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SERVICESAND RELATIONSHIP MARKETING (SRM) KEYUR DVASAVA..
Module 1. Basics of ServicesMarketing
1.WHATARE SERVICES?
The term services cover a heterogeneous range of intangible products and activities
that are difficult to encapsulate within a simple definition.
Services are also often difficult to separate from goods with which they may be
associated in varying degrees.
"There is a group of industries, generally classified as service industries, that
produce outputs that have many of the characteristics of goods, i.e., those
concerned with the provision, storage, communication and dissemination of
information, advice and entertainment in the broadest sense of those terms--the
production of general or specialized information, news, consultancy reports,
computer programs, movies, music, etc. The outputs of these industries, over which
ownership rights may be established, are often stored on physical objects--paper,tapes, disks, etc.--that can be traded like ordinary goods. Whether characterized as
goods or services, these products possess the essential characteristic that they can
be produced by one unit and supplied to another, thus making possible division of
labour and the emergence of markets."
Examples of service activities are wholesale, retail, certain kinds ofrepair, hotel, catering, transport, postal, telecommunication, financial, insurance,
real estate, property rental, computer-related, research, professional, marketing
and other business support, government, education, health, social, sanitation,
community, audiovisual, recreational, cultural, personal, and domestic services.
Why Study Services?Good customer service is all about bringing customers back.
And about sending them away happy - happy enough to pass positive feedback
about your business along to others, who may then try the product or service you
offer for themselves and in their turn become repeat customers.
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By maintaining good customer service, you will be keeping customers - which in the
long run is quicker, easier and cheaper then finding new ones!
Good customer service is much cheaper and far more effective
A satisfied customer that has purchased a product from you, or used your service
will tell friends and colleagues about their experience. Generally, happy customers
will recommend your business to others.
Good customer service is important as its easier and cheaper to keep existing
customers happy than to keep finding new ones.
every member of staff needs to take ownership of customer care and be proactive
when dealing with customers so that problems do not arise.
Marketing brings a customer in, customer service keeps them coming back.
Good customer service can be the difference between being able to compete andsurvive and failing.
customer service that builds customer loyalty, gives positive word-of-mouth
advertising, and increases sales in short, the good, better or even superior
customer service that consumers want.
Providing excellent customer service is one way a small business can distinguish
itself from the competition.
The essence of good customer service is forming a relationship with customers a
relationship that that individual customer feels that he would like to pursue.
Flexibility
Reliability
2. ROLEOFSERVICESINTHEECONOMY
Role of Services in an Economy
What is a service?
n An idea?
n A circumstance?
n A convenience?
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n A physical thing?
Goods vs. Services
n Good: tangible physical object; created and transfered; existence over time
n Service: intangible and perishable; created and used simultaneously; only theeffect has an existence over time
Book, restaurant, TV
Challenge to managers
n Identify appropriate techniques developed in manufacturing that are
applicable to service operations
n Initiate the innovative use of information systems
n Recognise the consumer as a productive resource
Service Definition
A Service is a Time-perishable, Intangible Experience Performed for a Customer
Acting in the Role of a Coproducer.
-- James Fitzsimmons
Definition of Service Firms
Service Enterprises are Organizations that Facilitate the Production and
Distribution of Goods, Support Other Firms in Meeting Their Goals, andAdd Value to
Our Personal Lives.
-- James Fitzsimmons
Taxonomy of services
n Domestic services
n Trade and Commerce
n Services that refine and extend human capacities
Role of Services in an Economy
GOVERNMENT SERVICES
Military
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Education
Judicial
Police and fire protection
BUSINESS SERVICES
Consulting
Auditing
Advertising
Waste disposal
MANUFACTURING
Services inside company:
Finance
Accounting
Legal
R&D and design
DISTRIBUTION SERVICES
Wholesaling
Retailing
Repairing
PERSONAL SERVICES
Healthcare
Restaurants
Hotels
CONSUMER
(Self-service)
INFRASTRUCTURE SERVICE
Communications
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Transportation
Utilities
Banking
FINANCIAL SERVICES
Financing
Leasing
Insurance
Stages of Economic Development
Features
==============================================================
==================================
Pre- Use of Standard
Dominant human Unit of of living
Society Game activity labor social life measure Structure
Technology
==============================================================
===================================
Pre- Against Agriculture Raw Extended Sub- RoutineSimple hand
Industrial Nature Mining muscle household sistence Traditional
tools
Power
Authoritative
==============================================================
=====================================
Industrial Against Goods Machine Individual Quantity Bureaucratic
Machines
fabricated production tending of goods
Hierarchical
nature
==============================================================
=====================================
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Post- Among Services Artistic Community Quality of Inter-
Information
Industrial Persons Creative life in terms
dependent
Intellectual of health, Global
Education,
Recreation
The New Experience Economy
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The Four Realms of an ExperienceThe Four Realms of an ExperienceThe Four
Realms of an Experience
Experience Design Principles
n Theme the Experience (Big Chefs)
n Harmonize Impressions with Positive Cues
n Eliminate Negative Cues
(Cinemark talking trash containers)
n Mix in Memorabilia (Hard Rock T-shirts)
n Engage all Five Senses (Mist in Rainforest)
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Source of Service Sector Growth
n Information Technology (e.g. Internet)
n InnovationPush theory (e.g. Post-it)
Pull theory
Services derived from products
Exploiting information (e.g. Auto part sales)
Difficulty of testing service prototypes
n Changing Demographics
Aging of the population
Two-income families
Urbanisation
Role of the Service Manager
n Entrepreneurial Innovation
n Capitalizing on Social Trends
n Management Challenges
Economies of Scale (MRI scanner)
Economies of Scope(Convenience store)Complexity (Yield Management)
Boundary Crossing (Bank vs Brokerage)
International Competitiveness( Cultural Diversity)
Services and Technology -
3.TECHNOLOGYINSERVICEENCOUNTER
Service encounters were viewed as person-to-person interactions. Now, in many contexts, technology
is replacing human providers and either giving customers an option of, or requiring, the use of self-service technologies. Technology is also being deployed to enhance the performance of the front line
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employee in interacting with the customer. In still other cases, technology is allowing introduction ofentirely new service innovations. Across all these situations, the infusion of technology is
dramatically altering the very essence of service encounters formerly anchored in a low tech, hightouch paradigm.
The objective of this research is to explore the changing nature of service encounters emanating from
the infusion of technology, with an emphasis on how service encounters can be improved throughtechnology. We examine the influence of technology on the ability of firms to effectively:
(1) customize service offerings;
(2) recover from service failure; and,(3) delight customers.
The role of technology infusion is examined as an enabler of both employees and customers in
creating satisfying service encounters across all three of these categories. Examples are featured andmanagerial and research implications highlighted.
IMPLEMENTING SUCCESSFUL SELF-SERVICE TECHNOLOGIES
As companies race to introduce technology that enables customers to get service on their own,
managers often find that it is more difficult than it looks to implement and manage effective self-
service technologies (SSTs). In this research, we present findings from qualitative interviews andsurvey research investigating SSTs from the customers point of view. Based on this research and our
work with companies, we present and develop insights around important lessons listed below toguide managers in developing successful SSTs.
Lesson 1: Be very clear on the strategic purpose of the SST.
Lesson 2: Maintain a Customer Focus.
Lesson 3: Actively promote the use of SSTs.Lesson 4: Prevent and Manage Failures.Lesson 5: Offer Choices.
Lesson 6: Be prepared for constant updating and continuous improvement.
Descriptions of technologically based service encounters were collected from over 800 customers.
Results indicate that the determinants of satisfaction or dissatisfaction with SSTs are quite different
from factors that determine satisfaction or dissatisfaction in interpersonal encounters. Satisfactoryencounters result primarily from the customers delight at being able to solve an immediate need,
fascination with being able to conduct transactions electronically, or being able to do something moreeasily and conveniently. On the other hand, all dissatisfactory encounters resulted from some type of
service failure, either with the technology itself, the design of the technology, the resulting serviceprocess, or occasionally from the customers own mistake.
As expected, satisfactory encounters lead to significantly greater occurrence of
positive word of mouth and repeat purchases, and less complaining than
dissatisfactory encounters. It was also determined that customers found certain
types of failures (design of the technology or service process) to be more
unforgivable than other more temporary failures such as an out of order SST.
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This research examines the issue of employee behaviors and motivation with regard torecommending a new SST to end customers. Over 300 sales and service employees in dealerships of
a major manufacturer were surveyed to assess their motivation for recommending a new consumerSST that allows online scheduling of service appointments and tracking of service status by end
customers. Conclusions from the study suggest that:
Employees who have more positive beliefs & feelings about the new SST will be more likelyto recommend it.
Employees are more motivated when they feel they are competent to recommend thetechnology and when they feel free to decide to recommend it.
Employee competence and freedom of choice, and thereby motivation and ultimaterecommending behaviors, are increased through:
o Creating a sense of the importance of the strategic SST initiative and buy-in
throughout the organization.
o Increasing management and co-worker support of the SST initiative.
o Having managers clearly expect, or even require, that employees recommend the SST
to customers.o Training and re-training all managers and employees to use the SST themselves.
o Promoting and advertising the SST internally to employees as well as externally to
customers.
An overall conclusion from the study is the need for organizations to implement
an internal marketing and employee roll out plan for new SSTs in addition to the
more common customer advertising and customer roll out plans.
OR
A service encounter may be described as the direct or indirect interaction between
a service provider (i.e., a firm) and its customer.
The availability and use of appropriate technologies govern the success of a service
encounter. An examination of the role of OT is therefore essential to the
comprehensive understanding of the service encounter. Recent efforts (e.g., Mills
and Moberg, 1990; Quinn and Paquette, 1990) have provided a first attempt at
understanding the role of OT in service encounters. Findings suggest that the
customer is often not just a passive recipient of the service, but an active
participant in the service production process. In fact, in most service encounters
(from a simple tax return preparation to something as complex as psychoanalytic
therapy), the active participation of the customer is not just helpful, but rather an
essential necessity. In general, as customer involvement increases, so does the
complexity of a given service encounter.
The firm's inability to adequately control the extent of customer participation has
prompted researchers to treat the customer as an uncertainty faced by a firm.
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Contemporary investigations have accepted the existence of this uncertainty and
have focused on how firms can best manage and control the encounter
Others have suggested the use of appropriate governance structures that match
the nature of the service (e.g., Jones, 1990). A common thread in these arguments
is the need for the firm to focus on the difficult task of managing the customer. Theactive role that the customer plays in service encounters makes this task even more
critical for the firm. Therefore, any attempt at understanding OT in service
encounters must account for the active and often unpredictable involvement of the
customer during the encounter.
The article hopes to make several academic and managerial contributions. First, it
extends the research on the co-alignment of customer and firm in service
encounters. Next, it provides a framework for investigating technologies as they
enter the service encounter. This is particularly relevant since the customer is a
provider of technological inputs. Third, to understand the role of OT in service
encounters researchers need to define the broad constructs at a lower level ofabstraction than the words denoting the construct
The article is organized in three sections. The first section of the article sets the
stage for framework development by describing the two primary constructs (i.e.,
service encounters, and OT). Next, the conceptual framework for viewing OT in
service encounters is developed. The conclusions section of the article includes a
discussion on the implications and usefulness of the proposed model.
PRIMARY CONSTRUCTS
Two streams of research have directly influenced the theory development process proposed inthis article --research on service encounters and that on OT. These two areas offer rich sources of
information for the necessary rationale and support of the framework developed in this paper.This section contains a brief discussion of the relevant research on service encounters and OT.
The Service Encounter
There is increasing agreement among researchers on the basic form and definition of a service.
This consensus has stemmed from an agreement on the unique and distinctive characteristics of aservice (e.g., Gronroos, 1983; Lovelock, 1981; Norman, 1984; Uhl and Upah, 1983; Zeithaml et
al., 1985). The unique characteristics of a service dictate the structure and the conduct of the
service encounter. A review of commonly accepted definitions suggests two uniquecharacteristics of service encounters. First, both the customer and the firm have key roles to play
in the service encounter. Scholars in management and marketing (e.g., Bowen, 1990;Jones, 1990;
Gronroos, 1990) have noted that service encounters call for a high level of coordination between
the customer and the firm. The interaction between the customer and the firm results in thesharing and/or use of resources held by the firm and by the customer. Since technology is a
resource that the customer can contribute to the service encounter, researchers must study, (1) the
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complimentary roles of the firm and the customer as contributors of technology in a service
encounter, and (2) the process of assembling appropriate technological resources.
The second characteristic noted in the literature is the dynamic interaction between the two keyparticipants (the customer and the firm) in a service encounter. Researchers have consistently
noted that the customer is not a passive participant in the resource transformation process.Bowen (1986) suggests that the customer should be considered an active participant in the
resource transformation process. Mills, Chase and Margulies (1983) have suggested that thecustomer's willingness to participate in the transaction depends on the expected value of that
outcome. Similar sentiments are expressed by Czepiel (1990), and Larsson and Bowen (1989).
Thus, understanding the role of both the customer and the firm in combining technologies duringthe transformation process is the second issue that must be explored when developing a
framework for OT in service encounters.
OR
The value of technology in service encounters
To gain competitive advantage in the market, several retail banks have recently started to deploybiometric technologies in their service encounters. Biometrics is an emerging technology that
authenticates individuals using their unique physical characteristics. While the application of
biometrics is expected to increase security of a certain physical or logical area, this newtechnology seems to engender various consumer concerns.
This study aimed to understand consumers' value perception of using biometric technology, in
particular fingerprint recognition technology at ATMs. Following the utilitarian approach to
define consumers' value, perceived benefit and perceived risk were measured as a "get"component and a "give" component, respectively. The levels of trust in a bank and personal
innovativeness were also measured as constructs that may influence individuals' value judgment
of using the new technology.
The perceived benefit and the perceived risk were hypothesized as multi-dimensional constructsand measured by formative indicators. Specific dimensions of those two molar constructs were
determined based on informal personal interviews as well as reviews of extant literature. To
validate the research model of this study, an empirical study was conducted with an Internetsurvey. Customers' e-mail addresses were randomly selected from the database of the bank that
deployed fingerprint recognition technology for its ATMs.
Understanding what attracts or inhibits consumers from using such a new
technology-embedded service would enable businesses to evaluate the
technology from their customers' perspectives and develop effective
marketing strategies. This study concludes with discussion on the use of
formative and reflective indicators, limitation, and direction for future
research.
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4.AUTOMATIONINSERVICES
Automation Service is the World's largest remanufacturer
of process controls. Our major brands include:
Rosemount, Fisher, Foxboro, Honeywell and Moore
products
Automation Service is a leading remanufacturer of electronic transmitters, diaphragm seals and
capillary systems, pneumatic transmitters, electronic controllers, recorders, indicators andauxiliary stations, butterfly valves, rotary valves, sliding stem valves, pneumatic controllers,
recorders, indicators and auxiliary stations, valve positioners, transducers, and magnetic flow
systems. Primary industries served include pulp & paper, petro-chemical, chemical, petroleum,utility and water & wastewater industries. Automation Service also offers the most extensive
process controls recycling program in the world.
Automation Service remanufactures or reconditions equipment originally manufactured by
Fisher Controls and Rosemount and is not a representative, distributor, agent, affiliate, or factoryauthorized repair center for Fisher Controls and Rosemount. Specifications and certification
marks applied by the orignial manufacturer may no longer apply.
http://www.automationservice.com/LinkClick.aspx?link=75&tabid=36http://67.199.57.202/Products/FisherControls/tabid/76/Default.aspxhttp://67.199.57.202/Products/Foxboro/tabid/77/Default.aspxhttp://67.199.57.202/Products/Honeywell/tabid/79/Default.aspxhttp://67.199.57.202/Products/Honeywell/tabid/79/Default.aspxhttp://67.199.57.202/Products/MooreProducts/tabid/78/Default.aspxhttp://www.automationservice.com/LinkClick.aspx?link=75&tabid=36http://67.199.57.202/Products/FisherControls/tabid/76/Default.aspxhttp://67.199.57.202/Products/Foxboro/tabid/77/Default.aspxhttp://67.199.57.202/Products/Honeywell/tabid/79/Default.aspxhttp://67.199.57.202/Products/MooreProducts/tabid/78/Default.aspx8/2/2019 SRM - MBA (GTU)
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automation in services
Internet services
Internet Services is the embedded HTTP server application that is available on a
network enabled Document Centre (DC 220/230/332/340). Internet Services
enables you to access printing, faxing and scanning features of the Document
Centre, as well as view device status, perform queue management and perform
device management, over the internet.
Using a browser application, such as Netscape Navigator or Microsoft Internet
Explorer, you can access any Document Centre on a network using the TCP/IP
protocol. By entering the Document Centres IP address as the URL in the
browser, you have access to the Document Centre 220/230/332/340 for scanning,
printing, faxing, performing device management and many other functions you
would normally have to execute at the Document Centre control panel.
FEATURES
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Internet Services gives users access to the Document Centre 220/230/332/340
printing, faxing and scanning control panel features over the internet.
Additionally, many system administration tasks can be performed without the use
of native network utilities, allowing faster and easier set up of the Document
Centre 220/230/332/340.
The features that are described in this section correspond to the tabs that areavailable within the Internet Services interface.
The following features are available with Internet Services:
Services
Queue
Status
Properties
Maintenance
Assistance
SERVICES FEATURES
There are three primary areas within Services that are available for general users
encompassing Job Submission and Stored Templates selections:
Scanningoffers the functionality of scanning a paper document into electronic
format. Scan options, such as scanning to a specified repository or
manipulating templates, allow customisation of scan jobs. Scanning with
Internet Services is a component of other scanning capabilities provided with
the Document Centre 220/230/332/340 ST.
Printingoffers the high-speed, high-quality, laser printer functionality of the
Document Centre 220/230/332/340. Print ready files can be submitted for
printing from the Internet Services user interface. Print options, such asnumber of copies, collation and paper specifications, allow flexible choices for
print jobs.
Faxingoptionally offers the functionality of a fax machine. If faxing is
configured and available on the Document Centre, files can be submitted for
faxing from a workstation. Fax options, such as delayed fax and recipient
phone number list, provide preferences for fax jobs.
PROPERTIES FEATURES
Many system options can be set using Internet Services. The Properties feature
includes options for system administrators:
Modify the system default template that defines how to file, fax, or distribute a
scanned document.
Select a Template Pool for scanning use.
Modify PCL (font information, form length) or PostScript (error sheet)
emulation settings.
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Modify connectivity settings that are used by the Document Centre 220/230/
332/340.
Select public and private repositories for scanning.
Define job defaults for print, fax, or scan jobs that do not requirecustomisation.
Define attributes, such as filing policy and confirmation sheet, for stored
templates.
Obtain device information, such as device profile, fault history, support
contacts and billing meters.
SETTING UP INTERNET SERVICES
GENERAL SETUP
General setup consists of configuring your Document Centre with TCP/IP,
configuring your browser to use Internet Services and then accessing a Document
Centre over the internet.
STEP 1. CONFIGURE THE DOCUMENT CENTRE
NOTE: For complete information on the installation and setup of Internet
Services and Scanning Services with the DC 220/230/332/340 ST, see theXerox
Document Centre 220/230/332/340 ST or 230 LP System Administration Guide.
To setup a Document Centre for internet access:
1. Configure an IP address for the Document Centre on your network.
2. Setup the embedded HTTP server.
STEP 2. SETTING UP THE INTERNET BROWSER
Internet Services can be used on any system that has an internet browser.
Microsoft Internet Explorer 4.x or later, or Netscape Navigator 3.x or later arerecommended. Other browsers may work but could produce unexpected results.
Internet Browser Configuration
If any problems are encountered using Internet Services, check the following
internet browser settings have been correctly configured.
1. The internet browser should be configured to run Java programs.
2. The internet browser should also be configured with caching disabled.
The procedures to configure these settings vary on different browsers - see the
internet browser on-line help or documentation for assistance.
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STEP 3. ACCESS INTERNET SERVICES
To access the Document Centre using Internet Services:
Type the Document Centres IP address in your browsers URL location field.
TIP: Once you have accessed the embedded HTTP server, you can designate it as
a bookmark in your browser, then directly access it simply by clicking this bookmark.
Scanning with Internet Services provides the following options:
printing your electronic document using Print Service options faxing your electronic document using Fax Service options
specifying a scanning template
scan to public or private repository
On the Services, Job Submission page, printing with Internet Services provides
the following output options:
number of copies to print collation
duplexing (2-sided)
stapling (if Document Centre has a Finisher configured)
input paper tray
output destination
paper size, type, color
file format
The table below lists the common buttons that are available on many of the pages
and frames. Some of them match the look of the actual button on the Document
Centre control panel.
Button ActionInternet Services ButtonsApply (new settings, settings)Apply changes.
Cancel Exit the page without updating.
Device IndexAccess Internet Services index for the Document Centre.
Help Access Internet Services help system.
Print/Fax SubmissionSubmits a job for printing or faxing.
Refresh (status, now, latest values, jobs) Update the page with the new information.
Restore SettingsReturn the settings to their last saved values.
Restore Default ValuesReturn the settings to their default values.
Browse Access network or local directory paths. Note that the Browse buttons do notappear if you are using Internet Explorer version 3.0 or less.
Device HomeAccess the Document Centre home page.
QueueRefresh job listing.
WHAT YOU CAN DO WITH INTERNET SERVICES
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This section discusses the different tasks that users and system administrators can
perform using Internet Services.
SUBMITTING A JOB
Print-ready (PCL, PostScript, or ASCII) files can be submitted for printing or
faxing directly from Internet Services to the Document Centre.
NOTE: Existing preformatted jobs do not take priority over options that are seton the Job Submission page.
To submit files for processing to the Document Centre:
1. Access the Document Centre embedded HTTP server.
2. ClickServices.
3. Click the Job Submission radio button to display the Job Attributes. Perform
the following if these options are not already set according to your jobrequirements:
Type in the number of copies needed.
Select other options, such as finishing options, for your job from the dropdown lists.
4. Type the path and file name or clickBrowse (if available) to locate the file to process.
5. When finished with your selections, click the submission button to process your job.
NOTE: It is recommended that print files should not be larger than 6 MB.
ORBasic network types
System area network (SAN)
same room (meters)
300 MB/s Cray T3E
Local area network (LAN)
same bldg or campus (kilometers)
10 Mb/sEthernet
100 Mb/s Fast Ethernet
100 Mb/s FDDI
150 Mb/s OC-3 ATM
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622 Mb/s OC-12 ATM
Metropolitan area network (MAN)
same city (10s of kilometers)
800 Mb/s Gigabit Nectar
Wide area network (WAN)
nationwide or worldwide (1000s of kilometers)
telephone system
1.544 Mb/s T1 carrier
44.736 Mb/s T3 carrier
Global Internet
The internetworking idea (Kahn, 1972)
Build a single network (an interconnected set of networks, or
internetwork, or internet) out of a large collection of separate
networks.
Each network must stand on its own, with no internal changes
allowed to connect to the internet.
Communications should be on a best-effort basis.
black boxes (later called routers) should be used to connect
the networks.
No global control at the operations level.
Internetworking challenges
Challenges:
heterogeneity
lots of different kinds of networks (Ethernet, FDDI, ATM,
wireless, point-to-point)
how to unify this hodgepodge?
scale
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how to provide uniques names for potentially billions of
nodes? (naming)
how to find all these nodes? (forwarding and routing)
Note: internetrefers to a general idea, Internetrefers to a
particular implementation of that idea (The global IP Internet).
Internetworking with repeaters: Pros and cons
Pros
Transparency
LANS can be connected without any awareness from the
hosts.
Useful for serving multiple machines in an office from one
ethernet outlet.
Cons
Not scalable
ethernet standard allows only 4 repeaters.
more than 4 would introduce delays that would break
contention detection.
No heterogeneity
Networks connected with repeaters must have identical
electrical properties.
Internetworking with bridges: Pros and cons
Pros
Transparency
LANS can be connected without any awareness from the
hosts
popular solution for campus-size networks
Cons
Transparency can be misleading
looks like a single Ethernet segment, but really isnt
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packets can be dropped, latencies vary
Homogeneity
can only support networks with identical frame headers
(e.g., Ethernet/FDDI)
however, can connect different speed Ethernets
Scalability
tens of networks only
bridges forward all broadcast frames
increased latency
Internetworking with routers
Def: An internetwork(internet for short) is an arbitrary
collection ofphysical networks interconnected by routers to
provide some sort of host-to-host packet delivery service.
Building an internet
We start with two separate, unconnected computer networks
(subnets),
which are at different locations, and possibly built by different
vendors.
Next we physically connect one of the computers, called a
router
to each of the networks.
Finally, we run a software implementation of the Internet
Protocol (IP)
on each host and router. IP provides a global name space for
the hosts, routing messages between network1 and network 2
if necessary.
At this point we have an internet consisting of 6 computers
built from
2 original networks. Each computer on our internet can
communicate
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with any other computer. IP provides the illusion that there is
just
one network.
IP: Internetworking with routers
IP is the most successful protocol ever developed
Keys to success:
simple enough to implement on top of any physical network
e.g., two tin cans and a string.
rich enough to serve as the base for implementations of more
complicated protocols and applications.
The IP designers never dreamed of something like theWeb.
rough consensus and working code
resulted in solid implementable specs.
Basic Internet componentsAn Internet backbone is a collection of routers (nationwide or
worldwide) connected by high-speed point-to-point networks.
A Network Access Point (NAP) is a router that connects
multiple backbones (sometimes referred to aspeers).
Regional networks are smaller backbones that cover smaller
geographical areas (e.g., cities or states)
Apoint of presence (POP) is a machine that is connected to the
Internet.
Internet Service Providers (ISPs) provide dial-up or direct
access to POPs.
The Internet circa 1993
In 1993, the Internet consisted of one backbone (NSFNET) that
connected 13 sites via 45 Mbs T3 links.
Merit (Univ of Mich), NCSA (Illinois), Cornell Theory Center,
Pittsburgh Supercomputing Center, San Diego Supercomputing
Center, John von Neumann Center (Princeton), BARRNet (Palo
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Alto), MidNet (Lincoln, NE), WestNet (Salt Lake City),
NorthwestNet (Seattle), SESQUINET (Rice), SURANET (Georgia
Tech).
Connecting to the Internet involved connecting one of your
routers to a router at a backbone site, or to a regional networkthat was already connected to the backbone.
5. DISTINCTIONSBETWEEN SERVICESAND GOODSOne of the most basic ideas in economics is goods and services. More than
anything else, money is spent on goods and services. It helps to know the difference
between two.
A good is something that you can use or consume, like food or CDs or books or a car or clothes.
You buy a good with the idea that you will use it, either just once or over and over again.
A service is something that someone does for you, like give you a haircut or fix you dinner oreven teach you social studies. You don't really get something solid, like a book or a CD, but you
do get something that you need.
The basic difference is that a good is something you can hold in your hand (unless it's somethingbig, like a car or a house).
Now, a service can also contain a good. Someone who fixes you dinner gives you food, which
was bought. In this example, the food is the good and the person's fixing it for you is the service.
In the same way, your teacher gives you a service by teaching you social studies. He or she also
gives you a good by giving you a textbook.
Your teacher teaching you social studies is a good example of a service that you personally don't
pay for. (Your family might pay for it, but you don't.)
And not all services are economic, either. A service can be as simple as reading a book to
someone. This kind of activity doesn't cost anything, but it is something that one person did foranother.
A good doesn't have to cost anything, either. If you give your friend a book or a CD, then you
given that friend a good, since we have already defined books and CDs as goods. Your friend
didn't give you any money for the good. But you didn't really do something for your friend,either; you just gave your friend something he or she could hold or touch.
Remember, the one thing that sets goods and services apart is the ability to touch them. You can
touch a good, but you can't touch a service. You can touch the result of a service but not the
service itself.
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OR
1. Goods are tangible, and transferable while the services are intangible and
non transferable.
2. Goods are separable, and non - perishable while services are inseparable.3. Goods are homogeneous while services are heterogeneous
A good is a tangible object used either once or repeatedly. A service is intangible.
The tangibility differentiator indicates the ability to touch, smell, taste and see
which is absent in services. This can be a deterrent to the service receiver to gauge
the quality and dependant on the service company reputation. In the case of goods
the ownership of the product is transferable from sellers to buyers, whereas in
services there is no ownership involved.
On the quality front, with goods it is homogeneous, once produced the quality is
uniform across all line of products. They can be separated from the seller/ provider
and not dependant on the source for its delivery to the purchaser. With regard to
service it is inseparable from the service provider and heterogeneous, where each
time the service is offered it may vary in quality, output, and delivery. It cannot be
controlled and is dependant on the human effort in achieving that quality hence is
variable from producer, customer and daily basis.
Another key distinction is perishability of services and the non perishability of
goods. Goods will have a long storage life and are mostly non perishable. Whereas
services are delivered at that moment and do not have a long life or cannot bestored for repeat use. They do not bear the advantage of shelf life as in the case of
goods like empty seats in airlines. With the production and consumption taking
place simultaneously in services, it differs from goods on simultaneity and the
provisions for quality control in the process.
6.SERVICES MARKETING MIX
Service marketing mix means
Seven P's: 4 P's of a tangiblegood (price, presentation, place, and Promotion) plus 3
P's of an intangibleserviceparticipants, physical evidence, and process (of service
assembly).
The service marketing mix comprises off the 7ps. These include:
Product
Price
http://www.businessdictionary.com/definition/seven-P-s.htmlhttp://www.businessdictionary.com/definition/tangible.htmlhttp://www.businessdictionary.com/definition/good.htmlhttp://www.businessdictionary.com/definition/labor-rate-price-variance.htmlhttp://www.businessdictionary.com/definition/presentation.htmlhttp://www.businessdictionary.com/definition/promotion.htmlhttp://www.businessdictionary.com/definition/intangible.htmlhttp://www.businessdictionary.com/definition/final-good-service.htmlhttp://www.businessdictionary.com/definition/participant.htmlhttp://www.businessdictionary.com/definition/evidence.htmlhttp://www.businessdictionary.com/definition/process.htmlhttp://www.businessdictionary.com/definition/assembly.htmlhttp://www.businessdictionary.com/definition/seven-P-s.htmlhttp://www.businessdictionary.com/definition/tangible.htmlhttp://www.businessdictionary.com/definition/good.htmlhttp://www.businessdictionary.com/definition/labor-rate-price-variance.htmlhttp://www.businessdictionary.com/definition/presentation.htmlhttp://www.businessdictionary.com/definition/promotion.htmlhttp://www.businessdictionary.com/definition/intangible.htmlhttp://www.businessdictionary.com/definition/final-good-service.htmlhttp://www.businessdictionary.com/definition/participant.htmlhttp://www.businessdictionary.com/definition/evidence.htmlhttp://www.businessdictionary.com/definition/process.htmlhttp://www.businessdictionary.com/definition/assembly.html8/2/2019 SRM - MBA (GTU)
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Place
Promotion
People
Process
Physical evidence.
7 Ps of Services Marketing
Marketing services is different from marketing goods, and the marketing tools and practices
developed for goods marketing are often not directly transferable to the marketing of services.There are several major differences, including:
The buyer purchases are intangible
The service may be based on the reputation of a single person
It's more difficult to compare the quality of similar services
The buyer cannot return the service
4 P's product promoation placement and price The differences have resulted in a divergence in the education of services marketing
versus regular marketing. Apart from the traditional "4 P's," Product, Price, Place,
Promotion, there are three additional "P's" consisting of People, Physical
evidence, and Process.
Product refers to the creation of a service concept that will offer value to target
customers and satisfy their needs better than competing alternatives. This consists of a
core product that responds to the customer primary need and an array of supplementaryservice elements that are mutually reinforcing value-added enhancements that help
customers to use the core product more effectively.
Place and time may involve physical or electronic channels such as banks now offercustomers a choice of distribution channels including visiting a branch, using a network
of ATMS, doing business by phone or conducting them over the Internet.
Price and other user outlays are crucial as well. To determine if a particular service is
worth it, customers go beyond monetary considerations and assess the outlays of theirtime and effort. Thus, service marketers must set prices that target customers are willing
and able to pay and minimize other burdensome outlays that are incurred. These may
include additional monetary expense in traveling, time expenditures, unwanted mentaland physical effort and exposure to negative sensory experiences.
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Promotion in services marketing is also educational in nature, especially for new
customers. Suppliers need to teach these customers about the benefits of the service,where and when to obtain it, and how to participate in service processes to get the best
results. This can be delivered via individuals such as salespeople, at websites, on displayscreens in self-service equipment and through a variety of advertising media.
The process of delivering the service is very often as important as the function of theservice. Operational inputs and outputs can vary widely due to the lack of inventory and
real time interaction involved. Nonetheless, variability can be reduced through careful
design of the customer service process, adopting standardized procedures, implementingrigorous management of service quality, high standards of training, and automation.
Furthermore, customers are often involved in co-production as partial employees through
self-service, telecommunications and the Internet.
Physical environment includes the appearance of buildings, landscaping, vehicles,
interior furnishing, equipment, uniforms, signs, printed materials and other visible cues
that provide evidence of service quality, facility service delivery and guide customers
through the service process. This can also be referred to as the servicescape which canhave a profound impact on customer satisfaction and service productivity.
People refer to the human capital of the firm, i.e. the employees. These individuals
should possess the required technical skills, good interpersonal skills and positive
attitudes that can become a key competitive advantage for the firm.
CHARACTERISTICSOFA SERVICE
What exactly are the characteristics of a service? How are services different from a
product? In fact many organisations do have service elements to the product they sell, forexample McDonalds sell physical products i.e. burgers but consumers are also
concerned about the quality and speed of service, are staff cheerful and welcoming anddo they serve with a smile on their face?
There are five characteristics to a service which will be discussed below.
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1. Lack of ownership. You cannot own and store a service like you can a product. Services are used or hired for
a period of time. For example when buying a ticket to the USA the service lasts maybe 9
hours each way , but consumers want and expect excellent service for that time. Because
you can measure the duration of the service consumers become more demanding of it.
2. Intangibility You cannot hold or touch a service unlike a product. In saying that although services are
intangible the experience consumers obtain from the service has an impact on how they
will perceive it. What do consumers perceive from customer service? the location, and
the inner presentation of where they are purchasing the service?.
3. Inseparability Services cannot be separated from the service providers. A product when produced can
be taken away from the producer. However a service is produced at or near the point ofpurchase. Take visiting a restaurant, you order your meal, the waiting and delivery of the
meal, the service provided by the waiter/ress is all apart of the service production process
and is inseparable, the staff in a restaurant are as apart of the process as well as thequality of food provided.
4. Perishibility Services last a specific time and cannot be stored like a product for later use. If travelling
by train, coach or air the service will only last the duration of the journey. The service is
developed and used almost simultaneously. Again because of this time constraint
consumers demand more.
5. Heterogeneity It is very difficult to make each service experience identical. If travelling by plane the
service quality may differ from the first time you travelled by that airline to the second,because the airhostess is more or less experienced.
A concert performed by a group on two nights may differ in slight ways because it is very
difficult to standardise every dance move. Generally systems and procedures are put intoplace to make sure the service provided is consistent all the time, training in service
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organisations is essential for this, however in saying this there will always be subtle
differences.
Services marketing is a form of marketing which focuses on selling services.
Services can be tricky to sell and the marketing approach for them is much different
than the approach for products. Some companies offer both products and services
and must use a mixture of styles; for example, a store which sells computers also
tends to offer services such as helping people select computers and providing
computer repair. Such a store must market both its products and the supporting
services it offers to appeal to customers.
6.CUSTOMER BEHAVIOURIN SERVICE ENCOUNTER:
Four Categories of Services
1. DirectCaring for or providing for others face-to-face whoare different in age/experience.
Examples
Tutoring children
Reading to the elderly Serving as a mentor or buddy
Working with animals/shelters
IndirectDoing something tocare for thecommunity, agroup ortheenvironment as awhole; often donewith a partner orgroup.
Examples
River/roadside clean up
Donation programs for the homeless or poor
Stocking a food pantry
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3.Advocacy Creating awareness or promoting action on an issueof public interest.
Examples
Letter writing campaign
Sponsoring a public meeting on an issue
Public speaking
Performing a play on an issue
4. ResearchFinding, gathering, and reporting on information inthe public interest.
Examples
Conducting surveys on issues related to public
safety, school, the environment, etc.
Testing water or soil samples for pollution
Differences among Services Affect Customer Behavior
Consumers are rarely involved in the manufacture of goods butoften participate in
service creation and delivery
Challenge for service marketers is to understand how customersinteract with
service operations
Based on differences in nature of service act (tangible/intangible)and who or what
is direct recipient of service(people/possessions), there are four categories of
services:
People processing
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Possession processing
Mental stimulus processing
Information processing
Who or What Is the Direct Recipient of the Service?
Nature of the Service Act People Possessions
Tangible Actions People processing
(services directed at peoples bodies): People
processing
(services
Is the Direct Recipient of the Service?
Who or What Is the Direct Recipient of the Service?
Nature of the Service Act People
Possessions
.
Tangible Actions People processingPossession processing
.
(services directed at(services directed at
peoples bodies):physical possessions):
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Barbers
Refueling
Health careDisposal/recycle
..................... Intangible ActionsMental stimulus Information processing
processing
(services directed at(services directed at
peoples minds):intangible assets):
EducationAccounting
Advertising/PRBanking
..
People Processing
Customers must:
Physically enter the service factory
Co-operate actively with the service operation
Managers should think about process and output from customers perspective
To identify benefits created and non-financial costs:
Time, mental, physical effort
Possession Processing
Customers are less physically involved compared to people processing services
Involvement is limited
Production and consumption are separable
Mental Stimulus Processing
Ethical standards required when customers who depend on such services canpotentially be manipulated by suppliers
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Physical presence of recipients not required
Core content of services is information-based
Can be inventoried
Information Processing
Information is the most intangible form of service output
But may be transformed into enduring forms of service output
Line between information processing and mental stimulus processing may beblurred.
Customer Decision Making
Three-Stage Model of Service Consumption
The Purchase Process for Services
1.Prepurchase Stage
2.Service Encounter Stage
3.Post-Encounter Stage
Pre-purchase Stage
Customers seek solutions to aroused needs
Evaluating a service may be difficult
Uncertainty about outcomes increases perceived risk
What risk reduction strategies can service suppliers develop?
Understanding customers service expectations
Components of customer expectations
Making a service purchase decision
Customers Seek Solutions to Aroused Needs
People buy goods and services to meet specific needs/wants
External sources may stimulate the awareness of a need
Companies may seek opportunities by monitoring consumer attitudes and behavior
Evaluating a Service May Be Difficult
Search attributes help customers evaluate a product before purchase
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Style, color, texture, taste, sound
Experience attributes cannot be evaluated before purchasemust experienceproduct to know it
Vacations, sporting events, medical procedures
Credence attributes are product characteristics that customers find impossible toevaluate confidently even after purchase and consumption
Quality of repair and maintenance work
Perceived Risks in Purchasing and Using Services
Functionalunsatisfactory performance outcomes
Financialmonetary loss, unexpected extra costs
Temporalwasted time, delays leading to problems
Physicalpersonal injury, damage to possessions
Psychologicalfears and negative emotions
Socialhow others may think and react
Sensoryunwanted impact on any of five senses
How Might Consumers Handle Perceived Risk?
Seeking information from respected personal sources
Relying on a firm that has a good reputation
Looking for guarantees and warranties
Visiting service facilities or trying aspects of service before purchasing
Asking knowledgeable employees about competing services
Examining tangible cues or other physical evidence
Using the Internet to compare service offerings and search for independent reviewsand ratings
Strategic Responses to Managing Customer Perceptions of Risk
Offer performance warranties, guarantees to protect against fears of monetary loss
For products where customers worry about performance, sensory risks:
Offer previews, free trials (provides experience)
Advertising (helps to visualize)
For products where customers perceive physical or psychological risks:
Institute visible safety procedures
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Deliver automated messages about anticipated problems
Websites offering FAQs and more detailed background
Train staff members to be respectful and empathetic
Understanding Customers Service Expectations
Customers evaluate service quality by comparing what they expect against whatthey perceive
Situational and personal factors also considered
Expectations of good service vary from one business to another, and amongdifferently positioned service providers in the same industry
Expectations change over time
Example: Service Perspectives 2.1
Parents wish to participate in decisions relating to their childrens medical treatment
for heart problems
Media coverage, education, the Internet has made this possible
Components of Customer Expectations
Desired Service Level:
Wished-for level of service quality that customer believes can and should be delivered
Adequate Service Level:
Minimum acceptable level of service
Predicted Service Level:
Service level that customer believes firm will actually deliver
Zone of Tolerance:
Range within which customers are willing to accept variations in service delivery
Factors Influencing Customer Expectations of Service
Personal Needs Desired Service
Beliefs about what is possible Desired Service
Perceived Service alterationsAdequate Service
Situational FactorsAdequate Service
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Service Encounter Stage
Service encounters range from high- to low-contact
Understanding the servuction system
Service marketing systems: high-contact and low-contact
Role and script theories
Theater as a metaphor for service delivery: An integrative perspective
Implications for customer participation in service creation and delivery
Distinctions between High-Contact and Low-Contact Services
High-Contact Services
Customers visit service facility and remain throughout service delivery
Active contact between customers and service personnel
Includes most people-processing services
Low-Contact Services
Little or no physical contact with service personnel
Contact usually at arms length through electronic or physical distribution channels
New technologies (e.g. the Web) help reduce contact level
Medium-Contact Services Lie in between These Two
The Servuction System: Service Production and Delivery
Service Operations (front stage and backstage)
Where inputs are processed and service elements created
Includes facilities, equipment, and personnel
Service Delivery (front stage)
Where final assembly of service elements takes place and service is delivered tocustomers
Includes customer interactions with operations and other customers
Service Marketing (front stage)
Includes service delivery (as above) and all other contacts between service firm andcustomers
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Service Marketing System for a High-Contact Service
SERVICE MARKETING SYSTEM
Service Delivery
System Other Contact Points
Service Operations System Other CustomersAdvertising
Sales Calls
Interior & Exterior
Market Research Surveys
Technical Facilities The Customer
=====Billing/Statements
Core EquipmentMisc. Mail, Phone Calls
E-mails, Faxes, etc.
Service People
Website
Random Exposure to
Facilities/Vehicles
Back Stage Front StageChance Encounters with
( Invisible ) ( Visible ) Other Customers
Service Personnel
Word of Mouth
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Theater as a Metaphor for Service Delivery
All the worlds a stage and all the men and women merely players. They have their exits
and their entrances and each man in his time plays many parts
Theatrical Metaphor: Service dramas unfold on a stagesettings may change as
performance unfolds
Many service dramas are tightly scripted, others improvised
Front-stage personnel are like members of a cast
Like actors, employees have roles, may wear special costumes, speak required
lines, behave in specific ways
Support comes from a backstage production team
Customers are the audiencedepending on type of performance, may be passive or
active participants
An Integrative Perspective
Implications for customer participation in service creation and delivery
Greater need for information/training to help customers to perform well, get
desired results
Customers should be given a realistic service preview in advance of servicedelivery, so they have a clear picture of their expected role
Post-Encounter Stage
Evaluation of service performance
Future intentions
Customer Satisfaction Is Central to the Marketing Concept
Satisfaction defined as attitude-like judgment following a service purchase or series
of service interactions
Customers have expectations prior to consumption, observe service performance,
compare it to expectations
Satisfaction judgments are based on this comparison
Positive disconfirmation if better than expected
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Confirmation if same as expected
Negative disconfirmation if worse than expected
Satisfaction reflects perceived service quality, price/quality tradeoffs, personal and
situational factors
Research shows links between customer satisfaction and a firms financial
performance
Customer Delight: Going Beyond Satisfaction
Research shows that delight is a function of three components:
Unexpectedly high levels of performance
Arousal (e.g., surprise, excitement)
Positive affect (e.g., pleasure, joy, or happiness)
Is it possible for customers to be delighted by very mundane services?
Strategic links exist between customer satisfaction and corporate performance.
Getting feedback during service delivery help to boost customer loyalty
Progressive Insurance seeks to delight customers through exceptional customer
service (Best Practice in Action 2.1)
SUMMARYOF CHAPTER: CUSTOMER BEHAVIORIN SERVICE ENCOUNTERS
Four broad categories of services
People processing, possession processing, mental stimulus processing,
information processing
Based on differences in nature of service act (tangible or intangible), and
who or what is direct recipient of service (people or possessions)
Each poses distinctive service management challenges
Three-Stage Model of service consumption helps us to understand and better
manage customer behavior
Prepurchase stage
Customers seek solutions to aroused needs
Evaluation alternatives are more difficult when a service involves experience
and credence attributes
Customers face a variety of perceived risks in selecting, purchasing and
using services
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Steps taken to reduce customers risk perceptions, include: (1) guarantees
and warranties, (2) previews of service and visits to service facilities, (3)
employee training, (4) instituting visible safety procedures, (5) easy access
to information, and (6) advance notice of problems or delays
Customer expectations of service range from desired to adequate with a
zone of tolerance in between; if actual service is perceived as less thanadequate, customers will be dissatisfied
Service encounter stage
Service encounters range from high contact to low contact
Servuction system differs by level of contact:
High-contact services: Most parts of operations, service delivery, and
marketing systems are exposed to customers
Low-contact services: Some parts of systems are invisible to
customers
Role and script theories help us understand and manage customer behavior
during encounters
Theatrical view of service delivery offers insights for design, stage-managing
performances, and relationships with customer audience
Post-encounter stage
In evaluating service performance, customers can have expectations
positively disconfirmed, confirmed, or negatively disconfirmed
Unexpectedly high levels of performance, arousal and positive affect are
likely to lead to delight
CUSTOMER EXPECTATIONSAND PERCEPTIONSOF SERVICES- ZONEOF TOLERANCE
How Might Consumers Handle Perceived Risk?
Seeking information from respected personal sources
Relying on a firm that has a good reputation
Looking for guarantees and warranties
Visiting service facilities or trying aspects of service before purchasing
Asking knowledgeable employees about competing services
Examining tangible cues or other physical evidence
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Using the Internet to compare service offerings and search for independent reviews
and ratings
Strategic Responses to Managing Customer Perceptions of Risk
Offer performance warranties, guarantees to protect against fears of monetary loss
For products where customers worry about performance, sensory risks:
Offer previews, free trials (provides experience)
Advertising (helps to visualize)
For products where customers perceive physical or psychological risks:
Institute visible safety procedures
Deliver automated messages about anticipated problems
Websites offering FAQs and more detailed background
Train staff members to be respectful and empathetic
Understanding Customers Service Expectations
Customers evaluate service quality by comparing what they expect against what
they perceive
Situational and personal factors also considered
Expectations of good service vary from one business to another, and among
differently positioned service providers in the same industry
Expectations change over time
Example: Service Perspectives 2.1
Parents wish to participate in decisions relating to their childrens medical
treatment for heart problems
Media coverage, education, the Internet has made this possible
Factors Influencing Customer Expectations of Service
Personal Needs Desired Service
Beliefs about what is possible Desired Service
Perceived Service alterationsAdequate Service
Situational FactorsAdequate Service
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Components of Customer Expectations
Desired Service Level:
Wished-for level of service quality that customer believes can and should be
delivered
Adequate Service Level:
Minimum acceptable level of service
Predicted Service Level:
Service level that customer believes firm will actually deliver
Zone of Tolerance:
Range within which customers are willing to accept variations in service
delivery
MODULE 2. SERVICES MARKETING MIX:
service marketing mix means
Seven P's: 4 P's of a tangiblegood (price, presentation, place, and Promotion) plus 3
P's of an intangibleserviceparticipants, physical evidence, and process (of service
assembly).
The service marketing mix comprises off the 7ps. These include: Product
Price
Place
Promotion
People
Process
Physical evidence.
7 Ps of Services Marketing
Marketing services is different from marketing goods, and the marketing tools and practicesdeveloped for goods marketing are often not directly transferable to the marketing of services.
There are several major differences, including:
The buyer purchases are intangible
The service may be based on the reputation of a single person
It's more difficult to compare the quality of similar services
The buyer cannot return the service
http://www.businessdictionary.com/definition/seven-P-s.htmlhttp://www.businessdictionary.com/definition/tangible.htmlhttp://www.businessdictionary.com/definition/good.htmlhttp://www.businessdictionary.com/definition/labor-rate-price-variance.htmlhttp://www.businessdictionary.com/definition/presentation.htmlhttp://www.businessdictionary.com/definition/promotion.htmlhttp://www.businessdictionary.com/definition/intangible.htmlhttp://www.businessdictionary.com/definition/final-good-service.htmlhttp://www.businessdictionary.com/definition/participant.htmlhttp://www.businessdictionary.com/definition/evidence.htmlhttp://www.businessdictionary.com/definition/process.htmlhttp://www.businessdictionary.com/definition/assembly.htmlhttp://www.businessdictionary.com/definition/seven-P-s.htmlhttp://www.businessdictionary.com/definition/tangible.htmlhttp://www.businessdictionary.com/definition/good.htmlhttp://www.businessdictionary.com/definition/labor-rate-price-variance.htmlhttp://www.businessdictionary.com/definition/presentation.htmlhttp://www.businessdictionary.com/definition/promotion.htmlhttp://www.businessdictionary.com/definition/intangible.htmlhttp://www.businessdictionary.com/definition/final-good-service.htmlhttp://www.businessdictionary.com/definition/participant.htmlhttp://www.businessdictionary.com/definition/evidence.htmlhttp://www.businessdictionary.com/definition/process.htmlhttp://www.businessdictionary.com/definition/assembly.html8/2/2019 SRM - MBA (GTU)
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4 P's product promoation placement and price
The differences have resulted in a divergence in the education of services marketing
versus regular marketing. Apart from the traditional "4 P's," Product, Price, Place,
Promotion, there are three additional "P's" consisting of People, Physical
evidence, and Process.
Product refers to the creation of a service concept that will offer value to target
customers and satisfy their needs better than competing alternatives. This consists of a
core product that responds to the customer primary need and an array of supplementaryservice elements that are mutually reinforcing value-added enhancements that help
customers to use the core product more effectively.
Place and time may involve physical or electronic channels such as banks now offer
customers a choice of distribution channels including visiting a branch, using a networkof ATMS, doing business by phone or conducting them over the Internet.
Price and other user outlays are crucial as well. To determine if a particular service is
worth it, customers go beyond monetary considerations and assess the outlays of theirtime and effort. Thus, service marketers must set prices that target customers are willing
and able to pay and minimize other burdensome outlays that are incurred. These may
include additional monetary expense in traveling, time expenditures, unwanted mentaland physical effort and exposure to negative sensory experiences.
Promotion in services marketing is also educational in nature, especially for new
customers. Suppliers need to teach these customers about the benefits of the service,
where and when to obtain it, and how to participate in service processes to get the bestresults. This can be delivered via individuals such as salespeople, at websites, on display
screens in self-service equipment and through a variety of advertising media.
The process of delivering the service is very often as important as the function of theservice. Operational inputs and outputs can vary widely due to the lack of inventory and
real time interaction involved. Nonetheless, variability can be reduced through careful
design of the customer service process, adopting standardized procedures, implementing
rigorous management of service quality, high standards of training, and automation.
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Furthermore, customers are often involved in co-production as partial employees through
self-service, telecommunications and the Internet.
Physical environment includes the appearance of buildings, landscaping, vehicles,interior furnishing, equipment, uniforms, signs, printed materials and other visible cues
that provide evidence of service quality, facility service delivery and guide customers
through the service process. This can also be referred to as the servicescape which canhave a profound impact on customer satisfaction and service productivity.
People refer to the human capital of the firm, i.e. the employees. These individuals
should possess the required technical skills, good interpersonal skills and positiveattitudes that can become a key competitive advantage for the firm.
Characteristics of a Service
What exactly are the characteristics of a service? How are services different from a
product? In fact many organisations do have service elements to the product they sell, forexample McDonalds sell physical products i.e. burgers but consumers are also
concerned about the quality and speed of service, are staff cheerful and welcoming and
do they serve with a smile on their face?
There are five characteristics to a service which will be discussed below.
1. Lack of ownership.
You cannot own and store a service like you can a product. Services are used or hired for
a period of time. For example when buying a ticket to the USA the service lasts maybe 9hours each way , but consumers want and expect excellent service for that time. Because
you can measure the duration of the service consumers become more demanding of it.
2. Intangibility
You cannot hold or touch a service unlike a product. In saying that although services areintangible the experience consumers obtain from the service has an impact on how they
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will perceive it. What do consumers perceive from customer service? the location, and
the inner presentation of where they are purchasing the service?.
3. Inseparability
Services cannot be separated from the service providers. A product when produced can
be taken away from the producer. However a service is produced at or near the point of
purchase. Take visiting a restaurant, you order your meal, the waiting and delivery of the
meal, the service provided by the waiter/ress is all apart of the service production processand is inseparable, the staff in a restaurant are as apart of the process as well as the
quality of food provided.
4. Perishibility
Services last a specific time and cannot be stored like a product for later use. If travelling
by train, coach or air the service will only last the duration of the journey. The service is
developed and used almost simultaneously. Again because of this time constraint
consumers demand more.
5. Heterogeneity
It is very difficult to make each service experience identical. If travelling by plane theservice quality may differ from the first time you travelled by that airline to the second,because the airhostess is more or less experienced.
A concert performed by a group on two nights may differ in slight ways because it is very
difficult to standardise every dance move. Generally systems and procedures are put into
place to make sure the service provided is consistent all the time, training in serviceorganisations is essential for this, however in saying this there will always be subtle
differences.
Services marketing is a form of marketing which focuses on selling services.Services can be tricky to sell and the marketing approach for them is much different
than the approach for products. Some companies offer both products and services
and must use a mixture of styles; for example, a store which sells computers also
tends to offer services such as helping people select computers and providing
computer repair. Such a store must market both its products and the supporting
services it offers to appeal to customers.
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Product Core and Supplementary Elements
A service product consists of two components, the core productand supplementary services. The core product is based on thecore set of benefits and solutions delivered to customers.Supplementary services are those elements that facilitate andenhance the use of the core product.Designing a service concept is a complicated task that requires anunderstanding of how the core and supplementary servicesshould be combined, sequenced, delivered, and scheduled tocreate benefits that meet the needs of the target marketsegments.
Different types of core products often share similar
supplementary elements. The Flower of Service conceptcategorizes supplementary services into eight groups (eachrepresented as a petal surroundingthe core).
The eight groups can be categorized as
(1) facilitating and
(2) enhancing supplementary services.
Facilitating supplementary services are needed for servicedelivery or help in the use of the core product. They are:
o Informationo Order-takingo Billing, ando Payment.
Enhancing supplementary services add extra value for thecustomer and include:
o Consultationo Hospitality
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o Safekeepingo Dealing with exceptions.
The use of a flower helps us to understand that all the
supplementary elements must be performed well. A weakness inone element will spoil theoverall impression.
OR
Core Product
Central component that supplies the principal, problem-solvingBenefits customers seek
Supplementary Services
Augment the core product, facilitating its use and enhancing itsValue and appeal
The Service Offering
In this chapter, we address the question, what should be the core andsupplementary elements of our service product? The core addresses the customersneed for a basic benefit such as transportation to a desired location, resolution of
a specific health problem, or repair of malfunctioning equipment. As an industry matures and competition increases, theres a risk that prospectivecustomers may view competing core products as commodities that areindistinguishable from each other.
The Augmented Product
Marketers use the term augmented product to describe the combination of acore product with a bundle of value-adding supplementary elements. Molecularmodel that can be applied to either goods or service. The model uses a chemicalanalogy to help marketers visualize and manage what she termed a total marketentity.
At the center benefit that addresses the basic customer need, with links to a seriesof other service characteristics. Surrounding the molecules is a series of bandsrepresenting price, distribution, and market positioning (communication messages).
The molecule model helps identify the tangible and intangible elements involvedin service delivery.
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Identifying and Classifying Supplementary Services
The more we examine different types of core services, the more we find thatmost of them have many supplementary series in common. There are dozens ofdifferent supplementary services, but almost all of them can be classified into oneof the following eight clusters.
We have listed them as either facilitating supplementary services, which aid inthe use of the core product or are required for service delivery.
o Informationo Order takingo Billingo Payment
Enhancing supplementary services, which add extra value for customers.
o Consultation
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o Hospitalityo Safekeepingo Exceptions
These eight clusters are displayed as petals surrounding the center of a flower,which we call the Flower of Service.
o A visual framework for understanding the supplementary service elements thatsurround and add value to the product core.
Information
To obtain full value from any service experience, customers need relevantinformation. New customers and prospects are especially information hungry.Customers needs may include directions to the physical location where the productis sold (or details of how to order it by telephone or Website), service hours, prices,and usage instructions. Some information is required by law like notifications ofchanges, reminders, warnings, and conditions of sale and use. Customers may want
documentation of what has already taken place, such as confirmation ofreservations, receipts and tickets, and monthly summaries of account activity.
Companies should make sure the information they provide is both timely andaccurate; if its not, customers may be annoyed or inconvenienced.
Order Taking
Once customers are ready to buy, companies must have effective supplementaryservice processes in place to handle applications, orders, and reservations. Theprocess of order taking should be polite, fast, and accurate so that customers do not
waste time and endure unnecessary mental or physical effort.
Certain companies need to receive information about the potential clients, withthat information they can decide to either provide services or not. I.G. would beuniversities, banks, insurance companies, and utilities, and other.
Ticketless systems, based upon telephone or online reservations, provideenormous cost savings for airlines. Eliminates the need to compensate agents.
Billing
Billing is common to almost all services (unless it is free). Inaccurate, illegible, orincomplete bills risk disappointing customers who may, up to that point, have beenquite satisfied with their experience. Such failures add insult to injury if thecustomer is already dissatisfied.
Customers usually expect bills to be clear and informative, and itemized in a waythat makes it clear how the total was computed.
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Marketing Research can help companies design user-friendly bills by identifyingwhat information customers want and how they would like it to be organized.
Busy customers hate to be kept waiting for a bill. Some service providers offerexpress checkout options, taking customers credit card details in advance anddocumenting changes later by mail.
Payment
A bill requires the customer to take action on payment. Bank statements are anexception, since they detail charges that have already been deducted from thecustomers account. Ease and convenience is what customers expect.
A variety of options exists to facilitate customer bill paying. Self-service paymentsystems. For instance, require customers to insert coins, banknotes, tokens, orcards in machines. Equipment breakdown destroy the whole purpose of having sucha system.
To ensure that people actually pay what they owe, some services employ controlsystems, such as ticket collection before entering a movie theater or boarding atrain. Those collecting those tickets must be trained to be polite and professional, sothat the customer does not feel harassed.
Consultation
Consultation is an enhancing service that involves a dialog to identify customerrequirements and develop a personalized solution.
Counseling represents a more subtle approach to consultation. It involves
helping customers better understand their situations so that they can come up withtheir own solutions and action programs.
Hospitality
Hospitality-related services should ideally reflect pleasure at meeting newcustomers and greeting old ones when they return. Courtesy and consideration forcustomers needs apply to both face-to-face encounters and telephone.
The quality of a firms hospitality services can increase or decrease satisfactionwith the core product.
Some air transportation companies differentiate themselves from theircompetitors with better meals and more attractive cabin crew.
Safekeeping
While visiting a service site, customers often want assistance with their personalpossessions.
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Additional safekeeping services are directed at physical products that customersbuy or rent.
Exceptions
Exceptions involve supplementary services that fall outside the routine of normalservice delivery. Astute businesses anticipate exceptions and develop contingencyplans and guidelines in advance.
1. Special requests. There are many circumstances when a customer may requestservice that requires a departure from normal operating procedures.
2. Problem Solving. Situations arise when normal service delivery fails to runsmoothly as a result of accidents, delays, equipment failures, or customerexperiencing difficulty in using the product.
3. Handling of complaints/suggestions/compliments. This activity requires well-
defined procedures. It should be easy for customers to express dissatisfaction, offersuggestions for improvement, or pass on compliments, and service providers shouldbe able to make an appropriate response quickly.
4. Restitution. Many customers expect to be compensated for serious performance
failures.
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FACILITATING SUPPLEMENTARY SERVICES
Information
Direction to service site Schedules/service hours Prices Reminders Warnings Conditions of sale/service Notification of changes Documentation
Confirmations of reservations Summaries of account activities Receipts and tickets
Order-Taking
Applications
Memberships in clubs/programs Subscription services (e.g., utilities) Prerequisite based services (e.g., financial credit, college enrolment)
Order Entry
On-site order fulfillment Mail/telephone/e-mail/web order
Reservations and Check-in
Seats/tables/rooms Vehicles or equipment rental Professional appointments
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Billing
Periodic statements of account activity Invoices for individual transactions Verbal statements of amount due Self-billing (computed by customer)
Machine display of amount due
Payment
Self-Service
Insert card, cash or token into machine Electronic funds transfer Mail a check Enter credit card number online
Direct to Payee or Intermediary
Cash handling or change giving
Check handling Credit/charge/debit card handling Coupon redemption
Automatic Deduction from Financial Deposits