service marketing unit 4

7/29/2019 service marketing unit 4

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UNIT IV

SERVICE DELIVERY


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Classification of Service Personnel

Based on the level of interaction

Low contact service

High contact service

Based on the type of service provided

Consumer service employees Professional service employees

Based on the frequency and length ofcustomer interaction

Contact personnel Moderate contact personnel

Back office staff

Support staff

Management


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Job Characteristics

Skill variety

Task identity

Task significance

Autonomy

Feedback

Empathy


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The Control Issue

Customers

FirmPersonnel


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Increasing Control

Physical control

Through leadership

Through rewardsThrough education

Behavioral control

Cognitive control

For the firmFor the customer


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Types of Conflict

Employee-role

Employee-organization

Employee-employee

Employee-customer

Customer-customer

Customer-role

Customer-organization


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Employee-Role

Conflict

1. Inequality dilemma

2. Dress codes

1. Screen applicants

2. Provide instructions

and training3. Develop procedure

for employees to

complain


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Employee-Organization Conflict

Two-boss dilemma

1. Instruct employees in

policies and goals of

firm.2. Empower employees.

3. Support employees

decisions.


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Employee-Employee Conflict

1. Lack of clear communication.

2. Lack of chain-of-command.

3. Conflict of personalities.4. Competition for customers.

5. Difference in perceived

work loads.1. Determine cause of

conflict.

2. Gather information.

3. Explore solutions.

4. Involve each person

in a resolution plan.

5. Follow-up.


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Customers Conflicts

Customer-Customer

Customer-Role

Customer-Organization

Customer-Employee 1. Provide instruction.2. Analyze policies.

3. Negotiate.

4. Instruct in roles.

5. Educate newcustomers.

6. Teach people skills

to employees.


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Dealing with Conflict

Avoidance of contact.

Psychological

withdrawal.

Direct confrontation.

Retaliation.( avoiding

negative communication )


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Hire the Right People

The old saying People are your most

important asset is wrong.

The RIGHT people are your most

most important asset.

Jim Collins


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Staff Selection and Recruitment

Preliminary stage

Identification of vacancy

Develop job profile

Consider internal sourcesConsider using specialist recruitment agency

Advertise - internally and externally

Process applications

Screen applications for shortlist


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Selection stage

Arranging interviews; venue, timing, date

Determine process for selection;

formal/informal interviews use of pre-

selection test, presentations

Conducting interviewsTesting

Offer / Acceptance

Formal appointment Follow-up stage

InductionTraining

Ongoing staff development and appraisal


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Training and Development

Identification of training needs

Implementation of training

programmes

Evaluation of training effectiveness


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Human Resources Management Issues

Recruitment and selection

Training and development Setting up new modes of operation, e.g.quality circles

Management of change

Team briefings, communications strategies

Staff suggestion schemes

Internal communications Administration(pensions, insurance) Appraisal schemes

Pay structures

Staff development and support

Trade Union liaison

Conditions of service Discipline and grievance procedures

Termination issues (redundancy, ill-health)Capability


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Designing Service Processes

Customer participation in the process

Location of service delivery

The service itself

High-contact or low-contact services

Degree of standardization

Complexity of the service

Specific Characteristics of Service Process Design and Implementation


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Spectrum of Service Processes - The Service Process Matrix

Professional Service

Doctors

Lawyers

Accountants

Architects

Mass Service

Retailing

Wholesaling

Schools

Retail aspects of

commercial banking

High

Service Shop

Hospitals Auto repair

Other repair services

Service Factory

Airlines Transportation

Hotels

Resorts and recreation

Low

HighLow

Degree of

Labor

Intensity

Degree of interaction and Customization


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Planning a Service Process

Technology

Conversion process

Equipment

Flow of process

Service personnel

Service location

Layout design

Organizational structure


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Distribution of ServicesThe Place


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Service Transactions

Customer goes to the service provider (or

intermediary)

Service provider goes to the customer

Interaction at arms length (via the Internet,

telephone, fax, mail, etc.)

There are 3 types of interactions between customers andservice firms


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Channel Options

Extensive

distribution

Selective

distribution

Exclusivedistribution


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Service Location

Proximity

Image

Parking facility

Convenience

Accessibility to other services

Competitive advantage


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FUNCTIONS OF SERVICE

INTERMEDIARIES

An intermediary assists in making the service available

to customers at a place and time that is convenient to

them.

The intermediaries often share the risk of providing theservice when they contribute their own capital to

acquire the equipment and deliver the service.

The intermediaries provide sales support at the point ofsale. They collect feedback from the customers

regarding the service rendered.


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Often intermediaries provide wider choice of

services including that of the competitors.

They offer advice to the customers and guide them

to choose the service that matches their need. E.g.

Tour operators and financial service agents.

Intermediaries provide after sales support to the

customers making the service more accessible.

E.g. An insurance agent who gives advice aboutmaking a claim and handles much of the paper

work involved in making the claim.


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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 2 lakh people employed in offices in Mumbai get their lunch

from the Dabbawallahs who have a wide distribution network that is

extremely reliable. The company sends around 50,000 direct mailers toofficegoers in Mumbai by hanging a mailer to the handles of meal dabbas. The

distribution of these mailers is timed perfectly- they are distributed around the

end of the financial year when most of the employees are thinking of aving on

tax and planning to invest in some financial policies. The first line of the

mailer aims to attract the customers. It reads, Yes! I want to save more taxand add to my retirement savings. Interested customers are required to fill in

the forms and mail them to the company specifying a time and date convenient

for them to interact with the companys agent. Further, the company has also

tied up with Dominos Pizza and BPCL loyalty-card holders in some cities to

expand its distribution network.


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Distribution Channel Functions

Information

Promotion

Contact

Matching

Negotiation

Physical

Gathering and distributing marketingresearch about the environment

Developing and spreading persuasivecommunications about an offer

Finding and communicating with prospectivebuyers

Shaping and fitting the offer to the buyersneed

Agreeing on price and terms of the offer soownership or possession can be transferred

Distribution: transporting and storing goods

FinancingAcquiring and using funds to cover the costs

of channel work

Distribution Key Function

Channel

Risk TakingAssuming financial risks such as the inability

to sell inventory at full margin


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Channel Options for Service Providers

AGENTS

SE

RV

IC

E

PRO

VI

D

ER

C

U

S

T

O

M

ER

S

FRANCHISEES

E- CHANNELS

BROKERS


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Direct Distribution

Advantages

Control Healthy customer

relationships

Flexibility and

confidentiality

Disadvantageous

Financial risk Lack of knowledge

Direct distribution of services takes place when a serviceprovider directly delivers the services to the customer without

any intermediaries in the process.


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Franchising

Franchising: A contractualarrangement where a wholesaler

or retailer (the Franchisee) agreesto make some payment and to

meet the operating requirements

of a manufacturer or other

franchiser in exchange for theright to use the firms name and

to market its goods or services


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Franchising

Franchising is the most often used channel for thedistribution of services.

It is like the retail selling of services.

The franchisers are authorized to distributeservices to the end customers, on behalf of theservice principal.

Agreements and contracts are essential documentsin franchising.


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Franchising

Advantages DisadvantagesFranchisor

1. Capitol for growth

2. Faster growth

3. Additional management

4. Additional income

1. Lower potential profits

2. Controlling service quality

3. Controlling firm image

Franchisee

1. Lower risk

2. Established brand name

3. Successful business plan4. Expert assistance

1. Franchisee fees

2. Lack of freedom3. Controlled by franchisor


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Agents and Brokers An agent is an

intermediary who isauthorized to negotiate on

behalf of the service

principal with the

customers.

Brokers are middlemen

who bring buyers andsellers together and assist

in negotiation.

Advantages

Low selling and distribution cost

Specialized skills and knowledge

of the agents and brokers

Wider representation in the

market

Customer choice


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Electronic Channels Service companies that adopt

electronic channels fordistribution do not require direct

interaction with customers.

Telephone and television have

been the original channels of

distribution through the

electronic media;

New additions to this

distribution channel include the

Internet, which has come to play

a very powerful role.

Advantages

Lower costs Increased customer

convenience

Increased bargaining power of

the customer

Extensive distribution

Ability to customize services

and gain quick feedback

Disadvantages

Uncontrolled price

competition

Customer variability

Security challenges

service marketing unit 4

Documents

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