Process of Service Marketing Issues

Introduction:

The purpose of this report is to understand the process of service marketing issues works in today's business world. The article which I have selected is about General Motors and its failure serving there customers and dealers today. The article is tuff to relate as it's more about the company ways of doing business. How General Motors is failing to understand the needs of the customers. Recent financial losses, bankruptcy and unsatisfied buyers have really affected the image of the company. The company is still not learning from its past mistakes and not understanding the need of the customer and market today ( Wallace, 2009). As per our study when a company is providing a service to its customer they need to provide reliable and consistent service. Weather it's buying a house, car, mobile provider, eating in a restaurant or a stay in a hotel. When buying a car a customer is not only buying the car he is buying the service of the company that it will be fuel efficient, durable for years and provide safety while driving. According to customer gap model, GM is trying to hype its product in the market but in the end they are not delivering what they promised.

For a successful growth in business we have to carefully study the need of the customer and try to deliver more than expected and what promised to them.

The main problem GM is facing:

Not delivering according to the promises made: According to the article GM has always promised to deliver more than what it can. GM promise that it will return to its technological superiority with its new Chevrolet Volt in the market. But the facts are saying that GM is promising more to its buyers than what it can deliver. It has already promised its buyer that its new Volt hybrid car will be more fuel efficient before testing in the real condition and will come with low price tag of $30,000 which increased to $40,000 which can create disappointment in buyers when they buy this car (Wallace, 2009). Studying the customer gap model we can conclude:

Customer's expected Service:

Expectations are the reference point's customers have coming into a service experience (Zeithmal, Bitner, and Gemler, 2006). GM has always failed to fulfil the expectation of its customer. Promises made by GM for its car has never been the facts when customer has actually bought the product.

Customer's perceived Service:

Perceptions reflect the service as actually received. When customer perceive the service from GM it has always been disappointing in the case of mileage or price that was quoted by GM before any launch of its car. Increasing the expectation of customers and then not delivering according to that creates an unsatisfaction for customers and loose their customer (Zeithmal, Bitner, and Gemler, 2006).

According to the customer gap model the study of the article highlights that GM has major problem in the Provider Gap 4 which is related to Communication Gap. GM major problem is that they have tried to overpromise for there New coming car Volt in 2010 related to its mileage and price but the facts stated that it's the opposite when it actual gets launch (Wallace, 2009).

Also GM is facing difficulty in closing the provider Gap 2 Design and Standard. GM has started new way of selling its product on popular web auction site Ebay. This can have a negative effect on the price of its car as it has mass production of vehicles.

Studying the Marketing Mix of GM

Product: Tangible product or intangible service that are mass produced on a large scale. GM has world best cars like Chevrolet Volt, Chevrolet Lumina and Camaro and others. They have the best products in line.

Price: Price is an important component in consumer's assessment of value. Price is the amount a customer pay for the product. Consumers often seek reasonable cost in relation to quality; GM offers fair prices and maximum quality. Unless General Motors can maintain the brand image it has established for itself, then consumers will continue to believe that the product is worth the financial sacrifice.

Place: Place is important in business because the product must to be easily accessible to consumers. GM is one of the global names in automobile industry and has its cars around the world.

Promotion: A company cannot sell a product if they do not competitively advertise in magazines, television commercials, billboards, or other forms of media. The advertisements must appeal and convince the consumer they need that product. GM has different promotional campaign going on for which it wants to change public view about the company and its technological superiority.

Extended P's of Service

People: They may include the employees of the company, customer and consumers. GM has skilled employees which are working to provide outstanding products and service to its buyers.

Physical Evidence: It is created by physical displaying the product by creating an environment where customers can see and buy the product. GM has good physical evidence through its showrooms, hoardings and Logos etc.

Process: The method or procedure the product is available to the customer. GM has a efficient procedure for selling the product from the start when consumer are interested in and are contacted to buy the car and continued even after the car has been bought by providing after sales service to the buyers (Services Marketing and the Extended Marketing Mix (7P's), n.d.).

Pros: Advertising cars year before year of its launch helps increase the anticipation between the customer to buy the car earlier until its launched. Also GM can alter any features or design according to the market needs before the final product come in the market.

Cons: The disadvantage can be related to wait for the car when its advertised 2-3 years before its get launched. This can decrease the value of the car when it gets launched in the market. Also GM new way of selling its car on auction site can decrease the price of its car as GM has a mass production of car. Also if customers are not able to buy the car on their bided price then they can turn to other company. Also it can be seen that GM is failing to provide service quality to its customer on the basis:

5 Servqual dimensions of perceived service quality

Reliability: In the sense of providing promised service dependably and accurately

Assurance: GM group has to really work hard to provide assurance that the product that will be coming in the market will be worth spending money.

Responsiveness: Employees and dealers of GM are skilled to provide quick and effective service.

Empathy: The need to understand customer needs so that attention can be provided to that service which is needed by the customer.

Tangibles: GM has showrooms, advertisement, billboards that provide an good effect on the customer when they go to purchase a car.

Recommendation:

As per the article studied it can be said that GM should effectively bridge the gap between the customer expectation and perception by under promising and over delivering i.e. to provide more than what customer expected. Also learn from the past mistakes its way of marketing its car in the market. It's not good to reveal the product unless they are ready to be delivered in the market. This can keep the buyers interested until they reveal the product. And carefully design there marketing and business process according to the 5 servqual dimensions so that they can improve there service quality.

Conclusion:

In the end with the reference of this article it can be said that its time that GM learns from its past mistakes if it wants to remain competitive in the market. They should carefully review there old perception of customers. Buying a car involves high risk for customers GM should see that they should deliver what they have promised. Providing products and service which are not according to the promise made may decrease the value of company and also create more unsatisfied customers which is not good for the business. Creating an expectation for customers and not providing them increases the customer gap. The main issue according to the article GM is facing is related to Communication gap and design and standard gap. The company should effectively learn and close this gap of customer expected services and perceived services.

References:

Ed Wallace, 13th August (2009) GM: Still Making the Same Mistakes, retrieved on 19th August 2009 from: http://www.businessweek.com/lifestyle/content/aug2009/bw20090813_397576.htm Palmer, A. (2005). Principles of service marketing (4th ed). Berkshire: McGraw-Hill

Services Marketing and the Extended Marketing Mix (7P's), n.d. retrieved on 21st August 2009 from: http://www.marketingteacher.com/Lessons/lesson_services_marketing.htm