service mgmt lec 1

8/7/2019 service mgmt lec 1

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Nature of Services


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Service

The Service Process Matrix Service Package

Distinctive Characteristics of Service

Operations Classification of services for strategic insight


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Health Care hospital, medical practice, dentistry, eye care

Professional Services accounting, legal, architectural

Financial Services banking, investment advising, insurance

Hospitality restaurant, hotel/motel, bed & breakfast ski resort, rafting

Travel airline, travel agency, theme park

Others hair styling, pest control, plumbing, lawn maintenance,

counseling services, health club, interior design


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AService is a type of a product.

a deed performed by one party for another

Discussions about the marketing of goods applyto services as well.

Services have special characteristics that makethem different than products.


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Goods andServices: Scale of

Elemental Do

minance


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Services are classified across two dimensionsthat significantly affect the service deliveryprocess.

Degree of Labor IntensityRatio of labor cost to capital cost.

(Labor Intensive (High) and Capital Intensive (Low))

Degree of Customer Interaction andCustomization


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Degree of aborIntens ty

Degree of Interact on and Custom zat on

Low H gh

Service factory:

* Airines* Hote s

Service shop:

* Hospita s* Autorepair

Low

Mass service:

* Retailing* Schools

Professional service:

* Doctors* Architects

High

Managers of services in any category share similar challenges.

There are some differences as well.


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Supporting Facility

Facilitating Goods Information

Explicit Services

Implicit Services

Service Package


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Supporting Facility: The physical resources that

must be in place before a service can be sold.

Examples are golf course, ski lift, hospital, airplane.


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Facilitating Goods: The material consumed by the

buyer or items provided by the consumer. Examples

are food items, legal documents, golf clubs, medicalhistory.


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Explicit Services: Benefits readily observable by the

senses. The essential or intrinsic features. Examples

are quality of meal, attitude of the waiter, on-timedeparture.


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Implicit Services: Psychological benefits or extrinsic

features which the consumer may sense only vaguely.

Examples are privacy of loan office, security of a well

lighted parking lot.


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Intangibility

Services are ideas and concepts. Not patentable. Perceptions

Process Simultaneity

Created and consumed simultaneously. Cannot be stored

Heterogeneity

Variation of service from customer to customer

Perishability

Unused capacity is lost

Customer Participation in the Service

Attention to facility WebPortal feel


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1. Intangibility - u cant touch this

Services cannot be stored

Services cannot be protected through patents

- therefore a really great travel package and service can becopied

- a really great physical object can be patented, and NOT

allowed to be copied Hard to explain and display Services if you cant see them

Prices are difficult to set - depends on customers expectations

Distinctive Characteristics of Services


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1. Intangibility - u cant touch this

Marketing Strategies

stress tangible cues, e.g.. Smiling face use personal information, sources, references

use word-of-mouth

contact customers after they buy to stimulatecontinued enthusiasm and hope they talk it up



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2. Inseparability ofProduction (or

performing the service) andConsumption

(using the service) - happens at the same time

Many people involved in delivering a service

mass production of services is hard to do



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2.

Inseparabilityof

Prod

uctio

n (or performing theservice) andConsumption (using the service) -

happens at the same time

Marketing Strategies

Emphasize how much you train your people - so their ability togive you good service will be high

Have many locations, so customers can get to you

i.e.. Insurance sales personnel come to your home



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3.

Hetero

geneity - services are not always delivered thesame way

It is very difficult to standardize services

e.g..A machine can make ice cream cones a standard size

100% of the time

A person filling an ice cream cone with a scoop cannot do itthe same amount each time, unless you use a machine todispense the ice cream



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3. Heterogeneity - services are not alwaysdelivered the same way

It is very difficult to standardize services

e.g..ATaxi driver cannot drive you to the office inexactly the same time each day because the trafficpatterns change

e.g..A travel agent can sell you a vacationpackage - but cannot guarantee you will like thetrip exactly the same way another tourist did.



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4. Perishability - cannot be put in inventory orstored for later use

i.e.. You cant buy 2 haircuts

Demand fluctuates and changes, sometimesdepending on the season, or weather

e.g.. Taxi in the rain, vacation in summer



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Direct Recipient of the ServiceNature of

the Service Act P le ssessi nsPe ples ies:

Healt care Passengertransp rtati nBea ty sal nsExer ise clini sResta rants

Physi alp ssessi ns:

Freighttransp rtati nRepairand aintenan eVeterinary care

andscaping / gardeninga ndry anddry cleaning

angiblea ti ns

Pe ples inds:

Ed ati nBr ad astingInf r ati n servi es

heatersMuseu s

Intangibleassets:

Bankingegal servi es

Acc untingSe uritiesInsuran e

Intangiblea ti ns


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Type of Relationship between Service Organization and Its Customers

Nature ofService Delivery Membersh prelationship No formal relationship

InsuranceTelephone subscription

Electric UtilityBanking

Radiostation Police protection

LighthousePublic Highway

Continuous

delivery

ofservice

Long-distance phone calls

Theaterseries ticketsTransitpass

Airline frequent flyer

RestaurantPayphone

TollhighwayMovie theater

Public transportation

Discrete

transactions


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Ava a ty ofServ ceOut ets

NatureofInteractonbetweenCustomerandServ ceOrgan zaton Singe site utip e site

Custo ertrave s toservice organization

Theaterarbershop

Bus serviceFast- oodchain

Service provider

trave s to custo er

Ta iPest contro service

Maildelivery

E ergencyrepairs

Transaction isatar s length

Credit cardco panyLocalTVstation

BroadcastnetworkTelephone co pany


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The class will break into 5 groups and each group willbe assigned one of the service classifications (e.g.,nature of act, relationship with customer,customization, nature of demand, or method ofdelivery) to come up with an example for each ofthe four quadrants in the matrix.


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AForeign Institutional Investor (FII) Wants toinvest funds in India in the following sectors.How would you market these sectors to the FIIfor maximum fund investment?

1. Health Care2. Education3. Tourism4. Infrastructure Development

5. Entertainment6. Banking and Insurance7. Retail trade8. Communication


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Presentation should cover the following:1. Background of the sector (general details)

2. Development in the sector (past)3. Economic policies relating to the sector4. Scope of development (Future)5. Industry suggested for investment and the

reason for the same6. Competition in the selected industry7. Suggested Marketing Strategy


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service mgmt lec 1

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