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
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Agenda
Core, expected, augmented and potential services
New service decisions
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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
New Service Development
CSF:
Involvement of customers and employees (especially front-
line staff) at appropriate stages
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Business Strategy Development or Review
Define or review the organizations vision, mission,strategy
New service strategy must fit within organizations
vision, mission, strategy
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Vision / Mission / Strategy (examples)
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.
Source: Respective company websites (accessed on 01 Feb 11)
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Vision / Mission / Strategy (examples)
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.
Source: Respective company websites (accessed on 01 Feb 11)
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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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?
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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)
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Business Analysis
Verify economic feasibility Demand analysis
Revenue-cost-profit analysis
Verify operational feasibility
Personnel
Delivery systems
Facilities
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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)
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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)
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Post-introduction Evaluation
Ongoing review of and changes in delivery processes,staffing, or marketing mix based on market feedback
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
READ !!
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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Levels of Service
Core-Expected-Augmented-PotentialTheodore Levitt
Core-Supplementary
Lovelock, Wirtz, Chatterjee
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Core-Expected-Augmented-Potential
Core Need
Core Benefit
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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Exercise (contd.)
Classify the service elements for hotel stay into: Core
Expected
Augmented
Potential
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Supplementary Services
Facilitating Services
Information
Order taking
Billing
Payment
Enhancing Services
Consultation
Hospitality
Safekeeping (Caretaking)
Exceptions
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
The Flower of Service
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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Facilitating Services
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
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Facilitating Services
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
Exercise (contd.)
Classify the service elements for hotel stay into: Core
Supplementary
Facilitating
Information, Order taking, Billing, Payment
Enhancing
Consultation, Hospitality, Safekeeping/caretaking, Exceptions
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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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Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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
Girish Ketkar Session 07Services Marketing
BITM 2010-12 (Semester 2)
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
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