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Learning Objectives
Classify a service into one of four categories using the service process matrix. Describe a service using the four dimensions of the service package. Discuss the managerial implications of the distinctive characteristics of a service operation. Discuss the insights obtained from a strategic classification of services. Discuss the role of a service manager from an open-systems view of service.
The Eight Components Product Elements Place, Cyberspace, and Time Promotion and Education Price and Other User Outlays + Process + Productivity and Quality + People + Physical Evidence Require the Integration of Marketing, Operations, and Human Resources
Service/Product Bundle
Element Business Core Peripheral Goods Peripheral Service Variant Core Goods Example Custom clothier Business suits Garment bag Deferred payment plans Coffee lounge Core Service Example Business hotel Room for the night Bath robe In house restaurant Airport shuttle
Low
High
Supporting Facility: The physical resources that must be in place before a service can be sold. Examples are golf course, ski lift, hospital, airplane. Facilitating Goods: The material consumed by the buyer or items provided by the consumer. Examples are food items, legal documents, golf clubs, medical history. Information: Operations data or information that is provided by the customer to enable efficient and customized service. Examples are patient medical records, seats available on a flight, customer preferences, location of customer to dispatch a taxi.
Explicit Services: Benefits readily observable by the senses. The essential or intrinsic features. Examples are quality of meal, attitude of the waiter, on-time departure. Implicit Services: Psychological benefits or extrinsic features which the consumer may sense only vaguely. Examples are privacy of loan office, security of a well lighted parking lot.
Customer Participation in the Service Process: attention to facility design but opportunities for coproduction Simultaneity: opportunities for personal selling, interaction creates customer perceptions of quality Perishability: cannot inventory, opportunity loss of idle capacity, need to match supply with demand Intangibility: creative advertising, no patent protection, importance of reputation Heterogeneity: customer participation in delivery process results in variability
Tangible actions
Peoples minds:
Education Broadcasting Information services Theaters Museums
Intangible assets:
Banking Legal services Accounting Securities Insurance
Intangible actions
Discrete transactions
Long-distance phone calls Theater series tickets Transit pass Sams Wholesale Club Airline frequent flyer
Low
Narrow
Tax preparation
Multiple site
Bus service Fast-food chain Mail delivery AAA emergency repairs
Service operations manager Production function: Alter Monitor and control process Schedule supply demand Marketing function: Interact with consumers Control demand Modify as necessary Define standard Service package Supporting facility Facilitating goods Explicit services Implicit services
Communicate by advertising
Basis of selection
Nature of the service act Relationship with customers Customization and judgement Nature of demand and supply Method of service delivery
How could Village Volvo manage its back office (repair operations) like a factory? How can Village Volvo differentiate itself from Volvo dealers?
Nature of the service act Relationship with customers Customization and judgement Nature of demand and supply Method of service delivery
What elements of Xpresso Lubes location contribute to its success? Given the example of Xpresso Lube, what other services could be combined to add value for the customer?
What are the characteristics of services that will be most appropriate for Internet delivery? When does collecting information through service membership become an invasion of privacy? What are some management problems associated with allowing service employees to exercise judgement in meeting customer needs? What factors are important for a manager to consider when attempting to enhance a service firms image? What contributions to the management of professional service firms can a business school graduate provide?