Service marketing(final)

8/7/2019 Service marketing(final)

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Service Management

Ritesh Lal


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Major Sectors of Indian

Economy

Primary Sector

Secondary Sector

Tertiary Sector


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Service Management

A service is an act or performance offered

by one party to another

An economic activity that creates valueand provides benefit for customers at

specific times and places by bringing

about a desired change in, or on behalf

of, the recipient of the services


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The Service Sector

The Service Sector has been growing at

a rate of 8% per annum in recent years

More than half of our GDP is accountedfrom the Service Sector

This sector dominates with the best jobs,

best talents, and best incomes


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Difference between Goods &

Services

On the Basis of:

Ownership

Intangibility

Perishability

Variability or Heterogeneity

Inseparability


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Dissatisfaction level in Service

Industry vs. Manufacturing Industry Service based on calculated profit

Increasing use of self-service & technology based

service

Customers expectation are higher because of

excellent service at other place

The intensely competitive job market results in less-

skilled people working in front line; talented workers

soon get promoted or leave for better prospects Many Cos give only lip-service to customer focus and

service quality

Delivering consistent, high quality service is not easy


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Customer complaints

It pays to resolve customer complaints

On an average only 5 % dissatisfied customers

complain. Others simply go over to thecompetitor

A satisfied consumer speaks to an average of 3

people on his/her experience

A dissatisfied consumer gripes to on anaverage 11 persons about his/her unpleasant

experience


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Companies that pay importance to

resolving customer complaints

Pay attention to quality and training of

manpower recruited

Have clear benchmarks on service quality andcommunicate to employees

Take remedial steps to improve customer

satisfaction and prevent repeats of customer

dissatisfaction

Have a data base on customer complaints that

is periodically analysed and policies adjusted


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Satisfied employees will

produce satisfied customers

Morale

Motivation

Mood


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Evaluation for Different Types of

Products/Services

High in search

qualities

High in experience

qualitiesHigh in credence

qualities

MostMost

GoodsGoods

MostMost

ServicesServices


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Classification of Service

People Processing

Possession Processing

Mental stimulus Processing

Information Processing


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People Processi

Customers must physically enter thesystem

Sometimes, service provider goes tocustomer with necessary tools

People must be prepared to spend timeactively cooperating with the serviceoperation

evel of involvement can vary


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PossessionProcessing

Working to tight deadlines to restore customerspossessions to good working order.

People are less physically involved and usually,no real need for them to enter the service; oftenlimited to requesting the service; explaining theproblem or paying the bill only.

The output in each instance, whether, installingsoftware or repairing car etc. should be asatisfactory solution to a stated problem


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Mental Sti l s Processing

Services that interact with peoples mind.

Anything touching peoples mind has power toshape attitudes and influence behaviour.

ecipients should spend time but notnecessarily be physically present in a servicefactory; just mentally in communication withinformation being presented.

Information based content can be converted to

digital bits, recorded or transformed intomanufactured products viz. CDs, Videos, whichcan be packed and sold like any physicalproduct


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Infor ationProcessing

Most intangible form of service output.

Customer involvement determined more bytradition or personal desire to meet face to faceand not by the needs of the operationalprocess.

Customer / Supplier learn each others needs,

capabilities and personalities by personalmeetings, however this relationship can also bebuild / sustained on trust or telephonic contact.


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CUSTOME EXPECTATION

O SE VICE

Customer expectations are the beliefs

about service delivery that serve asstandards or reference points against

which performance is judged.


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LEVELS O EXPECTATION


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THE ZONE O TOLE ANCE

Adeq ate Service

Desired Service

Zone ofTolerance

Difference between the desired service andthe adequate service


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FACTORS THAT INFLUENCE DESIRED

AND PREDICTED SERVICE

Predicted

Service

Explicit Service

Promises

Implicit Service

Promises

Word-of-Mouth

Past ExperienceZone

of

Tolerance

Desired Service

Adequate Service


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THE SE VICE ENCOUNTE

It is the Moment of Truth

It occurs any time the customer interacts with

the employee

Service Encounter can potentially be critical indetermining customer satisfaction and loyalty

is an opportunity to:

Build trust

einforce quality Build brand identity

Increase loyalty


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The Service Encounter

TriangleCompany

(Management)

External MarketingSetting the Promise

Internal MarketingEnabling the Promise

CustomerEmployee

Interactive MarketingDelivering the Promise

Moment of Truth

8-22


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The Service Encounter

Triangle External Marketing- The company does this for

customers. It promises benefits, features, pricing strategythrough advertisement & public relations.

Internal Marketing- The company does this for itsemployees. It gives training, motivational and teamworkprograms to its employees. Provide infrastructure andamenities to channel partner and franchisees.

Interactive Marketing- Both the customer as well as theemployees get instant feedback about each other during aservice transaction. The employee delivers the promisemade by the company to the customers.


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CUSTOME PE CEPTION

O SE VICE Customers perceive services in terms of

quality of service & how satisfied they

are overall with their experiences.


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CUSTOMER PERCEPTIONS OFQUALITYAND

CUSTOMER SATISFACTION


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CUSTOME SATIS ACTION

It is a judgment that a product or service

feature or the product or service itself

provides a pleasurable level of consumption related fulfillment.

It is the customers evaluation of a

product or service in terms of whether it

has met the customers needs &expectations. Its failure leads to

dissatisfaction.


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DETE MINANTS O

CUSTOME SATIS ACTION P ODUCT & SE VICE EATU ES

CUSTOME EMOTIONS- your mood

ATT IBUTION O SE VICE SUCCESS OAILU E: how much the customer blames orcredits the failure or success of a service on theservice provider

PE CEPTION O EQUITY O AI NESS:

have I been treated fairly compared to othercustomers?

PE CEPTION O AMILY MEMBE S,IENDS, PEE S ETC


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OUTCOMES O

CUSTOME SATIS ACTION Increased customer retention

Positive word-of-mouth communications

Increased revenues


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RELATIONSHIP BETWEEN CUSTOMER

SATISFACTION AND LOYALTY IN

COMPETITIVE INDUSTRIES

Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The

ree Press, 1997), p. 83.


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SE VICE QUALITY

The customers judgment of overallexcellence of the service provided in

relation to the quality that was expected.

Service quality assessments are formedon judgments of:

outcome quality interaction quality

physical environment quality


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THE IVE DIMENSIONS O

SE VICE QUALITYAbility to perform the promised service

dependably and accurately.

Knowledge and courtesy of employees and their

ability to inspire trust and confidence.

Physical facilities, equipment, and appearance ofpersonnel.

Caring, individualized attention the firm providesits customers.

Willingness to help customers and provideprompt service.

Tangi les

Relia ility

Responsiveness

Assurance

Empathy


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Buying Behaviour of Service

Consumer Decision Making Process (Eight-stage model)

1. Need Arousal

2. ecognition of the need

3. Choice of level of involvement4. Search for information & identification of

alternatives

5. Evaluation of Alternatives

6. Decision- buy or not buy

7. Purchase Action and other decisions8. Post purchase feeling & behaviour


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Demand and Supply

Management of Services luctuation of demand in services like restaurants,

vacation resorts, courier services, consultingfirms, tax authorities etc

As the service cannot be stockpiled, theresources should be used as productively aspossible

The following can be scenario with the ServiceIndustry:

Excess Demand

Demand exceeds optimum capacity

Demand and supply are well balanced

Excess Capacity


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Capacity level can be

stretched or shrunk Transport and BEST buses; aircraft

switching to higher capacity on a busy

day; a restaurant may add extra chairs &tables

Minimising slack time , when bill is

presented promptly to a group of diners

estaurant opening early for dinner,

universities & colleges offering evening

classes


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Adjusting capacity to match

demand (chasing demand) Schedule downtime during periods of low

demand eg., repair and holidays

Use part - time employees ent or share extra facilities and equipments

Cross train employees


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Techniques for managing

service demand Use price and other costs to manage demand

(eg., theatre & hotel stay in peak time)

Change product element Modify the place and time of delivery

Promotion and Education


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Thank You!!!

Service marketing(final)

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