MANAGING SERVICES

• The government sector

• The private nonprofit sector

• The business sector

• The manufacturing sector

• The retail sector

• An act of performance one party can offer to another that essentially is intangible and does not
result in the ownership of anything

• Identifiable, intangible activities that are the main object of a transaction designed to provide
want-satisfaction to customers A Banking Transaction

• Supplementary Services support the sales of a good or service. Installation of AC

Service Mix

Product/Service types:

• Search

• Credence

• Experience

Service Distinctions

• Equipment-based or people-based

• Service processes
• Client’s presence required or not

• Personal needs or business needs

• Objectives and ownership

 Intangibility: Physical evidence and presentation

• Place

• People

• Equipment

• Communication material

• Symbols

• Price

Inseperability:

 Simultaneous production and consumption

 Work Faster
 Add More Service Providers
 Work with Larger Groups

Variability:

Steps to increase quality control:

• Invest in good hiring and training procedures

• Standardize the service-performance process (service blueprint)

• Monitor customer satisfaction

A service blueprint can map out the service process, the points of customer contact, and the evidence of
service from the customer’s point of view. Figure 12.2 shows a service blueprint for a bank branch.
Service blueprints can be helpful in developing a new service, supporting a zero-defects culture, and
devising service recovery strategies.

Perishability:

Services cannot be stored, so their perishability can be a problem when demand fluctuates

Supply Side:

• Part-time employees

• Peak-time efficiency

• Increased consumer participation

• Future expansion

New Service realities

• Shifting customer relationships

• Customer empowerment

• Customer coproduction

Root cause of customer failure:

Solution:

• Redesign processes

• Technology

• Encourage customer citizenship where customers help customers

Marketing in service industry

Best practices:

Management Commitment

Strategic Concept

Profit Tiers

High Standards

Satisfy Customer complaints

Satisfy Customer complaints

Why Customer switch?

• Pricing

• Inconvenience

• Core Service Failure

• Service Encounter Failures

• Response to Service Failure

• Competition

• Ethical Problems

• Involuntary Switching
Improving Service quality

• Listening

• Reliability

• Basic service

• Service design

• Recovery

• Surprising customers

• Fair play

• Teamwork

• Employee research

• Servant leadership
Gap 1: Knowledge gap

Between consumer expectation and management perception

Probable Causes

• Insufficient marketing research

• Inadequate upward communications

• Too many layers of management

• Wedding planner: Decoration color/ flowers

Gap 2: Standard gap:

Between management perception and service-quality specifications

Probable Causes

• Lack of management commitment to service quality

• Employee perceptions of infeasibility

• Inadequate goal setting

• Inadequate task standardization

 • Wedding planner: Perceived 2 waiter per table but removed due to cost cutting

Gap3: Delivery gap:

Between service-quality specifications and service delivery

Probable Causes

• Technical breakdowns or malfunctions

• Role conflict/ ambiguity

• Lack of perceived control

• Poor employee-job fit

• Poor technology- fit

• Poor supervision or training

• Wedding: The best exotic food communicated to customer, but delivered bad

Gap4:Communication:

Between service delivery and external communications

Probable Causes

• Lack of horizontal communications

• Poor communication with advertising agency

• Inadequate communications between sales and operations

• Differences in policies and procedures across branches or divisions of an entity

• Propensity to overpromise

• Wedding planner: Groom in Mercedes vs…

Gap5:

Between perceived service and expected service

Probable Causes

• Final effect of the four gaps on consumer

• Cultural, demographics, social

Determinants of service quality:

• Reliability

• Tangibles
 • Responsive

• Empathy

• Assurance

• Based on this service-quality model, researchers identified five determinants of service quality,

Dimension Definition

Reliability The ability to perform the promised service dependably and accurately

Assurance The knowledge and courtesy of employees and their ability to convey trust and confidence

Tangibles The appearance of physical facilities, equipment, personnel and communication materials

Empathy The provision of caring, individualized attention to customer

Responsiveness The willingness to help customers and to provide prompt service

Dimension Respondent’s expectations

Reliability When excellent telephone companies promise to do something by a certain time, they do so

Assurance The behaviour of employees in excellent banks will instill confidence in customers

Tangibles Excellent telephone companies will have modern looking equipment

Empathy Excellent banks will have operating hours convenient to customers

Responsiveness Employees of excellent telephone companies will never be too busy to help a customer

Customer worries:

• Failure frequencies

• Downtime

• Out-of-pocket costs

• Indigo service failure