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First Post, Concept of Services VS Products Marketing.
November 14, 2017
Choose one product and one service. Use them to describe the basic differences between products and services described in the reading.
The company that I chose to discuss is my own company that is called Fine Art Shippers, with a domain name Fineartshippers.com. We are a Fine Art Shipping company that specializes in literally shipping Fine Art. Our name directly correspondence to the type of business and the scope of our business that we are in. Our range of services could be referred to as Art services, Fine Art Services, or if narrowed down Fine Art Moving and Shipping services, even though most of our business is shipping fine art internationally. This is obviously an intangible asset or benefit that our clients receive when we transport their paintings, sculptures, rugs, or whatever other tangible goods that they might have purchased from Auction houses like Sotheby’s, Christie’s or Bonham’s and have entrusted in our company’s to transport and deliver to their final destination.
In regards to the product we also manufacture custom made wooden crates for shipping fine art. This is one of our products that we actually manufacture on our own from raw materials and assemble it fully, cut the wood, and fully manufacture the custom made wooden crates. The obvious difference is that a wooden crate has clear measurements and is a tangible good or after fact that could be marketed according to standard parameters. It is much easier to describe a product in terms of its clear function and it normally serves a direct purpose such as to protect the art works during the time of the transport. Also the expectations of a client when ordering the wooden crate form us regardless whether they are shipping with us or not are very concrete and are very specific. It is very hard to be discontent with the way the crate is made if it is made fully to the specifications of the client. A service which we provide in many cases is the complete opposite because there are many more moving parts to it and on occasion some things are even out of our control. Such as the sea lines, airlines, airport logistics, customs, brokers, etc. If one of those bolts and joints malfunctions or is late the people / firm who gets the ultimate blame is Fine Art Shippers and the firm that is expected to resolve the problems is also Fine Art Shippers. I guess a comparison that I can easily come up with is that if you purchase an I phone it is very hard to get upset with Apple unless the I phone is defective, but if you get a service from At & t there are millions of moving parts where you can get upset with them starting from being overcharged, going over your data, having bad service, being treated poorly during a phone call and much more. It is much harder to please a client or a consumer with a service than with a clearly described and well presented product where the expectations are very clear. To conclude I would say that any service no matter what it is will always be kind of experience oriented even if it may be an indirect experience that a consumer themselves is not feeling like in a restaurant, they are still experiencing the service one way or another. A product on the other hand is directly felt and the only way that a consumer can be upset with the product is if the product is false advertised or presented in a shape or form in which it is over exaggerated.
Eight components of service management are described in the reading (please note that they are referred to as 8Ps--these are different than the 7Ps of service marketing we discussed briefly on Monday). Consider the service you chose in the previous question through the lens of these eight components and describe how they apply to each.
Unlike in the case of products where we have 4 P’s which are the Product, Price, Placement and Production. In case of the services industry we have the 8 P’s that I am about to discuss in my paragraphs below.
Product Elements which means that the features of the actual product or service must be very clearly defined. In the case of Fine Art Shippers, we were very lucky as the brand name of our firm directly describes the scope of our business and what we do, hence we ship fine art. We do not do moving jobs, we don’t ship furniture, we ship Fine Art, which means artifacts that have significant artistic value and possibly antiques as they are also related to art. Part of that service are obviously broad elements such as the actual product that we sell with the service which are custom wooden crates for protection of the art works, delivery services, pick up services, packing and crating, services, installation services, all of these make up a bundle of Fine Art Shipping services as the actual shipping process cannot exist without all of the individual elements combined. It is like Car Service cannot exist without passenger pick up, it is essential to that service. In Broad terms we ship fine art and this is the core element of our business and the main service that we provide. Technically all the other services that surround the main service as well as the products that accompany the service are our bundle services and all incorporate into Fine Art Shipping.
Place and time is essential as in our particular case the services are delivered B2B, we are a service company and our clients either find us through our online portal Fineartshippers.com, in this case we deal directly with final end users or clients who require our services or products. We also work with Auction houses like Shapiro Auctions, I Gavel Auctions, Show Place Antiques, they solicit our services directly as a business. We also have referral business where the same auction houses and galleries refer their clients to us and recommend us as authorized and preferred shippers. Some other ways in which clients are able to locate our firm is by Yelp, as we put a great deal of importance on our reputation online on platforms like Facebook, G +, LinkedIn, and other art associated platforms. We also have similar firms such as ours but in Miami, LA, Chicago, Art Shuttles and we refer clients to them and they refer clients to us in New York that they are not able to service because of distance. This is kind of an alliance that we have for many years. We also do trade shows where the artists present their work such as Art Basel, Miami beach Antique and Jewelry show, New York Pier show, where we obviously have presence and get share of direct business from the dealers who participate in that art show. We do not pay commission for any jobs as we strongly believe in dealing directly with our clients and providing the best possible rates in the industry.
The process under which we operate is fairly simply as most of the business begins with our CRM / this is where all the clients get registered. They either come in through the website, referral by the phone, or referral from other businesses, either way the first point of contact is either the entry to the website and CRM or phone conversation where the needs of the client are assessed and the right service is recommended. Nothing gets by the CRM as that is the ultimate tracking system that helps us evaluate how many clients we actually close and how many leads on a daily bases we receive from different points of entry such as Yelp, Site, referrals, auctions, phone. If clients call on the phone often we will ask how they found us to keep a track record of the lead generation process. Ones the needs are assessed we determine the service we send out a contract with the payment request. We do not provide any job unless it is paid in full prior to us executing the job. The reason for that is because we are providing a service that is not refundable. It is not a good that could be returned and re sold. If we pick up and deliver and ship that means the client has already received a benefit from our service. Normally after the order is placed and paid for we will set a date in the CRM and the exact service that we will be providing as well as the accompanying products that are required such as Wooden crates, packing blankets, cardboard boxes, which we also resell upon request and use depending on the complication of the actual job. Our CRM follows up with clients until the final stage of the process where the goods are obviously received or delivered depending on which side we are working with.
Productivity and Quality. We position our firm being a small family owned boutique size art shipping firm. Therefore according to these metrics our productivity definitely suffers in the name of quality. We never take more than 2 jobs a day, and we never take on more jobs if we cannot handle them. The reason being is that we are a small team of 5 people and we handle all jobs ourselves. We make that very clear to our clients that if we are doing a job and we are shipping your Porcelain, Painting or Vase, than either Oleg, Ilya, Mike, etc. People who literally are the owners of the business will directly be there supervising your job and the items will never leave sight. We often take clients by offering them reputation that is built on personal involvement in the process and that is how we get items that are hundreds and thousands of dollars in value. This is also how we get our recommendations from some auction houses like Shapiro, not by the fact that we are huge and we have a huge staff and we can move the statue of liberty, but because we are personally accountable and we are personally involved in the process and we make sure that he job is done right. Sure unfortunately we are not able to grow as much as we would wish to and we cannot take 10 – 15 jobs a day because we do not have the right stuff. But the reason why we do not have the huge staff to handle many jobs is because we choose to stay this way simply because at the end of the day we believe it enhances our ultimate reputation being a small boutique Art Shipping company. We grow with referrals and ultimately our profits grows with the complexity of the jobs and the value of the items that we receive and personal attention that we bring, not with the volume of work that we are able to handle on a daily basis.
In regards to people our business explicitly identifies the level of professionalism that some of our employees have, such as 25 years of experience working for Piano moving company Steinway, or professional carpenters who manufacture the wooden crates. In regards to the actual presence or the personal touch of the employees we are not that dependent on their image as our clients are more concerned with the actual service that they will receive and how it will be delivered to them as well as the quality of the product that they will receive. So unlike a restaurant server who serves food and his appearance is essential in our case the situation is a bit more relaxed and we are not as concerned with the people that deliver the service and product, but more the quality and the level of expertise with which they do it that is what matters most to our clients.
For Promotion and Education, we take very strong pride in education of all the clients that come to us. We thoroughly explain the whole process from point A to point B regardless of whether client has used similar services or knows what they are coming from. We strongly encourage our clients to use the safest methods of shipping and protection such as using the custom wooden crates products for all of expensive shipping and one that especially merits extra care. In some cases sort of detrimental to our business, but we would prefer to decline a service rather than agree to service where the client is asking for us to ship art where we feel that accidents may occur when clients are trying to cut corners and save costs. We use many channels to educate our clients through businesses such as auction houses by participating in event, through or online blogs, art shows, and personal involvement which each client that we attend and a fully explanation of the art shipping process that we follow.
The Physical evidence is very important and for us it starts from having a Manhattan address that creates serious credibility. We also have a full warehouse in Brooklyn where we crate and pack complicated large art pieces that we cannot pack in Manhattan. All of our trucks have magnet logos and when we go on the job we have uniform with Caps and Shirts with our logo. Our fork lifts in the warehouse also have magnets with our logo and the warehouse is fully branded with banners of Fine Art Shippers. This creates a brand recognition and comfort zone for our clients and ultimately transcends to trust building.
In regards to the price that it costs for our clients to get our service it is a bit different than purchasing an I phone in order to get the actual phone service or mobile internet service. Our services are direct so basically the clients pay for whatever they are getting. It is a directly related service where they are paying for their art work to be moved. In some sense we could say that we would encourage them to acquire additional protection products and services such as the custom wooden crate and insurance in order to get the fine art shipping service, but they are not directly related. In other words yes they technically can get the shipping service and decline the extra costs that will be associated with wooden crate and insurance, but in a high value item we would most likely decline to perform the service under these types of circumstance.
The reading introduces value, values and ethics as particularly important in the sphere of services. Do you agree that the fundamental nature of services described in the chapter amplify the importance of these three factors in services (versus products). Why or why not?
I absolutely agree with this statement and I feel that ethics and values play an ultimate role in any services as they must uphold the expectation that the end user or the consumer of the services has. In my opinion services must be provided with utmost care as when taking on a client or providing any service one becomes an agent of the client. Being the agent of the client whether to such a high extent a firm almost has the fiduciary duty to provide the service to the highest possible level the same way as if that service would be provided to their own. In our case if we are doing a job for our clients, we do that job the same way that we would be doing that job as if the items would be our own and it doesn’t matter if we have insurance or not, the care with which the service must be provided, described is extremely important. It is also very important that the aspect of value that the client see in the service has to amount and they have to feel that they are getting true value, otherwise it can be mistaken for fraud or abuse. Product is a different ball game because when dealing with products it is much easier to have concrete descriptions boundaries and in our case if we are selling a wooden crate it is only important to fulfill the measurements, the materials, and the size. For service we must provide value and we must provide it with utmost care and duty to our client.