The Nature of Services.

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The Nature of Services.

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Presentation transcript:

The Nature of Services

Service/Product Bundle Element Core Goods Example Core Service Business Custom clothier Business hotel Core Business suits Room for the night Peripheral Goods Garment bag Bath robe Service Deferred payment plans In house restaurant Variant Coffee lounge Airport shuttle

The Service Process Matrix

The Service Package Supporting Facility: The physical resources that must be in place before a service can be sold. Examples are golf course, ski lift, hospital, airplane. Facilitating Goods: The material consumed by the buyer or items provided by the consumer. Examples are 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. Examples are 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. Examples are quality of meal, attitude of the waiter, on-time departure. Implicit Services: Psychological benefits or extrinsic features which the consumer may sense only vaguely. Examples are 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)

Strategic Service Classification (Relationship with Customers)

Strategic Service Classification (Customization and Judgment)

Strategic Service Classification (Nature of Demand and Supply)

Strategic Service Classification (Method of Service Delivery)

Open Systems View of Services

Village Volvo’s Service Package Supporting Facility Facilitating Goods Information Explicit Services Implicit Services

Village Volvo’s Distinctive Service Characteristics Intangibility Perishability Heterogeneity Simultaneity Customer Participation in the Service Process

Village Volvo’s Service Classification Nature of the service act Relationship with customers Customization and judgement Nature of demand and supply Method of service delivery

Managing Village Volvo How could Village Volvo manage its back office (repair operations) like a factory? How can Village Volvo differentiate itself from Volvo dealers?