9 pages/≈2475 words
Business & Marketing
Business Theories, Concepts, & Techniques (Term Paper Sample)
The Purpose, Application and Limitation of Service Concept, Customer Segmentation and Customer Expectationssource..
The Purpose, Application and Limitation of Service Concept, Customer Segmentation and Customer Expectations
Business processes and techniques have changed with every change in factors that affect and influence their effectiveness, applicability and suitability in achieving business objectives that are varied depending on organizational goals and objectives. It has more so been dynamic in response to changing customer needs which forms the basis for which the theories are developed and applied in order to close the gap between the business processes and actual outcomes.
These theories can be used to evaluate the gaps existing with regard to the actual experiences, perceptions and perceived experience and perceptions that exist between businesses and their clients (Marc, 2009). In most instances the service providers tend to believe that whatever they provide is exactly what the customers want or if the customer says nothing about it, the product is okay. It is also mistaken often that whatever the customer says about the service, especially positive comments, is true and not biased. These gaps in reality and perceptions in both customers and service organizations need to be re-evaluated to ascertain the true and real perceptions and experiences.
Although the theories depend so much on qualitative analysis, it is still possible to assess the situation. The perceptions and experiences are qualitative variables that cannot be measured by physical units like time, weight or price, but on customer ratings on how they feel about the variable being measured. Therefore, this becomes one challenge with determining the level of satisfaction of services among customers.
Separating these differences is very important to both customers and organizations but mostly to the business which seeks to provide a service that actually has the right impact to the consumer. It will also help avoid dishonesty that normally exists in businesses especially when they make big claims only for the service to prove them otherwise.
The service concept
Service concept is the principle basis upon which businesses try to provide their services with a strong consideration of what the customer actually wants. The service concept theory gives the foundations which must be laid and used by a company in order to achieve a balance between the needs of customers and what they provide (Marc, 2009). This concepts further helps to direct and guide the way production and delivery of services are done in order to achieve maximum satisfaction and move away from the problems brought by the missing link existing between the customers and the businesses. This understanding is basically achieved when the business process take into account the feelings of the customer about the service, its quality, affordability and satisfaction it brings to the consumer. With this in mind the whole process of service production will be geared towards a known and very specific objective of satisfying customer’s needs (Marc, 2009).
The main purpose for the use of service concept as an idea and a theory in business is to meet customer needs through a business process that constantly reflects upon the customers’ take on the service. The customer perception towards the service is taken into serious considerations. This understanding will guide the way the business will strive to achieve a common ground that is acceptable for the customers regarding the product.
The service concept also opens up avenues for better interaction and engagement between the business and customers in the process of selling the service. This will be beneficial to both the customer and the business in that the customer will articulate his views about the service quality, efficiency, etc., to the business and therefore reduce the information asymmetry existing between the two. Service concept is also applied as a formula for undertaking various strategies and techniques that are aimed at increasing productivity and profitability. For instance the firm wants to improve customer experience when they buy certain services. The service concept will be employed to the effect of improving the provision of the basic needs of a customer which includes friendliness, fairness and giving information among others, thus, helps to improve the perceptions that the customers and business may have heard about each other (Marc, 2009).
The service concept however has some shortcomings in its application and it lies mostly on the nature and characteristics of service concept itself. One of the limitations is the problem of intangibility. Services in the first place, are not physical and can only be felt when consumed. The service concept as a tool therefore lacks the universally accepted way of measuring the intangible attributes being examined. It is also hard to quantify how much it has affected a consumer or its impacts are hard to measure quantitatively, which is very important for statistical and credible analysis. Another limitation to the service concept as a tool is that services rely so much on complicated human behaviour which creates an overly complex and hard to understand preference and tastes of each consumer. Consumers and even service providers the same have unique thoughts and perceptions which will strongly affect the service concept’s use. There will be no standard judgment criteria since the results are derived from individuals with non standard behaviours and perceptions.
This is the process of placing customers in different categories depending on various attributes that are common to them like age, location, gender, etc. It is done to reduce the inefficiencies and challenges in service production and delivery. The market is always full of different types of consumers. But as much as they are very unique from each other, there exists some factors that are common to many of them for instance gender. A customer will be either a male or a female. Most customers within a university for instance will be young people aged 18 to 30 years. This attributes can be used to put customers in categories for the purpose of serving them in the best way possible according to characteristics and needs of the group. For example, providing counselling services to married or old people will be done differently from counselling a teenager who is a drug addict. This forms the basis to which service organizations approach their clients and also make their businesses run well without many problems.
Consumer segmentation is important for service delivery in the sense that mode of delivering services to the different segments of consumers varies and needs to be tailored to suit the needs of specific segments. For instance, the elderly will require patient and polite service providers. Due to their age, they are not able to work fast or understand many concepts that are very new, e.g., an 80 year old being taught how to use the latest I-Pad model. Providing services to different segments also helps increase customer satisfaction due to specialized and focused approach to customer satisfaction.
Customer segmentation also applies mostly in businesses when marketing their service. Marketing of services is normally expensive since it is hard to explain a service without giving a physical elaboration as in the case of advertising bleaching detergent. Tax consulting services for instance, are hard to market (Peter, 2009). But if the tax consultants have segmented their customers in categories like employed, self employed, or small companies, partnerships and multinational corporations, they can easily use the different customer segments to market their products. This is by marketing specifically to a certain segment or segments that have some similarities.
Improving customer experience can also be achieved greatly by use of customer segmentation. The service quality that appeals to different segments is always different; therefore, the service providers can use the segment to develop unique services that appeals most to them than making a universal product which will yield little satisfaction to some specific segments. This also translates to better production of the services and service development will be guaranteed. Service providers can also use the customer segmentation strategy to develop a specialized unit in the company to handle specific segments which have potential of growth, or are very profitable. Therefore the concept of customer segmentation is very beneficial and applicable in business development.
The theory of customer segmentation is also not free from challenges and limitation in application in the services business. Customer segmentation makes it hard for firms to provide a service that will be used by many people. The company will have to develop highly unique services that specifically suits specific customer. This consequently reduces their target market since the product will only be relevant to the segment. It is also very expensive to apply the consumer segmentation concept to the fullest because of the financial investments that must be used to achieve a truly specialized and segment specific service that will sell, thus limiting the use of the technique (Peter, 2009). There are also high chances that the concept of customer segmentation will lead to high concentration of the organizations in one segment. This is most common for instance in IT products, where the services like social networking will tend to target young people. Software developers for instance, focus more on large corporations in the business solution software and forget about small businesses. This increases competition in the name of targeting a certain consumer segment. This therefore limits the applicability of this concept.
The customer expectation and perception
The customer will always have some ...
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