Lesson 12

E-SERVICES

What is a Small Business Entrepreneur?

Entrepreneur n. a business man

or woman of positive disposition who

attempts to make profit from opportunities

by risk, initiative and guidance from

2-small-business.com.com

SESSION OBJECTIVES

SERVICE MARKET CHARACTERISTICS IMPACT ON INTERNET ADDING VALUE TO SERVICES SERVICE QUALITY

EARLY SERVICE MARKETERS APPLIED CLASSIC FMCG MARKETING WITH MIXED RESULTS

RECOGNITION THAT SERVICE MARKETS HAVE UNIQUE CHARACTERISTICS

PRODUCTS ARE INTANGIBLE USE PLACE, PEOPLE AND PROCESS

EQUIPMENT TO SUPPORT TANGIBILITY

ON-LINE MODELS NEED TO MEET CUSTOMER NEEDS

PEAPOD.COM OFFERING AT-HOME SHOPPING AND DELIVERY

STREAMLINE DELIVERING TO AT-HOME SERVICE DROP OFF BOX

INTERNET PROVIDES TIME AND CONVENIENCE TO SERVICE OFFERING

MANY SERVICE MARKETS REQUIRE SUPPLIER / CUSTOMER INTERACTION

VARIATION IN NEEDS OF CUSTOMER AND ABILITIES OF SUPPLIER EMPLOYEES

MANY SERVICE GOODS ARE HIGHLY PERISHABLE (E.G. UNSOLD AIRLINE SEAT)

USE VARIOUS DEMAND AND SUPPLY MECHANISMS TO BALANCE MARKET (E.G. DIFFERENTIAL PRICING TO SHIFT DEMAND)

COMMODITISATION

MINIMAL DIFFERENCE BETWEEN MANY SERVICES MEANS INTERNET MOVES MARKET TOWARDS PRICE-BASED COMPETITION

OFF-LINE CUSTOMERS NOT ABLE TO RAPIDLY PRICE COMPARE

ON-LINE SERVICES PROVIDE INSTANT PRICE INFORMATION

MANY MARKETS (E.G. CAR INSURANCE, BANKING) WILL SEE INTERNET CAUSING SERVICES TO BECOME COMMODITY GOODS

SURVIVORS WILL OFTEN BE THOSE USING TECHNOLOGY TO REDUCE OPERATING COSTS

ALTERNATIVE IS TO UPGRADE SERVICE TO DIFFERENTIATE COMPANY

DELL’S PERSONALISED DESIGN AND CUSTOMER SERVICE OPERATION

BUILD CLOSE TECHNOLOGICAL LINKS BETWEEN SUPPLIER AND CUSTOMER OPERATIONS (E.G. FEDEX SYSTEM FOR CISCO)

FIGURE 12:1 AN E-COMMERCE PRICE/VALUE MATRIX

SERVICE GAPS

PARASURAMAN ET AL’S 5 VARIABLES IMPACTING SERVICE EXPECTATIONS: 1. RELIABILITY

2. TANGIBLES

3. RESPONSIVENESS

4. ASSURANCE

5. EMPATHY

DEFINED 5 GAPS:

1. CUSTOMER EXPECTATIONS AND PERCEPTIONS

2. DEFINITION OF QUALITY STANDARDS

3. INTERNAL OPERATION

4. MARKET COMMUNICATION

5. COMBINATION OF GAPS 1-4

DELL EXCEEDS CUSTOMER EXPECTATION THEREBY ABOLISHING GAP 1

FEDEX HAS CLEAR MEASURABLE STANDARDS ABOLISHING GAP 2

USAA HAS AUTOMATED INSURANCE DOCUMENTATION MANAGEMENT TO ABOLISH GAP 3

CAR WEB-SITES PROVIDING ACCURATE INFORMATION ABOLISHING GAP 4

RESOURCE DRIVING SERVICE PROVISION OF:– CONTACT PERSONNEL– PHYSICAL RESOURCES TO PRODUCE SERVICE– CUSTOMER

GRONROOS PROPOSES THAT REQUIRE:– EXTERNAL MARKETING ACTIVITIES– INTERACTIVE MARKETING AT INTERFACE– INTERNAL MARKETING INSIDE ORGANISATION

ERRORS BY BOTH INTERFACE STAFF AND INTERNAL PROCESSES IMPACT QUALITY

AUTOMATION

LEVITT BELIEVES IN MANUFACTURING (OR STANDARDISED) ORIENTATION (E.G. McDONALDS APPROACH)

OTHERS ARGUE FOR FLEXIBLE AN EMPOWERED WORKFORCE

PROBABLY CAN USE EITHER (E.G. FEDEX VERSUS UPS IN PARCEL DELIVERY)

ANOTHER SOLUTION IS TO REDUCE HUMAN INVOLVEMENT

BANKS INTRODUCED EDI FOR BANK-TO-BANK OPERATIONS, A.T.M.s AND ON-LINE BANKING

NEED TO ENSURE AUTOMATION IS APPROPRIATE TO SITUATION

EXAMINE CUSTOMER PERCEPTION OF TRANSACTION COMPLEXITY

NUMBER OF ALTERNATIVE PROVISION CHANNELS

FIGURE 12:2 AN E-COMMERCE SERVICE PROVISION MATRIX

NEED TO ENSURE AUTOMATED SERVICE LINKS TO PERSONAL ASSISTANCE

TECHNOLOGIES SUCH AS VOICE-OVER INTERNET (VOIP) STILL FACES OPERATING PROBLEMS

WILL IMPROVE AS TECHNOLOGICAL PROBLEMS OVERCOME TO CREATE SEAMLESS SERVICE

ORGANISATIONAL FORM

NEED TO BUILD HIGHLY RESPONSIVE AND FLEXIBLE SYSTEMS

USE PEOPLE AND TECHNOLOGY WORKING IN PARTNERSHIP

FEDEX REDUCED ORGANISATIONAL LAYERS TO ONLY FIVE BY INTRODUCING I.T.

PROFESSIONAL FIRMS NEEDING TO CAPTURE EXPERTISE OF INDIVIDUAL STAFF

EMERGENCE OF VIRTUAL ORGANISATIONS

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