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Services Marketing

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Usman Waheed

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If You want these slides then send me at E-mail at pankaj.bettiah@gmail.com or call me at 09910665814

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Chapter 1

INTRODUCTION

TO
SERVICES
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Usman Waheed

Pankaj Kumar (RBS )

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Objectives for Chapter 1: Introduction to Services

Explain what services are and identify service trends Explain the need for special services marketing concepts and practices Outline the basic differences between goods and services and the resulting challenges for service businesses Introduce the service marketing triangle Introduce the expanded services marketing mix Introduce the gaps model of service quality
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Introduction

Services are deeds,processes and performance Intangible, but may have a tangible component Generally produced and consumed at the same time Need to distinguish between SERVICE and CUSTOMER SERVICE
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Challenges for Services

Defining and improving quality


Communicating and testing new services Communicating and maintaining a consistent image Motivating and sustaining employee commitment Coordinating marketing, operations and human resource efforts Setting prices Standardization versus personalization
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Examples of Service Industries


hospital, medical practice, dentistry, eye care

Health Care
Professional Services
accounting, legal, architectural

Financial Services
banking, investment advising, insurance

Hospitality
restaurant, hotel/motel, bed & breakfast, ski resort, rafting

Travel
airlines, travel agencies, theme park

Others:
hair styling, pest control, plumbing, lawn maintenance, counseling services, health club
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Salt

Figure 1-1

Tangibility Spectrum

Soft Drinks Detergents Automobiles Cosmetics Fast-food Outlets


Fast-food Outlets

Intangible Dominant

Tangible Dominant

Advertising Agencies Airlines Investment Management Consulting

Teaching

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Figure 1-2

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Percent of GDP

Percent of U.S. Labor Force by Industry


80

70
60 50 40 30 20 10 0

1929 1948 1969 1977 1984 1996


Year
Source: Survey of Current Business, April 1998, Table B.8, July 1988, Table 6.6B, and July 1992, Table 6.4C; Eli Ginzberg and George J. Vojta, The Service Sector of the U.S. Economy, Scientific American, 244,3 (1981): 31-39. Contact: +923006641921

Services Manufacturing Mining & Agriculture

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Figure 1-3

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Percent of GDP

Percent of U.S. Gross Domestic Product by Industry


80 70 60 50 40 30 20 10 0 1948 1959 1967 1977 1987 1996 Year
Source: Survey of Current Business, August 1996, Table 11, April 1998, Table B.3; Eli Ginzberg and George J. Vojta, The Service Sector of the U.S. Economy, Scientific American, 244,3 (1981): 31-39.

Services Manufacturing Mining & Agriculture

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Differences Between Goods and Services

Intangibility

Heterogeneity

Simultaneous Production and Consumption


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Perishability

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Implications of Intangibility

Services cannot be inventoried Services cannot be patented Services cannot be readily displayed or communicated Pricing is difficult

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Implications of Heterogeneity

Service delivery and customer satisfaction depend on employee actions Service quality depends on many uncontrollable factors There is no sure knowledge that the service delivered matches what was planned and promoted

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Implications of Simultaneous Production and Consumption


Customers participate in and affect the transaction Customers affect each other Employees affect the service outcome Decentralization may be essential Mass production is difficult

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Implications of Perishability

It is difficult to synchronize supply and demand with services Services cannot be returned or resold

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Goods
Tangible

Table 1-2

Services are Different


Services
Intangible

Resulting Implications
Services cannot be inventoried. Services cannot be patented. Services cannot be readily displayed or communicated. Pricing is difficult.

Standardized

Heterogeneous Service delivery and customer satisfaction depend on employee actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted. Simultaneous production and consumption Customers participate in and affect the transaction. Customers affect each other. Employees affect the service outcome. Decentralization may be essential. Mass production is difficult. It is difficult to synchronize supply and demand with services. Services cannot be returned or resold.

Production separate from consumption

Nonperishable Perishable

Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Problems and Strategies in Services Marketing, Journal of Marketing 49 (Spring 1985): 33-46. Contact: +923006641921 Usman Waheed

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Figure 1-5

The Services Marketing Triangle


Company (Management)
Internal Marketing External Marketing
setting the promise

enabling the promise

Employees

Interactive Marketing
delivering the promise

Customers

Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler
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Ways to Use the Services Marketing Triangle


Specific Service Implementation
What is being promoted and by whom? How will it be delivered and by whom? Are the supporting systems in place to deliver the promised service?
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Overall Strategic Assessment


How is the service organization doing on all three sides of the triangle? Where are the weaknesses? What are the strengths?
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Figure 1-6

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The Services Triangle and Technology


Company

Technology

Providers
Source: Adapted from A. Parasuraman
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Customers

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Services Marketing Mix: 7 Ps for Services

Traditional Marketing Mix Expanded Mix for Services: 7 Ps Building Customer Relationships Through People, Processes, and Physical Evidence

Ways to Use the 7 Ps

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Traditional Marketing Mix


All elements within the control of the firm that communicate the firms capabilities and image to customers or that influence customer satisfaction with the firms product and services: Product Price

Place
Promotion
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Expanded Mix for Services -the 7 Ps


Product Price Place Promotion

People Process Physical Evidence


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Table 1-3

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Expanded Marketing Mix for Services


PLACE PROMOTION PRICE
Promotion blend Salespeople Advertising Flexibility

PRODUCT

Physical good Channel type features Quality level Accessories Packaging Warranties Product lines Branding Exposure Intermediaries

Price level Terms Differentiation Allowances

Outlet location Sales promotion Transportation Publicity Storage

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Table 1-3 (Continued)

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Expanded Marketing Mix for Services


PEOPLE PHYSICAL EVIDENCE
Facility design Equipment Signage Employee dress Other tangibles

PROCESS
Flow of activities Number of steps Level of customer involvement

Employees Customers Communicating culture and values Employee research

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Ways to Use the 7 Ps


Specific Service Implementation
Who is the customer? What is the service? How effectively does the services marketing mix for a service communicate its benefits and quality? What changes/improvements are needed?
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Overall Strategic Assessment


How effective is a firms services marketing mix? Is the mix well-aligned with overall vision and strategy? What are the strengths and weaknesses in terms of the 7 Ps?
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Services Marketing Triangle Applications Exercise

Focus on a service organization. In the context you are focusing on, who occupies each of the three points of the triangle? How is each type of marketing being carried out currently? Are the three sides of the triangle well aligned? Are there specific challenges or barriers in any of the three areas?

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FOCUS ON THE CUSTOMER

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Gaps Model of Service Quality


CUSTOMER

Expected

Service
Customer Gap

Perceived Service
External Communications to Customers

COMPANY

Service Delivery
GAP 3
Customer-Driven Service Designs and Standards

GAP 4

GAP 1

GAP 2
Part 1 Opener

Company Perceptions of Consumer Expectations

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Gaps Model of Service Quality


Customer Gap: difference between expectations and perceptions Provider Gap 1: not knowing what customers expect Provider Gap 2: not having the right service designs and standards Provider Gap 3: not delivering to service standards Provider Gap 4: not matching performance to promises

Part 1 Opener

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The Customer Gap

Expected Service
GAP

Perceived Service

Part 1 Opener

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CONSUMER BEHAVIOR IN SERVICES

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Objectives for Chapter 2: Consumer Behavior in Services

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Overview the generic differences in consumer behavior between services and goods Introduce the aspects of consumer behavior that a marketer must understand in five categories of consumer behavior: Information search Evaluation of service alternatives Service purchase and consumption Postpurchase evaluation Role of culture

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Consumer Evaluation Processes for Services


Search Qualities attributes a consumer can determine prior to purchase of a product Experience Qualities attributes a consumer can determine after purchase (or during consumption) of a product Credence Qualities characteristics that may be impossible to evaluate even after purchase and consumption

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Figure 2-1

Continuum of Evaluation for Different Types of Products


Most Goods Most Services
Difficult to evaluate

Easy to evaluate

High in search qualities

High in experience High in credence qualities qualities

Figure 2-2

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Categories in Consumer Decision-Making and Evaluation of Services


Use of personal sources Perceived risk

Information Search

Evaluation of Alternatives
Evoked set Emotion and mood

Purchase and Consumption


Service provision as drama Service roles and scripts Compatibility of customers

Post-Purchase Evaluation
Attribution of dissatisfaction Innovation diffusion Brand loyalty

Figure 2-3

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Categories in Consumer DecisionMaking and Evaluation of Services


Information Search
Use of personal sources Perceived risk

Evaluation of Alternatives
Evoked set Emotion and mood

Values and attitudes

Culture

Manners and customs Material culture Aesthetics Educational and social


institutions

Service provision as drama Service roles and scripts Compatibility of customers

Purchase and Consumption

Attribution of dissatisfaction Innovation diffusion Brand loyalty

Post-Purchase Evaluation

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Information search

In buying services consumers rely more on personal sources. WHY? Refer p32 Personal influence becomes pivotal as product complexity increases Word of mouth important in delivery of services With service most evaluation follows purchase

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Perceived Risk

More risk would appear to be involved with purchase of services (no guarantees) Many services so specialised and difficult to evaluate (How do you know whether the plumber has done a good job?) Therefore a firm needs to develop strategies to reduce this risk, e.g, training of employees, standardisation of offerings

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Evoked Set

The evoked set of alternatives likely to be smaller with services than goods If you would go to a shopping centre you may only find one dry cleaner or single brand It is also difficult to obtain adequate prepurchase information about service The Internet may widen this potential Consumer may choose to do it themselves, e.g. garden services

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Emotion and Mood

Emotion and mood are feeling states that influence peoples perception and evaluation of their experiences Moods are transient Emotions more intense, stable and pervasive May have a negative or positive influence

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Service Provision as Drama

Need to maintain a desirable impression Service actors need to perform certain routines Physical setting important, smell, music, use of space, temperature, cleanliness, etc.

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Global Feature: Differences in the Service Experience in the U.S. and Japan Authenticity Caring Control Courtesy Formality Friendliness Personalization Promptness

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Chapter 3

CUSTOMER EXPECTATIONS OF SERVICES

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Objectives for Chapter 3: Customer Expectations of Service

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Recognize that customers hold different types of expectations for service performance Discuss controllable and uncontrollable sources of customer expectations Distinguish between customers global expectations of their relationships and their expectations of the service encounter Acknowledge that expectations are similar for many different types of customers Delineate the most important current issues surrounding customer expectations
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DEFINITIONS

Customers have different expectations re services or expected service Desired service customer hopes to receive Adequate service the level of service the customer may accept DO YOUR EXPECTATIONS DIFFER RE SPUR and CAPTAIN DOREGO?
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Figure 3-1

Dual Customer Expectation Levels


(Two levels of expectations)
Desired Service Zone of Tolerance

Adequate Service

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Figure 3-2

The Zone of Tolerance

Desired Service

Zone of Tolerance
Adequate Service

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Figure 3-3

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Zones of Tolerance VARY for Different Service Dimensions


Desired Service

Level of Expectation

Zone of Tolerance
Adequate Service

Desired Desired Service Service Zone of Tolerance Adequate Adequate Service Service

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Most Important Factors Least Important Factors Source: Berry, Parasuraman, and Zeithaml (1993)

Usman Waheed

Figure 3-4

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Zones of Tolerance VARY for First-Time and Recovery Service

First-Time Service Outcome Process

Recovery Service Outcome Process LOW


Source: Parasuraman, Berry and Zeithaml (1991)
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Expectations

HIGH

Figure 3-5

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Factors that Influence Desired Service


Enduring Service Intensifiers

Desired Service Personal Needs Zone of Tolerance

Adequate Service

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Personal needs include physical, social, psychological categories Enduring service intensifiers are individual, stable factors that lead to heightened sensitivity to service This can further divided into Derived Service Expectations and Personal service Philosophies

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Figure 3-6

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Factors that Influence Adequate Service


Transitory Service Intensifiers
Desired Service Zone of Tolerance Adequate Service

Perceived Service Alternatives

Self-Perceived Service Role

Situational Factors
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Transitory service intensifiers temporary a computer breakdown will be less tolerated at financial year-ends Perceived service alternatives Perceived service role of customer Situational factors

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Figure 3-7

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Factors that Influence Desired and Predicted Service


Explicit Service Promises Implicit Service Promises Word-of-Mouth

Desired Service Zone of Tolerance Adequate Service


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Past Experience

Predicted Service
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Chapter 4

CUSTOMER PERCEPTIONS OF SERVICE

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Objectives for Chapter 4: Customer Perceptions of Service

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Provide you with definitions and understanding of customer satisfaction and service quality Show that service encounters or the moments of truth are the building blocks of customer perceptions Highlight strategies for managing customer perceptions of service

Figure 4-1

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Reliability Responsiveness Assurance

Customer Perceptions of Service Quality and Customer Satisfaction


Service Quality
Situational Factors

Empathy
Tangibles

Product Quality

Customer Satisfaction

Price

Personal Factors

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Factors Influencing Customer Satisfaction

Product/service quality Product/service attributes or features Consumer Emotions Attributions for product/service success or failure Equity or fairness evaluations

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Outcomes of Customer Satisfaction


Increased customer retention Positive word-of-mouth communications Increased revenues

Figure 4-3

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Loyalty (retention)

Relationship between Customer Satisfaction and Loyalty in Competitive Industries


100% 80% 60% 40% 20% 0%
Very dissatisfied Dissatisfied Neither satisfied nor dissatisfied Satisfied Very satisfied

Satisfaction measure
Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.

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Service Quality

The customers judgment of overall excellence of the service provided in relation to the quality that was expected. Process and outcome quality are both important.

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Reliability

The Five Dimensions of Service Quality

Ability to perform the promised service dependably and accurately. Knowledge and courtesy of Assurance employees and their ability to convey trust and confidence. Physical facilities, equipment, and Tangibles appearance of personnel. Caring, individualized attention the Empathy firm provides its customers. Responsiveness Willingness to help customers and provide prompt service.

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Exercise to Identify Service Attributes

In groups of five, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customers point of view.

Reliability: Assurance: Tangibles: Empathy: Responsiveness:

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RELIABILITY

SERVQUAL Attributes
ASSURANCE

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Providing service as promised Dependability in handling customers service problems Performing services right the first time Providing services at the promised time Maintaining error-free records

Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions

EMPATHY

RESPONSIVENESS

Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers requests

Giving customers individual attention Employees who deal with customers in a caring fashion Having the customers best interest at heart Employees who understand the needs of their customers Convenient business hours Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service

TANGIBLES

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The Service Encounter

is the moment of truth occurs any time the customer interacts with the firm can potentially be critical in determining customer satisfaction and loyalty types of encounters: remote encounters phone encounters face-to-face encounters is an opportunity to: build trust reinforce quality build brand identity increase loyalty

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Check-In

Figure 4-4

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A Service Encounter Cascade for a Hotel Visit

Bellboy Takes to Room Restaurant Meal Request Wake-Up Call Checkout

Figure 4-5

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Sales Call

A Service Encounter Cascade for an Industrial Purchase

Delivery and Installation


Servicing Ordering Supplies

Billing

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Critical Service Encounters Research

GOAL - understanding actual events and behaviors that cause customer dis/satisfaction in service encounters METHOD - Critical Incident Technique DATA - stories from customers and employees OUTPUT - identification of themes underlying satisfaction and dissatisfaction with service encounters

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Sample Questions for Critical Incidents Technique Study

Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with an employee of . When did the incident happen? What specific circumstances led up to this situation? Exactly what was said and done? What resulted that made you feel the interaction was satisfying (dissatisfying)?

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Common Themes in Critical Service Encounters Research

Recovery:
Employee Response to Service Delivery System Failure

Adaptability:
Employee Response to Customer Needs and Requests

Coping:
Employee Response to Problem Customers

Spontaneity:
Unprompted and Unsolicited Employee Actions and Attitudes

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DO

Recovery
DONT Ignore customer Blame customer Leave customer to fend for him/herself Downgrade Act as if nothing is wrong

Acknowledge problem Explain causes Apologize Compensate/upgrade Lay out options Take responsibility

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DO

Adaptability
DONT
Promise, then fail to follow through Ignore Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility

Recognize the seriousness of the need Acknowledge Anticipate Attempt to accommodate Explain rules/policies Take responsibility Exert effort to accommodate

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DO

Spontaneity
DONT Exhibit impatience Ignore Yell/laugh/swear Steal from or cheat a customer Discriminate Treat impersonally

Take time Be attentive Anticipate needs Listen Provide information (even if not asked) Treat customers fairly Show empathy Acknowledge by name

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DO

Coping
DONT Take customers dissatisfaction personally Let customers dissatisfaction affect others

Listen Try to accommodate Explain Let go of the customer

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Figure 4-6

Evidence of Service from the Customers Point of View



Contact employees Customer him/herself Other customers

Operational flow of activities Steps in process

People

Flexibility vs. standard


Technology vs. human

Process

Physical Evidence

Tangible communication

Servicescape
Guarantees Technology

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Part 2

LISTENING TO CUSTOMER REQUIREMENTS

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CUSTOMER

Provider GAP 1
Expected Service

GAP 1 Company Perceptions of Consumer Expectations

COMPANY

Part 2 Opener

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Chapter 5

UNDERSTANDING CUSTOMER EXPECTATIONS AND PERCEPTIONS THROUGH MARKETING RESEARCH

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Objectives for Chapter 5: Understanding Customer Expectations and Perceptions through Marketing Research

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Present the types of and guidelines for marketing research in services Show the ways that marketing research information can and should be used for services Describe the strategies by which companies can facilitate interaction and communication between management and customers Present ways that companies can and do facilitate interaction between contact people and management

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Common Research Objectives for Services

To identify dissatisfied customers To discover customer requirements or expectations To monitor and track service performance To assess overall company performance compared to competition To assess gaps between customer expectations and perceptions To gauge effectiveness of changes in service To appraise service performance of individuals and teams for rewards To determine expectations for a new service To monitor changing expectations in an industry To forecast future expectations

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Figure 5-1

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Criteria for An Effective Services Research Program


Includes Perceptions and Expectations of Customers

Occurs with Appropriate Frequency

Research Objectives

Measures Priorities or Importance


Includes Statistical Validity When Necessary

Includes Measures of Loyalty or Behavioral Intentions

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Portfolio of Services Research


Type of Research
Customer Complaint Solicitation Relationship Surveys Post-Transaction Surveys Customer Focus Groups Mystery Shopping of Service Providers Employee Surveys Lost Customer Research Future Expectations Research

Research Objective
Identify dissatisfied customers to attempt recovery; identify most common categories of service failure for remedial action Assess companys service performance compared to competitors; identify service-improvement priorities; track service improvement over time Obtain customer feedback while service experience is still fresh; act on feedback quickly if negative patterns develop Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service Measure internal service quality; identify employeeperceived obstacles to improve service; track employee morale and attitudes Determine the reasons why customers defect To forecast future expectations of customers To develop and test new service ideas

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Stage 1 : Stage 2 : Stage 3 : Stage 4 : Stage 5 : Stage 6 :

Stages in the Research Process


Define Problem Develop Measurement Strategy Implement Research Program Collect and Tabulate Data Interpret and Analyze Findings Report Findings

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9 8 7

Figure 5-5

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Service Quality Perceptions Relative to Zones of Tolerance by Dimensions

6
5 4 3

O O

2
1 0
Reliability Responsiveness Assurance Empathy Tangibles

Retail Chain

Zone of Tolerance O S.Q. Perception

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10 8

Service Quality Perceptions Relative to Zones of Tolerance by Dimensions

6
4 2 0
Reliability Responsiveness Assurance
Zone of Tolerance

Empathy

Tangibles

Computer Manufacturer

S.Q. Perception

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HIGH

Figure 5-6

Importance/Performance Matrix
High Leverage
Attributes to Improve

Attributes to Maintain

Importance

Low Leverage

Attributes to Maintain

Attributes to De-emphasize

LOW

Performance

HIGH

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Chapter 6

BUILDING

CUSTOMER
RELATIONSHIPS

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Objectives for Chapter 6: Building Customer Relationships

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Explain relationship marketing, its goals, and the benefits of long-term relationships for firms and customers Explain why and how to estimate customer lifetime value Specify the foundations for successful relationship marketing--quality core services and careful market segmentation Provide you with examples of successful customer retention strategies Introduce the idea that the customer isnt always right

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Relationship Marketing

is a philosophy of doing business that focuses on keeping and improving current customers does not necessarily emphasize acquiring new customers is usually cheaper (for the firm)--to keep a current customer costs less than to attract a new one goal = to build and maintain a base of committed customers who are profitable for the organization thus, the focus is on the attraction, retention, and enhancement of customer relationships

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Lifetime Value of a Customer


Assumptions Income Expected Customer Lifetime Average Revenue (month/year) Other Customers convinced via WOM Employee Loyalty?? Expenses Costs of Serving Customer Increase??

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A Loyal Customer is One Who...


buys from only one supplier, even though other options exist increasingly buys more and more from a particular supplier provides constructive feedback/suggestions

Shows Behavioral Commitment

Exhibits Psychological Commitment


wouldnt consider terminating the relationship-psychological commitment has a positive attitude about the supplier says good things about the supplier

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Customer Loyalty Exercise

Think of a service provider you are loyal to. What do you do (your behaviors, actions, feelings) that indicates you are loyal? Why are you loyal to this provider?

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Benefits to the Organization of Customer Loyalty

loyal customers tend to spend more with the organization over time on average costs of relationship maintenance are lower than new customer costs employee retention is more likely with a stable customer base lifetime value of a customer can be very high

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Benefits to the Customer


inherent benefits in getting good value economic, social, and continuity benefits contribution to sense of well-being and quality of life and other psychological benefits avoidance of change simplified decision making social support and friendships special deals

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The Customer Isnt Always Right


Not all customers are good relationship customers:
wrong segment

not profitable in the long term


difficult customers

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Strategies for Building Relationships


Foundations: Excellent Quality/Value Careful Segmentation Bonding Strategies: Financial Bonds Social & Psychological Bonds Structural Bonds Customization Bonds Relationship Strategies Wheel

Figure 6-1

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Customer Goals of Relationship Marketing

Enhancing Retaining Satisfying Getting

Figure 6-3

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Underlying Logic of Customer Retention Benefits to the Organization


Customer Satisfaction

Customer Retention & Increased Profits

Quality Service

Employee Loyalty

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Figure 6-5

Steps in Market Segmentation and Targeting for Services

STEP 1:
Identify Bases for Segmenting the Market

STEP 2:
Develop Profiles of Resulting Segments

STEP 3:
Develop Measures of Segment Attractiveness

STEP4:
Select the Target Segments

STEP 5:
Ensure that Segments Are Compatible

Figure 6-6

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Levels of Retention Strategies


Volume and Frequency Rewards Integrated Information Systems Stable Pricing Bundling and Cross Selling

I. Financial Bonds
IV. Structural Bonds

Continuous Relationships

Joint Investments

Excellent Quality and Value

II. Social Bonds

Personal Relationships

Shared Processes and Equipment

III. Customization Bonds

Social Bonds Among Customers

Anticipation / Innovation Mass Customization

Customer Intimacy

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Chapter 7

SERVICE RECOVERY

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Objectives for Chapter 7: Service Recovery

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Illustrate the importance of recovery from service failures in building loyalty Discuss the nature of consumer complaints and why people do and do not complain Provide evidence of what customers expect and the kind of responses they want when they complain Provide strategies for effective service recovery Discuss service guarantees

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Figure 7-1

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Unhappy Customers Repurchase Intentions


9% 37% 19% 46% 54% 70% 82%

Unhappy Customers Who Dont Complain Unhappy Customers Who Do Complain

Complaints Not Resolved

Complaints Resolved

Complaints Resolved Quickly

95%
Percent of Customers Who Will Buy Again

Minor complaints ($1-$5 losses)

Major complaints (over $100 losses)

Source: Adapted from data reported by the Technical Assistance Research Program.

Figure 7-3

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Customer Response Following Service Failure


Service Failure

Take Action

Do Nothing

Switch Providers Complain to Provider


Complain to Family & Friends

Stay with Provider

Complain to Third Party

Switch Providers

Stay with Provider

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Figure 7-5

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Service Recovery Strategies

Service Recovery Strategies

Pricing
High Price Price Increases Unfair Pricing Deceptive Pricing

Figure 7-6

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Inconvenience
Location/Hours Wait for Appointment Wait for Service

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Causes Behind Service Switching

Core Service Failure


Service Mistakes Billing Errors Service Catastrophe

Service Encounter Failures


Uncaring Impolite Unresponsive Unknowledgeable

Response to Service Failure


Negative Response No Response Reluctant Response

Service Switching Behavior

Competition
Found Better Service

Ethical Problems
Cheat Hard Sell Unsafe Conflict of Interest

Involuntary Switching
Customer Moved Provider Closed

Source: Sue Keaveney

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Service Guarantees

guarantee = an assurance of the fulfillment of a condition (Websters Dictionary) for products, guarantee often done in the form of a warranty services are often not guaranteed cannot return the service service experience is intangible (so what do you guarantee?)

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Table 7-7

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Characteristics of an Effective Service Guarantee


The guarantee should make its promise unconditionally no strings attached. It should guarantee elements of the service that are important to the customer. The payout should cover fully the customer's dissatisfaction. For customers - they need to understand what to expect. For employees - they need to understand what to do. There should not be a lot of hoops or red tape in the way of accessing or collecting on the guarantee.

Unconditional Meaningful

Easy to Understand and Communicate

Easy to Invoke and Collect

Source: Christopher W.L. Hart, The Power of Unconditional Guarantees, Harvard Business Review, July-August, 1988, pp. 54-62.

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Why a Good Guarantee Works


forces company to focus on customers sets clear standards generates feedback forces company to understand why it failed

builds marketing muscle

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Service Guarantees

Does everyone need a guarantee? Reasons companies do NOT offer guarantees:


guarantee would be at odds with companys image too many uncontrollable external variables fears of cheating by customers costs of the guarantee are too high

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Service Guarantees

service guarantees work for companies who are already customer-focused effective guarantees can be BIG deals - they put the company at risk in the eyes of the customer customers should be involved in the design of service guarantees the guarantee should be so stunning that it comes as a surprise -- a WOW!! factor its the icing on the cake, not the cake

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Part 3

ALIGNING STRATEGY, SERVICE DESIGN AND STANDARDS

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CUSTOMER

Provider GAP 2

COMPANY

Customer-Driven Service Designs and Standards


GAP 2

Company Perceptions of Consumer Expectations


Part 3 Opener

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Chapter 8

SERVICE DEVELOPMENT AND DESIGN

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Objectives for Chapter 8: Service Development and Design

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Describe the challenges inherent in service design Present steps in the new service development process Show the value of service blueprinting and quality function deployment (QFD) in new service design and service improvement Present lessons learned in choosing and implementing high-performance service innovations

Figure 8-1

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Risks of Relying on Words Alone to Describe Services

Oversimplification Incompleteness Subjectivity Biased Interpretation

Figure 8-2

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New Service Development Process


Business Strategy Development or Review New Service Strategy Development

Front End Planning

Idea Generation Screen ideas against new service strategy Concept Development and Evaluation Test concept with customers and employees Business Analysis Test for profitability and feasibility Service Development and Testing Conduct service prototype test

Implementation

Market Testing
Test service and other marketing-mix elements Commercialization Postintroduction Evaluation

Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal 1997.

Figure 8-3

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New Service Strategy Matrix for Identifying Growth Opportunities


Markets

Offerings
Existing Services

Current Customers

New Customers

SHARE BUILDING

MARKET DEVELOPMENT

New Services

SERVICE DEVELOPMENT

DIVERSIFICATION

Figure 8-4

Service Mapping/Blueprinting
A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customers point of view.
Process

Service Mapping

Points of Contact Evidence

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Service Blueprint Components


CUSTOMER ACTIONS line of interaction ONSTAGE CONTACT EMPLOYEE ACTIONS line of visibility

BACKSTAGE CONTACT EMPLOYEE ACTIONS line of internal interaction


SUPPORT PROCESSES

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CONTACT PERSON CUSTOME PHYSICAL EVIDENCE (Back Stage) (On Stage) R
Customer Calls

Express Mail Delivery Service


Truck Packaging Forms Hand-held Computer Uniform
Customer Gives Package

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Truck Packaging Forms Hand-held Computer Uniform


Receive Package

Driver Picks Up Pkg.

Deliver Package

Customer Service Order

Dispatch Driver

Airport Receives & Loads

Fly to Sort Center Load on Airplane Sort Packages

SUPPORT PROCESS

Fly to Destinatio n

Unload & Sort

Load On
Truck

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CUSTOMER PHYSICAL EVIDENCE Hotel Exterior Parking Cart for Bags

Overnight Hotel Stay


Desk Elevators Cart for Registration Hallways Bags Papers Room Lobby Key
Go to Room Receive Bags

Room Menu Amenities Bath

Delivery Food Tray Food Appearance

Bill Desk Lobby Hotel Exterior Parking


Check out and Leave

Arrive at Hotel

Give Bags Check in to Bellperson

Sleep Shower

Call Room Service

Receive Food

Eat

CONTACT PERSON SUPPORT PROCESS (Back Stage) (On Stage)

Greet and Process Take Registration Bags

Deliver Bags

Deliver Food

Process Check Out

Take Bags to Room

Take Food Order

Registration System

Prepare Food

Registration System

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Step 1
Identify the process to be blueprinted.

Figure 8-8

Building a Service Blueprint


Step 2
Identify the customer or customer segment.

Step 3
Map the process from the customers point of view.

Step 4
Map contact employee actions, onstage and backstage.

Step 5
Link customer and contact person activities to needed support functions.

Step 6
Add evidence of service at each customer action step.

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Application of Service Blueprints


New Service Development
concept development market testing

Supporting a Zero Defects Culture


managing reliability identifying empowerment issues

Service Recovery Strategies


identifying service problems conducting root cause analysis modifying processes

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Blueprints Can Be Used By:


Human Resources
empowering the human element
job descriptions selection criteria appraisal systems

Service Marketers
creating realistic customer expectations
service system design promotion

Operations Management
rendering the service as promised
managing fail points training systems quality control

System Technology
providing necessary tools:
system specifications personal preference databases

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Chapter 9

CUSTOMER-DEFINED SERVICE STANDARDS

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Objectives for Chapter 9: Customer-defined Service Standards

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Differentiate between company-defined and customer-defined service standards Distinguish among one-time service fixes and hard and soft customer-defined standards Explain the critical role of the service encounter sequence in developing customer-defined standards Illustrate how to translate customer expectations into behaviors and actions that are definable, repeatable, and actionable

Figure 9-1

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AT&Ts Process Map for Measurements


Customer Need
Reliability Easy To Use Features / Functions Knowledge Responsive (40%) (20%) (40%) (30%) (25%)

Business Process 30% Product

Internal Metric
% Repair Call

% Calls for Help Functional Performance Test


Supervisor Observations % Proposal Made on Time % Follow Up Made Average Order Interval % Repair Reports % Installed On Due Date % Repeat Reports Average Speed Of Repair % Customers Informed % Billing Inquiries % Resolved First Call % Billing Inquiries

30% Sales Total Quality 10% Installation

Follow-Up

(10%)

Delivery Interval Meets Needs (30%) Does Not Break (25%) Installed When Promised (10%) No Repeat Trouble Fixed Fast Kept Informed Accuracy, No Surprise Resolve On First Call Easy To Understand (30%) (25%) (10%) (45%) (35%) (10%)

15% Repair

15% Billing

Source: AT&T General Business Systems

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Exercise for Creating Customer-Defined Service Standards

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Form a group of four people Use your schools undergraduate or graduate program, or an approved alternative Complete the customer-driven service standards importance chart Establish standards for the most important and lowest-performed behaviors and actions Be prepared to present your findings to the class

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Customer-Driven Standards and Measurements Exercise


Customer Requirements Measurements

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Service Encounter

Service Quality

Figure 9-2

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Getting to Actionable Steps


Requirements: Diagnosticity:
Satisfaction Value Relationship Solution Provider

Abstract General Concepts

Low

Dig Deeper

Reliability Empathy Assurance Tangibles Responsiveness Price

Dimensions

Dig Deeper

Delivers on Time Returns Calls Quickly Knows My Industry

Attributes

Dig Deeper

Delivers by Weds 11/4 Returns Calls in 2 Hrs Knows Strengths of My Competitors

Behaviors and Actions


Concrete High

Figure 9-3

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Process for Setting Customer-Defined Standards


1. Identify Existing or Desired Service Encounter Sequence

2. Translate Customer Expectations Into Behaviors/Actions


3. Select Behaviors/Actions for Standards 4. Set Hard or Soft Standards Measure by Audits or Operating Data Measure by TransactionBased Surveys

Hard

5. Develop Feedback Mechanisms

Soft

6. Establish Measures and Target Levels 7. Track Measures Against Standards 8. Update Target Levels and Measures

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HIGH 10.0

Importance/Performance Matrix
Improve
Does whatever it takes to correct problems (9.26, 7.96)

Maintain
Gets project within budget, on time (9.31, 7.84)

Completes projects correctly, on time (9.29, 7.68)

Delivers on promises specified in proposal/contract (9.49, 8.51)

9.0


Gets back to me when promised (9.04, 7.63)

Importance
8.0

Provides equipment that operates as vendor said it would (9.24, 8.14) Takes responsibility for their mistakes (9.18, 8.01) Delivers or installs on promised date (9.02, 7.84)

Gets price we originally agreed upon (9.21, 8.64) Tells me cost ahead of time (9.06, 8.46)

LOW

7.0
8.0 9.0 10.0

HIGH

Performance

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S A 10 T 9 I S F 8 7 6 5 4 3 2

Figure 9-5

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Linkage between Soft Measures and Hard Measures for Speed of Complaint Handling

Large Customers Small Customers

A
C T I

O 1 N 0

12

16

20

24

WORKING

HOURS

Figure 9-6

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Aligning Company Processes with Customer Expectations


Customer Expectations

Customer Process Blueprint


Company Process Blueprint

48 Hours
Report Lost Card Receive New Card

Company Sequential Processes

Lost Card Reported

40 Days

New Card Mailed

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Chapter 10

PHYSICAL EVIDENCE AND THE SERVICESCAPE

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Objectives for Chapter 10: Physical Evidence and the Servicescape

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Explain the impact on customer perceptions of physical evidence, particularly the servicescape Illustrate differences in types and roles of servicescapes and their implications for strategy Explain why the servicescape affects employee and customer behavior Analyze four different approaches for understanding the effects of physical environment Present elements of an effective physical evidence strategy

Table 10-1

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Elements of Physical Evidence


Servicescape
Facility exterior
Exterior design Signage Parking Landscape Surrounding environment Facility interior Interior design Equipment Signage Layout Air quality/temperature

Other tangibles
Business cards Stationery Billing statements Reports Employee dress Uniforms Brochures Internet/Web pages

Table 10-2

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Examples of Physical Evidence from the Customers Point of View


Service
Insurance

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Physical evidence Servicescape Other tangibles


Not applicable Policy itself Billing statements Periodic updates Company brochure Letters/cards Uniforms Reports/stationery Billing statements

Hospital

Airline

Express mail

Building exterior Parking Signs Waiting areas Admissions office Patient care room Medical equipment Recovery room Airline gate area Airplane exterior Airplane interior (dcor, seats, air quality) Not applicable

Tickets Food Uniforms Packaging Trucks Uniforms Computers Signs Tickets Program Uniforms

Sporting event

Parking, Seating, Restrooms Stadium exterior Ticketing area, Concession Areas Entrance, Playiing Field

Table 10-3

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Typology of Service Organizations Based on Variations in Form and Use of the Servicescape
Complexity of the servicescape evidence
Servicescape usage
Self-service (customer only)

Elaborate
Golf Land Surf 'n' Splash

Lean
ATM Ticketron Post office kiosk Internet services Express mail drop-off Dry cleaner Hot dog stand Hair salon

Interpersonal services (both customer and employeee)

Hotel Restaurants Health clinic Hospital Bank Airline School Telephone company Insurance company Utility Many professional services

Remote service (employee only)

Telephone mail-order desk Automated voice-messagingbased services

Figure 10-3

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A Framework for Understanding Environment-user Relationships in Service Organizations


HOLISTIC ENVIRONMENT INTERNAL RESPONSES
Cognitive Emotional Physiological Employee Responses Perceived Servicescape Customer Responses Individual Behaviors Cognitive Emotional
Social Interactions between and among customer and employees

PHYSICAL ENVIRONMENTAL DIMENSIONS

BEHAVIOR

Individual Behaviors

Ambient Conditions Space/Function Signs, Symbols, and Artifacts

Source: Adapted from Mary Jo Bitner, Servicescapes.

Physiological

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Part 4

DELIVERING AND PERFORMING SERVICE

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CUSTOMER

Provider GAP 3

Service Delivery
COMPANY

GAP 3

Customer-Driven Service Designs and Standards

Part 4 Opener

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Chapter 11

EMPLOYEES ROLES IN SERVICE DELIVERY

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Objectives for Chapter 11: Employees Roles in Service Delivery

145

Illustrate the critical importance of service employees in creating customer satisfaction and service quality Demonstrate the challenges inherent in boundaryspanning roles Provide examples of strategies for creating customer-oriented service delivery Show how the strategies can support a service culture where providing excellent service is a way of life

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Service Employees

They are the service They are the firm in the customers eyes They are marketers Importance is evident in
The Services Marketing Mix (People) The Service-Profit Chain The Services Triangle

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Service Employees
Who are they?
boundary spanners

What are these jobs like?


emotional labor many sources of potential conflict
person/role organization/client interclient quality/productivity

Figure 11-3

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Boundary Spanners Interact with Both Internal and External Constituents


External Environment

Internal Environment

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Figure 11-4

Sources of Conflict for Boundary-Spanning Workers


Person vs. Role
Organization vs. Client Client vs. Client Quality vs. Productivity

Figure 11-5

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Human Resource Strategies for Closing GAP 3


Hire for Service Competencies and Service Inclination

Hire the Right People


Customeroriented Service Delivery
Develop People to Deliver Service Quality
Empower Employees

Treat Employees as Customers

Retain the Best People

Provide Needed Support Systems


Provide Supportive Technology and Equipment

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Service Culture
A culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers, is considered a natural way of life and one of the most important norms by everyone in the organization.

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Chapter 12

CUSTOMERS ROLES IN SERVICE DELIVERY

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Objectives for Chapter 12: Customers Roles in Service Delivery

154

Illustrate the importance of customers in successful service delivery Enumerate the variety of roles that service customers play Productive resources Contributors to quality and satisfaction Competitors Explain strategies for involving service customers effectively to increase both quality and productivity

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Importance of Other Customers in Service Delivery


Other customers can detract from satisfaction
disruptive behaviors excessive crowding incompatible needs

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Other customers can enhance satisfaction


mere presence socialization/friendships roles: assistants, teachers, supporters

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How Customers Widen Gap 3

Lack of understanding of their roles Not being willing or able to perform their roles No rewards for good performance Interfering with other customers Incompatible market segments

Figure 12-2

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Customer Roles in Service Delivery


Productive Resources

Contributors to Quality and Satisfaction

Competitors

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Customers as Productive Resources


partial employees
contributing effort, time, or other resources to the production process

customer inputs can affect organizations productivity key issue:


should customers roles be expanded? reduced?

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Customers as Contributors to Service Quality and Satisfaction


Customers can contribute to
their own satisfaction with the service
by performing their role effectively by working with the service provider

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the quality of the service they receive


by asking questions by taking responsibility for their own satisfaction by complaining when there is a service failure

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Customers as Competitors

customers may compete with the service provider internal exchange vs. external exchange internal/external decision often based on: expertise resources time economic rewards psychic rewards trust control

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Technology Spotlight: Services Production Continuum

Customer Production

Joint Production

Firm Production

Gas Station Illustration 1. Customer pumps gas and pays at the pump with automation 2. Customer pumps gas and goes inside to pay attendant 3. Customer pumps gas and attendant takes payment at the pump 4. Attendant pumps gas and customer pays at the pump with automation 5. Attendant pumps gas and customer goes inside to pay attendant 6. Attendant pumps gas and attendant takes payment at the pump

Figure 12-3

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Strategies for Enhancing Customer Participation


Effective Customer Participation

Define Customer Jobs

Recruit, Educate, and Reward Customers

Manage the Customer Mix

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Strategies for Enhancing Customer Participation

1. Define customers jobs - helping himself - helping others - promoting the company
2. Individual differences: not everyone wants to participate

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Strategies for Recruiting, Educating and Rewarding Customers

164

1. Recruit the right customers 2. Educate and train customers to perform effectively 3. Reward customers for their contribution 4. Avoid negative outcomes of inappropriate customer participation

Manage the Customer Mix

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Chapter 14

MANAGING DEMAND AND CAPACITY

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Explain: the underlying issue for capacity-constrained services the implications of capacity constraints the implications of different types of demand patterns on matching supply and demand Lay out strategies for matching supply and demand through: shifting demand to match capacity or flexing capacity to meet demand Demonstrate the benefits and risks of yield management strategies Provide strategies for managing waiting lines

Objectives for Chapter 14: Managing Demand and Capacity

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Understanding Capacity Constraints and Demand Patterns


Demand Patterns

167

Capacity Constraints

Time, labor, equipment and facilities Optimal versus maximal use of capacity

Charting demand patterns Predictable cycles Random demand fluctuations Demand patterns by market segment

Figure 14-3

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Strategies for Shifting Demand to Match Capacity


Shift Demand

Demand Too High

Demand Too Low

Use signage to communicate busy days and times Offer incentives to customers for usage during non-peak times Take care of loyal or regular customers first Advertise peak usage times and benefits of non-peak use Charge full price for the service--no discounts

Use sales and advertising to increase business from current market segments Modify the service offering to appeal to new market segments Offer discounts or price reductions Modify hours of operation Bring the service to the customer

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Figure 14-4

169

Strategies for Flexing Capacity to Match Demand


Flex Capacity

Demand Too High

Demand Too Low

Stretch time, labor, facilities and equipment Cross-train employees Hire part-time employees Request overtime work from employees Rent or share facilities Rent or share equipment Subcontract or outsource activities

Perform maintenance renovations Schedule vacations Schedule employee training Lay off employees

Table 14-1

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What is the Nature of Demand Relative to Supply?


Extent of demand fluctuations over time
Extent to which supply is constrained Wide Narrow
2 Insurance Legal services Banking Laundry and dry cleaning

Peak demand can 1 usually be met Electricity without a major Natural gas delay Telephone Hospital maternity unit Police and fire emergencies Peak demand regularly exceeds capacity 4 Accounting and tax preparation Passenger transportation Hotels and motels Restaurants Theaters

3 Services similar to those in 2 but which have insufficient capacity for their base level of business

Source: Christopher H. Lovelock, Classifying Services to Gain Strategic Marketing Insights, Journal of Marketing, 47, 3 (Summer 1983): 17.

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Time

Table 14-2

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What is the Constraint on Capacity?


Nature of the constraint Type of service
Legal Consulting Accounting Medical Law firm Accounting firm Consulting firm Health clinic Delivery services Telecommunication Utilities Health club Hotels Restaurants Hospitals Airlines Schools Theaters Churches

Labor

Equipment

Facilities

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SM

Waiting Line Issues and Strategies


unoccupied time feels longer preprocess waits feel longer anxiety makes waits seem longer uncertain waits seem longer than finite waits unexplained waits seem longer unfair waits feel longer longer waits are more acceptable for valuable services solo waits feel longer

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Part 5

MANAGING SERVICE PROMISES

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CUSTOMER

Provider GAP 4

COMPANY

Service Delivery
GAP 4

External Communications to Customers

Part 5 Opener

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Chapter 15

INTEGRATED MARKETING COMMUNICATION

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Objectives for Chapter 15: Integrated Services Marketing Communications

Introduce the concept of Integrated Services Marketing Communication Discuss the key reasons for service communication problems Present four key ways to integrate marketing communication in service organizations Present specific strategies for managing promises, managing customer expectations, educating customers, and managing internal communications Provide perspective on the popular service objective of exceeding customer expectations

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Figure 15-1

Communications and the Services Marketing Triangle


Company
Internal Marketing External Marketing Communication
Advertising Sales Promotion Public Relations Direct Marketing

Vertical Communications Horizontal Communications

Employees

Interactive Marketing
Personal Selling Customer Service Center Service Encounters Servicescapes

Customers

Source: Parts of model adapted from work by Christian Gronroos and Phillip Kotler

Figure 15-3

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Approaches for Integrating Services Marketing Communication


Manage Customer Expectations

Manage Service Promises

Goal: Delivery greater than or equal to promises

Improve Customer Education

Manage Internal Marketing Communication

Figure 15-4

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Approaches for Managing Service Promises

MANAGING SERVICE PROMISES


Create Effective Services Communications Coordinate External Communicatio n Offer Service Guarantees Goal: Delivery greater than or equal to promises

Make Realistic Promises

Figure 15-8

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Approaches for Managing Customer Expectations


Offer Choices

Create Tiered-Value Offerings Communicate Criteria for Service Effectiveness


Negotiate Unrealistic Expectations
Goal: Delivery greater than or equal to promises

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Figure 15-9

181

Approaches for Improving Customer Education

Goal: Delivery greater than or equal to promises

Prepare Customers for the Service Process

Confirm Performance to Standards

Clarify Expectations after the Sale

Teach Customers to Avoid Peak Demand Periods and Seek Slow Periods

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Figure 15-10

Approaches for Managing Internal Marketing Communications


Goal: Delivery greater than or equal to promises
Create Effective Vertical Communications

Create Effective Horizontal Communications


Align Back Office Personnel w/ External Customers Create Cross-Functional Teams

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Chapter 17

THE FINANCIAL AND ECONOMIC IMPACT OF SERVICE QUALITY

Contact: +923006641921

Usman Waheed

SM

Objectives for Chapter 17: The Financial and Economic Impact of Service

184

Examine the direct effects of service on profits Consider the impact of service on getting new customers Evaluate the role of service in keeping customers Examine the link between perceptions of service and purchase intentions Emphasize the importance of selecting profitable customers Discuss what is know about the key service drivers of overall service quality, customer retention and profitability Discuss the balanced performance scorecard to focus on strategic measurement other than financials
Contact: +923006641921 Usman Waheed

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Figure 17-1

The Direct Relationship between Service and Profits

Service Quality

Profits

Contact: +923006641921

Usman Waheed

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Figure 17-2

Offensive Marketing Effects of Service on Profits

Service Quality
Market Share
Reputation

Profits
Sales

Price Premium
Contact: +923006641921 Usman Waheed

Figure 17-3

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Defensive Marketing Effects of Service on Profit

Costs

Service Quality

Customer Retention

Volume of Purchases Price Premium

Margins

Word of Mouth

Profits

Contact: +923006641921

Usman Waheed

SM

Figure 17-5

188

Perceptions of Service, Behavioral Intentions and Profits


Costs
Volume of Purchases Price Premium

Margins

Customer Retention

Service

Behavioral Intentions

Word of Mouth

Profits
Sales

Contact: +923006641921

Usman Waheed

Figure 17-6

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The 80/20 Customer Pyramid


What segment spends more with us over time, costs less to maintain, spreads positive word of mouth?

Most Profitable Customers

Best Customers

Other Customers
Least Profitable Customers
Contact: +923006641921

What segment costs us in time, effort and money yet does not provide the return we want? What segment is difficult to do business with?

Usman Waheed

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Figure 17-7

The Expanded Customer Pyramid

Most Profitable Customers

Platinum Gold

What segment spends more with us over time, costs less to maintain, spreads positive word of mouth?

Iron
What segment costs us in time, effort and money yet does not provide the return we want? What segment is difficult to do business with?

Lead
Least Profitable Customers

Contact: +923006641921

Usman Waheed

SM
Key Drivers

Figure 17-8

191

The Key Drivers of Service Quality, Customer Retention, and Profits


Service Encounters
Service Encounter

Service Encounter

Service Quality
Service Encounter

Behavioral Intentions

Customer Retention

Profits

Service Encounter

Contact: +923006641921

Usman Waheed

Figure 17-9

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Sample Measurements for the Balanced Scorecard


Financial Measures
Price Premium Volume Increases Value of Customer Referrals Value of Cross Sales Long-term Value of Customer

Customer Perspective
Service Perceptions Service Expectations Perceived Value Behavioral Intentions:

Operational Perspective:
Right first time (% hits) Right on time (% hits) Responsiveness (% on time) Transaction time (hours, days) Throughput time Reduction in waste Process quality

% Loyalty % Intent to Switch # Customer Referrals # Cross Sales # of Defections

Innovation and Learning Perspective Number of new products Return on innovation Employee skills Time to market Time spent talking to customers

Contact: +923006641921

Adapted from Kaplan and Norton

Usman Waheed

Figure 17-10

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Service Quality Spells Profits


Costs

Defensive Marketing

Volume of Purchases Price Premium

Margins

Service Quality

Customer Retention

Word of Mouth

Profits
Sales

Market Share

Offensive Marketing

Reputation

Price Premium
Contact: +923006641921 Usman Waheed