Discipline of Service Marketing

Discipline of Service Marketing

Chapter 3: Winner’s Choice:

Successful companies specialize to provide one best kind of value proposition to its customers- best total cost, best product, or best total solution. These three kinds of value disciplines are appropriate for a different kind of customer depending on their expectations and preferences. In the business world, these three discipline value are known as operational excellence, product leadership, and customer intimacy. In another words, these are operating models for business which is made up of operating processes, business structure, management systems, and culture. At the heart of the operating models there is a set of core processes that make or break an organization’s ability to create unsurpassed value at a profit. Different value discipline demand different operating processes. However, companies that excel in the same value discipline have remarkably similar operating models. Now, let’s look at each of three value discipline.

·         Operational excellence: Operationally excellent companies deliver a combination of quality, price, and ease of purchase that no one else in their market can match. Companies who are operationally excellent are not product or service innovators, nor do they cultivate one to one relationships with their customers. They execute extraordinary well, and their proposition to customer is guaranteed low price and hassle-free services.

·         Product Leadership:  A product leader companies consistently strives to provide its market with leading-edge products or useful new applications of existing products or services. Product leadership companies always should consider three goals before innovating new products. First, they must be creative. It means recognizing and embracing ideas that may originate any where inside the company or out. Second, they must commercialize their ideas quickly. To do so, all their business and management process are engineered for speed. Third, they must relentlessly pursue ways to leapfrog their own latest product or services. Product leaders do not stop for self-congratulation; they are too busy raising the bar. Product leaders avoid bureaucracy at all costs because it slows commercialization of their ideas. Some of the features of product leader companies:

·         Customer Intimacy: Customer intimacy builds bonds with customers like those between good neighbors. Customer-intimate companies don’t deliver what the market wants, but what a specific customer wants. The customer-intimate company makes a business of knowing the people it sells to and the products and services they need. It continually tailors its products and services, and does so at reasonable prices. The customer-intimate company’s greatest assets are its customers’ loyalty. Customer-intimate companies do not pursue transactions; they cultivate relationships. They are adopting at giving the customer more than customer expects. By constantly upgrading their offerings, customer-intimate companies stay ahead of their customers’ rising expectations- expectations that, they themselves create. Customer-intimate companies consider the customers’ lifetime value, not just the profit and loss on a few transactions. Their employees make sure that customer gets exactly what he or she wants.

In conclusion, choosing a discipline is the choice of winners. Not choosing means ending up in a muddle. It means hybrid operating models that are neither here nor there, and that consequently cause confusion, tension and loss of energy. It means steering a rudderless ship, with no clear way to resolve conflicts or set priorities. Therefore, to be successful companies must choose its area and specialized on that area to satisfy their target customers.