Services Marketing - 11/13/17

ASSIGNMENT 1

a. A single brand can provide both products and services, a very common component of most industries today. As referenced in the text, manufactures becoming service providers in one of the contributing forces of change in service management. For example, Apple Inc. manufactures computers, phones, and tablets as tangible products available for consumer ownership. Additionally, they provide services such Apple Care or their App Store which facilitates maintenance and additional software for their products. The manufactured hardware created by Apple have very specific physical inputs that are assembled in a factory to create a tangible item that is available for purchase. The transaction process for purchasing an Apple computer does not affect the satisfaction with the ownership of the product. Using Apple Care to fix the computer is a specific service that will impact a consumer's satisfaction - ie. the speed of repair, additional costs involved, knowledgeable employees, etc. Although Apple Care can be purchased, a customer does not own it as a tangible good. The function of Apple Care is to pre-purchase the expertise and skills of an Apple Genius in case there are hardware/software issues with the tangible product purchased from Apple. The services provided by the Genius Bar through Apple Care is an intangible performance because it involves a tangible product purchased like a MacBook Pro, but satisfaction with the Apple Care service depends on the expert's knowledge and ability to fix the issue. Customers are involved in the production process because they are the ones responsible for initiating a report for an issue to Apple Care. Customers provide the insight for what is wrong with the good in order for the Genius Bar to assist them in fixing the issue. Although customers can customize a MacBook Pro to their specification, they are not involved in the manufacturing of the good, besides the decisions of what gets installed.

b. The eight components of integrated service management

Product elements. Apple Care is bundled as an option for purchase when buying any Apple hardware as a safeguard for any technical issues that a customer may encounter with the physical product. The value to customers is the expertise of the Genius Bar in quickly and efficiently resolving issues.
Place and time. Through Apple Care, customers make appointments at the Genius Bar to speak to an associate at a specific location and time at an Apple Store. Although the initial meeting is at a physical location, once repairs are complete, there are options to mail the product after the service has been completed.
Process. There is a clearly defined process for Apple Care that if there is an issue under the covered Apple Care rules, customers can make an appointment to speak to a technician who can advise them what the problem is, the time it will take for repair, and if there any additional costs.
Productivity and quality. The knowledgeable employees at the Genius Bar are responsible for being able to clearly identify and explain why an Apple product is not functioning to a customer’s expectation. A customer’s satisfaction will be highly impacted by the quality of service provided by the experts at the Genius Bar.
People. Because Apple Care requires interaction with Apple staff at the Genius Bar, Apple ensures they are personable and are highly trained to work with customers to solve their possible frustrations with Apple products.
Promotion and education. Apple Care is offered as an add-on at the point of sale for any Apple hardware purchased as a safeguard for the product for an additional two years beyond the one-year warranty. Apple gives a detailed explanation for why it is beneficial and cost effective for customers to purchase Apple Care, as hardware issue could be costly if it’s an out of pocket expense.
Physical evidence. Apple Stores are very well known building filled with similar technology bars and an overabundance of staff dressed in solid colored shirts. Apple has worked very hard to create a brand image that is clean and modern, where customers will have similar experiences at any Apple Store they visit.
Price and other costs of service. The cost of Apple Care depends on the product purchased – it will be more expensive for a MacBook Pro than an iPod Mini because the expense to repair a laptop will be far more than an iPod. The value proposition to customers is that the price of Apple Care is very inexpensive compared to what they would have to pay out of pocket for a service or part purchased without Apple Care.

c. Ethics is a huge driver in providing value to customers whether it’s a service or product. Companies that are unethical have received fierce backlash in recent years, to the point that many brands will take sides in support of current events, for example Oreos supporting marriage equality. Services such as Uber are required by their customer base to take strict stances against unethical behavior because it could severely hurt their profits. If Uber didn’t take a stance against allegations made towards some of their drivers, they would lose women as customers if they felt unsafe in using that service. A company’s values will add to the value they can provide to their customers.