CHANGE

Which is the most powerful organization in the world?

AL

QAIDA

Nothing is Unimaginable! Imagine That!

Who would have guessed that 19

terrorist,

using internet & arming themselves with box cutters, could bring the UNITED STATES effectively to its knees? Anything is possible. Anything is likely. Are you ready? Change is coming & coming fast.
3

Substituting information for armor is a discomfiting notion to a tank soldier, Soldiers will learn that battelfield awareness can be as comforting as armor.
4

The 98.5 percent factor

540 man days 8 man days

5

Look at a Roster of the 100 in existence.

largest U.S. companies at the beginning of the 1900s. Youll find that only 16 are still
Then consider Fortune Magazines First list (published 1950) of Americas 500 firms topping that first Fortune 500 only 20
could be found in the top 100 by 1992.

During the decade of the 1980s. A total of 230 companies

46% disappeared from the Fortune 500.

Obviously, size does not guarantee continued success.

6

Neither does a good reputation.

The factory of the future will have two employees,

a man & a dog.

The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment. Warren Bennis
Author & Distinguished Professor of Biz Administration University of Southern California
7

Business Firms in Transition

WAS IS

Make Everything Buy Outside (Outsource) Inside Improve on Ones Benchmark Others Own Go It Alone Network Collaborate Functional Processes, Department Multidiscipline Teams Domestic Focus Global Focus Product Centered Customer Centered
8

Business Firms in Transition

WAS IS
Standard Product Customised Product
Mass Marketing Target Marketing Sustainable Competitive Adv. Slow Product Devpmt. Cycle Long Product Life Cycle No Sustainable Competitive Adv. Quickened Product Devpmt. Cycle Shortening Product Life Cycle Hierarchical Flattened Organization Organization Market Place Activity Market Space Activity 9

The Age of the

Never
Regis McKenna

Satisfied Customer
10

ROMEO
Retired Old Men Eating Out
11

Brands have run out of

juice.

Theyre dead.

Kevin Roberts/Saatchi & Saatchi

12

Kevin Roberts*:

Lovemarks!
*CEO/Saatchi & Saatchi
13

*Mystery
*Magic *Sensuality

*Enchantment
*Intimacy *Exploration
Source: Kevin Roberts (e.g. Apple/iMac/)
14

15

16

17

18

Lovemark !
Dreams Come True Awesome Experiences Services Goods Raw Materials

19

Relationships

The Customer Pyramid

Enhancing
Retaining

Satisfying

Getting

How Customers See Relational Benefits in Service Industries

Confidence Benefits
less risk of something going wrong, less anxiety ability to trust provider know what to expect get firms best service level

Social Benefits
mutual recognition, known by name friendship, enjoyment of social aspects

Special Treatment Benefits

better prices, discounts, special deals unavailable to others extra services higher priority with waits, faster service

How Firms See Relational Benefits in Service Industries

Increased Revenue from the Customer Reduced Marketing & Administrative Costs

Free Promotion through Word of Mouth

Customer Retention is employee Retention

LIFE TIME VALUE OF A CUSTOMER

Life time value of a customer is a concept or calculation that looks at customer from the point of view of their lifetime revenue contributions to a company.

and profitability

24

The Service Profit Chain

Source: An exhibit from J. L. Heskett, T. O. Jones, W. E. Sasser, Jr., and L. A. Schlesinger, Putting the Service-Profit Chain to Work, Harvard Business Review, March-April 1994, p. 166. 25

Success In a Nutshell
Hire people with a sense of humor.

Quit pretending. Give yourself the freedom to be yourself. Train for skill. Hire for spirit and enthusiasm.
Treat family members as best friends; dont take them for granted. Treat everyone with kindness and equal respect; you never know whom youre talking.
26

The Customer Pyramid

Most profitable customers

Platinum Gold Iron Lead

Least profitable customers

Which segment sees high value in our offer, spends more with us over time, costs less to maintain, and spreads positive word-of-mouth?

Which segment costs us in time, effort and money, yet does not provide the return we want? Which segment is difficult to do business with?

Relationship Hierarchy
Most profitable customers

Platinum Gold Iron Lead

Least profitable customers

Which segment sees high value in our offer, spends more with us over time, costs less to maintain, and spreads positive word-of-mouth?

Which segment costs us in time, effort and money, yet does not provide the return we want? Which segment is difficult to do business with?

THE CUSTOMER ISNT ALWAYS RIGHT

THE WRONG SEGMENT
DIFFICULT CUSTOMER NOT PROFITABLE IN THE LONG TERM

29

The Customer Satisfaction Loyalty Relationship

Apostle
100

Loyalty (Retention)

Zone of Affection
80

Near Apostle
60

Zone of Indifference Zone of Defection

40

20

Terrorist 0

1
Very dissatisfied

5
Very Satisfied

Neither Dissatisfied Satisfied satisfied nor dissatisfied

Satisfaction

Not everything that counts can be counted , and not everything that can be counted , counts. -Albert Einstein
31

Team
When people work really hard for
something they believe in,

a special bond inevitably develops

between them.

32

Think Like An Owner

Nonowners are more apt to worry

about how their actions are being

perceived by their superiors. Owners focus on the business results of their actions, regardless of who is watching.
33

Service Quality Dimensions

Reliability
The ability to perform the service right the first time. The ability to provide prompt service.

Responsiveness

Assurance

The knowledge and courtesy of employees.

Caring, individualized attention to customers.

Empathy

Tangibles

The physical evidence of a service.

34

Southwest Flight Attendants Make Flying Fun

35

The Wheel of Loyalty

3. Reduce Churn Drivers
Conduct churn diagnostic

1. Build a Foundation for Loyalty

Segment the market Be selective in acquisition Use effective tiering of service.

Address key churn drivers

Enabled through: Frontline staff Account managers Membership programs CRM

Implement complaint handling & service recovery Increase switching costs

Customer Loyalty

Deliver quality service.

Systems

Build higher level bonds

2. Create Loyalty Bonds

Give loyalty rewards

Deepen the relationship

Drivers of Service Switching

Service Failure / Recovery
Core Service Failure
Service Mistakes Billing Errors Service Catastrophe

Value Proposition
Pricing
High Price Price Increases Unfair Pricing Deceptive Pricing

Service Encounter Failures

Uncaring Impolite Unresponsive Unknowledgeable

Service Switching

Inconvenience
Location/Hours Wait for Appointment Wait for Service

Response to Service Failure

Negative Response No Response Reluctant Response

Competition
Found Better Service

Others
Ethical Problems
Unsafe Cheat Hard Sell Conflict of Interest

Involuntary Switching
Customer Moved Provider Closed

38

The [Starbucks] Fix Is on

We have identified a third place. And I really believe that sets us apart. The third place is that place thats not

Its the place our customers come for refuge.

work or home.
Nancy Orsolini, District Manager
39

! Contrasts
WAS IS

Technology helps links parts of an The network is the organization organization

Every department uses IS/IT Every department lives on the web Department = Compartment Access = Success Project teams have regular phone Project teams meet 365/24/60/60 conferences We favor independence We savor interdependence We are proud of being close to our We are proud at one with our customer customer We sell rigorously engineered product We sell information enabled awesome experience Here today here tomorrow Here today. reconfigured tomorrow

Men in suit Women in charge

40

The Perfect Answer

Jill and Jack buy slacks in black

41

The Connection Proclivity in women starts early. When asked, How was school today? a girl usually tells her mother every detail of what happened, while a boy might grunt, Fine.

EVEolution

42

Women dont buy brands.

They join them.

EVEolution
43

Brand Spaces

44

45

Brand Spaces

46

When land was the scarce resource, nations battled over it. The same is happening now for

talented people.
Stan Davis & Christopher Meyer, futureWEALTH
48

Historically, smart people have always turned to where the money was. where the smart are. Today, money is turning to

people
49

The High Standard Deviation Enterprise.

THINK WEIRD:
56

Defining the Essence of a Service

An act or performance offered by one party to another
An economic activity that does not result in ownership A process that creates benefits by facilitating a desired change in:
customers themselves

physical possessions intangible assets

59

Services Dominates Most of the Economies

Agriculture, Forestry, Mining, Construction 8% Manufacturing 14%

Finance, Insurance, Real Estate 20%

Government (mostly services) 13% Other Services 11%

SERVICES

Wholesale and Retail Trade 16% Transport, Utilities, Communications 8%

Business Health Services 6% 5%

60

Changing Structure of Employment as Economic Development Evolves

Agriculture Services

Industry

Time, per Capita Income

61

% of GDP in INDIA

2005 2001 1995 1980 1970 0 48 40 36 31 20

61 26 28 26 24 40 Services 60 Industry

20

19 26 32 38 45 80 100 120
62

Agriculture

Tangibility Spectrum
Salt
Soft Drinks Detergents Automobile Cosmetics Fast Food

Intangible Dominant

Tangible Dominant Advertising Airlines Management Consulting Insurance

63

Differences Between Goods & Services

Intangibility

Heterogeneity

Simultaneous Production and Consumption

Perishability
64

Differences between Goods and Services

GOODS
Tangible

SERVICES RESULTING IMPLICATION

Intangible Services cannot be inventoried Cannot readily be displayed or communicated Pricing is difficult

65

Differences between Goods and Services

GOODS SERVICES RESULTING IMPLICATION

Production Simultaneous Customers participate in and separate from affect the transaction consumption Customers affect each other Employees affect service outcome Decentralization may be essential Mass production is difficult
66

Differences between Goods and Services

GOODS SERVICES RESULTING IMPLICATION

Standardization Variability/ Service delivery & Heterogeneous customer satisfaction depend on employees action Service quality depends upon many uncontrollable factors There is no sure knowledge that the service delivered matches what 67 was planned and promoted

Differences between Goods and Services

GOODS SERVICES RESULTING IMPLICATION
It is difficult to synchronize supply and demand with services Services cannot be returned or resold

Non Perishable Perishable

68

Expanded Marketing Mix for Services

People

Physical Evidence
Process

69

People
Employees Recruitment Training Motivation Rewards Teamwork Customers Education
Training
70

Physical Evidence
Facility Design Equipment Employee Dress Signage Other tangibles Reports Business cards Statements
71

Process
Flow of activities Standardized Customized No. of steps Simple Complex Customer Involvement
72

The Services Marketing Triangle

Company (Management)
Internal Marketing
enabling the promise

External Marketing
setting the promise

Providers

Interactive Marketing
delivering the promise

Customers

Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler

73

The Services Triangle &Technology

Company

Technology

Providers
Source: Adapted from A. Parasuraman

Customers
74

Tell a man there are 300

billion stars in the universe

and he will believe you.

Tell him a bench has wet paint on it and he will have to touch to be sure
75

76

77

78

GAPS MODEL OF SERVICE QUALITY

EXPECTED SERVICE CUSTOMER GAP 5 PERCEIVED SERVICE

GAP 1

SERVICE DELIVERY GAP 3 GAP 4 CUSTOMER- DRIVEN SERVICE DESIGNS AND STANDARDS

EXTERNAL COMMUNICATIONS TO CUSTOMERS

GAP 2 COMPANY PERCEPTIONS OF CONSUMER EXPECTATIONS

79

Nature & Determinants Of Customer Expectations Of Service

Enduring Service Intensifiers Explicit Service Promise Advertising Personal Selling Contacts Other Communications

Derived Expectations Personal Service Philosophies

Personal needs

Transitory Service Intensifier Emergencies Service Problems

Perceived Service Alternatives

Implicit Service Promises Tangibles Price Expected Service Desired Service Word Of Mouth Personal Expert (Consumer Reports, Publicity Consultants) Past Experience

Self Perceives Service Role Situational Factors Bad Weather Catastrophe Random Over Demand

Zone of Tolerance Adequate Service

Predicted Service

Gap 5 (Customer Gap) Perceived Service

80

Service Blueprinting
A service blueprint is a picture or map
that accurately portrays the service system so that the different people involved in providing it can understand and deal with it objectively regardless of their roles or their individual point of view. 81

Service Mapping/Blueprinting
A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customers point of view.
Process

Service Mapping

Points of Contact Evidence

82

Service Blueprint Components

CUSTOMER ACTIONS line of interaction ONSTAGE CONTACT EMPLOYEE ACTIONS line of visibility BACKSTAGE CONTACT EMPLOYEE ACTIONS line of internal interaction SUPPORT PROCESSES
83

Service Blueprint Components

84

Overnight Hotel Stay

Hotel Exterior Parking Cart for Desk Elevators Cart for Bags Registration Hallways Bags Papers Room Lobby Key
Give Bags Check in to Bellperson Go to Room Receive Bags

Room Amenities Bath

Menu

Delivery Food Tray Food Appearance

CONTACT PERSON SUPPORT PROCESS(Back Stage) (On Stage) CUSTOMER

Bill Desk Lobby Hotel Exterior Parking

Check out and Leave

PHYSICAL EVIDENCE

Arrive at Hotel

Sleep Shower

Call Room Service

Receive Food

Eat

Greet and Process Take Registration Bags

Deliver Bags

Deliver Food

Process Check Out

Take Bags to Room

Take Food Order

Registration System

Prepare Food

Registration System

85

Four Categories of Services Employing Different Underlying Processes

What is the Nature of the Service Act?
TANGIBLE ACTS

Who or What is the Direct Recipient of the Service?

DIRECTED AT PEOPLE DIRECTED AT POSSESSIONS

People Processing
e.g., airlines, hospitals, haircutting, restaurants hotels, fitness centers

Possession Processing
e.g., freight, repair, cleaning, landscaping, retailing, recycling

INTANGIBLE ACTS

Mental Stimulus Processing

e.g., broadcasting, consulting, education, psychotherapy

Information Processing
(directed at intangible assets)

e.g., accounting, banking, insurance, legal, research

86

Relationships
87

The Customer Pyramid

Enhancing Retaining Satisfying

Getting

88

The Customer Pyramid

Most profitable customers

Platinum Gold Iron Lead

Least profitable customers

Which segment sees high value in our offer, spends more with us over time, costs less to maintain, and spreads positive word-of-mouth?

Which segment costs us in time, effort and money, yet does not provide the return we want? Which segment is difficult to do business with?

89

How Customers See Relational Benefits in Service Industries

Confidence Benefits
less risk of something going wrong, less anxiety ability to trust provider know what to expect get firms best service level

Social Benefits
mutual recognition, known by name friendship, enjoyment of social aspects

Special Treatment Benefits

better prices, discounts, special deals unavailable to others extra services 90 higher priority with waits, faster service

How Firms See Relational Benefits in Service Industries

Increased Revenue from the Customer Reduced Marketing & Administrative Costs

Free Promotion through Word of Mouth

Customer Retention is employee Retention

91

The Customer Satisfaction Loyalty Relationship

Apostle
100

Loyalty (Retention)

Zone of Affection
80

Near Apostle
60

Zone of Indifference Zone of Defection

40

20

Terrorist 0

1
Very dissatisfied

5
Very Satisfied

Neither satisfied Dissatisfied Satisfied nor dissatisfied

Satisfaction

92

The Wheel of Loyalty

3. Reduce Churn Drivers
Conduct churn diagnostic

1. Build a Foundation for Loyalty

Segment the market Be selective in acquisition Use effective tiering of service.

Address key churn drivers

Enabled through: Frontline staff Account managers Membership programs CRM Systems

Implement complaint handling & service recovery Increase switching costs

Customer Loyalty

Deliver quality service.

Build higher level bonds

2. Create Loyalty Bonds

Give loyalty rewards

Deepen the relationship

93

Drivers of Service Switching

Service Failure / Recovery
Core Service Failure
Service Mistakes Billing Errors Service Catastrophe

Value Proposition
Pricing
High Price Price Increases Unfair Pricing Deceptive Pricing

Service Encounter Failures

Uncaring Impolite Unresponsive Unknowledgeable

Service Switching

Inconvenience
Location/Hours Wait for Appointment Wait for Service

Response to Service Failure

Negative Response No Response Reluctant Response

Competition
Found Better Service

Others
Involuntary Switching
Customer Moved Provider Closed

Ethical Problems
Unsafe Cheat Hard Sell Conflict of Interest 94

Common CRM Applications

Signifies the whole process by which relationships with customers are built and maintained.
CRM as an enabler, offering a unified customer interface and allow firms to better understand and segment the customers etc. Applications include: Data collection Data analysis Sales force automation

Marketing automation
Call center automation
95

The Customer Isnt Always Right Wrong Segment Not Profitable in the Long term Difficult Customers
96

How Customers Respond to Service Failures

Complaint Action
-Complain to provider -Negative word-of-mouth -Third-party action

No Complaint Action

97

Types of Complainers Passives

Voicers Irates
Activists
98

When they Complain what do they expect

Customers expect fair Treatment

Outcome Fairness

Procedural Fairness
Interactional Fairness
99

Service Recovery Strategies

Fail-Safe the service

Learn from lost customers Welcome & Encourage complaints

Learn from Recovery experience

Service Recovery Strategies

Treat Customers Fairly

Act Quickly

100

Levels of Relationship Strategies

Bundling & Cross Selling Stable Pricing Continuous Relationships

Volume & Frequency Rewards Integrated Information Systems Joint Investments

Financial Bonds
Foundation: Excellent service & careful segmentation

Structural

Bonds

Social Personal Bonds Relationships

Social Bonds among Customers

Shared processes & equipment

Customization Bonds

Anticipation /Innovation

Customer 101

Intimacy Mass Customization

Consumer Decision Making

Need Recognition

Information Search

Evaluation

Decision

Post Purchase Evaluation

102

CONSUMER DECISION-MAKING PROCESS IN SERVICES

INFORMATION SEARCH Use Of Personal Sources Perceived Risk EVALUATION OF ALTERNATIVES Evoked Set

CULTURE
Values & Attitudes Manners & Customs Material Culture Aesthetics Educational & Social Institutions Language

PURCHASE & CONSUMPTION

Emotion And Mood Service Provision As Drama Service Roles And Scripts. Compatibility Of Customers

POST PURCHASE EVALUATION

Innovation Diffusion Brand Loyalty Attribution Of Dissatisfaction

103

INFORMATION SEARCH
Use of personal source
Goods -personal and non-personal sources are used.

Services - personal sources are used.

As mass media can convey about search qualities but can communicate little about experience qualities.
104

INFORMATION SEARCH
Perceived risk
Compare to goods more risk would be involved in purchase of services.
-Intangible nature -Since services are non-standardized always more uncertainty would accompany about the outcome each time it is purchased. -Services not accompanied by any warranties.
105

EVALUATION OF SERVICE ALTERNATIVES

Evoked Set

Evoked set of services is smaller as compared to goods.

Reasons
Retailing between goods and services Retail outlet would display competing brands in close proximity of goods. Service providers almost always offer only a single brand for sale
106

EVALUATION OF SERVICE ALTERNATIVES

Evoked Set
Less number of service providers for the same services in a given geographic area.
Difficulty to obtain adequate prepurchase information about services. Customers evoked set frequently includes self-provision of the service.
107

SERVICE PURCHASE AND CONSUMPTION Emotion and Mood

Emotion and mood influence peoples (and therefore customers) perceptions and evaluations of their experiences. Services characterized by human interaction are strongly dependent on the moods and emotions. Ways in which mood can affect the behavior of service 108 customer

SERVICE PURCHASE AND CONSUMPTION Service Roles and Scripts

Roles are defined as combinations of social clues that guide and direct behaviors in a given setting. Service employees need to perform their roles according to expectations of the customers.

One of the factors that most influences the effectiveness of role performance is a script.
109

SERVICE PURCHASE AND CONSUMPTION

The Compatibility of Service Customers

Customers can be incompatible for many reasons
Difference in beliefs Values Experience Abilities to pay Appearance Age, health etc.

110

POST PURCHASE EVALUATION

Attribution of Dissatisfaction
A customer may attribute their dissatisfaction to provider and also to themselves (as they participate in the service process) e.g. - Disappointed from a haircut - Doctors diagnosis depends greatly on this - Dry cleaners success in removing a spot depends on the customers knowledge of its cause

(Hence consumers may complain less frequently about services than about goods.)
111

POST PURCHASE EVALUATION

Innovation Diffusion
The rate of diffusion of an Innovation depends on the Consumers Perceptions of the innovation with regard to Five Characteristics:
Relative Advantage Compatibility Communicability Divisibility Complexity (Customers adopt innovations in services more slowly than

they adopt innovations in goods.)

112

POST PURCHASE EVALUATION

Brand Loyalty
The degree to which consumers are committed to particular brands of goods or services depends on a number of factors:
-Cost of changing brands (switching cost) -Availability of substitutes -Perceived risk associated with the purchase -Degree to which they obtained satisfaction in past (Consumers are more brand loyal with services than products)

113

CULTURE
The Role Of Culture In Services

Culture is learned, shared, and transmitted from one generation to the next, and is multidimensional.

Culture would include:

Language (both verbal and non verbal) Values and attitudes Manners and customs Material culture Aesthetics Education and social institutions

114

Levels of Customer Contact with Service Organizations

High
N ur sing H om e

Emphasizes encounters with service personnel

M a na ge me n t Consulti ng

H a ir Cut
4 - Sta r H ote l
G ood Re sta ur a nt Ai rl ine Tr a ve l (Econ.)

Tel ephone Ba nk ing

Re ta il Ba nk i ng M ote l

Ca r Repa i r I nsur a nce

Dr y Cl ea ning
Fa st Food Movie Theater
Ca bl e TV

Subway Internet Banking Mail Based Repairs

Emphasizes encounters with equipment

Internet-based Services

Low
115

Nature & Determinants Of Customer Expectations Of Service

Enduring Service Intensifiers Explicit Service Promise Advertising Personal Selling Contacts Other Communications

Derived Expectations Personal Service Philosophies

Personal needs

Transitory Service Intensifier Emergencies Service Problems

Perceived Service Alternatives

Implicit Service Promises Tangibles Price Expected Service Desired Service Word Of Mouth Personal Expert (Consumer Reports, Publicity Consultants) Past Experience

Self Perceives Service Role Situational Factors Bad Weather Catastrophe Random Over Demand

Zone of Tolerance Adequate Service

Predicted Service

Gap 5 (Customer Gap) Perceived Service

116

Marketing Information System

Marketing Information System is defined as an assembly of inter-related information subsystems: receiving, processing and disseminating information on a continued basis to help make marketing decision.
117

THE SUBSYSTEMS OF MARKETING INFORMATION

Subsystem
Internal Reporting System

Information
Internal reports as order, sales, deliveries, inventory, credit sales etc. It is data of events occurred and results obtained. Information about relevant events or developments external to the firm.
The sources are newspapers, magazines, journal and other publications, conferences, exhibitions, meetings etc.

Marketing Intelligence System

Marketing Research System

Systematic investigation of information about a phenomenon specific to marketing situation. Desk or field research own research or through agency.

118

Market Research
Type of Research Primary Research Objectives Complaint solicitation To identify/attend to dissatisfied customers
To identify common service failure points

Critical incident studies

To identify best practices at transaction level To identify customers requirements as input for qualitative studies To identify common service failure points To identify systemic strengths and weaknesses in customer-contact services
119

Market Research contd ..

Type of Research
Trailer calls

Primary Research Objectives

To obtain immediate feedback on performance of service transactions To measure effectiveness of changes in service delivery To assess service performance of individuals and teams To use as input for process improvements To identify common service failure points

Service expectation meetings and reviews

To create dialogue with important customers To identify what individual large customers expect and then to assure that it is delivered To close the loop with important customers
120

Market Research contd ..

Type of Research Primary Research Objectives
Process checkpoint To determine customer perceptions of long evaluations term professional services during service provision To identify service problems and solve them early in the service relationship Market oriented ethnography To research customers in natural settings To study customers from cultures other than your home country
121

Market Research contd ..

Type of Research
Mystery shopping

Primary Research Objectives

To measure individual employee performance for evaluation , recognition and rewards To identify systemic strengths and weaknesses in customer-contact services To identify reasons for customer defection
122

Lost customer research

Market Research contd ..

Type of Research Primary Research Objectives

Future expectations research

To forecast future expectations of customers To develop and test new service ideas

Database marketing research

To identify the individual requirements of customers using information technology and database information

123

Provider Gap 3
CUSTOMER

Service Delivery
COMPANY

Service Performance Gap Customer-Driven Service Designs and Standards

124

The Critical Importance of Service Employees

They are the service.

They are the organization in the customers eyes.

They are the brand.

They are marketers. Their importance is evident in:

the services marketing mix (people) the service-profit chain the services triangle

The Services Marketing Triangle

Company (Management)

Internal Marketing
Enabling the promise

External Marketing
Making the promise

Employees
Interactive Marketing
Delivering the promise

Customers
128
Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler

Services Marketing Triangle Applications Exercise

Focus on a service organization. In the context you are focusing on, who occupies each of the three points of the triangle? How is each type of marketing being carried out currently? Are the three sides of the triangle well aligned? Are there specific challenges or barriers in any of the three areas? 129

Ways to Use the Services Marketing Triangle

Overall Strategic Assessment

How is the service organization doing on all three sides of the triangle? Where are the weaknesses? What are the strengths?

Specific Service Implementation

What is being promoted and by whom? How will it be delivered and by whom? Are the supporting systems in place to deliver the promised service?
130

Service Employees
Who are they?
boundary spanners

What are these jobs like?

emotional labor many sources of potential conflict
person/role organization/client interclient

quality/productivity tradeoffs

Boundary Spanners Interact with Both Internal and External Constituents

External Environment

Internal Environment

132

Boundary-Spanning Workers Juggle Many Issues

Person versus role
Organization versus client Client versus client

133

Person/Role Conflict

This conflict arises when what they are asked to do things that are quite different from their personalities.

134

Organization/Client Conflict

Front line executives have two bosses:

the organization & the individual customer The conflict may arise when the employee has to make a difficult choice between the customer the rules & satisfaction for the customer
135

Interclient Conflict
Employee

Serving customers in turn

Serving many customers simultaneously

136

Quality/Productivity Trade-Offs

Front-line service employees have to both :

Effective & Efficient They are expected to deliver satisfying service to customers and at the same time have to be cost effective & productive .
137

Human Resource Strategies for Delivering Service Quality through People

Compete for the best people Measure and reward strong service performers Hire for service competencies and service inclination Be the preferred employer Train for technical and interactive skills

Hire the right people

Treat employees as customers

Retain the best people

CustomerOriented Service Delivery

Develop people to deliver service quality

Empower employees

Include employees in the companys vision Develop service-oriented internal processes

Provide needed support systems

Promote teamwork

Provide supportive technology and equipment

Measure internal service quality

138

Employees Roles In Service Industry

One of the main clues to corporate excellence has come to be incidents of unusual effort on the part of apparently ORDINARY EMPLOYEES.

139

The Importance of Customers in Service Delivery

Customer Receiving the Service:

Inputs could include

(a) Information (b) Effort (c) Physical possession Other Customers:

Other customers can either enhance or detract from customer satisfaction and perceptions of Quality.
140

Customers Role
Customers as Productive Process
Customers as Contributors to Service Quality and Satisfaction Customers as Competitors

141

Customers as Productive Process

Service customers have been referred to as partial employees of the organization.

If customers contribute effort, time, or other resources to the service production process, they should be considered as part of the organization.
142

Customers as Contributors to Service Quality and Satisfaction

Effective customer participation can increase the likelihood that needs are met and that the benefits the customer seeks are actually attained.
e.g. students, health care, personal fitness, weight loss.

143

Customers as Competitors
A final role played by service customers is that of potential competitor. Whether to produce a service for themselves (internal exchange) for example, child care, home maintenance , car repair or have someone else provide the service for them (external exchange) is common dilemma for consumers. 144

Strategies for Enhancing Customer Participation

Define Customers Jobs

Recruit, Educate and reward Customers Manage the Customer Mix

145

Define Customers Jobs

Helping Oneself Helping Others Promoting the Company Individual Differences: Not Everybody Wants to Participate

146

Recruit, Educate and Reward Customers

Recruit the Right Customers Educate and train Customers to Perform Effectively Reward Customers for Their Contributions Avoid Negative Outcomes of Inappropriate Customer Participation

147

Manage the Customer Mix

The Process of managing multiple and sometimes conflicting segments is known as Compatibility Management

148

Thank You
149

Questions
150