Write peer responses following posts,These responses should be a minimum of 125 words and besubstantive. A response such as “I agree with her,” or “I liked what he said about that” is not
considered a substantive post and will not be counted for course credit. CLEARLY LABEL EACH RESPONSE ON A WORD DOCUMENT (EXAMPLE HEADING: POST ONE)
According to the textbook, “Pursuing sustainable business practices allows companies to find not only areas of improvement, but also a source of competitive advantage.” (Bateson & Hoffman, XXXXXXXXXXIn terms of using sustainability as an effective business positioning strategy, there are four approaches to this method: Eco-Efficiency, Environmental Cost Leadership, Beyond Compliance Leadership, and Eco-Branding. Each of these methods introduce a different, effective approach to the overall improvement of a business with their ways of performing daily tasks.
Eco-Efficiency “focuses on the concept of ‘double dividend’”. (Bateson & Hoffman, XXXXXXXXXXMany companies in today’s society are using this method to gain attention of customers who are trying to reduce their “carbon footprint” on the world. For example, Trader Joe’s likes to build their stores in areas where “natural” resources are more readily available, such as solar-sourced heating and natural water sources are found. This captures the eye of the consumer and will, in turn, create more business and revenue for them, in the long-run.
Environmental Cost Leadership, according to the text, involves “developing a radical innovation that will allow the company to be more environmentally friendly while maintaining cost competitiveness.” (Bateson & Hoffman, XXXXXXXXXXAn example of this would be a company that uses a more “natural” source for producing items that are used on a regular basis in their stores, such as shopping bags. Shopping bags are normally made of lots of plastic, which is a non-renewable resource. Many companies use “reusable” bags, which are made of fabric and can be used over and over again.
Sustainability according to our textbook is, “the capacity to endure. More specifically,sustainabilityis defined as “the ability to meet current needs without hindering the ability to meet the needs of future generations in terms of economic, environmental, and social challenges.” Hence, sustainability is closely related to the concept of social responsibility”(Hoffman & Bateson, XXXXXXXXXXSo, what are the four approaches to using sustainability as an effective business position strategy? One approach is eco-efficiency where the focus is on the double dividend. Another is environmental cost leadership where innovation not only maintains cost competitiveness, but it is friendly to the environment as well. Then there is beyond compliance leadership. According to our textbook it, “involves companies wanting to increase their sustainability efforts, but also wanting these efforts to be acknowledged by the public. These companies often spend money on environmental certifications, such as LEEDS building certifications. The first-movers in an industry in this case have thegreatest advantage. Those who take the first initiative are seen as innovative, while the rest of the companies within the industry are forced to follow suit”(Hoffman & Bateson, XXXXXXXXXXAnd last but not least is, eco-branding strategies where the emphasis is geared towards the use of marketing variation based on the green qualities of the goods. According to our textbook, “There are three basic prerequisites that often exist for firms to successfully execute this approach: consumers must be willing to pay for the costs of ecological differentiation; reliable information about the product's environmental performance must be readily available to the consumer; and the differentiation must be difficult for competitors to imitate”(Hoffman & Bateson, 2017) A sustainability marketing strategy might be one that ensures the customer his or her oil is being recycled rather than being dumped into nearby streams. You might prefer to pay a few extra dollars to prevent your drinking water from becoming contaminated. These strategies are meant to build a relationship with the customer. According toEvolution of sustainability as marketing strategy: Beginning of new era, “Field of marketing has also evolved over time. Evolution of marketing has been discussed through five concepts, which are: production concept, product concept, selling concept, marketing concept and societal marketing concept. All the marketing activities revolved around these concepts”(Kumar, Rahman, Kazmi and Goyald, XXXXXXXXXXThe idea is that consumers want quality products with improved performance that take into consideration the requirements of not wasting precious resources or damaging the environment for future generations. It brings about the social and ethical consideration of purchasing a product. It requires one to look at the footprint that is being left from ones use of a product verses another more environmentally friendly one. This type of marking is focused on ensuring and protecting the environment and making a profit today.
Our textbook states,"theservice economyincludes the “soft parts” of the economy, consisting of nine industry supersectors:Education and health services,Financial activities,Government,Information,Leisure and hospitality,Professional and business services,Transportation and utilities,Wholesale and retail trade, andOther services." (pg. 142)The education and health services supersector consists of two subsectors: the educational services subsectorand the health care and social assistance subsector. Our textbook states, "the educational services sector includes schools, colleges, universities, and training centers. Since education is mandatory until at least age 16 in all 50 states, one in four Americans are currently enrolled in educational institutions. Accordingly, educational services, including both public and private institutions, are the second-largest employment industry, accounting for 13.3 million jobs. Half of all educational service jobs are teaching jobs that require at least a bachelor's degree. Master's and doctoral degrees are required for many higher education and administrative positions. Job opportunities in this field look promising, as expected retirements in the near future are forecasted." (pg. 145) Our textbook states, "the health care and social assistance sector is comprised of health services such as hospitals, nursing care facilities, physician's offices, and home health care services. In turn, social assistance includes individual and family services, vocational rehabilitation services, community food and housing, and emergencyand other relief services. Health services are currently the largest industry in the private sector, providing 14 million jobs. Moreover, seven of the top 20 fastest-growing occupations are in health care" (pg 145) Our textbook states, "the financial activities supersector consists of the banking and insurance subsector, as well as securities, commodities, and other investments. The banking subsector is comprised of establishments primarily engaged in protecting money and valuables and providing loans, credit, and payment services. The insurance subsector is comprised of firms that provide clients protection against financial loss for a variety of incidents such as fire, auto accidents, theft, medical expenses, storm damage, disability, and death. The securities, commodities, and other investments subsector manage the issuance, purchase, and sale of financial instruments. " (pg XXXXXXXXXXOur textbook states, "the government supersector of the service economy consists of three subsectors: advocacy, grantmaking, and civic organizations; the federal government; and state and local government." (pg. 146) Our textbook states, "the information supersector of the service economy consists of establishments that produce and distribute information and cultural products, provide the means to distribute or transmit these products, and/or process data. Major players in this supersector include the publishing industries (both traditional and Internet publishing), the motion picture and sound recording industries, the broadcasting industries, the telecommunication industries, Internet service providers and web search portals, data processing industries, and information services industries. Although wide in scope, the information supersector modestly accounts for about 2.6 percent of all employment and 1.9 percent of all establishments." (pg. 146) Our textbook states, "the leisure and hospitality supersector consists of three subsectors: the arts, entertainment, and recreation subsector; food services and drinking places; and hotels and other accommodations." (pg. 147)The professional and business services supersector consists of several subsectors, including:Management, scientific, and technical consulting services,Computer systems design and related services,Advertising and public relations services,Employment services,Scientific research and development services.Consulting is the fastest growing of the professional and business services and one of the highest paid. As its name implies, the transportation and warehousing and utilities supersector consists of three subsectors: air transportation; ) truck transportation and warehousing; and utilities. The wholesale and retail trade supersector consists of the wholesale trade subsector and the retail trade subsector, which include: automobile dealers; clothing, accessory, and general merchandise stores; and grocery stores. The “other services” supersector is a catch-all for all the services that do not neatly fit into the preceding eight supersector categories. The other services super-sector includesmyriad establishments engaged in activities as varied as equipment and machinery repair, promoting or administering religious activities, dry cleaning and laundry service, personal care, death care, pet care, photofinishing, temporary parking services, and dating services. The other services supersector accounts for approximately 3.3 percent of all employment and 12.6 percent of all establishments." (p. 156)
According to our textbook the 3 most highly rancked supersectors are education and health services, financial activities, and the government.Ibelieve what is the driving force for the growth of the three most highly ranked supersectorsare that they are always needed and they provide stable, reliable incomes. Everyone needs education, health care, and financial services.
According to the text,"It is generally accepted that the service economy includes the "soft parts" of the economy, consisting of nine industry supersectors: Education and health services, Financial activities, Government, Information, Leisure and hospitality, Professional and business service, Transportation and utilities, Wholesale and retail trade, and Other services." (Hoffman & Bateson, 2017 ).
Out of the categories listed above, according to the text, the highest-ranked is the education and health services. The text states, "Employment projections for the education and health services supersector forecase employment would increase by 3 million jobs over the period XXXXXXXXXX, the highest projected growth of any industry supersector. The healthcare industry consists of 580,000 establishments with offices of physicians, dentists and other health practitioners accounting for nearly 77 percent of establishments". (Hoffman & Bateson, 2017) Research has shown that over the years, as education has advanced, it is taking more and more "professionals" (teachers) to educate and teach the people of the world. This is part of the most popular sector, for this very reason. As the population continues to grow, so does the percentge of the "Education and Health Services" sector. Also, Health Services is certainly understandable as being a part of the highest sector. It is almost a given fact that anyone who is seeking employment in the healthcare industry, can and will find a job within this field. Going along with the education part of this sector, there are so many people in today's population, it takes more and more healthcare workers in the field to keep everything running smoothly.
The second highest ranked sector is professional and business services. The text states, "Scientific research and development services develop the technologies of tomorrow that will change the face of how we do business and how we live our lives Given its nature, 58 percent of all jobs in this subsector are characterized as professional and related occupations. THis is one of the highest-paying industries across all supersectors. Job oppurtunities are best for scientists and engineers who have obtained doctoral degrees. Projected employment growth for this subsector is a modest 9 percent." (Hoffman & Bateson, XXXXXXXXXXThis sector is responsible for the hiring of individuals who are fresh out of college and who are seeking employment in most areas of the workforce. This continues to grow, due to the many people graduating with college degrees, seeking their first job, or even people who are experienced in the department of business, trying to move up. The business sector is responsible for so much in today's society, it is no surpirse that it continues its growth on a daily basis.
The third sector is Leisure and Hospitality. According to the text, this represents the parts of the industry that people "enjoy" on a daily basis, such as entertainment. This sector experiences lots of growth on a daily basis because people have to have entertainment and leisure, in any form they enjoy. Despite all the hard work that goes on, people have to relax and enjoy life, so this sector makes up for a huge portion of the sector.
As technology continues to grow and advance, these sectors continue to grow. More and more companies are paying attention to the wants and needs of their consumers, which means change and growth. This leads to the advancement and growth of these sectors.
Models are a great way to help producers understand the purchasing habits and thought processes of consumers, in order to better their marketing campaign and product demonstrations.In this particular case,this model is called the "Consumer Decision Process Model", which is broken down into six steps: Stimulus, Problem Awareness, Information Search, Evaluation of Alternatives, Choice, and Post-purchase Evaluation. This model is very effective in showing what goes through the average consumer's mind when deciding to make a purchase.
The Stimulus stage, or "Pre-Purchase Stage", involves all the thoughts that go through a person's mind in the process of them deciding to make a purchase. The text states, "Fox example, when asked about their major motivations for seeking a university degree, student's responses included, "to get a good job", "to be taken seriously", "to get out of the house", "to make my parents happy", "to make friends" and "to have fun"." ( ) There is always a "cue" that stimulates the consumer to have the thought of making a purchase or performing an act.
The second stage in this modelis "Problem Awareness", which is where consumers realize that they have a problem that needs to be solved, and they begin to look for products, services, or other solutions that will help solve their problem and meet their needs. The text states, "Ultimately, needs are unsatisfactory conditions of the consumer that prompt him or her to an action that will make the condition better." ( )
The next stage is "Information Search", which is where, after the consumer realizes they have an issue that needs to be solved, they begin to do their research in attempt to find a good or service that will solve the issue. The text states, "During the Information Search phase, the consumer collects information about possible alternatives that will ultimately resolve the consumer's problem." () This stage is one of the most important parts of the process, because it involves the consumer trying to find the best product to fit his or her need. With so many products or services being offered in today's market, it is often difficult to decide which will be best for the needs of the consumer. Research is key to make sure the product that is chosen will be the best alternative.
The fourth stage is "Evaluation of Alternatives". During this stage, the consumer gathers up all possible alternatives in order to resolve their issue and attempts to make a choice about which one to go with. This stage also goes further to breakdown the different aspects of the step, by choosing an option based on the various needs and evaluating if and how well they can potentially be solved by choosing each solution.
The next stage is "Choice". Obviously, this is the stage where the consumer will make his or her final choice of what to purchase or do, in order to solve his or her problem.
The last stage in this model is "Post-purchase Evaluation", which occurs after the consumer has made his or her choice and actuallycarried out the purchase of a product or good. As the text states, "During this stage, consumers may experience varying levels of cognitive dissonance- doubt that the correct purchase decision has been made." () Of course, everyone who has ever made a large purchase decision has these feelings, so it is completely normal and understandable.
These models are great for helping manufacturers or businesses to see how the decision-making process is carried out by consumers. Everyone's mind works in different ways; however, the same basic strategies and thought processes are carried out in everyone's mind the same way, when making a purchase.
While reading chapter 4, I was introduced to the consumer decision process as they relate to the service of customers. The authors state that” understanding consumers and improving the experience is particularly important for services, which in many instances still tend to be operations-dominated rather than customer-oriented.” (Hoffman & Bateson, 2017, Introduction, para. 1) In layman’s terms, companies focus so much on making the products that they tend to forget the real reason for them making the product or offering the service in the first place, which is to gain customers, which in turn will influence sales of those very products and services, they are creating. Also, companies will often do good job marketing and selling their service, but they will do a bad job at managing the customer's entire service experience, from its use, to customer support, and even guarantees of those services. When a product or service is first introduced to the market, the product may sell, however, if certain steps are not taken by the marketers’ adverse effects could cause the behavior of unsatisfied consumers to negatively affect companies’ reputation, such as writing bad reviews about the product and service leading to bad brand image or reputation. According to the authors in chapter 4, there is a three-step process consumers use to make purchase decisions. These three steps include the prepurchase stage, the consumption stage, and the postpurchase evaluation stage. Then within these three stages, there are six steps which include, Stimulus, Problem awareness, Information Search, Evaluation of Alternatives, Choice, and Postpurchase evaluation. These six steps along with their associated actions are listed below.
1. “Stimulus – that incites a consumer to consider a purchase.
- Commercial cue – are the result of promotional efforts.
- Physical Cue - such as thirst, hunger, or various other biological cues
- Social Cue - are obtained from the individual's peer group or from significant others.” (Hoffman & Bateson, Services Marketing, 5th edition, 2017,The Prepurchase Stage: The Stimulus, para. 1-2)
2. “Problem awareness - consumers realize that they need to do something to get back to a normal state of comfort.
- Shortage – based on a need
- Unfulfilled desire – based on a want.” (Hoffman & Bateson, Services Marketing, 5th edition, 2017,The Prepurchase Stage: Problem Awareness, para. 1)
3. “Information Search - consumer collects information about possible alternatives that will ultimately their problem.
- Internal - A passive approach used to gather information such as one’s own memories about possible choices.
- External - proactive approach to use to gather information from sources outside the consumer's own experience.” (Hoffman & Bateson, Services Marketing, 5th edition, 2017,The Prepurchase Stage: Information Search, para. 1-2)
4. “Evaluation of alternatives - use of intuition—simply choosing an alternative by relying on a “gut-level feeling”Multi-attribute Models - set of formalized steps to arrive at a decision.” (Hoffman & Bateson, Services Marketing, 5th edition, 2017,The Prepurchase Stage: Evaluation of Alternatives, para. 1)
5. Choice – making decisions regarding the product.
- Buying- making a store choice, or non- store choice, internet, mail order or catalog purchase.
Postpurchase Evaluation Stage
6. “Postpurchase evaluation - consumers may experience varying levels of cognitive dissonance—doubt that the correct purchase decision has been made.” (Hoffman & Bateson, Services Marketing, 5th edition, 2017,The Postpurchase Stage: Postpurchase Evaluation, para. 1)
- Evaluation of satisfaction
According to the authors in chapter 4, there are alternate models other than the above used to determine how consumers eventually consume products. They also stated that the accuracy of each model unpredictable. This can be contributed to the fact that the thought process of how consumers pick different services is so ambiguous, it is hard to pinpoint. So, the authors raised the question, if the consumer buying process is so hard to determine, then why bother such models? I would say that if studied, the consumer behavior models like the consumer decision process model depicted in Figure 4.1, is more so to help marketers base their marketing decisions on how consumers behave toward the products or services being offered.
In Chapter 6,our reading discussed the four types of emerging service pricing strategies. These pricing strategies are satisfaction-based, relationship, efficiencypricing, and adaptive pricing. The text states, "Due to the many special considerations surrounding the pricing of services, traditional pricing strategies such as penetration pricing, competitive pricing, and premium pricing may offer little benefit to service customers or service providers." (Bateson& Hoffman, 2017, p XXXXXXXXXXThis is why alternative pricing strategies have become more popular and successful. Customers want to feel confident in their purchases and that they are truly benefiting from the service. Appropriate pricing of services can be difficult. This is whybusinesses will often just base their prices off competitors.
The text explains, "At the core of the pricing problem is a lack of understanding of the special considerations in the pricing of services and how consumers use and benefit from the services they are purchasing. Service marketers should create pricing strategies that offer a compromise between the overly complex and the too simplistic, both of which neglect the variations in consumer needs." (Bateson& Hoffman, 2017, p XXXXXXXXXXBusinesses should consider the market they wish to target, choose a pricing strategy that will appeal to that specific market, and then implement it.
I feel that a satisfaction-based pricing strategy makes the consumer feel more at ease. This market values certainty, so businesses can use benefit-driven pricing, flat-rate pricing, or service guarantees to draw them in. With so much competition in the service industry, these types of techniques can set a business apart, which will help them to gain and retain customers. When consumers are guaranteed satisfaction, it instills a sense of confidence in their purchase of a service. Knowing they are entitled to a refund if they are not pleased, makes them feel that the business is capable of delivering the requested service successfully.The salon/spa I work at part-time implements a satisfaction-based strategy. If a client is not pleased with their service, they are welcome to come back and have it fixed or redone free of charge or they can choose to have a refund. This rarely happens, but this policy lets customers know they can trust us to do our best, and if they are unhappy, we will make it right!
A relationship pricing strategy usually uses long-term contracts or price bundling. Businesses that utilize these techniques strive to build long-term relationships with their customers. Consumers will feel that they are greatly benefiting. An example of a business that uses this strategy is Discovery Cove in Orlando, Florida. My daughter and I went there a couple of years ago and experienced thisourselves. (By the way, if you haven't been, it's amazing!) They use the technique of price bundling. You pay an entry fee, but it is all-inclusive. Multiple meals, unlimited snacks and beverages, photos, etc. are included in the initial fee. You also mayreceive free tickets to other parks, as well as discounted prices to certain venues. Price bundling makes the consumer feel that they aregetting a lot of bang for their buck and will keep them coming back.
Efficiency pricing strategies get the attention of people who are looking for the best price. Businesses may share with customers how the company has managed to cut costs in order to provide the service at a lower price. These businesses often use cost-leadership pricing. "Efficiency pricing focuses on delivering the best and most cost-effective service available for the price...Understanding and managing costs are the fundamental building blocks of efficiency pricing." (Bateson& Hoffman, 2017, p. 160).
Adaptive pricing means that pricing is usually temporary and often changes. It is described as offering discounts without conceding margins on a permanent basis. In Chapter 6, it claims, "Common adaptive pricing strategiesinclude altering the product size, using new distribution channels, or requiring purchase minimums. Other adaptive pricing tactics include priceversioning, a la carte pricing, and promotional pricing." (Bateson& Hoffman, 2017, p XXXXXXXXXXAt the salon/spa that I mentioned above, we also use promotional pricing. There are often two-for-one and special promotions. Some examples include a free makeover with the purchase of two cosmetic products, a free lash tint with the purchase of a lash lift, or a free eyebrow waxing with a haircut. We have had great results and positive feedback using these techniques. I feel that all four of the emerging pricing strategies can be beneficial to help build businesses and improve their profits.
The four types of Emerging Service Pricing Strategies discussed in Chapter 6 are: Satisfaction-based pricing; Relationship pricing; Efficiency pricing; and, Adaptive pricing.
Satisfaction-based pricing - The primary goal is to reduce the amount of perceived risk associated with the service purchase and appeal to target markets that value certainty. Satisfaction-based pricing can be achieved by offering guarantees, benefit-driven pricing, and flat-rate pricing. The guarantee assure customers that if they are less than satisfied with their purchase, they can invoke the guarantee and obtain a partial or full refund to offset their dissatisfaction with the service firm. Offering service guarantees signals to customers that the firm is committed to delivering quality services and confident in its ability to do so. Customers often believe that a firm offering service guarantees would not do so unless it was confident in its ability to deliver.. In cases where competing services are priced similarly and options to differentiate providers are few, the service guarantee offers a differential advantage.
Relationship pricing - The primary objective is to enhance and expand the firm's relationship with its targeted consumers. Two types of relationship pricingtechniques include long-term contracts and price bundling. Long-term contracts offer prospective customers price and non priceincentives for dealing with the same provider over a number of years. Price bundling is the practice of marketing two or more services in a single package at a single price. Services are concerned with mixed bundling, which enables consumers to either buy Service A and Service B together or purchase one service separately. Bundling makes it possible to shift the consumer surplus from one to another service that otherwise would have a negative surplus. Mixed bundling offers customers a better value than purchasing services separately.
Efficiency pricing - The primary goal is to appeal to economically minded consumers who are looking for the best price. Efficiency pricers almost always are industry heretics, shunning traditional operating practices in search of sustainable cost advantages. Efficiency pricing focuses on delivering the best and most cost-effective service available for the price. Operations are streamlined, and innovations that enable further cost reduction become part of the operation's culture. The leaner the cost structure, the more difficult is for new competitors to imitate success. Understanding and managing costs are fundamental building blocks of efficiency pricing.
Adaptive pricing - The ideas is to vary product attributes to appeal to a variety of customers and their ideas of value. Common adaptivepricing strategies include altering the product size, using new distribution channels (onlineversus brick and mortar), or requiring purchase minimums. Other adaptive pricing tactics include price versioning(offering "good," "better," and "best" quality), a la carte pricing (unbundled offerings) and promotional pricing(two-for-one deals).
The pricing of service is a complex task. Consumers are buying an experience, and they often feel uneasy about or do not understand what they are paying for. Service providers do not have a cost of goods sold figure upon which to base their prices. Many providers simply look to what thecompetition is charging, regardless of their own cost structures and competitive advantage.
While reading chapter 8, I was introduced to the intangibility factor of services and how marketers use physical evidence to market more effectively to consumers. According to the authors of the required reading in chapter 8, Managing the Firm's Physical Evidence, “service marketers must understand the signals the customers perceive from their interpretations of the physical evidence that surrounds the service.” (Hoffman & Bateson, Services Marketing, 5th edition, 2017,8-1 Introduction, para. 2) Meaning because consumers cannot physically touch a service product, they take cues from what they observe from the environment that surrounds the service. Firms along with marketers use physical evidence to assist in facilitation communications of the service(s) to the customer(s). From reading chapter 8, it was observed that the entire chapter was dedicated to four strategic roles that physical evidence is used by consumers when evaluating service products that are offered by diverse companies. Also, according to the authors “from a strategic perspective, the importance of managing the firm's physical evidence stems from its ability to: (1) package the service; (2) facilitate the flow of the service delivery process; (3) socialize customers and employees alike in terms of their respective roles, behaviors, and relationships; and (4) differentiate the firm from its competitors” (Hoffman & Bateson, Services Marketing, 5th edition, 2017,Chapter 08: Managing the Firm's Physical Evidence, Summary, para. 2) Below I have listed these four strategic roles of physical evidence along with their importance in marketing intangible services as described by the authors.
1. Packaging the service– According to the authors, “using the firm's physical evidence to package the service does send quality cues to consumers and adds value to the service in terms of image development. This physical evidence influences perceptions which include improvement of image and aspect of reducing perceived risk and cognitive dissonance after the purchase.” (Hoffman & Bateson, Services Marketing, 5th edition, 2017,8-2a Packaging, para. 1) In other words, the overall presentation of a product or service, that helps aid in easing the customer's fears. It also lessens regret while also raising expectations of what to expect from the service being offered.
2. Facilitating the flow of the service delivery process– This type of physical evidence, “can provide information to customers on how the service production process works(Hoffman & Bateson, Services Marketing, 5th edition, 2017,8-2b Facilitating the Service Process, para. 1) It can include items such as signage to guide patrons. Also, physical structures i.e. fountain and atriums in a mall or store and technologically based interactive kiosk aid in direction.
3. Socializing customers and employees alike in terms of their respective roles, behaviors, and relationships– According to the reading, “the firm's physical evidence plays an important part in the socialization process by conveying expected roles, behaviors, and relationships among employees as well as between employees and customers.” (Hoffman & Bateson, Services Marketing, 5th edition, 2017, 8-2c Socializing Employees and Customers, para. 1) It is how firms use of uniforms to identify the firm's personnel that helps both customers and employees. The use of uniforms facilitates perceptions of consistent structure. The uniforms show the rank and status of the employees. The assistant in controlling misbehaving employees.
4. Differentiating the firm from its competitors– This form of physical evidence involves making a product or service being offered, stand out from the competitors. It can include the appearance of buildings, internal and external appearance. It also may include the firm’s personnel’s style of dress i.e. business attire, because companies with “well-dressed” people can be perceived as being more interactive, more intelligent, and have better workers. According to the authors, "the appearance of personnel and facilities can also serve as differentiating factors and can have a direct impact on how consumers perceive the firm will handle the service aspects of its business(Hoffman & Bateson, Services Marketing, 5th edition, 2017, 8-2d A Means for Differentiation, para. 2)
There are four strategic roles of physical evidence. Let’s take a look at each of them now and determine how they affect consumers. According to our textbook, “physical evidence is comprised of three broad categories: (1) facility exterior; (2) facility interior; and (3) other tangibles.Facility exteriorincludes the exterior design, signage, parking, landscaping, and the surrounding environment. Thefacility interiorincludes elements such as the interior design, equipment used to serve the customer directly or to run the business, signage, layout, air quality, and temperature.Other tangiblesthat are part of the firm's physical evidence include such items as business cards, stationery, billing statements, reports, employee appearance, uniforms, brochures, and website” (Hoffman & Bateson, XXXXXXXXXXThese are the images that contribute to a customer’s perception of a business. Some business’s function in a manner that correlates a consumer’s perception differently. The textbook states, “In contrast, remote service firms where customer interactions are limited, such as insurance providers and express mail drop-off locations (e.g., Federal Express), use limited physical evidence. Regardless of the variation in usage, all service firms need to recognize the importance of managing their physical evidence in its multifaceted role of:
- Packaging the service
- Facilitating the flow of the service delivery process
- Socializing customers and employees alike in terms of their respective roles, behaviors, and relationships
- Differentiating the firm from its competitors” (Hoffman & Bateson, 2017).
How a business packages and distributes its services gives a certain impression to its customers. According to the textbook, “The firm's physical evidence plays a major role in packaging the service. The service itself is intangible and, therefore, does not require a package for purely functional reasons. However, using the firm's physical evidence to package the service does send quality cues to consumers and adds value to the service in terms of image development” (Hoffman & Bateson, XXXXXXXXXXA well-defined service that meets a specified standard with identifiable packaging and delivery times can leave a professional impression on one’s customers. The consumers are given the impression that they are dealing with skilled personnel. However, sloppy presentation, packaging, and untimely delivery would lead one to have the opposite impression.
Activities that produce the service are another form of a business’s physical evidence. Our textbook notes, “Another use of the firm's physical evidence is to facilitate the flow of activities that produce the service. Physical evidence can provide information to customers on how the service production process works. Other examples include signage that specifically instructs customers. Menus and brochures explain the firm's offerings and facilitate the ordering process for consumers and providers” (Hoffman & Bateson, XXXXXXXXXXThese activities can directly affect the way consumers view a business. A nicely presented menu or brochure can entice consumers to purchase services that they might otherwise not consider.
Customers can attribute a certain expectation of attitude and assistance based on an employees uniform and position. In accordance with our textbook, “Organizationalsocializationis the process by which a person adapts to and comes to appreciate the values, norms, and required behavior patterns of an organization. The firm's physical evidence plays an important part in the socialization process by conveying expected roles, behaviors, and relationships among employees as well as between employees and customers. The purpose of the socialization process is to project a positive and consistent image to the public. However, the service firm's image is only as good as the image each employee conveys when interacting with the public” (Hoffman & Bateson, XXXXXXXXXXThat is why it is important to hire personnel that care about one’s customers and seeing the business grow. Good employees can directly affect the growth of a business. No one wants to patronize a business where the employees are rude, and service is poor. When one enters a business, he or she often expects a certain role of service from each employee according to his or her position. As stated by our textbook, “Physical evidence, such as the use of uniforms, facilitates the socialization of employees toward accepting organizational goals and affects consumer perceptions of the caliber of service provided. Studies have shown that the use of uniforms:
- Aids in identifying the firm's personnel
- Presents a physical symbol that embodies the group's ideals and attributes
- Implies a coherent group structure
- Facilitates the perceived consistency of performance
- Provides a tangible symbol of an employee's change in status (e.g., military uniforms change as personnel move through the ranks)
- Helps in controlling the behavior of errant employees” (Hoffman & Bateson, 2017).
The way a place looks also leaves an impression on consumers. According to the textbook, “Service differentiation through the purposeful use of physical evidence has long been exemplified by the lodging industry through the effective management of facility exterior, facility interior, and other tangibles associated with the hotel experience” (Hoffman & Bateson, XXXXXXXXXXCustomers may directly relate the quality of the services received with the environment that they are presented in. High quality furnishing would leave a much different impression than low quality economy grade furnishings in businesses.