customer analysis - iii
DESCRIPTION
Customer Analysis - III. Alaska Airlines. $6.00. $5.00. $4.00. $3.00. $2.00. $1.00. Commodity. Service. Experience. Good. Price of Coffee Offerings (Pine & Gilmore, 1999). Retail Banking: Transaction Costs. Co-production. Customer as co-producer (hence stakeholder) pre-purchase - PowerPoint PPT PresentationTRANSCRIPT
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Customer Analysis - III
Alaska Airlines
P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan
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$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
Commodity Good Service Experience
Price of Coffee Offerings (Pine & Gilmore, 1999)
P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan
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Retail Banking: Transaction Costs
P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan
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Co-production
• Customer as co-producer (hence stakeholder)
– pre-purchase
– production and consumption
– post-purchase
P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan
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Go back to Flowcharting
• Where can we create value?
Existing Actions
NewActions
Existing Actors
NewActors
P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan
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Co-Production: An Illustration
advanced
development
customer
interface
supplier
Traditional Approach
advanced
development
Customers-as-Innovators-Approach
supplier
interface
test (feedback)
Build (prototypes)
test (feedback)
Build (prototypes)
design
customer
design
P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan
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A Closer Look at the Impact of Co-production
•The Fundamental Issue in Alaska Airline–Use of Technology to alter Consumer Interactions with the Firm
•A Benchmarking Comparison–The Diffusion of Online Banking
•What are the consequences?–Service Consumption Activities–Segmentation–Customer Revenue–Firm’s Costs–Overall Profitability
P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan
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Estimated Transaction Cost by Channel
Channel Estimated Cost Per Transaction
Branch* 1
Call Center (Live Agent) 0.94
ATM 0.31
Voice Response Unit (VRU) 0.18
Online 0.09
*Cost of branch transaction normalized to 1
P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan
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Distribution of Transactions by Channel May 2001
Branch % Txn's Cumulative %Deposit 59.4% 59.4%
Cash Check 27.2% 86.6%Withdrawal 8.3% 94.9%Purchase 3.2% 98.1%
Verify Funds 1.7% 99.8%Miscellaneous 0.2% 100.0%
ATMWithdrawal 56.4% 56.4%
Deposit 18.5% 75.0%Balance Inquiry 14.6% 89.6%
Incompleted Transaction 4.2% 93.8%Miscellaneous 4.1% 97.9%
Transfer 2.1% 100.0%
P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan
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Performance Measures by Online Status
Mean Median Std. Dev. 10% 90% Min. Max Cost
Offline 7.2 5.7 4.96 3.3 12.8 0 218.7 Online 10.0 8.6 6.02 4.5 17.2 0 492.9
Revenue Offline 34.3 14.1 392.7 0.39 78.5 -1,603 395,556 Online 43.3 23.8 140.4 3.4 95.7 -2,643 59,336
Profit Offline 26.9 6.9 392.5 -3.7 114.3 -1,645 395,543 Online 33.5 14 139.8 -4.8 83.2 -2,652 59,334