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Marketing Services Domestics
This report seeks to examine the ways in which service could be improved in an Australian home care organisation called Absolute Domestics. Two analytical tools are used, both the blueprint and the multi-segment model, to give a clearer understanding of the processes and various services provided.
The analysis draws attention to that fact that Absolute Domestics has been facing the challenge of how to recruit the best employees to carry out the cleaning job for their clients. It was revealed that the company’s reputation depended on workers honesty and reliability. Meeting the customer’s expectations, promotion of the services, pricing and location of services were found to be critical success factors.
It has therefore been recommended that for Absolute Domestics to continue be successful in its operations, the company could benefit from reevaluating their service marketing strategy and focusing on the People, Promotion, Price and Place issues.
- People – internal marketing to increase employee motivation and satisfaction and improve customer consciousness, this could lead to more satisfied clientele and more sales
- Promotion – pursue a more proactive marketing strategy and actively seek more sales by targeting the cleaning services market through location and pricing
- Place – Sourcing locations where the target market spend time and promoting Absolute Domestics services
- Price – Offering specials and discounts to first time customers and advertising a price structure on the company website
Competition in today’s business world is intense, partially due to increased customer awareness and expectations. In order for a company to be effective in the market, marketing analysis tools should be used to improve business practices and increase performance. Services are activities or benefits that are offered for sale, and can sometimes be provided in connection to the sale of goods. The characteristics of services, as opposed to goods, are intangibility, inseparability, perishability, heterogeneity and non-standardization (Lovelock, Patterson & Walker 2007).
These characteristics make the positioning of services difficult and challenging. The process of positioning a service is more complex than positioning a product due to the need to communicate the intangible and often vague benefits of a service. Service marketers often face completely different marketing problems and opportunities than those faced by goods marketers.
The tools and strategies that are followed when applying positioning decisions within an organisation should take into account issues that are related to the complexity and the variability of the services being offered. According to Shostack (1987), positioning refers to the process of deliberately and interactively defining, measuring, modifying and monitoring consumer perceptions of goods and services in markets. This report will attempt to analyse the processes and services provided by the home care company Absolute Domestics and make recommendations on what could be improved.
Background of Absolute Domestics
Absolute Domestics was established in 1993, as an agency for domestic cleaning and housekeeping in order to satisfy the growing demand for quality domestic cleaning and general house cleaning services. The company has customer service centres located in all capital cities and in other major regional areas throughout Australia and New Zealand. The company also offers other services such as recruiting and coordinating of domestic services for their customers (Absolute Domestics 2008).
Absolute Domestics aims to meet the growing demand for cleaning services by offering affordable, reliable and quality service. The company offers a wide range of house cleaning services that takes care of all house cleaning chores such as cleaning, washing, ironing, tidying, vacuuming, mopping and window cleaning (Absolute Domestics 2008). The company recruits, selects and employs people with the intention of providing quality services for domestic home care. Recruitment officers and coordinators are trained to screen and select cleaners that can meet any housekeeping requirements needed by the client (Vess 2008).
Marketing analytical tools can be used by an organisation to determine how to improve the quality of the company’s services and increase effectiveness of the organisational structure and processes (Lovelock, Patterson & Walker 2007).
Blueprinting involves focusing on the short term and executing improvements in organisational segments. The function of the model is to reduce costs on the customers’ services and increase efficiency (Baum 1990). Blueprinting can lead to the improvement of organisational performance in specific units, particularly in areas of service, and consequently, the overall business.
If Absolute Domestic uses this analytical tool, it can lead to reduced costs and better service, hence they can be in a position to deliver more services to as many customers as possible and thus lead to the increase of revenue and profits in the company. As stated by Baum (1990), the elements of service blueprinting include: showing the time dimension of processes, presentation of information in diagrammatical form, identifying all the main functions and sub functions of a service and also precisely defining the tolerance of the model.
The tolerance of a service can be determined by taking into account the time, order or output of functions and the more complex processes that present greater difficulties to an organisation (Lovelock, Patterson & Walker 2007). Benefits derived from using Blueprinting include obtaining visual and quantitative description of the service elements, which can be used to improve the performance of a company in the future (Baum 1990).
The multi-segment model graphically represents product segments of the entity in four quadrants represented by product, product delivery, auxiliary services and additional marketing (Ward 2008). The multi-segment model can be used to describe the relationship that exists between the buyer and marketer, which allows issues to be addressed that have been shown to affect the company (Ward 2008).
It also shows the marketers’ activity which indicates how the marketers have performed over a given period and outlines those activities performed that affect service performance. The advantage of using the multi-segment model is that it identifies the specific types of entities, activities and interactions that exist. It is used by the marketers as an analytical tool for studying the interactions of the service provided and the customer (Ward 2008).
Implementation of the model can lead to increased productivity, sales, revenue and profits for a company. Thus, it can be beneficial to use the multi-segment model to review service interactions and processes so that the goal and objectives of increased efficiency and performance can be achieved (Ward 2008).
The ‘7Ps’ of Marketing
The 7P’s of marketing are the factors that are used to evaluate and re-evaluate a businesses marketing activities. The 7P’s represent the product, price, promotion, place, physical evidence, people and processes of an organisation. Since products, markets and customer needs change over time; organisations should re-evaluate their business on a regular basis to determine whether they have applied the 7P’s within their organisation to best effect (Lovelock, Patterson & Walker 2007).
The importance of applying the 7P’s is to make sure that the company does what it is supposed to do in order for it to achieve the best results. Four of the service marketing 7P’s should be looked at more closely by Absolute Domestics, these being the price, promotion, place and people issues.
Based on the blueprint and multi-segment model analysis, Absolute Domestics should reevaluate the people, promotion, place and price components of the marketing mix. The product is the actual service which does not need to be reevaluated, the processes are determined by the customer’s needs and the physical evidence is intangible. However, the people, promotion, place and price marketing components could all be revised to improve organisational performance and customer satisfaction.
People are a valuable component of any service organisation. According to Dessler, Griffiths and Lloyd-Walker (2004), it is critical for management to select, recruit, hire, and retain people who have the skills and the ability to do their jobs. People are vital to the success of a service company because employees can determine how well a company will meet the goals and objectives that have been outlined within a given financial period. On the other hand, employees that do not meet requirements can adversely affect the performance of a company, as the reputation of the company can be damaged (Dessler, Griffiths & Lloyd-Walker 2004).
The company should employ qualified personnel that can perform all the housekeeping duties required by the clients. According to the website, Absolute Domestics recruited employees based on factors such as personality, honesty, reliability, employment history, personality, background activities and interests. The main aim was to hire qualified personnel that could meet the both company and client expectations (Vess 2008).
The people employed by Absolute Domestics are one of the most significant success factors, because they are the ones that directly interact with the clients. It is therefore of critical importance that the employees meet client expectations. Internal marketing focuses on increasing employee motivation and satisfaction, which, according to Rafiq and Ahmed (2000) can in turn lead to higher customer satisfaction.
Another objective of internal marketing is to increase the customer consciousness of employees and to make them more aware of ‘selling’ the service to clients (Rafiq & Ahmed 2000). Because the employee has such direct and frequent contact, Absolute Domestics could benefit greatly from implementing an internal marketing strategy that focuses on employee motivation and increasing overall customer awareness.
Promotion refers to the way customers are informed about the existence of a product or service in the market. It consists of how to market and sell goods and services to increase the sales volume of a company (Lovelock, Patterson & Walker 2007). The changes that are made within an organisation in regards to promoting and selling services can lead to changes and improvements in other areas of the organisation. According to research that was carried out, advertising techniques can dramatically lead to increased sales within an organisation.
Companies that indicated high sales within their financial periods also had a strong sales and marketing department that promoted the companies products to the targeted market (Mattsson 1994). Another study that was carried out revealed that experienced copywriters could increase the response rate of advertising by over 500 percent by changing the headlines of promotion material. Therefore, the methods used to promote services should be reevaluated and companies should explore new strategies that are geared towards improving the quality of their promotion material (Mattsson 1994).
Promotion strategy involves making the customer aware of the existence of the product in the market, thus Absolute Domestic Company should ensure that they use various methods of promoting their services to increase productivity. While Absolute Domestics promotes through various mediums such as the internet and local directories, the company does not appear to promote their services proactively. Most of their potential clients seek a cleaning service and look for information themselves, whereas to increase sales and client base, it would be advisable for Absolute Domestics to actively seek out new clients (Lovelock, Patterson & Walker 2007). Promotions such as special deals for new clients, flyers and brochures, shopping centre advertisements and sales booths could all be used to gain more clientele.
Place states the location where a service is sold or delivered to reach the potential customers in the market. Businesses are charged with the responsibility of determining the right place or location to meet their customers need (Jonathan 2008). Methods used to promote products of an organisation include: direct marketing, which involves sending sales people to personally meet and talk with the potential customers, telemarketing, use of catalogs or mail order, trade shows or physical retail establishments.
Absolute Domestics should research places where they can meet potential customers and promote their services. Having an Absolute Domestics sales member standing outside the grocery store handing out discounts for first-time clients would be an idea worth considering, because in most households, the person who does the cleaning also generally does the shopping.
Absolute Domestics should look at actively promoting their services in places where potential clientele spends time on a regular basis. Targeting the appropriate market is one of the most important marketing strategies that can be used by service organisations (Lovelock, Patterson & Walker 2007).
Price shows the value that is attached to a product or service in the market. Companies can either raise or lower the prices of their services by looking at the prevailing conditions that are within the market such as inflation or climatic conditions. If the company raises the price of their products, it could have an adverse affect on their overall performance as customers could seek alternative services that can satisfy their needs (Moorthi 2002). Competition in today’s business world is intense, and competitors can easily take advantage if the price set by an organisation is higher than customers are willing to pay.Price
In order for companies to remain competitive, they should set a price that represents value to the customer, that is, an exchange of a service in terms of a price they see as fair (Moorthi 2002). Companies can also add free additional items that do not cost the company much, but appear attractive to the customer; this can lead to increased sales, as the price may seem to represent better value.
Whenever a company faces the problem of frustration or resistance, their marketing or sales activities should be regularly reviewed in order to improve on the performance of the company. One should accept the fact that the pricing structures change with time due to factors that are beyond control, such as inflation or unfavorable market conditions. Prices should always be reviewed in order for a company to compete effectively in the market and to ensure survival in today’s unstable business environment (Moorthi 2002).
Absolute Domestics should review the pricing of its services and ensure they are set at a price that satisfies customers and meets profitability objectives. Pricing is a delicate issue, pricing too high could lead to customers using a different service, however, pricing too low will reduce profitability (Shostack 1987).
One thing Absolute Domestics could do to encourage more business, is advertise prices of cleaning services on the company website. Absolute Domestics does not advertise their prices at all. Other competing housecleaning services, such as James Home Services, do offer a price structure. While it is difficult to set a price on a housecleaning service, due to the different needs of clients, it could be possible to advertise cleaning packages or a basic hourly rate to give potential clients an indication of what prices to expect.
It is therefore important for a service organisation to implement a good marketing strategy. Organisations should carry out extensive research and analysis to determine how to provide better service to their customers and also to reach new potential customers. Absolute Domestics is a service based organisation that provides home care through housecleaning services. The main concern of their services marketing plan is their people.
People are of particular importance to Absolute Domestics, because their employees provide an intangible service product. It is therefore critical that Absolute Domestics employees are well trained and capable of performing to client expectations. Internal marketing strategies could be used to improve employee motivation, satisfaction and customer awareness; this would lead to more satisfied customers and better service.
Promotion of the available services could also be increased; Absolute Domestics needs to pursue a more active approach to gaining more clientele. This could be achieved through promoting in locations where the targeted market spends time and promoting special prices and discounts to first time users of the cleaning service.
Prices also need to be clearer and made available to the public, a base price should be advertised so consumers have an idea of what to expect. Overall, Absolute Domestics is performing well, but with a few adjustments to the organisation’s service marketing strategy, they could further increase company performance and productivity.
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