2003 project desin
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Chapter - 13
Chapter - 13
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EveryEvery
businessbusiness
is a serviceis a service
business.business.
Does yourDoes yourservice putservice put
a smile ona smile on
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SERVICE
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The service sector accounts for more than 50%of India's GDP. It is growing at a much fasterrate than other two sectors.
SERVICE INDUSTRIES ARE :SERVICE INDUSTRIES ARE :
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CATEGORIES OF SERVICE MIX :
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Services have four distinctive characteristicsthat greatly affect the design of marketingprograms
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Inseparability expresses the notion that aInseparability expresses the notion that aservice cannot be separated from the serviceservice cannot be separated from the service
provider.provider.
-Services are produced and consumed at the-Services are produced and consumed at the
same time (air travel)same time (air travel)
-Service providers and sometimes other-Service providers and sometimes other
customers become part of the servicecustomers become part of the service
(restaurant)(restaurant)-Strong preferences for service providers exist-Strong preferences for service providers exist
--A product when produced can be taken awayA product when produced can be taken away
from the producer. However a service isfrom the producer. However a service is
produced at or near the point of purchase.produced at or near the point of purchase.
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Groups of people with diverse habits, attitudes,
circumstances, tasks and requirements
Heterogeneous markets -Markets in which all customers have
different requirements
Variability in the quality of service because services are
provided by people, and people perform inconsistently
Service providers vary with respect to attitudes, skills, mood,
etc. Even the same provider may give different service on a
different day.
QUALITY CONTROL IS CRITICALQUALITY CONTROL IS CRITICAL:Hiring the right peopleHiring the right people
Standardizing serviceStandardizing service
Monitoring satisfactionMonitoring satisfaction
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Service Sector the part of industry or business whichdeals with the marketing and selling of intangibleproducts rather than physical goods
characteristic of services whereby unused capacity on
one occasion cannot be stockpiled or inventoried forfuture occasions
Services can not be inventoried or otherwise stored
CAPACITY / DEMAND MANAGEMENT IS CRITICAL:CAPACITY / DEMAND MANAGEMENT IS CRITICAL:
DEMAND SIDE STRATEGIESDEMAND SIDE STRATEGIES
SUPPLY SIDE STRATEGIESSUPPLY SIDE STRATEGIES
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ON THE DEMAND SIDEON THE DEMAND SIDEDIFFERENTIALPRICING
NONPEAK DEMANDCOMPLEMENTARYSERVICES
RESERVATIONSYSTEMS
ON THE SUPPLY SIDEON THE SUPPLY SIDEPART-TIME EMPLOYEES
PEAK-TIME EFFICIENCY
INCREASEDCONSUMERPARTICIPATION
SHARED SERVICES
FACILITIES FOR
FUTURE EXPANSION
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A SHIFTING CUSTOMER RELATIONSHIP
In former times, service company'sIn former times, service company'sheld out a welcoming hand to allheld out a welcoming hand to all
customers, but these companys nowcustomers, but these companys now
have so much data on individuals theyhave so much data on individuals they
are able to classify their customersare able to classify their customersinto profit tiers. So service is notinto profit tiers. So service is not
informally bad for all customers.informally bad for all customers.
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Internalmarketing
CompanyCompany
CustomersCustomers
Externalmarketing
EmployeesEmployees Interactivemarketing
Cleaning/maintenance
services
Financial/bankingservices
Restaurantindustry
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PRICINGPRICING
-High price-High price
-Price increases-Price increases
-Unfair pricing-Unfair pricing
INCONVENIENCEINCONVENIENCE
-Location/hours-Location/hours
-Wait for appointment-Wait for appointment-Wait for service-Wait for service
CORE SERVICE FAILURECORE SERVICE FAILURE
-Service mistakes-Service mistakes
-Billing errors-Billing errorsINVOLUNTARY SWITCHINGINVOLUNTARY SWITCHING
-Customer moved-Customer moved
-Provider closed-Provider closed
SERVICE ENCOUNTER FAILURESSERVICE ENCOUNTER FAILURES
-Uncaring-Uncaring-Impolite-Impolite
-Unresponsive-Unresponsive
-Unknowledgeable-Unknowledgeable
RESPONSE TO SERVICE FAILURERESPONSE TO SERVICE FAILURE
-Negative response-Negative response
-No response-No response
-Reluctant response-Reluctant response
COMPETITIONCOMPETITION
-Found better service-Found better service
ETHICAL PROBLEMSETHICAL PROBLEMS
-Cheat-Cheat
-Hard sell-Hard sell
-Unsafe-Unsafe
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ANAGING SERVICE QUALITY
The service quality of a firm is tested at each
service encounter.
If the salesmen of a retail shop are bored, and they
cannot answer simple questions of their customers,
then the customer will think twice of doing business
again with that retailer because there is no individual
attention given to him.
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Customer Expectations
Customers form service expectations from many sources,such as past experiences, word of mouth, and advertising.
Customers always compare the perceive service with theirexpected service.
Most of the successful companies surprise and delight themby adding benefits to their offerings.
One company can differentiate it by providing more accurate
and reliable service to their customers.
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Expected service
Management perceptionsof consumer expectations
Marketer
Markete
r
Consumer
Consumer
Gap 1Service delivery (including
pre- and post-contacts)
Gap 3Translation of perceptions
to service-quality specifications
Gap 2
Gap 5 Perceived service
Externalcommuni-cations to
consumers
Gap 4
Personal needs Past experienceWord-of-mouthcommunications
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ere are five gaps that cause unsuccessful delivery a
own in the Service Quality model.
ap between consumer expectation and
anagement perception
It is impossible for any management to perceive
hat customers exactly wants at each and every time.
ap between management perception and
ervice-quality specificationsSometimes it may happen that the management
ight perceive exactly their customers needs but they
a lack at setting a performance standard.
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Gap between service-quality specifications and
service delivery
Sometimes it may happen that the employees arepoorly trained or incapable to meet the standards. They
may lack at listening to customers and serving them fast.
Gap between service delivery and externalcommunications
The representatives and advertisements of a
company make statements more then what they perceive.
Gap between perceived service and expected serv
This gap occurs when customer misperceives the
service quality.
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Strategic concept :In order to give the best service to their customer
the company should know their target customers andtheir needs well, and then develop a distinctive strategfor satisfying these needs.
Top-Management commitment :
The top management should not look only atfinancial performance, most of the successfulOrganizations also look at their service performance.
High standards :The best service providers set high service-quality standards. Successful companies offerbreakthrough service aim at being 100% defect free.
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Self-Service technologies :Nowadays Self-service technologies are booming
For example : ATMs ,self-ticket purchase on the internet.An auto insurance company can made available a
step-by-step guideline in internet telling the insuredPerson what to do? to assess the damage incase ofaccident.
Monitoring systems :Top firms audit service performance of both their own
and their competitors on a regular basis. They take the
customer surveys, suggestion and complaint forms andletters to know where they lack. Most of the customerwant the job to be done right at the first time.
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Satisfying customer complaints :Studies show that the customers are dissatisfied
With their 25% of the time but only about 5% complain.About 95% people feel complaining is not worthier.
Of 5% who complain about 50% are satisfied witTheir problem resolution.
Satisfying employees :Excellent service companies know that positive
Employee attitudes will promote stronger customer
loyalty.
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DEVELOPING BRAND STRATEGIES FOR SERVICESThe service offerings can be differentiated in many different
ways.The offering can include innovative features.
THE PRIMARY SERVICE PACKAGE It is what the customerexpects from the service offering.THE SECONDARY SERVICE PACKAGE The extra things which
the provider can add. Some of the services are using the human element to combat
the competition from the online businesses. Sometimes the companies can be differentiated through the
sheer range of service offerings and the success of its cross-selling efforts.
The company the offers frequent innovations, will gain atemporary advantage on the competitors and can bedifferentiated.
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To develop brand strategies for the services, it
requires close attention to
CHOOSING BRAND ELEMENTS Because a
physical product does not exist, brand recallbecomes critically important and thus an easy to
remember brand name becomes critical. Thus,
the physical facilities of the service provider its
primary and secondary signage, environmental
design and reception area and so on become
especially important.
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DEVICING BRANDING STRATEGIES The
services must also consider developing a
brand hierarchy and brand portfolio the
permits positioning and targeting of different
market segments. Sometimes there is a
necessity for sub-branding strategies, where in
the corporate name is combined with an
individual brand name or modifier.
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The product-based industries that must provide aThe product-based industries that must provide a
service bundle are no less important than the serviceservice bundle are no less important than the service
industries.industries.These product-based industries should alwaysThese product-based industries should always
provide product support services which is becoming aprovide product support services which is becoming a
major battleground for competitive advantage.major battleground for competitive advantage.
Firms that provide high-quality services outperformFirms that provide high-quality services outperform
their less-service-oriented competitors.their less-service-oriented competitors.
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The company must design customer needs carefully a
service support program.
The customers have three specific worries
They worry about reliability and failure frequency.
They worry about downtime. He longer the downtime,
the higher the cost. The customer also depends on the
sellers service dependability the sellers ability to fixthe machine quickly or at least lend him a loaner.
They worry about the out-of-pocket costs.
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The customer choices are increasing and the
companies need to innovate ways to hold onto the
existing customers and create a new band of
customers.
The postsale service strategy is creating a strong
ground for competitiveness.
The better the postsale service strategy, better is
the growth of the company.
This is because of the three risks thats the
customers are worried about as mentioned in the
previous slide.
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SRINIVAS DSRINIVAS D MUKESHMUKESH
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