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[SERVICE SECTOR MANAGEMENT]
SERVICE SECTOR MANAGEMENT
WHAT IS SERVICES Services include all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced and provides added value in forms (such as convenience, timeliness, comfort or health). That is essentially intangible concerns of its first purchaser. DIFFERENCES BETWEEN SERVICES AND CUSTOMER SERVICES A company like IBM offers repair and maintenance service of equipment, consultancy, training services etc. These services may include a tangible product like a report or train manual. Customer Services , however is the service provided in support of a company’s core product – ike answering question , taking orders ,dealing with billing issue , handling complaints etc Typically there is no charge for customer service is essential for building customer relationship . Customer services are hence different from services provided for sale by a company. Federal Express market and delivers services. It also provides a high level of customer services. Its services are overnight package delivery, and logistics services. Its customer services include well trained staff who can answer all question on telephone, on line tracking of parcels etc. CONCEPT OF ‘SERVICE MARKETING’ The perception of service marketing focuses on selling the services in the best interest of users/customers. Marketing a service is meant marketing something intangible. It is marketing a promise. It is more selling yourself. In the marketing of services, we go through a number of problems directly or indirectly influencing the business index. The problems like market segmentation, marketing information system, behavioural management are studied minutely which simplify the task of formulating a sound mix for marketing, such as Product mix, Promotion mix, Price mix and the Place mix. It is important to mention that we find “People” an important mix of marketing services. If we market the services in a right direction, the available opportunities can be capitalized on optimally and also it contributes substantially to the process of development. In view of the above, we observe the following key points regarding the concept or perception of services marketing: It is a managerial process of managing the services. It is an organized effort for providing a sound foundation for the development of an organization.
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[SERVICE SECTOR MANAGEMENT]
It is a social process helping an organization to understand the emerging social problem and to take part in the social transformation process to justify its existence in the society. SERVICE MANAGEMENT Service Management is : 1) To understand the utility the customers rceicve by consuming or using the service offering of the organization 2) To understand how the organization (personnel, technology, physical resources, systems and customers)will b able to produce and deliver this utility 3) To understand how the organization should be developed and managed so that the intended quality can be achieved 4) To make the organization function so that this quality can be delivered on a continuous basis GOODS SERVICE CONTINUUM As per Theodore Levit “There is no such things as service industries. There are some service industries whose service component are greater (or less) than those of other industries”. Everybody is in service. The point that Leavitt was trying to put across is that with almost every tangible physical product an intangible servicecomponent is associated. Therefore every body is in service.He has further put that goods can be put into two categories
Philip kotler suggests 4 categories 1) Pure tangible (salt) 2) Major tangible with minor intangibles (soap) 3) Minor tangible with major intangibles (consultancy) 4) Pure service (teaching)
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The above diagram shows the Service – goods continuum – some goods being tangible dominant others being service dominant. The fast food outlets has almost 50/50 of tangible and intangible parts i.e. in this case both tangible factors such (food) and intangible such as (services) is important. That is the reason it come in the middle. In case of other products like salt there services won’t play any important role so it is more towards tangible and in case of teaching profession it is purely service dominated. We never known about service with out experiencing and in this manner various goods fall in place according to its category i.e. less service oriented or more service oriented.
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[SERVICE SECTOR MANAGEMENT]
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“ Services is something which can be bought and sold but which you cannot drop on your foot”.COM MEMBERS| [Complied By Vishal. Its production may not my not be tied up to a physical product”.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] ** American Marketing association has defined services as “activities. 1.8 Characteristics of Services and its Marketing Implications The main Characteristics of Services are : Intangibility Inseparability Heterogeneity Perishability Intangibility 5 ONLY FOR MANAGEMENTPARADISE. ** Robert Judd defined services as “ a market transaction by an enterprise or entrepreneur. not necessarily. This definition took a limited view of services as it proposed that services are offered only in connection with sale of goods. which are offered for sale or provided in connection with sale o goods”. repair. where the object of market transaction is other than the transfer of ownership of a tangible commodity” This recognised three broad areas of services The right to possess and use a product (rented goods service) The customs creation. or a series of activities rather than things As a result they are intangible They take place in interaction between the customer and service provider – which means that services are produced and consumed simultaneously Customer has a role to play in the production process as services are provided in response to the problems of customers as a solution. B ] . or improvement of a product (owned goods service) No product elements but rather experience or what might be termed as experiential possession (nongoods service) ** Blois defines services. hich are provided as solution to customer problems. benefits or satisfactions. take place in interactions between the customer and the service employees and/or physical resources or goods and/or system of the service provider. ** According Gronross “a service is an activity or series of activities of more or less intangible in nature that normally. ** Gummesson says.” From this it follows that Services are by and large activities. as “a service is an activity offered for sale which yields benefits and satisfactions without leading to physical change in the form of a good” ** Kotler and Bloom defines services as “an activity or benefit that one party can offer to another that is essentially intangible and dos not result in the ownership of any thing.
sold and then consumed whereas the services are sold and then produced and then consumed. operations has to be decentralised to deliver to the consumer directly at convenient locations. They are inseparable. For e. Due to this it is not possible to stock services and hence fluctuations in demand becomes difficult to manage. A “problem customer” can result in disruption of service production process creating a dissatisfaction forhimself. This also creates a problem for what to include in advertisements and promotional materials. Heterogeneity As services are produced by humans. other customers (their presence or even absence) etc. hence no two services can be identical. other customers and also to the service producer. Hotels have same number of rooms all through the year but the customers requiring the room are always varying with some months seeing very few customers while other months seeing a rush of customers. Sometimes services are provided by a third party further increasing the heterogeneity. Even the same customer can be with different frame of mind at different times – which results in differing satisfactions from the same service at different times. B ] .g.COM MEMBERS| [Complied By Vishal. not separable. health experts and other professionals create and offer their service at the same given time. Inseparability Services are generally created or supplied simultaneously. Further the actual cost of “unit service” is difficult to determine and hence pricing becomes difficult.. Further no two customers are precisely alike and hence their experiences of the same service are different. and hence it will be difficult for the consumers to assess the quality. the entertainment industry.. hence the service provider cannot know if the service is delivered in a manner which has been originally planned and promoted. A tax consultant may provide different a service experience to two different customers on the same day depending upon their needs and on whether the consultant is meeting the customer when he is fresh in the morning or tired at the end of the day. Because of this ensuring a consistent quality becomes a challenging job. The quality depends upon a number of factors like the customer. Donald Cowell states ‘Goods are produced. Services and their providers are associated closely and thus. a dinning experience. Thus mass production is impossible. Eg.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] Services are actions and hence they are intangible. These cannot be readily displayed or easily communicated. it is not possible to get economy of scale by centralisation. Further services cannot be patented and any new concept can be easily copied by competitors. 6 ONLY FOR MANAGEMENTPARADISE. The service producer also plays an important role in quality. service provides. Thus the customers are present when the service is produced thus other customer play an important role in satisfaction.’ A service is produced when it is consumed eg.
The reasons for this growth are quite a few. There are other’s who would like to utilize this time to improve their career prospects and therefore there is a need for adult education/distance learning/part time courses. car. hotels. individuals find it difficult to manage things on their own. REASONS FOR THE GROWTH OF SERVICE INDUSTRY • • • • • • • • • • It is obvious that the growth in the services sector has been substantive. Affluence: . personal security.A large no. nursing homes. Further one has to be right the first time or if things go wrong one should have strong recovery strategies to retain the customer goodwill.5 in 1998 is an indicator of he increase in general affluence has given rise to service like pest-control. property advisers. Working wives: . health care. 7 ONLY FOR MANAGEMENTPARADISE. Leisure time: . interior designer. Resource scarcity and ecology: . Hence demand forecasting and creative planning to meet the demand is a problem. Life expectancy: .As more and more women have started working. etc. maintenance service providers. Due to these characteristics of services the marketeers face a major challenge in marketing of Services. micro wave ovens.8 in 1950 to Rupees 11. Product complexity: . etc. etc. saved. legal advisors. etc. etc.The health programmed have significantly contributed to an increase in life expectancy given rise to services like old age homes. of products are now being purchased in households which can be serviced only by specialized persons like water purifies.People do get some time to travel and holiday and therefore there is a need for travel agencies. and entertainment. and so is the care with packed food and home delivery. home computers. resorts.The increase in per capita income from Rupees 238. Life complexity: . Their leads to an obvious need for tax consultants.As the natural resources are depleting and need for conservation is increasing. we have seen the coming up of service providers like pollution control agencies. some of which are summarized as follows. pools.934. giving rise to the need for services like after sales service agents for durables. water management. the need for day care for children has increased. etc. B ] . A bad haircut cannot be returned or resold to another customer.COM MEMBERS| [Complied By Vishal.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] Perishability Services cannot be stored. resold or returned.As the daily routine gets busier.
the service sector's contribution in GDP has sharply risen and that of industry has fallen (as shown above). The rise in the service sector's share in GDP marks a structural shift in the Indian economy and takes it closer to the fundamentals of a developed economy (in the developed economies. As countries develop the role of agriculture in the economy declines and that of services increase. 35% from industry.38 per cent to 22.COM MEMBERS| [Complied By Vishal. They say that service sector growth must be supported by proportionate growth of the industrial sector. The agricultural sector's share has fallen from 30.16 per cent in 1998-99. the industrial and service sectors contribute a major share in GDP while agriculture accounts for a relatively lower share). and 15%from agriculture) • during recession it has been seen that service output declines less than industrial output – the service employment is less sensitive to business cycle fluctuation • globalisation as strategy for service firm is becoming more important INDIAN SCENARIO • The service sector now accounts for more than half of India's GDP: 51.93 per cent to 26. etc CONTRIBUTION OF SERVICE INDUSTRY TO INDIAN ECONOMY AND WORLD ECONOMY WORLD SCENARIO • as economy shifts from developing to developed stage. the industrial sector's share in GDP has declined from 25. Pager service providers.(china has 50% GDP from service. Web Shoppe. they will show more and more shift toward services • today. in India. • The service sector's share has grown from 43. but there has been a trade surplus in services • today service sector dominates the economics of many developed nations. It is true that.83 per cent in the respective years. In contrast. 8 ONLY FOR MANAGEMENTPARADISE. This sector has gained at the expense of both the agricultural and industrial sectors through the 1990s. economic growth can be distorted. otherwise the service sector grown will not be sustainable. the fastest growing segments of the US economy is services • in 1948 54% of the GDP of US was generated by services which is 80% now • employment in this sector which was 55% in 1950 is now 83% • the US balance of trade in goods has remained in the red for many years. • Some economists caution that if the service sector bypasses the industrial sector.16 per cent in 1998-99.01 per cent in 1990-91 and 1998-99 respectively.[SEMESTER 5] • [SERVICE SECTOR MANAGEMENT] New products: . B ] .the development in information technology has given rise to services like PCOs.69 per cent in 1990-91 to 51.
3 billion $ against its merchandized exports of $32. IT.COM MEMBERS| [Complied By Vishal. example:.26 per cent to 7. Three times between 1993-94 and 1998-99. It is expected that service exports could a third of merchandize exports now this will be well above the global average of ¼. the share of trade. Courier and stock brokers. partly because lower fixed investment requirements. in addition lower wage structure has helped to develop CALL CENTRE’s. 51% . and grown quite impressively through the 1990s (except in 1998-99). most of the tax came from manufacturing sector.2 billion. The share of construction has remained nearly the same during the period while that of financing. in last 25 years the increase in employment in the organized sector is 57% while if only service sector is considered it is 70%(other than service sector it 41%) India’s service exports in1997 were 9. 9 ONLY FOR MANAGEMENTPARADISE. storage and communications has grown from 5. from 1996 BSE has given a prominent place to service industry in it’s 30 share index since no tax is imposed on agriculture sector.61 per cent in the years under reference.44 per cent. industry surpassed the growth rate of GDP. EDUCATION. MEDICAL TRANSCRIPTION. many export benefits like EPCG is now extended to the service sector.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] • • • • • • • • • • • • • • • But. real estate and business services has risen from 10. It implies that India which has failed to catch the bus in the exports of manufactures is among the early leaders of the developing world in the race for service exports. the service sector has grown at a higher rate than industry which too has grown more or less in tandem..68 per cent in 1998-99. 83% of this is contributed by service sectors. Within the services sector. Thus.22 per cent to 11.52 per cent in 1990-91 to 15. The rise of the service sector therefore does not distort the economy. hotels and restaurants increased from 12. now services are being taxed service tax collection is to the tune of 5000 crore. The share of transport. B ] .today’s concept of banking technological advances have made it possible for India to compete on global basis in areas like SOFTWARE. AD agencies. HEALTH. etc.Telecom. etc. insurance. it is equally true that the industrial sector too has grown. the share of agriculture sector to GDP has come down from 50% in 1960 to 24% service sector contribution to GDP is around 54% with an annual growth of 8% employment in this sector is around 50% the response to liberation has been more in service sector. others are Insurance..
• Gate Keeper : The person or organization or promotional material. Hence while targeting a customer the service provider may have to influence other persons. In services these roles are played by many persons.[SEMESTER 5] • [SERVICE SECTOR MANAGEMENT] The fact that the service sector now accounts for more than half the GDP probably marks a watershed in the evolution of the Indian economy. B ] . • His boss may be the initiator • The travel agency may act as a Gatekeeper • The finance department may be the influencer • The administrative department the buyer • The executive the user. In purchase of any service six distinct roles are played Initiator : The person who has a specific need and proposes to buy a service • Influencer : The person or group of persons whom the decision maker refers to or who advice the decision maker.COM MEMBERS| [Complied By Vishal. UNDERSTANDING THE CONSUMER 1 KNOWLEDGE OF THE BUYER In buying decisions many times other people also influence the decision. In this case the user may have no role in the buying process. For example if a sales executive wants to do a market tour ……. which act as filter on the range of services which enter the decision choice • Decider : The person who makes the buying decision • Buyer : The person makes the actual purchaser • User : The actual user. 10 ONLY FOR MANAGEMENTPARADISE.
insightful and effective. Process Variables. gender. attitude. reference group. 3. A simple consumer decision-making model. their prepurchase search for information and their evaluation of alternatives. interested in the consumer decision-making process by which a consumer selects an alternative amongst the lot available. Factors Influencing The Buying Behaviour • Situational Factors : Time. Input Variables. Both pre-purchase and postpurchase evaluation feed back in the form of experience into the consumer’s psychological field and serves to influence future decision processing. (On a holiday a customer may change hotels in between his stay). • Social Factors : Culture. B ] .[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] CONSUMER DECISION MAKING. family • Psychological Factors : Perception. occupation etc. Marketing Stimuli (the occasion) • Personal Factors : Personality. social and cultural concepts into an easily understood framework. Output Variables:The output phase of the model includes the actual purchase (either trial or repeat purchase) and post purchase evaluation. motivation TEN SUCH QUALITIES EVALUATION OF 11 WHICH INFLUENCE THE CONSUMER’S ONLY FOR MANAGEMENTPARADISE. therefore. 2.COM MEMBERS| [Complied By Vishal. Store’s atmosphere. Marketer are. The decision model has three distinct sets of variables: 1. life style. The decision not to buy is also an alternative. whether it was poorly planned and missed the mark. ties together the psychological. Input Variables:Input variables are those variables which affect the decision making process and include commercial marketing efforts as well as non-commercial influences from the consumer’s socio-cultural environment. Decision Variables:The decision process variables are influenced by consumer’s own psychological fields. which affect their recognition of a need. Other demographic factors like age. The consumer’s decision to purchase or reject a product or service is the moment of final truth for the marketer. It signifies the marketing strategy has been wise. Output Variables.
It also means that the firm honours its promises especially in terms of accuracy in billing.”) 12 ONLY FOR MANAGEMENTPARADISE.COM MEMBERS| [Complied By Vishal. access and ease of contact.it involves politeness. It means that the service is easily accessible by telephone.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] SERVICES (Quality Dimensions of Services) Consistency: .it involves making the effort to understand the customer’s needs. Competence: .g. E. THE SERVICE ENCOUNTERS (“MOMENT OF TRUTH. It involves explaining the service itself and how much the service will cost explaining the trade-off between service and cost and assuring the customer that a problem will be handled. record keeping and performing the service at the designated time. i. learning the customer’s specific requirements. honesty. calling the customer back quickly or mailing the transaction slip immediately. It involves timeliness of service or giving prompt service. Contact:.e. Credibility: . Confidentiality: . waiting time to receive the services is not extensive. E.it includes physical evidence of the service. financial security or confidentiality. Concern:-it is the willingness or responsiveness of employees to provide the service. It may mean that the company has to adjust its language for different consumers – increasing the level of sophistication with a well educated consumer and speaking simply and plainly with a novice. It involves having the customer’s best interest at heart thus contributing to credibility. It means that the firm performs the service right the first time. believability. convenient hours of operation and convenient location of service facility. It includes consideration for the consumer’s property. providing individualized attention and recognizing the regular customer.it involves consistency and reliability of performances and dependability.it means having the required skills and knowledge to perform the service. consideration and friendliness of contact personnel.it involves approachability. Courtesy:.the security and the freedom from risk or doubt.g. It involves knowledge and skill of the contact personnel. involving physical safety. Tangibles: . personal characteristics of the contact personnel and degree of hard sell involved in interaction with the customer. physical facilities.it means keeping consumers informed in a language that they can understand and listen to them. report.it involves trustworthiness. and appearance of personnel tools or equipments used to provide the service. company name and reputation. physical representations of the service such as a plastic credit card or a bank statement and other customers in the service facility. proper telephone operators etc. knowledge and skill of operating support personnel and research capability of the organization. B ] . Customer knowledge: . Communication:. no muddy shoes on the carpet. Clean and neat appearance of public contact personnel. securities brokerage firm.
In a hospital context. When the customer has had many interactions with firm. no matter how many encounters had taken place in the past. For every organization. which take place in direct contact between the customer and the service provider. Example: A customer calling for the repair service may switch to some other company if he is put on hold for a long time or even treated rudely. So. as it determines customer satisfaction and loyalty. The encounter cascade refers to a series of encounters right from the time a customer comes to take the service. B ] . one negative encounter can drive the customer away.” The same applies in this too. Most services are results of social acts. So a firm has to give a lot of importance to such encounters. Thus the airlines say there 50 million moments of truth – each one is managed well and “They prove they are the BEST”.COM MEMBERS| [Complied By Vishal. these interactions have to be given importance. when he comes out of the bank the watch man asks Rs. certain encounters can act as a key to customer satisfaction.” when the customer interacts with the service firm. As it is rightly said “one bad apple can ruin the whole basket of apples. a study of patients revealed that encounters with the nursing staff were more important in predicting the customer satisfaction. One fine morning. He has a huge deposit and many accounts. Many positive experiences will give an image of High Quality and many negative experiences will represent a bad image. At this stage the Customer realises the perceived service quality. each one of their 10 million customers come in contact with 5 employees. If it’s the first interaction of the customer then the initial interaction will be the first impression. ENCOUNTER CASCADE Every Moment of Truth is Important – according to Scandinavian Airlines. 10 for 13 ONLY FOR MANAGEMENTPARADISE. This is the foundation to “Satisfaction of Service Quality” – it is where the promises are kept or broken. the most vivid impression of service occurs in the service encounter or “Moment Of Truth. taking the metaphor from Bull Fighting. It is suggested that not all encounters are equally important in building longterm relations. The encounter cascade can be important as any encounter can be critical. This concept was put forth by Richard Norman. “A customer who has been using a bank for nearly 15 years is quite happy with the service. each encounter will be important as it will create a combined image of that firm. the firm may not get a chance to prove themselves in front of the customer. it is the early encounters that are important.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] MOMENTS OF TRUTH From the customer’s point of view. For example: for MARRIOT hotels. as they are critical and influences customer’s perception of the organization. Even if the technical quality of that firm is superior. However some encounters are more critical. Combination of positive and negative interactions will leave the customer confused about the Quality.
who says he is helpless as this is a new policy of the bank. A customer 14 ONLY FOR MANAGEMENTPARADISE. phone encounters.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] parking charges of his car. As for the company.remote encounters. They found that 4 out of 5 factors came into play in the first 10 minutes of the guest’s stay. B ] . MARRIOT Hotels learned this through their extensive customer survey to determine what service element contributes to customer loyalty. He goes inside the bank and informs the clerk at the counter. Among the service encounters a hotel customer experiences are checking in. who directs him to the officer. and face – to – face encounters. The customer who was so happy with the bank services decides to close all his accounts – “Some encounters can be very Critical”. eating a restaurant meal etc as shown in the figure. Some services have few service encounters and others have many.COM MEMBERS| [Complied By Vishal. being taken to the room by a bell person. TYPES OF ENCOUNTERS A service encounter occurs every time a customer interacts with the service organization. each encounter represents an opportunity to prove its potential as a quality service provider and to increase customer loyalty. It is in these encounters that the customer receives an overall view of the organizations service quality and encounter contributes to customer satisfaction and willingness to do business with the organization again. The officer directs him to the Manager. Mistakes or problems that occur in the early levels of the service cascade can e critical because failure at one point results in greater risk of dissatisfaction in the long run. There are three general types of encounters .
Remote encounters also occur when the firm sends its billing statements or communicates others types of information to customers by mail. Retail purchases. the most frequent type of encounter between a customer and the firm occurs over the telephone is called as phone encounter. Almost all firms (whether goods manufacturers or service businesses) rely on phone encounters in the form of customer-service. or order-taking functions. receptionist. Such as. Face-to –Face Encounters:A third type of encounter is the one that occurs between an employee and a customer in direct contact is called as Face-to-Face Encounter. Phone Encounters:In many organizations. EXAMPLE:Services are being delivered through technology. Determining and understanding service equality issues in face – to –face 15 ONLY FOR MANAGEMENTPARADISE. when a customer interacts with a bank through the ATM system. bellboy. The judgment of quality in phone encounters is different from remote encounters because there is greater potential variability in the interaction. general inquiry. food and beverage servers and others. Tone of voice. face – to – face encounters occurs between customers and maintenance personnel. employee knowledge. In remote encounter the tangible evidence of the service and the quality of the technical process and system become the primary bases for judging quality. and package and shipment tracking are just a few examples of services available via the Internet. B ] .[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] may experience any of these types of encounters.COM MEMBERS| [Complied By Vishal. particularly with the advent of Internet applications. repair and maintenance troubleshooting. each represents an opportunity for a firm to reinforce or establish perceptions in the customer. or with a mail-order service through automated dial-in ordering. airline ticketing. All of these types of service encounters can be considered remote encounters. or a combination of all three in his or her relations with a service firm. In a hotel. or with Ticketron through an automated ticketing machine. Remote Encounter:Encounter can occur without any direct human contact is called as Remote Encounters. Although there is no direct human contact in these remote encounters. and effectiveness/efficiency inhandling customer issues become important criteria for judging quality in these encounters.
physical settings).g. Customers who experience service failures. and bottom-line performance. If left unfixed they can result in customers leaving. the outcome may be incorrect or poorly executed. delivery personnel. B ] . Both verbal and non-verbal behaviours are important determinants of quality. informational brochures. The logical. For example:A hotel customer who arrives & finds there is no room available. loyalty. In an effort to recover. For a company such as. At Disney theme parks. equipment. All these types of failures bring about negative experiences. THE RECOVERY PARADOX. In face to. ride personnel. as are tangible cues such as employee dress and other symbols of service (equipments. and vows to be loyal into future. In face – to – face encounters the customer also play an important role in creating quality service for herself through her own behaviour during the interaction. Research has shown that resolving the problems effectively has a strong impact on the customer satisfaction. conclusion is that 16 ONLY FOR MANAGEMENTPARADISE. may be more satisfied and more likely to repurchase than are those who are satisfied at the first place. but are ultimately satisfied based on recovery efforts by the firm. the front-desk person immediately upgrades this guest to a better room at the same price.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] context is the most complex of all. will be more loyal. or employees may be rude or uncaring. maintenance personnel. Of all determining and understanding service quality issues in face-to-face context is the most complex. SERVICE FAILURES AND RECOVERY • SERVICE FAILURES Even with the Best organizations failures can just happen – they may be due to the service not available when promised. in a business-tobusiness setting direct encounters occur between the business customers and salespeople. Both verbal and non-verbal behaviours are important determinants of quality. it may be delivered late or too slowly (some times too fast ??). actors in Disney character costumes.COM MEMBERS| [Complied By Vishal. and physical settings). It is suggested that customers who are dissatisfied. is even more impressed with the hotel than he was never before. and professional consultants.. IBM. face-to-face encounters occur between customer and ticket-takers. and others. food and beverage servers. informational brochures. but experience a high level of excellent service recovery. but not very rational. as are tangible cues such as employee dress and other symbols of service (e. telling others about the negative experiences or even challenging through consumer courts. maintenance representatives. The customer is so thrilled with this compensation that he is extremely satisfied with this experience.face encounters the customer also plays a role in creating quality service for herself through her own behaviour during the interaction.
self. dissatisfaction at some levels will occur for the customer. relatives. This type of failure may be too much to be overcome by any recovery effort. it may be possible to observe evidence of the recovery paradox. The explanation for why no recovery paradox is suggested by the magnitude of the service failure in this study it is-a three hour airplane flight delay. Thos is often the best-case scenario for the company it has the second chance right at that movement to satisfy the customer. This negative word of mouth can be extremely detrimental because it can reinforce the customer’s feeling of negativism and spread that negative impression to other as well. keep his or her business in the future. disappointment. If the recovery effort is absolutely superlative then the negative impression can be overcome. Then there is a recent study which shows no support to recovery paradox. and coworkers. or the recovery effort is clearly superlative.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] companies should plan to disappoint customers so they can recover &gain even greater loyalty from them as a result. When a failure does occur then every effort at superior recovery should be made. B ] .COM MEMBERS| [Complied By Vishal. discontent. This idea is known to be as Recovery Paradox. Considering mixed opinions on if recovery paradox exists it is safe to say “doing it right the first time” is the best and safest strategy. HOW CUSTOMERS RESPOND TO SERVICE FALIURE If customers initiate action following service failure. In cases where the failure can be fully overcome the failure is less critical. First of all it is expensive to fix mistakes and would appear ridiculous to encourage service failure-as reliability is the most important aspect of service quality. A dissatisfied customer can choose complaint on the spot to the service provider. If the experience is negative.pity and anxiety. When there is a failure. no matter what the recovery effort is. simply 17 ONLY FOR MANAGEMENTPARADISE. Many customers are very passive about their dissatisfaction. It shows the overall satisfaction was consistently lower for those customers who had experienced a service failure than for those who had experienced no failure. and potentially avoids any negative word of mouth. the company has no chance to recover unless the negative word of mouth is accompanied by a complaint directly to the company. including such feeling as anger. Further. Some customer chooses not to complaint directly to the provider but rather spread negative word of the mouth about the company to friend. According to a research it is observed that a customer weight their recent experiences heavily in their decision to buy again. research suggest that variety of negative emotion can occur following service failure. In fact. overall feelings about the company will decrease and repurchase intentions will also reduce. giving the company the opportunity to respond immediately. customer can respond in a variety of ways as illustrated in the figure. It is assumed that following are the failure. The recovery paradox is more complex than it seem. the action can be various types.
B ] .COM MEMBERS| [Complied By Vishal. When the company fails to stand for its promises made to the customer on the basis they build expectation. 3rd step: Avoid defending the company and offer a rational explanation. 4th step: Offer some extra benefits 5th step: Have a proper follow up and make sure no mistakes this time.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] saying or doing nothing. so that he can easily forget about the service failure and is retained. 1) 2) 3) 4) The customer wants what they were promised. 18 ONLY FOR MANAGEMENTPARADISE. Customer is considered to be the bread and butter. at some point the customer will decide weather to stay with that provider or switch to a competitor. there can be again severe ramification. They are mentioned as below 1st step: Acknowledgement and apology for the fact. hence retaining them is the biggest challenge. 2nd step: Listening to the customers. take action or not. (Though in many cases they are responsible for nuisance) There are again five steps involved in order to deal with service failure. it’s to be said that there is service failure. In such failures. Customer wants personal attention Customer wants a decent apology Customers want that they should not be made to feel that they are the cause of the problem. and however service failure acts as an obstacle to it. When the service failure occurs.
It’s better to give bad news rather giving false news. 19 ONLY FOR MANAGEMENTPARADISE. but he still expects fairness and courtesy in the language and tone used by the addresser 2.to know in detail about the incidence of service failure or to avail the compensation. 7) If corrective action cannot be taken immediately. let me see what I can do”. ACTION PLAN TO SOLVE THE PROBLEM : Handling complaints is a big challenge for every company today. which is involved. They are mentioned below. which can result in customer’s complaints.when there is service failure. They are mentioned as below. Before understanding how to handle. arranging for some alternative mode of transporting or complies with the customer condition.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] A customer expects 3 shorts of fairness in case of service recovery. The outcome should be taken by considering the customer. 9) Look into the matter. 2) Let the customer get the story off their chest. Due to this the customer might turn erate. make him feel important. 8) Record the action to be taken and inform anyone else in the organization involved. tell the customer. In this case listening skills comes into picture. his needs and the company’s policy. provide a proper follow-up. this will only cause irritation. Give attention to the customer. 3. Outcome fairness: . 6) Take action if you have authority or involve manager or concerned person. There are ten steps involved in handling such airline flights delayed departure complaints effectively. Service failure and complexity in procedure both together might result in a disaster as far as customer is concern. B ] . 4) Get facts by using question and try to find out the real and whole story behind it. 1.now when the company realizes that there is service failure they should end up compensating.do not interrupt. first the company is supposed to acknowledge the customer. The officer just need to show concern like. 1) The frontline employee handling complaints should stay calm under any circumstances. Procedure fairness: . just identify appropriate action considering company’s policy and customer’s expectation. 3) Avoid admitting any liability at this stage. There should be simplicity in procedure. “I’m sorry for the inconvenience. Interaction fairness: . 5) After listening and collecting data.COM MEMBERS| [Complied By Vishal. let us see what are the factors.
by examining each and carefully and adapting them to your customer's needs. you need to get the right type of mix (marketing mix). In order for your business to tackle this correctly.This components addresses management of the expenditures and other outlays incurred by customers in obtaining benefits from the service product. setting trade margins and getting credit terms but also. In short. they must be attentive to all aspects of the service performance that have the potential to create value for customers 2) Price and other user costs: . All these elements need to be targeted at the right people at the right time. how you can create interest and awareness for your products. delayed departures of flights). continue to seek improvements EIGHT COMPONENTS OF INTEGRATED SERVICE MANAGEMENT The Marketing Mix (THE 5 P’s OF SERVICES MARKETING) In order for your business to sell its products and services as successfully as possible. B ] . OTHER SOLUTIONS • Control costs. with reference to the benefit desired by customers and how well competing products perform. i. where you are best distributing your product. you need to look at what products you are selling in detail to ensure they will be attractive and needed.COM MEMBERS| [Complied By Vishal. you will continue to produce and needed products and services 1) Product element: Managers must select the feature of both the core product (either a good or service) and the bundle of supplementary service elements surrounding it. complaints can be handled properly and possibly a customer can be retained.e. the mix should include four main elements: Product. the price to ensure it is not too cheap or too expensive. Place and Promotion. reduce waste • Set productive capacity to match average demand • Automate labor tasks • Upgrade equipment and systems • Train employees • Leverage less-skilled employees through expert systems • Change timing of customer demand • Develop customer trust • Understand customers’ habits and expectations • Pretest new procedures and equipment • Publicize the benefits • Teach customers to use innovations and promote trial • Monitor performance. (Solution is only for the taken example. It is not only related to traditional pricing tasks of establishing selling price to customers. Price. and finally.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] This ten approaches if followed effectively. how to minimize other burdens of customers 20 ONLY FOR MANAGEMENTPARADISE.
The EXTENDED marketing mix for services marketing isas follows : 5) People: . A tangible element such as insurance and advertising is often employed to create meaningful symbols. wants and expectations. 7) Process: . equipment. newspaper.Productivity relates to how inputs are transformed into outputs that are valued by customers. 8) Productivity and quality: . staff members. 21 ONLY FOR MANAGEMENTPARADISE. c)Encouraging to take action at a specific time (purchase).It is the method and sequence of actions in which service operating system works.e.COM MEMBERS| [Complied By Vishal. This component plays three vital roles: a)Providing needed information and advice (awareness). printed materials.The appearance of buildings. successful service firm devote significant effort to recruitment. 3) Place . Improving productivity keeps costs under control Quality refers to the degree to which a service satisfies customers by meeting their needs. signs. (Concentrating on a particular segment of the market). Delivery may involve physical or electronics distribution channels or both).: . Badly designed process: . media such as TV. training and motivating their personnel. Invest in quality profitably i. This interaction strongly influences the customer perception of service quality.Many services depend on the direct. 6) Physical evidence:. postures. E. 4) Promotion and education:.No marketing program can succeed without effective communications. cyberspace and Time:. b)Persuading target customers of the merits of a specific product. mental and physical efforts and unpleasant sensory experiences such as noises and smells. radio.depending on the nature of the service being provided. interior furnishing. Service quality helps in product differentiation and building customer loyalty.g. by considering incremental cost and incremental revenue. and other visible cues all provide tangible evidence of the firms service quality. Communication is educational in nature for new customers. So. magazines. B ] . This promotion is usually used as incentives to catch customer’s attention and to motivate them to act.annoys customers which leads to likelihood of service Failures. personal interaction between customers and a firm’s employees (such as getting a haircut or eating at a restaurant). security.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] while purchasing such as time. The service firms need to manage physical evidence carefully because it can have a profound impact on customers’ impression as the service itself is intangible. vehicle.Delivering product elements to customers involves decisions on the place and time of delivery as well as on the methods and channels employed.umbrella may symbolize protection and a fortress. websites etc. landscaping. Communication can be delivered by individuals such as sales people and trainers. The above four are the traditional marketing mix.
. these are the 8ps of service management. and expectations. warranties. direct or indirect. place (holiday resort). Lack of communication among divisions makes this problem worse. repairs. the problem is worse still. This happens even in well-managed organizations. Note that the elements of the marketing mix should be integrated because each element of the mix usually has some impact. The marketing mix should be viewed as an integrated and coordinated package of benefits that reflect the characteristics of customers and various targeted publics and satisfy their needs. which are the essence of it. Levels of product: Kotler has identified 5 levels of a product 1) Core product 2) Basic product 22 ONLY FOR MANAGEMENTPARADISE. Although you may not have to change where the product is delivered to the customer. in services there is no or very little tangible elements. B ] . However.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] Thus. appearance. It also includes pre-sale and post-sale services like training. For example. PRODUCT MIX Introduction ‘Product’ includes name. operational case. And if they don't share the same view of organizational objectives. a product is an object. acquisition use or consumption that satisfy a want or need.and if they aren't satisfied you are unlikely to meet your objectives.. features. Hence. the package of benefits should have a customer’s perspective. One problem in many organizations is that different divisions may be responsible for different elements of the marketing mix. wants. Service is a bundle of benefits and has relevance for a specific target market. The integration of each p’s is necessary for the successful service management Collectively these are the tools organizations uses to develop offerings to satisfy their target market(s) . the only tools at their disposal. Remember: If your marketing mix doesn't meet their needs they will not be satisfied .COM MEMBERS| [Complied By Vishal. service (banking). It includes physical objects (TV). quality. which is delivered and consumed.” Conventionally. on the other three. According to Philip Kotler “a product is anything that can be offered to market for attention. organization (red cross) and idea (aid awareness). packaging. you will almost certainly have to change the promotion or communication with the customer because you need to tell the customer about the changes you have made in the product and how the changes will make it more desirable and satisfying. The result is that the offering is confusing to the target market. design. what is offered for sale is benefits. person (political person). maintenance and replacements. range and size. Hence. if you improve the product or service you probably have to change the price because it costs more to produce.
Level 5 : Potential product : The possible evolutions that can be made to make the product a distinguishedoffer (all suite room) In a Bank these can be • Core Product (Safety of deposits. A customer going to a Hotel is buying rest. Product Decisions 23 ONLY FOR MANAGEMENTPARADISE. The aim is to ensure that your potential customers purchase your one service. FD. Water cooler • Potential product : Greetings for New Year. Bed. The basic product is not equivalent to the service product which the customer perceives. Therefore there is a need for an augmented product – like Accessibility (number and skills of personnel. 3. What is the core benefit your product offers? This is the fundamental benefit or service that the customer is buying. which is in fact based on customer’s experience and evaluation.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] 3) Expected product 4) Augmented product 5) Potential product Kotler suggested that a product should be viewed in three levels. music. location. convenient timing. with physical and technical resources. For eg. Bath are important. 24 hour banking The PACKAGE CONCEPT of Service product – suggests that what you offer to the market si a bundle of different services – tangible and intangible. B ] . his willingness to share information and use service equipments) The package should also include the management of service image through encouraged word of mouth and market communication. 1. Easy loans • Basic product : Savings deposit. Recurring deposit • Expected product : Correct transaction records. Interest. Level 3 : Expected product : Set of attributes that the buyer expects (Clean room. All Hotels provide rest and sleep. Thus the functional attributes like Room. Without this the service would collapse (a bell boy in a Hotel). Level 4: Augmented product: What additional non-tangible benefits can you offer? This meets the customer’s desires beyond his expectations – (Prompt room service. timely service. Level 1: Core Product. sleep etc. Yet another service is the supporting service – it is used to increase the product value (a car rental in a hotel). Level 2 Basic Product: Basic functional attributes.. large towels. There is a core service and around it are built the auxiliary or facilitator service.) Interaction with service organization (Between employees and customer. aroma etc) 5. convenient timing • Augmented product : Congenial waiting room. quietness) 4.COM MEMBERS| [Complied By Vishal.(how well the customer is aware about the process of service delivery. with other customers) Consumer participation. infrastructure etc. 2.
B ] . (Recently within the UK banking industry we have seen the introduction of Internet banks such as cahoot. The value of brands in oday’s environment is phenomenal. Generic names like Bank. In many organizations they are represented by brand managers. As a new service development assumes greater importance. as some brands can be cash cows for organizations. a symbol. Brand decision is important for tangible goods.com and marbles. Internet branding is now becoming an essential part of the branding strategy game. These include: • Consumer benefits – assess what benefits the consumer looks for • Service concept – To translate it to suitable service offer • Develop augmented offer BRANDING: One of the most important decisions a marketing manager can make is about branding. there importance is expected to rise due to the following reason. they convey a message of confidence. As service itself does not offer unique tangible benefits. who have huge resources to ensure their success within the market. Customer gives more significance to the service provider than the individual service products that the 24 ONLY FOR MANAGEMENTPARADISE. or a designed or a combination of them which is intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of competitors”. 4.COM MEMBERS| [Complied By Vishal.com the task by brand managers is to insure that consumers understand that these brands are banks! Branding of Services and its Importance Philip Kotlar defines a brand as “a name.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] When placing a product within a market many factors and decisions have to be taken into consideration. A brand is a tool. a term.com have been sold for £m’s. brand development tangibilises the service. 1. the risk of product launch is reducing in the context of umbrella branding. But in the case of service offering branding is still in its infancy. Ask yourself what is the value of a pair of Nike trainers without the brand or the logo? How does your perception change? Increasingly brand managers are becoming annoyed by ‘copycat’ strategies being employed by supermarket food retail stores particular within the UK. 2. quality and reliability to their target market. Brands have the power of instant sales.com and Business. 3. Coca-Cola threatened legal action against UK retailer Simsbury after introducing their Classic Cola. which is used by an organization to differentiate itself from competitors. which displayed similar designs and fonts on their cans. Brands have to be managed well. Service market is getting more competitive and there is as increasing proliferation of brands in the service sector. It is five times cheaper to retain customer than to attract new ones.
4. Both from economic and social standpoint. Ones the corporate brand is developed it is found that service firms move with relative easy to other service product categories. Therefore. fastfood restaurants. the various schemes of LIC like Jeevan Kishore. To reduce price comparison. PRICE MIX Introduction: This element of the marketing mix is related to the decision influencing the fee structure. Example Suvidha Account of Citibank. 6. development and expansion plans of an organization. Keeps current customers satisfied by developing and sustaining a unique service advantage. Encourages repeat usage using sales promotions. 5. rate of interest. Offers a powerful tool for relationship building. The service organization brand name is reinforce by courteous employees.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] provideroffers. Advantages of branding services 1. 7. Jeevan Mitra etc.COM MEMBERS| [Complied By Vishal. this leads to branding the service providers cooperate image. There are instance where the service itself is branded. commission charged and paid by the service generating organizations. professional firm are usually differentiated on the basis of their corporate name and reputation rather than the specific service they offer. 25 ONLY FOR MANAGEMENTPARADISE. professional looking uniform. To tangibilise the intangible. B ] . Guidelines for service pricing: 1) Pricing strategy should enable handling demand fluctuations successfully. Airlines. Primarily companies resorts to corporate brand building with a goal of maximizing market capitalization and creating shareholders wealth. 2) As services need to have some tangible element attached to it. In case of service firms corporate branding reflects the service itself. service pricing should be based on costs so as to take into account the tangible clues. However no matter how good the corporate brands may be the quality of service determines the success of the image. logos and other means to brand themselves. banks. To create an image of quality and consistency. To support the positioning strategy. It is considered to be the most critical component of the marketing mix. the management of pricing is important but at the same time more critical and challenging. 2. pricing should encourage customers to use the service during period of low demand. 3. As services cannot be inventoried. Banks especially have recognized the importance of corporate image and identity and have used slogans. advertising etc. We find pricing decisions important because the pricing decisions are to influence the maintenance.
g. The costs being a major component of employee time are difficult to allocate. B ] . E. and thereby arrives at the price. It also includes the stage ofstrategic low pricing to attract first time customers. such as in the 26 ONLY FOR MANAGEMENTPARADISE.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] 3) Service price as an indicator of quality: Services not having specific brand names to indicate quality. 2) Competition-based pricing: This approach focuses on the prices charged by other firms in the same industry or market.COM MEMBERS| [Complied By Vishal. This method is widely used by industries such as utilities. Tour operators). consultant. where the price variation is too much with in a particular class of service (e.g. Thus pricing too low can give wrong signals and pricing too high can set expectations that the firm may find it difficult to match in service delivery. Competition-based pricing does not always imply charging the identical rate others charge but rather using others prices as an anchor for the firm’s price. wholesaling and advertising. 4) Pricing strategy should cope-up with the degree of competition operation with in certain geographic and time zone. overhead costs are a share of fixed costs. Heart surgery). For e. adds amounts or percentages for overhead and profit. E. teacher etc. contracting.g. b) Where a firm provides multiple services. Because goods are dominated by search qualities. Thus many services are sold in terms of input units rather than units of measured output. 3) Demand–based pricing. Price is taken as an indicator of quality. This approach is used predominantly in two situations: (a) When services are standard across providers. 1) Cost-based pricing: In cost-based pricing. The basic formula for costbased pricing is Price = Direct costs + Overhead costs + Profit margin Direct costs involve materials and labor that are associated with the service. Price is normally not used to judge quality. Also. Approaches to pricing services: The 3 approaches to pricing services are: 1) Cost-based pricing 2) Competition-based pricing.g.g. a company determines expenses from raw materials and labor. c) Service cost may not represent true value. Bus operators will have to consider prices of train. where the risk associated with the service is high (e. a darner charging same price for a expensive suit and an ordinary pant. customers use price as an indicator of quality. This in particular in some cases. and the profit margin is a percentage of full costs (direct + overhead) Problems in cost-based pricing services: a) It is difficult to define the units in which a service is purchased. Thus the concept of price or unit is vague.
such as in the airline. In some of the cases we find that providers have no option but to locate the units/branches as per the instructions of the apex body. Problems in demand-based pricing: (a) There is an element of non-monetary costs and benefits which must be considered while calculating perceived value.g.COM MEMBERS| [Complied By Vishal. demand-based pricing. Similarly because of inseparability they have t be produced and sold simultaneously. Hence the traditional channels of product marketing like wholesalers cannot be used. who market the tangible part of the service offering OR there can be agents who are trained to provide the 27 ONLY FOR MANAGEMENTPARADISE. attractive and healthy surroundings or so. making it difficult to assess the price. All of these factors can and should be accounted for in a company’s pricing decisions. THE PLACE MIX. INTRODUCTION Another important element of the marketing mix is place mix. services cannot be stored. involves setting prices consistent with customer perceptions of value: prices are based on what customers will pay for the services provided. safety or protection availability of the infrastructural facilities.g. insurance agents etc. services requiring time. Eevn retailing cannot be an independent activity. The third major approach to pricing. (b) Information on service may be less available to customer. travel agency. Problems in competition-based pricing: (a) Small firms may charge too little and not make margins high enough to remain in business. E. Banks charge different rates of commission for drafts and other services. transported and inventoried. The better thing is direct selling. courier eye. 3) Demand-based pricing: The first two approaches of pricing are based on the company and its competitors rather than on customers. psychological and search costs should be riced lower. which focuses our attention on the offering of services by the providers to the ultimate users and the place of location for the service generating organizations. At the most there can be one agent like in the case of insurance.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] dry cleaning industry. inconvenience. (b) In oligopolies where there are a few large service providers. Due to the intangibility. Agents when employed can have two types of functions – either they market the services lke travel agents. Neither approach takes into consideration that customers may lack reference price. Some of the essential features are taken into consideration such as easy and convenient accessibility. (b) Heterogeneity of services across and within providers makes this approach complicated. Due to this tehe channels of distribution are made very short. It is difficult to convert this non-monetary cost into monetary cost. may be sensitive to nonmonetary prices and may judge quality on the basis of price. E. B ] .
the creation of time and place utility is very important. There are a number of critical variables requiring due consideration in the process such as. the organizations are supposed to know the demand position so that the potentials are enriched to increase the quantity or capacity of generating the services and second. our prime focus is on strategic planning since the process of enriching strength can’t be made possible within a couple of days. minds active to know about the future and continue to enrich our potentials to manage the future. availability of capital and the quality of human resources. How much of what (service) will be needed to achieve its pre-determined goals is an important consideration that makes an advocacy in favor of capacity planning and scheduling. Capacity planning is known as planning the capacity in the face of future. We can’t deny the fact that if an organization succeeds in maintaining the process of profit generation. preferences. It is not sufficient that we are interested only in managing our present. This throws light on both the aspects-first. Capacity Planning. market segments served and the level of service quality aimed at.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] service Like a Shahnaz Hussain Beauty parlour. When we talk about capacity planning. The organizations not managing the future fail in managing the demand and supply position.COM MEMBERS| [Complied By Vishal. the task of facing the challenges and threats in the markets is simplified considerably. PROMOTION MIX 28 ONLY FOR MANAGEMENTPARADISE. Further as there is no actual transfer of ownership. goals of the service firm. It is much more significant that we keep our eyes open. Hence proper location to cover maximum cuxtomers becomes important. make possible a contraction in their resistance power and both on quantitative and qualitative fronts. make it difficult to optimize the development of marketing resources to cope with the changing requirements. By capacity planning. the organizations are also required to know about the likes and dislikes. attitudes which make an advocacy in favor of technologies to fulfill their expectations and this is not possible unless we think in favor capacity planning. we find them moving backward. B ] . the financial health of that organization becomes so sound that the task of satisfying the employees and investors is simplified considerably. If an organization is strong. A detailed scheduling of man. Banks often have extension counters or use money collectors. Capacity Scheduling. our emphasis is on the management of strength. materials. expectations. The strategic plan would make the ways for the mobilization of financial resources to cater to their increasing requirements. money and machines (four M’s) is essential for each element of the service mix. It is against this background that strategic planning assumes a place of outstanding significance.
f) It is found more effective in the service generating organizations.COM MEMBERS| [Complied By Vishal. The marketers bear the responsibility of using the different components of promotion in such a way that the measures adopted for promoting the goods or services are found productive. It is also significant that they know the art of developing rapport with the media people. The creativity is found to be an essential aspect of advertising. tact. They should have the potentials to throw a positive imprint on the prospects. The following facts are observed regarding the personal selling: a) It is a direct personal relation between the buyer and seller. The promotion communicates to customer’s information on the other elements of marketing mix. 2) Publicity/public relations: All the organizations need to develop and strengthen the public relation activities to promote their business. e) It is an exercise for selling the goods and services. Personal selling is a process of informing the customers besides persuading them to purchase products being influenced by personal communication. This component of promotion is found effective though the organization don’t make any payment for publicity. details on the place through which it is sold and details on the pricing are transmitted through promotion. Thus we find personal selling a personal communication. B ] . 3) Personal selling: The personal selling is found instrumental in promoting the business of service generating organizations. skill and ability to influence the impulse of prospects and to transform them into customers.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] INTRODUCTION: The promotion mix is found instrumental in informing. such as product. The most important thing in the context of public relations is the instrumentality of executives in projecting a positive image of the services offered. c) It is two-way communication. 29 ONLY FOR MANAGEMENTPARADISE. seller-buyer interaction. which increases the importance of professional excellence in making the advertising processes productive. pricing and place. b) It is an oral presentation in conservation. d) It is personal and social behavior. inter-personal communication and more so direct selling. sensing and persuading the prospects or customers. each of the person in face-to-face contact. COMPONENTS OF THE PROMOTION MIX: 1) Advertising: Advertising is paid form of persuasive promotion since it plays an effective role in informing and sensing the customers. salesman and prospect influence the other. It is just a process of communication in which an individual exercises his or her personal potentials. g) It is based on the professional excellence of an individual. The advantage of product itself. It involves not only individual but the social behavior too. Personal selling is basically a method of communication.
demonstrations and coupons. The instrumentality of telephones and televisions are found effective in the process of promoting the business. The service generating organizations in general and the banking.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] h) It is an important element of the promotion mix. insurance. exhibitions. The telemarketing helps in activating the process of advertisement in addition to its instrumentality in increasing the sale. 6) Telemarketing: Telemarketing is found instrumental in promoting the business. sales promotion measures. such as display shows. clearing the old products to be declared absolute in the near future. transport. Tools of sales promotion: a) Gift b) Contest c) Discount and commission d) Entertainment e) Travel and tours f) Additional allowance g) Fairs and shows These are some of the tools of sales promotion offered to both. increasing the market share. The word-of-mouth recommendations the hidden sales force make the process of communication effective. tourism organizations in particular have been found using telemarketing with the two-fold objectives of selling and advertising. The growing sensitivity of the words and experiences of hidden sales force simplify the task of promoting the business. The tools are generally in the form of samples. demonstrations and various non-recurrent selling efforts not in the ordinary routine are the sales promotion measures. the providers as well as the users. The instrumentality of telemarketing in persuading the users is substantially influenced by the quality of personnel supposed to discharge the responsibility. B ] . 4) Sales promotion: Marketing activities other than personal selling. The telemarketing minimizes the dependence of service 30 ONLY FOR MANAGEMENTPARADISE. which is also as word-of-mouth promotion. 5) Word-of-mouth promotion: Much communication about the performance of the service generating organizations actually takes place by word-of-mouth information. The advertisements. hotel. touching the target. excelling the competition. Sales promotional activities are devices aimed at reaching the consumer at home or in his business establishment. the personal selling may of course be effective but the word-of mouth recommendations are found acceptable in all the conditions by almost all the prospects. Sales promotion directed at consumers may be done with a view to increase the products rate of use among existing customers or to attract new customers to the company’s product.COM MEMBERS| [Complied By Vishal. The motivesare increasing the selling activities. contest. advertising and publicity that stimulate customers and dealers effectively.
honesty and sincerity 3) Should be able to use indirect selling techniques (create a derived demand – mobile companies give free sim card) 4) Manage to maintain a fine image by positive word of mouth 5) Packing and customization of service offering TARGET AUDIENCE 1) Buyer (or user/influencer/gatekeeper) 2) Employees (discussed in detail under people) PLANNING THE PROMOTION MIX 1) Advertisement should have positive effects on contact personnel 2) It should be able to capitalise on word of mouth 3) It should provide tangible clues to the customers 4) It should make the service offering easily understandable 5) It should promise only what is possible to deliver 6) It should contribute to the continuity CONSUMER PROMOTION IN SERVICE MARKETING 1) Sampling is less frequently used compared to Goods (Sampling gives consumer a free trial – though now becoming popular) 2) Gift premiums are frequently used to give an element of tangibility 3) Price/quantity promotions can be used to get long term commitments from consumer (frequent flyer programme or group booking in Hotels) 4) Use of coupons are less frequent (coupon with straight price cut OR discount or fees waiver for one or more purchases with original purchase OR Discounts on augmented products – like a free wax polish with car wash) 5) Future discounts are less frequent 6) Prize promotions are frequently used (prize for mobile bank use etc) GUIDELINES FOR SELLING SERVICES 1) It is personal relationship rather than the service itself that results in satisfaction 2) Buyer’s confidence in the seller’s ability to deliver the results is important – hence make a strong impression of competency. sincerity. 3) As what is sold is intangible – indirect selling techniques have to be adopted (Hotels selling tour programmes) 4) As word of mouth is important – building up a favourable is image is essential.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] generating organizations on the sales people since just a counter or a center listed in the call numbers serves multi-dimensional purposes.COM MEMBERS| [Complied By Vishal. PROMOTION OBJECTIVES 1) Develop personal relation with client 2) Make a strong impression of competency. and honesty. 5) A service provider sells “services” and not just a single service – hence ability to customise the service offering is important (Jain food in Air-lines Hotels etc) 31 ONLY FOR MANAGEMENTPARADISE. B ] .
in turn. B ] . The service profit chain suggest that there are critical linkages among internal service quality. PEOPLE MIX INTRODUCTION The employees of an organization represent the organization in the eyes of the customers. customer satisfaction will be difficult to achieve.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] 6) Public relations becomes important – particularly in industries where advertisement cannot be used as a promotional tool like Hospital industry. Some have even gone so far as to suggest that unless service employees are happy in their jobs. Hence the most important marketing strategy is to market the service first to the organization’s employees. AND PROFITS There is concrete evidence that satisfied employees make more satisfied customers (and satisfied customers can. 32 ONLY FOR MANAGEMENTPARADISE. reinforce employees’ sense of satisfaction in their jobs).COM MEMBERS| [Complied By Vishal.which needs to be fulfilled – this needs internal marketing enabling the comapany to keep up the promises made. There are two types of contact personnel – HIGH CONTACT PERSONNEL and LOW CONTACT PERSONNEL (eg . The underlying logic connecting employee satisfaction and loyalty to customer satisfaction and loyalty and ultimately profits is illustrated by the service profit chain shown in the figure. This will result in proper interaction of thecustomers with the service providers which helps the organization to keep the promises (Interactive marketing) EMPLOYEE SATISFACTION.in a hospital a nurse is a high contact personnel and ward boy may be a low contact personnel) In addition there can be a NON CONTACT PERSONNEL SERVICE TRIANGLE When company makes efforts to do external marketing. Unless the employees are able and willing to deliver. it should have strategies of Internal marketing. If they are not give proper training in representing the organization and its goals the service efforts will fail. External marketing is nothing but promises made. CUSTOMER SATISFACTION. the servicepromises will fail.
The model does imply that companies that exhibit high levels of success on the elements of the model will be more successful and profitable than those who do not. the value of services provided to the customers. b) Hire for service competencies and service inclination: Once potential have been identified. productivity. service-minded workforce. and ultimately customer satisfaction.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] employee satisfaction. rather the two are interrelated and feed ff each other. The strategies presented here are organized around four basic themes.COM MEMBERS| [Complied By Vishal. The firm act as marketers in their pursuit of the best employees. an organization needs to identify them and compete with other organizations to hire them. a) Compete for the best people: To get the best people. Thinking of recruiting as a marketing activity results in addressing issues of market (employee) segmentation. HUMAN RESOURCE STRATEGIES: Human resources decisions and strategies primary goal is to motivate and enable employees to deliver customer-oriented promises successfully. Service profit chain researchers are careful to point out that the model does not cause customer satisfaction. retention and profits. B ] . product (job) design. an organization must: 1) Hire the right people 2) Develop people to deliver service quality 3) Provide the needed support systems 4) Retain the best people 1) Hire the right people: One of the best ways to close gap 3 is to start with the right service delivery people from the beginning. organizations need to be conscientious in interviewing and 33 ONLY FOR MANAGEMENTPARADISE. This implies that considerable attention should be focused on hiring and recruiting service personnel. To build a customer-oriented. just as they use their marketing expertise to compete for customers. and promotion of job availability in ways that attract potential longterm employees.
While the key to empowerment is giving employees authority to make decisions on the customer’s behalf. and any operational rules the company has for running its business. Most service organizations are quite conscious of and relatively effective at training employees in technical skills. B ] . Service employees also need training in interactive skills that allow them to provide courteous. Employees need the knowledge and tools to be able to make these decisions and theyneed incentives that encourage them to make the right decisions. It has been suggested that service employees need two complementary capacities: they need both service competencies and service inclination. excellent internal support and attractive incentives and offering quality goods and services that employees a proud to be associated with. authority alone is not enough. 2) Develop people to deliver service quality: To grow and maintain a workforce that is customer oriented and focused on delivering quality. Companies are increasing their use of information technology to train employees in the technical skills and knowledge needed on the job. Service competencies may not be degree related. 2) customers are long-term relationship customers. (4) the business environment is 34 ONLY FOR MANAGEMENTPARADISE. Examples of technical skills and knowledge are working with accountingsystems in hotels. an organization must develop its employees to deliver service quality. b) Empower employees: Empowerment means giving employees the desire. career and advancement opportunities. responsive. once it has hired the right employees. Organizations are well suited to empowerment strategies to ones in which (1) the business strategy is one of differentiation and customization. the organization must train and work with these individuals to ensure service performance. skills.COM MEMBERS| [Complied By Vishal. employees need ongoing training in the necessary technical skills and knowledge and in process or interactive skills. and empathetic service. and authority to serve the customer.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] screening to truly identify the best people from the pool of candidates. That is. caring. tools. (3) technology is nonroutine or complex. c) Be the preferred employer: One way to attract the best people is to be known as the preferred employer in a particular industry or in a particular location. cash machine procedures in a retail store. a)Train for technical and interactive skills: To provide quality service. underwriting procedures in an insurance company. Service competencies are the skills and knowledge necessary to do the job. Achieving particular degrees and certifications validates competencies. such as attaining a doctor of law degree and passing the relevant state bar examinations for lawyers. but may instead relate to basic intelligence or physical requirements. Other strategies that support a goal of being the preferred employer include providing extensive training.
measure how well they are doing. In many companies internal processes are driven by bureaucratic rules. having the right technology and equipment can extend into strategies regarding workplace and workstation design. and other departments as well as evaluations of technology used on the job were all strongly related to employee satisfaction and ability to serve customers. Employees who supported and that they have a team backing them up will be better able to maintain enthusiasm and provide quality service. service employees need the right equipment and technology. a) Measure internal service quality: One way to encourage supportive internal service relationships is to measure and reward internal service. and make improvements. determine their needs. teammates. Because service jobs are frequently frustrating. Without customer-focused internal support and customer-oriented systems. b) Provide supportive technology and equipment: When employees don’t have the right equipment. or their equipment fails. Internal customer service audits and internal service guarantees are two strategies used to implement a culture of internal service quality. they can be easily frustrated in their desire to deliver quality service. demanding and challenging.COM MEMBERS| [Complied By Vishal. To do their jobs effectively and efficiently. Providing service and customer oriented internal processes can therefore imply a need for total 35 ONLY FOR MANAGEMENTPARADISE. B ] . c) Promote teamwork: The nature of many service jobs suggests that customer satisfaction will be enhanced when employees work as teams. c) Develop service-oriented internal processes: To best support service personnel in their delivery of quality service on the front line. an organization can begin to develop an internal quality culture.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] unpredictable. internal organizations identify their customers. or the needs of internal employees. an organization’s internal processes should be designed with customer value and customer satisfaction in mind. tradition. service workers require internal support systems that are aligned with their need to be customer focused. and (5) managers and employees have high growth and social needs and strong interpersonal skills. By promoting teamwork an organization can enhance the employee’s abilities to deliver excellent service while the camaraderie and support enhance their inclination to be excellent service providers. By first acknowledging that everyone in the organization has a customer and then measuring customer perceptions of internal service quality. it is nearly impossible for employees to deliver quality service no matter how much they want to. a teamwork environment will help to alleviate some of the stresses and strains. cost efficiencies. In examining customer service outcomes researchers found that internal support from supervisors. In other words. 3) Provide need support systems: To be efficient and effective in their jobs. Through the audit. internal procedures must support quality service performance.
they are more likely to stay with the organization. Employee turnover. and provides the needed support must also work to retain the best ones.5 IMPORTANCE OF EMPOWERING PEOPLE IN SERVICES An organization that emphasizes customer service needs people at the frontline to do the service. People who deliver service day in and day out need to understand how their work fits into the big picture of the organization and its goals. meaning that feels a sense of 36 ONLY FOR MANAGEMENTPARADISE. 6. employee morale. He feels empowered to do so. and thus basic marketing strategies can be directed at them. trains and develops them to deliver service quality. to take initiative to provide satisfaction through exceptional service. To determine whether the job and work life needs of employees are being met.COM MEMBERS| [Complied By Vishal. especially when the best service employees are the ones leaving. Reward systems may value productivity. c) Measure and reward strong service performers: If a company wants the strongest service performers to stay with the organization. a) Include employees in the company vision: For employees to remain motivated and interested in sticking with the organization and supporting its goals. sales or some other dimension that can potentially work against good service. Reward systems need to be linked to the organization’s vision and to outcomes that are truly important. they need to share an understanding of the organization’s vision. causing these good employees to search for job alternatives. to use discretions be concerned about the customer. B ] .” 4) Retain the best people: An organization that hires the right people. Some firms spend lot of time attracting employees but then tend to take them for granted. if he does not feel empowered. This kind of wholesale redesign of systems and processes has become known as “process reengineering.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] redesign of systems. The person at the front must fell empowered to do in the circumstances. b) Treat employees as customers: If employees feel valued and their needs are taken care of. Often the reward systems in organizations are not set up to reward service excellence. it must reward and promote them. can be very detrimental to customer satisfaction. and overall service quality. Many companies have adopted the idea that employees are also customers of the organization. Example A peon who takes responsibility to direct the fireman in a burning office to areas housing the most important documents is acting without formal authority.6. A person with authority may not exercise that authority. Empowering cannot be done through a formal delegation of authority. The products that the organization has to offer its employees are a job and quality of work life. organizations conduct periodic internal marketing research to assess employee satisfaction and needs.
4) He believes that the organization will not find fault with him for having one something new and nusual. These categories together represent the service and provide the evidence that tangibilizes the offering.COM MEMBERS| [Complied By Vishal. The new mix elements essentially are evidence of service in each moment of truth. He is not inhabitant by formalities of position . He “sees” constraints but not does not feel prevented thereby . authorityor function . 6) He feels that he is dedicating to satisfy the customer to upgrade organization reputation 7) An empowered employee may be willing to challenge company policies at meetings with sensors. from what is to be done . 2) He does not consider himself bound by rules and procedure. The figure depicts the three major categories of evidence as experienced by the customer: people. 5) He believes that he is expected to take the initiative and ensure that the customer needs are met and thereby maintain and enhance the reputation of the organization. that he is doing the right thing . and physical evidence. 3) He believes that the organization expects him to be aware of the ends to be achieved and to act in furtherance thereof. process. the customers are searching for evidence of service in every interaction they have with an organization. 37 ONLY FOR MANAGEMENTPARADISE. he believes that the organisation will applaud him for having done something that had to be done. instead he tries to overcome the constraints. that he feels it is his duty to save the organization as much as possible . On the contrary. Following are the importance of empowering the people in services:1) An empowered employee focuses on results.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] dedication to the organization. B ] . PHYSICAL EVIDENCE MIX THE EVIDENCE OF SERVICE As services are intangible.
COM MEMBERS| [Complied By Vishal. B ] . The three types of evidence may be differentially important depending on the type of service encounter (remote. All these types will operate in face – toface service encounters as in the one just described. When a guest enters the hotel for a stay the first encounter of the guest is the door attendant and frequently with receptionists at the reception. face – to – face). and any tangible components that facilitate performance or communication of service. PHYSICAL EVIDENCE It is the environment in which the service is delivered and where the firm and customer interact. in somecases the physical facilities where 38 ONLY FOR MANAGEMENTPARADISE. It includes all tangible representations of the service-such as brouchers. phone. letter head. or a subset of them are present in every service encounter a customer has with a service firm and are critically important in managing service encounter quality and creating customer satisfaction. knowledgeable? Does she handle the enquiries fairly and efficiently?) and the physical evidence of the service (is the awaiting area clean and comfortable). The quality of that encounter will be judged by how the registration process works (How long is to wait? Is the registration system computerized and accurate?) The actions and attitudes of the people (Is the receptionist courteous.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] All of these evidence elements. helpful. equipment etc.
COM MEMBERS| [Complied By Vishal. in a hotel the parking lot.. etc. parking space. B ] . signboards.e.g. of service scape can influence customer expectation. In other services such as telecommunication the physical facilities may be irrelevant. (a) Physical facilities: The potential customers form impression about the service organization on the basis of physical evidence like building. Others like hospitals. (b) Consist of service environment • Ambient factors (light. In this case physical evidence must be planned to facilitate the activities of both. ability of equipment and furniture to accomplish interactions) • Decor and artefacts (c) Social setting: Employee uniform.. surroundings are important.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] service is offered is important e. In this case other tangibles like billing statements become important. In shopping mall soft music is played/crossroads had hired separate parking space. The quality 39 ONLY FOR MANAGEMENTPARADISE. Essential Evidence: They are dominant features like building area. colour. Between the two extremes is a situation where both customer and employee interact. Employees however feel that an investment in environments is an indication of management’s concern for their job satisfaction. At other end employee performs without any interaction (mail order business) here physical evidence is designed to promote operational efficiency. Bitner identifies Physical Facilities and Environment as SERVICE SCAPES However too much decor may make customers feel that they are paying for the expensive décor. At one end is self-service of customer without any interaction with employee (ATM) where physical facilities must be to attract customer and user friendly. Certain service environments are simple requiring very little space or equipment (ATM.satisfaction and other behavior. temperature) • Space (spatial layout and functionality.g. appearance etc. Vending machine).. MANAGING SERVICE QUALITY To compete successfully a firm must define how the customers perceive the service quality and in what way the service quality is influenced. Banks. Peripheral Evidence: They are less dominant like admission card. Physical evidence includes (A) Physical facilities (essentials and peripherals) (B) Physical setting (appearance of premises) (C) Social setting (appearance of staff) The decision on the physical evidence will differ in terms of customeremployee interaction. furniture etc. hotels are elaborate environment where proper planning is needed. (E. medical reports. Airlines).i. Hence the challenge is to strike a balance.. They are called lean environment.
COM MEMBERS| [Complied By Vishal. • Dimensions – reliability. customers search for the evidence of quality in every interaction they have with a service firm. assurance. Perceptions are judgment of the consumers about the actual service performance or delivery by a company. PERCEIVED SERVICE QUALITY Customer service is about perception. Since service are intangible. Result = delighted customer. Apart from these the corporate image of the service provider as well as the service can also influence the perceived quality. Result = satisfied customer. process and physical evidence. While comparing the expected and perceived service quality the following may be the outcome. When he takes the service he experiences a service quality – this is his perceived quality. • People – contact employees. other customers or the customer himself. Perceive quality = expected quality. Dissatisfied customer. 3). 2). The evidence of service that are experience by the customer are people. empathy and responsiveness. When a customer comes to the service provider he comes with some expected quality. • Physical evidence – tangible aspect of service. Perceive quality > expected quality. • Dimensions – reliability and promptness of service. Perceive quality < expected quality. • Process – operational flow of activities. B ] .[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] can be of seen from two angles (1) Technical quality (What is delivered) (2) Functional quality (How it is delivered). A very important factor in important service quality is to always keep promises and not guarantee which the firm cannot deliver 40 ONLY FOR MANAGEMENTPARADISE. 1).
two things are critical: • The promises about how the service will perform given by traditional marketing activities and communicated by word-of-mouth. customers will be frustrated. The extent to which the customers recognize and are willing to accept this variation is called as zone of tolerance. must not be unrealistic when compared to service received by the customer. In order to develop greater understanding of the nature of service quality and how it is achieved in an organization. If the service levels fall below this level.COM MEMBERS| [Complied By Vishal. To keep the gap between expected service minimal. between employees and even with in employees at different times. • Managers have to understand how the technical and functional quality of a service is influenced and how the customers perceive these quality dimensions. • Different customers possess different zones of tolerance • Zones of tolerance vary for different dimensions fo service • Zones of tolerance vary for first time and recovery service QUALITY GAPS To manage the perceived quality of a service one has to match the expected service and perceived service to each other so that consumer satisfaction is achieved. ‘A Gap Model Of Service Quality’ was developed.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] ZONE OF TOLERANCE The services provided are varying between organizations. The model clearly 41 ONLY FOR MANAGEMENTPARADISE. B ] .
[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] indicated that the consumer’s quality perceptions are influenced by a series of five distinct gaps occurring in the organizations. This gap depends on the size and direction of the first four gaps associated with the delivery of service quality.COM MEMBERS| [Complied By Vishal. Gap3 (Service Performance Gap) : Difference between service quality specifications and the service actually delivered. Gap4 (Communication Gap) : Difference between service delivery and what is communicated about the service to consumers resulting in discrepancy between communications to customers describing the service and the service actually delivered. These Gaps develop due to the following reasons GAP 1 : • Lack of adequate market research • Lack of upward communication between front line staff and Management • Lack of interaction with the customers • Lack of segmentation to identify specific needs of the customers GAP 2 : • Lack of commitment from Management (they may perceive that customer expectations are unreasonable) • Lack of Goal setting • Lack of resources GAP 3 : • Ineffective recruitment • Role ambiguity • Lack of training/incentives to perform to the staff • Lack of training to customer on use of service and their roles • Lack of pre-testing when new procedures are introduced • Lack of understanding of customer habits – how they prefer to consume a service (a customer may prefer a slow delivery of food in an exclusive restaurant compared to an Udipi restaurant) GAP 4 : • Exaggerated promises 42 ONLY FOR MANAGEMENTPARADISE. B ] . Gap5: Difference between the perceived service and expected service. which are as follows: Gap1 (Marketing Information Gap) : Difference between consumer expectations and management perceptions of consumer expectations arising due to inadequate or inaccurate management understanding of customers’ service expectations Gap2 (Standard gaps) : Difference between management perceptions of consumer expectations and service quality specifications arising due to Management’s failure to develop performance specifications reflecting customer’s expectations.
. Promote the benefits and stimulate trial. Understand the determinants of consumer behaviour in terms of their choice. and proved to be countered productive.. 2. by force or by any other external forces. both among customers and employees. a customer wouldprefer extended hours for a meal in a exclusive restaurant. 4. when Indian Airlines introduced computerized reservation system to improve its service. One can learn from experience—good or bad. 6. it changes between weekdays and weekends. It changes between the first weeks to the fourth week of the month. eg. in the same way as traffic routes at India Gate or Connaught Place are notified through press and television before introducing them. Pre-test new procedures and equipments before introducing them. 7. e. shopping behaviour is not even throughout the month. Develop customer trust through long-term strategy rather than a snipshot superficial programme. B ] . it found that at most places the system remained down most of the time. Teach consumers how to use service innovations—most people don’t know how to go about treatment in government hospitals—there is a need to make people aware of how to go about from registration to appointment to check—up and treatment.g. 5. corrective measures should also be taken simultaneously.g. As one goes along introducing changes.. 3. communicating and promoting the efforts. 43 ONLY FOR MANAGEMENTPARADISE. It created more confusion. Monitor and evaluate performance.[SEMESTER 5] • • [SERVICE SECTOR MANAGEMENT] Ineffective communication Lack of Horizontal communications with in the organization GAP 5 Too much of Gaps (1 to 4) To close the gaps the following things should be implemented: 1.COM MEMBERS| [Complied By Vishal. The failure of a productivity improvement programme is more damaging than otherwise. The success in innovation lies in encouraging trial by making the benefit obvious. e. Understand customers’ habits on how they prefer to consume a service. These measures should be restricted to redesign of facilities and procedures or extending to educating.
For example. Responsiveness also captures the notion of flexibility and ability to customize the service to the customers needs. Customers want to feel understood by and important to that provide service to them. and pricing. personnel at small firm know customers by name and build 44 ONLY FOR MANAGEMENTPARADISE. In other words reliability means that the company delivers on its promises – promises about delivery. brokerage. this company effectively communicates and delivers on the reliability dimension. Empathy: is defined as carrying individualized attention the firm provides its customers. insurance. This dimension emphasizes on attentiveness and promptness in dealing with customer’s request. complaints and problems. problem resolution. B ] .COM MEMBERS| [Complied By Vishal. Responsiveness: is the willingness to help customers and provide prompt service. banking. FedEx.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] THE 5 DIMENSIONS OF SERVICE QUALITY ARE AS FOLLOWS On Which Customers Judge The Service Quality Reliability: means the ability to perform the promised service dependably and accurately. the customers are unique and special. For example. This dimension is likely to be particularly important for service for services that the customer perceives as involving high risk and / or about which they feel uncertain about their ability to evaluate outcomes. For examples. Assurance: is defined as employee’s knowledge and courtesy and the ability of the firm and its employees to inspire trust and confidence. The essence of empathy is conveying through personalized or customized service. etc. service provisions. questions.
good safety records & competent employees. knowledge and skills.COM MEMBERS| [Complied By Vishal. gets to know the client. in flight baggage handling. 2. Empathy: understanding clients industry acknowledges and adapts to specific clients needs. exam rooms. uniforms. Tangibles: aircraft. billing statement. anticipates consumer needs. 5. Assurance: credential. 4. no waiting. waiting areas. adapt to change. B ] . All of these provide physical representations or images of the service that customers particularly new customers. Responsiveness: accessible. When such a small firm competes with large firms. no waiting. 4. phone calls. Responsiveness: prompt and speedy system of ticketing. Airlines (consumers): 1. skills. Empathy: acknowledges customers by name. Empathy: acknowledges patients as a person.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] relationships that reflect their personal knowledge of customer’s requirements and preferences. dress of the employees. and patients. 2. written materials. Reliability: appointments are kept on schedule diagnoses prove accurate. good listening. and name of the community. and equipment. credentials. Reliability: problem fixed the 1st time and ready when promised. equipment’s. Examples of how customers judge the 5 dimensions of service quality: Car repair (consumers): 1. 3. 5. 2. remembers previous problems. 3. provide continuity. 2. and baggage areas. most company combine tangibles with another dimension to create a service quality strategy for the firm. 4. uniform. remembers previous problem and preferences. depart and arrives on time. Assurance: knowledge. 4. and reputation. Empathy: understanding of special individual needs. the ability to be empathetic may give the small firm a clear advantage. Although tangibles are used by Service Company’s to enhance their image. 3. will use to evaluate quality. Assurance: knowledgeable mechanics. Architecture (business): 1. Reliability: delivers plans when promised and within budget. plan themselves. 5. respond to request. 3. Tangible: tangibles are defined as the appearance of physical facilities. 5. ticketing counters. willingness to listen. Responsiveness: accessible. reputation. Reliability: flights to promise destination. Assurance: trusted name. Tangibles: repair facility. 45 ONLY FOR MANAGEMENTPARADISE. Tangibles: waiting room. and signal quality to consumers. and equipment’s. report. Tangibles: office areas. personnel and communication materials. Responsiveness: returns. Medical care (consumer): 1.
Customer participation is necessary because of which it will be easy to achieve in some service environments. A comparative impression gained of the service without examining the different facets in a structured way & attempting to measure them.g. Super market chain might benchmark operations across stores. Functional or Generic Benchmarking: The third approach is Functional or Generic Benchmarking. For e. 4. Often however. Responsiveness: quick website with easy access and no down time. Reliability: provides correct information and executes customer’s requests accurately. 2. Benchmarking can be applied at three levels: 1. Internal Benchmarking: Internal Benchmarking is normally carried by large organization by way of comparison between operation units. For e. well trained. Functional or Generic Benchmarking. Assurance: credible information sources on the site. 5. 2. brand recognition credential apparent on site. this is done in informal manner. office areas. credentials. 3. 3. 2. Tangibles: internal reports. Responsiveness: prompt response to request not “bureaucratic’ deals with problems promptly. B ] . Competitive Benchmarking.g: As a hotel owner. Internal brokerage (consumer and business): 1.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] Information processing (internal): 1. Internal Benchmarking. Assurance: knowledgeable staff. financial across branches.COM MEMBERS| [Complied By Vishal. Tangibles: appearance of the website and collateral. Empathy: knows internal customers as individuals and departmental needs. 3. different colleges under the same authority. 5. Benchmarking is a part of process of continuous improvement. The advantage 46 ONLY FOR MANAGEMENTPARADISE. BENCHMARKING OF SERVICES Benchmarking means measuring the performance of a business against that of the competitors in order to establish ‘best practice’. it is possible to ‘sample’ the service to competitor simply by ‘posing’ the guest. which compares specific functions such as distribution and after sale service. Empathy: ability to respond with human interaction as needed. But important thing is how performance is measured &this is clear link to the strategy of organization. This is probably the most frequently use where comparisons are made with directly competitive organization. and dress of employees. Competitive Benchmarking: At a second level competitive Benchmarking can be used. 4.. Reliability: provides needed information whenever requested.
Care has to be taken in selecting the dimension & sales to be used for performance measuring and ensuring that due account is taken of all relevant factors. B ] .COM MEMBERS| [Complied By Vishal.[SEMESTER 5] [SERVICE SECTOR MANAGEMENT] here is that information is sometime easier to obtain than when comparison are being made with competitors. 47 ONLY FOR MANAGEMENTPARADISE.
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