Dissertation Proposal on Marketing: Application of Service Differentiation Strategy in WNG

APPLICATION OF SERVICE DIFFERENTIATION STRATEGY TO IMPROVE CUSTOMER SATISFACTION AND COMPETITIVE ADVANTAGE (WNG)

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CHAPTER 1: INTRODUCTION

1.1 Introduction

Wartsila Marine and Energy Company is worldwide leading in solutions for lifecycle power in the markets. Wartsila has four main businesses; Energy Solutions, Marine Solutions, Oil & Gas Solutions and Services (Wartsila 2015; Wartsila 2011). The company services, includes marine support, energy support, and support of the market in oil and gas, where it offers solutions of lifecycle and after sales services (Wartsila 2011). Wartsila Marine and Power Services Nigeria (WNG) (Wartsila 2015) owned by Wartsila Corporation, operation is through service business unit. The company is able to maximise performance of economy and environment though emphasises on sustainable innovation. According to Wartsila (2015), the company has over 18,800 employees in over 200 locations worldwide with total Net Sales of EUR 5 billion in year 2015 and present in over 70 countries.

The company has achieved the tremendous growth through achievement of customer satisfaction and competitive advantage through Service differentiation strategy. In most marine and energy markets there is need to have standout services in comparison to competitors to succeed in its business. Thus there is need to identify the service-driven differentiators for the Wartsila company so as to sustain customer satisfaction and competitive advantage (Wartsila 2015). According to sharp and Dawes (2001), in definition, differentiation terms out from the aspect of outperforming competitor companies or brands in service provision, where the service reduces the sensitivity of other services or features. This study will focus on application of service differentiation strategy by Wartsila to improve customer satisfaction and competitive advantage. The study will look into ways in which WNG applies service differentiation strategy.

Presently I work as the Services Account Manager for Wartsila Services in Nigeria. I am responsible for:

Ensuring the achievement of sales results, sold margin, collection time, customer satisfaction and order intake related to all accounts of Wartsila

Managing relationships with key customer accounts to develop appropriate services opportunities.

Managing sales cycle through CRM tool and identifying business opportunities to grow sales levels.

1.2 Clarification of Terms and Concepts

WNG - Wartsila Marine and Power Services Nigeria, a marine and energy market company in Nigeria, which is source of the study

Service Differentiation Movement from product provider to service provider, where services are the main source of profit for the company.

Customer Satisfaction the ability to fulfill the complex need of the customer in terms of product or service

Competitive advantage- Outperforming Competitors through offering a unique or innovative process, service or product

Customer centricity- this is the ability to satisfy the needs of customer through aspect of innovations

1.3 Explanation of the Problem

Today we have a strong culture of one size fits all. But we have a large variety of customers that are of different sizes with different needs and expectations. We need to respond and create this flexibility by finding ways to serve them better. Through this flexibility the organisation will makes most profits affecting business success at corporate and individual levels. Many factors affect application of service differentiation strategy in an organisation and the role of services management cannot be ignored.

1.4 Problem Statement

The aim of the paper is to find the way forward for improving customer satisfaction and competitive advantage for WNG through moving away from the one-size-fits-all approach and this can be achieved by Boosting service differentiation to improve customer satisfaction and competitive advantage in WNG. A quantitative experimental design will be applied to develop the service differentiation strategy for Wartsila marine and energy customers in order to improve customer satisfaction and offer a competitive advantage.

1.5 Theoretical Framework

The theoretical framework of this research paper builds on improvement of customer satisfaction and increment of competitive advantage through application of service differentiation strategy. The strategy represents a strategic orientation of companies in service provision and manufacturing. Customer satisfactions and competitive advantage falls in market orientation strategy, which interacts with service differentiation. Market orientation supports the idea of customer satisfaction for their complex needs. This paper conceptual model concentrates on improvement of customer satisfaction and increment of competitive advantage and their relation to service differentiation strategy application in WNG Marine and Power Services Company. A wide of research has provided information about customer satisfaction and competitive advantage and performance of business (Olive and Kallenberg, 2003; Matsuno and Mentzer, 2000; Tanwar, 2013; Neu and Brown, 2005). The authors provide the concepts of customer satisfaction and competitive advantage in relation to service differentiation. They provide a positive relationship in terms of business profitability and market orientation in terms of customer satisfaction and competitive advantage.

Indeed, the authors consider the turbulence of market instead of addressing the strategies of customer satisfaction and customer needs (Matsuno and Mentzer, 2000). There is a big relationship in existence between service application and improvement of customer satisfaction and competitive advantage, where company shifts from good provider to a provider of service (Oliva and kallenberg, 2003). The service should be the main source of company revenues and profits. Thus to meet company target and customer needs a company can combine product and services to ensure that customers are satisfied and that a competitive advantage in increased (Neu and Brown, 2005).

The paper will introduce aspect of service differentiation, customer satisfaction and competitive advantage in the relations to business performance. The relationships and concepts provided in this study are basis for strategic service differentiation for service oriented firms. The paper provided four strategies regarding the concepts of service differentiation and its use in the improvement of customer satisfaction and competitive advantage for WNG improved business performance.

2.0 CHAPTER 2: LITERATURE REVIEW

2.1 Introduction

The chapter entails about literature on application of service differentiation and how to satisfy customers and offer a competitive advantage. Various perspective and approaches of applying service differentiation will be provided. The chapter will concentrate on the ways of customer satisfaction and competitive advantage through customer relationship management. Additionally, various aspects of strategic management will be considered.

In todays business companies, various companies have opted for service differentiation as a way of attracting and retaining customers, where services become the optimal for the business operation. According to Gustafsson et. al (2010), service differentiation involves aspects of products to services transition, servizitation, infusion of service, business development of service and solutions of high-value. The differentiation assist in the getting an advantage of marketing, financial and strategic opportunities. According to Vargo & Lusch (2008), the benefit of services being labor dependent and less visible assists business in attaining competitive advantage, which is sustainable and offers them a strategic opportunity leading to co-creation of customer and company competencies bases value.

However, in the study of application of service differentiation phenomena, most researchers fail to study it with other antecedents of the firm influencing the success as such as improvement of customers satisfaction and competitive advantage. Through application of service differentiation and combining it with aspects of innovativeness and customer centricity can improve customer satisfaction and competitive advantage of the company. The phenomena of service differentiation mostly involve case studies, where exploration of service differentiation mechanisms is allowed in-depth. Other literature explores service differentiation through case studies; however no literature has explored service differentiation in regards to improving customer satisfaction and offering a competitive advantage through study of participants feedback. The study will cover 100 participants 50 for employees and 50 customers in Wartsila marine and Energy Company. The research will offer additional information to the literature about service differentiation, through providing the application of service differentiation in its improvement of customer satisfaction rather than the study basing on strategic management of the company (Vargo & Lusch, 2008). Additional to the literature, will be the positive and negative effects of service differentiation to the Wartsila Marine and Energy Company.

2.1.1 Service differentiation

According to Olive and Kallenberg (2003), service differentiation terms from movement of products to services, where customer service provide interaction with customers that is quality and where product offering are segmented. The customer service is included in service component for the company, while product dominates a pure provider of goods. The Customer service offers a marginal contribution to company, but the main source of revenue are products for a company (Olive and Kallenberg, 2003). Under the service oriented company the offer is for services i.e. outsourcing services, integration of system services, solutions of high value and construction and design services. To offer the business needs specific to customers, there is need to balance components of products and service, through combining the two. Under the marine and energy markets the service would evolve and dominate the market of the service providers. Indeed, the company services are attributed to performance in terms of increased profits and revenue, where the services add-on becomes the products (Olive and Kallenberg, 2003). Thus service differentiation is the optimum strategy to foster customer satisfaction and offer the company a competitive advantage in the marine and Energy markets.

2.1.2 Customer Satisfaction

According to Neu and Brown (2005), Customer has higher needs that are complex in the external environment of the company as they do require constant fulfillment and require i...