Managing Transport and

Logistics Operations

Module 5:
Customer Service

CILT International Managing Transport & Logistics Operations 1

Operating in a competitive
environment
 Competition between transport operators has become
more aggressive due to deregulation
 The success of operators e.g. airlines in growing their
passenger numbers is attributed to a high level of
customer service and care
 In fact operators use customer service to differentiate
their services from competition
 Excellent customers services adds value to your offering
 Consumer representative bodies have become more
powerful

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 Knowledge of Marketing
 Customer service is an integral part of the
marketing function of an organisation
 It requires knowledge of marketing and its basic
concepts
 However, customer service commences from the
marketing department but only works when all
the organisation’s employees adopt the concept
as common work practice

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Kotler defines Marketing:
 “Marketing is a social and managerial process
by which individuals and groups obtain what
they need and want through creating, offering
and exchanging products of value with others”.
 Marketers do not create needs: we suggest to
consumers how to satisfy pre-existing needs.
 Therefore we need to consider value, Cost &
Satisfaction.

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Company Orientations Toward
The Marketplace (1)
There are 5 competing concepts under which
organisations conduct their marketing activities:
The production concept
The product concept
The selling concept
The marketing concept
The societal marketing concept

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Company Orientations (2)
 The production concept holds that consumers
will favour products that are widely available and
low in cost.
 The product concept holds that consumers will
favour those products that offer the most quality
or performance.
 The selling concept holds that consumers, if left
alone, will not buy enough of the organisation’s
products.

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Company Orientations (3)
The marketing concept holds that the key to
achieving organisational goals consists in
determining the needs and wants of target markets
and delivering the desired satisfaction more
effectively and efficiently than competitors
through:
Market focus
Customer orientation
Co-ordinated marketing
Profitability
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Company Orientations (4)
The societal marketing concept holds that the
organisation’s task is to determine the needs,
wants, and interests of target markets and to
deliver the desired satisfaction more effectively
and efficiently than competitors in a way that
preserves or enhances the consumer’s and the
society’s well-being.

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Marketing of Transport
Marketing transport services is different and more
complex than marketing product services because
services, unlike products are:
Intangible: the customer must experience the
services to really know them
Inseparable: produced, purchased, used and
evaluated at the same time
Perishable: cannot be stored
Variability: depend on who, when, where

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The marketing implications of these
characteristics (1)
Intangibility: to reduce uncertainty the buyer will
look for signs or evidence of service in the:
Place: interior / exterior of ticketing booth
People: smart, uniformed personnel
Equipment: ships, equipment
Communication material: clear, concise
brochures, timetables
Symbols: name of services, logo, name of ships
Price: pricing should be simple and clear

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The marketing implications of these
characteristics (2)
Inseparability: the customer purchases a ticket,
sits on a bus and undertakes a journey
The customer and the organisation / personnel
interact and both can effect the service outcome at
service point

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The marketing implications of these
characteristics (3)
Perishable:
 Cannot be stored and inspected before the
product is placed for sale
 Fluctuating demand with peak periods resulting
in queues and lack of service
Variability:
 Customers expect a consistent service, and in
transport services this can be difficult

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The Marketing Mix (1)

Product Price Place

Market Marketing Marketing Customer Satisfaction

Needs Research Mix

Promotion Process
People
Physical
Evidence
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The Marketing Mix (2): the 7Ps
 Product: which business are we in and what is
our offering
 Price: setting a price at a level affordable by our
target market
 Place: accessibility to transport, where to sell,
not only directly from the organisation but
through intermediaries e.g. travel agents and
freight forwarders

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The Marketing Mix (3)
 Promotion: you must tell customers that the
service is available through advertising and
promotion
 People: choose, train, motivate people to meet
customer needs
 Physical evidence: physical environment,
vehicles and personnel influence customers’
judgement
 Process: the process of how the service is
delivered to the customer, its performance and
how it is monitored is of utmost importance
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Market Segmentation (1)
 Customers have unique requirements
 You cannot possibly meet these unique
requirements in any mass form of transport, i.e,
one service to meet everyone’s needs
 The organisation will seek to group together as
many customers as possible with broadly similar
wants and needs; this process is known as
market segmentation.

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Market Segmentation (2)
3 steps to segment the market:
1. Determine the relevant characteristics that
divide a market into smaller groups e.g. trip
purpose, length of stay, importance of time etc
2. Use characteristics to identify all the significant
market segments and relating these to the
services each segment requires
3. Collecting the market segments most consistent
with the organisation’s objectives and
capabilities and choosing which markets to
serve

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Market Segmentation (3)
 Market segmentation determines an
organisation’s competitors
 It enables management to POSITION the
organisation in the market sector so that
customers will understand what the organisation
stands for in relation to competitors

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Internal Marketing
Front line personnel are the most important aspect
within an organisation that provides transport -
they can make or break the service
The organisation must:
select / recruit
train
motivate
control, this human resource aspect to ensure
that the right people give the right service
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Interactive Marketing
 The employees’ skill in handling customer
contact
 The service quality is enmeshed with the service
deliverer
 Good / bad landing of an aircraft is usually
perceived to reflect the pilot’s capabilities and
experience

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Managing Customer Service Quality

 One of the best ways to differentiate your firm

from competitors is to deliver consistently
service quality
 It is important to exceed the target of customers’
service-quality expectations
 Customers will be satisfied if they get the right
sort of transport to the right place at the right
time in the right quantities at the right price

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Determinants of Service Quality (1)
 Access: the service is easy to obtain in
convenient locations at convenient times with
little waiting
 Communication: the service is described
accurately in the customer’s language
 Competence: the employees possess the
required skill and knowledge
 Courtesy: the employees are friendly, respectful
and considerate

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Determinants of Service Quality (2)
 Credibility: the company and employees are
trustworthy and have the customer’s best
interests at heart
 Reliability: the service is performed with
consistency and accuracy
 Responsiveness: the employees respond
quickly and creatively to customers’ requests
and problems

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Determinants of Service Quality (3)
 Security: the service is free from danger, risk, or
doubt
 Tangibles: the service tangibles correctly project
the service quality
 Understanding/ knowing the customer: the
employees make an effort to understand the
customers’ needs and give each customer
individual attention

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Practices that Enhance / Encourage
Service Quality (1)
 Know the needs of your target market and
develop a distinctive strategy for satisfying these
needs to win enduring customer loyalty
 Top-level management commitment to quality
 Set high standards

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Practices that Enhance / Encourage
Service Quality (2)
 Implement systems for monitoring performance:
audit both your own and competitor’s service
performance, on a regular basis
 Implement systems for satisfying complaining
customers: respond quickly and generously to
customer complaints
 Satisfying employees as well as customers:
employee relations reflect on customer relations

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Service Information to Customers (1)
Information dissemination is extremely important in
the provision of customer service:
to create awareness of a company’s services
among potential users
to generate detailed knowledge of the company’s
products and services
to improve the company’s image among existing
and potential users

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Service Information to Customers (2)
 to eliminate perceived misconceptions
 to advise existing and potential customers of
special offers or modifications to the services
 to advise the market place of new sales
channels
 Two important sources of informing customers
are company image and advertising. These can
be broken down into personal selling,
advertising and public relations.

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Company Image (1)
All the aspects mentioned in slide 10 make-up the
image of the company, customers impressions of a
transport company are based on:
the sight of the vehicles
the attitude of employees
cleanliness of the office, ship
shabbily dressed employees
public relations and promoting a favourable
public image through:
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Company Image (2): Public Relations
publications e.g. monthly report, newsletter
events e.g. exhibits, competitions
news
speeches
public-service activities e.g. philanthropic
activities
identity media e.g. design and layout of
company’s documents, logos and slogans

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Advertising (1)
Paid messages communicated to the media to:
make potential consumers aware that the service
exists and it fulfills some need
persuade people to try the service
retain customers’ loyalty to the service by making
customers want to use the service again

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Advertising (2)
It is important to know WHO we are directing the
advertising to (the segment):
the social status of the people we are trying to influence will effect
the media that we use
the way we present the information, the copy and the timing of the
advertisement
the type and amount of information to provide
whether to direct the advertising to the public at large (mass) or to
restricted groups

Advertising costs money and must be costed to make sure

that the money spent is repaid in increased custom/sales

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Passenger Information (1)
 Information to passengers is of utmost importance to provide quality
service
 Clear and precise information will help the user to make successful
use of the transport service
 Information should be made readily available to passengers through:
 radio & TV
 newspapers & magazines
 over the telephone
 display information
 operating / front line personnel
 the internet

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Passenger Information (2)
You can really show you care about the welfare of your
customer by making readily available information that is
important to the user regarding:
 up-to-date price lists (including concessions)
 up-to-date time-tables
 onward connections by other modes of transport
 conditions of travel
 short notice changes e.g. cancellations, delays, diversions,
breakdowns
 weather conditions
 emergencies
 constraints, problems and policies
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Managing for Quality Customer Service (1)

 Understand your customers

 Set quality service standards that are:
clear, concise, observable and realistic
communicated to internal (employees) and external
customers
written
become part of recruiting profiles, job descriptions
and appointing decisions

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Managing for Quality Customer Service (2)

 Check Up Regularly
A service audit system - which allows you to focus on
the key indicators of quality service
A customer feedback system - which enhances
customer accessibility on an on-going basis
An employee feedback system - which keeps the
entire team on track and heading in the right direction

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Managing for Quality Customer Service (3)

 Create a supportive climate for solving

customer-service problems
 Use your customer-service team to identify
customer-service problem areas
 Make your customer-service team a resource for
improving service
 Turn customer problems and complaints into
opportunities for strengthening ties with your
customers

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