Term Paper on "Marketing Regulation and Consumer Behavior"

Term Paper 10 pages (3105 words) Sources: 12 Style: APA

[EXCERPT] . . . .

Marketing Regulation and Consumer Behavior

Rylander & Provost (2006) suggest the services sector is failing because the services provided to consumers are less than optimal. The service sector is simply not providing high quality customer service. There are many reasons for this.

Not only is the service sector not providing the quality one would expect from a company in the services industry, the service sector has also for some time now, continued to become less productive, which increases the rate of poor consumer satisfaction reported in market research (Rylander & Provost, 2006). When consumers are not happy with the service they receive, they are more likely to shop around, increasing the competition any one service provider faces as consumers search for the best possible service. Given this information, one would assume that the problem in the services sector must relate to products or some factor other than the service provided. However, market research shows that the main problem in the services sector is "service" meaning customer service that comes from employees working for a company in the services sector. This paper will address the problem of customer service in the services sector.

Introduction

The services sector has been growing for some time, yet despite this there are many problems one can identify within the services sector. This paper will provide an analysis of the poor customer service offered by many companies including retail establishments in the services sector. Nelson (1994) is one of the earlier researchers to note the trend toward problems in the service sector, suggesting that many of the customer service related problems in service industries including in offline shops and online have to do with the low pay for the employees working behind the scenes, and lack of opportunities for advancement among employees working for the services sector.

Nelson makes a solid point. Human Resources Management has long concerned itself with identifying problems and developing solutions for people working in the service sector. Human Resources teams often have trouble retaining and recruiting good employees to work in the service industry. This is due to many factors, including the competition for skilled workers and the low pay that many companies have to offer their workforce. However, what many do not realize is that it isn't just a matter of pay for employees. As Nelson (1994) points out, service workers are "more likely to have fewer opportunities and realize greater inequality in earnings" (p. 241). This can lead to decreased motivation, which can tempt employees to leave and work for other companies that offer better benefits or even marginally higher pay rates.

Problems in the services sector are not limited to the United States. Gandhi & Ganesan (2002) note that many countries have service sector problems including those related to poor employee retention and customer service issues. The researchers focus on service sector problems in India, noting the excessive growth of technology and "radical changes in the capital market segment" have led to lower pay for common employees or those that do not hold jobs with "special skills" in up and coming fields like technology (p.32). Customers are also becoming more technology savvy. Consumers are now buying online rather than going to retail store centers, so many employees that work in the service sector in major consumer centers have concerns over their job status, because the odds that a computer may replace a person in a job are realistic (Gandhi & Ganesan, 2002). If consumers can buy online without the need for human interaction, then super retail centers can save money, and if they can save money by laying off employees, then they will.

Retail service centers that work offline rather than online often hire employees that are less skilled because they can, and often pay them minimum wage rates or less in other countries, which for many employees is barely enough to compensate them for drive time to work much less raise a family (Gandhi & Ganesan, 2002). If retail centers continue to provide employees with little income and little incentive to work, they will continue to have high turnover rates. The employees that do work for companies will harbor resentment or bad feelings toward the company because they will feel as though they are not paid equitably for the time they do put into their work (Nelson, 1994; Gandhi & Ganesan, 2002).

According to a report prepared for a trade union seminar in the late 1960s, manpower problems were a huge concern in the service sector among international companies. This trend has continued in the present. This early report, printed in 1967, shockingly describes in detail how troubling the manpower problem in the services sector is. The report notes that there was an information gap at the time among companies with regard to why manpower in the services sector was lacking. The services sector economy as noted by the report "consists of those diverse activities which are not embraced within the primary sector or natural resource or "manufacturing" sector (OECD Publication, p. 50). The highlights of this lengthy report detailing problems in the service sector regarding manpower states that four key elements contribute to manpower problems, including (1) a demand for "increasing services" which often can't be met because consumers are not willing to "pay for an increase in price" which would help compensate employees better; (2) the lack of government support and funding to the services sector; (3) the "ever-changing pattern of services" that required a "mobile" and "fluid" labor force with "wider and more flexible skills" and (4) needs including more training, better recruitment and "educational standards for entry workers" (OCED Publishing Center, p. 29). The question that arises from this historical background is "How do problems with manpower in the services sector today compare with those experienced during the early to late 1960s?"

The answer is simple. The services sector today is facing many of the same problems it faced four decades ago, and for that reason, customer service is lacking. Customer service is lacking because there are not enough employees to work for companies given the low wages and poor benefits packages available to employees. While many service sector employees do not need extensive technical training, they DO need training, because companies are so technology oriented. However, retail sector employees are often not paid for their time or the time they have to invest in training. While the skills they need to know may be less extensive than one might expect in other industries, the skills are still worthy of proper compensation. The government isn't likely to support retail outlets because they have their own financial woes to commiserate about. The retail market is still requesting employees have knowledge and come on board with "flexible" skills, however again, employees often do not feel compensated for their talent. Even in cases where they are compensated well, because there is so much competition in the industry, employees are constantly tempted to work for other companies that offer even a miniscule increase in pay or benefits.

Customer service problems affect companies in many ways. From a purchaser and user perspective, companies are likely to loose their status and their place of "grandeur" if they do not constantly work to please the selective consumer. The purchaser is the individual that buys something from a company. They are important to companies because if there were no purchaser then a company would sell no product. The user of a product however, is a client the company must also consider very carefully, because the user of products is the "target market" or audience for a product. and, if the user doesn't feel a product or service meets their need they will go elsewhere. The purchaser may not be as selective as the user; however, if they experience poor customer service, they may influence the user to try a different service or retail outlet, regardless of the brand name of the company they work for. Therefore, from a marketing perspective, the user and purchaser should be an important consideration to Human Resources Management teams as they contemplate problems of service especially customer service in the services industry.

Triplett & Bosworth (2000) explore problems in the services sector related to productivity. The authors cite the U.S. Bureau of Labor Statistics or BL, noting that productivity had been growing in the services sector until the early 1970s, where it began to drop off. The reasons for this are varied, but they include as cited by the authors low morale and motivation among employees. This in turn can result in poor customer service, which can discourage the user from using products. The purchaser then no longer buys products because of the poor customer service received, which decreases the profits a company makes, which then results in increasingly poor pay. It is a domino effect of sorts (Triplett & Bosworth, 2000) that leads to increasing problems and headaches for human resources agents trying to remedy labor problems.

Triplett & Bosworth (2000) also note that in… READ MORE

How to Reference "Marketing Regulation and Consumer Behavior" Term Paper in a Bibliography

Related Term Papers:

Consumer Behavior From a Cultural, Social Research Paper

consumer behavior from a cultural, social, personal and psychological standpoint are analyzed in the context of globalized brands, social media and the counterbalancing effects of ethnocentrism globally. The implications of… read more

Research Paper 9 pages (3397 words) Sources: 6 Topic: Advertising / Marketing / Sales

---

Cultural Aspects of Consumer Behavior Research Paper

Cultural Aspects of Consumer Behavior

The accelerating pace of globalization and the continued shift in cultural values within and between nations is leading to en masse shifts in consumer behavior.… read more

Research Paper 6 pages (2508 words) Sources: 4 Topic: Advertising / Marketing / Sales

---

Consumer Piracy Research Paper

Consumer Privacy: Regulations and Ethics: Judging Privacy Concerns and Protections

Consumer Privacy and Data Mining:

Ethical Implications for Marketers in the 21st Century

The ethical implications of using customer data… read more

Research Paper 6 pages (2099 words) Sources: 4 Topic: Advertising / Marketing / Sales

---

Marketing Plan for a Sport Product Research Paper

Marketing Plan for a sport product

The modern day society is often criticized for its unhealthy life style. The incidence of cancers or blood pressure related illnesses is increasing at… read more

Research Paper 8 pages (2230 words) Sources: 8 Topic: Advertising / Marketing / Sales

---

Marketing Challenges of Going Green in the Domestic Automobile Industry Term Paper

Marketing Challenges of Going Green in the Domestic Automobile Industry

The domestic automobile industry

The automotive industry is one of the most competitive in the world and the U.S. automotive… read more

Term Paper 12 pages (3409 words) Sources: 6 Style: APA Topic: Advertising / Marketing / Sales

---

View 100+ more related papers  >>