Services MarketingServices Marketing

Session 1 Session 1

Tale of two IT Majors-Infosys and Tale of two IT Majors-Infosys and IBMIBM

InfyInfy

Headquartered in Headquartered in Bangalore, IndiaBangalore, India

Established in 1981Established in 1981

Started out as an IT Started out as an IT services providerservices provider

Current Yr Revenues: $ Current Yr Revenues: $ 5 Billions5 Billions

IBMIBM

Headquarted in Headquarted in Armonk,NYArmonk,NY

Established in 1881Established in 1881

Started out as a Started out as a manufacturer of manufacturer of puched card data puched card data processing equipemtsprocessing equipemts

Current Yr Revenues: $ Current Yr Revenues: $ 100 Billion100 Billion

Offerings from IBMOfferings from IBM

ProductsProducts

Systems and ServersSystems and Servers (Blade Servers, Cluster (Blade Servers, Cluster

Servers,….)Servers,….)

SoftwareSoftware

(Lotus,Rational,Websphere,Ti(Lotus,Rational,Websphere,Tivoli,DB2)voli,DB2)

POS and Self Service POS and Self Service OfferingsOfferings

(kiosks, POS, (kiosks, POS, printers,dispalys)printers,dispalys)

Storage SystemsStorage Systems ( Disks,Tapes, SANs,….)( Disks,Tapes, SANs,….)

ServicesServices

Business Continuity and Business Continuity and Resiliecy ServicesResiliecy Services

End-User ServicesEnd-User Services

IT strategy and IT strategy and Architecture ServicesArchitecture Services

Maintenance and Maintenance and Technical Support Technical Support ServicesServices

Offerings from InfosysOfferings from Infosys

ProductsProducts

Infosys ActiveDeskInfosys ActiveDesk

FinacleFinacle

Infosys mConnectInfosys mConnect

Infosys Unified Infosys Unified Communication and Communication and CollaborationCollaboration

ServicesServices

IT ServicesIT Services

Engineering ServicesEngineering Services

Consulting ServicesConsulting Services

BPO ServicesBPO Services

What are Services?What are Services?

DeedsDeeds

ProcessesProcesses

PerformancesPerformances

What are Services?What are Services?

Economic ActivityEconomic Activity

Output not a physical productOutput not a physical product

Generally consumed at the time it is procucedGenerally consumed at the time it is procuced

Provides Added ValueProvides Added Value

Value in terms of Value in terms of intangibles(amusement,health,security,accomodation)intangibles(amusement,health,security,accomodation)

Industries within the Services Industries within the Services SectorSector

Transportation and UtilitiesTransportation and Utilities

TransportationTransportationRailroad TransportationRailroad Transportation

Local and Suburban TransportLocal and Suburban Transport Water Transportation Water Transportation Air TransportationAir Transportation PipelinesPipelines

CommunicationCommunication Telephone and TelegraphTelephone and Telegraph Radio and Television BroadcatingRadio and Television Broadcating

Electric, gas and Sanitary ServicesElectric, gas and Sanitary Services

Industries within the Services SectorIndustries within the Services Sector

Wholesale TradeWholesale Trade

Retail TradeRetail Trade

Finance,Insurance and Real EstatesFinance,Insurance and Real Estates

Hotels and LodgingHotels and Lodging

Health ServicesHealth Services

Legal ServicesLegal Services

Government ServicesGovernment Services

Services versus Customer ServicesServices versus Customer Services

Services can be offered by wide range of Services can be offered by wide range of companies. Manufacturing and Tech cos also can companies. Manufacturing and Tech cos also can provide servicesprovide services

Customer Services offered by wide range of Customer Services offered by wide range of companies alsocompanies also

Customer Service: Customer Service: Service provided in Service provided in support of company’s core productssupport of company’s core products

Customer ServiceCustomer Service

Usually, not chargeableUsually, not chargeable

Essential to building customer Essential to building customer relationshipsrelationships

Customer Service…..Customer Service…..

Airtel Employee attending billing complaintAirtel Employee attending billing complaint

Dell employee explaining laptop Dell employee explaining laptop operations on phoneoperations on phone

Indian Railway Employee attending to Indian Railway Employee attending to passenger Queriespassenger Queries

LG employee explaining remote LG employee explaining remote operations to customeroperations to customer

Tangibilty SpectrumTangibilty Spectrum

Tangible…..detect with sensesTangible…..detect with senses

Very few products are purely tangible or purely intangibleVery few products are purely tangible or purely intangible

Services tend to be more intangible than manufactured Services tend to be more intangible than manufactured productsproducts

Manufactured products tend to be more tangible than Manufactured products tend to be more tangible than servicesservices

The Importance of ServicesThe Importance of Services

Services play an increasingly Services play an increasingly dominant role in a developing dominant role in a developing countrycountry

like Indialike India

Percentage of GDP from Percentage of GDP from ServicesServices

Hong Kong…90.6%Hong Kong…90.6%

Netherlands: 79.6%Netherlands: 79.6%

USA: 78.7%USA: 78.7%

Japan: 72.3%Japan: 72.3%

India: 53.8%India: 53.8%

China: 40%China: 40%

Percentage of GDP from AgriculturePercentage of GDP from Agriculture

Somalia….65%Somalia….65%

Liberia…..60%Liberia…..60%

Myanmar: 56.4%Myanmar: 56.4%

India: 18.6%India: 18.6%

Japan: 1.1%Japan: 1.1%

USA: 1%USA: 1%

UK: 0.5%UK: 0.5%

Percentage of GDP from IndustryPercentage of GDP from Industry

Quatar………80%Quatar………80%

Iraq………….66%Iraq………….66%

Angola……..65%Angola……..65%

China………47.3%China………47.3%

Uk………….23%Uk………….23%

Japan……..21%Japan……..21%

India………..16%India………..16%

USA…………14%USA…………14%

Fillip to Services Marketing Fillip to Services Marketing

Deregulation in several key Deregulation in several key industries(Airlines, Telecommunication, industries(Airlines, Telecommunication, Education,Insurance and Healthcare)Education,Insurance and Healthcare)

Professional Service NeedsProfessional Service Needs

Services MarketingServices Marketing

Different from product marketing,though fundamental Different from product marketing,though fundamental princples remain sameprincples remain same

Better Service translates into increased profitsBetter Service translates into increased profits

Quality of service remains very unsatisfactoryQuality of service remains very unsatisfactory

Measuring Customer Satisfaction at JUSCOMeasuring Customer Satisfaction at JUSCO

Jamshedpur Utilities and Services Co. Ltd. Jamshedpur Utilities and Services Co. Ltd. Created out of Tata Steel Town Services Division Created out of Tata Steel Town Services Division in 2004in 2004

India’s only comprehensive urban infrastructure India’s only comprehensive urban infrastructure service providerservice provider

Mission: providing “quality services for life”Mission: providing “quality services for life”

Services include water,power,infrastructure,public Services include water,power,infrastructure,public health and horticultural serviceshealth and horticultural services

CSI at JUSCOCSI at JUSCO

Servicewise CSI at JUSCOServicewise CSI at JUSCO

Poor Customer Service…many Poor Customer Service…many reasonsreasons

Tiered Service….many unhappyTiered Service….many unhappy

Self Service Technologies…no human interactionSelf Service Technologies…no human interaction

Technology FailuresTechnology Failures

High expectationsHigh expectations

Organizations too lean and understaffedOrganizations too lean and understaffed

Availibility of human resourcesAvailibility of human resources

Inadequate training, compensation and empowermentInadequate training, compensation and empowerment

Services and TechnologyServices and Technology

Technology dramatically changing the nature of servicesTechnology dramatically changing the nature of services

New service offerings(eMedicine,remote support of New service offerings(eMedicine,remote support of Software Applications,mobile VAS applications)Software Applications,mobile VAS applications)

Innovations in service delivery(eTicketing,Internet Banking)Innovations in service delivery(eTicketing,Internet Banking)

Technology-the Dark SideTechnology-the Dark Side

Lack of privacy (unwelcome phone calls,emails)Lack of privacy (unwelcome phone calls,emails)

Lack of human interactionLack of human interaction

Huge Investments-unsure about paybacksHuge Investments-unsure about paybacks

Technology and New Service Technology and New Service OfferingsOfferings

Travel aggregators(www.cleartrip.com.www.yatra.com)Travel aggregators(www.cleartrip.com.www.yatra.com)

Education portals(Education portals(www.indianmba.comwww.indianmba.com))

Online booksellers(Online booksellers(www.amazon.com.www.firstandseond.comwww.amazon.com.www.firstandseond.com))

Online Auctionsites(Online Auctionsites(www.ebay.comwww.ebay.com))

Technology…New Ways of Delivering Technology…New Ways of Delivering ServicesServices

Facilitates Facilitates Learning and Information SeekingLearning and Information Seeking

TransactionsTransactions* * RetailRetail

* B2B(eProcurement sites like w* B2B(eProcurement sites like www.teaauction.com,www,indiaetrade.comww.teaauction.com,www,indiaetrade.com,www.steelexchangeindia.com etc.),www.steelexchangeindia.com etc.)

Basic customer serviceBasic customer service* Bill paying* Bill paying* Query handling* Query handling* Checking account records* Checking account records* Order Tracking* Order Tracking

Customer Service….a full circleCustomer Service….a full circle

Face to Face Interactions

Telephone Based Services

IVR systemsInternet Based Customer Service

Mobile based Customer Service

Technology Enables CustomersTechnology Enables Customers

Self-Service Technologies(SSTs)Self-Service Technologies(SSTs)

Customers operate their Internet Enabled Bank Customers operate their Internet Enabled Bank AccountsAccounts

Customers check in Flights Online or through Customers check in Flights Online or through KiosksKiosks

Customers place orders and track orders at Customers place orders and track orders at eCommerce siteseCommerce sites

Technology Enables EmployeesTechnology Enables Employees

Customer Relationship Management SoftwareCustomer Relationship Management Software

Availibilty of comprehensiveAvailibilty of comprehensive information about customer information about customer helps employees serve customers betterhelps employees serve customers better

Sales Support SoftwareSales Support Software

Availibilty of comprehensive information about products Availibilty of comprehensive information about products and services help serve customers betterand services help serve customers better

Widely used by banks,hotels,insurance companies,airlines Widely used by banks,hotels,insurance companies,airlines etc.etc.

Technology Enables Globalization of Technology Enables Globalization of ServicesServices

Information, Transaction and Customer Services move Information, Transaction and Customer Services move across continentsacross continents

Virtual Teams(Boeing)Virtual Teams(Boeing)

New opportunitiesNew opportunities

Improved efficiency and effectiveness of service businessesImproved efficiency and effectiveness of service businesses

Difference in Goods versus Services Marketing-Difference in Goods versus Services Marketing-TangibilityTangibility

Goods….TangibleGoods….Tangible

Services…..IntangibleServices…..Intangible

Implications:Implications:

Cannot be Cannot be storedstored

Cannot be Cannot be patentedpatented

Cannot be Cannot be displayed or communicateddisplayed or communicated

Difficult to priceDifficult to price

Intangible ServicesIntangible Services

Actions performed by providers and directed towards Actions performed by providers and directed towards customerscustomers

Intangible Services,tangible componentsIntangible Services,tangible components

Many services difficult to comprehendMany services difficult to comprehend

Assessing Quality difficultAssessing Quality difficult

Marketing Challenges for Service ProvidersMarketing Challenges for Service Providers

Synchronising Demand and SupplySynchronising Demand and Supply

New service concepts easily copied…difficult to New service concepts easily copied…difficult to differentiatedifferentiate

As customers find it difficult to assess quality,what to As customers find it difficult to assess quality,what to communicate?communicate?

Difficult to determine costsDifficult to determine costs

How to arrive at pricing?How to arrive at pricing?

Differences in Goods and Services Marketing-Differences in Goods and Services Marketing-HeterogenityHeterogenity

Two Michael Jackson performances are not Two Michael Jackson performances are not identicalidentical

No two services are identicalNo two services are identical

Employees differ in their performancesEmployees differ in their performances

Each customer has unique demandEach customer has unique demand

Human interaction ( between and among Human interaction ( between and among employees and customers) is the keyemployees and customers) is the key

Marketing Challenges for Service ProvidersMarketing Challenges for Service Providers

Ensuring consistent service quality is a challengeEnsuring consistent service quality is a challenge

Numerous factors beyond control by service providerNumerous factors beyond control by service provider

Service Manager never knows for sure whether service Service Manager never knows for sure whether service delivered as per plan or what is promoteddelivered as per plan or what is promoted

Differences in Goods and Services Differences in Goods and Services Marketing……Marketing……Simultaneous production and Simultaneous production and

consumptionconsumption Most goods produced first, then sold and consumedMost goods produced first, then sold and consumed

Most goods sold first, then produced and consumed Most goods sold first, then produced and consumed simultaneouslysimultaneously

Lux soap manufactured in Mumbai, sold after a month in Lux soap manufactured in Mumbai, sold after a month in Muzaffarpur and used over a monthMuzaffarpur and used over a month

A theatre performance is produced and consumed at the A theatre performance is produced and consumed at the same timesame time

Customers often present when service being producedCustomers often present when service being produced

Other customers present affect experienceOther customers present affect experience

Service provider essential ingredient for experienceService provider essential ingredient for experience

Marketing Challenges for Service ProvidersMarketing Challenges for Service Providers

Mass production is difficult,if not impossibleMass production is difficult,if not impossible

No significant economies of scale through No significant economies of scale through centralizationcentralization

Need for rekative decentralization for convenienceNeed for rekative decentralization for convenience

Problem customersProblem customers

Differences in Goods and Services Marketing-Differences in Goods and Services Marketing-PerishabilityPerishability

Services cannot be Services cannot be stored,stored, resoldresold or or returnedreturned

Marketing Challenges for Service ProvidersMarketing Challenges for Service Providers

Demand ForecastingDemand Forecasting

Creative planning for capacity utilizationCreative planning for capacity utilization

Services Marketing….the Seven Services Marketing….the Seven Ps Ps

ProductProductPricePricePromotionPromotionPlacePlacePeoplePeoplePhysical EvidencePhysical EvidenceProcessProcess

People-the Fifth PPeople-the Fifth P

All human actors provide cuesAll human actors provide cues

Dress,appearance,behaviour all influence Dress,appearance,behaviour all influence pereptionspereptions

Service provider is the serviceService provider is the service

Person may play relatively small part……Person may play relatively small part……but criticalbut critical

Physical Evidence-the Physical Evidence-the Sixth PSixth P

The Environment where service is deliveredThe Environment where service is delivered

Where the firm and customer interactWhere the firm and customer interact

Any tangible components that faccilitate performanceAny tangible components that faccilitate performance

Includes all tangible representations Includes all tangible representations (brochure,letterhead,signage etc.)(brochure,letterhead,signage etc.)

ServicscapeServicscape

CuesCues

Strong and consistent messagesStrong and consistent messages

Process-the Seventh PProcess-the Seventh P

Operational Flow give customers evidence to judge servicesOperational Flow give customers evidence to judge services

Production Line-Standardized approach or Production Line-Standardized approach or Empowered/Customized approachEmpowered/Customized approach

Marketing Mix ImperativeMarketing Mix Imperative

All Elements of Marketing Mix should All Elements of Marketing Mix should be consistent with vision and market be consistent with vision and market positionposition

Staying focused on the Staying focused on the customercustomer

All strategies dveloped with an eye on the All strategies dveloped with an eye on the customercustomer

All implementations carried out with All implementations carried out with understanding of their impact on the customerunderstanding of their impact on the customer

All decisions re new services & communication All decisions re new services & communication will integrate customer’s point of viewwill integrate customer’s point of view

Operations and HR decisions will be considered in Operations and HR decisions will be considered in terms of their impact on customersterms of their impact on customers

The Importance of the The Importance of the CustomersCustomers

Customers as AssetsCustomers as Assets

To be valued,developed and retainedTo be valued,developed and retained

All strategies and tools: Focus on customer relationship All strategies and tools: Focus on customer relationship building and loyaltybuilding and loyalty

No transactional focusNo transactional focus

CRM: not a software, but a business philosophyCRM: not a software, but a business philosophy

Serving Customers in the DownturnServing Customers in the Downturn

Usual corporate reaction to recession: belt tighteningUsual corporate reaction to recession: belt tightening

One major danger: compromising relationship with the best One major danger: compromising relationship with the best customerscustomers

Key relationships must be nurtured and grownKey relationships must be nurtured and grown

No compromises in customer sevices to the best customersNo compromises in customer sevices to the best customers

Even during recession,some customers want more than Even during recession,some customers want more than lowest priceslowest prices

Serving Customers in the DownturnServing Customers in the Downturn

High Yield customers most profitableHigh Yield customers most profitable

Cut Service: Price sensitive customers may not be Cut Service: Price sensitive customers may not be lostlost

Cut Service: High Yield customers will departCut Service: High Yield customers will depart

Common fallacy : “All customers want is a low Common fallacy : “All customers want is a low price”price”

Most cos don’t sell pure commoditiesMost cos don’t sell pure commodities

Downturn in the Travel IndustryDownturn in the Travel Industry

Business Class customers often pay ten timesBusiness Class customers often pay ten times

Profitability of almost every flight depends on themProfitability of almost every flight depends on them

Easy to fill planes-just cut pricesEasy to fill planes-just cut prices

Much harder to make moneyMuch harder to make money

2-3% of airlines customers account for 25% of revenues2-3% of airlines customers account for 25% of revenues

Airlines strategy during downturnAirlines strategy during downturn

Cutting costsCutting costs

If services re cut for high-yield passengers,needless If services re cut for high-yield passengers,needless commoditizationcommoditization

Deathly spiral,if major carriers follow strategy of budget Deathly spiral,if major carriers follow strategy of budget carrierscarriers

High Yield FliersHigh Yield Fliers

Easy to identify most profitable customers from databaseEasy to identify most profitable customers from database

Frequent Flier records: Who boards most flights/logs most Frequent Flier records: Who boards most flights/logs most milesmiles

Ticket Sales: How much customer pays for each flight?Ticket Sales: How much customer pays for each flight?

Combine the two: Who flies often at high pricesCombine the two: Who flies often at high prices

United Airlines Targets High-Yield FliersUnited Airlines Targets High-Yield Fliers

New Program: New Program: Global ServicesGlobal Services

Not only based on the number of flights,but also on Not only based on the number of flights,but also on amounts of money spent on flightsamounts of money spent on flights

Separate check-in Counters at major airportsSeparate check-in Counters at major airports

Separate check-in areas away from crowded ticket countersSeparate check-in areas away from crowded ticket counters

Special area overstaffed to minimize check-in timeSpecial area overstaffed to minimize check-in time

Global Services Global Services program at program at

Customers escorted in front of securityCustomers escorted in front of security

Adavantage: arrive at airport later, go to boarding area Adavantage: arrive at airport later, go to boarding area soonersooner

Better seating preferenceBetter seating preference

Better meal choicesBetter meal choices

Far more personal attentionFar more personal attention

United will call 55 min before departure,escorted from United will call 55 min before departure,escorted from airport gateairport gate

GAPS Model of Service QualityGAPS Model of Service Quality

Expected Service

Perceived Service

Service Delivery

Customer-driven service designs and standards

External communications to customers

Company perceptionsof consumer expectations

Customer Gap

Customer

Company

Gap 4Gap 3

Gap 1

Gap 2

The Customer GapThe Customer Gap

Difference between customer Difference between customer expectationsexpectations and and perceptionsperceptions

Expectations:Expectations: Reference points customer have coming in Reference points customer have coming in to a service experienceto a service experience

Perception: Perception: Service,as actually receivedService,as actually received

Firms will want to close this gapFirms will want to close this gap

To close this, four other gaps,To close this, four other gaps, the the Provider Gaps Provider Gaps must be must be closedclosed

The Provider GapsThe Provider Gaps

Gap 1 : Not knowing what customers expectGap 1 : Not knowing what customers expect

Gap 2: Not selecting the right service designs and Gap 2: Not selecting the right service designs and standardsstandards

Gap 3: Not delivering to service standardsGap 3: Not delivering to service standards

Gap 4: Not matching performances to promisesGap 4: Not matching performances to promises

The Customer GapThe Customer Gap

Perceived Service: Subjective assessment of actual Perceived Service: Subjective assessment of actual service experiencesservice experiences

Expected Services: Standards or reference points for Expected Services: Standards or reference points for performance against which service experiences are performance against which service experiences are compared: compared:

Expected Services: What should happenExpected Services: What should happen

Expected ServicesExpected Services

Market-Controlled FactorsMarket-Controlled Factors

PricingPricing

AdvertisingAdvertising

SalesSales

Expected ServicesExpected Services

Limited control by marketerLimited control by marketer

Innate personal needsInnate personal needs

Word-of-Mouth CommunicationWord-of-Mouth Communication

Competetitive offeringsCompetetitive offerings

Services: Important differencesServices: Important differences

Traditionally grouped by IndustryTraditionally grouped by Industry

Tunnel Vision: Look outside own industriesTunnel Vision: Look outside own industries

Service ProcessesService Processes

Important basis of classification of servicesImportant basis of classification of services

Process: Particular method of operation, or series Process: Particular method of operation, or series of operationof operation

Process: Multiple steps, often in predefined Process: Multiple steps, often in predefined sequencesequence

Process: Takes an input and transforms to outputProcess: Takes an input and transforms to output

What gets processed: What gets processed: PeoplePeople and and ObjectsObjects

Who or what is the Direct Recipient of the Service?

People Possessions

Tangible Actions

Intangible Actions

People Processing Possession processing

Mental stimulus processing

What is the nature of the service act?

Information processing

People ProcessingPeople Processing

Services directed at People’s bodiesServices directed at People’s bodies

Passenger transportationPassenger transportation Health careHealth care LodgingLodging Beauty SalonsBeauty Salons Physical TherapyPhysical Therapy Fitness CenterFitness Center Restaurant/BarsRestaurant/Bars BarbersBarbers Funeral ServicesFuneral Services

People ProcessingPeople Processing

Customers must physically enter the service systemCustomers must physically enter the service system

Must be prepared to spend time interacting and Must be prepared to spend time interacting and cooperating with the service providercooperating with the service provider

Output: A customer who has achieved a new stateOutput: A customer who has achieved a new state

Possession ProcessingPossession Processing

Services directed at physical possessionsServices directed at physical possessions

Freight transportationFreight transportation Repair and MaintenanceRepair and Maintenance Warehousing and storageWarehousing and storage Office Cleaning ServicesOffice Cleaning Services Retail distributionRetail distribution Laundry and dry cleaningLaundry and dry cleaning RefuellingRefuelling Landscaping and gardeningLandscaping and gardening Disposal and recyclingDisposal and recycling

Possession ProcessingPossession Processing

Customers less physically involvedCustomers less physically involved

Usually limited to dropping off item, requesting for service, Usually limited to dropping off item, requesting for service, explain problem and returning to pick up item/pay billexplain problem and returning to pick up item/pay bill

Sometimes service factory moves to customerSometimes service factory moves to customer

Output: Satisfactory solution to custome problem or Output: Satisfactory solution to custome problem or tangible enhancement to itemtangible enhancement to item

Mental stimulus processingMental stimulus processing

Services directed at people’s minds:Services directed at people’s minds: Advertising/PRAdvertising/PR Arts and entertainmentArts and entertainment Broadcasting and CableBroadcasting and Cable Management ConsultingManagement Consulting EducationEducation Information ServicesInformation Services Music concertsMusic concerts PsychotherapyPsychotherapy ReligionReligion Voice TelephoneVoice Telephone

Mental stimulus processing Mental stimulus processing

Power to Power to shape attitudesshape attitudes and and influence behaviourinfluence behaviour

Strong ethical standards and careful monitoring requiredStrong ethical standards and careful monitoring required

Investments of time requirementInvestments of time requirement

No requirement of physical presence in the service factoryNo requirement of physical presence in the service factory

Need to be mentally in communicationNeed to be mentally in communication

Often created in one location and transmitted over long Often created in one location and transmitted over long distancesdistances

Core content: Core content: InformationInformation

Information processingInformation processing

Services directed at intangible assets:Services directed at intangible assets: AccountingAccounting BankingBanking Data ProcessingData Processing Data TransmissionData Transmission InsuranceInsurance Legal ServicesLegal Services ProgrammingProgramming Research Research Securities InvestmentSecurities Investment Software ConsultingSoftware Consulting

Information ProcessingInformation Processing

Most intangible form of service offeringMost intangible form of service offering

Can be converted into more tangible formsCan be converted into more tangible forms

Some are highly dpendent on efficient collecting of Some are highly dpendent on efficient collecting of informationinformation

For both mental-stimulus and Information Processing For both mental-stimulus and Information Processing ServicesServices

Is there any need for customer to visit the service Is there any need for customer to visit the service factory?factory?

More habits and traditionsMore habits and traditions

Continous shift to arms-length transactionsContinous shift to arms-length transactions

Designing the Service FactoryDesigning the Service Factory

People-processing Services: customers need to visit service People-processing Services: customers need to visit service factoryfactory

Satisfaction influenced by :Satisfaction influenced by :

* * Appearance and features of external and internal service Appearance and features of external and internal service faciltiesfacilties

* Encounters with service personnel* Encounters with service personnel

* Interactions with self service equipments* Interactions with self service equipments

* Characteristics and behavious of other customers* Characteristics and behavious of other customers

Designing the Service FactoryDesigning the Service Factory

Facilties should be designed to be pleasing to customers Facilties should be designed to be pleasing to customers and efficient to operateand efficient to operate

Need for marketing managers to work with counterpartsNeed for marketing managers to work with counterparts

Exterior: First ImpressionsExterior: First Impressions

Interiors: Stage Interiors: Stage

Longer the customer remains, the more the facilities should Longer the customer remains, the more the facilities should be attractive and comfortablebe attractive and comfortable

Alternative Channels for Service DeliveryAlternative Channels for Service Delivery

Only people processing requires customers visit service Only people processing requires customers visit service factoryfactory

For others,various alternative delivery channels:For others,various alternative delivery channels:

* * Let customers come to user-friendly factoryLet customers come to user-friendly factory

* Limiting contact to “back office”* Limiting contact to “back office”

* Coming to customer’s home or office* Coming to customer’s home or office

* Conducting business via phone/Fax/email/Website* Conducting business via phone/Fax/email/Website

Innovation in Service DeliveryInnovation in Service Delivery

Physical and Electronic Channels allow customers and Physical and Electronic Channels allow customers and providers conduct transactions at arms lengthproviders conduct transactions at arms length

Information based items delivered immediatelyInformation based items delivered immediately

Rethinking Service-Delivery Procedures: InnovationRethinking Service-Delivery Procedures: Innovation

From High-Contact to low contactFrom High-Contact to low contact

Design and location of factory purely on operational Design and location of factory purely on operational prioritiespriorities

Integrating Marketing,Operations and HRIntegrating Marketing,Operations and HR

Marketing Management

Human ResourcesManagement

Operations Management

Customers