Designing and Managing Services The Nature of Service

  • Slides: 38
Download presentation
Designing and Managing Services

Designing and Managing Services

The Nature of Service l l A service is any act or performance that

The Nature of Service l l A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. 台灣近年產業結構變動

Categories of Service Mix l l l Pure tangible good, e. g. soap, toothpaste,

Categories of Service Mix l l l Pure tangible good, e. g. soap, toothpaste, or salt. Tangible good with accompanying services, e. g. cars and computers. Hybrid, e. g. restaurants. Major service with accompanying minor goods and services, e. g. airline. Pure services, e. g. baby-sitting, psychotherapy, and massage.

Service Continuum

Service Continuum

Categories of Service Mix l Levitt observes that “the more technologically sophisticated the generic

Categories of Service Mix l Levitt observes that “the more technologically sophisticated the generic product (e. g. cars and computers), the more dependent are its sales on the quality and availability of its accompanying customer services (e. g. , display rooms, delivery, repairs and maintenance, application aids, operator training, installation advice, warranty fulfillment). ”

Categories of Service Mix l Equipment-based or people based l l l People-based →

Categories of Service Mix l Equipment-based or people based l l l People-based → unskilled, or professional workers Different processes to deliver the service, e. g. restaurant → cafeteria-style, fast-food, buffet, or table service Client’s presence or not Personal need or business need Different objectives (profit or non-profit) and ownership (private or public)

Categories of Service Mix l Equipment-based or people-based

Categories of Service Mix l Equipment-based or people-based

Characteristics of Services l l Intangibility Inseparability Variability Perishability

Characteristics of Services l l Intangibility Inseparability Variability Perishability

Intangibility l l l Services can not be seen, tasted, felt, heard, or smelled

Intangibility l l l Services can not be seen, tasted, felt, heard, or smelled before they are bought. Customer experience engineering: clear picture → a consistent set of performance and context clues. Tangibilize the intangible: place, people, equipment, communication material, symbols, and price, e. g. the “fast” bank, Thai Airways – Smooth as Silk, Cathay Pacific – The Heart of Asia, and SIA Singapore Girl.

Inseparability l l Services are typically produced and consumed simultaneously. Strategies l l l

Inseparability l l Services are typically produced and consumed simultaneously. Strategies l l l Learn to work with larger groups. Learn to work faster. Train more service providers and build up client confidence.

Variability l l Services are highly variable. Three steps toward quality control: l l

Variability l l Services are highly variable. Three steps toward quality control: l l l Investing in good hiring and training procedures, e. g. SIA Singapore Girl’s acceptance rate – 2%. Standardizing the service-performance process throughout the organization. (service blueprint) Monitoring customer satisfaction through suggestion and complaint systems, customer surveys, and comparison shopping.

A Service-Performance-Process Map: Nationwide Floral Delivery

A Service-Performance-Process Map: Nationwide Floral Delivery

A Service-Performance-Process Map: Installment Lending: Bank X

A Service-Performance-Process Map: Installment Lending: Bank X

Perishability l l l Services can not be stored. Strategies on the demand side:

Perishability l l l Services can not be stored. Strategies on the demand side: differential pricing, cultivating nonpeak demand, complementary services, and reservation systems (e. g. Club Med). Strategies on the supply side: part-time employees, peak-time efficiency, increased consumer participation, shared service, and facilities for future expansion.

Managing Service Quality l l l Gap analysis (Parasuraman, Zeithaml and Berry, 1985) Gap

Managing Service Quality l l l Gap analysis (Parasuraman, Zeithaml and Berry, 1985) Gap between (1) consumer expectation and management perception, (2) management perception and service-quality specification, (3) service-quality specification and service delivery, (4) service delivery and external communications, and (5) perceived service and expected service. E. g. Hospital

Service-Quality Model

Service-Quality Model

Determinants of Service Quality l l l In order of importance: reliability, responsiveness, assurance,

Determinants of Service Quality l l l In order of importance: reliability, responsiveness, assurance, empathy, and tangibles SERVQUAL (Table 13. 2) Zone of tolerance

Common Practices that Well-managed Service Companies Share l l l l Strategic concept Top-management

Common Practices that Well-managed Service Companies Share l l l l Strategic concept Top-management commitment High standards Self-service technologies (SSTS) Monitoring systems Satisfying customer complaints Satisfying employees as well as customers

High Standards l Changi Airport (樟宜國際機場) l l l More than 90% of the

High Standards l Changi Airport (樟宜國際機場) l l l More than 90% of the passengers are served with in 10 minutes. Passengers wait not more than 8 minutes for immigration. 95% of arriving baggage is cleared within the stipulated targeted time.

Self-Service Technologies (SSTS) l l l Make service transaction more accurate, convenient, and faster.

Self-Service Technologies (SSTS) l l l Make service transaction more accurate, convenient, and faster. Examples: vending machines, ATMs, selfpumping at gas stations, self-check-out at hotel, self-return in library, and buffet. Provide the “Call Me” information.

Monitoring Systems l l Comparison shopping, ghost shopping, customer surveys, suggestion and complaint forms,

Monitoring Systems l l Comparison shopping, ghost shopping, customer surveys, suggestion and complaint forms, service-audit teams, and letters to the CEO. Importance-performance analysis

Tracking Customer Service Performance

Tracking Customer Service Performance

Importance-Performance Analysis – Auto Dealership Attribute Mean Importance Performance Number Attribute Description Rating 1

Importance-Performance Analysis – Auto Dealership Attribute Mean Importance Performance Number Attribute Description Rating 1 Job done right the first time 3. 83 2. 63 2 Fast action on complaints 3. 63 2. 73 3 Prompt warranty work 3. 60 3. 15 4 Able to do any job needed 3. 56 3. 00

Importance-Performance Analysis – Auto Dealership

Importance-Performance Analysis – Auto Dealership

Satisfying Customer Complaints l l l Rate of dissatisfaction: 25%; rate of complaint in

Satisfying Customer Complaints l l l Rate of dissatisfaction: 25%; rate of complaint in dissatisfaction: 5%. 50% of complaints report a satisfactory problem resolution. On average, satisfied → 3 people, and dissatisfied → 11 people.

Satisfying Customer Complaints l Rate of complainant repurchase Resolved quickly Major complaints 34% 52%

Satisfying Customer Complaints l Rate of complainant repurchase Resolved quickly Major complaints 34% 52% Minor complaints 52% 95%

Reasons for Higher Rate of Silent Dissatisfied in Asia l l l Asians are

Reasons for Higher Rate of Silent Dissatisfied in Asia l l l Asians are generally quite taciturn and sparing with words. Asians are less open to giving negative feedback to each other. Asians are keen on maintaining face.

Satisfying Employees As Well As Customers l l Positive employee attitudes will promote stronger

Satisfying Employees As Well As Customers l l Positive employee attitudes will promote stronger customer loyalty, e. g. Southwest Airlines. Internal marketing: train and motivate employees to serve customers well, e. g. Mount Elizabeth Hospital. External marketing: prepare, price, distribute, and promote the service to customers. Interactive marketing: the employee’s skill in serving the client, e. g. Bumrungrad Hospital.

Three Types of Marketing in Service Industries

Three Types of Marketing in Service Industries

Case: Mount Elizabeth Hospital l l Keys to high-quality assessments by patients: nursing care,

Case: Mount Elizabeth Hospital l l Keys to high-quality assessments by patients: nursing care, the clinical skills of the medical stuff, and the attitudes of the hospital employees. The hospital’s lowest paid, least educated individuals usually had the most patient and visitor contact. Emphasis on hiring practices, job development, and training for above positions. The role of the front office clerk

Case: Bumrungrad Hospital l l The largest private hospital in Thai. (554 inpatient beds,

Case: Bumrungrad Hospital l l The largest private hospital in Thai. (554 inpatient beds, over 600 doctors, and 9 overseas offices). Targeting strategy after 911 – the Middle East: the basic tenets of Islam, Muslim’s traditional greeting “Assamualaikum”, halal kitchen, and prayer rug with a sign pointing to Mecca.