CHAPTER 10

:
INTEGRATED SERVICE MANAGEMENT

8 P MODEL : COXSWAIN MODEL

8 P MODEL : COXSWAIN MODEL
PROCESS PRODUCT PRODUCTIVITY & QUALITY PEOPLE

PLACE & TIME

PROMOTION & EDUCATION

PRICE & OTHER COSTS

PHYSICAL EVIDENCE

A. PRODUCT
The term “product” is defined as a bundle of attributes capable of exchange or use, usually a mix of tangible and intangible forms. It may be an idea, a physical entity, or a service, or any combination of these.

LEVELS OF SERVICES

LEVEL CONTENTS 1 2 Basic Basic+ minimum conditions

EXAMPLE Food

3

4

Kitchen, serving space, menu availability In addition to expected Sparkling floors, Smiling employees, ambience Exceed expectations Welcome flowers, Welcome Drink Beyond the usual

SUPPLEMENTARY SERVICES: SERVICE FLOWER
Locker facility Card room CORE: Food and shelter

Swimming

Shopping

Transport

Casino Medical services Lounge

Supplementary services

CORE AND PRODUCT SURROUND
BASIC FEATURES

PRODUCT SURROUND
CORE PRODUCT

ADDED VALUES

Consists

Impact

Cost

Core product Product surround

Basic features Added values

30%

70%

70%

30%

CONTINUUM OF PRODUCT ATTRIBUTES
Most Goods Most Services

Easy to evaluate
Chair Motor vehicle
Education

Difficult to evaluate
Clothing Foods Haircut Restaurant meals Computer repair Legal services Lawn fertilizer Entertainment Complex surgery

High in search attributes

High in experience attributes

High in credence attributes

TYPES OF NEW SERVICES
TYPE Major Innovation Start up business New service for currently served market Service Line Extensions Service Improvements Style Changes EXAMPLES First broadcast TV. Service ATM, Vending Machines Library starts a restaurant

New Courses, New Sectors, New dish on menu Extended Banking hours New design on bank cheques

NEW SERVICE DEVELOPMENT PROCESS
1. 2. 3. 4. 5. 6. 7. 8. Exploration & Idea Generation Screening Concept testing Business analysis Service development Test marketing Commercialization Evaluation

PRODUCT LIFE CYCLE

SERVICE PRODUCT DECISIONS
EXISTING PRODUCTS NEW PRODUCTS

EXISTING MARKETS

Market penetration

Product development

NEW MARKETS

Market Development

Diversification

IGOR ANSOFF`S PRODUCT GROWTH MATRIX

B. PRICE
• Only element of the marketing mix which generates revenue. All others generate cost • Importance of income groups, Competition and Government Regulations • “Perceptions of quality” • Influence of Pricing on service Sector • Pricing Objectives

METHODS OF PRICING
1)    6)    COST BASED: Basic Cost/ Cost Plus Contribution Working Back/ Expected Return/ Rate Of Return

MARKET ORIENTED/ DEMAND BASED: Skimming Penetration Price Discrimination (Customer, Product, Location, Time, Quantity)  Pricing to meet customer expectations  Discounts and Sales

1)   

COMPETITION BASED: Destroyer Pricing Going Rate Pricing/ price matching Price bidding/ close bid pricing

6) VALUE STRATEGIES:      Satisfaction Based: Service Guarantee Benefit Driven Pricing Flat Rate Pricing Convenience Pricing

A. Relationship Based:  Long term contracts  Price Bundling C. Efficiency Pricing

A. PLACE
a) Time: doctor 4-7 pm pharmacy 24 hours b) Method: Physical Electronic c) Speed and convenience: channel of distribution must be short since services are intangible and inseparable

PLACE OF INTERACTION/ OPTIONS FOR SERVICE DELIVERY
Service provider Service provider customer

customer

Service provider

customer

S E R V I C E

CHANNEL DECISIONS
DIRECT C U S FRANCHISEES T O ELECTRONIC CHANNELS M E R AGENTS AND BROKERS

P R O V I D E R

MARKET COVERAGE STRATEGIES
1. Intensive Distribution 2. Selective Distribution 3. Exclusive Distribution

D. PROMOTION
“Promotion is used in hope of influencing the recipients feelings, beliefs or behavior, through any form of communication.”

ICICI sindhoor campaign Amity Education Taj- “She” Campaign

GUIDELINES FOR SERVICE COMMUNICATION

     

Provide tangible clues Make the service understood Communication continuity Promising what is possible Capitalizing on word of mouth Direct communication to employees

ORIGINATING SOURCES OF MESSAGE RECEIVED BY THE TARGET AUDIENCE
Messages originating within the organization
Front-line staff
i on duct s Pro nel Chan

Service outlets Advertising Sales promotions Direct marketing Personal selling Public relations

Mark Chan eting nels

A U D I E N C E

Word of mouth

Messages originating outside the organization

Media editorial

PROMOTION MIX ELEMENTS
1. 2. 3. 4. 5. 6. 7. 8. Advertising Personal selling Sales promotion Public relations Word of mouth Direct mail Tele-marketing E-marketing

PROCESS OF COMMUNICATION
ENCODES SENDER MESSAGE SELECTIVE EXPOSURE CHANNEL RECEIVER DECODES

FEEDBACK PRE TESTS AND POST TESTS

E. PEOPLE
Who provide the service Who receive the service

SERVICE PROVIDER

SERVICE RECEIVER/ CUSTOMER

PEOPLE
EXTERNAL INTERNAL

Other customers

Employees

Students of other divisions

Teachers

ROLE OF EMPLOYEES IN SERVICES
High contact – Low contact services Professional – Non- Professional Services

Primary Role Facilitating Role Ancillary Role

INTERDEPENDANCE CYCLE/ THE SERVICE MANAGEMENT TRINITY

Operations Management Customers

Marketing Management

Human Resources Management

KEY CONCEPTS
• • • • • • Recruitment Training and development Motivation Retaining Boundary spanning Emotional labour & Surface Acting

VIMP CONCEPT : EMPOWEREMENT
“Removing the barriers that prevent workers from exercising judgment and creativity” 4. Suggestion involvement: Big Mac, Fedex pay for suggestion schemes 5. Job involvement 6. High involvement

PARTIAL EMPLOYEES
• Some service providers treat customers as “partial employees” so as to improve the service quality and productivity. • Customer is both employee and customer • Example: student council

F. PHYSICAL EVIDENCE
“Physical evidence is the environment in which the service is delivered and where customers and firms interact. Any tangible commodities that facilitate performance or communicate the service are also physical evidence.” ELEMENTS OF PHYSICAL EVIDENCE  Exteriors  Interiors  Other tangibles

PHYSICAL ENVIRONMENT

AMBIENT FACTORS

DESIGN FACTORS

SOCIAL FACTORS

Furniture Smell in hospital Tables Operation theatres Lights Other patients

EVIDENCE

ESSENTIAL EVIDENCE

PERIPHERAL EVIDENCE

Equipments in gym

Brochure/ magazine

PURPOSE OF SERVICE ENVIRONMENT/ INFLUENCE ON BUYER BEHAVIOUR
 Message-creating Medium

 Attention-creating Medium

 Effect-creating Medium

G. PROCESS: VVVVIMP
“ It is the way of undertaking transactions, supplying information and providing services in a way that is acceptable to the consumers and effective to the organizations. Since service is inseparable, it is the process through which consumers get into interaction with the service provider”

FUNCTIONALTY

EASE OF USE

DESIGN OF PROCESS

SECURITY

ASTHETICS

EG. ATMS

Tells us the actual sequence in which service flows to every customer

Every service will have: • Complexity: steps involved • Divergence: variability in each step.

complexity standard high customized Low

divergence example low high Airlines Doctors/ restaurants

STAGES OF SERVICES
Pre-transaction Stage •Observing •Enquiring

Transaction Stage •Meeting with agents •Customization of service package •Purchasing

Post-transaction Stage •After sales service (e.g. Information, Extra advice, Additional services).

VIMP CONCEPTS
2. CRITICAL MOMENTS/ CRITICAL INCIDENTS/ MOMENTS OF TRUTH 3. SERVICE ENCOUNTERS 4. CIT 5. BLUE PRINTING 6. ROLE AND SCRIPT THEORIES 7. SERVICE MAPPING 8. CUSTOMER CONTACT WITH SERVICES 9. CUSTOMERS AS COPRODUCERS

1. CRITICAL MOMENT/ INCIDENTS/ MOT “All those moments when you come in contact with the service provider which leaves either a satisfying or a dissatisfying experience for either or both of them” Venn Diagram - Carlzon (chief executive) Scandinavian Airlines coined the term MOT 4. SERVICE ENCOUNTER “Entire length/ duration/ period during which customers interact directly with the service” • Service encounters must meet the customers expectation. • Venn Diagram

1. Could be: • Single encounter: restaurant • Series/ multiple encounters: doctor/ consulting • Different places/locations: airlines- baggage, check in, etc • Different employees: restaurant 2. Could be: • Shorter period encounter • Longer period encounter

3. CRITICAL INCIDENT TECHNIQUE :( CIT ) “Method to collect and categorize moments of truth and critical moments”

Cit helps to find

Customer satisfaction

Customer dissatisfaction

CHANGES

4. BLUE PRINTING
• “Process/ design needed to make sure that the critical moments are encountered correctly” • “A blue print is a visual portrayal of a service plan. This is a technique used when planning a new or a revised process and prescribes how to function” • Allows the service marketer to evaluate which tasks are more important/ critical and which are prone to failure. • BP helps turn complaints into repeat business

Stages in blue printing 1. 2. 3. 4. Represent the service product in molecular structural formula Breaking down the process into logical steps Recognizing the variability in the process Identify the backstage elements in the process

Q) WHAT IS BLUE PRINTING. EXPLAIN WITH AN EXAMPLE: 10 MKS. VVVVVIMP

EXAMPLE : AN OVERNIGHT STAY IN A HOTEL

5. ROLE AND SCRIPT THEORIES
• Role: A set of behavior patterns learned through experience and communication • Role congruence: In service encounters, employees and customers must act out defined roles for good outcomes • Script: Predetermined stereotyped sequence of actions that defines a well known situation. A script will have a set of activities that has conventional roles, props, even sequences, standard entering conditions and standard outcomes

Script tells a customer
Sequence of events Other peoples actions

His role

INTERACTION BETWEEN ALL 3

“CUSTOMER SATISFACTION WILL ALWAYS DEPEND ON WHETHER HE HAS RECEIVED SERVICES AS PER THE SCRIPT”

6. SERVICE MAPPING
“Service mapping is a technique which is used to
portray an existing service situation and provides a useful tool to access and identify service evidence opportunities.”

Service maps tell us: • How to deliver a service • Role of employee • Interaction with customers SM gives a visual picture of the entire organization

LAYERS AND FEATURES OF SERVICE MAPS: IMP
PROCESS

customer Front line
Service Structure

Front Stage

Line of Interaction Line of visibility

employees
Back stage

Support staff
Management Services

Line of internal interaction Line of Impletation

EG: educational institution- COLLEGE Teaching Students Teachers, Professors, Service Structure Peons Staff Office and Admin Staff Admissions & H. R. C. office Front Stage Line of (classrooms) Interaction Line of visibility Line of internal interaction Line of Impletation

Principal’s HSNC, Principal, Vice Principal Office

7. LEVELS OF CUSTOMER CONTACT WITH SERVICES
• High contact: customers visit the service facility / provider in person. Teacher. • Medium contact: customer contact is limited. Travel agency. • Low contact: very little. Call center. The 3 levels are based on: • The extent of interaction with the service personnel • The extent of interaction with the Physical elements • The extent of interaction with both

Types of Customer Contact: • • • • Constant physical contact (barbers)

Constant communication contact (call center) Sporadic physical contact (medical services) Sporadic communication contact (financial services

8. CUSTOMERS AS COPRODUCERS (3 LEVELS OF CUSTOMER PARTICIPATION)
• LOW- service is provided regardless of any individual purchase. Theatre. Online buying. Flight. • MODERATE- Inputs required for service creation. Restaurant. • HIGH- Co-production. Service is created from the customers purchase & active participation. Counseling/ learning.

H. PRODUCTIVITY & QUALITY
PRODUCTIVITY: How inputs are transformed into outputs : THE TRANSFORMATION PROCESS QUALITY : Degree of satisfaction a customer gets from a service, by meeting their needs, wants and expectations  Competitive advantage = Good quality  Competitive disadvantage = Poor quality  In services quality is perceived by – supplementary services.( flower)

COMPONENTS OF SERVICE QUALITY
QUALITY

TECHNICAL QUALITY

FUNCTIONAL QUALITY

EXTRINSIC

INTRINSIC

GARVINS 5 PERSPECTIVES OF QUALITY
Transcendental: Quality = excellence. Quality is synonymous with innate excellence, a mark of uncompromising standards & high achievements Quality is precise and measurable Quality lies in the eyes of the beholder Quality is conformance to the firm’s developed specifications Quality is a trade-off between price and value

Product-Based:

User-Based: ManufacturingBased: Value-Based:

DIMENSIONS/ DETERMINANTS OF QUALITY 1. Credibility:
2. Security: locker facility 3. Access: hotel answering in 3 rings 4. Communication: proper rates given 5. Understanding the customer: making customers welcome at reception 6. Tangibles: car park 7. Reliability: airlines ensuring baggage 8. Responsiveness: willingness to help. Idbi. 9. Competence: Ability 10. Courtesy:

10 DIMENSIONS 3. Tangibles 5. 7. 9. 10. 11. 12. Reliability Responsiveness Competence Courtesy Credibility Security

5 DIMENSIONS 3. TANGIBLES 5. 7. RELIABILITY RESPONSIVENESS

10. ASSURANCE

14. Access 15. Communication 16. Understanding the customer

15. EMPATHY

SERVQUAL SCALE
• Includes the 5 dimensions of quality • “Servqual is based on the premise that customers can evaluate a firms service quality by comparing their perceptions of its service with their expectations” • Servqual: Instrument developed by Parasuram, Ziethaml and Berry Servqual to measure the level of customer satisfaction with respect to quality

SERVQUAL SCALE: RATER

R

A

T

E

R

SERVICE QUALITY

RATER: VIMP CONCEPT
• • RELIABILITY: Ability to perform the required service dependably and accurately ASSURANCE: Knowledge and accuracy of the employees and their ability to convey trust and confidence TANGIBLES: Appearance of physical facilities, equipments, personnel and communication material EMPATHY: Caring individual attention to the customer. It involves Customizing services RESPONSIVENESS: Willingness to help customers and provide prompt service

• • •

5 STAR OF QUALITY: VIMP
Reliability

Responsiveness

Assurance

Empathy

Tangibles

QUALITY: HOUSING SECTOR
RELIABILITY Rahejas – know their construction will be excellent Delivery of house on time Trust the big names Security, fire alarms Gate of bldg, surrounding area, park, car park etc Interior designer, architect, watchman knowing residents

ASSURANCE TANGIBLES EMPATHY

RESPONSIVENESS Real estate agent, plumber, electrician of bldg come immediately

QUALITY SHORTFALLS
Customer expectations based on: • Individual needs and wants • Recommendations: word of mouth • Service marketor/provider • Past experience Quality v/s expectations 8. Good quality: more than expectations 9. Adequate quality: within tolerance zone 10. Quality shortfall: outside/ below tolerance zone

GAPS IN SERVICES: GAP MODEL/ GAP ANALYSIS
Customer needs and expectations

CUSTOMER

1. Knowledge Gap
Management definition of these needs

MANAGEMENT

2. Standards Gap
Translation into design/delivery specs

3. Delivery Gap
Execution of design/delivery specs

4. I.C.Gap

Advertising and sales promises

5. Perceptions Gap
Customer perceptions of product execution

6. Interpretation Gap
Customer interpretation of communications

7.

Service Gap
Customer experience relative to expectations 1, 6, 7 – external – between customer and organization 2,3,4,5 - between different functions and departments within organization

The knowledge gap: The difference between what the service provider believes the customers expect and the customers actual needs and expectations The standards gap: The difference between management perception of customer expectations and the quality standards established for service delivery The delivery gap: The difference between specified delivery standards and the service providers actual performance on these standards. Eg. Pizza half hour delivery promise.

The internal communication gap: The difference between what the company's advertising & sales personnel think are the products features, performance & service quality level and what the company is actually able to deliver The perception gap: The difference between what is actually delivered and what customers perceive they have received The interpretation gap: The difference between what a service providers communication efforts actually promise and what a customer thinks was promised by these communications

The service gap: The difference between what customers expect to receive and their perception of the service that is actually delivered

Quality shortfall occurs here in 7th gap

No.

Gap

Remarks Narrow Kotak: “We believe the customer wants the right product and quick claim settlements.” Customer: “I need the right product and want speedy settlements for every claim.” Negligible Kotak meets the customers the customer’s expectations of high quality service standards, that are at par with the best in the industry. Substantial Customer’s usual expect speedy claim settlement. The processing time is often longer than what the customers expect.

1

Knowledge

2

Standards

3

Delivery

4

Internal communications

Narrow Kotak’s employees are well trained to explain the features of the products as mentioned on their advertisements. Negligible Life insurance policies of Kotak deliver exactly what the customer perceives one to be. Narrow Kotak does not complicate its advertisement campaigns and the employees are trained well to explain technicalities in a simple fashion. Hence customers are able to interpret communications.

5

Perceptions

6

Interpretation

7

Service

Negligible-Narrow

PRESCRIPTIONS FOR CLOSING GAPS
1. 2. 3. 4. 5. 6. 7. Learn what customers expect Establish the right quality standards Ensure that the service performance meets standards Ensure communication promises are realistic Explain to the customer what the service has done for them Pretest all advertising so there is no communication gap Try to match customers perception to what is being delivered

SERVICE GUARANTEE: VIMP CONCEPT
• “Predefined standards where the customer is
entitled compensation in case of failures” • “Is a promise to customers ensuring highest of standards” • Examples: Dominoes, Mc Donald's

ADVANTAGES OF GUARANTEES
• Force firms to focus on what customers want & expect in each element of the service • Set clear standards telling customers and employees what the company stands for • Require development of systems for generating meaningful customer feedback and acting on it • Force service organizations to understand why they fail and encourage them to identify and overcome potential fail points • Reduce the risk of purchase decision and build up long term loyalty

Service guarantee must be: • Unconditional • Easy to understand • Meaningful • Easy to invoke • Quick and easy to collect Service Guarantee types: • Express/ stated/ explicit • Implied/ implicit • Satisfaction guarantee • Service attribute guarantees DIFFERENCE BETWEEN GURANTEE AND WARRANTY

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