By Venkatesh.N

ByVenkatesh.N

Koshys college

1st Chapter SERVICE MANAGEMENT

Service

>A service is an action of doing something to some one which is essentially (purely) intangible…

>“Service is an act or performance offered

by one party to another that is essentially

intangible and does not result in the

ownership of anything.”

What is Management Management is an individual or a group of individuals that

accept responsibilities to run an organisation. They Plan, Organise, Direct and Control all the essential activities of the organisation. Management does not do the work themselves. They motivate others to do the work and co-ordinate (i.e. bring together) all the work for achieving the objectives of the organization.

Management brings together all Six Ms i.e. Men and Women, Money, Machines, Materials, Methods and Markets. They use these resources for achieving the objectives of the organisation such as high sales, maximum profits, business expansion, etc.

What is service management

A structure basic of supply chain management that connects actual company sales and the customer. The goal of service management is to maximize service supply chains as they are typically more complex that the supply chain of finished goods. The purposes of service management is to reduce high costs by integrating products and services and keep inventory levels smaller.

Supply chain management

Supply chain management is a total system approach to managing the entire flow of information, materials, and services from

raw -materials suppliers through factories warehouses to the end customer

Contd…..

A supply chain is the system of organizations, people, activities, information and resources involved in moving a product or service from supplier to customer.

Supply chain activities transform raw materials and components into a finished product that is delivered to the end customer.

Supply chain

Supplier Manufacturer Distributor Retailer Customers

Supply chain management

Classification of service It is required to design & apply marketing techniques to

completely satisfy the customer & increase profit & identify new emerging services

Classification can be done on the following basis Classification by industry Classification by target effect Skill level of service provider (professional/Non

professional) Labour intensiveness(people-based/ equipment-based) Degree of customer involment

Classification of service

Marketable vs unmarketable service Producer service and consumer service The level(degree) of service in the

product Ex:-pure service(teaching) Independent serviceadded to the

product to make the product more attractive.

Degree of consumer participation

Classification by industry Entertainment industry Education Telecommunication Transportation Public utilities Government services Health Hospitality industry Business services

Classification by target effect

Based on degree of customer involment People processing:- service aimed at physical care

Ex:-health care, clinics, restaurants, hospital, hair stylist, fitness centers.

Mental Stimulus processing:- services aimed at mind of customer Ex:-education, information, entertainment, consulting, psychotherapy.

control processing:- Service aimed at physical possession & tangible assets Ex:- repair & maintance, Laundry, repair Services, House cleaning services

Contd….

Information processing:- service for tangible assets Ex:- banking legal consultation, brokerage , financial service.

Skill level of service provider:- Teacher Doctor Engineer Accountant

Lobour Intensiveness

Mechanic Electrician Labour Plumber Artisan

Degree of customer contact

High degree (every day)-TV channels, Mobile etc…..

Moderate Degree(regular)- teacher, barber, washer man etc…

Low degree(occasional)-priest, doctor etc…

Layman or layperson:-(a professional person)

Characteristics of services

Characteristics Intangibility: It cannot be taste, feel & smell before they are bought

unlike physical product. The intangibility creates a feeling of uncertainty about the outcome of service.

Inseparatebility: Services cannot be separated from the services provided

(we cannot separate the service from the product) in fact the product delivers consumption of a service.

Variability: Services of highly variable. It is almost impossible to have

the same service from the same seller the second time.

Contd….Customer participation: Service product is not a one side activity customer

are core product of services. The product quality of services greatly depends upon the ability, skills and performance of the employees as well as the activity and performance of the customer.

No ownership here we cannot transfer ownership from one

person to other person that particular service belongs to particular person because its purely intangible

Pershability They cannot be stored

Goods / Services

Service encounter

A service encounter is a period of time during which customer interact directly with a service. It is also called as "Moment of Truth“

Service encounters are transactional interactions in which one person (e.g., a vendor, office clerk, travel agent) provides a service or good (e.g., a product, an appointment, airline tickets) to another person.

Service blueprint

The blueprint is an operational tool that describes the nature and the characteristics of the service interaction in enough detail to verify, implement and maintain it.

Blue print

Steps in developing service blue print

Step 1:- identify the process to be blueprinted-

in this stage the company should clearly mention the service process that should be blueprinted(it means the company should have a clear picture of the objective behind blueprinting)once the purpose is clear , the other requirements can neatly be arranged.

Step 2 :- identify the customer or customer segment-

identifying customer segment is a very important aspect of service blueprinting . the content of the service delivery system and condition of facilities are largely dependent on the selected customer segment

Step 3:- Map the process from the customer point of -view

As we said earlier , the service blueprint aims at providing maximum customer convenience and satisfaction. This point should be kept in mind at all the level of service designing process.

Step 4:- Map the contact employee actions, onstage and back stage

the design should be describe in detail and responsibilities for all the individuals involved in the service delivery system(there must not be any changes in the statement of roles and responsibilities if necessary the employee should maintain a record)

Step 5:- link customer and contact persons activities to need support functions

each performed activity is expected to produce some value to the customer . If any of the activities are not adding any value to the customer, they will be treated as unnecessary such kind of things we have to remove.

Step 6:- Add evidence of service at each customer action step

it is necessary to illustrate to the customer what he sees and receives at each stage of customer encounter and experience.(this can be done through photos or videos. This helps customer in knowing the expected service and the service received by him.

GAP Model

The GAP Model The Service Quality Model, also known as the

GAP Model, was developed in 1985. It highlights the main requirements for

delivering a high level of service quality by identifying five ‘gaps’ that can lead to unsuccessful delivery of service.

o GAP 1: Gap between consumer expectation and management perception(awareness): arises when the management or service provider does not correctly identify what the customers wants or needs.

o GAP 2 : Gap between management perception and service quality requirement: this is when the management or service provider might correctly perceive (identify) what the customer wants, but may not set a performance standard.

o GAP 3: Gap between service quality requirement and service delivery: may arise pertaining to the service personnel. This could arise due to there being poor training, incapability or unwillingness to meet the set service standard

GAP 4 : Gap between service delivery and external communication: consumer expectations are highly influenced by statements made by company representatives and advertisements. The gap arises when these assumed expectations are not fulfilled at the time of service delivery.

GAP 5: Gap between expected service and experienced service: this gap arises when the consumer misunderstand the service quality.

Product And Service Marketing Mix

Product Goods/service manufactured by organizations

for the end-users are called products/Services Products can be of two types - Tangible

Product and Intangible Product (Services)An individual can see, touch and feel tangible products as compared to intangible products.

A product in a market place is something which a seller sells to the buyers in exchange of money.

Good example:- here you can see both product as well as service (tangible and intangible) Once you open the saving account , current account, or demat account you will receive a card documents from the bank that is tangible and once u started doing transaction (receiving service from the bank )that is intangible.Bank will be providing life insurance(product) bond that bond itself tangible and later you will be receiving service that is intangible

Price

it is a key element of the marketing mix. All the other elements represent costs—for example, expenditure on product design (product),advertising and salespeople (promotion), and transportation and distribution (place). Marketers, therefore ,need to be very clear about pricing objectives, methods and the factors that influence price setting

Place refers to the location where the products are available and can be sold or purchased. Buyers can purchase products either from physical markets or from virtual markets. In a physical market, buyers and sellers can physically meet and interact with each other whereas in a virtual market buyers and sellers meet through internet.

Promotion Promotion refers to the various strategies and ideas

implemented by the marketers to make the end - users aware of their brand. Promotion includes various techniques employed to promote and make a brand popular amongst the masses.

Promotion can be through any of the following ways:

Advertising Print media, Television, radio are effective ways to entice

customers and make them aware of the brand’s existence. Billboards, hoardings, banners installed intelligently at

strategic locations like heavy traffic areas, crossings, railway stations, bus stands attract the passing individuals towards a particular brand.

Contd…

Taglines also increase the recall value of the brand amongst the customers.

Word of mouth One satisfied customer brings ten more customers along

with him whereas one dis-satisfied customer takes away ten more customers. That’s the importance of word of mouth. Positive word of mouth goes a long way in promoting brands amongst the customers.

People

People - The individuals involved in the sale and purchase of products or services come under people.

Peoples are the ultimate users of product/service Here service provider can get feedback about

the banking service and there is chance of re design the service or modify to fulfill their need and attract the more number of customer.

Process

Process - Process includes the various mechanisms and procedures which help the product to finally reach its target market

Service process is the way in which a service is delivered to the end user

Process is something related to How do people consume service What process do the have to go through to

acquire the service

P.Evidence With the help of physical evidence, a marketer

tries to communicate the USP’s(unique selling propositions) and benefits of a product to the end users.

Ex:-if a customer is going to meet bank employ to know about the home loans while explaining a service provider will be showing some broachers , Documents, bonds , company website , these are all physical evidence.

Managing the service sector

Service marketing focus on selling the service in the best interest of users/customers, marketing a service is meant for marketing something intangible. It is marketing a promise.

Service management includes formulation of a sound mix for marketing, such as product,price,place,promotion,people,proces and physical evidence.

The aim of service management is: To understand the utility (usefulness) the customer receive

by consuming or using the service offered by the organization

Contd…. To understand how the organization( personnel,

technology, physical resources ,system and customer) will be able to produce and deliver this utility.

To understand how the organization should be developed and managed so that intended(future) quality can be achieved.

To make the organization function so that this quality can be delivered on a continuous basis

Functions of service management Marketing objectives:- the marketing objectives may be

short term or long term. They have to be in coherence(unity) with the organizational goals

Planning:-after setting objectives the organization should plan to achieve those objectives. This includes sales forecast, marketing programmes and marketing strategies

Organizing:-the organizing functions involves structure of marketing organization, duties responsibilities and powers of various members of the marketing organization

Coordination :-it involves coordination of among various activities such as sales forecasting, product planning , product designing and development, transportation, warehousing etc..

Directing:-Direction In marketing management refers to the development of new markets, employee communication, motivation and control of employees.

Control;- Controlling refers to the effectiveness with which the marketing plan is implemented.(it involves purpose of standards , evaluation of actual performance and adoption of corrective measure).

Staffing:-the marketing manager coordinates with human resource manager to hire the staff with the desired capacity.(here in this step the company is recruiting the employees to a particular job to run marketing actives)

Analysis and evaluation:-marketing management involves tha analysis and evaluation of the productivity and performance of each employees.

What is Customer Loyalty?

Customer loyalty is all about attracting the right customer, getting them to buy, and buy in higher quantities and bring you even more customers. However, that focus is not how you build customer loyalty.

In short, you build customer loyalty by treating people how they want to be treated. Does your marketing plan include strategies and tactics for customer loyalty & customer retention?

Marketing Plan

You build loyalty by… keeping touch with customers using email marketing,

thank you cards and more. treating your team well so they treat your customers

well. showing that you care and remembering what they like

and don’t like. You build it by rewarding them for choosing you over

your competitors.

“The function of business is to attract and maintain customers.”

Why Do You Want Loyal Customers?

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?

?

?

Contd….

Measurements

Customer Satisfaction

Customer Loyalty

“I expected…I got it”

“I got more than I expected”

C

People don’t quit organizationthey quit BOSSES!

Perceived ValueDefined by your

customer

Differences B/W Goods and Services