Download - Session 2 - Designing and Managing Services
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Designing and Managing Services
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Definition
A service is any act or performance thatone party can offer to another that isessentially intangible and does not resultin the ownership of anything.
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Services are everywhere..
Government sector Private nonprofit sector
Business sector
Manufacturing sector
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Categories of Service Mix
Pure tangible good Tangible good with accompanying
services
Hybrid
Major service with accompanying minorgoods and services
Pure service
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Evaluation Continuum for Different Types of Products
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Characteristics
Intangibility
Inseparability
Variability
Perishability
Cannot be touched, seen,tasted, heard, or smelled beforepurchase
Marketers must try totangibilize the intangible
Lack of trial means higherconsumer risk
Consumers rely on cues to drawquality inferences
Distinctive Characteristics of Services
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Distinctive Characteristics of Services
Characteristics
Intangibility
Inseparability
Variability
Perishability
Services are produced andconsumed at the same time (airtravel)
Service providers andsometimes other customersbecome part of the service(restaurant)
Strong preferences for serviceproviders exist
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Distinctive Characteristics of Services
Characteristics
Intangibility
Inseparability
Variability
Perishability
Service providers vary withrespect to attitudes, skills,mood, etc. Even the sameprovider may give differentservice on a different day.
Quality control is critical:
Hiring the right people
Standardizing service
Monitoring satisfaction
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Distinctive Characteristics of Services
Characteristics
Intangibility
Inseparability
Variability
Perishability
Services can not be
inventoried or otherwisestored
Capacity / demandmanagement is critical:
Demand side strategies
Supply side strategies
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Distinctive Characteristics of Services
Demand-side
strategies Use differential pricing
Cultivate nonpeakdemand
Develop
complementaryservices
Install reservationsystems
Supply-side strategies
Hire part-time employees Introduce peak-time
efficiency routines
Increase consumerparticipation
Share services
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Holistic Marketing - ServicesCompany
Customers
Externalmarketing
Internalmarketing
Employees Interactivemarketing
Cleaning/maintenance
services
Financial/bankingservices
Restaurantindustry
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Managing Service Quality
Service quality represents a formalization of themeasurement of customer expectations of aservice compared to their perceptions of actualservice performance
Parasuraman, Zeithaml and Berry formulated a
service-quality model that highlights the mainrequirements for delivering high service quality.
The model identifies five gaps that causeunsuccessful delivery.
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Service-Quality Model
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GAP ANALYSISGap 1
Managements Perceptions ofCustomer Service Expectations
versus Actual CustomerExpectations of Service
Gap 2Managements Perceptions ofCustomer Service Expectationsversus the Actual Service QualitySpecifications Developed
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GAP ANALYSIS
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Determinants of Service Quality
Fivedimensionsof service
quality
Tangibles
Reliability
Responsiveness
Assurance
Empathy