ABHISHEK DEV (002) PRESENTED BY: ABHISHEK SINGH (003) AJMAL MOHAMMAD (004) AKSHAY BINDROO (005) AKSHAY KUMAR (006) LEARNING OBJECTIVES Classify a service into one of four categories using the service process matrix.
Describe a service using the four dimensions of the service package.
Discuss the managerial implications of the distinctive characteristics of a service operation.
Discuss the insights obtained from a strategic classification of services.
Discuss the role of a service manager from an open-systems view of service. AN INTEGRATED APPROACH TO SERVICE MANAGEMENT The Eight Components: Product Elements Place, Cyberspace, and Time Promotion and Education Price and Other User Outlays + Process + Productivity and Quality + People + Physical Evidence
Require the Integration of Marketing, Operations, and Human Resources. SERVICE/PRODUCT BUNDLE Element Core Goods Example Core Service Example Business Custom clothier Business hotel Core Business suits Room for the night Peripheral Goods Garment bag Bath robe Peripheral Service Deferred payment plans In house restaurant Variant Coffee lounge Airport shuttle THE SERVICE PROCESS MATRIX
Degree of Interaction and Customization Low High Degree Service factory: Service shop: of labor Intensity * Airlines * Hospitals Low * Trucking * Auto repair * Hotels * Other repair services * Resorts and recreation
Mass service: Professional service: * Retailing * Doctors High * Wholesaling * Lawyers * Schools * Accountants * Retail aspects of * Architects commercial banking
THE SERVICE PACKAGE Supporting Facility: The physical resources that must be in place before a service can be sold. Eg: golf course, ski lift, hospital, airplane.
Facilitating Goods: The material consumed by the buyer or items provided by the consumer. Eg: food items, legal documents, golf clubs, medical history.
Information: Operations data or information that is provided by the customer to enable efficient and customized service. Eg: patient medical records, seats available on a flight, customer preferences, location of customer to dispatch a taxi. THE SERVICE PACKAGE (CONT.) Explicit Services: Benefits readily observable by the senses. The essential or intrinsic features. Eg: quality of meal, attitude of the waiter, on-time departure.
Implicit Services: Psychological benefits or extrinsic features which the consumer may sense only vaguely. Eg: privacy of loan office, security of a well lighted parking lot. DISTINCTIVE CHARACTERISTICS OF SERVICES
Customer Participation in the Service Process: attention to facility design but opportunities for co-production.
Simultaneity: opportunities for personal selling, interaction creates customer perceptions of quality.
Perishability: cannot inventory, opportunity loss of idle capacity, need to match supply with demand.
Intangibility: creative advertising, no patent protection, importance of reputation.
Heterogeneity: customer participation in delivery process results in variability.
STRATEGIC SERVICE CLASSIFICATION (NATURE OF THE SERVICE ACT)
Nature of Direct Recipient of the service the Service Act People Things Peoples bodies: Physical possessions:
Health care Freight transportation Passenger transportation Repair and maintenance Tangible actions Beauty salons Veterinary care Exercise clinics Janitorial services Restaurants Laundry and dry cleaning
STRATEGIC SERVICE CLASSIFICATION (RELATIONSHIP WITH CUSTOMERS)
Nature of Type of Relationship between Service Organization and Its Customers Service Delivery Membership relationship No formal relationship
Insurance Radio station Telephone subscription Police protection Continuous delivery Electric Utility Lighthouse of service Banking Public Highway
Long-distance phone calls Restaurant Theater series tickets Pay phone Discrete transactions Transit pass Toll highway Sams Wholesale Club Movie theater Airline frequent flyer Public transportation
STRATEGIC SERVICE CLASSIFICATION (CUSTOMIZATION AND JUDGMENT) Extent to Which Service Characteristics Are Customized Extent to Which Personnel Exercise Judgment in Meeting Customer Needs High Low
Surgery Preventive health programs High Taxi services Education (large classes) Gourmet restaurant Family restaurant
Telephone service Public transportation Hotel services Spectator sports Low Retail banking Movie theater Cafeteria Institutional food service
STRATEGIC SERVICE CLASSIFICATION (NATURE OF DEMAND AND SUPPLY) Extent of Demand Fluctuation over Time Extent to which Supply Is Constrained Wide Narrow
Electricity Insurance Peak demand can Telephone Legal services usually be met Police emergency Banking without a major delay Hospital maternity unit Laundry and dry cleaning
Tax preparation Fast food restaurant Peak demand regularly Passenger transportation Movie theater exceeds capacity Hotels and motels Gas station
STRATEGIC SERVICE CLASSIFICATION (METHOD OF SERVICE DELIVERY) Availability of Service Outlets Nature of Interaction between Customer and Service Organization Single site Multiple site
Customer travels to Theater Bus service service organization Barbershop Fast -food chain
Service provider Taxi Mail delivery travels to customer Pest control service AAA emergency repairs Taxi
Transaction is at Credit card company Broadcast network arms length Local TV station Telephone company
OPEN SYSTEMS VIEW OF SERVICES CASE STUDY VILLAGE VOLVO VILLAGE VOLVO SERVICE PACKAGE
Supporting Facility: Owners occupied a new Butler building. With 4 work bays, an office, waiting area and storage room.
Facilitating Goods: The shop was built in suburban area. Daily shuttle service for two or three times a day was considered. Waiting room equipped with a television set, comfortable chairs, coffee, a soft-drink vending machine, magazines and the local newspaper.
Information: Village Volvo maintains a Custom Care Vehicle Dossier (CCVD), a continuing file for each vehicle it services.
VILLAGE VOLVO SERVICE PACKAGE (CONT..)
Explicit services: Provides quality repair on out of warranty Volvos at a reasonable cost. High quality customer service. Takes care to keep the car clean throughout the repair process. The inside of car is vacuumed as a courtesy before pickup.
Implicit services: Mechanic takes a short test drive with the client to be certain that both understand the area of concern. Client feels comfortable and satisfied.
VILLAGE VOLVOS DISTINCTIVE SERVICE CHARACTERISTICS Customer Comfort
Trust
Respect
Good service with additional service
Customer Participation in the Service Process
Good MIS
VILLAGE VOLVOS SERVICE CLASSIFICATION The nature of the service act: Clients car is the direct recipient of the service.
The relationship with customers: Owners contact clients directly. Owners are also considering to offer a mini course one Saturday morning each month to teach clients what they can do to attain their 200,000-mile Volvo medals.
Customization and judgment: Ensure service quality. E.g. the mechanic will discuss the problems the client has noticed during the repair process. VILLAGE VOLVOS SERVICE CLASSIFICATION (CONT..)
The nature of demand and supply: Owners have 22 combined years of training and experience with the local Volvo dealer. By this they have earned a respected reputation and a following of satisfied customers.
The method of service delivery: Ensure service quality. Ensure consistency. HOW TO MANAGE ITS BACK OFFICE WORK AS A FACTORY? Proper spare parts management .
Provide next service date and have a record with Village Volvo. It will help in daily and weekly Planning.
Differentiate between emergency and routine repairs.
Implementation of 5S of quality.
HOW VILLAGE VOLVO CAN DIFFERENTIATE ITSELF FROM OTHER VOLVO DEALERS? Differentiation Through Service Excellence
Integrated Virtual Call Centre
Integrated Service Network
Proactive offer sales service
Customer Touch point Management
Smart Service agent
CASE STUDY - XPRESSO LUBE FACILITY Supporting facility: tools and equipment, an equipment storage area, a spacious waiting room, chairs, a service counter, street access and parking. Facilitating goods: oil, filters, auto parts, coffee, snacks, cups, napkins, sugar and milk. Information: for regular customers a reminder card could be sent for routine maintenance. Explicit services: a car with new oil and filter, maintenance checks of the car, and a cup of coffee. Implicit services: trust, a feeling of not getting screwed, a feeling of keeping the car maintained, the satisfaction that comes from taking care of ones car, the good feeling that comes from recycling the old oil, a caffeine lift, and the satisfaction of drinking good coffee while
XPRESSO LUBES SERVICE PACKAGE: THE DISTINCTIVE CHARACTERISTICS OF A SERVICE OPERATION ILLUSTRATED BY XPRESSO LUBE Customer Participation in the Service Process: Customers bring their car to Xpresso Lube and wait for the oil change. Customers are invited to inspect the car while on the lift to observe other needed repairs.
Simultaneity: Using the coffee shop as a pleasant diversion allows Xpresso Lube to partially reduce the need for immediately working on arriving cars. Providing a shuttle service to nearby University and State Capital would further allow scheduling oil changes.
Perishability: the number of car lifts at the shop limits Xpresso Lubes capacity. This oil change business also owns an auto repair facility next door so the two businesses can deploy mechanics between them to best utilize labor capacity.
Intangibility: Xpresso Lubes car lift design allows customers to watch its service, which gives customers more assurance that their needs are being met. Thus, the intangibility factor as in typical pits is taken care of.
Heterogeneity: Different cars provide some variability in the oil change routine. Some customers even come for only the coffee.
CHARACTERIZE XPRESSO LUBE Changing the oil is the primary function of Xpresso Lube. This is a tangible action performed on the car, but the secondary service is serving coffee, which recognizes the personal needs of the owners.
Xpresso Lubes service relationships consist of discrete, one-time transactions, but the companys focus on fostering customer trust and a pleasant waiting environment might lead to more long-term customers.
Fairly low customization is possible, but the accessibility of the service area and the mechanics can lead to customization opportunities if there are problems with the cars.
There is a significant demand fluctuation based on the obvious convenience of having the work performed after work or during the weekend. This peaked demand pattern can easily exceed Xpresso Lubes capacity. But Xpresso Lubes service environment encourages people to accept longer waits and, by providing transportation, it enables customers to drop off their cars in the morning and retrieve them later in the day. ELEMENTS OF XPRESSO LUBES LOCATION CONTRIBUTING TO ITS SUCCESS Xpresso Lube is located on the main thoroughfare leading to the University of Texas and thus provides excellent visibility.
The immediate business area is a bustling and diverse that attracts a broad spectrum of visitors.
Its also an area where customers dont mind waiting because they can walk to a variety of popular shops (e.g., Wheatville Co-Op and Half-Priced Books)
INDIAN SCENARIO: CARNATION AUTO An initiative by former chief executive of Maruti Suzuki (Mr. Jagdish Khattar) to provide Customization Service.
Indias Largest Integrated Multi Brand Auto Solution Network.
Services Provided By CARNATION: New and Used car sales Used car exchange Car repair and service Car accessories Car Insurance
NATURE OF SERVICES - A DIFFERENT PERSPECTIVE ???? Agri Services MFG IT Microsoft
Mobile Manufacturers partner Service providers to offer products
Automobile Majors BMW, Audi, Benz, etc. have FinServ arms
Housing as a service
Support from Governments Infrastructure Provisions Civic Amenities WHAT IS IN IT FOR GOVERNMENTS AND COMPANIES? Growth of Service Industries -produces less cyclic national Economies
Service Industries negotiate recessionary pressure with relative ease
Growth of services leads to better quality of life and often increases the efficiency of the system as a whole TRENDS THAT DRIVE SERVICE INDUSTRIES Aging Population across the world
Unprecedented Growth of 2 income families
Increasing number of Singles
Consumerism - change in saving & expense pattern
Affordability and Reach of Services
CURRENT TREND EXPERIENCE ECONOMY(EE) EE Agri Services MFG EXPERIENCE ECONOMY!? Upcoming trend which is the successor of the Service Economy.
Highly customized service leaves an everlasting impression/experience with the customer.
The experience is treated as the value proposition offered by such a product. EXAMPLES OF STAGED EXPERIENCE PRODUCTS Airtels My Plan post paid offering
Audi Indias experience offering
Taj Hotels Outdoor catering services
Economic Times - Article on Recent trends in Service Offering
Thank You TOPICS FOR DISCUSSION What are the characteristics of services that will be most appropriate for Internet delivery?
When does collecting information through service membership become an invasion of privacy?
What are some management problems associated with allowing service employees to exercise judgement in meeting customer needs?
What factors are important for a manager to consider when attempting to enhance a service firms image?
What contributions to the management of professional service firms can a business school graduate provide?