What is the best solution to start apps like Deliveroo and Just Eat? Please suggest the best possible solution
The food delivery service comes under the service management, before we move deeper into how, what, and why, let us look at the service product concept, because food is the product and delivery is the service, and it is very essential to understand the relationship between the two.
Theodore Levitt had proposed the Product Concept model. This model can be adapted for services. A service organisation has to differentiate its services from those of its competitors to manage its positioning and obtain competitive advantage. A variation in the offering can differentiate the total service product offering. The different levels are called core benefit, basic service product, augmented service product and potential service. Core benefit is what the buyer is really buying without which there is no service offering. If you are visiting the gym, then the core benefit is health and fitness. If you are buying a movie ticket, the core benefit is entertainment. The intangible service through which the core benefit is received is called as basic service. This comprises all the factors that consumers assume to be present in the offering. For example – when you visit a restaurant, you expect tables and chairs and a hand wash area. Low cost airlines like Indigo provide only basic service.
Customers expect to get certain service quality or features when they purchase a service. This is called as expected service. For example – when you visit a five star hotel, you expect washrooms that are impeccably clean and well maintained. When we travel by flight, we expect good service from the cabin crew, availability of food and water in the flight and a comfortable experience. Augmented service represents the measures by the service organisation to differentiate its services from the competitors. Here the objective is to delight the customer by surpassing his expectations. Providing a business centre in the airline lounge can be considered an augmented service. Augmented services involve expenditure. The features of augmented services are copied by competitors.
Potential service includes augmentations and innovations that are planned. The service firm tries to find better ways of delighting the customers. A hotel in a tourist location that is only offering boarding and lodging services can expand its offering by converting itself into a resort with games, swimming pool, amusements, sight-seeing, in-door games, contests etc. Successful service organisations augment their offerings and plan potential services. Market leaders generally focus on augmented and potential services. Whenever a service is co-created with the help of customers, the latter can be used as creative sources to explore augmented and potential services. Core service is one that satisfies a customer’s minimum expectations. It is the main service provided by the company. Peripheral services refer to how the customer is treated while sourcing, buying, and using the service. These services supplement the core service.
Pricing will also be an essential point in the food delivery services, there are essentially 3 pricing models to follow:
1. Cost-plus pricing. This is a standard method of pricing. Calculate the cost for providing the service, and then add an additional amount to indicate the desired profit. The costs must cover employee costs, rent, utilities, administrative costs and other general overhead costs.
2. Competitor’s pricing. A business has to be aware of the prices charged by competitors. The information can be sourced from competitor websites, phone calls, talking to business associates or using published data. This awareness must be used in communication with customers to highlight the value that they are deriving from the service.
3. Perceived value to customer. This is where pricing assumes a form of art.
The customer’s perception of the service determines the value that they attach
to the service.
Before you make the pricing decision of your food delivery services keep these things in mind:
1. Product Cost
2. Demand for the service
3. Extent of competition in the market
4. Government Regulations (Tax structure for instance)
5. Pricing objectives
6. Marketing methods used
There are 5 place marketing Mix in services which are as follows:
1. PLACE OF BUYER & SELLER INTERACTION: The place of buyer and seller interaction in services management plays a role in fixing the price. E-commerce provides pricing options via the website or an app. The price depends on how much is consumed and how much need to be produced. Also, in services other than E-commerce services, the interaction between the seller and buyer takes place in the service environment. Servicescape refers to the environment where the buyer and seller interaction takes places and shapes the buyer’s experience and impressions about the service. The physical evidence, as a component of marketing mix, contributes to this experience too. Thus, both the Ps (place and physical evidence) must work in tandem to deliver the service output.
2. LOCATION & LOOK OF PREMISES: There are several factors to be considered while selecting the location of service premises. The competition in that area, the demographics, lease rentals, availability of manpower – all these are strategic considerations while arriving at a service location. For example, in many metropolitan cities, parking is a major issue. So, a retail store that offers free parking facilities can attract customers better than those stores that are unable to offer such facilities. The place must be well-connected and must be easily accessible to all the patrons of that service. The location must also be safe and secure with appropriate fire-fighting measures in place. In case of e-commerce, the design of the website plays a significant role. The website must be easy to navigate and customer queries should be resolved as quickly as possible through a FAQ section or through a live chat. When a service is being delivered in a physical location, the premises must be well-maintained. The premises should be clean, hygienic, and tidy and the service staff should also be neatly and professionally dressed (for example – wearing uniforms, head caps, gloves etc).
3. CHANNELS OF DISTRIBUTION IN SERVICES: Distribution channels form part of the “Place” P in marketing. Even though it is the most important strategy for a business, seldom do businesses pay attention to the same. When a service business wishes to expand its distribution channels, it must pay attention to minutest details and ask questions like:
1. What are the problem customers are trying to solve when they buy the service?
2. What are the factors that influence their buying decisions?
3. What is the competition like?
4. Which is the media that consumers use – online content, podcasts, or newspapers- to know about the services that they wish to avail?
The business can also partner with a company whose customers need their service. Developing a new distribution strategy is a challenge for a service organization with limited resources.
Distribution channels are avenues used by businesses to sell or deliver their product or service. There are many types of distribution channels – brick-and-mortar stores, online stores, solicitations by direct mail, catalogues, sales representatives, wholesalers, and distributors.
1. On-site consulting – A human resources consultant might visit the client site and spend considerable time interacting with people and observing them. He can then review the company’s recruiting, retention and succession strategies and also look at legal compliance issues.
2. Virtual delivery – Using the same example as above, the HR consultant can interact with clients via phone, email, online surveys, teleconferences, or Skype. Freelance writers and graphic designers do their work remotely.
3. Third-Party consulting – A business can form strategic alliances with another service provider to deliver the services required by customers.
Conducting workshops and seminars, releasing publications or brochures or a newsletter as a value-added benefit to customers is another way of supporting the
promotion and distribution of services. A motivational speaker may extend his reach by publishing a book. Additional training material can be provided at the website that customers may refer to and benefit from. Service organisations often resort to multi-channel service delivery that can provide the best and seamless experience to the users across multiple communication channels in an integrated fashion. Identification of different platforms to sell the services is a pre-requisite before reaching a targeted audience. The use of different distribution channels helps in managing the demand for services. This is achieved through appropriate segmentation, targeting and appropriate pricing strategies.
Direct sales strategy is considered another distribution strategy that can enable one to contact customers and prospects without using the services of an intermediary. Direct sales can involve personal visits, mail order and online solicitation such as newsletters and email subscription. Direct interaction with customers leads to direct feedback from them. This enables the business to tweak their marketing strategy accordingly. Virtual service is another emerging distribution channel in marketing. A salesman can offer his services through a combination of phone, email, and video conference. Online distribution of services (like graphic designs, content management) can also help a business to achieve cost optimization. Using the services of agents or referrals to deliver the service is another option. These people will do all the marketing legwork to promote the service.
4. CUSTOMER’S ROLE IN SERVICE DELIVERY: In the delivery of services, there is close interaction between customer and the service provider. In e-commerce services, there is no physical interaction between the customer and the service provider; however in all other services – be it a taxi ride, a hair salon, a classroom, a bank or a retail store – physical interactions are inevitable.
We can say that the place where customer interactions take place with the service provider can be considered a service factory. The presence of customers during the production of service affects the delivery. Other customers can also contribute to the success or failure of service delivery. For example – a customer who is standing in a queue at the bank may argue with the bank staff delaying the process for other customers. Customers can get into an argument with one another while they are standing in a queue affecting the delivery. A customer who is drunk and enters a flight and misbehaves with the crew and other customers ends up affecting the quality of service rendered.
Delivery of service is impossible without the participation of customers. In services, production and consumption happens at the same time. Employees, customers, and others in the service environment interact to deliver the service outcome. As it often happens, some customers take up an unconscionably long time in dealing with a service request. They may have several queries whereas the customer next may be having only a simple request. Imagine a retail mall where a customer has three credit cards and the cashier informs him that his credit card limit has been exceeded. The customer then searches for other credit cards and delays the process for other customers too. These customers get dissatisfied and irritated with the delay. The level of customer participation differs according to the nature of service. For example – a customer shopping for diamond jewellery may need more time than someone who visits a retail store for purchasing grocery items. Customer involvement is low when a film is being screened or a music concert is on. However, these services will need the presence of the customer. In other cases, customer inputs are needed to enable the service organization to deliver the service. Example – in a tailor’s shop, customer involvement hovers between moderate to high. The inputs can be information, effort, or physical possessions. Let us take the case of a client who goes to a tax consultant to file his returns. He needs to have information like tax history, marital status, number of dependents, additional sources of income etc. Additionally, the customer may have to carry documentary evidence like previous tax returns, salary statement, bank account details etc. The customer may also need to take the effort to clarify any doubts to the consultant or provide any other evidence that the consultant might need. If a management consultant visits a business establishment for a re-engineering exercise, then this may need greater involvement of employees in sharing relevant data. In such cases, the service is co-created by the customer along with the service provider.
5. TQM IN SERVICES: Every product that is manufactured can be checked for quality and statistical quality control tools can be applied to improve quality. But application of statistical quality control tools is difficult in services because customers play a crucial role in service delivery and expectations are variable. But TQM in services can be adapted for the softer elements like leadership abilities, customer focus, training etc. Services are intangible, perishable and are inseparable. Services are heterogeneous because of differences in customer expectations as well as difference in the quality of service rendered by different service employees. A defective product can be replaced but a defective service cannot be replaced. Due to expanded marketing mix (People, Physical Evidence, Process), implementation of TQM becomes difficult. Due to the 24 x 7 nature of services, many services find it difficult to be committed to the implementation of TQM. TQM in services is more complex and challenging than goods because of differences between services and goods.
Apart from these keep the following points in mind:
1. Look for Signs of Demand: To assess if an area is right for your business, you may want to poll potential customers. You can even offer services temporarily to gauge demand. Besides these, you can also look closely at other signs of demand. For instance, to order food via online delivery, people need to have disposable income and access to the internet. That means you need to be in areas that are relatively affluent with high internet and smartphone usage.
2. Find a Niche: Once you have decided the area to be targeted, consider finding a niche. You may want to target individual entrepreneurs working in offices or focus on big corporate deals. For instance, with a corporate client, you may decide to bring a certain number of meals every day for their staff. To make yourself stand out from the crowd, you may want to focus on certain types of food. This may include raw foods, meals that meet the guidelines of the Atkins diet, or foods from other popular diets. Alternatively, you may want to strike a global note with food from China, Italy, or other tasty spots around the world.
3. Be Mobile Friendly: Smartphone usage in India is rising faster than anywhere else in the world. In 2018, the usage was expected to grow by 16%. Analysts projected that over a quarter of the population would be using smartphones by the end of that year. Therefore, to reach these consumers, you need to make your online services mobile friendly. Optimize your website for mobile and see how it looks on a variety of smartphones and tablets. Can customers easily see your offerings? Is the order process intuitive? Consider questions like these. Alternatively, you may want to follow the path adopted by companies like Uber. Accordingly, develop an app for your business. Then, consumers can download the app and order food directly from there.
4. Hire Reliable Drivers: Once your customers order, you must ensure you get the food to them quickly and safely. And for that, you would need reliable drivers. Depending on the size of your business, you may want to start as the main driver. But eventually, you will need to hire more drivers. Make sure the drivers you hire are licensed. If possible, check their records for accidents or driving violations. Also remember that these drivers are essentially the waitstaff at your online restaurant. Therefore, consider training them in basic customer service skills to boost customer satisfaction.
5. Always Be Marketing: Consider launching a traditional advertising campaign with ads in local papers, billboards, and radio stations. Additionally, make sure to take advantage of the marketing potential of your delivery vehicles. Consider printing large magnets with your website and company name in order to put them on delivery vehicles. If possible, spend some time building awareness on social media. Tell local media outlets about your offerings. See if a food critic can review your business, or sponsor events in your community.
. Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath