Services marketing approach from the airline industry

The first Modern approach was given by Adam Smith, introduces the first marketing philosophy in which companies focus their strategies in the needs of their customers supplying standardized products. (Adam Smith, 1776). Years after, England starts to change into the industrial revolution, process in which farmers leave country side areas and travel through the cities to work in factories. This process was the beginning of the first industrial companies in the world; in fact the workers produce a good with standardized features and the company sells them to final customers. The result of that process increases the consumption of the people, in that way consumers start to have more influence over the manufacturers demanding more and more goods. Manufacturers start to produce more variety of goods till today recent industrial models.

However, Nowadays marketing is a study in which there are much more elements than before. In the 60s (Keith, 1960) said that marketing was now the dominant business philosophy and had replaced the production and selling philosophies from the past

Today things have dramatically. Firstly of all, differentiation of goods and services is the key are to succeed in a the actual market. Form the market research the firm understands the needs of its customers, to fulfill that with something to suit on that needs. Secondly, to target the goods to specific markets or specific niches. Basically means that consumers are different and there are consumers with different needs and they should be treated different. Thirdly, Marketing today is known as a complete business strategy, the orientation of every area in the firm should be focused on the niche of customers, every area work together through the same objective. In fact, Tosdal (1933) says that the customer should be the starting point of every business.

Although, for the purpose if this report the focus to discuss is services marketing. Services marketing are defined as the activity that provides benefit to consumers from a previous experience. Its basic characteristics are intangibility, inseparability, variability and perishability. Because of this, services are a complete new challenge because they could be delivered in a different way every time; so the expectations from the customer are different every time.

Moreover, other important area is the consumer evaluation according to the value of the service. Basically, the evaluations from customers are dissatisfaction, indifference or satisfaction. As we know marketing is an exchange; this exchange has a value that could be expressed by money, time, or even effort. The decision of the consumer is determinate in elements like, the product category and the brand; influence the final decision of the purchase.

Quantas Airlines experience.

I’m going to explain in detail the theory information with an experience that happened a few months ago in one of the most recognized airlines of Australia Quanta’s airlines.

Service: Ticket from Perth to Overseas.

Service Sector: The Service sector of the company is Airlines

Service delivery and brief description of the service: The delivery of the service was a business to consumer transaction. Quantas provides the service directly to the final consumers. Basically I was wondering to travel overseas; before I made a decition i made an small analysis with my own experiences and experiences from friends and colleges. They gave me important information, that I mix with my own ideas and finally I decide flying with Quantas.

They day arrive, I got the flight and receive the service; everything was going good but, unfortunately when I arrive to my destiny I had a problem with my luggage (was damaged). That same day I made compliant, and from that day till today i have never receive an answer or either a apologize, and off course I fell disappointed and frustrated.

To sum up I’m going to make an analysis of what possibly happened in the delivery of the service, extending the discussion with the 7ps of services marketing mix, the three time zones, concepts of quality and some other ideas and recommendations from my own experience.

Competence: Before the purchase I made an analysis in the Australian market, the competence of Quanta’s basically is Virgin, Emirates, Singapore Airlines, air New Zealand.

7 Ps and the marketing Mix.

The marketing mix is a concept that focuses the strategy of the company with the needs of the customers.

Price: Is the amount of money charged to a product. The price of the service was over the average price in the market. Basically i decided to pay 30% more to minimize the risk in the purchase because the brand evokes me quality and security. According to (Kotler 1999) Branding is a name term or sign that differentiates a company against the competitors. In my top of mind the brand is one of the leader brands in the market. Moreover, the logo is modern and represents nationalistic Australian unique animals (Kangaroo). To sum up the brand evokes me security.

Place: The service is sold with multiple channels, in my personal case was directly in the web page. But could be purchased with different agencies that work together with as a distribution channel.

Promotion: Basically the company makes advertisements in media (TV, magazines, and radio). The advertisement enforces that the company is the leader airline in Australia. They generally showing images and videos from their latest airplanes, comfortable seats and excellent service on board. Nevertheless, a strong emphasis with its nationalistic logo that evokes Aussies to purchase it.

Product. The product is defined as, activities that benefits and satisfied together to customer needs, this products could be goods or services. In my experience, the service was designed for my needs that mean that i was the perfect target customer for that particular service.

People: The people are one of the most important concepts in the 7Ps Mix; because it influences and change the way the service is delivered. Some companies make extended efforts in this area to increase the competitive advantage. In my example, the people are really important, because the service is delivered with a special attention through all passengers. Service culture is important in Quantas, because they differentiate the service giving the best experience ever in their flights.

Process. This area focuses in information system to abroad customer service. My experience the information systems were good. When i made my complaint everything was relatively easy, as far as i know the compliant was in the system waiting for someone to abroad and give a solution to my case.

Physical evidence: Apart from the problem that i had with my luggage the service was comfortable and the service of the staff in the plane was how i was expecting.

The three time zones are:

• Pre-purchase: The pre-purchase time zone basically explains why the consumers select a certain product. Some studies (Tosdal 1986) say that the consumers decide their purchases from previous experiences, which is basically learning and remembering. Firstly, l in my personal situation I made a research before to see the best options that where available in the market. Basically was a simple research in the popular airlines that travel to the destiny, basic characteristics, and the average price for that ticket in each airline, as well. Secondly, after that I comment my primary analysis to some friends, and then they gave me the opinion from their experiences. Finally, making my expectations and the experiences from my friends. I made a decision; I grab the ticket with Quantas.

• Service delivery: The first impression was really good, the service and the staff members where really serviceable with all the passengers in the flight. In fact, exactly how I was expecting.. After that, when I arrived to my destiny, I was not expecting problems with my luggage but unffortunelly when I arrived to my destiny one luggage was broken. Immediately, I made a compliant in the customer service area explaining the details of the stuff that where in my luggage, they apologize in mane of the company, and then they gave a number to track my compliant. According to (Zeithaml, Valarie A 1988) services are delivered with certain standards, but customers experience the service in a different way according to several circumstances, that basically are experience and expectations. In my case I did not cover my expectation the delivery of the service was under what I was expecting.

Post-purchase – I made a claim in customer service waiting for an answer. But, unfortunately I have never receive a notification or even a information about my case. The company does not recover the damages and loses I suffered that day in the flight. Till today, I have never receive nothing, so all this reasons made me decided to never fly again with that airline.

Recommendations.

I clearly experience dissatisfaction with the service I bought, that made me irritated and annoyed, changing my whole perception of the company. A small thing could change a complete set of good things. In my personal case, I experienced a good service but when I arrive to my destiny everything changes. According to (Janet R McColl-Kennedy; Beverley 1995) says that the services should be delivered in all the processes in the proper way. In fact, I lose all the credibility in the company. In fact, all the effort that made the staff in the flight to satisfy customers, went directly though the rubbish at the moment I received my luggage. The effect is that, my last impression changes my perception of all the whole service, making myself an unsatisfied customer, with a bad impression.

However, (Spreng, Harrel, Mackoy 1995) says that is possible to fight against this dissatisfaction if the company, if the company reacts properly, and on time. Basically he says that the customers have expectations for their problems. If the company satisfies this expectation the damages would be smaller than not doing it. Moreover, service recovery has many options, sometimes is really difficult to understand the compensation that is expecting the customer, but the best option is to chat with the customer and make and arrangement. Furthermore, In my personal case possibly I will change my opinion about the delivery of the service. If I have received compensation from damages and looses probably I will be reasonably satisfied.

Moreover, is a priority that customer service resolves complaints of customers quickly and compensates them. The compensation could be with products from the company rather than in refunds in money, because the effect will be less than a refund. Resolving these inconvenient situations with customers will reduce the impact of it in the brand equity. However, it is extremely important to remember that an unsatisfied customer is likely to tell its case to more than 7 friends or colleges, affecting the credibility of the brand.

Although, the services marketing always should be completed in a successful way, the service should maintain the quality in all the areas. Because generally what happens is that some areas are doing their work properly and others are not matching with the minimal standards. In that way all the departments should work together in a synergic way ensuring their maximum level.

Nevertheless, According to (Rudie and Wansley, 1985) says that if the product is delivered with quality the company with have measurable benefits in the future like an increase in the market share, more gross profit and a better competitive advantage in the industry. Basically this happen because the company has a better understanding in its customers. On the other hand, Not all the complaints are complaints with a reason, in some way many customers complain about minor things just to get and advantage of a retailer or a manufacturer. (Halstead , Diane 2002)

Conclusion

In Sum up, since the days of Adam smith till today the marketing model have change. From Standard goods to specialized goods to different niches of customers. Clearly the model producing goods change and because of that Service Marketing start to become an important area to analyze. Services marketing basically analyses the customer in three different stages and combines the unique 3 Ps, also analyze the experience of the customer with the particular service. This valuable information helps firms and business to learn from customers and improve the quality. Understanding the concept, firms can gain a better competitive advantage, increase the market share, Gross profit and ensure its position in the future.