Service Delivery Channels.ppt

© Prentice-Hall, 1999

CREATING AND

DELIVERING SERVICES

7-1


Service Delivery Issues

• Service is a performance versus a thing.

• Importance of „Servicescape‟ (place

where service is manufactured)

• Degree of customer involvement

7-3

© Prentice-Hall, 1999 7-4

Physical Evidence of the

Servicescape• Firms are paying more attention to the design of the Servicescapes that

they offer their customers. Examples include:

• Airlines.

• The restaurant design industry .

• Modern hotels and resort hotels that invest enormous sums to create exotic gardens and

surroundings

• The role of physical environment

• Shape feelings and reactions

• Create positive first impressions

• Impact of Physical evidence and accompanying atmosphere

• As attention-creating medium to standout from competition

• As message-creating medium to communicate with intended audience

• As an effect-creating medium (using colors, smells, sounds,and scents to enhance

services and experiences


A framework fo r understand ing the impact of

the phys ical env ironment

Customers,employees

Behaviouralresponses

Thoughtsand feelings

Environmental stimuli

Cognitive

Emotional

Physiological

Ambience

Space

Signs,symbols

Customers

Approach Avoid

Employees ProductivityJob SatisfactionService qualityStaff turnover

7-5


Process of Service Delivery

• Planning, creating and delivering service

• Evaluating alternatives

• Place and time decision

7-6


The Process of Service Delivery

• Design of a new service delivery system is more than:

– physical facilities

– equipment

– a specification of the service personnel required.

• Planning and configuring service delivery system should

address the following questions:

– What should the sequencing of the various steps in the service be?

(where/location and when/scheduling)

– Should service elements be bundled or unbundled for delivery purposes?

– What should the nature of the contact between the service provider and it

customers be?

– What should be the nature of the service process at each step?

– What should be the serving protocol?

– What imagery and atmosphere should the service delivery environment strive

to create? (servicescape)


Planning Service Delivery Processes

Market Opportunity Analysis Resource Allocation Analysis

MARKET POSITIONING STATEMENT

•What product/s

•What distinguishing characteristics

•What target market segment.

Corporate Objectives and Resources

OPERATING ASSETS STATEMENT

•What physical facility

•What equipement

•What information & communication

technology

•What human resources (#s and skills)

SERVIVE MARKETING CONCEPT SERVICE OPERATING CONCEPT



SERVICE MARKETING CONCEPT

•What Customer Benefits

•Core product

•Supplementary service

•Reliability levels

•Accessibility (where & when)

•At what cost

•Money

•Time

•Effort (mental and physical)

SERVICE OPERATIONS CONCEPT

•Geographic scope of operation

•Areas served; Single versus multiplesites; Facilities location;Telecommunication Linkages

•Scheduling

•Hrs/days/seasons of service

•Continuous versus intermittent

•If intermittent, what frequency

•Facility Design and layout

•Operating assets deployed (What task, where,

when)

•Leverage through intermediaries‟ operating

assets, customers‟ assets (partnership & self

service).

•Specific tast assigned to front and back stage

operations.


Classifying Service Concepts

• Service factory (McDonalds, fitness

centres, public transport)

• Mass service (retailing, higher education,

retail banking)

• Service shops (some restaurants,

hospitals, personal fitness trainer)

• Professional services (management

consulting, engineering, legal)

7-10



Service Marketing Concept Service Operations Concept

Service Delivery Process

- Sequencing of service delivery steps (what steps, in what order, where, when and how quickly)

- Extent of Delegation (Should the firm take responsibility for all steps or delegate some to

intermediaries?)

- Nature of contact between customers and provider (Customer come to provider, Provider goes to

customer, Arm‟s length transactions)

- Nature of the process (Customers served in batches, customers served individually, Customers serve

themselves/self-service)

Protocol for allocating limited capacity (reservations procedures, Queuing procedures)

Imagery and Atmosphere (Employees scripts and protocols, Variations in décor, lighting and music)

Performance Evaluation (By customer, by managers, and By Employees)


Evaluating Alternative Delivery Channels

Factors to Consider:

• Nature of service

• Customer preferences

• Firm‟s positioning

• Costs

• Operational requirements

7-12


EVALUATING ALTERNATIVE

DELIVERY CHANNELS CONTINUED

• Distribution Strategy

– Depends on the nature of the service

– A variety of options exist

• should be selected based on needs of target segment

• price and other costs (time and effort) must be acceptable

• Delivery Channels Options include:

– firm’s own retail site

– delegation to an intermediary or franchisee

– coming into the customer’s home or business

– serving customers at a distance through physical or electronic channels



DELIVERY CHANNELS CONTINUED

• Key Question is:

– Does the nature of the service or the firm’s positioning strategy

require customers to be in direct contact with its personnel,

equipment, and facilities/

– If so do customers have to visit the facilities or will the firm send

personnel and equipment to the customer’s own site

• Multiple options are available

– Customers visit the service site

• Retail gravity models are sometimes used to decide where to locate

– Providers come to customers

– Arm’s Length Transactions


Methods of Service Delivery

Availability of Service Outlets

Nature of Interaction Between

Customer and Service Organization

Customer goes to service organization

Single Site Multiple Sites

Service organization comes to customer

Customer and service organization

transact at arm‟s length (mail or

electronic communications)

Theater

Barbershop

Bus Service

Fast-food chain

Lawn care service

Taxi

Mail delivery

auto club road

service

Credit card company

Local TV station

Broadcast

company

Telephone

company



DELIVERY CHANNELS

• Speed of Delivery is an important competitive factor

– customers are demanding more convenience

– expecting services to be delivered where and when they want them.

– Customers no longer need to visit service facilities

– physical processes have become faster

• Services marketing strategy must address place and time

– The service product and its means of delivery are often closely linked

– High-contact Services

• physical environment and way tasks are performed by customer-contact personnel

shape the customers experience and enhance productivity and quality

• Low-contact services

• Are expanding in number due to advance in electronic technology.

• Designed with improved productivity in mind are often being delivered via self-service


Place and Time Decisions

• Should reflect: – customer needs

– customer expectations

– competitive offerings and activity

– the nature of the service operation

• core and supplementary services

• Services delivery considerations: – noise and environmental factors (i.e. airports, rail stations)

– definitional constraints (i.e. beach resorts)

– economies of scale (i.e. large multi-service hospitals)

– co-location near customers (i.e. ATM’s, restaurants)


Place and Time Decisions -

Continued

• Delivery timing considerations:

– Traditional retail schedules (i.e. 40 - 50 hours per week)

– 7 X 24 service (service that is available 7 days per week 24 hours per

day)

• Factors driving the move for extended operating hours:

– Economic pressure from consumers

– Changes in legislation

– Economic incentives to improve asset utilization

– Availability of employees to work during “unsocial” hours

– Automated self-service facilities


Process of Service Delivery

• Branding service - product lines & brands

• Creating New service/product

– Serching for new ideas,

– Role of research, – Role of blueprinting

7-19


New Service Development

Major

Innovations

Startup Business

New Products

Product Line

Extensions

Product

Improvements

Style Changes


Designing a New Hotel Chain -

The Marriott Experience

• Research amongst 601 respondents

evaluated 50 possible attributes

• Results from a conjoint analysis

approach

• Conjoint analysis determines an optimal

mix and level of attributes

7-21


$80

$120

$160

$200 $220

$240

$280+

Economy Mid-priced Upscale Luxury

Accor Formula 1 IbisMercure

Novotel Sofitel

Sheraton 4 points Sheraton Mirage LuxuryCollection

Hyatt HyattRegency

Grand Hyatt Park Hyatt

Ramada

Inn

Ramada Inn Renaissance

Southern Pacific Travelodge Centra Parkroyal

Illustrative service product ‘lines’ in the hotel

indust ry

7-22


Quality, Consistency, and Cost Effectiveness

• Key determinants of quality

• Lessons from Franchising

• Use of intermediaries for selected tasks

• Internal marketing - steps for developing,

implementing and monitoring

• Role of technology.


The Role of Intermediaries

• Firms frequently delegate supplementary service

elements to intermediaries. These elements include:

– Providing information

– Providing advice

– order-taking

– delivery installation

– billing and payment

– repairs and upgrades

– problem-solving


Role of Intermediaries

• Allows supplementary services to be

outsourced

• Enhances core service

• Makes service more readily available to

target markets

• Avoids investments in fixed costs

7-25


+ =

Splitting responsibilities in

the distribution channel

As created by

originating

firm

As enhanced

by distributor

As experienced

by distributor

Service concept development

7-25(b)


Technology in Service Delivery

• Technology is revolutionizing Service Delivery

• Market place versus Market Space

• Four Innovations are: – Development of “Smart Telephones” (Keypad responses to voice

commands)

– Creation of Free-standing Automated Kiosks (Bank ATM’s)

– Development of Websites

– Development of smart cards using microchips to store detailedinformation about the customer.


Improving Productivity in

Service Settings

• Backstage changes affect customers

• Frontstage efforts to improve

productivity

• Customer driven approaches

– Alter timing of demand

– Involve customers in production

– Ask customers to use 3rd party

7-28


Getting Customers to Accept

Changed Procedures

• Develop trust

• Understand customer habits

• Pre-test new procedures

• Publicise benefits

• Educate customers

7-29


• THANK YOU

Documents

Service Delivery Channels.ppt