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7/30/2019 Services Marketing Session 10
1/41
Planning The Service Environment
Services Marketing - SZABIST
7/30/2019 Services Marketing Session 10
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Comparison of Hotel Lobbies
The servicescape is part of the value proposition!
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Elements of Service Environment
Exterior facilities
Facade
Vehicles
Corporate design
General interior
Colors Furniture and fixtures
Textures
SoundsServices Marketing - SZABIST
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Elements of Service Environment
Store layout
In line with service blueprint
Online store layout
Interior displays
Corporate communication
Brand communication Product display
Social dimensions
Services Marketing - SZABIST
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The Purpose of Service Environments
The service environment influences buyer behavior in 3ways
Message-creating Medium: symbolic cues to communicate thedistinctive nature and quality of the service experience.
Attention-creating Medium: to make the servicescape stand outfrom other competing establishments, and to attract customers
from target segments.
Effect-creating Medium: colors, textures, sounds, scents and
spatial design to enhance the desired service experience,and/or to heighten an appetite for certain goods, services or
experiences
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The Mehrabian-Russell Stimulus-
Response Model (Figure 10.2)
Response
Behaviors:
Approach/
Avoidance &
Cognitive
Processes
EnvironmentalStimuli & Cognitive
Processes
Dimensions ofAffect:
Pleasure and
Arousal
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The Mehrabian-Russell Stimulus-
Response Model Simple and fundamental model of how people
respond to environments
Peoples conscious and unconscious perceptions
and interpretation of the environment influencehow they feel in that environment
Feelings, rather than perceptions or thoughts drivebehavior
Typical outcome variable is approach oravoidance of an environment, but other possibleoutcomes can be added to the model as well
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The Russell Model of Affect
Arousing
Pleasant
Sleepy
Unpleasant
Exciting
RelaxingBoring
Distressing
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The Russell Model of Affect
Emotional responses to environments can be
described along two main dimensions, pleasure
and arousal.
Pleasure is subjective depending on how much theindividual likes or dislikes the environment
Arousal quality of an environment is dependent on
itsinformation load
, i.e., its degree of
Novelty (unexpected, surprising, new, familiar) and
Complexity (number of elements, extent of motion or
change)
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Behavioral Consequence of Affect
Basically, pleasant environments result inapproach, and unpleasant environments result inavoidance
Arousal acts as an amplifier of the basic effect of
pleasure on behaviour If the environment is pleasant, increasing arousal
can lead to excitement and stronger positiveconsumer response. If the environment is
unpleasant, increasing arousal level will moveconsumers into the Distressing region
Feelings during the service encounter is also animportant driver of customer loyalty
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An Integrated Framework Bitners
ServiceScape ModelEnvironmental
Dimensions
Perceived
ServiceScape
Ambient
Conditions
Space/
Function
Signs,Symbols &
Artefacts
Cognitive
Emotional
Psychological
Customer
Response
Moderator
EmployeeResponses
Approach
or
Avoid
Approach
or
Avoid
Social Interaction
Between
Customers &
Employees
Holistic
Environ-
ment
Moderators Internal Responses Behaviour
Customer
Responses
Employee
Response
Moderator
Cognitive
Emotional
Psychological
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An Integrated Framework Bitners
ServiceScape Model(cont)
Identifies the main dimensions in a serviceenvironment and views them holistically
Customer and employee responses classified
under, cognitive, emotional and psychologicalwhich would in turn lead to overt behaviortowards the environment
Key to effective design is how well eachindividual dimension fits together witheverything else
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Dimensions of the Service
Environment
Ambient Conditions Music (e.g, fast tempo and high volume increase arousal levels)
Scent (strong impact on mood, affect and evaluative responses,
purchase intention and in-store behavior)
Color (e.g, warm colors associated with elated mood states and
arousal but also increase anxiety, cool colors reduce arousal but
can elicit peacefulness and calm)
Service environments are complex and have many designelements. The main dimensions in the servicescape model
includes:
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Dimensions of the Service Environment
(cont)
Spatial Layout and Functionality Layout refers to size and shape of furnishings and the ways it is
arranged
Functionality is the ability of those items to facilitate performance
Signs, Symbols and Artifact Explicit or implicit signals to communicate the firms image, help
consumers find their way and to convey the rules of behavior
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Aromatherapy: The Effects of
Fragrance on PeopleFragrance Aromathe
rapyAromatherapy Class
Traditional Use
Potential PsychologicalImpact on People
Orange Citrus Calming Soothingagent,astringent
Calming and relaxing effectesp. for nervous people
Lavender Herbaceous
Calming,balancing,soothing
Musclerelaxant,soothingagent
Relaxing and calming, helpscreate a homey andcomfortable feel
Jasmine Floral Uplifting,balancing
Emollientsoothingagent
Helps makes people feelrefreshed, joyful, comfortable
Peppermint Minty Energizing,stimulating
Skincleanser
Increase attention level andboosts energy
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Common Associations and Human
Responses to ColorsColor Degree of
WarmthNatureSymbol
Common Association andHuman Responses to Color
Red Warm Earth High energy and passion; canexcite, stimulate, and increasearousal and blood pressures
Orange Warmest Sunset Emotions, expressions, and warmth
Green Cool Grass
andTrees
Nurturing, healing and
unconditional love
Blue Coolest Sky andOcean
Relaxation, serenity and loyalty
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Selection of Environmental Design
Elements There is a multitude of research on the perception and
impact of environmental stimuli on behaviour,
including: People density, crowding
Lighting
Sound/noise
Scents and odours
Queues
No standard formula to designing the perfectcombination of these elements. Design from the customers perspective
Design with a holistic view!
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Tools to Guide in Servicescape Design
Keen Observation of CustomersBehavior and Responsesto the service environment by management, supervisors,branch managers, and frontline staff
Feedback and Ideas from Frontline Staff and Customers
using a broad array of research tools ranging fromsuggestion boxes to focus groups and surveys.
Field Experiments can be used to manipulate specificdimensions in an environment and the effects observed.
Blueprinting or Service Mapping - extended to include thephysical evidence in the environment.
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Managing People for Service
Advantage
l l f
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Frontline Service Personnel: Source of
Customer Loyalty and Competitive
Advantage
Frontline is an important source ofdifferentiation and competitive advantage. It is: a core part of the product
the service firm
the brand
Frontline also drives customer loyalty, with
employees playing key role in anticipatingcustomer needs, customizing service deliveryand building personalized relationships
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Boundary Spanning Roles
Boundary spanners link the inside of the organization
to the outside world
Multiplicity of roles often results in service staff having
to pursue both operational and marketing goals
Consider management expectations of restaurant
servers:
deliver a highly satisfying dining experience to their
customers be fast and efficient at executing operational task of serving
customers
do selling and cross selling, e.g. We have some nice desserts
to follow your main course
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Role Stress in the Frontline
Person vs. Role: Conflicts between what jobs require andemployees own personality and beliefs
Organization vs. Customer: Dilemma whether to followcompany rules or to satisfy customer demands
Customer vs. Customer: Conflicts between customers thatdemand service staff intervention
3 main causes of role stress:
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Emotional Labor
The act of expressing socially desired emotions duringservice transactions (Hochschild, The Managed Heart)
Three approaches used by employees
surface acting
deep acting
spontaneous response
Performing emotional labor in response to societys or
managements display rules can be stressful Good HR practice emphasizes selective recruitment,
training, counseling, strategies to alleviate stress
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The Cycles of Failure, Mediocrity and
Success
Too many managers make short-sighted assumptionsabout financial implications of:
Low pay
Low investment (recruitment, training)
High turnover human resource strategies
Often costs of short-sighted policies are ignored:
Costs of constant recruiting, hiring & training
Lower productivity & lower sales of new workers
Costs of disruptions to a service while a job remains unfilled
Loss of departing persons knowledge of business and
customers
Cost of dissatisfied customers
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Cycle of Failure
Customerturnover
Failure to developcustomer loyalty
No continuity inrelationship for
customer
Customerdissatisfaction
Employees cantrespond to customer
problems
Employeesbecome bored
Employee dissatisfaction;poor service attitude
Repeat emphasis onattracting new customers
Low profitmargins Narrow design of
jobs to accommodatelow skill level
Use of technology
to control quality
High employee turnover;poor service quality
Payment oflow wages
Minimization ofselection effort
Minimizationof training
Emphasis onrules ratherthan service
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Service Sabotage
Customary-Private ServiceSabotage
Sporadic-Private Service
Sabotage
Customery-Public ServiceSabotage
Sporadic-Public Service
Sabotage
Openness of Service Sabotage BehaviorsCovert Overt
Normality
ofServiceSabo
tageBehaviors
Routiniz
ed
In
termittent
e.g. Waiters serving smaller
servings, bad beer or sour winee.g. Talking to guests like
young kids and putting them
down
e.g. Chef occasionally
purposefully slowing down
orders
e.g. Waiters spilling soup onto
laps, gravy onto sleeves, or hot
plates into someones hands
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Cycle of Mediocrity
Good wages/benefits
high jobsecurity
Other suppliers (if any)seen as equally poor
Customers tradehorror stories
Service not focused
on customers needs
Employees spendworking life
in environmentof mediocrity
Narrow designof jobs
Success =
not making
mistakes
Complaints met byindifference or
hostility
Employeedissatisfaction
(but cant easily quit) Emphasison rules
vs. pleasingcustomers
EPromotionand pay
increases basedon longevity,
lack of mistakes
Initiative isdiscouraged
Jobs are boring andrepetitive; employees
unresponsive
Resentment at inflexibility and
lack of employee initiative;
complaints to employees
No incentive for
cooperative relationship
to obtain better service
Training emphasizes
learning rules
Customer dissatisfaction
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Cycle of SuccessLow
customerturnover
Customerloyalty
Continuity inrelationship with
customer
High customersatisfaction
Extensivetraining
Employee satisfaction,positive service attitude
Repeat emphasis oncustomer loyalty and
retention
Higherprofit
marginsBroadened
job designsLowered turnover,high service quality
Above averagewages
Intensifiedselection effort
Train, empower frontline
personnel to control quality
Source: Heskett and Schlesinger
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How to Manage People for Service
Advantage?
1. Hire the right people
2. Enable your people
3. Motivate and energize your people
Staff performance is a function of both ability and motivation.How can we get able service employees who are motivated toproductively deliver service excellence?
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Hire the Right People
The old saying People are your most
important assetis wrong.
The RIGHT people are your most
most important asset.
Jim Collins
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Recruitment
The rightpeople are a firms most important asset:
take a focused, marketing-like approach to recruitment
Clarify what must be hiredversus what can be taught
Clarify nature of the working environment, corporate
values and style, in addition to job specs
Ensure candidates have/can obtain needed
qualifications
Evaluate candidates fit with firms culture and values
Fit personalities, styles, energies to the appropriate
jobs
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Select And Hire the Right People:
(1) Be the Preferred Employer
Create a large pool: Compete for Talent Market Share
What determines a firms applicant pool?
Positive image in the community as place to work
Quality of its services The firms perceived status
There is no perfect employee
Different jobs are best filled by people with different skills,
styles or personalities
Hire candidates that fit firms core values and culture
Focus on recruiting naturally warm personalities
Select and Hire the Right People:
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Observe Behaviour
Hire based on observed behavior, not words you hear
Best predictor of future behavior is past behavior
Consider group hiring sessions where candidates given group
tasks
Personality Testing
Willingness to treat co-workers and customers with courtesy,consideration and tact
Perceptiveness regarding customer needs
Ability to communicate accurately and pleasantly
Select and Hire the Right People:
(2) How to Identify the Best
Candidates
S l d Hi h Ri h P l
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Select and Hire the Right People:
(3) How to Identify the Best
Candidates Employ Multiple, Structured Interviews
Use structured interviews built around job requirements
Use more than one interviewer to reduce similar to meeffects
Give Applicants a Realistic Preview of the Job
Chance to have hands-on with the job
Assess how the candidates respond to job realities
Allow candidates to self select themselves out of the job
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The Organizational Culture, Purpose and Strategy Promote core values, get emotional commitment to strategy
Get managers to teach why, what and how of job.
Interpersonal and Technical Skills Both are necessary but neither is sufficient for optimal job
performance
Product/Service Knowledge
Staffs product knowledge is a key aspect of service quality Staff need to be able to explain product features and to
position products correctly
Train Service Employees
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Factors Favoring Employee
Empowerment Firms strategy is based on competitive differentiation and on
personalized, customized service
Emphasis on long-term relationships vs. one-time transactions
Use of complex and non-routine technologies
Environment is unpredictable, contains surprises
Managers are comfortable letting employees work independently for
benefit of firm and customers
Employees seek to deepen skills, like working with others, and are
good at group processes
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Control vs. Involvement Model of
Management
Information about operating results and measures of
competitive performance
Rewards based on organizational performance (e.g. profit
sharing, stock ownership)
Knowledge/skills enabling employees to understand and
contribute to organizational performance
Power to influence work procedures and organizational direction
(e.g. quality circles, self-managing teams)
Control concentrates 4 key features at top of organization;Involvement pushes them down:
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Suggestion involvement
Employee recommendation
Job involvement
Jobs redesigned
Employees retrained
Supervisors facilitate
High involvement
Information is shared
Employees skilled in teamwork, problem solving etc. Participate in decisions
Profit sharing and stock ownership
Levels of Employee Involvement
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Motivate and Energize the Frontline
Job content Feedback and recognition
Goal accomplishment
Use the full range of available rewards effectively,including:
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The Inverted Organizational
Pyramid
FrontlineStaff
TopMgmt
MiddleMgmt
Traditional
Organizational PyramidInverted Pyramid with a
Customer & Frontline Focus
Customer Base
Frontline Staff
Middle Mgmt& Top Mgmt
Support Frontline
h h l f f l
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The Wheel of Successful HR in
Service FirmsLeadership that:
Focuses the entire organization
on supporting the frontline
Fosters a strong
service culture with
passion for service
and productivity
Drives values that
inspire, energize
and guide service
providers
1. Hire the
Right People3.Motivate &
Energize Your People
2. Enable Your People
Be the preferred
employer & compete
for talent market share
Intensify the
selection
process
Empower Frontline
Build high performance service
delivery teams
Extensive Training
Utilize the full
range of rewards
Service Excellence
& Productivity