Conduct a critique of the following service management ideas, theories and techniques, specifically with reference to purpose, application and limitations and with regard to how these service management ideas, theories and techniques might contribute to the development of a business.
Study the market, its structure, identify attitudes and behaviours of consumers, this is the first step of marketing. Among the range of behaviours and characteristics of potential buyers, it is necessary to identify homogeneous groups or segments of customers, assess their importance and possible development. It should also define a relevant market: local, regional, national, international ... A small business has no incentive to grow because it will lose the knowledge of its customers and run the risk of not being in line with demand. However, a large size can operate in several market segments, have better control of the field, to have opportunities to better negotiate with suppliers, and therefore to better meet customers sensitive to low price.
The establishment of customer segmentation is critical to enable: -
Establish treatment of different type of clients and thus meet distinct customer expectations -
To rationalise the means and thus to adapt the devices to the value of contacts and potential customers and optimising the profitability of the company.
Segmentation consists in dividing a population into homogeneous groups of people; these groups must be as different as possible. A business segments to better meet customer’s expectations, to exploit new market opportunities and to concentrate its forces and place of battle. Segmenting customers is to cut it into homogeneous groups, based on specific criteria, each group being distinct from each other and can be chosen as the target of a marketing action. There are many possible criteria for segmentation, which can be grouped into broad categories:
The demographic characteristics (gender, age, physical, household size, family composition...), geography (size of locality, climate...), social and economic (income, education, occupation, religion...). 2)
The criteria of personality and lifestyle.
The behavioural criteria (user status and loyalty, role in the decision process, quantities consumed, consumption patterns, situations and events...). 4)
A mixture of several of these criteria.
Its main advantage is to increase the efficiency of the commercial offer, which then applies to well-identified targets. However, care must be taken because a too far carried segmentation with segments too small leads to too high adjustment costs.
For a segment to be usable, it requires that:
The number of consumers concerned is sufficient to return the mass production of products -
It is clearly identifiable
It is accessible, meaning that there are media that can address this segment.
One good example of segmentation is those realised in the banking industry. According to age, income, social level the products proposed their prices would be different. Even the type of contact between customers and banks would be different: phone, internet, classical bank, private space dedicated to VIP. The marketing man defines «niche» or «target» he chooses to serve. He continuously adapts the product or service to sell, sets prices in line with what the market is willing to pay. It also involves the adaptation of its mode of distribution and sales force, in order to be better than competitors. Given the expectations and desires of consumers, it is a competitive advantage in the type of product, price or service that will make its offer chosen. The perfect knowledge of its market and a unique of the segmentation can develop appropriate strategies and better define the implementation.
Ways to make themselves known are specific to each case, and according to different industries. The parameters to be...
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