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The Nature of A Service. We live in an age in which our thinking about what a product or service is must be quite different from what it ever was before.

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Presentation on theme: "The Nature of A Service. We live in an age in which our thinking about what a product or service is must be quite different from what it ever was before."— Presentation transcript:

1 The Nature of A Service

2 We live in an age in which our thinking about what a product or service is must be quite different from what it ever was before. It is not so much the basic,generic, central thing we are selling that counts, but the whole cluster of satisfactions with which we surround it. Levitt 1973, p.47 In other words, service is comprised of many dimensions.

3 The Nature of A Service The service product is essentially a bundle of activities, consisting of the core product - which in Federal Express case consists of transporting packages overnight and delivering them next morning to the addressee, plus a cluster of supplementary services. C. Lovelock, 1991, Ch.2

4 The Nature of A Service The Example of Federal Express Source: C. Lovelock 1991, Ch.2 Overnight Transportation and Delivery of Packages Advice and Communication Order Taking Supplies Pick-up Documentation Tracking Bill Statements Problem Solving

5 The Nature of A Service As first proposed by Grönroos (1979), services marketing focuses on buyer-seller interactions (where the seller may be selling many services and the buyer may be a business or non-business customer). It is these buyer-seller interactions which are now commonly referred to as customer service. Therefore, it is this interaction which is being evaluated by a customer.

6 The Nature of A Service Moments of Truth: There are certain times when a customer comes into contact with a service provider where the interaction between the two parties enables the service provider to display its real nature. Jan Carlsson For example, when an American Express customer has lost his / her American Express Card and all other money in a foreign country and needs $1.000, urgently. Does American Express succeed in looking after the customer or do all their previous promises turn out to be lies.

7 The Nature of A Service Pre-transaction Stage –Observing –Enquiring –Sampling –etc. Transaction Stage –Booking –Purchasing –etc. Post-transaction Stage –After sales service (e.g. Information, Returns, Repair, additional services). 3 Stages of Service Each of these stages contain core and supplementary services. Evidence: Hummel and Savitt (1990) Dawson and Sparks (1990) Supported by: Grönroos (1987,1988) Bolton and Drew (1991)

8 The Nature of A Service Core and Supplementary Services Evidence: Grönroos (1987,1988) Bolton and Drew (1991) Industry Core ServiceSupplementary Service AutomobilesTransport,After Sales Service etc. Reliability etc. BankingBanking ProductsInformation, Politeness etc. Facilitating Supporting Airline CheckFlight Meals in facilities Evidence Bolton and Drew (1991) These elements apply to both goods and service industries but will be more complex in service industry products. SAS Travel on time Safely

9 The Nature of A Service Core and Supplementary Services Augmented Service Offering Fundamental and Sub-dimensions of Service (Many have been suggested and the suggestions often overlap and conflict with each other) Fundamental and Sub-dimensions of Service (Many have been suggested and the suggestions often overlap and conflict with each other) All parts can be evaluated by a customer in terms of :

10 The Nature of A Service The Dimensions of Service According to research conducted by Parasuraman, Zeithaml and Berry (1988) there are 5 main dimensions of service: Reliability Responsiveness Assurance Empathy Tangibles Limitation : Whilst people may not be able to objectively decipher between for example access and communication, they may be able to subjectively Contradictory Evidence : Babakus and Boller (1991), Brensinger and Lambert (1990), Carman (1990), Finn and Lamb (1991), Cronin and Taylor (1992) suggested that in fact there may just be one dimension, but then of course there would be ultimately.

11 The Nature of A Service The Dimensions of Service Other suggested dimensions include: Scarcity Classicalness Nationality The Perceived Servicescape : Ambient Conditions Temperature Air Quality Noise Music Odour etc. Space / Function Layout Equipment Furnishings etc. Evidence: Pitt (1991) Signs, Symbols and Artefacts Signage Personal Artefacts Style of Decor etc. Evidence: M.Bitner 1992

12 The Nature of A Service The Dimensions of Service Other suggested dimensions include: Green Matters (environmental considerations) The ability of a service provider to sort out mistakes. Relationships. i.e: Customers prefer to be relationship customers rather than ordinary customers. In other words: They want ongoing, personalised relationships with the same repres- entatives. They want these representatives to contact them, rather than always having to initiate the contact themselves. They want a partner, some who knows and cares about them....Customer relationships are central to exceeding customer expectations. Evidence: E. Gummesson (1993) Evidence: C.Grönroos (1988) Berry & Parasuraman (1991) Evidence: Parasuraman, Berry and Zeithaml (1991)

13 The Nature of A Service The Dimensions of Service Evidence: C. Grönroos (1982,83,84) Perception of all the dimensions of service Technical Evaluation What is delivered by a service provider as part of a service. e.g: Room Service Technical Evaluation What is delivered by a service provider as part of a service. e.g: Room Service Functional Evaluation The way a service is delivered by a service provider. e.g: Friendly room service Functional Evaluation The way a service is delivered by a service provider. e.g: Friendly room service

14 The Nature of A Service Provider All products and services deliver a service, and producers of products provide services which are important and additional to the service directly provided by the product. It is difficult to imagine a situation where a transaction takes place without any customer service. Even slot machines dispensing chocolate use some form of customer service, for example the dispensing machine itself, the range of chocolate provided and the convenience of it. Nevertheess there are 2 extremes: Evidence: C. Grönroos (1982) Product Extreme ProviderService Extreme Provider Tangibility Homogeneity Interpersonal Interaction (inseparability) Perishability

15 The Nature of A Service Provider Example: Light Bulb: Can be evaluated fairly well by using official evaluations of its effectiveness, appearance and reliability specifications, before it is bought because it is Tangible, Homogenous with other light bulbs of the same type, fairly, but not very quickly perishable, and interaction between the customer and the light bulb will make no difference to its operation unless it is misused. Guided City Tour: Cannot be effectively evaluated without experiencing it, because it is Intangible, may be better or worse on different occasions, may be adversely affected by interpersonal interaction (such as clashes of personality between the tour guide and the tourist), and because the specific tour will last only for one use.

16 The Nature of A Service Provider Therefore, all companies provide services but Service Companies provide more complex and ambiguous services. Raw Mateials Producers Final Service Deliverers Finished Product Producers Manufactured Goods Producers E.g: Copper / Copper Wires E.g: Electrical Components E.g: Audio Systems / Cars E.g: Car Dealership / Car Rental Provider Increasing service Complexity and Ambiguity

17 The Nature of A Service Provider It is also apparent that products may be provided by some providers of services. e.g: Banks provide check books (in some countries), check cards and piggy banks. Therefore there is even less distinction between products and services.


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