurable experience; it's a chore. If you can make it easy for the customers, if you give them what they want, the way they want it, and when they want it, you can do business."

Creating a Sustainable Competitive Advantage

The first step in establishing a service strategy is to focus on customers' needs. Important service needs that are not being met by competitors provide opportunities for a company to move into an "open" position in the marketplace.

Two questions should be asked about the needs and expectations of a target market relative to a specific service offering: What attributes are absolutely essential to this group of customers? And what attributes will delight them? The service strategy can then be designed to include both the essential attributes and those features that have the potential to exceed customer expectations.

The best service strategies provide organizations with a sustainable competitive Advantage a way of meeting customer needs in a specific market segment better than other competitors. (By sustainable, we mean a position in the marketplace that can't be taken away or minimized by competitors in the short run.)

Obtaining and keeping such an advantage presents a significant challenge, because it's hard for a firm to protect innovations legally and competitors can quickly copy many service attributes. Consider how Amtrak positions its high-speed rail service in the Boston-Washington corridor against competing air service.


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