Service Marketing 5 - (People, Process, Physical Evidence and Servicescape)

8/9/2019 Service Marketing 5 - (People, Process, Physical Evidence and Servicescape)

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People, Process, Physical evidence

and Servicescape


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Service EnvironmentService Environment

Physical backdrops surrounding the service

(Servicescape)Ambience and cleanliness of a cinema hall

Caf near a collegeElegant dcor of a shop to cater to upscale market


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Physical Evidence the sixth PPhysical Evidence the sixth P

Servicescape or Atmospherics creates mood,longing, attraction or desire to visit / recommendservice provider by tangibalisation. It includes

every tangible touch point i.e. brochure, building,dress of the people, furniture, wall dcor etc.


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Physical Evidence the sixth PPhysical Evidence the sixth P

Service Design is of utmost importancePeople visit expensive restaurants to relish dishes

otherwise available in less costly eating houses

because of better ambienceTheme parks are developed based on common

cartoon figuresLuxury buses / better maintained buses are

preferred over lousy staff to traverse samedistance


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Service factory designingService factory designing

ConvenienceComfortAmbience

Speed


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Service Design (Pre-Delivery)Service Design (Pre-Delivery)

Defining design attributesSetting design standardsGenerating/ Evaluating design concepts

Developing design details


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Service Design (Post- Delivery)Service Design (Post- Delivery)

Implementing the designMeasuring PerformanceAssessing Satisfaction

Improving Performance ( Feedback to Redesign)


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Managing the firmsManaging the firmsphysical evidencephysical evidence


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Physical EvidencePhysical Evidence

The elements of 'marketing mix' which customerscan actually see or experience when they use aservice, and which contribute to the perceived

quality of the service, e.g. the physical evidenceof a bank could include the state of the branchpremises, as well as the delivery of the bankingservice itself.


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The role of physical evidenceThe role of physical evidence

Packaging the serviceConveys expectations Physical evidence => quality cues => image development

Influences perceptions Image development => reduces perceived risk => reduces

cognitive dissonance after the purchase


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Facilitates the flow of the service delivery processProvides information How am i to act?

Facilitates the ordering process How does this work?

Manages consumers Barriers separate different consumer groups or help to isolate

the technical core


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Socializes employees and customersUniforms Identify the firms personnel Physical symbol that embodies the groups ideals and

attributes Implies a coherent group structure Facilitates perceptions of consistent performance Assists in controlling deviant members


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Provides a means for differentiationwell-dressed personnel are perceived as: more intelligent better workers more interactive


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Components of the physicalComponents of the physicalenvironmentenvironment

Facility exteriorExterior design

Signage

Parking

Landscaping

Surrounding environment


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Facility interiorInterior design (warm colors) Red Love, romance, sex, courage, danger, fire, sinful, warmth,

excitement, vigor, cheerfulness, enthusiasm, and stop YellowSunlight, warmth, cowardice, openness, friendliness, gaiety, glory,

brightness, caution

OrangeSunlight, warmth, openness, friendliness, gaiety, glory


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Facility interiorInterior design (cool colors) BlueCoolness, aloofness, fidelity, calmness, piety, masculine,

assurance, sadness GreenCoolness, restful, peace, freshness, growth, softness, richness, go

VioletCoolness, retiring, dignity, rich


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Facility interiorInterior design

Equipment

Layout Grid vs. Free-flow

Temperature


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Other tangible evidenceBusiness cards

Stationary

Billing statements CP&L statement

Reports

Brochures

Employee performance

Employee appearance


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Creating service atmospheresCreating service atmospheres

Sight appealsSize, shape, colors, contrast, clash, location, architecture,

signs, entrance, and lighting

Sound appealsMusic, announcements, and sound avoidance


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Creating service atmospheresCreating service atmospheres

Scent appealsappeals and avoidance

Touch appeals

Taste appeals


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Examples of Physical Evidence fromExamples of Physical Evidence from

the Customers Point of Viewthe Customers Point of View

Service

Insurance


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Typology of Service Organizations Based onTypology of Service Organizations Based onVariations in Form and Use of the ServicescapeVariations in Form and Use of the Servicescape


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A Framework for Understanding Environment-userA Framework for Understanding Environment-userRelationships in Service OrganizationsRelationships in Service Organizations

PHYSICAL

ENVIRONMENTAL

DIMENSIONS

HOLISTIC

ENVIRONMENT

INTERNAL

RESPONSES

BEHAVIOUR

AmbientConditions

Space/Function

Signs, Symbols,and Artifacts

PerceivedServicescape

CognitiveEmotional

Physiological

CognitiveEmotional

Physiological

EmployeeResponses

CustomerResponses

IndividualBehaviours

SocialInteractionsbetween and

amongcustomer and

employees

IndividualBehaviours


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SERVICE DELIVERYSERVICE DELIVERY


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CUSTOMER

COMPANYService Delivery

GAP 3

Customer-DrivenService Designsand Standards

Provider GAP 3Provider GAP 3


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Process--- the seventh PProcess--- the seventh P

A critical variable from the point of view of thecustomer because he has to know what is neededto avail of a service

Process of service delivery can be mapped with aflow-chart or service BlueprintIf average time, step overlaps etc. can be gauged

appropriately, then with current technologicalimprovement, service delivery /quality could beupgraded through Business Process Re-engineering ( BPR )


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Gap 3: Role of Process in OperationalGap 3: Role of Process in OperationalDesign & DeliveryDesign & Delivery

Service Blueprinting: An Extended Process MapDesign & Diagnostic Tool

Effectively Handling DemandImpact of Random Arrival Pattern

Waiting Line (Queue) Configurations

Waiting Line (Queue) Management

Matching Demand to Capacity Through DemandManagement

Pricing: Yield ManagementCustomer Communication

Alternative Service Delivery Processes

Complementary Products


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Some examples of Process InnovationSome examples of Process Innovation

Airlines no more lost ticket woesInternet booking of railway ticketsSingle window concept in HDFC

Reducing waiting time by pre-process in aninternational flight ( like in-flight supply ofimmigration and customs clearance forms

Self service options /Automation ( vending

machines )


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Design considerations for high versusDesign considerations for high versuslow contact service firmslow contact service firms

Facility locationFacility layoutProduct design

tangible and intangible componentsmolecular models

Process designevaluations based on outcomes only vs. outcomes and

process


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Designing a Service design considerationsDesigning a Service design considerations

Design Consideration Facility location

Facility layout

Product design

Process design

operation must be nearcustomer

should accommodatecustomers physical andpsychological needs andexpectations

environment as well asphysical products definenature of service

stages of productionprocess have direct effecton customer


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Designing a Service -Designing a Service -

considerationsconsiderations Time standards

Wage payment

Capacity planning

Forecasting

Service time depends oncustomer needs, therefore,time standards inherentlyloose

Variable output requirestime-based wage systems

To avoid lost sales, capacity

must be set to match peakdemand

Forecasts are short-term,time oriented


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Designing a Service - designDesigning a Service - designconsiderationsconsiderations Scheduling

Production Planning

Labour Skills

Quality Control

Customer is in theproduction schedule andmust be accommodated

Orders cannot be stored, sosmoothing production flow

will result in loss of business

Direct personnel major partof service product, so mustinteract well with customer

Quality standards often ineye of beholder and hencevariable


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Employees roles in serviceEmployees roles in servicedeliverydelivery


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People- The fifth PPeople- The fifth P

Recruiting right peopleCreating right skill set particularly soft skillLine jobs demand specific skills

Service providers image / skill--- utmostimportant ( Amin Sayanis voice in Binacageetmala, Simi Grewals personality inRendezvous talk show


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Employees Role in ServiceEmployees Role in Service

DeliveryDeliveryThe critical importance of service employees in

creating customer satisfaction and service qualityDemonstrating the challenges inherent in

boundary-spanning rolesExamples of strategies for creating customer-oriented service delivery

How the strategies can support a service culturewhere providing excellent service is a way of life


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Service EmployeesService Employees

Who are they?boundary spanners

What are these jobs like?emotional labor

many sources of potential conflict person/role organization/client Inter-client quality/productivity


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Service EmployeesService Employees

They are the service.They are the organization in the customers eyes.They are the brand.

They are marketers.Their importance is evident in:

The Services Marketing Mix (People)

The Service-Profit Chain

The Services Triangle


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The Services Marketing TriangleThe Services Marketing Triangle

Internal

Marketing

Interactive Marketing

External

Marketing

Company(Management)

CustomersEmployees

enablingpromises

keeping promises

settingpromises


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Boundary Spanners Interact with BothBoundary Spanners Interact with BothInternal and External ConstituentsInternal and External Constituents

Internal Environment

External Environment


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Sources of Conflict for Boundary-Sources of Conflict for Boundary-Spanning WorkersSpanning Workers

Person vs. Role

Organization vs. Client

Client vs. Client

Quality vs. Productivity


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Employee Motivation- Key to successEmployee Motivation- Key to success

Giving more autonomyJob RotationJob enrichment

Incentivisation for good performanceRecognition and non-monetary rewardsA clear career pathEquity or Fairness


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Employee Motivation- Key to successEmployee Motivation- Key to success

ICICI reduces rate of attrition at its call centers byoffering lateral placement in any of its groupcompanies after 18 months of good track record

Infosys recreated a campus environment in theoffice complexes to offer mental sustenance tocampus recruits. It also was first to offer stockoption


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Service Productivity measurementService Productivity measurement

Broadly the ratio of Quality and Quantity ofoutput to Quality and Quantity of input

An employee disposing 10 customers per day is

not necessarily more productive than the onehandling 9 customersIf Quality rating of the former is say 7.5 and that

of the latter is 9, then the latter (9*9=81) is moreproductive than the former (7.5*10=75)


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Customer-OrientedServiceDelivery

Hire theRight People

ProvideNeeded SupportSystems

Retain theBest

People

DevelopPeople toDeliverServiceQuality

Compete

for

theBe

st

People

Hire for

ServiceCompetencies and Service

Inclination

ProvideSupportiveTechnology

and

Equipment

Treat

Employees

as

Customer s

Empower

Employee

s

Bethe

Preferred

Employer T

rainfo

r

Technical

and

Intera

ctive

Skills

Prom

ote

Teamw

ork

Meas

ure

Intern

al

Servi

ce

Quali

ty

Develop

Service-

oriented

Internal

Processes

M

easure

and

Rew

ard

Strong

Service

Performers

In

clude

Em

ploy

ees

inth

e

Comp

any

s

Visio

n

Human Resource Strategies for ClosingHuman Resource Strategies for ClosingGAP 3GAP 3


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The Service Profit ChainThe Service Profit Chain


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Customers Roles In ServiceCustomers Roles In ServiceDeliveryDelivery


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Importance of Other Customers inImportance of Other Customers inService DeliveryService Delivery

Other customers can detract from satisfaction disruptive behaviors excessive crowding incompatible needs

Other customers can enhance satisfaction mere presence socialization/friendships roles: assistants, teachers, supporters


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How Customers Widen Gap 3How Customers Widen Gap 3

Lack of understanding of their rolesNot being willing or able to perform their rolesNo rewards for good performance

Interfering with other customersIncompatible market segments


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Customer Roles in Service DeliveryCustomer Roles in Service Delivery

Productive Resources

Contributors toQuality andSatisfaction

Competitors


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Customers as ProductiveCustomers as ProductiveResourcesResourcesPartial employees

Contributing effort, time, or other resources to theproduction process

Customer inputs can affect organizations

productivityKey issue:

Should customers roles be expanded? Reduced?


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Customers as Contributors to ServiceCustomers as Contributors to ServiceQuality and SatisfactionQuality and Satisfaction

Customers can contribute totheir own satisfaction with the service by performing their role effectively by working with the service provider

the quality of the service they receive by asking questions by taking responsibility for their own satisfaction by complaining when there is a service failure


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Customers as CompetitorsCustomers as Competitors

Customers may compete with the serviceprovider

Internal exchange vs. External exchange

Internal/external decision often based on:ExpertiseResources

Time

Economic rewards

Psychic rewardsTrust

Control


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Technology Spotlight:Technology Spotlight:Services Production ContinuumServices Production Continuum

1 2 3 4 5 6

Petrol Station Illustration

1. Customer pumps Petrol and pays at the pump with automation

2. Customer pumps Petrol and goes inside to pay attendant

3. Customer pumps Petrol and attendant takes payment at the pump4. Attendant pumps Petrol and customer pays at the pump with automation

5. Attendant pumps Petrol and customer goes inside to pay attendant

6. Attendant pumps Petrol and attendant takes payment at the pump

Customer Production Joint Production Firm Production


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Strategies for Enhancing CustomerStrategies for Enhancing CustomerParticipationParticipation

Effective

CustomerParticipationDefineCustomerJobs

Recruit, Educate,and RewardCustomers

Manage theCustomer

Mix


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Physical Evidence and thePhysical Evidence and theServicescape (Exercise)Servicescape (Exercise)

Explain the impact on customer perceptions ofphysical evidence, particularly the servicescape

Illustrate differences in types and roles ofServicescape and their implications for strategy

Explain why the Servicescape affects employeeand customer behavior

Analyze four different approaches forunderstanding the effects of physical

environmentPresent elements of an effective physical

evidence strategy


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QuestionsQuestions

Documents

Service Marketing 5 - (People, Process, Physical Evidence and Servicescape)