Ducati - Consumer Decision Making Process

The Consumer’s decision making process is based upon how they conduct themselves when purchasing products or services. The decisions they make are laid out into five steps. Before the steps however, there are some other factors that can be taken into account. The first factor to take into account is psychological factors. This influences the consumer’s decision and is based upon a person’s personality traits. It’s these traits like self-confidence, dominance, sociability, defensiveness, adaptability, and aggressiveness that help decide whether the consumer will go through with the decision making process in the first place. The traits also help determine different feelings toward products and services and ultimately shape what type of buyer you are. “The relationship of basic personality variables to buying behavior has been investigated across a fairly wide range of products and services. In probably the best-known such study, Franklin B. Evans used the Edwards Personal Preference Schedule to test for personality differences between Ford and Chevrolet owners. His basic conclusion was that personality is of little value in predicting whether an individual owns a chevrolet or Ford” (Thomas et al., 1969). Although Evans discovered that there was little contribution from a personality point of view; researchers later on found that individual personality types would have a profound impact when conducting the decision make process. When comparing the Ducati Superbike to its competitors we get a similar picture to Evan’s study with the Ford and the Chevrolet. With the Ducati However, there is a predominantly different target market. The Ducati is a top of the line motorcycle that attracts thrill seekers all around the world who want to feel the roar of the italian made engine. Straight off the cuff Ducati customers are prepared to pay more for a premium product as they feel the need to want to push their thrills to the limit.

The buyer decision making process is split up into 5 steps. Need recognition, Information Search, Evaluation of Alternatives, Purchase Decision, and Post-Purchase Behaviour. This is the order in which a consumer will typically run through when making a purchase of some sort. Needs Recognition is the first step in the consumer decision making process and occurs when the consumer feels that are not satisfied and a need must be filled. Consumer’s feel that they need products and services in their life to fulfil certain needs, such as entertainment and pleasure. The first stage is considered ‘the problem stage’, as the need or want is missing and the product or service is ‘the fix’ to the problem. Someone who has a strong desire to buy the Ducati Superbike will be willing to pay extra because they feel that their need is worth the cost of the bike’s superior design and quality. Once the consumer has figured out that they need the Super Bike they move onto the second stage of the buyer’s decision making process. Information search is the second stage and consists of the need (Ducati Superbike) and also the alternative options or competitors in the market. In this case the Ducati is a speciality item that does not have many competitors, however, you can compare the Ducati Superbike to a Supercar like a Ferrari Lamborghini. If someone is willing to pay a large amount for the superbike they are probably also likely to purchase a fast car as well. This alternative product has a similar need to the Ducati Super bike.

The third stage involves evaluating the options or alternatives and outlines the differences of each options and the benefits of each as compared to each other. “So how does a consumer choose among these alternatives? The truth is that there are several processes at work inside the consumer's mind, forming beliefs and attitudes about all of the products to choose from. However these processes all "evolve" based on the individual's buying situation. The situation evolves from the set of attributes the consumer is choosing to evaluate products by” (The Market Media Life, 2015). “An Evaluation of Alternatives is the stage of the buyer decision process in where a consumer uses the information gathered in the Information Search to evaluate alternative brands in the product category” (The Market Media Life, 2015). When it comes to buying a Ducati you cannot undermine their superior quality and performance. “The Ducati Superbikes are the most advanced, most powerful twin-cylinder motorcycles ever built. They are the product of a team of designers and engineers who have combined their Ducati Motogp and World Superbike technologies to create the finest sport bikes in the world. From race-level engine specifications to World Championship-winning traction control, the results are pure excellence” (Fraser Motorcycles, 2011).

The fourth step of the consumer buyer decision making process is the actual purchase decision itself. The decision comes down to the previous three steps deducting your options down to one and considering you're motivated enough and still have the need to buy the purchase will take place. “The decision will depend on the information and the selection made in the previous steps based on the perceived value, product’s features and capabilities that are important to the consumer” (The Consumer Factor, 2011). The actual final decision still depends on other external factors like the quality of service from the place of purchase, the return policy and also any existing promotions for the product. Ducati is renowned for their great customer service. “In April of 2015 was the best sales month in Ducati's history. The company delivered 7,309 units to customers. For that kind of duty, the Ducati delivers the best combination of style and fun at a reasonable cost” (MacDonald, 2015).

After the purchase there is a post purchase evaluation which looks at the “original needs (those who caused the buying behaviour). And whether he has made the right choice in buying this product or not” (The Consumer Factor, 2011). The consumer will most likely feel a sense of satisfaction for the product and the choice, or otherwise feel disappointed with the product. If the product has satisfied the need and the consumer is satisfied with the final product then he or she will minimise the stage of information search. This is because there is no need to go back and look for other products to fulfill that need. However, if the consumer was dissatisfied then they will need to repeat the 5 stages of the consumer buying decision process with alternative products so that they can fulfill that need properly. “Positive or negative, consumers will also be able to share their opinion on the brand. Whether in their family or by word-of-mouth. Or on a much broader scale now with social networks or on consumer product review websites. A tendency not to be overlooked because now with the Internet, an unhappy customer can have a strong power to harm for a brand” (The Consumer Factor, 2011). The importance for companies like Ducati to have the proper awareness of influencing the consumer in a positive manner is paramount to the buyer’s final decision. If the customer service is sub-par then the customer might think twice before purchasing the product. “That’s why it’s important for companies to optimize the customer experience, a guarantee an efficient customer service and a specific call centre are some of the assets that can be developed to improve post-purchase behaviour if there is any trouble with the product” (The Consumer Factor, 2011). Companies with a successful history like Ducati are renowned for their products quality and unique design. Ducati makes some of the best looking motorbikes with the most powerful engine in the world. This sets them apart from their competitors and allows the consumers to be sure they are purchasing a higher quality motorbike for the higher premium. “At Ducati, interest in business-to-business trade is slow because 85 percent of Ducati components are self-designed and ordered from suppliers in the Bologna region. But a percentage of parts, including spark plugs, chains, tires and lamps, may be purchased by joining Moto clusters, an online procurement system for the motorcycle industry that was set up last year by Giuseppe Narducci, Ducati's former head of purchasing” (Tagliabue, 2001). The Ducati Traction Control (DTC) system further underlines Ducati's technology flow from racing to production and demonstrates how solutions developed for the track can be applied to enhance safer performance on the road (Fraser Motorcycles, 2011).




References:

"Ducati." Marketing 2 Nov. 2011: 16. Academic OneFile. Web. 4 Sept. 2015.

Fraser Motorcycles, 2011, About Superbike: Ducati Superbike, viewed 2 September 2015, <http://www.frasermotorcycles.com.au/ducati/superbike>.

Hoffman, E. (1988). The right to be human: A biography of Abraham Maslow. Jeremy P. Tarcher, Inc.

Kenrick, D. T., Neuberg, S. L., Griskevicius, V., Becker, D. V., & Schaller, M. (2010). Goal-Driven Cognition and Functional Behavior The Fundamental-Motives Framework. Current Directions in Psychological Science, 19(1), 63-67.

McLeod, S. A. (2014). Maslow's Hierarchy of Needs. Retrieved from www.simplypsychology.org/maslow.html

Tagliabue, J 2001 "How Ducati roared onto the Internet. (marketing motorcycles)." New York Times 18 Apr. 2001: H14. Academic OneFile. Web. 7 Sept. 2015.

The Consumer Factor, 2011, The 5 stages of Consumer Buying Decision Process, viewed 2 September 2015, <http://theconsumerfactor.com/en/5-stages-consumer-buying-decision-process/>.

The Market Media Life, 2015, Marketing 101: The Buyer Decision Process, viewed 2 September 2015, <http://marketmedialife.blogspot.com.au/2013/03/marketing-101-buyer-decision-process.html/>.

Thomas S. Robertson and James H. Myers, 1969, 'Personality Correlates of Opinion Leadership and Innovative Buying Behavior', American Marketing Association, vol. 6. no. 2, pp. 164-168.

MacDonald, S 2015, Rev Zilla: Why the Ducati scrambler is the bike for you, viewed 2 September 2015, <http://www.revzilla.com/common-tread/the-ducati-scrambler-is-the-best-bike>.

Microsoft Lumia - Situational Recap + Marketing Mix

4.1 Situational Recap

The Microsoft Lumia has a broad price range. The Lumia 550 and 650 are the budget range, and the Lumia 950 is the top-tier model. The Lumia 950 is loaded with Windows 10 operating system, 20MP camera and a device-pairing function called Continuum. Continuum can turn the Lumia into a desktop, and when paired with the increasing trend of cloud storage subscriptions, is beneficial to the portable lifestyle of the modern consumer. The Lumia 950 also comes with a unique system called Windows Hello, which scans your iris as a password substitute. An aspect like this is part of Microsoft’s unique selling proposition regarding the product. Statistics vary, but it is said between 79-89% of Australians own a smartphone, and 8% of that figure are using Windows phones. This can be considered an opportunity for Microsoft since it is projected that with each year more Australian’s will buy a smartphone. Microsoft’s two main competitors are Apple and Samsung, who collectively control 73% of the market share. Other lesser known competitors include Chinese brands Huawei and Xiaomi.

4.2 Marketing Mix

Product Lumia is a smartphone Unique operating system, Windows 10	Promotion Point-of-sales through retailers Advertising Social media
Price Affordable budget models – Lumia 550 and 650 High priced model – Lumia 950 and 950XL	Place Social media Online and magazine reviews Mobile phone retailers

4.3 SWOT

Strengths Strong grasp over businesses and educational institutions Windows is the primary operating system taught in schools Windows holds the majority of the market share for the most popular desktop operating system	Opportunities Appealing to a younger demographic, targeting ages 18-44 Point-of-sales commissions schemes to encourage retailers Emphasis on new features and use of own operating system Emphasis on interconnectivity via the Windows 10 OS. Appeal to price-sensitive consumers
Weaknesses Significantly low number of Windows            phone users in comparison to Google            Android and Apple’s iOS. Weak innovativeness in the smartphone field, not attracting customers.	Threats Losing more market share to competitors (Apple and Samsung) Competitors copying and potentially expanding on Microsoft’s ideas Negative reviews and press regarding the Lumia smartphone range

Implications of integrating and/or fragmenting the Asian markets

There are numerous outcomes that can come from Old Spice engaging in either the integration or fragmentation of the Asian markets by the CPG manufacturer.

The integrated approach consists of companies such as Old Spice collaborating with a range of individuals such as vendors and business partners to find potential markets and cater the product to that region. CIO of British Airways Paul Corby describes the process as; “maintaining consistency of service, clarity of what the brand means, whilst being sensitive to a country’s needs”. Keeping this in mind when Old Spice enters the Asian market to distribute their various men’s health care products they need to ensure that they maintain their consistency across the board, and that they are considerate of the environment they are entering and how to cater for the demands in this region. Whilst Old Spices product of men’s health ware products are a universal necessity, the entry into the Asian market can be a complex equation. Whilst entry into such markets as Japan and China would mean access to a large population with a dispensable income, other countries such as Thailand or Indonesia have a vast poverty rate and low level incomes. Market Integration undertaken by Old Spice in this situation would be difficult but not unachievable, Old Spice would need to be sensitive to the cultural and religious differences between the two countries when undertaking promotional campaigns. For example such countries as China have restrictions on social media such as YouTube, the website plays a large role in the company's promotional campaigns as described earlier in the report, and would be a damaging blow on the success of Old Spice’s entry into this market. The implications of this would be that Old Spice would need to re-examine their marketing strategy in this country, but the nature of the integration system allows for companies to be faster and nimbler to changing opportunities. Whilst Old Spice’s prevailing social media campaign may be hindered, they can target other opportunities such China’s huge television audiences, with over 1 billion individuals (Wikipedia, 2016) tuning in to an array of programs.

Contrasting to this method the fragmented approach consists of organisations recognizing the diverse nature of the global market, and realising that whilst cultures, values and needs are different, they need to cater for their specific markets needs in order to be successful in a particular region. When engaging in this form of marketing Old Spice need to divide the market into four categories, psychographic, demographic, geographic, and behavioural segments (See Appendix 1.2). This allows for Old Spice to recognize and divide the market according to structure of the population, different countries acclamations, knowledge/usage/response to the product, and based on the various personalities of consumers. For example if Old Spice was to engage in this method they would need to gain an enormous and in-depth analysis of the chosen country, which would result in huge expenses due to the need to research the countries different segments appropriately.

Based on the implications discussed, Old Spice would be better suited to market integration as it allows for the company to seamlessly integrate and align their core values with that of their consumers and target market. This marketing technique is of the best interest to Old Spice as it will allow for the company to be more proactive rather than reactive to changing environments, to better maintain their products presence and dominance in the region.

Social media research facilitate the firm’s business growth in the global marketspace

Research of social media in the global marketspace can be beneficial for a business and its growth in the global market space. Statistics provided by Chaffey (2016) show that at January 2016, there were 2.307 billion active social media users across the globe, which is a 10% (219 million people) growth from January 2015. These figures show that social media is a profound channel of communication for businesses and a promising facilitator of growth. With social media use rapidly growing globally, businesses can capitalise on this to gain mass exposure for their brand. Social media research can help facilitate business growth by providing vital information to a firm’s strategy when choosing to actively advertise or participate in social media interactions. Old Spice can use social media research as a tool to obtain information about the male personal care market, such as personal behaviour of consumers, social behaviour, and the social aspects theory. More importantly, Netnographic studies and sentiment analysis.

Netnography is primarily a qualitative research method in studying behaviours of online communities and provides consumer insights in regard to a product or service.  “Netnography is essentially ethnographic research applied to the web” (Rocca, 2014). This research involves a business to follow conversations online between consumers about its products on its social media sites (Facebook, twitter etc.) and develop a data set that can be analysed for commonalities (What is netnography?, 2011) and using that information, the firm can determine common trends with certain cultures or with different age groups and adapt its strategy to further improve or maintain certain patterns of consumer reactions. By using netnographic as a research method, Old Spice can gain a better understanding of its consumers and how they receive the products being offered and their experiences with the products. For example, Old Spice may conduct netnographical research on its Facebook page, monitoring discussions on threads about its deodorants and may discover that some consumers react negatively to the odours that old spice offer and may discuss probabilities of new scents that they may desire or are using from other companies. Old Spice can take this information and discover a business opportunity to introduce new scents for its deodorants in addition to those currently on offer.

“Sentiment analysis and opinion mining is the field of study that analyzes people's opinions, sentiments, evaluations, attitudes, and emotions from written language.” (Liu, 2012). It is paramount that firms understand how consumers are talking about their products and understand how consumers are perceiving the brand and expressing that to other users or potential users. With the internet being the fastest and easiest way to express positive or negative opinions about products, it has become one of the main channels that consumers use to gain information about a product or brand pre purchase and use this information to come to a purchasing decision (Browning, 2013). Old Spice can use a sentiment analysis to track negative reviews, new product perception (suggestions for new products), brand perception (how consumers feel about Old Spice as a brand), and reputation management.

Social media research can facilitate business growth in the global marketspace by providing firms with the necessary information to further develop products and advertisements based on consumer opinions and input rather than guessing what consumers want.

References:

What is netnography?, 2011, video recording, SAGE Publications, Inc., Thousand Oaks, CA. Viewed 10 May 2016, doi:http://dx.doi.org.ezproxy.lib.swin.edu.au/null.

Liu, B 2012, Synthesis Lectures on Human Language Technologies, May 2012, Vol. 5, No. 1 , Pages 1-167

Browning, V. So, K. & Sparks, B. A. (2013). The Influence of Online Reviews on Consumers’ Attributions of Service Quality and Control for Service Standards in Hotels, Journal of Travel & Tourism Marketing, 30 (1-2) 23-40.

Two way dialogue between the brand and consumers

“Old Spice, a decidedly old-school Procter & Gamble brand, unleashed a social media blitz so profoundly brilliant that it not only changed the rules of social network marketing, it may have written them for the first time” (Reiss, 2010). The old spice commercial brand revolutionised the social media scene transforming the brand right before the customer’s eyes. Using comedic marketing techniques together with a ‘shirtless, magnetic presence of actor Isaiah Mustafa’, we get a sense of the overwhelming presence of sex appeal, from the ‘former NFL wide receiver who goes big--very big--here’. Mustafa’s opening tagline which captivates listeners from the very get go. “Hello, ladies,” he thunders. “Look at your man. Now back at me. Now back at your man. Now back to me” (Lippert, 2010).

Since social media has come onto the scene, big named brands have been trying to get in the limelight. They do this because Social media is an important aspect of any brand. According to HubSpot, “social media produces almost double the marketing leads of traditional outbound methods” (Edgecomb, 2013). But how does this connect to two-way conversation? Well Old Spice created the lead by broadcasting a very interesting and captivatingly funny television commercial, which then people took to social media to talk about. Old Spice used this opportunity to further communicate their brand. They did this by taking to Youtube with personalised video’s for consumers and also posting funny comments on Twitter (See Appendix 1.1).

In the first three months of 2010 Old Spice captured 75% of all conversations about the product. Half of this Buzz was generated by women. So from this the Response Campaign was born. In two and a half days a team of developers and producers and creative geniuses created 186 video responses to fans and celebrities about questions on Twitter, Facebook, Reddit and more. “On social media, the “Responses” campaign was deployed mainly through Twitter and YouTube and delivered customized tailored content in a flash” (Top Ad Campaign of the 21st Century, 2015). These videos were then posted on Youtube sparking a social-media sensation that spread through thousands of people. On one day alone the campaign received 5.9 million Youtube views, after a week that rose to over 40 million views.

“Unlike a one-way conversation, where companies dominate the conversation and don't really engage, a two way conversation allows companies to interact and engage with consumers in a direct and responsive way” (Edgecomb, 2013). It’s not all about forcing your message onto the public, Old Spice new this and took comfort in knowing that their product was seen as ‘Cool’, and ‘Funny’. The once traditional aftershave brand label with ties to grandparents was reinvigorated into their new body wash product. Old Spice was marketed to the ‘average Joe’, they wanted to have a conversation with their customers says Paula Borowska. ‘Old Spice wanted to create a relationship, which the value of is irreplaceable’. (Borowska, 2013). In the commercials, the Old Spice Man would ask the audience for requests, revealing that they cared for their customers. This contributed to the overall success and the viral status of the commercial. Within the first six months of ‘the man your man could smell like’, sales increased 27%. The commercial itself made over 1.4 billion impressions (Borowska, 2013). Alternatively online Old Spice's Facebook page has gotten more than 7,000 comments (and 13,000 or so "likes"). Look again, at YouTube, where it's been viewed more than 3 million times” (Lippert, 2010).

For two-way communication to work over the internet the company needs to first direct 80% of communication towards adding value, and brand building. ‘Examples of these include, sharing news, ideas, educating and creating delightful content. The other 20% of communication should be focused on endorsing products and upcoming events’ (Edgecomb, 2013). This in-turn makes the company more personal and actually embodies the company's culture onto the public.

References:

Lippert, B 2010, 'Man, This Man Can Sell', Brandweek, vol. 51, no. 9, p. 20

Edgecomb, C 2013, ‘Social Media Marketing: The importance of two way conversation’, Impact, https://www.impactbnd.com/blog/social-media-marketing-the-importance-of-a-two-way-conversation

'Top Ad Campaign of the 21st Century', 2015, Advertising Age, vol. 86, no. 1, p. 0018.

Borowska, P 2013, ‘What can Old Spice teach us about effective marketing?’, Viral Marketing, Creative Guerrilla Marketing, http://www.creativeguerrillamarketing.com/viral-marketing/can-old-spice-teach-us-effective-marketing/

Managing Capacity and Demand

It is very important to match demand and capacity as it would allow the organisation to maximise on profitability and utilise resources efficiently. If capacity and demand are not matched, issues can arise such as failure to smooth the peaks and valleys of demand and overuse of the capacity (Kossmann 2006, p. 39).

Failure to smooth the peaks and valleys of demands is caused by failing to match the supply to the demand (Kossmann 2006, p. 39). It could get really busy before lunch time in Canary Jane’s Flowers with up to five customers all at once. Ms. Stacey, the owner and manager, is aware that during this time and also the morning that it can get very busy so they ensure they have enough stock and staff to match for the day because of the uncertainty. In addition, seasonal changes can affect the demand. For example, weddings tend to happen a lot more in the spring and therefore this increase the demand for flowers more in comparison to winter. This means, for Canary Jane’s Flowers that they would need to increase the capacity to match the demand in spring time and reduce it in winter where it's not as busy. Another method to match the capacity and demand is shifting demand which focuses on customers and involves stretching capacity by using strategies to either attract or detract customers at certain times (Zeithaml, Bitner & Gremler 2013, p. 385). For instance, at Canary Jane’s Flowers on slow days they modify their hours of operation. On busy days such as Valentine’s Day they promote the benefits of ordering earlier than on the day to shift the demand since they know capacity will be too low. For more information on methods to shift demand please refer to Figure 8.1.

Overuse of capacity in the Canary Jane's Flowers scenario would refer to the ratio of staff to customers. Adjusting capacity focuses on the supplying side to fix the difference between capacity and demand (Zeithaml, Bitner & Gremler 2013, p. 388). Ms. Stacey usually has two florists in during the busiest days of the year, for instance Valentine’s Day and Mother’s day. To decrease demand during peak times they rely on students who are on work placements for extra hand when it is necessary. In the winter time where demand it too low employees have a holiday and Ms. Stacey would only keep one person in the store while she would drop in every now and then to give a hand if necessary. For more information on methods to adjust capacity please refer to Figure 8.2. Therefore, there isn’t much overuse in the capacity for Canary Jane’s flowers since adjusting capacity strategies are utilised effectively.

If capacity and demand aren’t matched this means there is both excess demand and business can be lost, or an excess in capacity and resources are wasted. It is very important for Canary Jane’s Flowers to understand their capacity and demand because on top of this they also need to stock the freshest flowers, not have stock sitting there for days. Therefore, capacity and demand should be recognised as an important way for Canary Jane’s to maximise on profitability. Capacity and demand levels will also be influenced by the organisation's communications.

References: 

Kossmann, M 2006, Delivering excellent service quality in aviation, Ashgate, Aldershot, England.Zeithaml, V, 

Bitner, M & Gremler, D 2013, Services marketing, McGraw-Hill Irwin, New York.

Monitoring and Researching Service Success and Failure

Monitoring and evaluating service performance is important because it allows for improvement throughout the service profit chain. Measurement and analysis allows businesses to make decisions based on data, lowering their exposure to risk and providing more predictable results (Gale 1992). Small businesses such as Canary Jane’s Flowers have less need and means to monitor performance, due to smaller sample sizes and more intimate existing knowledge of the business and customers, but such research still holds substantial value for service improvement.

It is common and natural for business operators to self-assess their performance against their past performance and objectives, but it is generally unreliable when done without structure, analysis and impartiality (Parker 2012). Canary Jane’s currently has unstructured performance measurement without formal metrics, consisting of a personal awareness of repeating customers, and reviews on external websites. The business is incidentally reviewed extremely well, with an average 4.9 star rating from 35 reviews on Facebook, Yelp, Yellow Pages, and Etsy. Reviews and ratings are currently the only impartial measurement of Canary Jane’s performance.

Measurement of returning customers is important as it is much cheaper and easier to retain customers than it is to attract new ones (Hennig-Thurau & Klee 1997). As such, customer retention rates are a very important metric to measure. Measuring retention rate is a simple calculation comparing a quantity of new customers to existing customers, but requires those two points of data. Returning and new customers can be counted simply by asking all customers if they have shopped at Canary Jane’s before, with figures stored and compared and monthly intervals to assess retention and attrition rates. A services success or failure will also be impacted by the organisations ability to manage capacity and demand.

References: 

Parker, D 2012, Service Operations Management, Edward Elgar, Cheltenham: UK, pp. 285-287.

Hennig-Thurau, T & Klee, A 1997, 'The impact of customer satisfaction and relationship quality on customer retention: A critical reassessment and model development', Psychology and Marketing, vol. 14, no. 8, pp. 737-764.

Gale, B 1992, Monitoring customer satisfaction and market-perceived quality, American Marketing Association, Chicago.

Service Quality and Service Guarantee

Service quality defines the level a customer is satisfied because it is the critical element customers use to evaluate service (Zeithaml, Bitner & Gremler 2013, p. 87). Therefore in a consumer service experience within a store, service providers must reach out to customers and listen to their desired fulfilments while also assisting their journey from enquiries, selection process, purchase process through to the possible post purchase issues. Ensuring service quality and eliminating the need for service recovery is “doing it right the first time”, this shows the business is reliable (Zeithaml, Bitner & Gremler 2013, p. 201). Canary Jane’s Flowers is a floral service combined with highly priced yet small sized gift goods, for example candles, rosedale hankies and hand creams. The higher costs of the small gift products would naturally create an implied higher service quality. “The intangibility and unpredictability of services generally cause consumers to perceive a higher risk associated with a service” (Sharma & Varghese 2013). Customers can have uncertainty and be unconfident of the service quality for particularly high priced stores, like Canary Jane’s (Sharma & Varghese 2013).

A method to reduce consumer’s uncertainty with the quality of a product is guarantees, which ensure the customer is 100% satisfied (Hart 1988). “A service guarantee is a promise by a company to compensate the customer in some way if the defined level of service delivered is not met.” (Sharma & Varghese 2013). There are several characteristics of effective guarantees that will be explained relating to Canary Jane’s Flowers and the benefits of having an effective guarantee will be illustrated. Effective guarantees should be unconditional, meaningful, easy to understand and easy to invoke (Zeithaml, Bitner & Gremler 2013, p. 202). Canary Jane’s guarantees that the flowers will last at least 4 days after buying them, this is unconditional because it “promises customer satisfaction unconditionally, without exceptions” (Hart 1988). This guarantee is meaningful because it covers the aspects of the service that is important to the customer, which is the freshness and quality of the flowers. It is also meaningful financially; a full refund or replacement is given. The guarantee is easy to understand as it is simple and pinpoints the promise (Hart 1988). A guarantee must be easy to invoke, as explained by Hart (1988) “A customer who is already dissatisfied should not have to jump through hoops to invoke a guarantee.”

“Service guarantees have been advocated as a potentially powerful weapon today in trying to differentiate between services and gain the competitive edge” (Sharma & Varghese 2013). Another benefit of service guarantees is maintaining quality (Zeithaml, Bitner & Gremler 2013, p. 204).The organisation can maintain quality as the guarantee is an indicator of what the service should provide, for instance at Canary Jane’s Flowers they guarantee same day delivery if you order before 2pm. By having this benchmark an employee knows the minimum needs that need to be met for the customer, which in this case is getting the flowers delivered to the customer on the same day. Canary Jane’s Flowers uses Murphy Alan Johns for the delivery of their orders and if for any reason there is a disruption with the process, then the staff will assist with the delivery to ensure that the guarantee is met. Small to medium enterprises often bestow less service guarantees due to less workers to help achieve promises, avoiding over promising is considered safe in the employer's eyes. The low number of apparent written and verbal guarantees from Canary Jane’s will ultimately impact the “willingness of the customer to make frequent visits” (Sharma & Varghese 2013). Ensuring the guarantees are used effectively, they will benefit the business. Canary Jane’s will increase loyal customers through the use of guarantees, which equates to profitability in the long run. Guarantees are irrelevant if the organisation does not monitor whether they are successfully delivering a quality service.

References: 

Zeithaml, V, Bitner, M & Gremler, D 2013, Services marketing, McGraw-Hill Irwin, New York.

Sharma, K & Varghese, M 2013, 'Influence of Service Guarantee on Consumer Behavior in organized retail stores', Romanian Journal of Marketing, vol. 1, pp. 10-17.

Hart, C 1988, 'The Power of Unconditional Service Guarantees', Harvard Business Review, vol. 66, no. 4, pp. 54-63.

Servicescape Strategy

Physical surrounding, also called servicescape coined by Bitner (1992) are fashioned by service organizations to facilitate the provision of service offerings to customers. According to Biggers and Pryor (1982), the elements of physical evidence help to influence perceived performance in the service encounter and also affect the perception of an experience independently of the actual outcome. The physical evidence elements are categorised into four distinct areas: package, facilitator, socialiser, and differentiator. Bitner (1992) defines it as all of the objective physical factors that can be controlled by the firm to enhance (or constrain) employee and customer actions. The first of the four areas is ‘Package’, which conveys the expectations and can also influence consumer perceptions. In regards to Canary Jane’s Flowers, the beautiful interior along with the pretty arrangements of flowers scattered around the shop make for a very appealing flower shop. The scent from the flowers, the subtle music heard in the background and the art deco beautifications all add to the overall package of the servicescape. This is very important for new customers as they need to be persuaded to come back again and again to the store.  

Facilitating the flow of the delivery service is not an easy task. The shop keeper or clerk needs to be able to provide information, carry out the ordering process and also facilitate the delivery service adequately in order to achieve a good servicescape outcome. After visiting Canary Jane’s Flowers in Hawthorn, I was immediately amazed at the vibrancy of colour and the overall presentation of the shop. At a first glance the shop is flustered with different assortments of flowers that range from small garden flowers to a bouquet (See Appendix 5.2). There is also a lot of knick-knacks displayed around the store symbolising the type of quirky style that the shop inhibits. (Aubert-Gamet 1997; Baker 1987). Baker (1987) considers servicescape as “not only a material stimulus but also a social construct containing humans who play a significant role in influencing behaviour”. At Canary Jane’s Flowers the customer and employee relationship is very friendly, together with nice gestures and a friendly greeting the overall experience was very pleasing. The customer service exceeded average expectations, even with many customers at once the store clerk was able to deliver excellent service and kindly told some customers they would be with them in a minute when it was necessary. “It is further postulated that the performance of these social factors within the servicescape can serve to either enhance or inhibit the service experience, thereby leading to the display of either approach or avoidance behaviour by customers” (Aubert-Gamet 1997; Bitner 1992).

The shop face uses a window display to entice customers to look into the store. In the window there is sometimes promotional banners associated with special days of the year such as mother’s day or Valentine’s Day. “In Babin and Attaway’s (2000, p.93) estimation, the servicescape “evokes emotions, which help to determine value, and this value motivates customers to patronize a given choice repeatedly”. The shop face itself is simple, the design is friendly with a natural colour yellow painted over the brick veneer. ‘’According to Bitner (1992), [these] controllable physical factors such as signage, furnishing, layout, colour, cleanliness, scent, music etc. can be systematically manipulated to produce desired effects in the form of a favourable disposition towards the servicescape – and by extension, the providing organization’’ (Arnould, Price & Tierney 1998). Many of these physical factors are present at Canary Jane's Flower shop, flowers themselves give off a vibrant colour array that entices consumers as well as the scent of the flowers which smells inviting. Together with other factors like colour and cleanliness the shop has the desired expectations of consumers and also influences the perceptions of customers with its package physical elements clearly evident at the flower shop. The shop window at the front of the store displays the logo on the glass and there’s a bunch of flowers lining the bottom of the window. Inside there’s a whole display of cups and other products for sale which can easily catch the eye of a passing consumer. The overall style of the shop is art deco (1950s) posters hang in one corner of the store and the floor is a black and white tile pattern. Once inside the store it is easy to tell that is no ordinary florist, every inch of the store is taken up with products that create this sense of organised chaos. As well as the flowers odour filling the small store space there are also hand creams and scented candles that fill up the room with a love aroma of jasmine, rosemary and other flowery type scents.

“Whilst accepting the importance of servicescape variables, Kotler (1973) contends that there is no ideal servicescape composition for all industries. He argues that since each market is made up of customers with varying tastes, servicescape composition should be based on (a) the target audience, (b) what that target audience is seeking from the buying experience, (c) the servicescape variables that can fortify emotional reactions sought by the buyers and (d) the ability of the servicescape to compete with the servicescape of competitors” (Kotler, 1973). Largely the servicescape of Canary Jane’s Flowers is quite simple is design and style, using the 50s art-deco theme reveals a different experience than customers are used to. The retro style that the store so beautifully represents is like stepping into a time machine and the experience is unlike what you could expect in ordinary florist shops. The experience transitions your typical perception of a florist from entrance to pre-purchase to exit and post-purchase, you come away feeling satisfied, and therefore all the elements of servicescape have an impact on the services quality.

References:

Bitner, M 1992, 'Servicescapes: The Impact of Physical Surroundings on Customers and Employees',Journal of Marketing, vol. 56, no. 2, pp. 57-71.

Baker, J 1987, 'The Role of the Environment in Marketing Services: The Consumer Perspective', in J Czepial, C Congram & J Shanahan (ed.), The Services Challenge, 1st ed, American Marketing Association, Chicago, pp. 79-84.

Aubert‐Gamet, V 1997, 'Twisting servicescapes: diversion of the physical environment in a re‐appropriation process', Int J of Service Industry Mgmt, vol. 8, no. 1, pp. 26-41.

Babin, B & Attaway, J 2000, 'Atmospheric Affect as a Tool for Creating Value and Gaining Share of Customer', Journal of Business Research, vol. 49, no. 2, pp. 91-99.

Arnould, E, Price, L & Tierney, P 1998, 'Communicative Staging of the Wilderness Servicescape', The Service Industries Journal, vol. 18, no. 3, pp. 90-115.

Kotler, P 1973, 'Atmospherics as a marketing tool', Journal of Retailing, vol. 49, no. 4, pp. 48-64.

Dynamics of Social Media in the Global Market Place

“Social Media platforms allow easy access to the target market whereby consumers become actively involved and engaged ultimately influencing customer behaviour” (Jones et al.  , 2015). 

Social media, nowadays utilises different avenues for businesses and everyday people to take advantage of.  Some of these include faster communication, marketing and data collection.  These avenues allow businesses to get access to a wider audience and even the global marketplace.  So what are the dynamics of social media and how does it play its role in determining the success or failure of a company? Well there are lots of reasons.  The cost of using social media and the risk of benefits from it.  Also, whilst communication maybe 24/7 online there are some drawbacks to using social media.  Furthermore the benefits of social media through the use of small and big data has changed the way we market our products and ultimately gain competitive advantage over one another. Change is integral to a business’s survival. If the majority of consumers want to move into an online market where they are open to all forms of social media messaging and communication then businesses need to be ready to change, adapt and apply this new technology into their everyday lives. It goes without saying “Build it, and they will come” only works in the movies. Social Media is a “build it, nurture it, engage them and they may come and stay.” – Seth Godin (Lazzaroni, 2014).

Social Media has seen a new era of marketing.  Digital marketing through the use of social media websites is rapidly becoming the new way to market on a global scale.  Although with this comes some advantages and disadvantages.  If we look at the global marketplace and how social media has shaped the online presence for most business’s we cans start to understand just how much companies are pouring their money into social media advertising.  It’s no coincidence why either, the cost comparison of running a TV ad or using Digital Marketing is huge.  “The cost of 30 second television advertisement aired at 7:30 could cost companies between $30,000 and $35,000” (Davidson, 2012).  “In comparison to social media, twitter can cost companies between $1,000 and $4,000 a month and Facebook can cost between $2,000 and $9,000 a month” (Thomas, 2012).  As we move into a more technological world more and more people are using social media.  Some statistics from the Search Engine Journal, found that 71% of organisations use Facebook and 59% of companies use Twitter as a form of marketing (SEJ, 2011).  The statistics show that as we move toward social media and the digital age, more and more social media is exploited for its diverse demographic and efficient communication pathway.  Although Facebook and twitter might be cheaper than say TV ads or even Radio ads, the real investment comes from change.  If we look back on a company and see that they have restructured and reorganised how they sell over the years, changing with trends and moving with the crown and looking at what customers want.  Then they have a much higher chance of being successful.  We live in a dynamically changing world where technology is consistently updating.  “Social media made customer review become more accessible and extensively which can Strong the power of the consumers. when customers engaged in networks of brands like agree/disagree on Facebook, or write comments on site which means social media can make company and customer relationship more close so that can also increase the customer loyalty and endorsement” (Jacqueline, 2014). 

“Folkens wrote that social media brings strategic communicators closer to their audience by utilising the human conditions of listening and responding.  He argues that social media has softened the barrier between the company and the audience” (Folkens, 2011).  Folkens wrote that social media brings strategic communicators closer to their audience by utilising the human conditions of listening and responding.  He argues that social media has softened the barrier between the company and the audience, (Folkens, 2011), making audiences feel as though they are communicating with a company that listens and takes action on their requests.  Social media has facilitated two-way communication as customers can comment on blogs or YouTube videos, like and comment on company statuses and photos on Facebook and tweet companies their feelings about their products.  Social media allows consumers to engage with companies wherever they want, whenever they want, making a company more accessible to its customers.  This means that although information is getting out there faster, there is “increased the potential for complaints and the visibility of this negative outcry” (Royse, 2011).  People can write reviews of products and can negatively affect the brand name just by writing a single bad word.  The problem arises when companies don’t realise how public there message really is, and also who is reading that message.  Another dynamic that can combat this is how fast communication is projected in real time.  If we look at social media and how fast information is getting out there we can see that PR problems can be resolved far more quickly and with less hassle than through traditional methods.  “Social media allows for strategic communication consultants to distribute their message as it happens, keeping their company’s message as up to date as possible with the concerns of their audience.  Communication in real time also allows for companies to tweak and alter their message or image to suit the current trends at that time.  Twitter and Facebook have trending sections on their sites that allow people to see what is popular at the current moment.  When a trending subject is clicked on, it takes the user to all the posts and tweets concerning that subject that is trending” (Cuce, 2014). 


As social media has grown and developed into our everyday lives we see more and more how businesses are trying to pry at our eyes, and ultimately get our attention for a second hoping that we will go out and buy their products. The everyday consumer is learning and understanding the value of these messages but mostly what we do goes unseen. When we talk about social media we think of the website and instant messaging on a global scale, but what we sometimes miss is all the data that flows from the millions upon millions of people clicking and typing there details into social websites. This data is called big data. “Nowadays companies are using smaller data which consists of focusing in on what customers want to buy and understanding their purchasing habits so they can target certain products towards them.  When consumers are faced with significant lifestyle events like having a baby, getting married, or buying a house, they are more open to changing their purchasing habits” (Revis, 2016). Data collection through the use of social media can be seen as strategic investment as it provides the company with a wealth of knowledge about their customers and their interests.

References:

Davidson, D, 2012, ‘Ten, Nine…network count down cost of prime-time spots’, The Australian, 26 March, viewed 7 May 2014, http://www.theaustralian.com.au/archive/media/ten-nine-networks-count-down-cost-of-prime-time-spots/story-fna1k39o-1226309686889

Folkens, D, 2011, 3 Ways Social Media Is Changing Public Relations, Top Rank, online marketing, blog post, viewed 7 May 2014, <http://www.toprankblog.com/2011/02/social-media-changing-pr/>

Henrikson, J. U, 2011, The Growth Of Social Media: An Infographic, SEJ Search Engine Journal, blog post, 30 August, viewed 7 May 2014, http://www.searchenginejournal.com/the-growth-of-social-media-an-infographic/32788/

Jacqueline, I 2014, social media marketing influence customer behavior, viewed 23 March, 2016, <http://www.blastmedia.com/2014/07/30/3-ways-social-media-marketing-influences-consumer-behavior/>. 

Jones, N Borgman, R & Ulusoy, E 2015, Impact of social media on small businesses.  Journal of Small Business and Enterprise Development, 22(4), 611-632. 

Lazzaroni, D 2014, ‘75 Quotes to Inspire Marketing Greatness’, Linkedin,

Revis, L 2016, ‘Social Media Trends’, The Blog, http://www.huffingtonpost.com/layla-revis/social-media-trends-2016_b_8914190.html

Royse, M, 2011, Seven Ways Social Media is Changing PR, Spin Sucks, blog post, 4 April, viewed 7 May 2014, http://spinsucks.com/social-media/seven-ways-social-media-is-changing-pr/