Services MarketingThe Apple Retail Service

Presented by:Rei Lynn Lim

30089392MBA – University of Ballarat, Australia

Presentation Overview •Introduction

•Brief Summary

•Service Theories and Models

•Implications

• Personal Evaluation

•Conclusion

Introduction• Apple Incorporate, is an American

multinational company that manufactures, designs, markets and retails consumer electronics, appliances and personal computers.

• Entered the retail industry in 2001• First retail outlets set in Virginia and

California. • To date, Apple retail industry has more

than 300 outlets worldwide.

Brief Summary• Summary of Issues-Poor customer services practiced in electronic

consumers retail outlets-Customer’s perceptions of the brand are formed

through services.-Apple as the prime example of retail customer service.-Apple’s physical environment, operations and

supporting services.

• Service Marketing theories:- Service Marketing Mix & Servicescape

Service Marketing Mix (1/3)The Service Marketing Mix is an expansion of the 4Ps in the marketing mix which includes People, Physical evidence and Processes.

(Kotler,2000)-In order to succeed in retail, Apple cannot rely on the 4Ps of alone. Top quality services requires consideration and research on the additional Ps of the service marketing mix .

-Apple has effectively executed strategies based on the Service Marketing Mix.

Service Marketing Mix (2/2)People

Physical Evidence

Processes

All human actors that play a part in the service delivery including customers and employees.

(Boom and Bitner,1981)

Apple trains its retail staff to be customer oriented and are passionate fans of its products.

The physical surroundings where the service is delivered and customers and employees interact.

(Boom and Bitner,1981)Apple stores interior incorporate an open, clean and spacious concept.

The operations, procedures, mechanisms and flow of activities where the service is delivered. It is also known as service delivery and operating systems.

(Boom and Bitner,1981)Apple incorporates a standardise training operation for all retail staff and paid close attention to the flow of experience while designing its stores.

The Apple Acronym

• A pproch customers with a personalised warm welcome

• P robe politely to understand all the customer’s needs

• P resent a solution for the customer to take home today

• L isten for and resolve any issues or concerns.

• E end with a fond farewell and invitation to return

Implications

•Out of all the service marketing mixes, Apple ‘s strength lies in the People element.

•Retailers regardless of industry will eventually evolve their recruitment methods and instil the values of good customer service to its retail staff as Apple has done.

•Retail industries will now have to rethink of ways to improve on the flow of customer experiences which would mean a paradigm shift in processes and standard operating features and inclusion of new technology.

Service Theory 2Servicescape (1/2)

• The complete physical surroundings where the service is delivered and customer and service provider interacts.

Booms and Bitner (1981)

• Influences the perception of the company before the purchase and the customer’s response while experiencing the service.

Servicescape Framework

Servicescape (2/3)• The 4 Generic Strategic Roles of Servicescape

Packager

Socialiser

Facilitator

Diffentiator

Servicescape (3/3)• Servicecape can influence the approach and avoidance behaviour of customers (Boom and Bitner,1981)

• The 3 important aspects of servicescape includes, include ambient conditions, layout and functionality; signs, symbols and artifacts. (Bitner, 1982)

Implications

•Apple’s approach to its retail servicescape has redefine new standards for the electronic retail industry.

•In order to compete, other competitors will need to emulate Apple’s servicescape model.

• In the long-run, Apple’s model may become a standard feature for all electronic retailers meaning competitors will undergo a paradigm shift in service strategy planning with customers as the priority

• Industries will change is perception and strategy to include the general consumers including children and families.

Personal Evaluation• Customers derive more lasting value from positive experiences than products alone.

•Passionate fans as retail assistants may not be as effective.

• Apple’s retail service strategy be as effective once competitors catches up.

• The success of Apple retail stores is not solely attributed to its services alone.

•Apple’s type of retail model may not appeal to all market segments.

Conclusion• Apple is willing to invest and innovate in services to differentiate itself from competitors

•The 2 service theories explored is the services marketing mix and servicescape. Apple has executed both successfully.

•Apple has set a new retail model and standard for others to emulate.

•It is an unusual company and unlike other retailers, hence other retailers should not imitate it blindly.

•The author disagrees with training operations and hiring of Apple fans.

Thank You Very Much

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