The following is a series of questions/responses referring to this reading on services marketing.
a. Choose one product and one service. Use them to describe the basic differences between products and services described in the reading. You can approach this by describing a single brand or an entire industry. Your choice.
Product: An example of a product is a men’s suit. A suit is a physical product, which is different from a non-physical services. A suit can be owned, and its quality depends on what it is made of / how it was made.
Service: An example of a service is tax assistance service, which might be performed by someone at an accounting firm. Tax assistance is done by a person, and is non-physical. The quality of tax assistance depends on the how efficiently and accurately the firm completes their customers’ forms and success is related to the level professionalism at which the accountant treats customers.
b. Eight components of service management are described in the reading (please note that they are referred to as 8Ps--these are different than the 7Ps of service marketing we discussed briefly on Monday). Consider the service you chose in the previous question through the lens of these eight components and describe how they apply to each.
Product Elements: Tax assistance can be broken into packages levels that vary based on what type of service is included in each. The accounting firm could charge low-end price for assistance once a year, right before taxes are due. The firm could charge a higher fee for year-round bookkeeping, providing analysis and reports on a regular basis. Pricing tiers could also be distinguished based on whether the customer is an individual or a business.
Place and Time: Accounting firms can have a physical location or can operate remotely via the internet. As long as files can be transferred from customer to accountant, the accountant can do their job prepare tax forms. Communication is necessary, and is sometimes easier when done in person. The time for tax assistance is usually early in the calendar year because “tax season” or “busy season” takes place in the months leading up to the tax due date, April 15.
Process: The process of tax assistance requires clear instruction of what the customer must provide (receipts, invoices, financial statements, etc.) and clear explanation of what the accountant will provide in return. The process description may also include an estimate of how long the tax services will take, or a potential guaranteed date by which the service will be completed by.
Productivity and Quality: Taxes are due by April 15 every year, so it is essential that tax services are completed in a timely manner. Customers will expect a high level of productivity and active collaboration as they work with accountants on their tax returns. Quality is necessary in the preparation of tax returns, especially regarding accuracy. Inaccuracies in submitted tax returns can be found by the IRS, which may lead to a delayed process or penalties like increased taxes for the taxpayer. Consistency in quality and timeliness must be prioritized in an accounting firm that aims to establish and maintain its reputation.
People: Personal interaction and professionalism can separate one accounting firm from another in the eyes of a customer. Customers remember the way they are treated, especially so when deciding what firm to hire for future tax assistance. Politeness and clear communication are important and present in a successful firm.
Promotion and Education: An accounting firm must market itself and communicate its services to attract business. Advertisement works best when it reaches a customer when they need help most, so accounting firms are best to advertise their services most heavily during tax season.
Physical Evidence: An accounting firm’s appearance, both physically in-office and digitally on the web will affect the way customers perceive quality. A good web presence might include descriptions of services, biographies of accountants, statistics and customer testimonials.
Price and other costs of Service: Accounting firms must compete with other accounting firms and also tax preparation software, like TurboTax. The price of the tax assistance service must be adjusted to attract customers from competitors, while still covering the firm’s expenses and producing a profit.
c. The reading introduces value, values and ethics as particularly important in the sphere of services. Do you agree that the fundamental nature of services described in the chapter amplify the importance of these three factors in services (versus products). Why or why not?
The specified chapter on Services Marketing includes explanation and logic behind focusing on value, values and ethics in a service oriented business. The text details the importance of creating value and benefits for customers, because failing to do so will leave a customer unhappy and unlikely to use a business’ service again. Values and ethics go hand in hand, because a business’ reputation as a good and ethical company can be easily tarnished. Social media, review sites, and even good ol’ word of mouth can spread stories and testimonials that can either boost or damage a company’s reputation if it seems generous vs. immoral in the way it is run. It is best for business leaders to emphasize value adding and ethical business practices regularly to keep the company operating the right way.
who is cj?
CJ is a Senior at St. John's University, hailing from Winston-Salem, NC. He studies finance in the Tobin College of Business. Following graduation at St. John's, CJ will be working on Data Analytics in the Internal Audit function at Synchrony Financial.