BITM 2010-12 - Services Mktg - 07 - Service Decisions

8/7/2019 BITM 2010-12 - Services Mktg - 07 - Service Decisions

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Girish Ketkar Session 07Services Marketing

BITM 2010-12 (Semester 2)

Service Decisions

Session 07



Agenda

Core, expected, augmented and potential services

New service decisions


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Reading

Services Marketing: Integrating Customer FocusAcross The Firm

(Zeithaml, Bitner, Gremler, Pandit)

Chapter 9: Service Innovation and Design

Services Marketing: People, Technology, Strategy(Lovelock, Wirtz, Chatterjee)

Chapter 4: Creating the Service Product



Reading

Service Marketing: Concepts, Applications and Cases(Rampal, Gupta)

Chapter 14: Product

Developing Services Consumers Want

by John Senior Harvard Business Review - Blogs - Best Practices, 21 Nov 2008


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Reading

R&D Comes to Services by Stefan Thomke

Harvard Business Review, Apr 03

Stop Trying to Delight Your Customers

by Matthew Dixon, Karen Freeman, and Nicholas Toman

Harvard Business Review, Jul-Aug10



Word of Mouth

CommunicationsPersonal Needs Past Experience

Service Delivery

(including pre- and post-contacts)

Expected Service

Perceived Service

External Communications toConsumers

Consumer

Marketer

GAP 3 GAP 4

GAP 1

GAP 5

GAP 4

Context

Management Perceptions ofConsumer Expectations

Translation of Perceptionsinto Service Quality Specs

GAP 2


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New Service Development

CSF:

Involvement of customers and employees (especially front-

line staff) at appropriate stages



Stages in New Service Development

Business strategy development or review

New service strategy development

Idea generation

Concept development and evaluation

Business analysis

Service development and testing

Market testing

Commercialization

Post-introduction evaluation

Implementation

Front-end

planning


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Business Strategy Development or Review

Define or review the organizations vision, mission,strategy

New service strategy must fit within organizations

vision, mission, strategy



Vision / Mission / Strategy (examples)

Jet Airways mission is to be the most

preferred domestic airline in India. It

will be the automatic first choice carrier

for the travelling public and set

standards, which other competing

airlines will seek to match.

Jet Airways will achieve this pre-eminent

position by offering a high quality of

service and reliable, comfortable and

efficient operations.

SpiceJets mission is to become Indias

preferred low-cost airline, delivering the

lowest air fares with the highest

consumer value, to price sensitive

consumers. We hope to fulfill

everyones dream of flying!

More and more Indians are traveling for

business and pleasure, and everyone

needs to save both time and money.

SpiceJets vision is to address that and

ensure that flying is for everyone.

Source: Respective company websites (accessed on 01 Feb 11)


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1st Source is a partnership of people

bound together by:

Our Mission to help individuals,

institutions, businesses and

communities achieve security, build

wealth and realize their dreams.

Our Vision viewing the future while

mapping goals that are ambitious,

diverse and within our reach.

ING DIRECT exists to help you save your

money.

We do business online, over the phone

and by mail.

Without the overhead and high

operational costs of other banks, we can

pass those savings onto Customers.





Mission

To inspire hope and contribute to health

and well-being by providing the best

care to every patient through integrated

clinical practice, education and research.

Primary value

The needs of the patient come first.

Our Mission

To operate as a world-class heart

hospital, incorporating the latest

technological advances and ethical

practices to provide quality heart care at

reasonable cost.



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New Service Strategy Development

Service

developmentDiversification

Share buildingMarket

development

Current

customer segments

New

customer segments

Markets

New

services

Existing

services

Offerings

Q: What would be examples of these four growth opportunities for

Sri Balaji Society?



Idea Generation

Several methods

Brainstorming

Soliciting ideas from employees

Customer contact personnel as well as back office staff

Learning from competitors

Collaborating with vendors, partners, competitors

Empathic design

Observing how customers use firms products and services

Remember Thomson case study in the session on Segmentation?

Soliciting ideas from customers

User groups, social networks


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Idea Generation

CSF:

Formal mechanism for ensuring ongoing idea generation

and evaluation

e.g. Innovation & Development Team, Bank of America

Ref: R&D Comes to Services by Stefan Thomke (HBR, Apr03)



Service Concept Development

Clear definition of the concept

Customer needs addressed by the service

Features, characteristics, benefits

Reasons why customers should purchase the service

Roles of customers and employees

Levels of service

Core, Expected, Augmented, Potential

Core, Supplementary


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Business Analysis

Verify economic feasibility Demand analysis

Revenue-cost-profit analysis

Verify operational feasibility

Personnel

Delivery systems

Facilities



Service Development and Testing

Detailing the service concept

Testing for consumer acceptance

Translating into implementation plan

CSF: Involvement of all stakeholders

Customers

Front-line staff, marketing, HR, operations

Service blueprinting


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Service Development and Testing: CSF

The I&D Team created a prototype branch in the banks Charlotteheadquarters where team members could rehearse the steps

involved in an experiment and work out any process problems

before going live with customers. By the time an experiment was

rolled out in one of the Atlanta branches, most of the kinks had

been worked out.

The use of the prototype center reflects an important tenet of

service experiments: Design and production problems should be

worked out off-line, in a lab setting without customers, before the

service delivery is tested in a live environment.

R&D Comes to Services

by Stefan Thomke (HBR, Apr03)



Market Testing

Test the service and other marketing mix elements

Key challenge

Difficult to test new service in isolation, because

New service offerings are often intertwined with the delivery

system for existing services


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Market Testing

Read the paragraph:

The challenges in applying the discipline of formal R&D

processes to services whether the variable

youre testing for is the one that actually causes the effect

you observe.

R&D Comes to Services by Stefan Thomke (HBR, Apr03)



Commercialization

Going live!!

CSFs:

Build and maintain acceptance of new service among

service delivery personnel

Monitor all aspects of the service during introduction andthrough the complete service cycle


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Post-introduction Evaluation

Ongoing review of and changes in delivery processes,staffing, or marketing mix based on market feedback



READ !!


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Types of New Services

Read:

Types of Service Innovations

Chapter 9, Page 266

Services Marketing: Integrating Customer Focus Across The Firm

by Zeithaml, Bitner, Gremler, Pandit

A Hierarchy of New Service Categories

Chapter 4, Pages 109-110

Services Marketing: People, Technology, Strategy

by Lovelock, Wirtz, Chatterjee



Exercise

Write down the service elements for hotel stay

service

For example:

For airline service, some of the elements could be:

Check-in Baggage handling

Transportation from city A to city B

Onboard services: food & beverages; duty-free shopping;

communication facilities; internet facilities

Pick-up and drop service between home/hotel and airport


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Levels of Service

Core-Expected-Augmented-PotentialTheodore Levitt

Core-Supplementary

Lovelock, Wirtz, Chatterjee



Core-Expected-Augmented-Potential

Core Need

Core Benefit


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Exercise (contd.)

Classify the service elements for hotel stay into: Core

Expected

Augmented

Potential



Core-Supplementary

Core service

What is the customer really purchasing?

What business are we in?

Supplementary services

Services that improve/enable the core service Facilitating services

Enabling the use of core service

Enhancing services

Improving the appeal and value of core service


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Supplementary Services

Facilitating Services

Information

Order taking

Billing

Payment

Enhancing Services

Consultation

Hospitality

Safekeeping (Caretaking)

Exceptions



The Flower of Service


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Information elements Examples:

Instructions for using the core/supplementary services

Terms & conditions

Pricing information

Order taking elements

Examples:

Application for membership of a club Reservation and check-in at a hotel

Placing an order through website




Billing elements

Examples:

Monthly/quarterly billing statements

SMS alerts

Bills generated at check-out counters

Payment elements

Examples:

Cash handling, Returning change

Online payments using credit cards or auto-pay facilities

Gift coupon redemption


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Enhancing Services

Consultation elements Examples:

Advising (such as: barber recommending a particular hair-style)

Counseling (such as: training institute helping a student choose

the right course)

Hospitality elements

Examples:

Waiting area and amenities

Offering transport to and from service site

Availability of shopping carts from check-out counter to parking lot



Enhancing Services

Safekeeping/caretaking elements

Examples:

Cloakrooms / coatrooms in restaurants

Safe deposit boxes in hotel rooms

Exceptions elements Examples:

Special requests (such as: availability of Jain meals in flights)

Handling special communications (such as: complaint handling)

Problem solving (such as: help desk facilities)

Restitution (such as: refunds)


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Exercise (contd.)

Classify the service elements for hotel stay into: Core

Supplementary

Facilitating

Information, Order taking, Billing, Payment

Enhancing

Consultation, Hospitality, Safekeeping/caretaking, Exceptions



Service Decisions

Other Decision Variables

Range

For example

Hotel stay: Ordinary rooms, Executive rooms, Deluxe rooms

Air travel: Economy class, Business class, First class

Quality levels

Reliability, Responsiveness, Assurance, Empathy, Tangibles

Brand

Guarantees

Service recovery


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What We Covered Today

New service decisions Stages in new service development

Growth opportunity matrix

Share building

Market development

Service development

Diversification

CSFs, Challenges

Types of new services



What We Covered Today (contd.)

Levels of service

Core-expected-augmented-potential

Core-supplementary

Core services, Facilitating services, Enhancing services

The Flower of Service

Other decision variables

Range, Quality levels, Brand, Guarantees, Service recovery

Case study: Bank of America

BITM 2010-12 - Services Mktg - 07 - Service Decisions

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