Commercial Services Note Web

8/14/2019 Commercial Services Note Web

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BocconiUniversity MasterofScienceinMarketingManagement______________________________________________________________________________________________

_______________________________________________________________________________________Course8009 ChannelMarketing

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COMMERCIALSERVICES

bySandroCastaldo,SimonaBotti1

NoteoutlineThedynamicmanagementofcustomerservicesprovidedby internationalretailershasstimulated

inmostcountriesafurtherreflectionontheissueofcommercialservices.Thisnote,therefore,aims

at delving into the strategies, features and consequences of the development of commercial

services on the entrepreneurial activity. Hence, commercial services are analyzed commencing

from the conceptsfound in the literatureof servicesmarketingand, especially,ofmarketing in

distributioncompanies.

Theoriginalityofretailproposals,analyzedinthisnotebymeansofInternationalexamples,points

outsome

of

the

limitations

in

the

traditional

services

models

in

literature.

Such

models,

in

fact,

do

notalwaysgrasp thedistinctivefeaturesoftheservicesmixofferedby innovativecompanies,as

they do not include two important dimensions of the analysis, and namely, the degree of

independenceofserviceswithrespecttothecompanyscoreservice,typicallyrepresentedbythe

logisticservicerelatedtotheassortment,andtheir informativeorhedonisticnature. Inourview,

considering these two other dimensions, not only provides a more accurate description of

commercial services, but helps understanding the strategic motivations underlying decisions

regardingthedevelopmentofservicesproper.

Ourassumptionisthat,throughservices,retailcompanieswillnotonlymakethefeaturesoftheir

offer more abstract thus promoting retailers strategies based on companycustomer value

relationshipsbut

they

will

also

better

manage

the

store

environment

in

order

to

positively

influence the customers affective structure and, consequently, behaviour. Services may be

interpreted, infact,asfacilitationtools inthe individualenvironmentrelationship,astheyenable

the individualtoestablishan interactiverelationshipwiththebasicelementsofthepointofsale.

Themodelthatwillbedevelopedinthisnoteaimsatmakingretailersevermoreawareofthefact

thatthechoiceofhowmanyandwhichservicesshouldbeproposedtotheircustomersaffectsthe

features of the store environment, the relationshipwith customers themselves and, eventually,

theirpurchasingbehaviour.

1Thisnoterepresentsapartialtranslationofthechapter2ofthebookRetail&ChannelManagement,byS.Castaldo(ed.),

Egea,

Milano,

2009.

It

has

ben

revised

and

edited

by

Katia

Premazzi.

It

is

intended

only

for

personal

use

by

the

thestudents(attendingandnotattending)thecourseChannelMarketing(code8009),class9,atBocconiUniversityduringtheAcademicYear20092010.ItcannotbediffusedorcitedwithouttheexplicitconsentofboththeAuthors.


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SERVICESANDCOMMERCIALSERVICESServicesServices

marketing

is

connoted

as

an

independent

study

area

characterized

by

the

peculiar

nature

of the researched subject (Car1996a;Cherubini1981;Gronroos1994;Parasuraman,ZeithamlandBerry1988;Podest1983;Sabbadin1997;Vicari1980).Servicesare, in fact,different fromgoods, due to some fundamental features in their production system, which finds its mostsignificant trait in the interaction between the provider and the receiver. An immaterialinteractionbetweensupplyanddemandwhich,actually,determinesthenonrepeatabilityoftheserviceduetothenumerouspersonalandenvironmentalvariablescontributingeverytimetoitsdefinition.Theimpossibilityofreiteratingexactlythefeaturesoftheinteractionistheconstituentoftheheterogeneityandperishabilityofservices.Stillanotheraspect,originallydiscussedbyShostack (1977), refers to the lackofdifferentiation

betweengoods

and

services.

There

is,

instead,

acontinuum

defined

according

to

the

immaterial

degree of products; at their poles there are pure goods and services. Such immateriabilitydegreedependson theabstraction levelofbothcentralandperipheral servicesnecessaryoraccessory (Car 1996a; Car 1996b).Central services are theoneswhichmeet the need for aservicedirectly;peripheralservicessupportthemainactivity,thusenablingaccesstotheserviceitself (necessaryperipheral services)ormaking fruitionmore comfortable (accessoryperipheralservices).Peripheral services,especially theaccessoryones,are important inmarketingas theyenablecompetingcompaniestodifferentiatetheiroffer.

CommercialservicesServicesmarketing literature isa foundation for studieson retailingas thecommercial servicesoldisamixofbasicfeaturesandservicesindifferentproportions(Pellegrini1990,p.32).Thereisstillanongoingdebateonthetypologyofsuchbasicservices.(CastaldoandPremazzi2000).

Afirstgroupofcontributionsfocusesonthecoreservice,carriedoutbyretailcompanies,i.e.thelogisticserviceentailingproximity,stockingandassortment,placingtheremainingactivities inaresidual category. Another group of contributions tends to delve into the issue of residualservices such as catering, product information, advertising, supply credits. Pellegrinis outlook(1990)ishalfwaybetweentheprevioustwo.AccordingtoPellegrini(Table1)servicesfeaturedby

retailersare

logistic,

informative

and

other.

The

basic

components

of

logistic

services

include

proximity,stocking,theextensionoftheopeninghoursandassortmentwidth.Componentsoftheinformative services are, instead, preselection, depth of assortment and direct information.Other services include components such as, for example, aftersale, speed of service andcomfort.


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Table1.Theelementary/basiccomponentsofcommercialserviceinbrick&mortarretailing

Elementary/Basicattributesofcommercialservices Relatedcostsforconsumers

Logistic proximity stockpiling openinghours assortmentwidth

transportcostandtime stockingcost subjectivecostoftime stockingcost

Informative preselection assortmentdepth directinformation

searchingcost

searching

cost

informationcost

Other postsale servicespeedwaitingtime comfort etc.

costsforanalternativemanagement subjectivecostoftime subjectivecostoftime

Source:Pellegrini(1990,p.41,inItalian)

Generallyspeaking,logisticservicesaretheraisondtreofretailcompanies.Inotherwords,theycreate a connection in time and space between the concentrated production and thefragmentedconsumption.Theresidualactivitieshaveagrowingimportanceinmarketing,albeittheydonot represent theoriginalandbasic functionassigned to retailers (Pellegrini1990,p.38).

Inthesubsequentparagraphsaclassificationofcommercialserviceswillbeproposed,stemmingfrom Tordjimans (1982) contribution. The author differentiates services according to the

connectionthey

have

with

the

products

sale,

into

endogenous

and

exogenous

services.

The

former are directly functional to the products commercialization; the latter, instead, generateadditionalconveniencefortheclient(CastaldoandPremazzi2000,p.9).Inourview, servicesshallbedivided into internalandexternal, the formerbeingmoredirectlylinkedtoassortmentandincludingtraditionalservices,someinformativeservicesandother.Thelatterareprovided inamoreautonomous fashionand refermostly to informativeservicesandother(Figure1).


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Figure1. Internalandexternalcommercialservices

Theclassificationofservices into internalandexternal facilitates theunderstandingof themostinnovative trends in retailing, i.e. theextensionof thecoreserviceand thedemand foramoreemotionalshopping.Extensionof thecoreservice (BottiandSoscia1999)has, infact,producedincreasing investments in activities that traditionallywere not performed by retailers, such as

catering,credit,

recreational

services

and

fuel

distribution.

The

attention

to

emotional

shopping

(CastaldoandBotti1999)hasconversely, impliedagradualtransformationofpointsofsale intoplaceswhereonecanexperienceemotions.Assortment,merchandisingandrecreationalservicesareincreasinglybeingusedbyretailersasmeanstomakebrowsingandvisitingstoresapleasantexperience.

EXTERNALSERVICES

=CoreService

INTERNALSERVICES


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InternationalCasesToExemplifyInternalAndExternalCommercialServicesInternalservicesTheprogramknownasfrequentriderspromotedbyCopsHarleyDavidsonanauthorized retailer of Harley Davidsons motorbikes and accessories is anexampleofaninternalservice.Thestoreoffersamotorbikerentalservice.Customerswhoresorttothisservicemorefrequentlyareknownasfrequentriders,andenjoysomeprivilegessuchasbeingexemptedfrommaking aguaranteepaymentandbegrantedlowerrates.In the grocery store, an example of internal service is the catering servicenowadays quite common amongmost retailers.An interesting case is that of

TescoExtra,

where

cakes

can

be

customized,

after

the

purchase,

with

pictures

selectedby the customer.Thesemaybe considered internal servicesbecausethey could not exist independently from the core service, i.e. the sale ofmotorbikesandfoodproducts.

ExternalservicesRecreationalactivitiesofferedinshoppingcentersare,instead,externalservicesas they could well be offered independently from the core logistics orassortmentactivities.

Meadowhall(UK)

runs

aclosed

circuit

TV

station

and

aradio

station

to

entertain

customersastheyshopandrelax.

Baricentro(Spain)staffofferfreedancingclasses.ParqueCorredor(Spain)offerscircussessionsforchildren.AlsocreditservicesofferedbyMigros (Switzerland)andMarks&Spencer (UK)are to be considered as external services. Besides having a bank for coopmembers,Migros runs also an insurance company.Marks & Spencer placesfidelitycardsbeforecreditservices.

Finally,

WalMart

(US)

offers

the

possibility

of

having

a

medical

check

up

and

rent

carsasexternalservices.

Recreationalservices:

theCocaColaOasisin

Meadowhallshoppingcenter

inSheffield,England


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THESTRATEGICIMPORTANCEOFSERVICESINRETAILCOMPANIES

Competition among retailers is increasingly shifting from the level of assortment and internal

servicesto

that

of

external

services.

The increase in the number and range of external services is especially due to intersectorexpansionand toemotionalshoppingand implies findingnewcriteria forformatdefinition.Thetraditionaldefinition identifies the formataspointsofsaleadopting thesamesales technique,thusofferingthesameservice(Spranzi1985,p.31).Actually,theconceptofformatinmodernretailingismuchmorecomplex,asmaybeseeninthecasesdescribedintheboxCommercialservicesandformats.Formatscanactuallyincludestoreswhichareverydifferent,basedonthetypesofservicesoffered.

CommercialServicesandFormatsInternationalCasesTescoExtra isthebannerofachainofEnglishsuperstoresthat,besideshavingthe typical assortment of supermarkets, offers also clothing, stationery andhouseholdgoods ina largesellingsurface. Inthepremisestherearealsoagasstation,afastfoodstore,abankbranchandapostoffice.

This format differs from Kaisers Charlies Farm which is a supermarket, butfocuses mainly on internal services and assortment in the fresh productsdepartment.ThetraditionalformatofaclothingstoredoesnotcoincidewithBoxsoffer.Thisis a store in Zurich where, besides clothing, it is also possible to purchasebicycles,snowboards,skateboardsandhiphopconcerttickets.


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TheexamplesmentionedintheCommercialservicesandformatsboxshowthatanunusualmixofservicesandproductcategories,basedoncustomersneeds,generatestheseformatsandevennewones.Hence,Boxsclienteledoesnotlookforonlyonegarment,butratherseekstomeettheneedsofanumberofrequirementsthatcorrespondtoaspecificlifestyle,i.e.theteenstreetculture.

Anexample

of

definition

of

format

following

asimilar

logic

is

that

of

the

so

called

convenience

stores(seebox).


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FormatsTheExampleofConvenienceStoresConvenience stores should include both Tesco Express and StarMarket

respectivelystores

of

the

Tesco

and

Texaco

stations

and

GB

Express,

the

formatoftheBelgiangroupGB.Actually, inspiteof the fact thatsuchstoreshavequitedifferentassortments,especially in terms of breadth,GB focusesmainly on grocery,whereas TescoExpressandStarMarketofferalsoproductsusefulfortravellers.The latter deliver to the same type of customers, i.e. the timebuyers (Berry1979)whobecauseof timeconstraints resort toemergency smallamountpurchases.GBExpressoffersproductssimilartothoseofTescoMetro,locatedindowntownareas,whosecustomersaremostlysingle,careerconscious individualswithno

timeto

cook

and

often

to

eat.

AssortmentsproposedbyGBExpressandTescoMetroaremainlymadeupofsingle readytoeatportions.Also smallappliancesare sold tobeusedeven inoffices,aswellasproductsnecessarytosolveurgentproblems (i.e.papercupsandplates,candles,lampbulbs,etc.)

Retailersseemorientedtoinvestinginthedevelopmentofexternalservices,andthismightbetheresultofa strategyaimingatgeneratinga storeenvironmentbehaviour fora specific targetofcustomersinordertoinfluencetheirpurchasebehaviours.Accordingtoenvironmentalpsychology(DonovanandRossiter1982;MehrabianandRussell1974)apositiveattitude (approach)oranegativeattitude (avoidance)visvisthestore isdueto theextent in which environmental stimuli act on the affective sphere of the potentialshopper/purchaser.The environment inwhich this behaviour occurs is notmerely the background of purchasersactions,but rather an active elementparticipating in thedefinitionof such actions (Babin and

Darden1995).

Due

to

their

interactive

nature,

services

are,

therefore,

basic

in

ensuring

and

SingleportionproductsproposedbyGBExpress

inBrussels


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conveyingtherelationshipbetweentheenvironmentandthe individual.Purchasersactivatethesurroundingenvironmentthroughservices,anddeterminetowhatextentandhowtheyaretobeexposed to environmental stimuli. In other words, retailers investing in services will providepurchasers with opportunities to generate their own sales environment, customizing therelationshipwiththeofferandincreasingcontroloverpurchasebehaviours.


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IncreasingthearrayofcommercialservicesTheexampleofAmericanGirlPlace

AmericanGirlPlace isachainofstoresatthemomentpresentinmajorNorthAmerican cities, i.e. Chicago, New York and Los Angeles. It sells dolls andaccessories that promote personality development, intellectual interest andimagination inyounggirls.Themain lineofproductsofferedbyAmericanGirlPlace ismadeupofeightdifferentdollsrepresentinggirlsatavariuosimportantmoment of American history. Each dolls has a range of accessories (clothing,furniture,objects,books).Otherproduct lineshavebeen added in 1992. Twonew series of dolls and accessories: one representing different lifestyles and

modernAmerican

girls

favourites;

the

other

one

for

smaller

girls

offers

books,educationalplaysetsandtoysaswellasthenewdancingmouse.The realpeculiarityofAmericanGirlPlaceconsists in thewide rangeof itemsand innovative services. In 1992 the company launched the American GirlMagazine,whoseaimwasthatofenhancinggirlsselfesteem,celebratesuccessstoriesandpromotecreativity.Themagazinedoesnotincludeadvertisements.Ithasapproximately650,000subscribersandisamongthetoptenU.S.magazinesfor children.AmericanGirlPlace alsooffers a lineofbody careproducts andclothingandaccessoriesjustlikethedolls.Insidethestores,fashionshowsareorganized,sothatgirlscanwalkdownthecatwalkandtheirdollsdressedalike.

Otherevents

promoted

by

AmericanGirlPlacearecookingclasses,moviesandshows given in their own theatres, aswell as customized theme parties. The

mostinterestingservicesofferedarethedollshospitalandthehairsalon.Inthedollhospitalbrokendollsordollsrequiringamakeoverare takencareofandafter a couple ofweeks are sent back homewith a hospital gown and an IDbracelet,attimesonawheelchair,withagetwellballoon. Inthehairsalon,specialized stylists treat dolls and girls to new hairdos. And, finally,grandmothers,mothersandgirlscanenjoy lunchorhave tea in therestaurantinsidethestores,obviouslyseatingthedollsonahighchair.


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REFERENCES(mainlyinItalian)BABINB.J.,DARDENW.R.(1995),ConsumerSelfRegulationinaRetailEnvironment,JournalofRetailing,vol.71,n.1,pp.4770.

BERRYL.L.(1979),TheTimebuyingConsumer,JournalofRetailing,vol.55,n.4,pp.5869.

BOTTIS.,SOSCIAI.(1999),Linnovazionedelladistribuzioneeuropea,inValdani,E.,CastaldoS.(acuradi),Euromanagement.ScenaricompetitiviepoliticheaziendaliinunEuropaquasicompiuta,Milano,Egea.

CARA.(1996a),Marketingeprogettazionedeiservizi,Torino,Utet.

CARA.(1996b),Ilcontributodelmarketingdeiserviziallevoluzionedeglistudidimarketing,

Sinergie,n.

40,

maggio

agosto,

pp.

69

93.

CASTALDOS.,BOTTIS.(1999),Ladimensioneemozionaledelloshopping.Unaricercaesplorativasulruolodelpuntodivendita,Economia&Management,n.1,pp.1737.

CASTALDOS.,PREMAZZIK.(2000),Lacreazionedivaloredellintermediazionevirtuale:iservizigeneratidalcommercioelettronico,WorkingPaper,Milano,OsservatoriodiMarketingSDABocconi,Inverno,n.55.

CHERUBINIS.(1981),Ilmarketingdeiservizi,Milano,FrancoAngeli.

DONOVANR.J.,ROSSITERJ.R.(1982),StoreAtmosphere:AnEnvironmentalPsychologyApproach,JournalofRetailing,vol.58,Spring,pp.3457.

GRONROOSC.(1994),Managementemarketingdeiservizi,Isedi,Torino.

MEHRABIANA.,RUSSELJ.A.(1974),AnApproachtoEnvironmentalPsychology,Cambridge(Ma),MITPress.

PARASURAMANA.,ZEITHAMLV.A.,BERRYL.L.(1988),Servqual:AMultipleItemScalefor

MeasuringConsumer

Perceptions

of

Service

Quality,

Journal

of

Retailing,

vol.

64,

n.

1,

pp.

12

40.

PELLEGRINIL.(1988),Servizicommercialieinnovazione:unanotametodologica,Commercio,n.30,pp.625.

PELLEGRINIL.(1990),Economiadelladistribuzionecommerciale,Milano,Egea.

PODESTS.(1983),Ilmarketingdeiservizi:unanalisicritica,Finanza,MarketingeProduzione,n.2,pp.99115.

SABBADINE.

(1997),

Marketing

della

distribuzione

emarketing

integrato,

Milano,

Egea


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SHOSTACKG.L.(1977),BreakingFreefromProductMarketing,JournalofMarketing,vol.41,n.2,pp.7380.

SPRANZIA.(1985),Economiadelcommercioepoliticacommerciale,Milano,FrancoAngeli.

TORDJMANA.

(1982),

Les

services

de

la

distribution,

Fondation

Turner

pour

la

recherche

en

distribution.

VICARIS.(1980),Lestrategiedisviluppodellimpresacommerciale,Giuffr,Milano.

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Commercial Services Note Web