1. Lecture 6

2. We have covered Service Mktg Service Mktg Mix
Consumer Behavior in Services
GAP model of Service Quality
Understanding Consumer expectations & perceptions through MR
Building Customer Relationship
Service Recovery
Service Development & Design

3. Physical Evidence

4. Physical facility is referred to as SERVICESCAPE
Physical Evidence is the environment in which the service is delivered & where the firm & the customers interact & any tangible commodities that facilitate performance or communication of service.
Physical facility is referred to as SERVICESCAPE

5. Elements of Physical Evidence
Servicescape
Facility exterior
Exterior Design
Signage
Parking
Landscape
Facility Interior
Interior design
Equipment
Layout
Air quality/Temperature
Other Tangibles
Business card
Stationary
Billing statement
Report
Employee dress
Uniform
Brochure
Webpage
Virtual servicescape egs.?

6. Typology of Service Organisations

7. Roles of the Servicescape
Package
Eg. Disneyland
Facilitator
Eg. Bank
Socailizer
Eg. Barista, Café Coffee Day
Differentiator
Eg. King Class

8. Framework on Environment-User Relationship in Service Organisations

9. Employees’ Role in Service Delivery

10. Gaps Model of Service Quality
Customer
Expected
sevice
Customer
gap
Perceived
service
Service delivery
External communications
to customers
Company
gap 1
Gap 4
Gap 3
Customer-driven service designs
and standards
Gap 2

11. IMPORTANCE OF SERVICE EMPLOYEES
Employees are the ‘Service’.
They are the ‘Brand’.
They are the ‘Organisation’ .
They are the ‘Marketers’ .
They are the ‘Most Visible Element’ in the servicescape.

12. SERVICE QUALITY DIMENSIONS
All service quality dimensions:
Reliability
Responsiveness
Assurance
Empathy
Tangibles
…… are directly influenced by service employees.

13. BOUNDARY SPANNERS
The frontline employees who operate at peripheral level or the boundary of the organisation.
They transfer information to and from the organisation….by understanding, filtering and interpreting it
They cover the full spectrum of jobs and professions.

14. BOUNDARY SPANNERS
At one end are the low qualified and low skilled workers and at the other end are the highly skilled and qualified professionals.
Irrespective of the skill or job, most boundary spanners often go through highly stressful situations.
They are also required to handle inter personal and inter organisational conflict.

15. EMOTIONAL LABOUR Effort required to deliver quality service.
Suppression of true feelings.
Emote with friendliness, empathy, responsiveness, courtesy towards their customers.

16. SOURCES OF CONFLICT Person / Role Conflict
Organisation / Client Conflict
Inter Client Conflict

17. STRATEGIES TO BUILD A CUSTOMER ORIENTED ORGANISATION
Hiring the right type of employees.
Train and develop them to deliver service quality.
Provide the needed support system.
Retain the best people.

18. HIRE THE RIGHT TYPE OF EMPLOYEES
Compete for the best people.
Hire for service competencies and service inclinations.
Be the preferred employer.

19. TRAINING AND DEVELOPMENT
Train for technical, interactive and inter-personal skills.
Empower employees.
Empowerment vs. Production Line
Encourage team work.

20. TRAINING AND DEVELOPMENT
Develop service oriented internal procedures / processes.
Provide supportive technology and equipments.
Measure internal service quality.

21. RETAIN THE BEST PEOPLE Measure and reward performers.
From productivity -> Customer Satisfaction
Treat employees as customers.
Include employees in the company’s vision.

22. Customers’ Role in Service Delivery

23. . At times Service is not successful due to Customer Inaction (eg. ??)
. Service delivery is all about customer driven approach, unlike the 4P’s approach which is product driven focusing on 4A’s
Awareness
Availability
Accessibility
Affordability
. Customers play a very vital role in successful delivery of service as customers are often present in the place where service is produced (Delivered)
. At times Service is not successful due to Customer Inaction (eg. ??)

24. Customer Participation in Service Delivery
Low level of participation
High level of participation
Airline
Fast food
Pest Control
Ad Agency
Payroll
Call centre
Transportation
Personal trainer
Major illness/surgery
Consulting

25. Other Customer
Other customers who are present in the Service scape can influence the Service positively or negatively
In many Service deliveries other customers also affect the service delivery in a positive or negative way. This can influence the customer’s perceptions of Service quality and affect customer satisfaction.

26. CUSTOMERS’ ROLES Customers as productive resources.
IT, Consulting
Customers as contributors to Service Quality & Satisfaction.
Satisfaction ~ Customer belief of doing their part effectively
Customers as Competitors.

27. Strategy for Enhancing Customer Participation
Recruit Educate & Reward Customers
Effective Customer Participation
Define Customer Jobs
Helping oneself, others, Promoting Co., Individual Differences
Educate thru orientation programs, literature, directional cues, watching other customers
Manage the Customer Mix
Compatibility Management

28. Delivering Service through Intermediaries

29. Types of Channels for Service Distribution
Franchising
Consistency, Knowledge of local markets, Shared financial risk
Agents & Brokers
Reduce selling & distribution cost
Electronic Channels (TV, Telephone, Net)

30. Managing Demand & Capacity

31. Variation in Demand Relative to Capacity
Excess Demand ( Business lost)
Volume Demanded
Maximum Capacity
Demand exceeds optimum capacity ( service quality declines)
Optimum Capacity ( Demand & Supply are well balanced)
Ideal use
Excess capacity ( wasted resources)
Low utilization ( May send bad signals )
TIME

32. Optimal vs Maximal Use of Capacity
Capacity constraints
Time: e.g Medical, legal, fitness
Labour: e.g Hospital, maintenance, education
Equipment: e.g Courier services, telecommunication, travel services
Facilities: e.g hospitality, educational institutions, airlines.
Optimal vs Maximal Use of Capacity

33. Understanding Demand Patterns
Charting demand patterns
Predictable cycles
Random demand fluctuations
Demand patterns by market segment.

34. Strategies for matching capacity and demand

35. Shifting demand to match capacity :
When the demand is too high;
(a) Communicate busy hours to the customers.
(b) Offer incentives for lean time usage
(c) Focus on loyal customers
(d) Communicate advantages of lean time usage.
(e) Do not offer discounts.

36. When the demand is too low;
(a) Attract current market segments by focusing on sales and advertising.
(b) Attract new segments with promotional schemes.
(c) Offer discounts.
(d) Bring the service to the customer
(e) Modify hours of operation.

37. 2. Adjusting capacity to match demand
When the demand is too high;
(a) Stretch time, labour, facilities and equipment
(b) Train employees for multiple skills
(c) Hire part-time employees.
(d) Pay the employees to work overtime.
(e) Rent facilities and equipments.
(f) Outsource activities.

38. When the demand is too low;
(a) carry out maintenance, repairs and renovations.
(b) Conduct training for employees.
(c) Offer leave to employees.
(d) Retrench employees.

39. When demand and capacity cannot be controlled
(a) Employ operational logic.
(b) Have a reservation procedure.
(c) Follow Queue discipline depending on;
- Importance of the customer
-Urgency of the job
-Duration of the service transaction
-Payment of a premium price.
(d) Make waiting tolerable.

40. Yield Management Used in capacity constrained services.
Objective of yield management is to produce the best possible revenue from a limited available capacity.
It involves allocating the right type of capacity, to the right type of customer, at the right price in order to earn maximum revenue.

41. Yield = Actual revenue potential revenue Continued…. Where,
Actual revenue = Actual capacity used X Average actual price
Potential revenue = Total capacity X maximum price

42. Case Study Discussions
Gp 5, 6 & 7

43. Thank you