Ans2)

1) THE NATURE OF SERVICES:

The service accounts for more than 50% of India’s GDP. It is growing at a much faster
rate than the other two sectors namely manufacturing and agriculture in highly
competitive rapid globalization environment, the designing and managing of services is
going to be a challenging task. Also, company’s facing parity with competitive offering
on product features use service dimensions for successful differentiations. Company’s
seek to develop a reputation for superior performance in delivery, a better and faster
response to queries, and a quicker resolution of complaints.

Service industries are everywhere:

A service is any act or performance that one party can offer to another that is essential
intangible and does not result in owner ship of anything. Its production may or may not
be tied a physical product. Manufactures, distributors, and retailers can provide value
added service or simply excellent customer service to differentiate themselves.

Categories of service mix:

A company’s offering often include some services: the service component can be a minor
or major part of total offering. Five categories of offering can be distinguished:

1. Pure tangible good-The offering consists primarily of a tangible good such as

soap,toothpaste or salt.No services accompany the product.
2. Tangible good with accompanying services-The offering consists of a tangible good
accompanied by one or more services. In this sense,General Motors is probably more
service intensive than manufacturing intensive.Without its services,its sales would
shrivel.
3. Hybrid-the offering consists of equal parts of goods and services. For example, people
patronize restaurants for both food and service.
4. Major service with accompanying minor goods and services-The offering consists of a
major service along with additional services or supporting goods. For example, airline
passengers buy transportation. The trip includes some tangibles, such as food and drinks,
a ticket stub, and an airline magazine. The service requires a capital-intensive good-an
airplane-for its realization, but the primary item is a service.
5. Pure services-The offering consists primarily of a service. Example include baby-
sitting, psychotherapy, and massage.

Distinctive Characteristics of Services

1. Intangibility-Unlike physical products, services can not be seen, tasted, felt, heard or
smelled before they are bought. The person getting a facelift can not see the results before
the purchase and the patient in the psychiatrist’s office cannot know the exact outcome.
To reduce uncertainty, buyers will look for evidence of quality. Therefore the service
provider’s task is to “manage the evidence”, to “tangibles the intangible.” Whereas
product marketers are changed to add abstract ideas, service marketers are changed to add
physical evidence and imagery to abstract officers.

Place-The exterior and interior should have clean lines. The layout of♣ the desks and the
traffic follow should be planned carefully. Waiting lines should not get overly long.
♣ People-Personnel should be busy. There should be a sufficient number of employees to
manage the workload.
♣ Equipment-Computers, copying machines, desks should be and looks “state of the
art”.
♣ Communication Materials-Printed materials-text and photos-should suggest
efficiency and speed.
♣ Symbols-The name and symbols should suggest fast service.
Price-The bank could advertise that it will deposited Rs.50 in the♣ account of any
customer who waits in the line for more than five minutes.

2. Inseparability-Services are typically produced and consumed simultaneously. This is

not true of physical goods, which are manufactured, put into inventory, distributed
through multiple resellers, and consumed later. If a person renders the service, then the
provider is part of the service. Because the client is also present as the service is
produced, provider-client interaction is a special future of services marketing.
a. Learn to work with larger groups.
b. Learn to work faster.
c. Train more service providers and build up client confidence.
d. Use technology to reach a larger audience without sacrificing interactivity.

3. Variability-Because services depended on who provides them and when and where
they are provided, they are highly variable. Some doctors have an excellent bedside
manner; others are less patient with their patients. Some surgeons are very successful in
performing a certain operation; others are not .Service buyers are aware of this variability
and often talk to others before selecting a service provider. Here are three steps service
firms can take to increase quality control.
Invest in good hiring and training procedures-Recruiting the right♣ employees and
providing them with excellent training is crucial, regardless of whether employees are
highly skilled professionals or low skilled works. Service Company FedEx and Marriott
empower their front-line personnel to spend up to$100 to resolve a customer problem.
Standardize the service-performance process through out the♣ organization-This is done
by preparing a service blueprint that depicts events and processes in a flowchart, with the
objective of recognizing potential fail points.
Monitor Customer satisfaction-Employ suggestion and complaint♣ systems, customer
surveys, and comparison shopping. Firms can also develop customer information
databases and systems to permit more personalized, customized service.

4. Perish ability-Services can not be stored. Perish ability is not a problem when demand
is steady. When demand fluctuates, service firms have problems. For example, public
transportation companies have to own much more equipment because of rush-hour
demand than if demand were even throughout the day.
Demand side
♣ Differential Pricing will shift some demand from peak to off-peak periods. Example
includes low early evening movie prices.
♣ Non peak Demand can be cultivated. McDonald’s pushes breakfast service.
Complementary services can be developed to provide alternatives to♣ waiting
customers, such as cocktail lounges in restaurants.
♣ Reservation systems are a way to manage the demand level. Airlines, hotels employ
them extensively.
Supply sides
♣ Part-time Employees can be hired to serve peak demand .Colleges add part-time
teachers when enrollment goes up.
♣ Peak-time efficiency routines can be introduced. Employees perform only essential
tasks during peak periods.
♣ Increased consumer Participation can be encouraged. Consumers fill out their own
medical records or bag their own groceries.
♣ Shared services can be developed. Several hospitals can share medical-equipment
purchases.
♣ Facilities for future expansion can be developed. An amusement park buys
surrounding land for later development.

2) MARKETING STRATEGIES FOR SERVICE FIRMS:

At one time, service firms lagged behind manufacturing firms in their use of marketing
because they were small, or they were professional businesses that did not use marketing,
or they faced large demand or little competition. This has certainly changed.

A Shifting Customer Relationship

not all companies, however, have invested in providing superior services, at least not to
all customers. In former times, service companies held out a welcoming hand to all
customers, but these companies now have so much data on individuals that they are able
to classify their customers into profit tiers. So service is not bad for all customers.
Airlines, hotels, and banks all pamper good customers. Big spenders get special
discounts, promotional offers, and lots of special service. The rest of their customers get
higher fees, stripped-down service, and at best a voice message to answer inquiries.

Companies that provide differentiated levels of service, however, must be careful about
claiming superior service-the customers who receive poor treatment will bad-mouth the
company and injure its reputation. Delivering services that maximize both customer
satisfaction and company profitability can be challenging. The Kingfisher is a good
example. Described as a low-cost airline with frills, Kingfisher Airlines offers a single
Kingfisher-class service at Junta-class fares. Its brand new aircraft offer individual TV
sets and a choice of six channels, apart from the efficient service of young, caring and
enthusiastic hostesses. Passengers are addressed and treated as guests.

Holistic Marketing for Services

it requires external, internal and interactive marketing. External marketing describes the
normal work of preparing, pricing, distributing and promoting the service to customers.
Internal marketing describes training and motivating employees to serve customers well.
Interactive marketing describes the employees’ skill in serving the client. Clients judge
service not only by its technical quality, but also by its functional quality. Technology has
great power to make service workers more productive.
Companies must avoid pushing productivity so hard; however, that they reduce perceived
quality. Some methods lead to too much standardization. Service providers must deliver
“high-touch” as well as “high-tech”. Arvin Eye Hospital, Madera is example of it.

3) MANAGING SERVICE QUALITY:

The service quality of a firm is tested at each service encounter. If retail clerks are bored,
can not answer simple questions, or are visiting with each other while customers are
waiting, customers will think twice about doing business again with that seller.

Customer Expectations
Customer form service expectations from many sources, such as past experiences, word
of mouth and advertising. Customer compares the perceived service with the expected
service. If the perceived service meets or exceeds their expectations, they are apt to use
the provider again. Successful companies add benefits to their offering that not only
satisfy customers but surprise and delight them. Delighting customers is a matter of
exceeding expectations.

1. Gap between consumer expectation and management perception-Management does not

always correctly perceive what customers want.
2. Gap between management perception and service-quality specification-Management
might correctly perceive customers’ wants but not set a performance standard.
3. Gap between service-quality specifications and service delivery-Personnel might be
poorly trained or incapable of or unwilling to meet the standard or they may be held to
conflicting standards.
4. Gap between service delivery and external communications-Consumer expectations
are affected by statements made by company representatives and ads.
5. Gap between perceived service and expected service-This gap occurs when the
consumer misperceives the service quality.

Based on this service-quality model, these researchers identified the following five
determinants of service quality, in order of importance.

1. Reliability-The ability to perform the promised service dependably and accurately.

2. Responsiveness-The willingness to help customers and to provide prompt service.
3. Assurance-The knowledge and courtesy of employees and their ability to convey trust
and confidence.
4. Empathy-The provision of caring, individualized attention customers.
5. Tangibles-The appearance of physical facilities, equipment, personnel and
communication materials.

Best practices of Service-Quality Management

1. Strategic concept-Top service companies have a clear sense of their customers and
their needs. They have developed a distinctive strategy for satisfying these needs.
2. Top Management commitment-Organizations such as Marriot, Disney, and Xerox’s
senior and top management look not only at financial performance but also at service
performance.
3. High Standards-A service company can differentiate itself by designing a better and
faster delivery system. There are three levels of differentiation: reliability, resilience and
innovativeness.
4. Self-Service technologies (SSTs)-Many person to person service interactions are being
replaced by self service technologies. To the traditional vending machines,
we can add automatic teller machines, self ticket purchase on the internet.
5. Monitoring Systems-Top firms audit service performance, both their own and
competitiors’, on a regular basis. Services can be judged on customer importance and
company performance.
6. Satisfying customer complaints-Customers whose complaints are satisfactory resolved
often become more company loyal than customers who were never dissatisfied. Every
complaint is a gift if handled well.
7. Satisfying employees as well as customers-Given the importance of positive employee
attitudes, service companies must attract the best employees they can find. Employees
should not be stressed in order to please the customers.