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Chapter 14

This document discusses various aspects of designing and managing services. It covers differentiating services, managing service quality, managing consumer expectations, determinants of service quality, incorporating self-service technologies, managing product support services, identifying customer needs, post-sale service strategies, and the evolution of customer service. Recommendations for improving service quality include listening to customers, reliability, basic service, service design, recovery, surprising customers, fair play, teamwork, employee research, and servant leadership.

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57 views22 pages

Chapter 14

This document discusses various aspects of designing and managing services. It covers differentiating services, managing service quality, managing consumer expectations, determinants of service quality, incorporating self-service technologies, managing product support services, identifying customer needs, post-sale service strategies, and the evolution of customer service. Recommendations for improving service quality include listening to customers, reliability, basic service, service design, recovery, surprising customers, fair play, teamwork, employee research, and servant leadership.

Uploaded by

JP O
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 14

Designing and
Managing Services
Part 2
Meil Mangana
Differentiating Services
Differentiation
is a basic business and marketing strategy by
which a company focuses on distinct differences
in its offering to customers as the basis for
establishing a competitive advantage.
Differentiation

• Primary and Secondary Service Options


• Innovation with Services
Managing Service Quality
Recommendations for Improving Service Quality

1. Listening 1. Surprising
2. Reliability Customers
3. Basic Service 2. Fair play
4. Service Design 3. Teamwork
5. Recovery 4. Employee Research
5. Servant Leadership
Managing Consumer Expectations
Sources:
• Past experiences
• Word of mouth
• Advertising

If the perceived service falls below expected


service, customers are disappointed.
Gaps that prevent successful
delivery of service:
• Gap between consumer expectation and
management perception.
• Gap between management perception and
service-quality specification.
• Gap between service-quality specifications
and service delivery.
• Gap between service delivery and external
communications.
• Gap between perceived and expected service.
Service-Quality Model
Determinants of Service Quality

• Reliability
• Responsiveness
• Assurance
• Empathy
• Tangibles
Zone of Tolerance

• a range in which a service dimension would be


deemed satisfactory, anchored by the
minimum level consumers are willing to
accept and the level they believe can and
should be delivered.
Service Quality Model
• Dynamic process model􏰗􏰘􏰅􏰎􏰆􏰍 􏰆􏰁of service
quality was based on the premise that
customer perceptions and expectations of
service quality change over time, but at any
one point they are a function of prior
expectations about what will􏰦􏰍􏰕􏰕 and what
should􏰉􏰓􏰁􏰒􏰕􏰗 happen during the service
encounter, as well as the 􏰎􏰊􏰇􏰒􏰎􏰕 service
delivered during the last contact.
Two Different Types of
Expectations
1. Increasing customer expectations of what
the firm will deliver can lead to improved
perceptions of overall service quality
2. Decreasing customer expectations of what
the firm should deliver can lead to improved
perceptions of overall service quality
Incorporating Self-service
Technologies
• Consumers value convenience in services, and many
person-to-person service inter- actions are being
replaced by self-service technologies (SSTs) intended to
provide that convenience. To traditional vending
machines we can add automated teller machines
(ATMs), self-pumping at gas stations, self-checkout at
hotels, and a variety of activities on the Internet, such
as ticket purchasing, investment trading, and
customization of products.
• Not all SSTs improve service quality, but they can make
service transactions more accurate, convenient, and
faster. Obviously, they can also reduce costs.
Incorporating Self-service
Technologies
• The biggest obstacle is not the technology
itself, but convincing customers to use it,
especially for the first time.
• Customers must have a clear sense of their
roles in the SST process, must see a clear
benefit and must feel they can actually use it.
Managing Product-support
Services
• No less important than service industries are product-
based industries that must provide a service bundle.
Manufacturers of equipment—small appliances,
office machines, tractors, mainframes, airplanes—all
must provide 􏰌􏰄􏰁􏰗􏰒􏰊􏰇􏰙􏰉􏰒􏰌􏰌product support services
now a battleground for competitive advantage. Many
product companies also have a stronger online
presence than before and must ensure they offer
adequate—if not superior—service online as well.
Identifying and Satisfying
Customer Needs
• Worry about reliability and failure frequency
• Worry about downtime
• Worry about out of pocket costs

Life Cycle Cost


-purchase cost plus discounted cost of
maintenance and repair less discounted salvage
value.
Post Sale Service Strategy

• Companies now have departments eager to


receive customer requests, suggestions, and
even complaints and handle them
expeditiously. Some firms even proactively
contact customers to provide service after the
sale is complete.
Customer Service Evolution

• Manufacturers of equipment run their own


parts and service departments.
• Supply parts and charge a premium price.
• Price equipment low and compensate by
charging high prices for parts and service.
Customer Service Evolution

• Switching to authorized distributors and


dealers.
• Closer to customers, operate in more locations
and offer a quicker service.
• Independent service firms emerge and offer
lower price and faster service.
Thank you!
The Customer Service Imperative

• Customer-service choices are increasing rapidly, however,


and equipment manufacturers increasingly must figure
out how to make money on their equipment,
independent of service contracts. Some new-car
warranties now cover 100,000 miles before customers
have to pay for servicing. The increase in disposable or
never-fail equipment makes customers less inclined to pay
2 percent to 10 percent of the purchase price every year
for service. A company with several hundred laptops,
printers, and related equipment might find it cheaper to
have its own service people on-site.

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