Post on 02-Jun-2018
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THE NATURE OF SERVICES
AASTHA BHARGAVA (001)
ABHISHEK DEV (002)
PRESENTED BY: ABHISHEK SINGH (003)AJMAL MOHAMMAD (004)
AKSHAY BINDROO (005)
AKSHAY KUMAR (006)
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LEARNING OBJECTIVES
Classify a service into one of four categories using the service process
matrix.
Describe a service using the four dimensions of the service package.
Discuss the managerial implications of the distinctive characteristics of aservice operation.
Discuss the insights obtained from a strategic classification of services.
Discuss the role of a service manager from an open-systems view of
service.
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AN INTEGRATED APPROACH TO SERVICE
MANAGEMENT
The Eight Components: Product Elements
Place, Cyberspace, and Time
Promotion and Education
Price and Other User Outlays+ Process
+ Productivity and Quality
+ People
+ Physical Evidence
Require the Integration of Marketing, Operations, and Human Resources.
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SERVICE/PRODUCT BUNDLE
ElementCore Goods
Example
Core Service
Example
Business Custom clothier Business hotel
Core Business suits Room for the night
Peripheral
GoodsGarment bag Bath robe
Peripheral
Service Deferred payment plans In house restaurant
Variant Coffee lounge Airport shuttle
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THE SERVICE PROCESS MATRIX
Degree of Interaction and Customization
Low High
Degree Service factory: Service shop:
of labor Intensity * Airlines * Hospitals
Low * Trucking * Auto repair
* Hotels * Other repair services
* Resorts and recreation
Mass service: Professional service:
* Retailing * Doctors
High * Wholesaling * Lawyers
* Schools * Accountants
* Retail aspects of * Architects
commercial banking
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THE SERVICE PACKAGE
Supporting Facility: The physical resources that must be in place before aservice can be sold.
Eg: golf course, ski lift, hospital, airplane.
Facilitating Goods: The material consumed by the buyer or items providedby the consumer.
Eg: food items, legal documents, golf clubs, medical history.
Information: Operations data or information that is provided by thecustomer to enable efficient and customized service.
Eg: patient medical records, seats available on a flight, customer preferences,
location of customer to dispatch a taxi.
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THE SERVICE PACKAGE (CONT.)
Explicit Services: Benefits readily observable by the senses. The essential
or intrinsic features.
Eg: quality of meal, attitude of the waiter, on-time departure.
Implicit Services: Psychological benefits or extrinsic features which the
consumer may sense only vaguely.
Eg: privacy of loan office, security of a well lighted parking
lot.
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DISTINCTIVE CHARACTERISTICS OF SERVICES
Customer Participation in the Service Process: attention to facilitydesign but opportunities for co-production.
Simultaneity: opportunities for personal selling, interaction createscustomer perceptions of quality.
Perishability: cannot inventory, opportunity loss of idle capacity, need tomatch supply with demand.
Intangibility: creative advertising, no patent protection, importance of
reputation.
Heterogeneity: customer participation in delivery process results invariability.
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STRATEGIC SERVICE CLASSIFICATION
(NATURE OF THE SERVICE ACT)
Nature of Direct Recipient of the service
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 cle aning
Peoples minds: Intangible assets:
Education Banking
Intangible actions Broadcasting Legal services
Information services Accounting
Theaters Securities
Museums Insurance
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STRATEGIC SERVICE CLASSIFICATION
(RELATIONSHIP WITH CUSTOMERS)
Nature of Type of Relationship between Service Organization and Its Customers
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
Airl ine frequent flye r Publi c transportation
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STRATEGIC SERVICE CLASSIFICATION
(CUSTOMIZATION AND JUDGMENT)
Extent to Which Service Characteristics Are CustomizedExtent 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
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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
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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
Taxi
Transaction is at Credit card company Broadcast network
arms length Local TV station Telephone company
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OPEN SYSTEMS VIEW OF SERVICES
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CASE STUDYVILLAGE VOLVO
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VILLAGE VOLVO SERVICE PACKAGE
Supporting Facility:
Owners occupied a new Butler building.
With 4 work bays, an office, waiting area and storage room.
Facilitating Goods:
The shop was built in suburban area.
Daily shuttle service for two or three times a day was considered.
Waiting room equipped with a television set, comfortable chairs, coffee, asoft-drink vending machine, magazines and the local newspaper.
Information:
Village Volvo maintains a Custom Care Vehicle Dossier (CCVD), acontinuing file for each vehicle it services.
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VILLAGE VOLVO SERVICE PACKAGE (CONT..)
Explicit services:
Provides quality repair on out of warranty Volvos at a reasonable cost.
High quality customer service.
Takes care to keep the car clean throughout the repair process.
The inside of car is vacuumed as a courtesy before pickup.
Implicit services:
Mechanic takes a short test drive with the client to be certain that bothunderstand the area of concern.
Client feels comfortable and satisfied.
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VILLAGE VOLVOS DISTINCTIVE SERVICE
CHARACTERISTICS
Customer Comfort
Trust
Respect
Good service with additional service
Customer Participation in the Service Process
Good MIS
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VILLAGE VOLVOS SERVICE CLASSIFICATION
The nature of the service act:
Clientscar is the direct recipient of the service.
The relationship with customers:
Ownerscontact clients directly.
Owners are also considering to offer a mini course one Saturday morning
each month to teach clients what they can do to attain their 200,000-mile
Volvo medals.
Customization and judgment:
Ensure service quality.
E.g. the mechanic will discuss the problems the client has noticed during the
repair process.
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VILLAGE VOLVOS SERVICE CLASSIFICATION
(CONT..)
The nature of demand and supply:
Owners have 22 combined years of training and experience with the local
Volvo dealer.
By this they have earned a respected reputation and a following of satisfied
customers.
The method of service delivery:
Ensure service quality.
Ensure consistency.
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HOW TO MANAGE ITS BACK OFFICE WORK AS
A FACTORY?
Proper spare parts management .
Provide next service date and have a record with Village Volvo. It will help in
daily and weekly Planning.
Differentiate between emergency and routine repairs.
Implementation of 5S of quality.
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HOW VILLAGE VOLVO CAN DIFFERENTIATE ITSELF
FROM OTHER VOLVO DEALERS?
Differentiation Through Service Excellence
Integrated Virtual Call Centre
Integrated Service Network
Proactive offer sales service
Customer Touch point Management
Smart Service agent
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CASE STUDY - XPRESSO LUBE FACILITY
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Supporting facility: tools and equipment, an equipment storage area, a
spacious waiting room, chairs, a service counter, street access and parking.
Facilitating goods: oil, filters, auto parts, coffee, snacks, cups, napkins,
sugar and milk.
Information: for regular customers a reminder card could be sent for
routine maintenance.
Explicit services:a car with new oil and filter, maintenance checks of the
car, and a cup of coffee.
Implicit services: trust, a feeling of not getting screwed, a feeling of
keeping the car maintained, the satisfaction that comes from taking care of
ones car, the good feeling that comes from recycling the old oil, a caffeine
lift, and the satisfaction of drinking good coffee while
XPRESSO LUBES SERVICE PACKAGE:
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THE DISTINCTIVE CHARACTERISTICS OF A SERVICE
OPERATION ILLUSTRATED BY XPRESSO LUBE
Customer Participation in the Service Process: Customers bring their car to
Xpresso Lube and wait for the oil change. Customers are invited to inspect the
car while on the lift to observe other needed repairs.
Simultaneity: Using the coffee shop as a pleasant diversion allows XpressoLube to partially reduce the need for immediately working on arriving cars.
Providing a shuttle service to nearby University and State Capital would further
allow scheduling oil changes.
Perishability: the number of car lifts at the shop limits Xpresso Lubescapacity.
This oil change business also owns an auto repair facility next door so the two
businesses can deploy mechanics between them to best utilize labor capacity.
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Intangibility: Xpresso Lubes car lift design allows customers to watch its
service, which gives customers more assurance that their needs are being met.
Thus, the intangibility factor as in typical pits is taken care of.
Heterogeneity: Different cars provide some variability in the oil change routine.
Some customers even come for only the coffee.
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CHARACTERIZE XPRESSO LUBE
Changing the oil is the primary function of Xpresso Lube. This is a tangible
action performed on the car, but the secondary service is serving coffee,which recognizes the personal needs of the owners.
Xpresso Lubes service relationships consist of discrete, one-time
transactions, but the companys focus on fostering customer trust and apleasant waiting environment might lead to more long-term customers.
Fairly low customization is possible, but the accessibility of the service area
and the mechanics can lead to customization opportunities if there are
problems with the cars.
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There is a significant demand fluctuation based on the obvious convenience of
having the work performed after work or during the weekend. This peaked
demand pattern can easily exceed Xpresso Lubes capacity. But XpressoLubes service environment encourages people to accept longer waits and, by
providing transportation, it enables customers to drop off their cars in the
morning and retrieve them later in the day.
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ELEMENTS OF XPRESSO LUBES LOCATION
CONTRIBUTING TO ITS SUCCESS
Xpresso Lube is located on the main thoroughfare leading to the Universityof Texas and thus provides excellent visibility.
The immediate business area is a bustling and diverse that attracts a
broad spectrum of visitors.
Its also an area where customers dont mind waiting because they can
walk to a variety of popular shops (e.g., Wheatville Co-Op and Half-Priced
Books)
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INDIAN SCENARIO: CARNATION AUTO
An initiative by former chief executive of Maruti Suzuki (Mr. Jagdish Khattar)
to provide Customization Service.
Indias Largest Integrated Multi Brand Auto Solution Network.
Services Provided By CARNATION:
New and Used car sales
Used car exchange
Car repair and service
Car accessories
Car Insurance
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NATURE OF SERVICES - A DIFFERENT
PERSPECTIVE
????
Agri
Services
MFG
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ITMicrosoft
Mobile Manufacturers partner Service providers to offer products
Automobile MajorsBMW, Audi, Benz, etc. have FinServ arms
Housing as a service
Support from Governments
Infrastructure Provisions
Civic Amenities
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WHAT IS IN IT FOR GOVERNMENTS AND
COMPANIES?
Growth of Service Industries -produces less cyclic national Economies
Service Industries negotiate recessionary pressure with relative ease
Growth of services leads to better quality of life and often increases the
efficiency of the system as a whole
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TRENDS THAT DRIVE SERVICE INDUSTRIES
Aging Population across the world
Unprecedented Growth of 2 income families
Increasing number of Singles
Consumerism - change in saving & expense pattern
Affordability and Reach of Services
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CURRENT TRENDEXPERIENCE ECONOMY(EE)
EE
Agri
Services
MFG
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EXPERIENCE ECONOMY!?
Upcoming trend which is the successor of the Service Economy.
Highly customized service leaves an everlasting impression/experience
with the customer.
The experience is treated as the value proposition offered by such a
product.
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EXAMPLES OF STAGED EXPERIENCE PRODUCTS
Airtels My Plan post paid offering
Audi Indias experience offering
Taj Hotels Outdoor catering services
Economic Times - Article on Recent trends in Service Offering
http://articles.economictimes.indiatimes.com/2014-01-17/news/46301383_1_outdoor-catering-spa-bangalore-five-star-hotelhttp://articles.economictimes.indiatimes.com/2014-01-17/news/46301383_1_outdoor-catering-spa-bangalore-five-star-hotelhttp://articles.economictimes.indiatimes.com/2014-01-17/news/46301383_1_outdoor-catering-spa-bangalore-five-star-hotelhttp://articles.economictimes.indiatimes.com/2014-01-17/news/46301383_1_outdoor-catering-spa-bangalore-five-star-hotelhttp://articles.economictimes.indiatimes.com/2014-01-17/news/46301383_1_outdoor-catering-spa-bangalore-five-star-hotel8/11/2019 Nature of Services
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Thank You
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TOPICS FOR DISCUSSION
What are the characteristics of services that will be most appropriate forInternet delivery?
When does collecting information through service membership become aninvasion of privacy?
What are some management problems associated with allowing serviceemployees to exercise judgement in meeting customer needs?
What factors are important for a manager to consider when attempting toenhance a service firms image?
What contributions to the management of professional service firms can abusiness school graduate provide?