How Service And Product Augmentation Could Increase Value

Published Date: 02 Nov 2017

ABP level 7

Lecturer: Mr. Munian

This assignment is submitted for Post-Graduate Diploma in Marketing Management from ABP via London Academy of Management Sciences.

Contents

Student’s Details

Surname: Majid

Forename: Abdul

Student Reference: 8670m/abdu

The subject of assignment

Value Added Marketing

Tasks of the proposed Assignment

Different perspectives in an organisation

Definitions of value added marketing

What drives value added marketing in an organization of your choice

Impact of the modern age of value added marketing

Importance of managing the customer relationship in value added marketing

Role of marketing management in value chain management

Task: 1

1.1: Explain the nature of value-added marketing with regard to tangible and intangible dimensions.

Marketing is about informing customers about the existence and benefits of a company’s product and it also tells where the product is available and what the price of that product is. Value added marketing is about an approach a company adopts in differentiating a company’s product in the market so as to attract customers that would lead to competitive advantage over its competitors.

Value adding can be defined into two dimensions, services and commodities in which commodities are tangible and services are intangible dimensions. Nowadays, customers want to buy things to get maximum benefits with minimum cost. They compare whether the benefits of a specific product is equal or not. However, different customers have different opinions as far as value added is concerned; and according to Helbig (2007) it is important that the value being added to a particular product or a service be beneficial.

On the basis of the argument of Helbig it can be concluded that whatever value is added to a product or a service it is critical that companies must ensure that the added value is a benefits to a customers.

If value added marketing is an approach then in case of jet blue, the airline set its feet in highly competitive environment. The main focus of the company is that customers have the right to get high quality service at affordable price. This high quality service of the company enhances the added value to its services.

The fundamental objective of value adding is to increase the worth of services and goods a company deals with, in order to attract and retain as many customers as possible in addition to increasing profits.

Southwest airline is the biggest domestic passenger airline operating in the United States. It is famous for its low cost carrier just like JetBlue.

When an organisation goes for value added, the price of that product increases so there is a possibility that consumers might not buy that product or service. The decision to go into value adding should not be taken lightly; it has above mentioned risks associated with it. However, the rewards are greater than the risk involved.

1.2: Illustrate how service and product augmentation could increase value.

There are three different levels in a product, Core product is an intangible product which is a core benefit of the product which makes it valuable to the customer. Actual product is the physical or tangible product which a customer buys. Augmented product is again intangible part of the product which consists of value added and for that a customer may pay a premium. This concept is called three levels of product.

Several scholars including Berry (1983 and Levitt (1983) are of the view that augmented product differentiated improve its competitiveness in the market.

According to berry (1983) in relationship marketing strategy, augmented service builds extras into the actual service or product. Levitt (1983) also argues about augmented products that the products which are offered with extras, the customers find them beneficial and therefore prefer doing business with the company that supplies them.

So augmented products add some more services in a actual service or a product which increase the value of the product than its competitors.

If this is the case then JetBlue is actually offering onboard assistance to customers with special needs like

An individual safety briefing

Assistance with stowing and retrieving carry-on and assistive devices

Assistance with opening food and drink items

Assistance to and from the onboard wheelchair

JetBlue aims at being the first airline that did not employ paper-based recording system. The company introduced computers and information technology in all sectors of its operations. JetBlue developed a novel e-ticketing reservation technique referred to as Open Skies. This innovative way of doing business increases value to its service.

When companies are offering extra to the customers, it should be free otherwise customers would realise that they are not getting anything extra. If the company is charging for extra service then that service is not augmented.

In other words, the augmented product encompasses everything surrounding the service and its delivery, including intangible attributes such as accessibility and atmosphere and provision of credit.

1.3: Examine the marketing process, focusing on the marketing planning process.

According to Verwey (1985) marketing planning process is a co-ordinated process which makes the best use of available resources to present a product proposition to a target market in order to achieve objectives, and then evaluating how successfully this has been done.

Malcolm (1976) is also of the view that Marketing is the management process which identifies, anticipates and supplies customer requirements profitably.

In this modern age the methods of communications are changing so quickly than ever before but the true challenge of marketing is planning strategically in a way that will ensure that the plan that emerges is realistic to the needs, wants and resources you have to hand as an individual or an organisation.

The initial marketing strategy of the JetBlue was to combine common sense and technology in addition to setting out an objective of introducing humanity into airline travels as well as making flying an enjoyable experience.

Neeleman Bodouva & Bodouva, (2004) intended to develop the new airline based on Southwest’s marketing strategy of stimulating demand in underserved markets with lowest possible fares.

There are some scholars who do not agree with the definition given by Melcolm and peter above for them strategy is about different things to different people.

According to the Mintzberg & Quinn (1991), There is not even single, universally accepted definition.

The strategic planning of JetBlue was to be achieved through the use of highly competent employees and aircrafts. Another strategy of accomplishing this objective was through flying bigger planes for longer distances in addition to offering an enhanced overall passenger experience.

1.4: Examine the key concepts of value-added marketing including quality service, wealth creation, and innovation.

The subject of service quality is very rich in context of definitions, models and measurement issue. Several researchers explored the subjects with varying perspectives and using different methodologies. According to the several scholars including Leonard and Sasser (1982), Cronin and Taylor (1992), Gammie (1992), Hallowell (1996); Chang and Chen (1998) service quality has a strong impact on business performance, lower costs, customer satisfaction, customer loyalty and profitability.

There are three things in it quality service, wealth creation and innovation. The more customers are satisfied with the quality of the service the more will be attracted to buy its products. Once the customers are satisfied, they are likely to come back again this would promote good customer relationship and it would lead to the development of the good customer loyalty who would not only come to purchase once but will remain lifelong customers.

Wealth creation is about long-lasting product and it has to do with the standard of living of the customers adopting it. Economic point of view wealth creation provides employment to the people and it will contribute to increase the GDP of the country. It also generates more returns to the share holders against their investments in terms of dividends.

Innovation is about translation of new ideas into a product or in new process or a process.

JetBlue offers low travel costs with high style, friendly crewmembers who believe in service as well as a high quality of service, the company has developed a great deal of value added services with sole intent of satisfying their customers’ needs. These include comfortable leather seats, ticketless travel, free satellite TV on every seat, a significant amount of legroom, no discount seats, airplane yoga cards, assigned seats, and a true loyalty program among many others.

If an organization is able to improve the quality of a service then there is no doubt that it will delight customers and customers will be happy and will remain loyal to the company. Several scholars have also concluded that a quality service play a critical role in promotion and customers loyalty. For example Gummesson 1998, Lasser 2000, Silvestro and Cross 2000, Newman 2001, Sureshchander, 2002 and Guru 2003 also support the view that if an organization is able to deliver high quality service it is more likely to succeed in attracting and retaining customers by promoting customers loyalty.

As a conclusion in marketing these three points quality service, wealth creation, and innovation increases or add enormous value to the service.

Task: 2

2.1& 2.2: Critically evaluate the impact of different definitions of value-added marketing on consumers from economic, social, ethical and moral perspectives.

Any step in the production process that improves the product for the customer and results in a higher net worth is called Value added.

In Marketing terms Creation of a competitive advantage by bundling, combining, or packaging features and benefits that result in greater customer acceptance.

We can analyse value added marketing by different perspectives, some of them are given below

Economical perspectives

If the product offers several augmented features and the price is competitive as regard to the rival or competitor then it has great economic benefits to the customers.

The following features may cause for increase in the value of a product and consumers will buy a product which is more economical for them.

Ease of Use

Quality

Adaptability

Time-Saving

Cost-Saving

Social

If the product is simple and more social or have following features then it may also increase the price of that product.

Flexibility

Simplicity

Customizing

User friendly

Environment friendly

Privacy

Ethical & moral prospective

It is a principle of moral values that influence of the behaviour of the people to distinguish between what is right and what is wrong. If the product is according to the moral values then it may also increase the value of that product.

According to law

According to principles

JetBlue treat their customers in an equal manner regardless of their social and economic status. Even though JetBlue is experiencing tremendous growth, the company is not contented. The management team realizes that it is only as good as its last appearance.

Due to that fact, the company is committed to dealing effectively with all issues that may negatively impact on customers’ experience. So in order to success and prosperity it is necessary that the company should take into account all the economic, social and moral perspectives.

JetBlue successfully delivered service without any social or moral issues because if any airline will promote any specific culture with is against the principles of equality then that will end up badly.

2.3: Examine the marketing principles of exchange of value.

According to the Philip Kotler and Gary Armstrong (1998) The amount of money charged for a product or service is called its price and product is anything that can be offered to a market for attention, acquisition, use or consumption that can satisfy a need or want.

Paul R Smith, Chris Berry, Alan Pulford (1999) are of the view that a set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or user and promotion include followings

Personal Selling

Sales Promotion

Direct Marketing

Public Relations

Advertising

Marketing principles of exchange of values are also known as 7ps of marketing, each principle add value to the product. There principles are given below

Product

If the product has innovative features in it then customer cannot find similar benefit in any other product. These features will add value to that product.

Place & Price

Place also play a very important role in addition of value to a product for example a product is placed at a convenient store or if the price of a product is competitive it will defiantly add value to that product.

Promotion & People

If any product is associated with any brand then people will prefer that product because promotion also adds value to a product.

Process & Physical environment

Process and physical environment also add value because better the physical environment is better will be the product and each stage of the process add benefits to that product.

The main objective of JetBlue is to provide customers quality service with lowest possible price. However, the management team has made it clear that they are aware that growth comes with a price and this is the reason why they are focused on maintaining customer loyalty in addition to customer value.

Several scholars agree of the view that market principles increase the value of the product or service, because service which is the activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything

The four Ps of marketing play an important role in the value added marketing. JetBlue place its customers at the first place which is the one of the reason for their success.

2.4 Examine how the value proposition applies to the provision of services and products.

According to Tracy and Wiersema (1993) value proposition is defined as an implicit promise a company makes to customers to deliver a particular combination of values. Each proposition searches for the unique value that can be delivered to a chosen market.

Ramirez (1999) says value proposition is the creation of mutual value for customer and supplier. It can be achieved as a consequence of a reciprocal relationship between organisations and stakeholders in a network or constellation.

The value propositions directly impact the markets where businesses are competing. Value propositions also impact new products development, services and customers’ relationship.

In other words the value propositions increase the worth or value of goods and services because when a company promise to deliver a quality service or augmented services then consumers will be happy to buy that product or service and this value proposition will add value to the product.

JetBlue aims at providing excellent services on all its operations based on the fact that customers do not necessarily point to a single issue that gives them value, but to all services provided by the company.

Bodouva & Bodouva (2004) states that the value offered by JetBlue to its customers extends to its service-oriented culture, which is characterized by the high quality service provided by all employees to the customers.

A value proposition is a short statement that clearly communicates the benefits that your potential client gets by using your product, service or idea. It boils down all the complexity of your sales into something that your customer can easily get or remember.

It needs to be very specific, Simply describing the features or capabilities of your offer is not enough. Value proposition must focus closely on what your customer really wants and values. Customer wants to solve problems, to improve on existing solutions, to have a better life, build a better business or do more, better and faster.

Creating a value proposition is a useful marketing technique that had wider application than product marketing. Whatever you are selling and to whom, a value proposition is useful, if not essential, tool. Whether your 'customers' are external customers, employees, co-workers or even your family, the idea is to help them see the specific value your offer brings to them. And by doing so, you will grab their attention.

Hence, the concept of value proposition is of increasing interest to both companies and consumers from different fields particularly from new products, services and performance management points of views.

Task: 3

3.1: Examine how consumer circumstances, lifestyles and cultural influences can drive marketing change.

Lifestyle was first defined by Lazer (1963) as a systematic concept representing the living characteristics of a certain society or group of people, which also differ from those of other societies and groups of people.

Kotler ( 2003) defined lifestyle as the way one lives his life, which is in other words, how one presents himself in his interests, activities, and opinions.

Hawkins, Best and Coney (1992) claimed that cultures are subjected to the effects of demographic variables, family, personality, social status, value views, motives, cognition, learning and marketing activities factors and are formed through the different attitudes and needs, and affect further the decision process of consumers including the choice.

Customer circumstances

Consumer circumstances have a very great impact on marketing decisions of a company.

Suppose there is an economy of a country in which all people are employed that means people are earning and they have more disposeable income therefore they will spend more and a manager can adopt an aggressive marketing strategy to attract more customers about their product.

On the other hand if an economy of a country is experiencing a recession in which most of the people are unemployed that means people will lose their purchasing power and the prices of the goods and services will go up. In that case company should decrease its prices of products which is only possible by reducing the production cost of that product.

Life styles

The lifestyles of people is changing day by day because of several factors like

Economic progress

Social mobility

Better education

Influence of other cultures

All these factors bring about changes in the approach of marketing.

Cultural influences

Culture also affect the marketing because consumers buy products which are according to their culture and do not buy those products which are prohibited in their culture or religion.

For example

Dress

Food

Language

JetBlue has established a very strong as well as vibrant customer service-oriented company culture; a culture that is reinforced by enlightening the employees concerning the importance of customer service in addition to safety as well as the need to remain productive and keep costs at a minimum.

The consumer who has different lifestyles and demographic characteristics purchases the same merchandises with the diverse preferences of the choice of consumers.

Kotler (2000) pointed out that, the factor of influencing consumer’s purchase behaviors are subjected to the effects of culture, society, individual and mentality factors of consumer characteristic, for individual factor including age, life cycle stage, occupation, economic situation, lifestyle, personality and self concept.

Consumers’ lifestyle has a positive relationship with their choice of channel type. Consumers’ lifestyle has significant effects on their choice of channel type.

3.2: Investigate the impact on value propositions of well-being, wealth creation, social and economic mobility, resource scarcity and natural effects.

Arrow et al (2010) defined wealth as the social worth of an economy’s entire productive base, which consists of the entire range of factors that determine intergenerational well-being.

We also define wealth comprehensively, as the stock of all assets, net of liabilities that can contribute to the well-being of an individual or group.

Well being

When a company offer its products or services which are beneficial for the consumers and according to the demands or expectations of the consumers then it is like working for the wellbeing of the consumers.

Wealth creation

When a company will deliver quality products or services, large number of people will buy that product so that company will be able to contribute in the wealth creation of that economy.

Social & Economic mobility

When a company introduce goods and services of a particular society in other society, it brings enormous changes in that society.

Natural effects

When companies give donations or charity out of there profit share it contributes to overcome the effects of natural calamities.

Jet blue is committed to conducting themselves in a fair, honest, and transparent manner in addition to providing reliable information to their customer on matters relating to environment and social responsibility. Airline treat its customers in an equal manner regardless of their social and economic status.

Up to 1980s people were unaware about the inverse effects of production of many products. Customers only concern was the cheap price and the quality products. But gradually people realised that the amount they have to pay in form of decline in economy, decrease in standard of living is far greater than the product.

Now customers are very concerned about the company’s value propositions relating well-being, wealth creation, social and economic mobility, resource scarcity and natural effects. If a company participate in all sectors of the economy, customers would be happy to buy the product of that company.

3.3: Systematically analyse how organisations apply value-added principles for improvements to include performance, profitability, cost-effectiveness and brand value.

The term performance was first used in 1970s, According to the Armstrong & Baron (1998) the organization of work to achieve the best possible results is called the performance of that organization.

Performance

When a manager wants to add value to a product he adopt TQM which will help him to increase performance because there will be less faulty products and that would increase the performance of the organisation.

Profitability

When the product is of good value then customers will be happy to buy that product at a extra or premium price which will increase the profitability of that organisation.

Cost-effectiveness

If a manager manages the whole productivity process efficiently then it will contribute to the cost effectiveness because there will be no dual working cost.

Brand value

Better the quality of the product is more reliable will be the name of that organisation. So quality increases the good will or brand name of that company.

Johnson & Weinstein (2004) says that in order to guarantee continued growth and success, the management team has come up with a strategy focusing on three main goals: people, performance and prosperity. This strategy is grounded on the perception that solid operating performance is driven by great people and as a result, continued prosperity is experienced.

In simple understanding performance management is not a system or technique, it is the totality of day to day activities of all managers. But Storey and sisson (1993) are of the view that performance is actually an interlocking set of policies and practices which have as their focus the enhanced achievement of organizational objectives through the concentration on individual performances.

All these things are essential about measuring, enhancing the performance of staff, as a contributor to overall organizational performance. It must be said that cost effectiveness and profitability has the direct relationship between them, better the cost effectiveness more will be the profit.

3.4: Systematically analyse the drivers that influence change and strategic development including financial, resource, cost and productivity.

Internal and External Drivers

Internal drivers are those forces within organisation which increase productivity, Improve effectiveness, innovation and cut down their cost. On the other hand external drivers are those forces, which are outside the organisation like globalisation, technology, change in customers taste and preferences.

Strategic development

According to J Bracker (1980) Strategic planning is the process of conducting researching, defining strategies, and developing business models and plans to achieve the organization’s vision. Strategic development is dynamic and assumes that the organization needs to respond to a changing environment.

As organizations dive deeper into the new economy and as traditional business models are being turned inside out, it is crucial that leaders of established and start-up companies alike understand the processes by which strategies are shaped, in order to guide their companies effectively.

Factors that affect and ultimately comprise a company’s strategy stream continuously from these intended and emergent sources. Regardless of the source, however, then they must flow through a common filter, the strategic process. This is because a company’s actual strategy is manifest only through the stream of new products, processes, services and acquisitions to which resources are allocated. The strategic process acts like a filter that determines which intended and/or emergent initiatives get funding and pass through, and which proposals are denied resources.

Financial resources

The money available to a business for spending in the form of cash, liquid securities and credit lines. Before going into business, an entrepreneur needs to secure sufficient financial resources in order to be able to operate efficiently and sufficiently well to promote success.

Cost and productivity

An amount that has to be paid or given up in order to get something is called cost and A measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs is called productivity.

Cost is usually a monetary valuation of effort, material, resources, time and utilities consumed, risks incurred, and opportunity forgone in production and delivery of a good or service.

Productivity is computed by dividing average output per period by the total costs incurred or resources (capital, energy, material, personnel) consumed in that period. Productivity is a critical determinant of cost efficiency.

JetBlue’s strategy of achieving success at such an early stage was excelling in the aspects that really distinguish the brand from others at a significantly low cost. Comfort, courtesy and punctuality were the guiding principles of the Airways. These principles were extended to all levels of the company’s operation, externally and internally and have resulted in the creation of a distinct customer appeal.

Task: 4

4.1: Critically evaluate the impact of design and innovation on value creation and development including incremental, relational, competitive, transformational, Diffusion of Innovation.

Incremental

Mobile companies as well as computer manufacturers are adding value to their product incrementally, so a Company should add value to the product incrementally.

Relational

Design, Innovation and value creation must promote such a form of relationship between a company and customers.

Competitive

Innovative product or design of that product should be such a way which generates a competitive advantage over its competitors.

For example Apple has launched iphone 4S which is such a innovative device that has competitive advantage over other products offered by mobile phone manufactures like HTC, Samsung and Blackberry.

Transformational

When a company transforms a product into a entirely new product with the help of design and innovation.

For example Apple iPad is the transformation from iPhone and notebook which have both features of a cell phone and a computer.

Diffusion of Innovation

Diffusion of Innovations takes a radically different approach to most other theories of change. Instead of focusing on persuading individuals to change, it sees change as being primarily about the evolution or "reinvention" of products and behaviours so they become better fits for the needs of individuals and groups. In Diffusion of Innovations it is not people who change, but the innovations themselves.

4.2: Systematically analyse the effect of science and technology on value creation and development.

Science and technology

Science and technology play an important role in the value creation and development because without nano technology it was impossible to have a mobile phone, Pads or laptops.

Mobile operators are likely to undergo a similar development as fixed operators already have, they will become data carriers only. The only difference however is, that the mobile operator has invested a lot of money into services and infrastructure , whereas the fixed operator has focused on sophisticated value-creation in terms of data carriage only .

In general, a total reinvention of the operator business concept will sooner or later become inevitable. In an historical retrospective, one could argue that this is no news, and actually just a final part of deregulation. Whereas most European incumbent operators for instance today are privately owned businesses, the biggest and most prestigious of them tend to originate from formerly state-owned post and telecommunication agencies, which started to disintegrate and privatize operations during the 1990s. As these industry conglomerates became open business models and part of a free competitive environment, they in result always had to give away slices of their traditional monopoly businesses. After the traditional post, telegraph and telecommunication institutions were separated, the remaining telecommunication businesses in many countries still had to step by step give away several opportunities of value generation opportunities based on changes in regulation, such as television channels broadcasting, cable TV infrastructure, and internet service provisioning.

As one conclusion, one could argue that technological convergence in the end implies positive effects for challengers firms, whereas established incumbent firms are more likely to fail in converging environments. This, as already mentioned, supports the theory that technological convergence could represent a special case of disruptive innovation, as the characteristics are the same, i.e. challenging firms outperforming incumbents in several cases . Those incumbents, which manage to ‘face the brutal facts’, to critically assess their core competencies and related opportunities in the emerging environment, and finally to derive innovative solutions from the new technological paradigm, will succeed in leading the convergence process, instead of following it.

Technological convergence furthermore initiates other convergence processes, such as industry convergence. Industry convergence is one major reason behind the entrance of previously unknown players in the fields of telecommunications. As industry borders become blurred, actors seek business opportunities elsewhere than in their traditional markets. Whether operators are able to exploit and benefit from convergence processes is a fairly interesting question, as future competition clearly evolves around value creation – both for the company and for the end-customers. In the case of VoIP the question is whether end-customers choose free of charge VoIP offerings before the incumbent’s bundle offerings. The question to be asked for the incumbents is whether VoIP is lucrative enough to invest in and whether return on investments will be satisfying enough. Value can be created through focusing on core competencies rather than riding the hype of technology development and convergence. Developing the company’s value network in order to find partners for maintaining customer satisfaction (e.g. develop converged products and services) might prove to be a better strategy than keeping one foot in all possible markets which in fact are outcomes of convergence processes.

4.3: Systematically analyse the effect of cultural and cross-cultural mobility on value-added marketing.

Douglas and Craig in 1997 identify four streams of cross-cultural research: studies focussed on examining the universality of consumer models, comparative research on similarities and differences in consumer behaviour between cultures; research on the assimilation of ethnic groups and the impact of ethnic identity on consumer behaviour; examinations of cultural context and the structure of symbols, artefacts and communication within a culture.

According to Jeong [2003] countries should be selected for cross-cultural research on a sound conceptual basis. Douglas and Craig [1997] argue that there are conceptual and methodological dangers inherent in restricting crosscultural research to country units, and propose the alternative of the "culti-unit" [Naroll 1970]. A culti-unit is defined as a group of people who are domestic speakers of a common language and are in regular contact with one another. The two dominant dimensions of a culti-unit, therefore, are language and the degree of social interaction and communication. We believe that this unit of analysis is ideally suited to research on m-commerce, as this is grounded in communication. Communication may be seen as a latent construct in our research; it can be argued that all commerce is grounded in communication and that m-commerce is no exception to this. The confounding of the components of and consequences of culture noted by Manrai and Manrai [1996] has already been discussed; is communication a component of culture or a behaviour that is shaped and influenced by culture? Such disentangling is beyond the scope of our research, and we argue that regardless of whether communication is an input to or output from culture, we would expect significant differences in patterns of communication and hence of m-commerce between cultures. Mobile phone users in a country can be seen as constituting a virtual culti-unit. In designing our research, we sought to identify culti-units which had similar mobile telecommunications infrastructures and penetration rates but different cultural profiles. We wished our research to be rooted in culti-units offering consumers similar opportunities to use m-commerce so that observed differences might be attributed to culture and not to differences in infrastructure.

Task : 5

5.1, 5.2: Examine the contribution of customer relationship management to value-added marketing including brand image, reputation management, competitive advantage, value chain and how brand disposition and quality assurance requirements impact upon value propositions.

Brand image

Brand image is like top position of a company in its customers mind. For example in mobile phone industry there was a time when Nokia was the market leader but now perception of the customers changed and now Apple is supposed to be the number one mobile phone manufacturer.

Reputation management

If a customer is unhappy with the product of a company then it is the liability of that company to make him satisfied to maintain its reputation otherwise customers will go for alternatives offered by its competitors.

Competitive advantage

The challenge for a marketing strategy is to find a way of achieving a sustainable competitive advantage over the other competing products and firms in a market.

A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.

Value chain

Michael Porter's defined the value chain. It is the theory that underlies activity based management and ultimately, Norton and Kaplan's Balanced scorecard. By analyzing the process flow through business, identifying the critical success factors for the key processes, where value is added to the firm, measuring that and mapping it onto a balanced scorecard, setting targets and emphasizing the key processes, a strategic planning team can focus and align the entire organization.

Brand disposition

Brand disposition is more to do with how brand is perceived, It is a manner in which a case or matter is determined or settled, or a property is transferred to another's care or possession such as by a sale deed or will.

Quality assurance

There are several quality assurance awarding bodies which award credits to a product or company. If a product of a company got quality assurance by governing legislations or other institutions like IS0 2009 then it will increase the value proposition of that product.

5.3: Critically compare brands with respect to image, identity and brand strength.

Brand

Brand is how customers recognise a product or consumer’s intensity of attachment with the product of a company in the market.

Image

Image is for the company that how customers or analysts perceive creditability of a company. For example if a company is using child labour then image of that company will be tarnish.

Image of a company can also be influenced by followings

Public relations

Social welfare

Sponsors

Cultural events

Donations

Charity

Corporate social responsibility

Environment protection from ecological effects

Identity

Identity is about what are the specific features a particular brand carries and how the brand is different from others.

Brand strength

The strengths of a company over its competitors for example if a company is the market leader or the dominating company then it is nothing but the brand strength of that company.

5.4: Examine the influence of customer service on customer retention, company value, long-term sustainability and organisational wealth .

Customer retention

If the customer service is good it will retain more customers. But if quality of a product is low then only good customer service cannot increase customer retention.

Companies spend millions trying to understand and influence customers - to hold on to them and to encourage them to spend more. But to increase the customers' loyalty, companies must do more than track today's typical metrics: satisfaction and defection. For despite all the money invested to promote loyalty among high-value customers, it is increasingly elusive in almost every industry.

A better appreciation of the underlying forces that influence the loyalty of customers - particularly their attitudes and changing needs - can help companies develop targeted efforts to correct any downward migration in their spending habits long before it leads them to defect. Such an appreciation also helps companies improve their current efforts to encourage other customers to spend more. Our recent two-year study of the attitudes of 1,200 households about companies in 16 industries as diverse as airlines, banking, and consumer products shows that this opportunity is surprisingly large. Improving the management of migration as a whole by focusing not only on defections but also on smaller changes in customer spending can have as much as ten times more value than preventing defections alone. Companies taking the approach we recommend have cut downward migration and defection by as much as 30 percent.

Company value

companies hire athletes and celebrities to sell and display their products. The goal of the celebrity endorsement is to make a company’s product more desirable and appealing in the marketplace. Being more desirable is certainly the first stop; however, the greatest influence a company has with a customer is through their customer service. After the consumer’s first stop to measure a product’s desirability and make a purchase, the product’s ability and longevity to satisfy the consumer’s needs determine its real value to the purchaser. This value is measured long after that customer’s initial purchase.

Long-term sustainability

If sustainability is all about ensuring the long term availability of an organisation’s vital resources to ensure long term survival, then the number one priority of all organisations is to retain the most vital resource of all: the customer. This means finding a competitive advantage, however, options for finding a competitive advantage may be few and far between.

Customers are fussy. We are inundated with choice and hold more power over brands and services than ever before. Faster, better and cheaper can still be sources of competitive advantage, but the ability to sustain these long term will require big investments in research and development and talent. Those companies that have bright enough talent, ideas and money to invest may still be able to compete on these fronts, but other companies can do far worse than to win the hearts and minds of their customers through delivering a personal and engaging customer experience. A well executed customer experience consistent time after time, visit after visit will win trust and ensure a service stays in the heart of their customers for a long time.

Task : 6

6.1: Investigate how organisational focus on improvement can build value-driven customer, organisation, market/industry relationships.

Value-driven customer is about realising that the pursuit of profit is one of the many essentials for sustainable organisation success and growth but not necessary the only motive. Value-driven leadership combines personal principles, values and corporate ethics with commercial sustainability consideration. It acknowledges that it is necessary to create wealth but also that monetary or commercial wealth creation is not the only necessity for long term sustainable business. The value in value-driven leadership alludes to the nature of the relationship between the organisation and others that it does business or has relationship with. For example, one employee might experience the valued relationship with an organisation if the organisation paid a fair wage and gave the employee time off to care for a sick parent or relative, etc., another employee might perceive the relationship as valuable if the organisation gave the employee sufficient training and career development opportunities for them to grow in their personal and career development, and to rise quickly within the management ranks based on excellent performance and meritocracy.

Every organization competing in an industry has a competitive strategy whether explicit or implicit. This strategy may have been originated explicitly or implicitly through a well articulated planning process or it may have been developed implicitly through the activities of the various functional arms of the organization (Achumba, 2000:18). The need for marketing in financial industry cannot be overemphasized. Insurance today is about marketing. The most critical role of marketing in financial institutions is to blend the element of the marketing mix optionally in coherent form in which it can be used to further the realization of the institution’s marketing objectives this is in the form of marketing strategy. However, the crave for development and marketing in the financial industry has thrown up a basic problem of insurance companies trying to employ strategies in making their services get to the customers but It appears the insurance continuously use the selling concepts, which focuses on the services rather than the prospects.

The effective communication of products or services benefits is also a weak area of marketing management in the financial industry. The end result therefore is the low level of awareness and poor attitude to the purchase of insurance services Marketing as applied to insurance is to identify present and future markets for service; select which markets to serve and identify customer’s needs within them; setting long and short term goals for the progress of existing and new services and managing the profit, and controlling success in doing so.

6.2: Systematically analyse the impact of able leadership on trust, value, understanding of customer needs and wants.

It’s up to leaders to guide employees through these times in ways that inspire optimum levels of worker productivity, performance and commitment. And to do this, it takes credible leadership. Credible leaders are trustworthy, competent, dynamic, inspiring and accountable. It’s not enough to have one or a couple of these attributes — which is how most of us have historically defined a great leader. Today, a credible leader needs to hold all of these attributes, while being proficient and competent to execute strategically.

It is leaders’ responsibility to build a workforce that is highly engaged and performing at maximum levels of contribution. Effective leadership impacts essential business metrics. As a critical component of a talent management strategy, investing in the development of credible leaders can drive:

Improved engagement

Increased workforce productivity

Better business performance

Improved morale

Optimum retention

Stronger ability to attract top talent

Increased levels of customer satisfaction

Innovation and creativity

Bottom-line business results depend on bringing leaders to the peak of their potential with maximum efficiency. Effective leaders positively impact employee retention and engagement. Capable leaders positively impact productivity and performance. Credible leaders do both while also demonstrating respect for worker contribution — the top leadership factor promoting employee engagement.

Leadership’s Influence on Employee Engagement encompasses more than traditional notions of job satisfaction. It consists of an active commitment to doing the job well and helping the organization achieve goals and implement strategies.

6.3: Critically evaluate how sales, selling and after-sales customer care can build long-term brand value.

Customer service is all about expectation. A business that offers a fast response or a personal service is setting up an expectation. If that company does not fulfil its promise, its customers will be disappointed.

Make sure your members of staff are delivering the level of customer service you expect. Lead by example and show your team exactly how you want them to deal with customers. Encourage them to come to you with feedback and suggestions. When you recruit new staff, look for people with the right attitude.

The best way to wow your customers is to under-promise and over-deliver. If you know you can deliver in three days, promise five and your customer will be pleasantly surprised.

It's good to advertise your strengths, whether they are fast delivery times, friendly service or top quality products. But if you make empty promises and the reality does not match your claims, then you will lose business. However, if your service is top notch and your customers agree then tell the world - there's no stronger marketing message.

But what is customer care all about? Really good customer service gets people talking. If you go above and beyond the call of duty for your customers, they will tell everyone they know and you will get wonderful word-of-mouth recommendations.

After you've made a sale, for instance, call your customer to check that everything is OK. If it is, they'll be pleased you rang. If there is a problem, you can address it immediately and they'll be delighted.

Pay attention to details. Follow up calls or emails quickly. If the customer has a problem, try and solve it for them. Keep records of customer service, especially if you have new members of staff that need to get up to speed on your customers.

Handling customer complaints

Inevitably, things go wrong sometimes. However, it is how you handle problems that can determine whether you lose business or actually improve customer loyalty.

More and more people are prepared to complain. Those that do are doing you a favour. They are giving you valuable feedback for nothing and helping you to improve your service. Many other customers may have quietly taken their business elsewhere. What's more, if you impress that customer with the way you handle their problem, they will become advocates for your business.

When a customer complains, you must be respectful and sympathetic, even if you think they are wrong. You should thank them for complaining and apologise. You must also act quickly. A prompt response shows that you take the problem seriously and reduces the time the customer spends feeling disgruntled.

When someone complains, always ask them what they want. Many firms assume that consumers are seeking a financial solution, such as a refund or compensation when all many people want is an apology. Allow the customer to give you all the facts so that they can get it off their chest and then you can provide the most suitable solution.

Set up a customer complaints procedure and ensure that members of staff know what they can offer. Follow up the complaint with a phone call or a letter of apology. Finally, ensure that you permanently fix the problem and let the customer know what you have done.