The main features of service differentiation are-
Ease in ordering:
Corporations like Dell, Baxter Healthcare and web-based services like peapod and net grocer have eased the process of placing an order. One does not have to step out of the house to buy the product.
Delivery:
It is related to how well a product or a service is delivered to the customer with speed and accuracy. The best examples are again Dell, which delivers its products right at the doorstep of the customers.
Installation:
It refers to the work undertaken to make the product operational at the prescribed location. Buyers of heavy equipment expect good installation service. Differentiation by installation is particularly important for companies that offer complex products such as computers and machinery.
Customer training:
It refers to how the seller provides training to the buyer about the product and how to use it. General Electric supplies and installs expensive X-rays equipment in hospitals but also gives extensive training to the staff of hospitals about using the machines.
Customer consulting:
It refers to the data, information systems and advising services that the seller offers to buyers. For example, the Rite aid drugstore chain’s communication program, called the Vitamin Institute provides customers with research so they can make more educated judgments and feel comfortable asking for help. On the web, Rite Aid has teamed up with drugstore.com to offer even more comprehensive health related information.
Maintenance and repair:
It refers to the post-sale services which generally include maintenance and repair services. Automobile manufacturers are often seen providing free services initially for the automobiles.
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Service Differentiation is a design pattern for business services and software, in which the service varies automatically according to the identity of the consumer and/or the context in which the service is used. Sometimes known as smart service or context-aware service.
The concept of being different is very much essential in today’s world of cut-throat competition. The difference of one product from its competitor is the revenue that it earns. Products have to be different in order to survive the competition. It is not just the domestic competition but also the competition from and abroad, as one country produces and sells in another country while some other countries produce and sell in our country. The targeted customers have many options. Choosing among options is always based on differences, implicit and explicit. So, one must differentiate in order to attract the customer and make him/her buy the product.
Creating differentiation in one’s own product and services is a better way to avoid competition. One can offer a number of possible options in products to the customers. Every type of customer can choose a product which he/she likes. In this way, low-end, mid-end or high-end customers, all of them will have a product to choose from. Common differentiations include, speed, performance, quality, responsiveness, availability, ease or integration.
All the above mentioned points are for a tangible product. But, how can we differentiate services. It is easy when the differentiation of variables is tangible as in the case of product but, difficult in case of services. If the product has not many tangible features, then adding value-added services to the product is one of the methods. This process is called service differentiation.
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In business, a strategic business unit is a profit center which focuses on product offering and market segment. Strategic business units typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though they may be part of a larger business entity.
A strategic business unit may be a business unit within a larger corporation, or it may be a business into itself or a branch. Corporations may be composed of multiple strategic business units, each of which is responsible for it’s own profitability. General Electric is an example of a company with this sort of business organization. Strategic business units are able to affect most factors which influence their performance. Managed as separate businesses, they are responsible to a parent corporation.
An example of a strategic business unit is General Electric. Product offering typically encompasses a strategic business unit.
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A strategic business unit (SBU) is an organizational subunit that acts like an independent business in many major respects, including the formulation of its own strategic plans and its own marketing strategy. An SBU may share its parent organization’s corporate identity or develop its own brand identity, depending on the degrees of freedom allowed to the management of the division.
A one-fit-all strategic approach would be inadequate in large, diversified organizations and multinational companies. Dividing the corporation’s operations into SBUs increases efficiency and market focus and efficiently organizes the business portfolio of a broadly diversified company.
SBUs are found to be a viable form of organizational sectioning because they ensure that products and product lines are given specialized focus, as if they were developed and marketed by an independent company. Products with smaller sales volumes and profit margins than a corporation’s top performers would still be nurtured and promoted by its SBU. The division would focus on a market sector that may be small in comparison but still constitutes a profitable market niche.
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Consumerism is the belief that personal wellbeing and happiness depends to a very large extent on the level of personal consumption, particularly on the purchase of material goods. The idea is not simply that wellbeing depends upon a standard of living above some threshold, but that at the center of happiness is consumption and material possessions. A consumerist society is one in which people devote a great deal of time, energy, resources and thought to “consuming”. The general view of life in a consumerist society is consumption is good, and more consumption is even better.
Consumerism --the consumption of goods and services in excess of one’s basic needs, usually in greater and greater quantities --is not a new phenomenon, and early examples of consumerism can be traced back to the fist human civilizations. A significant consumerist tide hit Europe and North America in the mid-18th Century as a result of the Industrial Revolution and the transformation of Western Europe’s and North America’s economies.
The mechanization of a number of processes such as farming freed a certain percentage of the workforce from farming, fuelled both the Industrial Revolution and population growth. As industrialization created the conditions for mass production and mass consumption, for the first time in history, immense quantities of manufactured goods were suddenly available at outstandingly low prices, and thus made available to nearly everyone.
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Customer satisfaction is defined as a customer’s overall evaluation of the performance of an offering to date. This overall satisfaction has a strong positive effect on customer loyalty intentions across a wide range of product and service categories.
The satisfaction judgment is related to all the experiences made with a certain business concerning its given products, the sales process, and the after- sale service. Whether the customer is satisfied after purchase also depends on the offer’s performance in relation to the customer’s expectation. Customers form their expectation from past buying experience, friends’ and associates’ advice, and marketers’ and competitors’ information and promises.
Factors which determine the extent of expectations are: customer needs, total customer value and total customer cost. It is mentioned by researchers who study customer choice that choosing a product or service is only one of the stages customers go through.
There is general agreement that: Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations. Based on this review, customer satisfaction is defined as the result of a cognitive and effective evaluation, where some comparison standard is compared to the actually perceived performance. If the perceived performance is less than expected, customers will be dissatisfied. On the other hand, if the perceived performance exceeds expectations, customers will be satisfied. Otherwise, if the perceived expectations are met with performance, customers are in an indifferent or neutral stage.
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The banking system in different countries varies substantially from one another. Broadly speaking, however, there are two important types of banking systems, viz., unit banking and branch banking.
‘Unit banking’ means a system of banking under which banking services are provided by a single banking organization. Such a bank has a single office or place of work. It has its own governing body or board of directors.
‘Unit banking’ functions independently and is not controlled by any other individual, firm or body corporate. It also does not control any other bank. Such banks can become member of the clearing house and also of the Banker’s Association. Unit banking system originated and grew in the U.S.A. Different unit banks in the U.S.A. are linked with each other and with other financial centers in the country through “correspondent banks.”
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