1

Desi gni ng and

Managi ng Ser vi c es
12
27 -2
Cont ent s.
1. The Nat ur e of Ser vic es
2. Mar ket i ng St rat egi es f or Servi ces Fi rms
3. Managi ng Servi ces Qual i t y
4. Managi ng Servi ces Br ands
5. Managi ng Pr oduc t Suppor t Ser vi ces
2
27 -3
1. The Nat ur e of Ser vi c es
What i s a Servi ce?
A servi ce i s any ac t of per f or manc e
t hat one par t y can of f er anot her t hat i s
essent i al l y i nt angi bl e and does not
resul t i n t he owner shi p of anyt hi ng; i t s
pr oduc t i on may or may not be t i ed t o a
physic al produc t .
27 -4
Servic e Sec t or s
Government
Pr i vat e nonpr of i t
Busi ness
Manuf ac t ur i ng
Ret ai l
3
27 -5
% of U.S. GDP by I ndust r y
0
10
20
30
40
50
60
70
80
1948 1959 1967 1977 1987 1999
P
e
r
c
e
n
t

o
f

G
D
P
Year
Services
Manufacturing
Mining & Agriculture
27 -6
4
27 -7
27 -8
5
27 -9
100.00 6,149, 432
3.66 225,360 Import duty
50. 82 9.41 578,778 COMMUNITY, SOCIAL AND PERSONAL SERVICES
2.20 135,079 HEALTH AND SOCIAL WORKS
2.53 155,871 EDUCATION
2.67 164,203 PUBLIC ADMINISTRATION AND DEFENCE
6.77 416,038 REAL ESTATE, RENTING AND BUSINESS ACTIVITIES
1.65 101,721 FINANCIAL INTERMEDIATIONS
10.61 652,500 TRANSPORT, STORAGE & COMMUNICATION
0.72 44,372 HOTEL AND RESTAURANTS
14.26 876,766 WHOLESALE AND RETAIL TRADE
8.14 500,849 CONSTRUCTION
1.05 64,520 ELECTRICITY, GAS AND WATER SUPPLY
17.22 1,058,902 MANUFACTURING
1.14 70,320 MINING AND QUARRYING
3.55 218,138 FISHING
14.41 886,015 AGRICULTURE AND FORESTRY
%
2008-2009
(Million Tk.)
Gross Domestic Product of Bangladesh at Current Prices
27 -10
10
6
27 -11
27 -12
Cat egor i es of Ser vi c e Mi x
Pure t angi bl e good
Good w i t h ac c ompanyi ng ser vic es
Hybr i d
Servic e w i t h ac company goods
Pure servi ce
7
27 -13
Tangi bi l i t y Spec t r um
Tangible
Dominant
Intangible
Dominant
Sal t
Soft Dr inks
Deter gents
Au tomobi l es
Cosmeti cs
Ad ver ti si ng
Ag enci es
Ai r l i nes
Investment
Management
Consul ti ng
Teachi ng
Fast-food
Outl ets
Fast-food
Outl ets

Slider/Track Control
27 -14
Ser vi c e Di st i nct i ons
Equi pment -based or peopl e-based
Servic e pr oc esses (Rest aur ant s: c af,
f ast -f ood, Buf fet )
Cl i ent s pr esence requi red or not
Personal needs or busi ness needs
Obj ec t i ves (Prof i t /Non-prof i t ) &
ownershi p (Pri vat e/Publ i c )
8
27 -15
Di st i nct i ve Char act er i st i c s
of Ser vi c es
I nt angi bi l i t y
I nsepar abi l i t y
Vari abi l i t y
Peri shabi l i t y
27 -16
Physi c al Evi denc e & Pr esent at i on
Pl ac e
People
Equi pment
Communi cat i on mat er ial
Symbol s
Pr i c e
9
27 -17
Var i abi l i t y
How t o I nc r ease Qual i t y Cont r ol
I nvest i n good hi ri ng & t rai ni ng proc edur es
St andar di ze t he servi ce-per f or manc e proc ess
Moni t or c ust omer sat i sf ac t i on
27 -18
Per i shabi l i t y
Mat chi ng Demand & Suppl y
Demand si de
Di ff er ent i al pr i c i ng
Nonpeak demand
Compl ement ar y
ser vi c es
Reser vat i on
syst ems
Suppl y si de
Par t -t i me empl oyees
Peak -t i me ef f i c i enc y
I nc r eased c onsumer
par t i c i pat i on
Shar ed ser vi c es
Fac i l i t i es for f ut ur e
ex pansi on
10
27 -19
I nsepar abi l i t y
?
27 -20
2. Mar ket i ng St r at egi es f or Ser vi c es Fi r ms
A Shi ft i ng Cust omer Rel at i onshi p
BusinessWeek, Oct 23, 2000, issues over story called
"Why Service Stinks," based in part on the fact that from
1994 to 2000, customer satisfaction in USA dropped
12.5 % for airlines,
8.1 % for banks,
6.5 %for stores, &
4 %for hotels.
Rachet/ Ratchet Effect
11
27 -21
Fac t or s Leadi ng t o Cust omer
Sw i t c hi ng Behavi or
Pr i c i ng
I nc onveni enc e
Core Servi c e Fai l ure
Servic e Enc ount er Fai lur es
Response t o Servi ce Fai l ure
Compet i t i on
Et hi cal Probl ems
I nvolunt ar y Sw i t c hing
27 -22
12
27 -23
Hol i st i c Mar k et i ng f or Ser vi c es
The Ser vi c es Mar k et i ng Tr i angl e
Internal Marketing
Interact ive Marketing
External Marketi ng
Company
(Management )
Cust omer s Empl oyees
Enabling the promise
Delivering the promise
Making the promise
27 -24
3. Managi ng Ser vi c es Qual i t y
13
27 -26
14
27 -27
Det er mi nant s of Ser vi c e Qual i t y
27 -28
Det er mi nant s of Ser vi c e Qual i t y
Rel i abi l i t y
Responsi veness
Assuranc e
Empat hy
Tangibl es
15
27 -29
1.Rel i abi l i t y: Abi l i t y t o per f or m t he pr omi sed
ser vi c e dependabl y and acc ur at el y.
Ex ampl es of Cust omer s Quest i ons:
Di d Pi zza Hut del i ver t he pi zza w i t hi n 30
mi nut es?
2.Responsi veness: Wi l l i ngness t o hel p c ust omer s
and pr ovi de pr ompt ser vi c e.
Ex ampl e of Cust omer s Quest i on:
I s my st oc k br oker w i l l i ng t o answ er my
quest i ons?
Det er mi nant s of Ser vi c e Qual i t y
27 -30
3.Assur ance: Empl oyees know l edge and c our t esy and
t hei r abi l i t y t o i nspi r e t r ust and c onf i denc e.
Ex ampl es of Cust omer s Quest i ons:
Does t he Dent i st appear compet ent ?
Does t he fl i ght at t endant have a pl easant manner ?
4.Empat hy: Car i ng and Indi vi dual i zed at t ent i on t o t he
c ust omers.
Ex ampl es of Cust omer s Quest i ons:
I s t he Bank manager l i st eni ng t o my f i nanc i al
obj ec t i ves?
Det er mi nant s of Ser vi c e Qual i t y (Cont d.)
16
27 -31
5.Tangi bl es: The appear anc e of physi cal
f ac i l i t i es, equi pment , personnel and
c ommuni cat i on mat er i al s l i k e repor t s, l et t er s.
Ex ampl es of Cust omer s Quest i ons:
I s my ac c ount ant dr essed appropr i at ely?
I s my bank st at ement easy t o underst and?
Ar e t he hot el s f ac i l i t i es at t rac t i ve?
Det er mi nant s of Ser vi c e Qual i t y
27 -32
I mpr ovi ng Ser vi c e Qual i t y
Li st eni ng
Rel i abi l i t y
Basi c ser vi c e
Ser vi c e desi gn
Rec over y
Sur pr i si ng c ust omer s
Fai r pl ay
Teamw ork
Empl oyee r esearc h
Ser vant l eader shi p
(J esus ur ged hi s
f ol l ow er s t o be
ser vant s f i r st .)
17
27 -33
Best Pr act i c es of Ser vi c e Qual i t y
Management
St rat egic Conc ept
Top-Management Commi t ment
Hi gh St andar ds
Sel f-Servi ce Technol ogi es (SSTs)
Moni t or i ng Syst ems
Sat i sf ying Cust omer Compl ai nt s
Sat i sf ying Empl oyees
27 -34
A) I dent i fying & Sat i sfyi ng Cust omer
Needs
Fai l ure fr equenc y
Dow nt i me
Out -of -poc k et cost s
B) Post sal e Ser vi ce St rat egy
Pr oduc t t ak e back
4. Managi ng Pr oduc t Suppor t Ser vi c es