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Chapter 7 Distributing Services

• Service Distribution • services are intangible and experiential in nature • service distribution does not typically involve moving items through a chain of firms that begins with a manufacturer and ends with a consumer – as the process for goods distribution • services – therefore- are delivered directly from the services producer to the consumer

• Services cannot be owned due to the absence of tangible components • this implies that there are no titles or rights to most services that cannot transferred to the agent along a delivery channel • thus the primary function that distribution channels serve – inventorying, securing and taking titles to goods – have no

• there are three participants in the service delivery process : the service provider. and the service intermediaries • two types of channel delivery modes for service: direct channels of service delivery and indirect or alternative channels of service delivery ( franchisees. and electronic channels) • the direct distribution of services takes place when a service provider directly delivers the service to the customer without any intermediaries . customer. agents and brokers.

HASBRO • Hasbro is a worldwide leader in entertainment products and services. Candy Land. the Easy Bake Oven.000 new products each year • the company attributes its success to staying ahead and anticipating the changing needs of the marketplace by making games consistently relevant to consumers . such as GI Joe. and Monopoly • Hasbro is a $3 billion company with brands in 100 countries and launching 1.

• even with big brands and successful products. the products will fail • world-class logistics and an efficient supply chain are critical for Hasbro to remain competitive and work with powerful retail stores • primarily. and Toys “R” Us . Hasbro knows that if its marketing and distribution strategies are not executed correctly. Target. the company distributes through big-box retailers such as Wal-Mart.

• due to this concentrated distribution strategy. online and smaller toy stores • in these alternate distribution channels. Hasbro knows that it needs to provide a different product or different packaging to compete . such as drugstores. the company does use alternate distribution channels to reach consumers where they shop. resulting in a tighter supply chain • it would be substantially harder with a lot of little retailers. wholesale clubs. However. it is easier for Hasbro to make changes and launch products.

but the company also makes sure its products fit correctly in retailers’ product mix and merchandising . but appropriate for the channel • Hasbro works with the channel members to make sure their brand is marketed correctly. resulting in a higher ticket item.• certain items may be bundled together.

direct marketing through individual agents and financial service consultants and corporate agents • ICICI Prudential runs its operations at 23 locations and some of them have many branches • in the year ending March 2008 the company had issued . • ICICI Prudential Life Insurance has developed a multichannel distribution strategy to market its insurance products • this distribution strategy includes bankassurance (offering banking and insurance products at one place). intangible.• financial services are perishable. and variable with direct distribution to the customer • ICICI Bank Ltd.

and highly reliable . widespread.000 advisors as well as 12 bankassurance tie ups • today ICICI Prudential commands over 40 per cent of the retail insurance market among the top private players in the country • Distributing through the meal dabba: ICICI Prudential’s intermediary channel of service delivery in metropolitan Mumbai • ICICI Prudential Life Insurance has discovered an innovative way to distribute its products and services to potential customers in Mumbai • the company found that over 200.000 office goes get their lunch boxes delivered at their work place by a dabbawala • the dabbawala network is efficient.• the company has a network of about 30.

• in 2004-05 the company undertook a successful pilot study to understand the marketing effectiveness of micro marketing: communicating the value benefits of the service through local media • the company sends around 50. 000 direct mailers to office goers in Mumbai by hanging a mailer to the handles of meal boxes • the distribution of these mailer is timed perfectly for maximum effectiveness – they are distributed around the end of the financial year when most employees are thinking of saving on tax and planning to invest in some financial policies • interested customers fill in the form and seek a meeting with the company agent .

• the conversion rate of interested policy seekers in policy holders in very encouraging through this direct marketing medium – 4% to 5 % of prospects convert to customers • the franchisee is a service outlet licensed by a principal to deliver a unique service concept it has created or popularised for business reasons : lowered marketing risk and wider reach • a service organization provides licenses to franchisees to sell its services according to standards or rules set by the organization • for examples. Café Coffee Day has many franchisees located in the Indian metros and NIIT provides computer education through franchisees across the world .

• the benefits for the franchisees include an established business format. and the minimised risk of starting a business • • picture this… Lakme India: Delivering Beauty and Grooming Service through franchising • The beauty and fitness business in India is estimated to be over Rs. national or regional brand marketing.000 crore • The services offered by most of the major brands within this sector include Shanaz Hussain. Personal Point. and Lakme Beauty • these brands have extended rapidly into Tier II and Tier III towns after establishing franchisee based businesses in metros . 15. VLCC.

• direct distribution or company-owned channels • a range of service offerings are distributed directly from the provider to customer • national level chains and international levels with multiple service outlets are direct channels of service delivery because the service marketer retains complete control over the market benefits of distribution • consistency in service and establishment of standards aids the service provider to monitor the service rewards • company-owned channels allow the service marketer to expand and contract channels without being bound by contractual agreements with other entities .

(ABCTCL).• CCD is a classic example of company owned direct channels of service delivery in India • while Starbucks Coffee is a classic example of company owned direct channels of service delivery in international markets • Café Coffee Day is a division of India's largest coffee conglomerate. popularly known as Coffee Day • sales in 2008 totaled Rs. employs around 1000 persons • since its establishment of six cafes in Bangalore in 1996 CCD is today CCD has become India’s largest and premier retail chain of cafes with 733 cafes in 103 cities around the country . 750 crore. Amalgamated Bean Coffee Trading Company Ltd.

• Coffee Day has its business spanning the entire value chain of coffee consumption in India: the company retains complete control and consistency in the service delivery through the operations of its five business divisions • Its different divisions include: Coffee Day Fresh n Ground (which owns 400 Coffee bean and powder retail outlets). . Coffee Day Xpress (which owns 895 Coffee Day Kiosk). Coffee Day Exports and Coffee Day Perfect (FMCG Packaged Coffee) division. Coffee Day Take away (which owns 12000 Vending Machines).

•Café Coffee Day (CCD) pioneered the café concept in India in 1996 by opening its first café at Brigade Road in Bangalore • till about the late 1990’s coffee drinking in India was restricted to the intellectual. the South Indian traditionalist. and the five star coffee shop visitor • CCD identified and responded to a clear but unsatisfied the market need for a relaxed and fun “hangout” for the emerging urban youth in the country • a large organized retail café chain with a distinct brand identity of its own .

• Amalgamated Bean Coffee Trading Company pioneered the F&B concept of “out-of-home premium coffee consumption” for the youth segment • Barista opened coffee bars in 2000 seeing growth in coffee retailing • companies positioned their brand and products differently in the coffee retailing space • CCD reaped the benefits of carving out a unique position in the marketplace 18 .

• target the youth segment with spending power • to satisfy the market need to socialize. • set up outlets close to colleges. etc. software companies. and shopping malls 19 . networking. meeting place for friends.

• initiated joint product promotions with youthful brands (Channel V) to craft a brand position • Barista positioned the coffee retail brand as a meeting place for coffee-loving business executives • meeting place for conducting business while savouring the aroma of coffee 20 .

• accurate targeting of its customer segment • helped CCD to differentiate the brand by crafting a unique position in the youth consumer’s mind • Barista positioned the benefits of its brand as premium coffee retail outlet for upwardly mobile business execs • let us now examine how Lakme India Limited is an application of indirect channels of service delivery 21 .

supply of professional salon products. colour cosmetics. training services. IT development.• Lakme the first beauty brand in India and now owned by HLL forayed into the beauty salon business through franchise outlets • with over 100 franchised outlets across the country Lakme has earned years of experience as a successful franchisor • innovator in a wide range of high quality skin care. and beauty services • before selecting a franchisee the company ensures that the franchisee shares Lakme’s philosophy of excellent service delivery and customer orientation • Franchising enables Lakme to drive down product and inventory costs • Lakme regularly guides and supports its franchisees with standard operating procedures for service quality. marketing and promotional activities . equipment sourcing.

Lake Cool Colours Show. training. • Lakme believes in empowering its franchisees with world class products.• Lakme the franchisor provides extensive marketing support to the franchisees both at the national level and individual level • Lakme carries out advertising campaigns and special events at the national level for the benefit of its franchisees • Lakme for example to extend the service reach of its franchisees organizes and promotes branded shows such as the Lakme Bridal Show. Hot Styles Hair Service Road Show etc. and marketing support .

good value. the company has to deal with powerful.DUNKIN’ DONUTS (educational video case) • what are the key learnings from the video case screened before you just now • Dunkin’ Donuts (the world leader in quick service coffee shop food and beverage category ) has many strengths (quality and freshness. flavor and variety. including Starbucks and Krispy Kreme • the company continues to be a major brand with over $3 billion in sales expected in 2009 • success is attributed to extensive market research conducted before a product is launched . new competitors. convenient locations. strong brand presence) • however.

the company is expanding into the coffee market by offering specialty coffee drinks in addition to its standard drip coffee • but Dunkin’ Donuts will not deviate from its original product offering and continues to offer the consumer quality. rather.• additionally. corporate training enforces the company standards to deliver a consistent product year after year and across all restaurants and franchises • Dunkin’ Donuts does not target one customer segment. it reaches across all demographic strata • promotional campaigns and diversity of locations support this strategy • to meet market demand. convenience. and variety .

insurance brokers.• agents and brokers • an agent is an intermediary who acts on behalf of a service principal (such as a real estate agent) or a customer and is authorised to make arrangements between the principal and the customer • a broker is an intermediary who brings buyers and sellers together while assisting in negotiation on price. and security brokers • agents and brokers do not take title to services but instead deliver right of use to the service by the customer • the travel industry provides examples of agents and brokers . and mode of service delivery • Real estate brokers. time. and demand of service.

SOTC World Tours. Agarwal Packers and Movers etc • Real estate: large builders such as Shobha Developers and Delhi Land Foundation undertake both realty agency and brokerage services for residential. Kuoni Voyages. Patel Roadways.• two main categories of travel intermediaries exist: tour packagers (Cox and Kings) and retail travel agents (Thomas Cook). DTDC. industrial. and commercial properties . and Mahindra Holidays) • the logistics industry also presents good examples of agents: Gati. DHL.

news. education. remote health services. TV sets. multimedia. banking and financial service. cable TV . mobile computing.•Electronic channels • electronic channels deliver information. distance learning. music. and entertainment to consumer and business markets via technology and electronic channels of communication • motion pictures (movies). video gaming. direct-to-home TV. videoconferencing. the Internet • the use of electronic channels of service delivery reduces the challenge of inseparability and allows for a form of standardization through electronic distribution . databases. •Walmart. Inc. • sells more than a brings you the best shopping experience on the Internet • Founded in January 2000.000 products (1 million items) available online which gives customers the convenience of ordering products online and picking them up at a local Wal-Mart .com is a subsidiary of Wal-Mart Stores.• Walmart.

• Nintendo Entertainment Systems: the world champion in the gaming industry loses its market leader position to Sony Play Station • convergence of services marketing applications and technology driven by direct and indirect channels of distribution .

• The 100 year old company of the same name began marketing the Nintendo game machine as ‘Famicom’ a family computer – which doubled up as a video game device once connected to the family TV set. .NINTENDO: the global gaming giant. • The company test marketed its computer in New York in 1984 and by 1991 had achieved a greater penetration with its product than had by any other home computer or personal computer: 30 million Nintendo machines had been sold to consumers. • NEW PRODUCT INVENTION: Nintendo carefully controlled the demand of its video games for its machines by designing the Nintendo machine with a proprietary chip so that the game software cartridges would play on the Nintendo only if they had a complementary compatible chip .one that only Nintendo could insert.

S.• Therefore. a software developer who sought to sell a game software to Nintendo had to license it to the company. Nintendo’s U. . • GLOBAL PRICING STRATEGY: Such control enabled the Nintendo to keep the games scarce and relatively higher priced at $ 40 a cartridge and prevented imitator games from eroding its market share. Nintendo’s licensing agreements required that the software developers do not sell the same game to competitors. sales rose from $800 million in 1987 to $ 3 billion in 1991 resulting in an 80 per cent market share of the global market for video games.

• SEEDING THE MARKET WITH HIGH PRICED NEW PRODUCTS: Sega. no functions other than playing games) . Nintendo’s closest market competitor.product design .need satisfaction .distribution advantages • the product was designed as a family game with user-friendly features (no keyboard. launched a flank attack to blunt the market leader’s edge by introducing a technologically more advanced machine: ‘Genesis’ a 16-bit system in 1991 and ‘Sonic the Hedgehog’ in 1992 • Nintendo launched a ‘fighter brand’ to stop the advance of Sonic in the market with the introduction of the ‘Super Family Computer’ accompanied by a market-skimming strategy with the product priced at US$ 200 • the price of Sonic was revised to match the $200 price tag of Super and both firms seeded the next generation 16 bit products with the sale of a large number of high priced games ($50 per game) • what was Nintendo’s market leadership the result of? .

userfriendly source of entertainment that did not intimidate the user (family computer that played video games) • Nintendo’s Famicom and Super products were sold across toy stores and were priced at just under $100 and $200 a piece • the competitive structure of the global market for gaming machines changed with the entry of Sony: Sony PlayStation (32 bit with graphics. and sound) using a CD-ROM based gaming machine • Nintendo tried to block Sony’s advance with the invention of N64 in partnership with Silicon Graphics (64 bit game machine but still cartridge based) . colours.• Nintendo was successful in meeting an emerging need among middle class families in advanced markets for a simple.

emerged as the market leader displacing Nintendo from the top position by eroding 50 per cent of the company’s market share • Sony PlayStation offered 500 games versus 95 by N 64 with Sony’s CD-ROM based approach making the gaming platform PC compatible rather than game machine compatible (cartridge) • technology and marketing interact in forming a profitable worldwide consumer-oriented industry • Nintendo's online stores allows customers to purchase games and trading card. and player guides .• in five years (1993-98) Sony. parts and accessories manuals. a nicher in the gaming business.

to develop the Britannica as an online resource • The channel strategy was to give content away was spun off in 1999 from Encyclopædia Britannica Inc. is the largest book retailer in the United States.. and for the website to act as a portal that would aggregate content from the Internet • Barnes & Noble. operating mainly through its Barnes & Noble Booksellers chain of bookstores headquartered in lower Fifth Avenue in Manhattan . Inc.• The company Britannica. which owns the Encyclopædia Britannica.

• Before Barnes & Noble created its web site, it sold books directly to customers through mail-order catalogs (direct channel). • It first began selling books online in the late 1980s, but the company’s web site was not launched until May 1997 • The site now carries over 1 million titles in more than 25 languages (direct channel), Inc. is an American electronic

commerce company and is the world’s largest online retailer • Revenue : US$ 19.166 billion (2008) • Operating income US$ 842 million (2008) • Net income: US$ 645 million (2008) • Employees 20,500 (2008)

Jeff Bezos founded, Inc. in

1994 and launched it online in 1995. It started as an on-line bookstore but soon diversified to product lines of DVD, music CDs and MP3s, computer software, video games, electronics, apparel, furniture, food, and toys

gourmet health and personal-care items. kitchen items. consumer electronics. . sporting goods. and clothing.•Amazon has steadily branched into retail sales of software. beauty products.

women’s. and children’s apparel and accessories •Today the company serves more than 1.6 billion customers annually throughout Asia. the Middle East. and Europe • the retailer has distribution presence in more than 30 countries through over 2000 retail outlets .GIORDANO • Let us first understand the company that is profiled in this case study and then attempt an analysis of the company case • Giordano is a Hong Kong based company that was established in 1981 • Giordano is a leading international private label and multi brand retailer of men’s.

the brands easy-going mix of relaxed and casual apparel enhance the global appeal of the brand .• look at the market positioning of the brand…! • Giordano is very clear about its differentiation strategy in global markets • the marketer positions itself as a retailer of casual apparel catering to a market that is young and with a thirst for refreshing fashions and affordable clothes! • “simple pleasure of basic fashion” .

oxford shirts.• the brand prides itself in dressing the youth in a preppy look • the positioning of the apparel brand has attracted the attention of academicians and the global success story has also featured as a HBS case study • jeans. polo neck T-shirts the merchandise can be easily mixed to match the mood. khaki trousers. occasion or place .

and human resource management to deliver “value-for-money” • the case study further demonstrates how a strong and clearly visible emphasis on customer service and value-for-money has resulted in Giordano differentiating itself from its competitors .• What is the three central learnings of this company case • the case study demonstrates the power of a tight integration of marketing. operations.

• the success of Giordano is attributed to five critical factors: 1. Short design to production cycles 5. Effective inventory control and profitable sales turnover . Providing excellent customer service 2. Stringent selection and training of staff 4. Understanding consumers’ needs and wants 3.

the case can be used to… • highlight the applications of marketing strategy: delivered through a clear focus on service staff (selection. and motivation) • and operations (logistics. IT. and communications) • combined with an organizational culture that encourages staff to try new things . training.• from a management perspective.

excellent service has become part of the tangible products sold at Giordano stores . logo. and quality. Describe and evaluate Giordano’s product. business. Giordano sees itself as being more than just a retailer of casual apparel • it was able to successfully incorporate customer service as part of its product • How…? • Besides its brand name. style. • Product Strategy.1. and corporate strategies.

•For instance. Giordano’s “no-questionsasked and no-time-limit” exchange policy can be seen as an augmented product offered by Giordano .

• Giordano focuses on the concept of value-for-money • Giordano is constantly aiming to improve the value of the product • Customers are often encouraged to request certain product adaptations if current products fail to meet their expectations • this can be illustrated by its dedication to training and motivating its front-line staff as well as its no-questions-asked return policy .

2. Should Giordano reposition itself against its competitors in its current and new markets. well-mannered. and helpful [personnel differentiation] . Describe and evaluate Giordano’s current positioning strategy. ever-smiling. and should it have different positioning strategies for different markets? • Giordano’s is positioning on the basis of three strategies: that of “value-for-money” or “quality merchandise at affordable prices” [product differentiation] high level of service provided to customers [service differentiation] • • sales staff are dedicated.

” . logistics and information technology systems: this includes effective supply chain management. excellent organizational communication • Excellence in management of operations. thus delivering “value-for-money. integration of purchasing and selling functions. due to flat organizational structure.• What are Giordano’s Key Success Factors (KSFs) and sources of competitive advantage? Are its competitive advantages sustainable. and how would they develop in the future? • Excellence in design: fast and market-driven new product development. Cost savings from efficient operations are transferred to customers.

• Excellence in service: continual commitment to providing excellent customer service and response. regular evaluations of service standards at store level and mystery shopping).. training and remuneration of frontline staff) and information systems.g.” consistent execution of advertising and promotion to strengthen brand image.. . selection. and performance monitoring (e.g. (e. brand equity for excellent service and ability to deliver “value-for-money.• Excellence in marketing and branding: strong positioning.


• ‘process’ is an element of the extended marketing mix of services marketing • a process in services marketing outlines the procedures and methods to be followed to produce and deliver a service • let us first fully understand what a process means in services marketing • a process comprises a series of logical steps that can be broken down and flowcharted to achieve efficiency • the outcome of a process in services marketing is the design and management of new services .

service line extensions. knowledge process. medical imaging. and service improvements • • • radical innovations are new services for markets as yet undefined eBay is a company that epitomizes radical innovations eBay is the world’s largest Internet retailing portal with over 30 million active users and well over $ 20 billion merchandise traded across buyers and sellers • innovations such as remote health systems: where medical diagnosis. and video enabled surgery have revolutionized the reach of medical expertise across continents instantly • the business process.• service processes create major or radical services. and engineering process outsourcing tasks never existed before and today transaction processing is the mainstay of many ITeS players .

an airline offering new routes.• Service line extensions represent augmentation of the existing service line such as a restaurant offering new menus. automated voice response systems installed for extending tele banking assistance . and a university offering new courses • services improvements represent perhaps the most common type of service innovation to allow for the faster execution of an existing service process: on the spot bank account opening facility at SBI. automatic teller machines that extend the service process of retail banking. credit card payment functionality at ATMs.

• • • • two types of processes are available for a service provider Line or flow operations Job Shop Operations in the line or flow operations process the activities required to produce or deliver a service are arranged in a logical flow or assembly line • high coordination among service personnel and the speed of operation are necessary for the process to run smoothly • In this process the output of a particular stage becomes an input for the next stage • the flow process is adopted by service providers which require a continuous operation to produce a standardized service without any deviations • quick service restaurants are classic examples of the line process .

French fries and so on • the food components are processed and cooked in a sequence and finally integrated on to the serving plate • this process in quick.• picture this… • You and your group of friends have entered a your favourite food joint and placed an order for the meal • • you find the restaurant serves you the meal in 10 minutes flat the cooks followed a line operations wherein the fast food meal is segregated into components – veggies. toppings. pizza bases. breads. meat. sauces. and manages high demand . efficient. cheese spreads.

the coffee decoction is uniform but added ingredients customize the coffee drink into basic. regular.• The job shop process on the other hand determines the activities and their sequential arrangement based on the type of job at hand • this process is used to offer various services and the need a similar work bench • this process allows a service provider to customize services according to customer needs using one type of process set up • for example your favourite café that you hand out at serves a Cappuccino. and speciality offerings . Latte. and Espresso using the same process set up at the food counter: the coffee beans are ground and pressed in the same coffee making machine.

it is also critical that the new service development process involves both employees and customers • service personnel or employees are often the service itself . the marketing objective of service development and design is to create new services for the marketer • because services are produced and consumed simultaneously and often involve interaction between employees and customers.• to sum up.

and evidence) to examine the precise intersects in the blueprint where service delivery fails . points of contact.• Service blueprinting • service blueprinting is a service process that maps all the processes and elements involved in service creation and delivery including service personnel and customers • service blueprinting is a process in service design that attempts to reduce the variability of the service by standardizing the serviceperformance process: and thereby adding an assurance against service failure and adding value to the customer • service blueprinting is a flowcharted tool that plots on a flowchart three elements (process.

consuming. and evaluating a service • when reading the flowchart of a service blueprint customer role translates to customer actions and corresponds to the horizontal flowchart notation of the line of interaction • in a blueprint the first horizontal line shows the point of interaction between the service personnel and the customer • a vertical line passes through a horizontal line to show a direct contact between a customer and a service provider has taken place . support process • PROCESS = Customer role/ line of interaction : all steps performed by a customer in selecting. onstage and backstage employee actions.• Three elements of service blueprinting are used in designing service products: customer role. purchasing.

distribution planning etc. sales presentation. operations.• POINTS OF CONTACT or onstage and backstage or backstage employee actions • onstage and backstage employee actions: onstage employee actions can be any activity performed by the service employee that can be seen by the customer (order taking. demo etc) • backstage employee actions are those activities that are performed by the service personnel necessary to support the onstage service personnel: billing. • while reading the blueprint look for the line of visibility: line that divides onstage and back stage employee actions .

•Support Processes are processes by service personnel to produce and deliver services (training is a support process) • to read the support process look for the line of internal interaction or the third horizontal line which divides the internal process that assist the service personnel in producing and delivering a service. a vertical line passes through the horizontal line to indicate a service encounter • EVIDENCE or Physical Evidence .

the points of customer contact. and the evidence of service from the customer’s point of view.Service Blueprinting • A flowcharting tool for simultaneously depicting the service process. Service Blueprint Proce ss Points of contact Eviden ce .

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 .

Service Blueprint Components .

Blueprint for Express Mail Delivery Service PHYSICAL CUSTOMER EVIDENCE Truck Packaging Forms Hand-held Computer Uniform Customer Calls Customer Gives Package Truck Packaging Forms Hand-held Computer Uniform Receive Package CONTACT PERSON (On Stage) (Back Stage) Line of interaction Driver Picks Up Package Deliver Package Line of visibility Customer Service Order Line of internal interaction SUPPORT PROCESS Dispatch Driver Airport Receives & Loads Fly to Sort Center Load on Airplane Sort Packages Fly to Destination Unload & Sort Load On Truck .

Blueprint for Overnight Hotel Stay Service PHYSICAL EVIDENCE Hotel Exterior Cart for Parking Bags Desk Registration Papers Lobby Key Elevators Hallways Room Cart for Bags Room Amenities Bath Menu Delivery Tray Food Appearance Food Bill Desk Lobby Hotel Exterior Parking Check out and Leave CUSTOMER CONTACT PERSON (Back Stage) (On Stage) Arrive at Hotel Give Bags to Bellperson Check in Go to Room Receive Bags Sleep Shower Call Room Service Receive Food Eat Line of Interaction Greet and Take Bags Process Registration Deliver Bags Deliver Food Process Check Out Line of Visibility Take Bags to Room Take Food Order SUPPORT PROCESS Line of Internal Interaction Registration System Prepare Food Registration System .


• the primary focus of the case is on the introduction of technology as a means of delivering services previously delivered by service personnel • the Quality Improvement case examines the potential introduction of an automated patient check-in system in a health care clinic • the case illustrates and discusses issues related to new service development and introduction • some pricing and promotion issues are also raised in the E&Y case .

•Innovation in services •Delivering services through technology •New service development and implementation •Customer acceptance of new technologies • Describe the basic situation in the Quality Improvement case. What decision is Allan Moulter facing? What are the issues. challenges and tradeoffs? •  Allan Moulter. CEO of Quality Care has received a consultant’s report recommending that they install an automated check-in system for their healthcare clients The issues revolve around costs v. Neither are clearly defined at this point in the case . benefits of implementing the new system.

• All of this would be accomplished by the patient inserting his/her card into the computer and entering information as requested . etc.• The recommended computer system would: •  Ask questions about the person’s condition and reason for the visit • Route the patient to the right staff person • Collect information that could later be used for insurance reporting purposes.

What would you do if you were Allan Moulter at Quality Care? • effect of new technology on customer satisfaction • Quality Care should develop and install the new reception system. and provide a strong financial return with a relatively small risk • The big payoff for installing this particular system is stated as “in­creased customer retention over the long term . improve employee morale.3. It will increase value to the customer as well as overall customer satisfaction.

STARBUCKS: DELIVERING CUSTOMER SERVICE • Over the past two decades Starbucks has become an extremely popular phenomenon and is the dominant specialty-coffee brand in the world with more than 4.500 retail outlets in North America alone • an aggressive retail outlet expansion strategy in mind and was pursuing other avenues of growth .

• at the same time. and (3) its customer base had changed in significant ways • to address these problems. the company had gathered evidence that (1) customer satisfaction was on the decline. however. (2) its brand image was showing signs of strain. Starbucks was considering investing an additional $40 million in labor in its stores .