UNIT IV SERVICE DELIVERY

Classification of Service Personnel

Based on the level of interaction Low contact service High contact service Based on the type of service provided Consumer service employees Professional service employees Based on the frequency and length of customer interaction Contact personnel Moderate contact personnel Back office staff Support staff Management

Job Characteristics
Skill variety Task identity Task significance Autonomy Feedback Empathy

The Control Issue

Customers

Firm

Personnel

Increasing Control
For the firm For the customer

Physical control Through leadership Through rewards Through education

Behavioral control Cognitive control

Types of Conflict

Employee-role Employee-organization Employee-employee Employee-customer Customer-customer Customer-role Customer-organization

Employee-Role Conflict 1. Inequality dilemma 2. Dress codes

1. Screen applicants 2. Provide instructions and training 3. Develop procedure for employees to complain

Employee-Organization Conflict

Two-boss dilemma

1. Instruct employees in policies and goals of firm. 2. Empower employees. 3. Support employees decisions.

Employee-Employee Conflict
1. Lack of clear communication. 2. Lack of chain-of-command. 3. Conflict of personalities. 4. Competition for customers. 5. Difference in perceived work loads.

1. Determine cause of conflict. 2. Gather information. 3. Explore solutions. 4. Involve each person in a resolution plan. 5. Follow-up.

Customers Conflicts
Customer-Customer Customer-Role Customer-Organization Customer-Employee

1. Provide instruction. 2. Analyze policies. 3. Negotiate. 4. Instruct in roles. 5. Educate new customers. 6. Teach people skills to employees.

Dealing with Conflict

Avoidance of contact. Psychological withdrawal. Direct confrontation. Retaliation.( avoiding negative communication )

Hire the Right People

The old saying People are your most important asset is wrong. The RIGHT people are your most most important asset.

Jim Collins

Staff Selection and Recruitment

Preliminary stage Identification of vacancy Develop job profile Consider internal sources Consider using specialist recruitment agency Advertise - internally and externally Process applications Screen applications for shortlist

Selection stage Arranging interviews; venue, timing, date Determine process for selection; formal/informal interviews use of preselection test, presentations Conducting interviews Testing Offer / Acceptance Formal appointment Follow-up stage Induction Training Ongoing staff development and appraisal

Training and Development

Identification of training needs Implementation of training programmes Evaluation of training effectiveness

Human Resources Management Issues

Recruitment and selection Training and development Setting up new modes of operation, e.g. quality circles Management of change Team briefings, communications strategies Staff suggestion schemes Internal communications Administration (pensions, insurance) Appraisal schemes Pay structures Staff development and support Trade Union liaison Conditions of service Discipline and grievance procedures Termination issues (redundancy, ill-health) Capability

Designing Service Processes

Specific Characteristics of Service Process Design and Implementation

Customer participation in the process Location of service delivery The service itself High-contact or low-contact services Degree of standardization Complexity of the service

Spectrum of Service Processes - The Service Process Matrix Degree of interaction and Customization Low High

Degree of Labor Intensity

Service Factory Airlines Low Transportation Hotels Resorts and recreation Mass Service Retailing Wholesaling High Schools Retail aspects of commercial banking

Service Shop Hospitals Auto repair Other repair services

Professional Service Doctors Lawyers Accountants Architects

Planning a Service Process

Technology Conversion process Equipment Flow of process Service personnel Service location Layout design Organizational structure

Distribution of Services The Place

Service Transactions
There are 3 types of interactions between customers and service firms

Customer goes to the service provider (or intermediary) Service provider goes to the customer Interaction at arms length (via the Internet, telephone, fax, mail, etc.)

Channel Options

Extensive distribution Selective distribution Exclusive distribution

Service Location
Proximity Image Parking facility

Convenience
Accessibility to other services

Competitive advantage

FUNCTIONS OF SERVICE INTERMEDIARIES

An intermediary assists in making the service available to customers at a place and time that is convenient to them. The intermediaries often share the risk of providing the service when they contribute their own capital to acquire the equipment and deliver the service. The intermediaries provide sales support at the point of sale. They collect feedback from the customers regarding the service rendered.

 Often intermediaries provide wider choice of services including that of the competitors. They offer advice to the customers and guide them to choose the service that matches their need. E.g. Tour operators and financial service agents.

Intermediaries provide after sales support to the customers making the service more accessible. E.g. An insurance agent who gives advice about making a claim and handles much of the paper work involved in making the claim.

 ICICI Prudential Life Insurance has discovered an innovative way to distribute its products and services to potential customers in Mumbai. The company found that over 2 lakh people employed in offices in Mumbai get their lunch from the Dabbawallahs who have a wide distribution network that is extremely reliable. The company sends around 50,000 direct mailers to officegoers in Mumbai by hanging a mailer to the handles of meal dabbas. The distribution of these mailers is timed perfectly- they are distributed around the end of the financial year when most of the employees are thinking of aving on tax and planning to invest in some financial policies. The first line of the mailer aims to attract the customers. It reads, Yes! I want to save more tax and add to my retirement savings. Interested customers are required to fill in the forms and mail them to the company specifying a time and date convenient for them to interact with the companys agent. Further, the company has also tied up with Dominos Pizza and BPCL loyalty-card holders in some cities to expand its distribution network.

Distribution Channel Functions

Distribution Channel
Information Promotion Contact

Key Function
Gathering and distributing marketing research about the environment

Developing and spreading persuasive communications about an offer

Finding and communicating with prospective buyers Shaping and fitting the offer to the buyers need Agreeing on price and terms of the offer so ownership or possession can be transferred Distribution: transporting and storing goods Acquiring and using funds to cover the costs of channel work Assuming financial risks such as the inability to sell inventory at full margin

Matching
Negotiation Physical Financing Risk Taking

Channel Options for Service Providers

SE RV IC E PR O VI D ER

FRANCHISEES

E- CHANNELS

AGENTS

BROKERS

C U S T O M E R S

Direct Distribution
Direct distribution of services takes place when a service provider directly delivers the services to the customer without any intermediaries in the process. Advantages Control Healthy customer relationships Flexibility and confidentiality Disadvantageous Financial risk Lack of knowledge

Franchising

Franchising:

A contractual arrangement where a wholesaler or retailer (the Franchisee) agrees to make some payment and to meet the operating requirements of a manufacturer or other franchiser in exchange for the right to use the firms name and to market its goods or services

Franchising
Franchising is the most often used channel for the distribution of services. It is like the retail selling of services. The franchisers are authorized to distribute services to the end customers, on behalf of the service principal. Agreements and contracts are essential documents in franchising.

Franchising
Advantages
Franchisor
1. Capitol for growth 2. Faster growth 3. Additional management 4. Additional income 1. Lower potential profits 2. Controlling service quality 3. Controlling firm image

Disadvantages

Franchisee
1. Lower risk 2. Established brand name 3. Successful business plan 4. Expert assistance 1. Franchisee fees 2. Lack of freedom 3. Controlled by franchisor

Agents and Brokers

An agent is an intermediary who is authorized to negotiate on behalf of the service principal with the customers. Brokers are middlemen who bring buyers and sellers together and assist in negotiation.

Advantages Low selling and distribution cost Specialized skills and knowledge of the agents and brokers Wider representation in the market Customer choice

Electronic Channels
Service companies that adopt electronic channels for distribution do not require direct interaction with customers.

Advantages
Lower costs Increased customer convenience

Telephone and television have been the original channels of distribution through the electronic media;
New additions to this distribution channel include the Internet, which has come to play a very powerful role.

Increased bargaining power of the customer

Extensive distribution Ability to customize services and gain quick feedback Uncontrolled price competition Customer variability Security challenges

Disadvantages