DESIGNING AND MANAGING SERVICES

What is a service?

A service is any act of performance that one party can offer another that is essentially intangible and

does not result in the ownership of anything; its production may or may

not be tied to a physical product.

Nature of Services

The Service Industry includes the following:–Government Sector–Private nonprofit Sector–Business Sector–Manufacturing Sector

“Government Sectors”

“Private nonprofit Sector”

“Business sectors”

Nature of Services

• Categories of Service Mix–Pure tangible good–Good with accompanying services–Hybrid– Service with accompany goods–Pure service

Nature of Services

CHARACTERISTICS• Intangibility

oCannot be seen, touched, tasted, heard or smelled before purchase

o Lack of trial means higher consumer needs

oConsumer rely on cues to draw quality inferences

SALON, SPA

Nature of Services

CHARACTERISTICS• Inseparability

o Services are produced and consume at the same time.

o Service providers and sometimes other customers become part of the service.

Air travel Services

Restaurant Services

Nature of Services

CHARACTERISTICS• Variability o Services providers varies with

respect to attitudes, skills, moods etc. Even the same provider may give different service on a different day.

o Quality control is critical: Hiring the right peopleStandardizing serviceMonitoring satisfaction

Nature of Services

CHARACTERISTICS• Perishability oServices cannot be

inventoried or otherwise stored.

Marketing Strategies

• People physical evidence must be considered in addition to the 4 P’s when creating external marketing plan.

• Successfully delivering the service often depends on staff being trained via internal marketing efforts.

Marketing Strategies

• Interactive marketing refers to the employees’ skill in serving the client.

• Customers judge a service by its:• Technical Quality• Functional Quality

• Search qualities, experience qualities and credence qualities are evaluated by customers.

Marketing Strategies

• Marketing Task

Managing differentiation

o Cannot differentiate on price alone.

o Innovative features.

o Delivery systemReliabilityResilienceInnovativeness

o Image and Branding

Marketing Strategies

• Marketing Task

Managing Service Quality

oThe service quality model identifies five gaps that can cause service delivery failure

oService companies that successfully address these gaps follow common practices

Marketing Strategies

• Service Delivery Failure Results from Gaps Between:

Consumer expectation and management perception

Management perception and Service-quality

specification

Service-quality specifications and service delivery

Service delivery and external communications

Perceived service and expected service

Marketing Strategies

• Well-Managed Service Firms Shared These Characteristics:

A strategic concept

Commitment from top-management

High standards

Firm and customer monitoring system

Satisfying customer complaints

Thank you!!