service marketing(final)
TRANSCRIPT
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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!!!