Service Industry Concepts

Student Name: D.D.C.H. Subasinghe

Reg.Number:142189
Lecturers Name: Dr.Asanka Pallegedara
Dr.M.M.D.R.Deegahawature
Semester: 1
Course Title: IMGT 2132

Content

Course Information Plan.

Lecture Notes and Reflections
Tutorials..
Assignments
Case Studies....
Presentation.
Field Visit

Course Information Plan

Lecture Notes and Reflections

Lecture Number: 1
Lesson: Introduction to Service Industry
Learning Objectives:

Define the Service industry and discuss the basic differences between
goods and services

Describe the central role of service in an economy

Discuss evolution of an economy from an agrarian society to a service

society

Describe the features of preindustrial, industrial and postindustrial

Societies

Key Concepts & definitions:

Service definition

Service firm definition

Major difference between service and goods

Role of services in an economy

Stages of economic development

Personal Reflection:
Within this lesson I have learned about the basic things related to the service
industry. Through this first lesson I got to know that we can divide almost all the economic
activities into two broad categories. Namely they are Goods and Services. At the end of
this lesson I learned the difference between the goods and services. Goods producing
industries are agriculture, mining, manufacturing, and construction. Each of them creates
some kind of tangible object. If we consider about the service industry it includes everything
else such as banking, communications, wholesale and retail trade, all professional services
such as engineering, computer software development and medicine, nonprofit economic
activity, all consumer services and all government services, including defense and
administration of justice etc. Further at the end of the lesson I have noticed that a service
dominated economy is a special characteristic of developed countries.

Lecture Number: 2
Lesson: Nature of services
Learning Objectives:

Describe the integrated service management approach

Classify a Service into one of four categories using the service process
matrix

Describe the a service using the five dimensions of the service package

Discuss the managerial implications of the distinctive characteristics of

a service operation

Discuss factors affecting the service industry

Key Concepts & definitions:

The 8Ps(Eight components)

The service process matrix

Five dimensions of service package

Factors drives the service industry

Personal Reflection:
Through this lesson I came to know about how to classify a service into one of
four categories using the service process matrix, how to describe a service using the four
dimensions of the service package etc. I have learned about a bundle of goods and services
that is provided in some environment which is known as Service Package and it contains
features like supporting facility, facilitating goods, information, explicit service and implicit
service. Within this lesson discussed the 8Ps and how it approaches to service management
by using various examples. Apart from that I have learned about the service process matrix
which was derived by Roger Schmenner in 1986.

Lecture Number: 3
Lesson: Environmental analysis of service industry
Learning Objectives:

Understand the business relevance of the environment to service

companies

Describe the types of environmental issues that service companies face

Explain the role that service companies play in creating and mitigating
environmental issues for both themselves and other companies

Evaluate the environmental impacts of a service company

Key Concepts & definitions:

Services and the environment are two separate issues

Environmental Management

Environmental Strategies for Service Operations

Personal Reflection:
Within this lesson I have learned what is environment of a service industry.
Environmental analysis is a strategic tool. It is a process to identify all the external and
internal elements, which can affect the organizations performance. The analysis entails
assessing the level of threat or opportunity the factors might present. These evaluations are
later translated into the decision-making process. The analysis helps align strategies with the
firms environment. There are many strategic analysis tools that a firm can use, but some are
more common. The most used detailed analysis of the environment is the PESTLE analysis.
This is a birds eye view of the business conduct. Managers and strategy builders use this
analysis to find where their market currently. It also helps foresee where the organization
will be in the future.
PESTLE analysis consists of various factors that affect the business environment. Each letter
in the acronym signifies a set of factors. These factors can affect every industry directly or
indirectly. In this lesson we have learned another analysis tool and thats name is SWOT
analysis.

Lecture Number: 4
Lesson: Service Strategies
Learning Objectives:

Formulate a strategic service vision.

Discuss the competitive environment of services.

Describe how a service competes using the three generic service strategies.

Discuss the service purchase decision.

Key Concepts & definitions:

Strategic Service Vision

Competitive Environment of Services

Competitive Service Strategies

Customer criteria for a Service Provider

Service Purchase Decision

Personal Reflection:
Here we have learned about the Service strategies that a company can use. When I am
going through this lesson I have learned that three effective long term service strategies. They
are Service as a product, The customer is the boss, Strive for reliability. Service as a product
means; most buyers dont have the technical knowledge they need to make the best choices
when theyre purchasing products such as electronics, software, cars or home appliances.
They want reassurance that support and service will be available if problems arise. The
customer is the boss means; for a company the customer is the most valuable and important
person. If we talk about the strive for reliability, reliability means consistent performance that
meets the expectations of all your customers all the time. Admittedly, this is ideal. But a
superior service program will come very close to achieving the ideal.

Lecture Number: 5
Lesson: Cost volume profit analysis
Learning Objectives:

Describe cost volume profit analysis and how is it used for decision making

How CVP analysis performed in a manufacturing firm

How CVP analysis performed in a service firm

Discuss the assumptions and limitations of the CVP

Key Concepts & definitions:

Profit Equation and Contribution Margin

CVP analysis for manufacturing firm

CVP analysis for service firm

Assumptions and limitations of the CVP

Personal Reflection:
In this lesson we have discussed about the cost volume profit analysis. Cost Volume
Profit analysis (CVP) is a method of cost accounting used in managerial economics. Costvolume profit analysis is based upon determining the breakeven point of cost and volume of
goods. It can be useful for managers making short-term economic decisions, and also for
general educational purposes. As I have studied Cost-volume profit analysis makes several
assumptions in order to be relevant. It often assumes that the sales price, fixed costs
and variable cost per unit are constant. Running this analysis involves using several equations
using price, cost and other variables and plotting them out on an economic graph.

Lecture Number: 6
Lesson: Service Process
Learning Objectives:

Appreciate the value of classification in service marketing

Understand useful ways of classifying differences between various

types of services

Define a service process

Describe four different types of service processes and their strategic

implications

Key Concepts & definitions:

The Value of Service Classification

Service Classification Ways

Service Process

Categories of Service Processing

Personal Reflection:
According to the things we have learned from this lesson service process is sixth
element of service marketing mix. The service process refers to how a service is provided or
delivered to a customer. Processes involve the procedures, tasks, schedules, mechanisms,
activities and routines by which a service is delivered to the customer. As we have learned
Designing a service delivery system is creative process. It begins with a service concept and
strategy to provide a service with features to differentiate it from the competition. Further we
learned service process matrix and service blueprint. Service blueprint is basically a
flowchart of the service process. It is a map in which all the element or activities, their
sequencing and interaction can be visualize. A detailed blueprint is a micro-level blueprint. A
concept blueprint demonstrates how each job or department functions relationship to the
service as a whole.

Lecture Number: 7
Lesson: Understanding customer needs and targeting
Learning Objectives:

Recall the principles of segmentation,

particularly as they relate to

customer behavior

Describe the three different types of attributes that consumers use to

evaluate products and how they relate to service offerings

Set priorities for targeting specific customer segments

Understand that not all customers are equally attractive to a firm

Recognize the role of customer loyalty in determining financial

success

Key Concepts & definitions:

The Principals of Segmentation

Customer Needs and Expectations

The components of customer expectations

Customer evaluation of service performance

Targeting specific customer segments

Nature of service relationship

Relationship marketing

Personal Reflection:
This lesson is a very important lesson. Because before we start promoting our
business we need to know what our customers want and why. Good customer research helps
us work out how to convince our customers that they need our products and services. As I
have studied the first step of customer research is identifying your customers. Our market
research should help you understand your potential customers. Further customer research can
help us develop a more detailed picture of them and understand how to target them. It will
also highlight key characteristics your customers share, such as; gender, age, occupation,
disposable income, residential location, recreational activities.

Lecture Number: 8
Lesson: Service product concepts for core and peripheral services
Learning Objectives:

Discuss several frameworks for describing the augmented service

product

Define the eight petals of the Flower of Service

Distinguish between facilitating and enhancing the supplementary

services

Complete a service blueprints for different kind of services

Key Concepts & definitions:

The augmented service product

Flower of Service

Service Design

Service blueprint

Personal Reflection:
We identified that what service failures have encountered recently, and how they involve the
core product or supplementary service elements. It discussed under augmented services. We
get briefly ideas about those models of augmented services products. Identify and classify
supplementary services within this topic. And identify the failures of business. And also
identify the possible causes and suggest how such failures might be prevented in future.

Lecture Number: 9
Lesson: Service quality and productivity
Learning Objectives:

Define the meaning of quality and productivity in a service context

Describe the five dimensions of service quality

Explain the gaps model of service quality

Describe the techniques for identifying the root cause of specific

service quality problems

Identify the components of a service quality information system

Discuss productivity and quality measurement techniques and issues

Key Concepts & definitions:

Service Quality and Productivity

Dimensions of Service Quality

Perceived Service Quality

Service Quality Gaps

Quality Information System

Personal Reflection:
This is very valuable and interesting lesson. Through this lesson we could identify the
potential service quality gaps in one firm that we choose. Quality and productivity create
value for customer and companies. Here the quality focuses on the benefits created for
customers while productivity addresses financial costs incurred by firm. The productivity is
very importance because it keeps costs down to improve profits and/or reduce prices, enable
firms to spend more on improving customer service and supplementary services, Secure
firms future through increased spending on R&D and may impact service experience

Lecture Number: 10
Lesson: Use of Technology in services
Learning Objectives:

Discuss the technology in the service encounter

Describe the emergence of self service

Place an example of service automation in its proper category

Describe the different internet business models

Understand the importance of scalability to e-commerce success

Discuss the managerial issues associated with the adoption of new

technology

Key Concepts & definitions:

Role of Technology in the service encounter

Self-service Technologies(SST)

Classification of service automation

Purpose of web-site

E-Business

Economic of E-Business

Electronic and Traditional services

Economic of Scalability

Personal Reflection:
At the end of the lesson and with self-studies I have come to know that in recent years much
attention has been appropriately focused on the structural changes technology has wrought
upon manufacturing, particularly in the United States. But technology has created even more
dramatic changes in the service sectors. At the beginning concepts of Self-Service
Technologies (SST) was explained. Then learn about the classes which the service
automation can be classified. Also consider about the E-Business models and economic of
business. Under this lesson usage of technology in services was studied subject to few
classifications.

Lecture Number: 11
Lesson: Managing customer waiting lines and reservations.
Learning Objectives:

Recognize the different queue designs.

Understand the psychology of waiting lines.

Calculate expected waiting times under simple condition.

Explain the basic of designing an effective reservation system.

Discuss the principles of yield management and the use of

segmented reservations strategies to improve profitability.

Personal Reflection:
From this lesson I improve my knowledge about Current trends and patterns in the service
industry.

Lecture Number: 12
Lesson: Integrating manufacturing and services
Learning Objectives:

The service factorys role.

Customers activity cycle.

Additional approach.

Key Concepts & definitions:

Customers activity cycle contains repurchases, purchase, post purchase

Personal Reflection:
By using this lesson I improve my knowledge about Integrating manufacturing and services.

Tutorials

Tutorial: 1
In tutorial number one we got two questions and according to my point of view this tutorial
was mainly focus on identifying the difference between manufacturing and service industries.
This is really important to understand on the beginning of this course module. Because the
every other thing in this course module is based on this simple fact. As in our second
question, by comparing the feature in manufacturing and service industries I have learned
how the service industry can support to a countrys economy.

Tutorial: 2
The second tutorial is about the Cost Volume Profit analysis. Through this tutorial I gained
knowledge how to calculate CVP and came to know about the situations that which moment
we have to use the Cost Volume analysis. By these kinds of tutorials we can learn how the
theories we learned in the lecture rooms can be applied in the real world applications

Tutorial: 3
This tutorial covers many topics on our course module. It contains questions about service
classification, service process, service strategies etc. This is another good tutorial for get
more knowledge about applications of service industry concepts. But it very useful to get
good knowledge Sales, cost, Overheads and other concepts. This is very interesting part of
lesson.

Assignments

Assignment: 1
Our first assignment was the field visit. This assignment is very different assignment from the
assignments usually we get. By this assignment we have to select a company in service
industry and had to visit there and had to check, apply, experiment all the theories that we
have learned within the course module. It was an interesting experience to get into the field
and analyse how the theories work in real worlds. Mainly we are considering about their
environmental analysis by using PESTLE, SWOT and 8Ps. As our field visit we went to
Allianz Lanka LTD Kuliyapitiya. We have talked with their customers and employees too.
And get the briefly idea about their environment. Finally we prepared a report and submitted.
Also we are conducting a presentation about their service environment. And this could be a
good opportunity to understand a service industry concepts and its applications.

Assignment: 2
This assignment is a group assignment and it is about a role play. This is mainly related to
our field visit assignment. By this we have to present the service quality problem which we
have experienced in our field visit company Allianz Lankas, service quality gaps,
consequences to poor service quality and our suggestion to improve the service quality using
quality information system. This assignment not only helps us to understand the concepts in
service industry but also it helps us to improve our presentation skills. According to my point
of view I think this assignment is very use full because creating a role play with a group of
friends helps me to memorize the key concepts in service industry other than studying them
by books and notes.

Assignment: 3
This assignment also connected with our field visit. In this assignment we consider about the
service design of the Allianz Lanka Insurance LTD..Also we are consider about the services
provide by the Allianz. Importance of the service design is another topic that we are follow.
And we provide suggestion for their current service design. We get good knowledge about
service design and its applications of a service firm.

Assignment: 4
Assignment number four is related with making Corse Portfolio. Another interest assignment
that is related with what we are learns from lessons. We are getting more and remind our
knowledge about service industry concepts. This is an individual assignment. Finally we
prepare a report that includes our assignments, lecture notes, tutorials and case studies with
our personal reflection.

Case Studies

CASE STUDY: 1
Case study was about the Introduction to service industry concept. In here the Mayo Clinic
used to provide their service goods too.

CASE STUDY: 2
It was about the Service strategy. We identified the competitive strategies and service
strategic vision of American West Airlines

CASE STUDY: 3
In this case study we discussed the information about the Royal Bank of Canada. We tried to
get a good knowledge about the market segmentation and target marketing by studying this
case. This is good chance to identify those factors by using good examples. We identified
how the service industry concepts apply in the current society.

CASE STUDY: 4
In this case study we study about the service consumer named Susan Munro.In here mainly
talk about the 8Ps and its application of day today scenario. Also this case study we done as a
group work. So we discussed and wrote answers. Therefor lots of information gathered
because every ones gave points. This is an another very valuable case study.

CASE STUDY: 5
This case is mainly target for the SWF3.This case

is very important to improve our

knowledge. This is very important case study for identified value adding supplementary
elements of that.

Presentation

Field Visit
Personal Reflection:
As our field visit to Service Company we went to the Allianz Lanka Insurance LTD
Kuliyapitiya Branch which situated nearby Kuliyapitiya town. By this field visit we had to
assess the nature of the service the company provides, importance of service design to the
company, identify the most suitable design for the particular company etc. I consider it is a
great opportunity because through that field visit we gained the knowledge how the theories
we learned in lecture rooms apply in the real world. In that field visit we analyse not only
how they provide their service to customers and the customer satisfaction but also the service
design of Allianz, office layout, and service environment etc. When we visited to the Allianz
company branch we met Mr Jayathissa Herath who is in charge of the general insurance
branch. Throughout our field visit he gave us his generous support to successfully complete
our field visit and gain knowledge about the real world applications.
In short Allianz Insurance Lanka Ltd. Is a company fully- owned and controlled by
Allianz SE, where headquartered in Munich, Germany. In 2004, Allianz Insurance Lanka
Limited registered as an insurer on the Insurance Board of Sri Lanka (IBSL) and received its
license from IBSL in July 2008 to set up Life insurance businesses in Sri Lanka.
At Allianz Lanka, they follow their parent company in their clear focus on
profitability, consistent underwriting policy, and business strategies. Since the establishment,
they have made big impact in the Sri Lanka insurance industry, with their top line growing by
more than thirty eight times during the past ten years. In Srilanka too Allianz Life Insurance
Lanka Ltd. has grown by more than 200 times in just seven years of operations. The
Company has a network of 55 branches in all provinces of Sri Lanka and within a short
period of time it becomes a leading Life insurance company in Sri Lanka

Within our field visit we have considered the following points:

History of Allianz Insurance Lanka Ltd.

Services provided by the company

Allianz environment Analysis

By using 8Ps

By using PESTLE

By using SWOT

Identify the uniqueness than the other insurance companies

Identify their service quality problems and solutions

Identify their service quality gaps and how to fill them

Identify their service design and its importance

Customer satisfaction about the service provides by Allianz

Employees point of view about their company.