Venkatesh.N Asst Professor Koshys Institute of Management ... · Managing the service sector...

Venkatesh.N

Asst Professor

Koshys Institute of Management Studies

Topic :- Service Management

Subject :- Marketing And Services Management

Class :- I Semester B.Com

ByVenkatesh.N

ByVenkatesh.N

Koshys college

Introduction to

SERVICE MANAGEMENT

Service

>A service is an action of doing something to some one

which is essentially (purely) intangible…

>“Service is an act or performance offered

by one party to another that is essentially

intangible and does not result in the

ownership of anything.”

What is Management Management is an individual or a group of individuals that

accept responsibilities to run an organisation. They Plan,

Organise, Direct and Control all the essential activities of

the organisation. Management does not do the work

themselves. They motivate others to do the work and co-

ordinate (i.e. bring together) all the work for achieving the

objectives of the organization.

Management brings together all Six Ms i.e. Men and Women, Money, Machines, Materials, Methods and Markets.

Layman or layperson:-(a professional person)

Characteristics of services

Characteristics of services

Characteristics Intangibility:

It cannot be taste, feel & smell before they are bought

unlike physical product. The intangibility creates a

feeling of uncertainty about the outcome of service.

Inseparatebility:

Services cannot be separated from the services

provided (we cannot separate the service from the

product) in fact the product delivers consumption of a

service.

Variability:

Services of highly variable. It is almost impossible to

have the same service from the same seller the second

time.

Contd….

Customer participation:Service product is not a one side activity customerare core product of services. The product quality ofservices greatly depends upon the ability, skills andperformance of the employees as well as theactivity and performance of the customer.

No ownershiphere we cannot transfer ownership from oneperson to other person that particular servicebelongs to particular person because its purelyintangible

Pershability They cannot be stored

Goods / Services

Service encounter

A service encounter is a period of time duringwhich customer interact directly with a service. Itis also called as "Moment of Truth“

Service encounters are transactional interactionsin which one person (e.g., a vendor, office clerk,travel agent) provides a service or good (e.g., aproduct, an appointment, airline tickets) toanother person.

It is a period of time during which customer interactdirectly with a service.

It has 3 different P’s than the product and theyare…..?

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The Services Marketing Triangle

Aligning the Triangle

Organizations that seek to provide again

and again the high levels of service

excellence will continuously work to

align the three sides of the triangle.

Aligning the sides of the triangle is an

ongoing process.

Services Marketing Triangle

Applications Exercise Focus on a service organization. In the

context you are focusing on, who occupies

each of the three points of the triangle?

How is each type of marketing being carried

out currently?

Are the three sides of the triangle well

aligned?

Are there specific challenges or barriers in

any of the three areas?

Making Promises

Understanding customer needs

Managing expectations

Traditional marketing communications

Sales and promotion

Advertising

Internet and web site communication

Keeping Promises

Service delivery

Reliability, responsiveness, empathy,

assurance, tangibles, recovery, flexibility

Face-to-face, telephone & online

interactions

The Customer Experience

Customer interactions with sub-

contractors or business partners

The “moment of truth”

Enabling Promises

Hiring the right people

Training and developing people to

deliver service

Employee empowerment

Support systems

Appropriate technology and equipment

Rewards and incentives

Ways to Use the

Services Marketing Triangle

Overall Strategic

Assessment

How is the service

organization doing on

all three sides of the

triangle?

Where are the

weaknesses?

What are the

strengths?

Specific Service

Implementation

What is being promoted

and by whom?

How will it be delivered

and by whom?

Are the supporting

systems in place to

deliver the promised

service?

Service blueprint

The blueprint is an operational tool that

describes the nature and the

characteristics of the service interaction

in enough detail to verify, implement and

maintain it.

Blue print

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Steps in developing service blue

print Step 1:- identify the process to be blueprinted-

in this stage the company should clearly mention the

service process that should be blueprinted(it means the

company should have a clear picture of the objective

behind blueprinting)once the purpose is clear , the other

requirements can neatly be arranged.

Step 2 :- identify the customer or customer segment-

identifying customer segment is a very important aspect of

service blueprinting . the content of the service delivery

system and condition of facilities are largely dependent on

the selected customer segment

Step 3:- Map the process from the customer point of

-view

As we said earlier , the service blueprint aims at providing

maximum customer convenience and satisfaction. This

point should be kept in mind at all the level of service

designing process.

Step 4:- Map the contact employee actions, onstage and

back stage

the design should be describe in detail and

responsibilities for all the individuals involved in the

service delivery system(there must not be any changes

in the statement of roles and responsibilities if

necessary the employee should maintain a record)

Step 5:- link customer and contact persons activities

to need support functions

each performed activity is expected to produce some

value to the customer . If any of the activities are not

adding any value to the customer, they will be treated

as unnecessary such kind of things we have to remove.

Step 6:- Add evidence of service at each customer

action step

it is necessary to illustrate to the customer what he sees

and receives at each stage of customer encounter and

experience.(this can be done through photos or videos.

This helps customer in knowing the expected service

and the service received by him.

GAP Model

The GAP Model

The Service Quality Model, also known as the

GAP Model, was developed in 1985.

It highlights the main requirements for

delivering a high level of service quality by

identifying five ‘gaps’ that can lead to

unsuccessful delivery of service.

o GAP 1: Gap between consumer expectation and

management perception(awareness): arises when the

management or service provider does not correctly

identify what the customers wants or needs.

o GAP 2 : Gap between management perception

and service quality requirement: this is when the

management or service provider might correctly perceive

(identify) what the customer wants, but may not set a

performance standard.

o GAP 3: Gap between service quality requirement and

service delivery: may arise pertaining to the service

personnel. This could arise due to there being poor

training, incapability or unwillingness to meet the set

service standard

GAP 4 : Gap between service delivery and external

communication: consumer expectations are highly

influenced by statements made by company

representatives and advertisements. The gap arises when

these assumed expectations are not fulfilled at the time of

service delivery.

GAP 5: Gap between expected service and experienced

service: this gap arises when the consumer misunderstand

the service quality.

Product And Service Marketing Mix

Product Goods/service manufactured by organizations

for the end-users are called products/Services

Products can be of two types - Tangible

Product and Intangible Product (Services)An

individual can see, touch and feel tangible

products as compared to intangible products.

A product in a market place is something which

a seller sells to the buyers in exchange of

money.

Good example:- here you can see both product as well as service

(tangible and intangible) Once you open the saving account , current

account, or demat account you will receive a card documents from the

bank that is tangible and once u started doing transaction (receiving

service from the bank )that is intangible.

Bank will be providing life insurance(product) bond that bond itself

tangible and later you will be receiving service that is intangible

Price

it is a key element of the marketing mix. All the

other elements represent costs—for example,

expenditure on product design

(product),advertising and salespeople

(promotion), and transportation and distribution

(place). Marketers, therefore ,need to be very

clear about pricing objectives, methods and the

factors that influence price setting

Place refers to the location where the products are

available and can be sold or purchased. Buyers can

purchase products either from physical markets or

from virtual markets. In a physical market, buyers

and sellers can physically meet and interact with

each other whereas in a virtual market buyers and

sellers meet through internet.

Promotion Promotion refers to the various strategies and ideas

implemented by the marketers to make the end - users aware of their brand. Promotion includes various techniques employed to promote and make a brand popular amongst the masses.

Promotion can be through any of the following ways:

Advertising

Print media, Television, radio are effective ways to entice customers and make them aware of the brand’s existence.

Billboards, hoardings, banners installed intelligently at strategic locations like heavy traffic areas, crossings, railway stations, bus stands attract the passing individuals towards a particular brand.

Contd…

Taglines also increase the recall value of the brand

amongst the customers.

Word of mouth

One satisfied customer brings ten more customers along

with him whereas one dis-satisfied customer takes away ten

more customers. That’s the importance of word of mouth.

Positive word of mouth goes a long way in promoting

brands amongst the customers.

People

People - The individuals involved in the sale and

purchase of products or services come under

people.

Peoples are the ultimate users of product/service

Here service provider can get feedback about

the banking service and there is chance of re

design the service or modify to fulfill their need

and attract the more number of customer.

Process

Process - Process includes the various

mechanisms and procedures which help the

product to finally reach its target market

Service process is the way in which a service is

delivered to the end user

Process is something related to

How do people consume service

What process do the have to go through to

acquire the service

P.Evidence With the help of physical evidence, a marketer

tries to communicate the USP’s(unique selling

propositions) and benefits of a product to the end

users.

Ex:-if a customer is going to meet bank employ to

know about the home loans while explaining a

service provider will be showing some broachers ,

Documents, bonds , company website , these are

all physical evidence.

Managing the service sector Service marketing focus on selling the service in the best

interest of users/customers, marketing a service is meant for

marketing something intangible. It is marketing a promise.

Service management includes formulation of a sound mix

for marketing, such as

product,price,place,promotion,people,proces and physical

evidence.

The aim of service management is:

To understand the utility (usefulness) the customer receive

by consuming or using the service offered by the

organization

Contd…. To understand how the organization( personnel, technology,

physical resources ,system and customer) will be able to

produce and deliver this utility.

To understand how the organization should be developed

and managed so that intended(future) quality can be

achieved.

To make the organization function so that this quality can

be delivered on a continuous basis

Functions of service management

Marketing objectives:- the marketing objectives may be short term or long term. They have to be in coherence(unity) with the organizational goals

Planning:-after setting objectives the organization should plan to achieve those objectives. This includes sales forecast, marketing programmes and marketing strategies

Organizing:-the organizing functions involves structure of marketing organization, duties responsibilities and powers of various members of the marketing organization

Coordination :-it involves coordination of among various activities such as sales forecasting, product planning , product designing and development, transportation, warehousing etc..

Directing:-Direction In marketing management refers to

the development of new markets, employee

communication, motivation and control of employees.

Control;- Controlling refers to the effectiveness with which

the marketing plan is implemented.(it involves purpose of

standards , evaluation of actual performance and adoption

of corrective measure).

Staffing:-the marketing manager coordinates with human

resource manager to hire the staff with the desired

capacity.(here in this step the company is recruiting the

employees to a particular job to run marketing actives)

Analysis and evaluation:-marketing management involves

tha analysis and evaluation of the productivity and

performance of each employees.

What is Customer Loyalty?

Customer loyalty is all about attracting the right customer,

getting them to buy, and buy in higher quantities and bring

you even more customers. However, that focus is not how

you build customer loyalty.

In short, you build customer loyalty by treating people how

they want to be treated. Does your marketing plan include

strategies and tactics for customer loyalty & customer

retention?

Marketing Plan

You build loyalty by… keeping touch with customers using email marketing,

thank you cards and more.

treating your team well so they treat your customers well.

showing that you care and remembering what they like and don’t like.

You build it by rewarding them for choosing you over your competitors.

“The function of business is to

attract and maintain customers.”

Why Do You Want Loyal Customers?

?

?

?

?

Contd….

Measurements

Customer Satisfaction

Customer Loyalty

“I expected…I got it”

“I got more than I expected”

C

People don’t quit organization

they quit BOSSES!

Perceived Value

Defined by your customer

Differences B/W Goods and Services