Drivers of Global Service Marketing, Advantages and Disadvantages of Global Service Marketing, Service Culture

25th November 2021 1 By indiafreenotes

Drivers of Global Service Marketing

One factor of particular significance to many service industries is the presence of global customers who demand consistent service from suppliers around the world, and the availability of global channels in the form of fast-developing physical supply chains or electronic networks. As large corporate customers themselves become global, they often seek to standardize and simplify the suppliers they use in different countries for a wide array of business-to-business services.

A related trend can be found among some of the people-processing services used by interna­tional business travellers and tourists, who often feel more comfortable with predictable standards of performance worldwide for such travel-related services as airlines and lodging.

In possession-processing services, the development of global logistics capabilities by firms such as Federal Express has encouraged a number of manufacturers to outsource responsibility for their logistics function to a single firm, which then coordinates transportation and warehousing operations around the world.

Competition drivers:

These exercise a powerful force in many service industries. To the extent that customers who operate around the world are known to value global provision of services, a firm may be obliged to follow its competitors into new markets in order to protect its position in existing markets.

Similarly, once a major player moves into a new foreign market, a scramble for territory among competing firms may ensue, particularly if the preferred mode of expansion involves pur­chasing or licensing the most successful local firms in each market.

Technology drivers:

For information-based services, the growing availability of broadband telecommunication channels, capable of moving vast amounts of data at great speed, is playing a major role in opening up new markets. Access to the Internet or World Wide Web is accelerating around the world.

But there may be no need to duplicate all informational elements in each new location. Significant economies may be gained by centralizing “information hubs” on a global basis. It may also be advantageous to take advantage of favorable labour costs and exchange rates by consolidating operations of supplementary services (such as reservations) or back office functions (such as accounting) in just one or a few selected countries.

Cost drivers:

The effect of these drivers varies according to the level of fixed costs required to enter an industry and the potential for cost efficiencies. Lower operating costs for telecommunica­tions and transportation, accompanied by improved performance, serve to facilitate entry into global markets.

Barriers to entry caused by the upfront cost of equipment and facilities may be reduced by such strategies as equipment leasing (as in airlines), seeking investor-owned facilities such as hotels and then selling them on management contracts, or awarding franchises to local entrepreneurs.

How­ever, cost drivers may be less applicable for services that are primarily people based and so require recreating most element of the “Service factory” in multiple locations. Under such circumstances, scale economies tend to be lower and experience curves relatively flatter. In service business on which new product development costs are low, cost drivers are also likely to be less significant.

Government drivers:

We can expect government drivers to be more favourable for people- processing and possession-processing services that require a significant local presence, because these services can create local employment opportunities. In contrast, governments often impose regula­tions to protect home-based services, such as passenger and freight transportation, from attacks by foreign carriers operating on the same routes.

A typical action involves restricting foreign airline’s landing rights or their ability to pick up passengers at an intermediate stop on a scheduled flight between two other countries.

If transportation services are easily exported, information-based services are even more so. Data, after all, can move around the world almost instantaneously through electronic channels. Govern­ments can play an important role in requiring adoption of internationally compatible technical stan­dards.

However, unrestricted imports of services in categories ranging from entertainments to fi­nance are often seen as both an economic and cultural threat. Hence such government actions as regulating international banking (widely practiced), banning private ownership of satellite dishes (already implemented in China, Iran, Singapore and Saudi Arabia), or seeking to limit access to ser­vices on the Internet.

Overall Assessment of Drivers:

The impact of each of the five groups of drivers. However, government drivers, expressed in terms of economic policy, regulation, and protections, are often specific to individual industries. Hence, it’s important to evaluate globalization drivers at the level of individual industries, as well as in terms of broader service categories.

Advantages of Global Service Marketing

Lower Costs:

With a common messaging to be done across the globe, marketing budget reduces significantly which helps to maintain profit margins.

Global Reach:

With the free availability of the internet, the reach of business has grown multiple-folds. Companies like Alibaba and Amazon which operate in China have managed to reach worldwide only with the help of internet. Ease of reach helps in building brand image to a wide array of customers.

Global Feedback:

 With uniform messaging throughout the world, the feedback received is equally important for companies and Global Marketing enables them to receive valuable feedback and adapt and change according to customer feedback.

Overcoming Time constraints:

Unlike traditional marketing, where the print requires days and weeks to approve and then distribute the end customer, in this case, the campaign reaches the customers within a few mouse clicks reducing the time to implement. Faster implementation of marketing campaigns means faster results and ultimately faster profits.

Disadvantages of Global Service Marketing

Limited Audience:

 Not everyone will be wanting the product and they may not be the suitable target audience. In those cases, the company can cater to only a limited percentage losing out on the other chunk of customers. For ex: Most of the business persons in the US may be seen taking a coffee to work – mostly Starbucks. While Starbucks works well over there, the same may not be the case in African countries where although there is a presence of Starbucks it has not been able to penetrate the usage limits like in the United States and other European countries.

Cultural barriers:

This is a major hurdle in cross country marketing. Not every culture is suitable for the products of the company. Crossing these cultural barriers can be cumbersome and costly for the company and it may have to adopt certain specific rules for specific countries. Managing them in global marketing can be challenging. For ex. McDonald’s has customized its menu for Arabic countries without Pork while for India without beef. Burger King and KFC have followed a similar trend.

Political and Legal Constraints:

President Trump launched the campaign Make America Great Again due to which a lot of international companies suffered and some had to shift their manufacturing plants back in the US. In such cases, huge costs are to be borne by the companies.

Inventory management:

 Huge unused stocks may pile up with company skyrocketing inventory costs. This may happen due to over or underestimation of projections or misjudging the locality or hurrying in launching without proper global marketing research.

Service Culture

A service culture exists when you motivate the employees in your organization to take a customer-centric approach to their regular duties and work activities. Sales and service employees put customer needs first when presenting solutions and providing support. Other employees work behind the scenes to ensure customers get a good product experience. Developing a service culture requires time and consistency.

Seek Feedback

The first step in developing a service culture is to show genuine interest in finding out what your customers want from your company, products and services. Ongoing research can help you gain insight as to how your company currently performs and what improvements you must make to strength loyal relationships. Your employees can more easily by into the customer-first mentality you project if they see you working to gather information about your customers.

Communicate and Establish Consistency

Most elements of a company culture begin at the top. As a business owner or manager, your actions and words set the tone for what employees view as core philosophies of the business. If you project a service attitude in your dealings with customers or clients, that helps. You can establish a vision and company objectives that emphasize customer service. In delegating responsibilities to departments, work teams and employees, you want to convey the specific duties each holds in the bigger picture.

Reward and Recognize

No matter what you say to instill viability in any cultural component, you must reinforce its importance through action. To perpetuate a service culture, you need to include service standards in job descriptions, employee evaluations and compensation. If you emphasize customer service in assessments, raises and promotion decisions, even above other production and sales standards, it strengthens your commitment. Publicly recognizing top service performers with praise and awards may encourage workers to work on their reputations as elite service performers. You may also have to eliminate workers that don’t fit into or desire to fit into the culture.

Set Policies and Train

You service culture is also developed through formal written documents and communications. Your company mission, website, employee policy manual and customer service policy all provide opportunities to infuse customer-oriented policies for internal or external communication. Once you establish customer-friendly policies, you need to orient and train new employees to accept the standards. Part of developing an enduring service culture is getting new hires to quickly assimilate into it.

Steps to create a Service culture:

1) Create a relentless strategy. A relentless strategy is a lifetime commitment to customer service. It is a propulsive, self-directed passion to continue to learn, improve, and exceed expectations in everything you do. You have to be relentless in serving your customers; it has to be a way of life.

2) Reduce friction. Remove stupid rules, policies, and procedures. Most rules are put in place to prevent customers from “taking advantage” of a company. What most managers and executives don’t understand is that those rules actually reduce the chances a customer will do business with you. Advertising and prices might get customers through the doors of your business once, but if they have a problem with a product or service – and if your rules don’t allow you to quickly solve it for them they won’t be back. Make it easy to do business with you.

3) Empower employees. Empowerment is the backbone of great service. Everyone must be empowered. If a front-line employee (your most important employee) does not have the power to satisfy a customer on the spot and to the customer’s satisfaction that customer will do one of two things: move the complaint up the ladder, often all the way to the CEO, which costs a lot in terms of time and money; or simply never do business with you again.

4) Do everything with speed. People today expect and want speed. You must drastically reduce the time for everything you do. This includes everything from answering the phone within the first ring or two to meeting or exceeding the deadline for a customer’s project. If something normally takes three weeks, do it in two. If you say you’ll get back to a customer within a week, do it within days. To focus on speed, all employees must organize, prioritize, manage their time, and look for efficiencies.

5) Train your employees. Employees at every level of your business must be trained on customer service every few months. Ninety-nine percent of customer interaction takes place with your front-line employees, yet they are the least trained, least empowered, and least valued. When you spend the time and money to train your employees and do it continuously you’ll realize a return on that investment that will drive your business to new heights.

6) Remember customers’ names. The most precious things customers have are their names. Our names are precious to us. Call your customers by name whenever you interact with them. Doing this lets the customer know that you value them and their business, that you acknowledge and respect them, and that they are important to you.

7) Practice service recovery. When you make a mistake, admit it and do whatever it takes to correct it. All employees must practice the four skills of service recovery: act quickly, take responsibility, make an empowered decision, and compensate fairly.

8) Reduce costs. Price is critical to all customers. Service leaders are frugal and always looking for ways to reduce costs. My research shows that service leaders are aggressive at eliminating waste and costs. When you reduce costs, you improve your bottom line. To realize even greater benefits, pass at least a portion of those savings on to your customers. It will give you an edge over your competitors.

9) Measure results. To keep management passionate about the process of creating a service culture and the financial investment and time required to do so, you must measure the results of your efforts. It’s critical to know where you came from and where you are now. When you can prove that what you are doing is having a positive impact, you will gain support throughout the company.