Module 3

Customer defined service

standards:

1 BEENA P,ASSISTANT PROF @ BGSIT (MBA) 2/12/2019

 CONTENTS:
 Leadership & Measurement system for market driven service
performance
 key reasons for GAP-2 service leadership- Creation of service vision
and implementation, Service quality as profit strategy, Role of service
quality In offensive and defensive marketing.
 Service design and positioning-Challenges of service design, new
service development-types , stages. Service blue printing-Using &
reading blue prints. Service positioning-positioning on the
 five dimensions of service quality, Service Recovery.
 ―Hard customer defined standards: Things that can be counted, timed,
or observed through audits (time, numbers of events)
 ―Soft customer defined standards: Opinion-based measures that
cannot be observed and must be collected by talking to customers
(perceptions, beliefs)

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 STANDARDS IN SERVICE
 The standards in this illustration is a time period for
responding to enquiries or resolving complaints. For the
customer, the standard is expressed in terms of expectations.
 The standard set is an expression of the service providers
view as to how long the process of responding to enquiries
or resolving complaint should take.
 Service performance is the time it actually takes. The
customer loses out not only in terms of failure to meet
expectations but also in terms of performance not even
meeting the standard.

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 TYPES OF CUSTOMER DEFINED
SERVICE
 Hard standards
 Soft standards

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 HARD STANDARDS
 Hard standards often involve counts or actions of how
accurately, how quickly. Two of the five quality dimensions
are particularly receptive to hard measures.
 The ultimate standard is either right first time or right on
time.
 Second dimension, responsiveness, time or speed of
response, is what’s looked for in a standard.

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 SOFT STANDARDS
 Soft standards are areas that are more difficult to measure
objectively and agree a standard. Soft standards are
developed in response to customers.
 How was I made to feel?
 Was I involved, informed and consulted?
 Did I like how I was treated?
 Service customers want to experience courtesy, trust, care,
and understanding. These attributes are encapsulated in a
further two dimensions of service quality namely empathy
and assurance.

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PROCESS FOR CUSTOMER DEFINED
SERVICE STANDARDS

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LEADERSHIP AND MEASURMENT SYSTEM IN
SERVICE SECTOR
 Market centric strategy helps in sustaining an organization in the long
run. Therefore, recent years have seen as increase in the importance
measurement systems that enable market driven service performance.
 These systems help to bridge a gap between service expectation and
delivery.
 Traditionally, organizations have measured their performance almost
completely on the basis of financial indicators such as profit, sales and
return on investment.
 Having a firm handle on what had been viewed as soft measures became
the way to help organizations to identify customer problems, improve
process, and achieve company objectives.

8 BEENA P ,ASSISTANT PROF @ BGSIT (MBA) 2/12/2019

 KEY REASONS FOR GAP 2
Customer driven service design and
standards

Management perceptions of customer

expectations

9 BEENA P ,ASSISTANT PROF @ BGSIT (MBA) 2/12/2019

Cont…
 POOR SERVICE DESIGN
I. Unsystematic new service development process
II. Vague, undefined service designs
III. Failure to connect service design to service positioning
• ABSENCE OF CUSTOMER DEFINED SERVICE
I. Lack of customer-defined service standards
II. Absence of process management to focus on customer
requirements
III. Absence of formal process for setting service quality goals
• INAPPROPRIATE PHYSICAL EVIDENCE AND SERVICE
SCAPES

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SERVICE LEADERSHIP
 Leadership theory has focused on various traits and behaviors
individual leaders and the circumstances in which they find
themselves, causing people to overlook the real leadership potential
all around them.
 ACCOREDING TO GEORGE BARNAD SHAW: The people who get
on in this world are they who get-up and look for the circumstances
they want, and if they cannot find them, make them.

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 CREATION OF SERVICE VISION

 The purpose of service vision is to paint a picture of the future that

motivates and energizes those who are going to get the organization
there. For the vision to have practical application, the organization need
to specify its stakeholders, products, or service in the future as well as
the company’s future location, as determined by the location of
potential future customers of the organization.

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 IMPLEMENTATION OF SERVICE VISION
 Target market: It deals with identifying the market segments or
groups of people the organization sets-out to serve. After
segmenting the market and pinpointing which customer segments
are most likely to be profitable and applicable to its services.
 Definition of an organization’s primary business: This definition
should be broad enough to allow for possible extension to the
definition because of such factors as technological advances or
changes in consumer need or wants.
 Development of an operational strategy: Its enhances the efficiency
of service delivery. The purpose is to develop a set of strategies for
important elements in the organization day to day operations, such
as marketing, human resources, finance and operations.

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Role of Service Quality in Offensive and
Defensive Marketing
1.Offensive Marketing: In this method, profit is obtained through
sales, but the methodology adopted is sales increase through
repetition and higher market share. In this method, the services
are charges higher than that of competitive, Sales promotion and
advertising are huge in this method. This method is possible
only for those companies which have a good reputation.
2.Defensive Marketing: In this method the emphasis is on
customer retention. This is because;
 we know that lost customer must be replaced by a new customer
when the replacement comes at the high cost because of high
advertising and promotion expenses. New customers may not be
profitable in the short term.
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 Challenges in Service Design &
Positioning
1. over simplification, shostack points out that to say that
portfolio management means buying and selling stocks is like
describing the space shuttle as something that flies, some
people will picture a bird, some a aero plane ,that means words
are simply inadequate to describe a whole service system.
2. Subjectivity, Any one person describing a service in words
will be biased by personal experiences, & degree of exposure
to the service. There is natural and mistaken tendency to
assume that because all people have gone to a fast-food
restaurant, they will understand what that service is. Persons
working in different functional areas of the same service
organization (e.g, A marketing persons, an operations person,
or a finance person) are likely to describe the service very
differently as well, biased by their own functional blinders.

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 Incompetency, In describing services, people (employees,
managers, customers) tend to omit details or elements of
the service with which they are not familiar person might
do a fairly credible job of describing how a discount stock
brokerage service takes orders from customers. But would
that person be able to describe fully how monthly
statements are created, how the interactive computer
system works and how these two elements of the service
are integrated into the order taking process. e.g, Surgeon,
Physician
Biased interpretation, No two people will define responsive,
quick, and flexible in exactly the same way. For e.g., a supervisor
or manager may suggest to a front line service employee, that the
employee should try to be more flexible or responsive in
providing service to the customer.

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 Five Dimensions of Service Quality
1. Reliability
2. Tangible
3 Responsiveness
4 Assurances
5. Empathy.

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 Cont….
 1. Reliability: Reliability means, ability to perform the promise to
service dependably and accurately. Reliability means that the company
delivers as per the promises. Customers want to do business with a
company which keeps up the promise.
Eg, Medical Care-Appointments are kept on schedule, diagnosis prove to
be accurate
Airline-Flights as promised-arrival and departure on time
2. Tangible: Tangible means, appearance of physical facilities, equipments
personnel and written materials. All of these provide physical image of
the service. This is very important particularly to the new customers
who will use this as criteria to evaluate quality. A Service industry
emphasizes tangibles in their strategy which includes hospitability in
services when the customers visit the establishment to receive services.
While tangibles are used by service companies to enhance their image,
provide continuity and signal quality to the customers.

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3. Responsiveness: Responsiveness means willingness to help customers and
provide prompt service. This deals with attentiveness and promptness in
dealing with customer request questions, complaints and problems.
Responsiveness is communicated to the customers in an indirect way as
follows,
a) The length of time they have to wait for assistance
b) Answers received to the questions asked
c) How flexible and ability to provide custom built service products
e.g., Airlines-Timely, prompt, speedy system of ticketing, baggage handling
efficient
Medical Care-No waiting time, willingness to listen
4. Assurances: Assurance means, employees knowledge and courtesy and their
ability to inspire trust and confidence. This dimension is likely to be
particularly important for services that customer perceives as having high risk
and feel uncertain about their ability to evaluate out comes. e.g. Medical,
Banking and Legal Services
e.g., Medical Care-Knowledge, Skills, Good Credentials, Reputation Car Repair-
Knowledgeable mechanics who know their jobs very well.

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  5. Empathy: Empathy means caring and individualized
attention to the customers. The essence of empathy is to
convey the message that the customers are unique and
special. Customers want to feel that he is important to the
company and to the service provider. Personnel at small
service firms often know the customers by name and build
relationship with them and meet their requirements and
preferences. Such a small firm competes with large firms; the
ability to empathetic may give the small firm a clear
advantage.

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Service quality as a profit strategy
 Service quality can be described as profit strategy because of its effective
relationship in the modern era of service marketing .

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 Yield management
 Yield management is a variable pricing strategy, based on
understanding, anticipating and
influencing consumer behavior in order to
maximize revenue or profits from a fixed, time-limited resource
(such as airline seats or hotel room reservations or advertising
inventory). As a specific, inventory-focused branch of revenue
management, yield management involves strategic control of
inventory to sell the right product to the right customer at the
right time for the right price. This process can result in price
discrimination, in which customers consuming identical goods
or services are charged different prices.

22 Beena p ,ASSISTANT PROF @ BGSIT (MBA) 2/12/2019

 Positioning on Service Evidence
Services can also be positioned based on service evidence from
the customers view point. The evidence of service falls into
three categories,
1. People
2. Physical Evidence
3. Process

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 THANK U….

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