Designing and Managing Services

1
Designing and Managing Services
Chapter 11
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The Nature of Service

• 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.
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3
Categories of Service Mix

• 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.

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Service Continuum
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Categories of Service Mix

• 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).

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Categories of Service Mix

• Equipment-based or people based
• People-based ? unskilled, skilled, or
  professional workers
• Different processes to deliver the service, e.g.
  restaurant ? cafeteria-style, fast-food, buffet,
  or table service
• Clients presence or not
• Personal need or business need
• Different objectives (profit or non-profit) and
  ownership (private or public)

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Categories of Service Mix

• Equipment-based or people-based

8
Characteristics of Services

• Intangibility
• Inseparability
• Variability
• Perishability

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Intangibility

• 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.

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Inseparability

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

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Variability

• Services are highly variable.
• Three steps toward quality control
• Investing in good hiring and training procedures,
  e.g. SIA Singapore Girls 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.

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A Service-Performance-Process Map Nationwide
Floral Delivery
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A Service-Performance-Process Map Installment
Lending Bank X
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Simplify SOP

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  line,?????????????????????????),????????????,????
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Perishability

• 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.

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Managing Service Quality

• 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

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Service-Quality Model
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Determinants of Service Quality

• In order of importance reliability,
  responsiveness, assurance, empathy, and tangibles
• SERVQUAL (Table 13.2)
• Zone of tolerance

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Common Practices that Well-managed Service
Companies Share

• Strategic concept
• Top-management commitment
• High standards
• Self-service technologies (SSTS)
• Monitoring systems
• Satisfying customer complaints
• Satisfying employees as well as customers

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Strategic Concept

• Customer obsessed clear sense of their target
  customers and their needs.
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21
Case ???

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22
Case ????

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Top-management commitment

• Thorough commitment to service quality
• Look not only at financial performance but also
  at service performance.
• McDonalds QSCV
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  ??????,???????,????????????????,??????????????????
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High Standards

• Changi Airport (??????)
• 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.

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Self-Service Technologies (SSTS)

• Make service transaction more accurate,
  convenient, and faster.
• Examples vending machines, ATMs, self-pumping at
  gas stations, self-check-out at hotel,
  self-return in library, and buffet.
• Provide the Call Me information.

26
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Monitoring Systems

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

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Tracking Customer Service Performance
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Importance-Performance Analysis Auto Dealership
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Importance-Performance Analysis Auto Dealership
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Satisfying Customer Complaints

• 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.

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Satisfying Customer Complaints

• Rate of complainant repurchase

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Reasons for Higher Rate of Silent Dissatisfied in
Asia

• 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.

34
Satisfying Employees As Well As Customers

• 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 employees skill in
  serving the client, e.g. Bumrungrad Hospital.

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Three Types of Marketing in Service Industries
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Case Mount Elizabeth Hospital

• Keys to high-quality assessments by patients
  nursing care, the clinical skills of the medical
  stuff, and the attitudes of the hospital
  employees.
• The hospitals 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

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Case Bumrungrad Hospital

• 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, Muslims traditional
  greeting Assamualaikum, halal kitchen, and
  prayer rug with a sign pointing to Mecca.

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Examples

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