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Chapter 2 The Nature of Services. Learning Objectives 1. 1. Service process matrix. 2. 2. The service package. 3. 3. Distinctive characteristics of a.

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Presentation on theme: "Chapter 2 The Nature of Services. Learning Objectives 1. 1. Service process matrix. 2. 2. The service package. 3. 3. Distinctive characteristics of a."— Presentation transcript:

1 Chapter 2 The Nature of Services

2 Learning Objectives 1. 1. Service process matrix. 2. 2. The service package. 3. 3. Distinctive characteristics of a service operation. 4. 4. The strategic classification of services. 5. 5. The role of a service manager from an open- systems view of service.

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

4 The Service Process Matrix Degree of Interaction and Customization Low High Service factory: Service shop: * Airlines * Hospitals Low * Trucking * Auto repair * Hotels * Other repair services * Resorts/ recreation Degree of labor Intensity Mass service: Professional service: * Retailing * Doctors High * Wholesaling * Lawyers * Schools * Accountants * Retail aspects of * Architects commercial banking

5 The Service Package 1. Supporting Facility Examples are golf course, ski lift, hospital, airplane. 2. Facilitating Goods Examples are food items, legal documents, golf clubs, medical history. 3. Information Examples are patient medical records, seats available on a flight, customer preferences, location of customer to dispatch a taxi. 4. Explicit Services Examples are quality of meal, attitude of the waiter, on-time departure. 5. Implicit Services Examples are privacy of loan office, security of a well lighted parking lot.

6 Distinctive Characteristics of Services Customer Participation Simultaneity Perishability Intangibility Heterogeneity

7 Strategic Service Classification (Nature of the Service Act) Direct Recipient of the Service Nature of 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 Peoples minds: Intangible assets: Education Banking Intangible actions Broadcasting Legal services Information services Accounting Theaters Securities Museums Insurance

8 Strategic Service Classification (Relationship with Customers) Type of Relationship between Service Organization and Its Customers Nature of 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

9 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

10 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

11 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 Transaction is at Credit card company Broadcast network arms length Local TV station Telephone company

12 Open Systems View of Services Service Process Consumer Evaluation Consumer arrivals Consumer participant departures Criteria (input) Consumer-Provider ( output) Measurement interface Control Monitor Customer demand Service Operations Manager Service personnel Production function: Perceived needs Alter Monitor and control process Schedule Empowerment Location demand Marketing function: supply Training Interact with consumers Attitudes Control demand Modify as necessary Define standard Service package Supporting facility Communicate Facilitating goods Basis of by advertising Explicit services selection Implicit services

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