SM/U4 Topic 1 Challenges of Service Distribution
Inability to Customize:
Some of you have experienced learning basic college courses through large, video-transmitted courses. If you consider what you missed in learning that way compared with learning directly from a professor, you will understand this challenge. In mass sections, you cannot interact directly with the professor, ask questions, raise points for clarification, or experience the connection that you receive in person.
In electronic classes-as in video conferences that are springing up in many businesses-the quality of the service can also be impeded by the way the audience reacts (or doesn’t react) in those situations. People talk among themselves, leave, laugh, and criticize, among other behaviors.
Customization can be achieved in these channels. IN college courses, small groups of students can be led by teaching assistants to discuss the electronic lecture. Call-in questions can simulate direct interaction. Two-way video can control the behavior of receivers.
In advertising on the Internet and other electronic channels, it is conjectured that personalized advertising will ultimately be developed because customers will be in control. Consumers will actively seek pertinent advertising, so marketers must develop ways to make their advertising compelling. Ad resources will shift toward supplying information the customer wants to know, rather than pitching what the company wants to sell.
Customer Involvement May times the customer produces the service herself using the technology. Unless the technology is highly user-friendly, customers may be reluctant to try it or to continue using it if it requires ongoing education.
Security One issue confronting marketers using electronic channels is security of information, particularly financial information. Many marketers who advertise on the Internet will not accept credit-card orders because of potential security problems in the transactions.
The value delivery system:
The value delivery sequence consists of three key steps – choose the value, provide the value and communicate the value
Choose the value:
It can be argued that customers select products and services because they believe they offer superior value. The prerequisite here is an understanding of changing customer needs in terms of the forces driving demand as well as customer economics and the buying process and also understanding how well the competition serves those needs particularly in terms of the products, the service and price charged.
Provide the value. The second stage, providing the value, is concerned with developing a product/service package that creates clear and superior value. This involves a focus on things such as product quality and performance, service cost and responsiveness, manufacturing cost and flexibility, channel structure and performance, and price structure.
Communicate the value. This involves the various aspects of promotional activity needed to persuade customers that the values are better than those offered by competitors. It involves not only the issues of organizing sales promotion, advertising and the sales force, but also of providing outstanding service in a way that is continually recognized by the target audience.