www wessexlearning com Managing Markets Strategically Professor Noel

www. wessexlearning. com Managing Markets Strategically Professor Noel Capon R. C. Kopf Professor of International Marketing Columbia Business School New York, NY © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 1

Managing Markets Strategically www. wessexlearning. com Section 1: Marketing and the Firm Section 2: Fundamental Insights for Strategic Marketing Section 3: Strategic Marketing Section IV: Implementing the Market Strategy Part A: Providing Customer Value Chapter 12: Managing the Product Line Chapter 13: Managing Services, Customer Service Chapter 14: Developing New Products © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 2

www. wessexlearning. com CHAPTER 12 Managing Services, Customer Service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 3

The Fundamental Business Model www. wessexlearning. com Shareholder Value Organizational Survival, Growth Current, Potential Profits Attract, Retain, Grow Customers Competit ors Customer Value Company © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 4

Six Marketing Imperatives www. wessexlearning. com • Imperative 1: Determine, recommend which markets to address • Imperative 2: Identify, target market segments • Imperative 3: Set strategic direction, positioning • Imperative 4: Design the market offer • Imperative 5: Secure support from other functions • Imperative 6: Monitor, control execution/performance © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 5

Chapter Roadmap www. wessexlearning. com Products, Services, Customer Service Growth in the Service Sector Characteristics of Services Intangibility Divisibility Inseparability Lack of Acquisition Variability Role of Customers Perishability Service Quality Measuring, Managing Service Quality Issues in Improving Service Quality © Noel Capon, 2017. All rights reserved. Customer Service Types of Customer Service Delivering Exceptional Customer Service PRESENTATION 12 OF 20 / 6

Managing Services, Customer Service www. wessexlearning. com Session Roadmap A • Products, Services, Customer Service • Growth in services • Key service characteristics • Service quality • Customer service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 7

Managing Services, Customer Service www. wessexlearning. com Session Roadmap A • Products, Services, Customer Service • Growth in services • Key service characteristics • Service quality • Customer service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 8

Service Distinctions www. wessexlearning. com A product is any core offering, including both physical products and services. However, we separate products as a tangible product – cannot be dropped on your foot! A service is any act or performance that one party can offer another that is essentially intangible and does not result in the ownership of anything. Customer service is a key component of the market offer. Customer service enhances the customer value inherent in the core product or service. © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 9

Managing Services, Customer Service www. wessexlearning. com Session Roadmap A • Service distinctions • Growth in services • Key service characteristics • Service quality • Customer service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 10

Growth in Services www. wessexlearning. com • Account for more than 70% of employment and GDP • Factors driving growth of private-sector services: • Rising incomes • Age-related demographic shifts – increased demand healthcare and financial services • Customer behavior changes – decreased concern for ownership • Deregulation – spurs innovation • Franchising – critical in fast food and hospitality industries • Globalization – fast transfer across national borders • Leveraging core competence – in-house activities offered as services • Outsourcing – internal activities counted as part of manufacturing; or sourced activities are services • Technology – increased customer/firm communication © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 11

Managing Services, Customer Service www. wessexlearning. com Session Roadmap A • Service distinctions • Growth in services • Key service characteristics • Service quality • Customer service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 12

Key Service Characteristics www. wessexlearning. com • Intangibility – not physical in nature • Inseparability – production and consumption at same time • modify supply • modify demand • Variability – lack of consistency • focus on human capital • substitute capital for labor • Perishability – cannot be inventoried • demand sufficient but unpaid • demand insufficient • Lack of acquisition – unlike products, cannot be acquired • Role of customers – customers are part of the offer • Divisibility – services combine many individual activities © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 13

Key Service Characteristics www. wessexlearning. com Addressing Intangibility • Service facilities • exterior • interior • onstage • offstage • Service equipment • Service personnel • Service guarantees © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 14

USAA Case Study www. wessexlearning. com Classroom Discussion • How could your educational institute learn from USAA customer service practices to deliver improved educational services? © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 15

Managing Services, Customer Service www. wessexlearning. com Session Roadmap A • Service distinctions • Growth in services • Key service characteristics • Service quality • Customer service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 16

Service Quality www. wessexlearning. com Session Roadmap AA • Service quality and customer satisfaction • SERVQUAL model • Service quality expectations and performance • Perceived service quality drivers • Enhance service quality © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 17

Service Quality www. wessexlearning. com Session Roadmap AA • Service quality and customer satisfaction • SERVQUAL model • Service quality expectations and performance • Perceived service quality drivers • Enhance service quality © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 18

Service Quality www. wessexlearning. com Service Quality and Customer Satisfaction Value Proposition Delivered Value Expected Value Perceived Value Customer Satisfaction = f(Perceived Value less Expected Value) © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 19

Service Quality www. wessexlearning. com Service Quality and Customer Satisfaction f(Perceived Value less Expected Value) = Customer Satisfaction Expected Value Perceived Value. Customer Satisfaction Firm A 5 hours 6 hours low Firm B 8 hours 7 hours high © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 20

Service Quality www. wessexlearning. com Session Roadmap AA • Service quality and customer satisfaction • SERVQUAL model • Service quality expectations and performance • Perceived service quality drivers • Enhance service quality © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 21

Service Quality www. wessexlearning. com SERVQUAL Model © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 22

Service Quality www. wessexlearning. com SERVQUAL Model Gap 1: The firm does not understand customer service expectations Gap 2: Service quality specifications do not reflect the firm’s beliefs about customer service expectations Gap 3: Service delivery performance does not meet service specifications Gap 4: External communications about service quality do not reflect service performance Gap 5: Expectations disconfirmation: The difference between perceived service quality and expected service quality © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 23

Service Quality www. wessexlearning. com Session Roadmap AA • Service quality and customer satisfaction • SERVQUAL model • Service quality expectations and performance • Perceived service quality drivers • Enhance service quality © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 24

Service Quality www. wessexlearning. com Service Quality Expectations and Performance © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 25

Service Quality www. wessexlearning. com Session Roadmap AA • Service quality and customer satisfaction • SERVQUAL model • Service quality expectations and performance • Perceived service quality drivers • Enhance service quality © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 26

Service Quality www. wessexlearning. com Perceived Service Quality Drivers Tangibles Appearance of communication materials, equipment, personnel, and physical facilities Reliability Ability to perform the promised service accurately and dependably Responsiveness. Willingness to help customers and provide prompt service Assurance Courtesy and knowledge of employees, and ability to convey confidence and trust Empathy Provision of caring, individualized attention to customers © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 27

Service Quality www. wessexlearning. com Session Roadmap AA • Service quality and customer satisfaction • SERVQUAL model • Service quality expectations and performance • Perceived service quality drivers • Enhance service quality © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 28

Service Quality www. wessexlearning. com Enhance Service Quality • Customer co-production • Improve the offer • Maintain the service environment • Service performance and information • Service quality failures and service recovery © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 29

Managing Services, Customer Service www. wessexlearning. com Session Roadmap • Service distinctions • Growth in services • Key service characteristics • Service blueprint • Service quality • Customer service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 30

Customer Service www. wessexlearning. com Customer Service Any act, performance, or information that enhances the firm’s core product or service • Customer service dimensions • Customer service and the purchase process • Deliver exceptional customer service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 31

Customer Service www. wessexlearning. com Order-taking Safekeeping Exceptions Billing Consultation Payment Information Customer Service Dimensions: Flower of Customer Service Hospitality Source: C. H. Lovelock and J. Wirtz, Services Marketing, 7 th ed. , Upper Saddle River, NJ: Prentice Hall, 2011. © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 32

Customer Service www. wessexlearning. com Customer Service and the Purchase Process Pre-purchase Help identify needs © Noel Capon, 2017. All rights reserved. During purchase Help make choice Post-purchase Help with many issues PRESENTATION 12 OF 20 / 33

Customer Service www. wessexlearning. com Deliver High-Level Customer Service Customer service strategy Top management support and involvement Measuring customer service quality © Noel Capon, 2017. All rights reserved. High-level customer service Human resource management Service infrastructure PRESENTATION 12 OF 20 / 34

Delivering Exceptional Customer Service www. wessexlearning. com Delivering Exceptional Service Tools include: • Top Management Support – Communicate and champion of importance of customer service • Customer Service Strategy – Focus on customer needs for customer service • Human Resource Management – HR planning for high customer service oriented personnel • Service Infrastructure – Design infrastructure to enhance to customer service delivery • Measuring Customer Service quality – “If you can’t measure it, you can’t manage it. ” © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 35

Managing Services, Customer Service www. wessexlearning. com Session Roadmap • Service distinctions • Growth in services • Key service characteristics • Service quality • Customer service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 36

www. wessexlearning. com CHAPTER 12 Managing Services, Customer Service © Noel Capon, 2017. All rights reserved. PRESENTATION 12 OF 20 / 37