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Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 1 Chapter 8: Designing and Managing Service Processes
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 2 Overview of Chapter 8 Blueprinting Services to Create Valued Experiences and Productive Operations Service Process Redesign The Customer as Co-Producer Dysfunctional Customer Behavior Disrupts Service Processes
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 3 Developing a Blueprint Identify key activities in creating and delivering service Define “big picture” before “drilling down” to obtain a higher level of detail Distinguish between “front stage” and “backstage” Clarify interactions between customers and staff, and support by backstage activities and systems Identify potential fail points; take preventive measures; prepare contingency Develop standards for execution of each activity — times for task completion, maximum wait times, and scripts to guide interactions between employees and customers
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 4 Key Components of a Service Blueprint 1. Define standards for front-stage activities 2. Specify physical evidence 3. Identify principal customer actions 4. Line of interaction (customers and front-stage personnel) 5. Front-stage actions by customer-contact personnel 6. Line of visibility (between front stage and backstage) 7. Backstage actions by customer contact personnel 8. Support processes involving other service personnel 9. Support processes involving IT - Identify fail points and risks of excessive waits - Set service standards and do failure-proofing
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 5 Setting Service Standards Service providers should design standards for each step sufficiently high to satisfy and even delight customers Standards may include time parameters, script for a technically correct performance, and prescriptions for appropriate style and demeanor Must be expressed in ways that permit objective measurement First impression is important as it affects customer ’ s evaluations of quality during later stages of service delivery Research by Marriott Hotels indicates that four of five top factors contributing to customer loyalty come into play during the first 10 minutes of service delivery Customer perceptions of service experiences tend to be cumulative For low-contact service, a single failure committed front stage is relatively more serious than in high-contact service Viewed more seriously because there are fewer subsequent opportunities to create a favorable impression
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 6 Improving Reliability of Processes by Failure Proofing Analysis of reasons for failure often reveals opportunities for failure proofing to reduce/eliminate future risk of errors Need fail-safe methods for both employees and customers Errors include: Treatment errors—human failures during contact with customer ― e.g., lack of courteous or professional behavior, failure to acknowledge, listen to, or react appropriately to the customer Tangible errors—failures in physical elements of service ― e.g., noise pollution, improper standards for cleaning of facilities and uniforms, equipment breakdown Goal of fail-safe procedures is to prevent errors such as: Performing tasks incorrectly, in the wrong order, too slowly Doing work that wasn ’ t requested in the first place See Service Perspectives 8.1 – Poka Yokes
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 7 Why Redesign? (2) Revitalizes process that has become outdated Changes in external environment make existing practices obsolete and require redesign of underlying processes Creation of brand-new processes to stay relevant Rusting occurs internally Natural deterioration of internal processes; creeping bureaucracy; evolution of spurious, unofficial standards Symptoms: - Extensive information exchange - Data redundancy - High ratio of checking or control activities to value-adding activities, increased exception processing - Customer complaints about inconvenient and unnecessary procedures
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 8 Process Redesign: Approaches and Potential Benefits (1) (Table 8.1) Eliminating non-value-adding steps Streamline front-end and back-end processes of services with goal of focusing on benefit-producing part of service encounter Eliminate non-value-adding steps Improve efficiency More customized service Differentiate company Delivering direct service Bring service to customers instead of bringing customers to provider Improve convenience for customers Productivity can be improved if companies can eliminate expensive retail locations Increase customer base
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 9 Process Redesign: Approaches and Potential Benefits (2) (Table 8.1) Shifting to self-service Increase in productivity and service quality Lower costs and perhaps prices Enhance technology reputation Greater convenience Bundling services Involves grouping multiple services into one offer, focusing on a well- defined customer group Often has a better fit to the needs of target segment Increase productivity Add value for customers through lower transaction costs Customize service Increase per capita service use
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 10 Process Redesign: Approaches and Potential Benefits (3) (Table 8.1) Redesigning physical aspects of service processes Focus on tangible elements of service process; include changes to facilities and equipment to improve service experience Increase convenience Enhance the satisfaction and productivity of front-line staff Cultivate interest in customers Differentiate company
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 11 Levels of Customer Participation Customer Participation Actions and resources supplied by customers during service production and/or delivery Includes mental, physical, and even emotional inputs Three Levels Low—Employees and systems do all the work - Often involves standardized service Medium—Customer inputs required to assist provider - Provide needed information and instructions - Make some personal effort; share physical possessions High—Customer works actively with provider to co-produce the service - Service cannot be created without customer ’ s active participation - Customer can jeopardize quality of service outcome (e.g., weight loss, marriage counseling)
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 12 Self-Service Technologies (SSTs) Ultimate form of customer involvement Customers undertake specific activities using facilities or systems provided by service supplier Customer’s time and effort replace those of employees ― e.g. Internet-based services, ATMs, self-service gasoline pumps Information-based services lend selves particularly well to SSTs Used in both supplementary services and delivery of core product ― e.g. eBay—no human auctioneer needed between sellers and buyers Many companies and government organizations seek to divert customers from employee contact to Internet-based self-service Economic trade-off between declining cost of these self-service systems and rising cost of labor Challenge: Getting customers to try this technology
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 13 What Aspects of SSTs Please or Annoy Customers? People love SSTs when … SST machines are conveniently located and accessible 24/7 — often as close as nearest computer! Obtaining detailed information and completing transactions can be done faster than through face-to-face or telephone contact People in awe of what technology can do for them when it works well People hate SSTs when … SSTs fail — system is down, PIN numbers not accepted, etc They mess up — forgetting passwords, failing to provide information as requested, simply hitting wrong buttons Key weakness of SSTs: Too few incorporate service recovery systems Customers still forced to make telephone calls or personal visits Blame service provider for not providing more user-friendly system
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 14 Addressing the Challenge of Jaycustomers Jaycustomer: A customer who behaves in a thoughtless or abusive fashion, causing problems for the firm, its employees, and other customers More potential for mischief in service businesses, especially when many customers are present Divergent views on jaycustomers “ The customer is king and can do no wrong. ” Marketplace is overpopulated with nasty people who cannot be trusted to behave in ways that self- respecting services firms should expect and require Insight: There ’ s truth in both perspectives No organization wants an ongoing relationship with an abusive customer
Service and Relationship Marketing Module:3 Chapter:8 – Designing and Managing Service Processes.
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E Chapter 8 Designing and Managing Service Processes.
CHAPTER 8 Designing and Managing Service Processes
Designing and Managing Service Processes
Essentials of Services Marketing, 2nd Edition Instructor Supplement.
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 1 CHAPTER 8 Designing and Managing S ervice Processes.
Chapter 8: Designing and Managing Service Processes.
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 1 Chapter 8 Designing and Managing Service Processes.
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter Chapter 8: Designing and Managing Service Processes.
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter The Customer as Co-Producer.
Services Design Techniques: Derbyshire Business School
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Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 1 CHAPTER 13 Complaint Handling and S ervice Recovery.
1 © The McGraw-Hill Companies, Inc., 2004 Chapter 6 Product Design and Process Selection – Services.
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 2- 1 Chapter 2 Customer Behaviour in Service Encounters.
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 1 CHAPTER 2 Consumer Behavior in a S ervices Context.
Chapter 13: Customers’ Roles in Service Delivery
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 1 CHAPTER 4 Developing S ERVICE Products: Core and Supplementary.
Employees' role in service delivery. The Services Marketing Triangle Internal Marketing Interactive Marketing External Marketing Company (Management)
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Service and Relationship Marketing Module:2 Chapter:1 Managing People for Service Advantage.
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5-1 Customer Perceptions of Service Customer Perceptions Customer Satisfaction Service Quality Service Encounters: The Building Blocks for Customer.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved. 1.
8 Chapter Service Recovery The Impact of Service Failure and Recovery How Customers Respond to Service Failures Customers’ Recovery Expectations.
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1.Define marketing and describe its contributions. 2. Differentiate among the concepts of needs, wants, and demands. 3. Define the concept of exchange.
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E Chapter 2 Consumer Behavior in Service Encounters.
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter Chapter 13: Achieving Service Recovery and Obtaining Customer.
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Service Products, Services, Intangibility, Inseparability, Perishability, Off Peak.
MTSU 1 Designing Quality Services. MTSU 2 The Nature of Services Services are unique Quality of work is not quality of service Service package contains.
Consumer Decision Making: The Three- Stage Model –Pre-purchase Stage –Service Encounter Stage –Post-purchase Stage.
Essentials of Health Care Marketing 2nd Ed. Eric Berkowitz
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