Professional Documents
Culture Documents
Management Defini
INTRODUCTION
are econoie nctivities offered by one party to another.) Often time
Accor
satisf
(Services
based performances bring about desired results to recipients, objects or other assets restr
for which purchases have responsibility, in exchange for money, time and effort,
labour, professional skill, acilit Accor
Serrice custoners evect value from excess to goodownership of any of the phvsieal benef
ahd networks but they do not normally take the s
elements involved.
consumer goods in the markets, across the Acco
(With the introduction of fast moving professionalism in all spheres of life) can
globe, it has become a necessity to have more attend to the
other people are required tomachineries,
OWne
Definition of Management
getting thin:
Aceording to Mary Parker Fillett, "Manngement is an art of
done through people".
Consisting o
According to George Terry, "Management is a distinct processdetermine and
planning, organizing, activating and controlling perfornmed to CO1
va
accompl1ish the objectives by the use of humnan beings and other resourees.
objeetives are in
Thus, we can say "Management is a process by which the maintainin:
achieved". Management can be defined as "the process of designs and elicicntly
n environment in which
aceomplish
individuals work together in groups,
selected aimslobjectives".
troductiont o Service Management 131
pefinition of Service
According to Stanton, "services are identifiable, intangible, provides want
satisfaction when marketed to consumer/industrial users and not necessarily
restricted to the sale of a product or another service.
onording toAmerican Management Association, "services are connection
those activities.
with
benefits or satisfaction which are offered for sale or provided in
the sale of goods".
Srcording to Philip Kotler A Service is any activity or benefit that one party
can offer another that is (i) essentially intangible and (ii) does not result in the
ownership of anything.
intangible,
To summarise the above definitions, "service is an activity which is
inseparable, variable, perishable and unable to own service on its own". Services
on one's foot",
can be described as "anything which cannot be dropped
Meaning of Services
touched, but can be felt and is
A service is an activity which cannot be
commodity, usage of the commodity. Example: Transportation,
permitted to enjoy the
Warehousing, etc.
satisfaction which are "offered for sale"
Services are those activities, benefits or
of goods.
or "provided in connection" with the sale
SEARGE
Services incude 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, comtort or health. That is essentially
intangible concerns of its first purchaser.
132 Marketing and Services
EVOLUTION OF SERVICE Matagement
After the World War II, service economy has gained importance. More he
of working population is engaged in service industry,
the economic output in our country.
contributing to nearlythan70%70%of
Even in United Kingdom, Germany, Japan, Canada have changed from
dominated" to services dominated". goods
In India, cities like New Delhi, Mumbai, Kolkotta, Chennai, Bengalury
Hyderabad are the best preferred cities for services sector in the World.
Any economic activity can be classified under three main groups viz:
(i) Primary activity: production of goods, agriculture, forestry, diary etc.
(ii) Secondary Activity: manufacturing, construction etc.
(iii) Tertiary Activity: services and distribution.
CHARACTERISTICS OF SERVICES
1) Intangibility: Intangibility means that cannot be touched, but can be felt, by (b)
enjoying/possessing and is quality oriented. Example: economy class, club class in
airlines, I tier, II tier, berth/seat in railway journey, etc.
2) Inseparability: In many service operations,
be separated. Example: a music programme can take
production and consumption cannot
provider i.e, without a musician, the programme cannot place only with the music
be given and without
audience, the mnusician cannot performance.
3) Heterogeneity: It means the
customers while delivering the service. requirements of customers, interaction with
standards for identical service, but closely Heterogeneity is difficult to apply qualhty
classical singers may sing differently, but itlinked to inseparability. Example: IWo
will be appealing
4) Perishability: If the to the audience.
service
be there, i.e. a person will
is not availed on time,
then it is not there it wl
not be permitted to
Example: (a) travel by flight/train the time ofavai/enjov after the stipulatet
travel will be known before, on check-in and flight number, ate
the ticket and make hand. If a passenger
on it. If he does not himself available before the willing to travel, has to buy
catch the departure time mentioned printed
given an opportunity for the flight at the appointed time date, he will not be
wants to avail, the same, next time for the and
earlier fare pand by him. If he
(b) If food is not facility/service,
consumed
once again he has to pay for the service.
consume it alter the expirywithin a
of the specified time, a person will not be able to
tornorroW, because it's taste will change time. Today's food cannot consumed
be c a
5) Ownership: The
the facility with iacustomer has no
definitely.
access to permitted to avail
cannot take
aWay stipulated
the lunch time. Example: Afterownership, but 1S hotel, one
having lunch a
ownerslhip of theplatevehicle/seat
cannot claim the or after In
passenger
travelling
in the in
vehicle.
a bus, the
133
oService Management
ASSIFICATIONTYPES OEFSERVICES
services:
following are the types of
the business market, private
Professional Oriented: These people serve and
or both. These are qualified people & have professional knowledgeTheir
individual supervisors, etc.
independent. They are not connected with suppliers, Advocates
are includes givingadvises, problem- solving, etc. Example:
etc.
service
Registered Medical Practitioners, Chartered Accountants.
(Lawyers),
either
These are non-professional oriented, serving
services,
b) Consumer Oriented: or consumer oriented. Example:
Catering
business to business market Homes, etc.
entertainment companies, Tourism-Holiday
Laundry Services, tangibility.
classified on the basis of Operations, Level of
Services can also be
customer-employee preference, customization/empowerment.
ONCEPTS OF SERVICEOPERATIONS
involved viz, people focus/equipment focus, customization,
There are four concept
value added, product/process focus.
"an equipment tocus", e.g
whether the service has a "people focus" (e.g.. Banker) or
ATM.
according to individual client's
xtent of customization" (e.g.. dental services
dental problems)
Marketing and Services
134
Management
"Sources of value added" i.e. job of front office receptionist, beautician. cte. job f
c)
back office, bank, etc.
d) Whether the services has a "product focus" (e.g.. maruti car service centen)
"Process focus" (e.g.. higher education course).
IMPORTANCE OFSERVICE MANAGEMENT
(1) Creation and expansion of job opportunities: The development of ser
sector would open doors, search new vistas for the development of even theee
Ci
sectors which have either remain untappcd or have partially been tapped
the wide scope of the services sector i.e. personal care services, consultancy
services, medicare services, communication services, tourism services and ahost af
would eroots
other services; an organiscd and a systematic development
tremendous job opportunities. This will als0 signal positive developments in the
national economy.
(2) An optimal utilisation of Resources: India faces the problem of anon-optimal
demographic structure and hence it is important that we tackle the misuse of
resourCes. Service management assumes importance here since this sector of the
economy if marketed properly regulates the unproductive use of resources. By
marketing of services, we use the resources which have remain unutilised.
(3) Paving avenues for formation of capital: The development of services sector
will speed up the process of capital formation and the problem of inadequacy of
financial resources will be minimised. For accelerating the rate of capital
formation, it is essential that we explore opportunities and identity important or
profitable services.
(4) Raising the standard of living: The philosophy of development is coiled in the
essence of improving the living conditions of masses which in turn helps increasing
the standard of living. For raising the standard of living, it is not only essential
that we create enough earning opportunities for the masses but it is also essential
that we make efforts to increase public awareness so that they know how to spend,
where to spend, what to ent, how much to eat, how to develop our personality. how
o keep sound health and so on. These things contribute immensely to the
standard of living.
(5) Environment friendly technology: All the services are technology-driven. The
banking services, insurance services, tourism services, hostel services,
communication services, education services and by and large almost all services
are now technology driven but environment friendly. Thus the technolog
driven service generating organisations ofler world class services evena
polluting the environment. If we talk about the technologies used for 1
manufacturing organisations, the harmful eflects on environment c
negated.
Se
a
tion o) Service Management 135
yx
The service management consists of another 3 Ps viz, (a) People, (b) Process and
c) Physical Evidence.
The 4Ps of marketing mix has been adapted to Service Management and
another 3Ps have been added to it, making it to 7Ps viz,
1 Product mix
2 Price mix
3 Promotion mix
4. PlacePhysical mix
5. People mix
6 Process mix
2Price
(Product
Physical Environment,
The MMarketing Mis Promotion.
Process
Place.
People
1) Product Mix
Service are products, but they are intangible. Then what is a "product" in
services marketing. The attributes are converted into benefits. Like other consumer
goods, the services are either convenience goods, shopping or speciality goods/services.
Convenience goods/services refer to services like repair of shoes, laundry servies,
alteration of clothes which are done by the service provider according to the
Markcting and Services
136 Management
Banking, airline travela
"Convenience/tastes/instructions" of customers. Insurance,
examples of "Shopping Services" and legal services, medical care,
are involved "Speciality Services".
brokerage, etc. are examples of Many servicee
cases, services also become products and are tangible RON
In some
products/services. Example: (1) In a Computer, RAM.
custom designed assembled according to the specifications/
Configuration, Disk capacity. etc., are of Cash Registers used in Medieol
requirements of a customer. 2) The functions
receivod
Restaurants, etc. vary according to the requirements/ instructions
shops, functione
are assembled to perform respective
from the customers and then they cannot be stored/transported, but it has to
Intangible dominant products like services
managed and maintained. The services cannot be branded, packaged and
be
labelled, because of intangibility and limited use.
2) Price Mix
product. Some service
Some marketers feel that price is equal to that of price
marketers follow competitive price policies, pricing their service either at market
or at a lower price.
Flexible pricing seems much more prevalent in the marketing services rather
than in the marketing of goods. It is unusual for the firm to charge different prices to
different customers for the same bundle of services. On the other hand, many firms
attempt to maintain an uniformn price policy. The pricing goals of service marketers
vary, but typically the pricing goal of most of them is to maximize profits for each
sale.
7) Physical Evidence
It refers to those tangible clues which the customer may receive during the
process of receiving the service, which can be verified either "the existence or the
completion of a service".
It is also referred "to physical environment, facilities and atmosphere" Physical
evidence can be classified into two categories:
(a) Peripheral evidence: like exterior of buildings, furniture, layout, colour, Labels,
etc., are part of the service, but little value to the core services, but they supple
ment the core service. Example: "lcon" or "Lancer" when taken for
mechanic, it creates a good impression on the part of the mechanic. servicing
to a
(b) Essential evidence: lt refers to those that cannot be
element in its own right. Example: Apassenger who virtually purchasespossessed. It is a
transportation in
the form of "airline ticket" (peripheral evidence), will have been probably be
onto Service Management
139
intluenced by the type of aircraft
that
the facilitates
aireraft, hence he would be or the services provided in that
buying ticket.
CHALLENGES FACED BY
SERVICES SERVICE MANAGERS IN MARKETING
llonses faccd by service managers in
marketing services are:
Clients can't see or touch services before they
purchase them: This makes
oarvices difficult to conceptualize and evaluate from the
client perspective, creating
increased uncertainty and perception of risk, from set price.
Services are often produced and consumed
tested before they go out the door. If a product simultaneously: Products are
has quality problems while in
production, the company can fix them and customers are none the wiser. Service
production happens with the customer present, creating a very different and
challenging dynamic.
3. Trust is necessary: Some level of trust in the service organization and its
people
must be established before clients will engage the services. This is as
than the service offerings and their value proposition. important,
4. Competition is often not who you think: Competition for service companies are
often the clients themselves. Sure, sometimes you find yourself in a competitive
Bar:
shootout (some firms more than others), but often the client is asking 'should we
engage this service at all' and if so, should we just do it in-house'.
5. Brand extends beyond marketing: Brand in service businesses is about who
you are as much as what you say about yourself. Internal brand management and
communications can be equally as vital to marketing success as are external
communications.
6. Proactive lead generation is difficult: Many service companies have tried and
failed, at using lead generation tactics that work wonders for product companies.
7. Service deliverersoften do the selling: Many product companies have dedicated
sales forces. For services, the selling is often split between sales, marketing,
ing
professional and management staft.
GROWTHOF SERVICE SECTOR
Phssi The following are the reasons for growth of Services Management:
Lates
) No Obsolescence: The services always have demand and there will be no
obsolescence in their value.
) Unlimited/Limited Competition: Since there is scope for everyone to do the
business, in spite of some competition, every service provider can continue to ofler
the services. In other words, in some businesses, there is very limnited competition,
which make other business minded people to enter the arena.
rtatin 0) Creative Management in freight transportation, pushback seats ete: The
Consumers are provided with variety of services for certain category of
Marketing and Services
140
menm 1)Social Changes: Joint families have vanished, nucleus family, single parenting,
working women, live-in relationships are becoming order of the day. Example:
Earlier, there were only
limited number of television channels,
operators, Now, the Govt., has introduced and is making then came private
Services compulsory of DTH
ues )Cultural Pattern of Living is changing: People have changed their style of
living, food habits, dressing, etc. due to movement of people from many places,
settling in other cities and towns. Exanmple: Noodles, fried rice, wearing of
hermudas, half pants etc.
SERVICEPROCESSES
The service process refers to how a service is provided/delivered to a customer.
Designing a service delivery system "is a creative process, which begins with a
orice concept and strategy to provide a service with features to differentiate it from
the competition".
Definition
Designing a service process system involves "issues such as location, facility,
design and layout for effective customer and work-flow, procedures and job definition
for service providers, degree of customer contact, complexity of service, customer
participation, the service itself and adequate service capacity".
Once the service becomes operational, modifications in the delivery system are
introduced as conditions warrant.
Service Delivery can be defined as "the degree of interaction and customization
between the customer/client and the service provider which involves the degree of
labour intensity".
DESIGNING SERVICE PROCESS
case The following are the factors to be considered in the design and implementation
of service process:
1) The Service itself: The service is a dependent factor, which should be understood
before it is processed and most of the services are equipment based like laundry
Services, up keeping of lawn and services with highly intangible attributes like
banking, legal services, medical services, etc., are process dependent.
2) Customer Participation: Customer participation will inerease the degree of
Customization, the customer represents productive labour just at the moment it is
needed.
Ct
strategy of
Involving the customer in the service process can support a competitive
involvement
cost
leadership with a limited customization. The degree of customer
shif
pends on the wide range of service delivery system trom serf-service to complete
services in a hotel depends
dependenceon a service provider. Example: The room
reype of room the customer has availed like
deluxe room, air conditioned
room, suite etc.
Marketing and Services
142
Management
tor high volumos
3) Degree of Customer Contact: A system should be designed
and should be focused. It should also be flexible while perform the servio
activities. In the process of delivering the service, the provider will have to come
should be taken to provide best
into contact with the customer and proper care help the management
service. by which the customer derives satisfaction. This will
to take correct decisions at the correct time.
ensure whether the
4) Location of Service Delivery: The service provider should provided at the customer's
service is to be provided in his premises or it should becustomer's place or at the
place. Example: Bridal make-up can be done at the
emergency is done at the
beauty parlour also, medical services in case of
customer's place itself.
processes involved in the
5) Complexity of Service: It refers to the number of or low services. Examol
deliverv of the service irrespective of whether it is high variation tha:
Service ina hotel are high in complexity but low in divergence (a determined
deviates from the standard or norm). The deviation/divergence can be
bv looking at the blue print of service processes.
staff. ect
2) greeting and directing guests, as well as
service issues and
3) Furthermore, duties include responding to complaints,
4) other general questions or concerns as appropriate.
usually are necessary.
5) Filing, mail distribution and use of a computer
register etc.
6) Performing cashier duties, maintaining visitor's
information clerk, registrar or
Front-desk jobs can carry the title of receptionist, a front-desk person could be
guest relations. If working in retail, such as for a spa, taking and marketing.
responsible for appointment setting and follow-up, (message
data and office documents
(6) Back Office Support: The job involves handling Interviews for IT
administrative support, additional information, conducting job Communications
Hardware and Networking Sales and Marketing., The Internal
Manager/Administrative Manager is responsible for an effective delivery of
information and corporate communications etc.
called as Back-office
The staff involved in processing the service orders are
Kithcen staff in ahotel.
people, and who are not visible to the customers. Example:
customers like
However. in some cases, the back office staff are visible to the
officers in the banks, Principals in Colleges, etc.
There should be an integration between front office staff and back ofice staf.
Front-to back-office integration can help companies to dramatically reduce
administrative costs, speed up order fulfillment, and improve customer service. Wniie
this mnay seem like a real win-win scenario for all involved. it is not without its
challenges.
FUNDAMENTALS OF FRONT- TO BACK-OFFICE INTEGRATION
The aim of front-to back-office integration is to bring together disconnected
overall
business processes (such as quote-to-order and order-to-cash as part of the
quote-to-cash cycle), applications (CRM and ERP), and datasets (financial and no
financial), and translate them into a mechanism to:
1. Manage customer relationships more effectively Front to Back Office
Integration
2. Reduce costs
3. Increase profitability
4. Achieve sustainable competitive advantage over the long term
nductionto Service Management l45
on
Dnont-to back-office integration harnesses business processes, applications
effectively, reduce costs, increase
ista to manage customer relationships more advantage over thÃ)
ofitability and give the organization a sustainable competitive
ong term.
be costly and complex for many
Front-to back-office integration, however, can integration
often prepackaged solutions are the most
ompanies, especially SMBs, and
eTective alternative for these organizations.