SERVICES

“give beyond the promise”

Service is an act or performance

that one party can offer to another &
is essentially intangible &
does not result

in any ownership
– Philip Kotler
 Flow of discussion
• Services ..perception

• 3 additional P’s

• 4 key characteristics

• Key Imperatives / Challenges

• Eg..5 S in the services industry

How do their deliveries differ ?
– Airlines
• Jet Airways
• Indian Airlines

– Telephony
• Airtel
• BSNL

– Financial services
• LIC
• MNC Insurance companies
 Do their deliveries differ ?
– Banks
• ICICI
• Indian Banks

– Hospitallity
• Taj Hotels
• ITDC

– Retail Industry
• Spencers /BB
• Kendriya Bhandar
3 additional P’s of service
marketing

people

Physical
process
evidence
 Process

• Process of delivery of service needs to be

free from complexities and should be
rational.
– Domino’s advertise pizza delivery within 30
minutes or eat your pizza for free.

An efficient service fosters consumer loyalty

and confidence.
 People
• People performing services need to be well-
trained to serve all customer needs efficiently.
• There have to be defined rules and regulations
for customer interface so that communication
errors are minimal.
• Taj service / Jet airways

People need to have consistency in their behavior.

 Physical Evidence
• Physical evidence is how customers
judge the organization.

– Layout of CCD , Trust of TATAs

Foster reliability in the mind of the customers.

 4 key characteristics

Economic Emergence of
significance Strategic
differentiator

Managerial Driver of gen

uniqueness X
Business model
 Economic significance
• Increasing contributor to GDP
– e.g. india ~ 60%, USA ~75 %

• Greater employability age 16 to 60

• V High productivity and gross national savings.

• Greater sectoral opportunity for global

leadership
– e.g. indian IT, Healthcare, tourism
Emerging strategic differentiator

• Greater component of the product service mix

– Domino , Taj , Jet , Maruti –service station anywhere

– Vodaphone – the network follows

• Redefines the brand.

– CCD , a lot can happen over coffee..nobody disturbs
you
Emerging strategic differentiator

• Increasing importance with greater product

commoditisation

– maruti total lifetime value

– the eureka salesman

• Provides new business advantages to the core brand

– Mcdonald ..the offers / mctikki aloo burger..customised for India

– HUL laundromat
– virgin airlines –the way Richard Branson promotes it .
 . Managerial uniqueness
• Issues

– standardisation of productivity
– delivery and shape
– person specific, simultanity of production and
consumption,
– thus variability of quality, cost and time
 . Managerial uniqueness
• controls

– specify the sizzle eg mcdonalds

– Aligned to corporate strategy
• suzuki dealer servicing norms
• 30 minutes or free
• the fedex next day delivery.
– internal marketing to all.
– Feedback loops from all stakeholders
– Personnel performance aligned
Driver of gen x business model

• lower entry barriers eg sks microfinance

• personal skill based eg google, microsoft

• build the idea eg IPL

Key imperatives/challenges

Intangibility Inseparability

heterogenity

Lack of
Perishability
ownership
 Intangability
• You cannot hold or touch a service unlike
a product.

• the experience consumers obtain from the service

has an impact on how they will perceive it.
• What do consumers perceive from customer
service? The location, and the inner presentation
of where they are purchasing the service?
 Inseparability
• Services cannot be separated from the service
providers.
• A product when produced can be taken away from
the producer.
• a service is produced at or near the point of purchase.

• Take visiting a restaurant, you order your meal, the waiting

and delivery of the meal, the service provided by the
waiter/rest is all apart of the service production process and
is inseparable, the staff in a restaurant are as apart of the
process as well as the quality of food provided.
 Hetrogeneity
• It is very difficult to make each service experience
identical.

• If travelling by plane the service quality may differ from the first
time you travelled by that airline to the second, because the
airhostess is more or less experienced.

• A concert performed by a group on two nights may differ in slight

ways because it is very difficult to standardise every dance
move.

Generally systems and procedures are put into place to make sure
the service provided is consistent all the time, training in service
organisations is essential for this, however in saying this there
will always be subtle differences.
 Perishability
• Services last a specific time and cannot be
stored like a product for later use.

– If travelling by train, coach or air the service

will only last the duration of the journey.
– The service is developed and used almost
simultaneously.
– Again because of this time constraint
consumers demand more
 Lack of Ownership
• You cannot own and store a service like
you can a product.

• Services are used or hired for a period of

time.
• when buying a ticket to the USA the service lasts
maybe 9 hours each way , but consumers want
and expect excellent service for that time. Because
you can measure the duration of the service
consumers become more demanding of it.
 eg…
The 5S in Services Industry
 The Application
• In services industry…

• Back office

• Front office

• Human resources

• Data collected / recorded

 Drive Quality
SEISO
SEIRI Cleanliness
 Problems are more visible
when everything is neat and
SEIKETSU
Arrange Properly clean
 Distinguish between those
 Find minor defects while
Always Clean
things that are needed and not  Clean tools, equipment and
"sweeping clean”
needed job site immediately after
 Keep only needed materials at use
the job site  Equipment that is kept clean
 Throw away all unneeded

5s
items immediately runs better

SEITON
SHITSUKE
Orderliness
 Put things in right order in Discipline
designated areas  Use and follow standard
 Store all materials and information procedures
 Follow company rules and
in an orderly fashion at all times regulations
 Organized according to frequency  Follow safety procedures at
 Place for everything and all times
everything in its place
The Back office of a bank’s
branch
 SEIRI
The Cleaning up / Sorting
• An almirah was
storing files and
stationery
• But….
• All was hap-hazard
 After Seiri

• All files were checked for relevance on

the following grounds…
• Usage within last four months
• Condition of usability
• It was found that many files of the year
2002 were also in these almirahs and
were of no use as such
• Some stationery was not in conditions
of use
Seiton : Maintain Orderliness
• A place for everything and everything is in its place

• All these files as well as racks were labeled

• Unnecessary files were send to the archives
section
• A list was sticked outside the almirah to make
search easy and quick
• More frequently used files were kept in 2nd and
3rd racks …while stationery was in the 4th and 5th
racks
 SEISO : Cleaning

• Rules were set to clean up the almirahs

every weekend in the order prescribed
 SEIKETSU: Standarisation
• Standards were set for a regular practice
of 5s to be imbibed among employees
• For eg. Labeling new file, putting them in
the sequence of months, and in the
appropriate rack
 SHITSUKE: Making it a Habit
• It was required to be followed strictly,
regularly and by everyone right from top to
bottom…
• Everyone was oriented towards the
consecutive benefits and how important is
everyone’s role in its implementation
 5S in a Hospital
• Government hospitals project the image of
a poorly equipped, low-morale, and badly
maintained organization.
• 5S could help in the basic quality
improvement
 SEIRI
• Department established disposal
standards and policies.

• Each hospital employee will initially be

asked to take out unnecessary items in his
area of work and dispose it properly.
Seiton : Maintain Orderliness
• They were further asked to re arrange the
items as per the convenience of user.
• Stored items must be properly labeled to
facilitate retrieval
• Warning signs are applied on items
needing safety precautions.
 SEISO : Cleaning
• Participants were to allot three to five
minutes a day for cleaning his/her own
assigned area.
• All work activities must be coordinated
 SEIKETSU: Standarisation
• Standards have been developed for the
numerous work processes and
procedures.
• Standards for dressing oneself at
workplace were set and were to be strictly
followed
 SHITSUKE: Making it a Habit
• It was instilled in people to give due
consideration to others and strictly abides
by the rules and standards of the
organization.
• With first 3S implemented successfully,
Shitsuke becomes incorporated as a
habit.
5S in Retail Sector
 SEIRI
• The areas of application
– The store room
– Display racks
Before
 Seiton
• All items were placed in labeled racks.
 Seiso, Seiketsu & Shitsuke
• Maintain
• Train
• Habitualise
 Computer Service Centre

• Seiri
• Seiton
• Seiso
• Seiketsu
• Shitsuke
Before 5s
After 5s
 Hope ….
• Charles Revlon
– made a famous comment regarding the business of
Revlon Inc.:
– `In the factory we make cosmetics. In the store we
sell hope.'

Most successful companies attribute at least 60-70%

sales from their existing happy customers
(services marketing)
remaining 30% new customers are a result of other
marketing initiatives.