Determination of Quality Standard for Business- myassignmenthelp.com

Question: Discuss about theDetermination of Service Quality Standardfor Business. Answer: In the present business scenario, contemporary business organizations have to provide effective customer service in order to maintain the retention rate of the customers as well as enhance the level of loyalty of the existing customers (Jahanshani et al. 2014). This concept is not only applicable for the service sectors, but also for the manufacturing sectors. This is due to the reason that, in the case of the manufacturing sector, providing tangible products to the customers will not enhance the customer experience but also they have to provide effective after sales service and various schemes related to the customer relationship in order to provide effective customer service (Wong et al. 2015). Current Business Scenario of Caterpillar Caterpillar is one of the leading organizations in offering diverse range of heavy mining machineries. They have their operations around the world and are having more than 100 years of experience in this field. However, in the recent years they are facing issues related to the customer service (Wilson et al. 2012). Various competitors are being emerged in the market, which are offering more cost effective service to the customers. Thus, the business potentiality of Caterpillar is being adversely affected. Thus, the Latin American wing of Caterpillar has initiated a scheme of customer service agreements. It is being projected that the initiation of the customer service agreements will help to gain competitive success factors and will provide effective customer service. The major stakeholders of Caterpillar include the customers, distributors, employees and the dealers. The proposed customer service agreements will involve all the stakeholders and it will be implemented in a holistic approach. The dealers and distributors will be involved to enhance the distribution networks and to provide effective and efficient customer service in the service centers. The industry where caterpillar is currently operating is having the core product of the tangible item, but the augmented product is of the service being provided to the customers (Beltagui et al. 2012). In the case of caterpillar, they provide mining machineries to their customers. However, it is being seen that a major portion of the existing customers are opting for other service providers for the after sale service or for the mid life services. Thus, providing effective customer service will not only retain the existing customers, but also increase their revenue generation (Khan and Inamullah 2012 ). Service Characteristics The service portfolio of caterpillar includes refurbishing the old products for the existing customers, financing services and insurance services. In this case, all of the above stated services will have their own significance in providing effective customer service. The refurbishing of the old machinery will help the existing customers in extending their life span of the machineries (Caixeta et al. 2013). Moreover, the refurbishing technologies being involved in the service of the caterpillar is more superior than that of the services being provided by the third party vendors. Thus, the loyalty of the customers will be increased if they can maintain their products as new one. The second service being provided by them is the financing service (Bernel et al. 2014). By providing this service, they will be able to provide the customers financial assistance in buying new products. Customers will have the options of paying in installment schemes. Thus, the customer convenience and custome r experience will be more in this case. The last service being provided by them is the insurance service. The machineries being offered by caterpillar is more vulnerable to the wear and tear and thus, there is more chance of depreciation and breakdowns. Thus, the insurance service being provided by them will be helpful for the customers due to the fact that it will be provide the customers of supports in case of any breakdowns. Providing this service will also enhance the customer convenience and will increase the customer loyalty and retention (Kaura et al. 2015). Micro and macro analysis In the case of the macro environment of caterpillar, the competitive scenario for them is rapidly changing. This is due to the emergence of the third party service providers is leading to the outsourcing of the fleet by the customers. Thus, due to this reason, the caterpillar dealers cannot get involved and the organization is getting deprived from providing service to their customers. In addition, the emergence of the various small workshops for servicing the mining machineries are also posing challenge for the service being offered by caterpillar. This is due to the reason that, these small workshops are offering similar level of expertise to their customers at more cost effective prices. Several equipment distributors have entered in the market of Latin America, which are offering equipments at lower cost than that of the caterpillar. The microenvironment of caterpillar includes the relationship between the caterpillar and dealers network. The internal environment and structure of the organization is feasible enough to provide effective customer service. However, there are several issues being identified, which is reducing the effectiveness of the service quality being provided by them to their customers (Zhao et al. 2012). One of the key issues being identified is the less information about the customer service agreements by the sales people. Moreover, the sales persons are not being provided for extra selling of the customer service agreements. Thus, the motive of increasing the customer service agreements is not being fulfilled. Another issue in the dealership network of caterpillar being identified is the lack of customer oriented focus of the dealership. It is being seen that the dealership of caterpillar is more concentrated on the effectiveness of the work being done rather than determining the effectiveness in providing the customer satisfaction (Jhandir and Saif Ullah 2012). Thus, though the dealership network of caterpillar is effective enough in providing effective and efficient service for their products but the customer satisfaction is not being taken care of. This should also be rectified in order to enhance the effectiveness of the service quality and the level of satisfaction of the customers. Constraints and Obstacles One of the key barriers that are being identified is the geographical distance between customers and the dealers. Thus, the time being consumed by the customers in availing the services is more and it have negative impact on the customer assumption. Another obstacle being identified is the lack of any particular standards being set by the organization to define the service quality (del Mar Alonso-Almeida et al. 2013). Thus, it is difficult for the dealership to maintain the service quality standard. Moreover, the diversity in culture in the Latin American region is also posing challenge for the effective maintenance of the service quality standard. Service Quality Standard The customers of caterpillar are actually the machineries from them but they are also expected to be given the good and effective service quality. The after sales services and other related augmented services is required and expected by them. However, emotional contagion can be an issue in providing the effective service quality due to the reason that, the customer will get influenced by the emotional labor being possessed by the employees. Thus, it should be considered that the emotional influence by the employees will have positive influence on the customers. For the successful service interaction, the emotional connectivity between the employees and the customers should be positive and effective. OrganizationalEffectiveness In the present scenario, caterpillar is performing positive in the Latin American market. However, the issues being identified may pose challenges in future. The issues they are facing in providing the customers service effectively. Thus, it should be well coordinated and implemented effectively in order to enhance the customer service. The back stage service being provided by them, consist of the employees in charge of servicing and repairing the machineries. On the other hand, front stage employees are the one who are responsible for enhancing the augmented service quality for the customers. They look after the emotional labor being provided to the customers and to effectively determine the requirement of the customers and offering services accordingly. The staffs are being trained effectively according to the job requirement. However, it should also be considered that the service requirement of the customers is rapidly changing and it is important for them to train and equip their employees accordingly (Elnaga, Amir and Amen Imran 2013). Effective implementation of the service marketing mix will help the organization in effectively providing the services to their customers. According to the service marketing mix, the service to be provided along with the place, promotion and pricing should be effectively managed and coordinated. Effective coordination of all the elements will help the organization in providing holistic service to the customers. The communication process in providing the service to the customers by caterpillar is not effective and it is been seen that employees are not been properly trained in promoting the CSA to the customers. Thus, in this case, caterpillar as an organization is failing to effectively marketing their services. Thus, it is being recommended that, initiation of an effective communication channel, preferably extensive will help to promote their services to the customers. It can be concluded that, caterpillar is effective in providing the products to their customers. However, in the case of the service quality, they should improve to gain competitive advantages from the market. Reference Beltagui, Ahmad, Marina Candi, and Johann CKH Riedel. "Design in the experience economy: Using emotional design for service innovation." 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