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What is Service?

There are no such thing as service

industries. There are only industries whose

service components are greater or less

than those of other industries. Everybody isin service. (Levitt)

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Continuum

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Goods Services

Toothpaste Airconditioner HospitalAutomobile RestaurantAirlines

(full service)Consulting

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Service Types

B2Co Salon

o Education

o Legalo Medical

o

B2Bo Janitor

o Consulting

o CA

o Maintenance

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Features of Services

Intangible

Perishable

Variable

Inseparable

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Service Attributes

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Searcho Can be evaluated before purchase

o High for goods

Experienceo Can be evaluated during the service delivery process

Credenceo Can take a long time to evaluateeven after the

process is over

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Customer Contact levels

High contact service Customers involved throughout the

service delivery process

Medium contact

service

Customers visit service facility but do not

remain for the whole durationLow contact service Little/no personal contact between

customer and service provider - servicedelivered from remote location, oftenthrough electronic means

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Marketing Challenges

Cannot be inventoriedo Demand forecastingsmoothing through promotions, dynamic

pricing

o Capacity adjustmentin tandem with operations

Intangibility - difficult to evaluate, and todifferentiate between competitorso Make tangible through physical cues

o Vivid imagery in advertising and branding

Difficult to visualise and understand - greaterperceived risko Educate on what to look for, documentation of performance,

guarantees

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Marketing Challenges Contd.

Co-production with customersencounter may getspoiled, hurt productiono User-friendly equipment & facilities

o Training of customers & customer support

Presence of people (service personnel & othercustomers)can affect satisfactiono Recruit and train employees

o Target right customers at right place and time

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Marketing Challenges Contd.

Variablehard to maintain consistency, reliability,mass productiono Quality standards based on customer expectations

o Good service recovery systems

o Automate interactionsin absence of customers

Time becomes importantwaiting time issueso Speed of delivery

o Ameliorate burden of waiting

o Extended service hours

Distribution through non-physical channelsinformation, moneyo User-friendly websites

o Security issues to be sorted out

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3 More Ps

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People

The human element

Physical Evidence

The material element

Process

The organisational element

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People

The most important element

Brand ambassadors

Service orientation

Keeping employees motivatedo Autonomy - higher say in how they perform the job

o Job rotation

o Job enrichmentmore responsibilitieso Recognition

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3 Pillars of Services

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ServiceExcellence

HumanRelations

OperationsMarketing

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Physical Evidence Servicescape

The material part of serviceo Actual locationambience, environment

o Webpageo Brochures

o Paperworkletterpads, tickets, invoices, business cards

o Furnishings

Corporate brandssignages (airports),symbols (fast food), artefacts (t-shirts,

caps)

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Spatial Design

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Process Important variable from the customers perspective

Service flowcustomer determines what needs to bedone

Service blueprinting Waiting - limited resources, personnel and/or facilities

o Seating vs. standing: Reduce waiting timemodelling

o Make it tolerable: Provide information upfront (KFC, DelhiMetro)

o Pre-processing: Self-service (Check-in kiosks)

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Service Quality

Empathyindividualising customers

Reliabilitydelivering on promises

Responsivenesswilling to help Assuranceinspiring trust and confidence

Tangiblesphysical representation

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Consistency

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Word of mouth

communications

Perceived

needsPast

experiences

Expected

service

Perceived

service

External

communications

to customers

Service

delivery

Service quality

specifications

Management perceptions

of customer expectations

Delivery Gap

Policy Gap

Communications Gap

Customer Gap

Knowledge Gap

PROVIDER

CUSTOMER

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Service FailureWhen any individual gap or the sum totalof all gaps become substantially high

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Desired Service

Zone of Tolerance

Adequate Service

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Complainer Types

Passives

Voicers

Irates

Activists

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Benefits of Complaints A satisfied consumer speaks to 3 people

(average) about her experience

A dissatisfied consumer gripes to 11 persons

(average) about her unpleasantexperience

It pays to resolve complaints

On an average only 5% dissatisfiedcustomers complain

o Others simply go to the competitor

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Service Recovery

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To make up for the inconvenience

caused by service failure

Clear training and instructions are

necessary for all customer-facingpersonnel to handle failure and create

recovery

Best opportunity to tie the customer forlife

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Thank You!

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