Nature of Services

8/11/2019 Nature of Services

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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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(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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(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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(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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(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-hotel


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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?

Nature of Services

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