Engaging Retail Customers Through Service and Systems Marketing: Insights for Community Pharmacy Stores

Engaging Retail Customers Through Service and Systems Marketing: Insights for Community Pharmacy Stores

Sergio Barile (Sapienza University of Rome, Italy) and Marialuisa Saviano (University of Salerno, Italy)
DOI: 10.4018/978-1-7998-1412-2.ch013

Abstract

This chapter highlights the need for and the directions of a rethinking of the approach to Retail Marketing to overcome the limitations of a view that can fail in effectively engaging customers in the relationship with retailers, as they are still excessively focused on the ‘structural' elements of the service offering. Many physical stores, in particular, show what can be called the ‘paradox' of a Goods-Dominant Logic in the service offering. Among the advancements of service research, Service-Dominant Logic has highlighted the need to take a general service view of market exchange to better engage customers in a value co-creation relational context. To accomplish such a paradigmatic change, systems thinking and the Viable Systems Approach (VSA) provide interpretation tools useful to shift focus on interaction. Essentially, this chapter illustrates the conceptual and practical advantages of the adoption of a Service & Systems Approach to Retail Marketing, providing examples and insights with reference to the case of Community Pharmacy.
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Introduction

By focusing on the inner service nature of retailing, in this chapter Authors argue that retail marketing needs to overcome the limitations of a view that still appears excessively focused on the ‘structural’ elements of the service offering. This structural view can fail in making the core potential of service value to emerge from retailer-consumer interaction. A relevant contribution in this respect can be provided by recent proposals of the theoretical context of service marketing, with particular reference to Service-Dominant Logic (SDL) (Lusch & Vargo, 2006; Vargo & Lusch, 2006, 2008; Vargo, Maglio & Akaka, 2008) and Service Science (SS) (Maglio & Spohrer, 2008; Spohrer, Maglio, Bailey & & Gruhl, 2007), integrated within the general perspective of systems thinking through the adoption of the Viable Systems Approach (vSa) (Barile, 2000, 2008, 2009; Golinelli, 2000, 2010; Various Authors, 2011; Barile, Pels, Polese, Saviano, 2012).

Marketing theory has accomplished a series of changes in perspective that have led, first, to a shift in focus from selling goods/products to establishing long lasting relationships with customers and, then, to the enhancement of the dynamic aspects of the market exchange process through the adoption of a true ‘service logic’. This evolution has been theorized as a progress from a Goods-Dominant Logic (GDL) to a Service-Dominant Logic (S-D Logic) in market exchange (Lusch & Vargo, 2006). A key step in this evolution is due to Relationship Marketing (Gummesson, 2002), which had the merit of recognizing the relevance of establishing and maintaining good relationships with customers overcoming the traditional transactional market logic (Golinelli, Barile, Saviano & Polese, 2012).

By adopting the general perspective of the vSa as a set of interpretative schemes, the evolution recalled above appears an expression of the need to overcome the traditional reductionist view of marketing, focused on goods, creating the basis for a general theory of exchange, based on service and focused on interaction. When focus is on goods/products to manufacture/distribute/deliver to customers, attention is reductionistically on their objective and physical features, i.e. how they are made instead of how they serve the needs of customers, solving their problems, that is, ‘serving’ a purpose.

This view appears to still dominate also in retailing. Retail, in actual fact, is a service. Nevertheless, almost paradoxically and despite relevant advances, in most cases focus is still on the ‘goods to sell’ instead of the ‘value to deliver’, that is the way retailers serve customers’ needs. Actually, many retailers yet represent the ‘operative marketing’ choice of manufacturers: the traditional fourth “P” (Place) of the manufactures’ marketing mix.

Two main aspects emerge in the light of a Service & Systems view of retailing:

  • 1.

    The major attention of retailers is devoted to the design and engineering of the store, i.e. the system’s structure;

  • 2.

    Less attention appears dedicated to the cognitive process of the retailer-consumer interaction, i.e. the core of the service process.

In fact, the definition and design of the offering system, based on the structural and physical aspects of space management and merchandising, have long caught the greater attention of retailers. As a consequence, what really emerges from interaction is rarely well captured.

The need to focus on the service process goes beyond the experiential marketing view (Schmitt, 1999), directing towards a wider view in which attention is on the interaction process and the overall systemic functioning of the retail enterprise. It has been argued, in this respect, that: “most enterprises, including retail organizations, are organized to manage compartmentalized tasks and activities and, thus, when a problem occurs the focus is on the local concern and not on fixing the systemic problem” (Lusch, Vargo & O’ Brien, 2007, p. 10).

Key Terms in this Chapter

Service-Dominant Logic: A mindset for a unified understanding of the market exchange and the nature of organizations, markets and society. Its foundational proposition is that organizations, markets, and society are fundamentally concerned with exchange of service intended as the applications of competences (knowledge and skills) for the benefit of a party ( http://sdlogic.net/ ).

Service System: A service structure in action finalized to the achievement of a goal (delivering value to other interested entities through service).

Retail Service Marketing: A theoretical and practical area of marketing that integrates a general service logic in the retail marketing approach.

Value Cocreation: A view of value as an outcome emerging from an interaction process among several actors in which each of them participates as a resource integrator.

Viable Systems Approach (VSA): A business governance and research methodology rooted in systems thinking and developed on the basis of an updated version of the Stafford Beer’s Viable System Model: ( http://en.wikipedia.org/wiki/Viable_systems_approach ). It is adopted and further developed by the aSvSa (Associazione per la ricerca sui Sistemi Vitali) research community ( http://www.asvsa.org/index.php/en/ ).

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