7 P’S OF SERVICE MARKETING

PROCESS

PROCESSES

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One of the 7Ps of Service marketing

Services are processes which are marketed Airline markets the process of transportation Restaurant markets process of meal

preparation & presentation

IMPORTANCE OF SERVICE PROCESS

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Goods - manufacturing takes place in factories in the absence of customers

Process within the factories are in the domain of operations and customer doesn’t come in contact with them

Services - customer is part of processes One bad process leads to bad service experience

SERVICE PROCESS

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Service experience - passing through a series of predetermined stages involving activity/interaction

Air service - ticket booking ,check-in, security check, boarding, being seated in plane, meal service, collection of luggage etc.

Goods are differentiated on the basis of their attributes.

Service firms use processes to create differentiation in their service products. Air Deccan’s no frill service Jet Airways high class service

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Visible services - check-in, security check & physical transfer of passengers to the airplane

Invisible services - refreshment procurement process, aircraft preparation service

People processing processes - security check Information processing processes - Ticket

booking Material processing - luggage transfer, meal

service

PROCESS ANALYSISUNDERSTANDING SERVICE PROCESS

VARIETY IN PROCESS

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Specifies whether the process has a standardized or flexible sequence of events

Has implications on cost, complexity and flexibility

Runner

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Standardized operation

Found in high volume operations

Lead to tight process control and automation

Allows high efficiency

Mass Service

EXAMPLE OF TRAIN RESERVATION SYSTEM

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Repeaters

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Complex and occur less frequently

Result of expansion of services

Handles variety

Require process adjustment in an existing runner setup

Service Shop

EXAMPLE OF LUXURY HOTEL

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Strangers

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Non-standardized process

Difficult to forecast demand and resource requirements

Occur least frequently

Added during addition of new services

Professional Service

Different process types are appropriate for different Volume-Variety combinations

VolumeLow High

Var

iety

Lo

wH

igh

Strangers

Repeaters

Runners

Service process types

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Deviating from the ‘natural’ diagonal on the product-process matrix has consequences for

cost and flexibility

Professionalservice

ServiceShop

Massservice

None

None

Less process flexibility

than is needed so less cost

More process flexibility

than is needed so high cost

The ‘natural’ line of fit of process to volume/variety characteristics

Service operations process types

Variety

Volume

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THE SERVICE PROCESS MATRIX

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Low volumeLow

standardization

INCREASING VARIETY

Low volumeMultiple Services

Higher volumeFew major Services

High volumeHigh

standardization

SERVICE CHARACTERISTICS

INCREASING VOLUME

Customer service branch

Investment banking

Bank call centre

Credit card processing

Jumbled flow

(job-shop)

Disconnected line flow(batch)

Connected line flow(mass)

Smooth flow (Continuous)P

RO

CE

SS

CH

AR

AC

TE

RIS

TIC

S

Random flow

(project)

VALUE ADDITION IN PROCESS

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Identifying which part of the process is most important to customer

Subjective as based on the context of service

Segregation of frontline and backroom process

TASK ALLOCATION

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Depends on the value focus of the service process

Varies depending on the service concept

SERVICE PROCESS DESIGN

INTEGRATING MARKETING WITH OPERATIONS

INTEGRATING MARKETING WITH OPERATIONS

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Service process needs to be designed with the customers in mind

Along with what is delivered, how it is delivered too has relevance

Poorly designed service may lead to poorly perceived quality

Operations led service design considerations often ignore customers

PROCESS DESIGN IN SERVICES

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Marketing and operations must communicate and collaborate in process design

Operations tend to focus on the needs of the providers

Customer-centric processes create a satisfied customer

A service system uses materials, equipments, people and information

DECISIONS IN SERVICE PROCESS PLANNING

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• Primary Technology• Conversion Process• Specific Equipments• Process Flow• People• Service Location• Facility Layout• Organizational Culture

PROCESS TYPES IN SERVICE OPERATIONS

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SERVICE-PROCESS MATRIX

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Services differ with respect to their products and character

Opportunity to transfer managerial know-how and skills between services

Common set of problems demand similar responses

Two dimensional matrix by Roger Schmenner

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Low High

Service Factory Service Shop

Airlines Hospital Trucking Auto repair Hotels Other repair services Resorts/ recreation

Mass Service Professional Service Retailing Physicians Wholesaling Lawyers Schools Accountants Retail banking Architects

Degre

e o

f La

bor

Inte

nsi

ty

Degree of Interaction and Customization

Low

Hig

h

SERVICE-PROCESS MATRIX: CHALLENGES

.

Low Labor Intensity Challenges:

•Capital Decisions •Keeping up with Technology •Managing Demand •Scheduling service delivery

Low Interaction/ Customization Challenges:

•Differentiating in market•Making service “warm”•Managing physical surroundings•Developing operating procedures

High Labor Intensity Challenges:

•Hiring workers•Training workers•Developing methods and controls•Assuring employee welfare•Controlling distant operations•Starting new units•Managing growth

High Interaction/ Customization

Challenges:

•Managing costs•Maintaining quality•Reacting to customers in process•Managing people in process•Gaining employee loyalty

Service FactoryLow labor, low

interaction/customization

Service ShopLow labor, high

Interaction/customization

Mass ServiceHigh labor, low

interaction/customization

Professional ServiceHigh labor, high

interaction/customization

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CASE STUDY: MUMBAI DABBAWALAS

Bombay Dabbalawas: An Overview

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Dabbawalas: An Overview

Standard Operating Procedures

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• Collect, Transport and Distribute• 5000 Dabbawalahs: 30 customers/Dabbawalah• Zoning System approach• Each zone served by a team of 20-25

dabbawala• Team leader, Mukadam• Self administered work units with common

agenda• 3 hierarchies: 5000 workers, 800 mukadams

and a small number in Executive committee

The System: Secrets of Success

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Committed Workforce Strong social bond Extensive railway system Coding System

The System: How it operates?

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THANK YOU