Page 62 - DMGT510_SERVICES_MARKETING

Unit 4: Customer Expectations and Perceptions of Services through Marketing Research

Marketing Research is the process of systematically and objectively identifying, collecting data Notes
on the environment and the market and translating them into information that can be used by
marketers to make better quality decisions. The service marketer uses this knowledge-based
information to find out the customer expectations and perceptions, and design his marketing
programmes.
In this unit, you will learn what are customer expectations and perceptions and how marketing
research can be used to analyse them.

4.1 Marketing Research and the Service Firm

Marketing research is a necessary and useful analytical tool for service firms for the following
reasons:
“Keeps in touch”: With geographical expansion of its market, a service firm resorts to the intake
of intermediaries like agents, franchisees, retailers and BPOs, and in the process, the company
“loses touch” with its customers. It is the intermediaries who are in regular touch with the
customers; and even they are hardly in touch with the potential customers. Marketing research
then helps the service firm to “keep in touch” with the present and potential customers.

Example: SOTC, the outbound tour package company began as a one-shop outlet from
then Bombay, during the fifties. The owners were in direct contact with its customers and were
able to tailor their products uniquely to satisfy their customers. With success came the desire to
expand - geographically as well as in operation terms. They were thus forced to take on
intermediaries like Travel Agents and franchisees. Now it were the latter who were ‘in touch’
with the customers, not SOTC. They would therefore resort to MR to know the changing customer
preferences as well as about the marketing mixes.
Perceptual Veil: Success might breed arrogance in a service firm and they might suffer from
marketing myopia. They then may not perceive the real needs of the customers. This blindness
also comes when a successful service firm has many layers and tiers of management and the
market information has to go through all of them, leading to a distortion of the message. This
‘Chinese whisper’ effect is sought to be avoided by the regular usages of marketing research.

Notes A leading public sector bank had many denominations in its Traveller’s Cheque
(TC). But it was noticed in a research of the internal records of payments and cancellation
of unutilised TCs that most of the latter were of ` 100 denomination. The ` 100 denomination
was therefore recommended for non-issue. Since everything was a ‘holy cow’ in the
mentality of the public sector, all officers rejected the proposal as it progressed up the
ladder - till it reached the Chairman. He was essentially an outsider, an erstwhile bureaucrat,
holding the post of Secretary in the Ministry of Defence Production, before taking up the
chairmanship of the banking behemoth. He dispassionately recommended its non-issue,
which was quickly agreed upon by all other junior functionaries. The whole journey of the
proposal up and down the hierarchy level took over a year. There were more than ten
layers through which it had to go - distorting the main view-point and delaying the
decision making process.

Minimizing Risks: With intensification of competition and inter-firm rivalry, it has forced most
service firms to come out with high voltage marketing. This has inflated the costs of marketing-
be they in new product development, pricing strategies and tactics, promotions or distributions.
In other words, the costs of marketing failures and mistakes - in terms of opportunity costs and

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