Services: “give Beyond The Promise”

SERVICES “give beyond the promise”

Service is an act or performance that one party can offer to another & is essentially intangible & does not result in any ownership – Philip Kotler

Flow of discussion • Services ..perception • 3 additional P’s • 4 key characteristics • Key Imperatives / Challenges • Eg..5 S in the services industry

How do their deliveries differ ? – Airlines • Jet Airways • Indian Airlines

– Telephony • Airtel • BSNL

– Financial services • LIC • MNC Insurance companies

Do their deliveries differ ? – Banks • ICICI • Indian Banks

– Hospitallity • Taj Hotels • ITDC

– Retail Industry • Spencers /BB • Kendriya Bhandar

3 additional P’s of service marketing people

process

Physical evidence

Process • Process of delivery of service needs to be free from complexities and should be rational. – Domino’s advertise pizza delivery within 30 minutes or eat your pizza for free. An efficient service fosters consumer loyalty and confidence.

People • People performing services need to be welltrained to serve all customer needs efficiently. • There have to be defined rules and regulations for customer interface so that communication errors are minimal. • Taj service / Jet airways

People need to have consistency in their behavior.

Physical Evidence • Physical evidence is how customers judge the organization. – Layout of CCD , Trust of TATAs

Foster reliability in the mind of the customers.

4 key characteristics Economic significance

Managerial uniqueness

Emergence of Strategic differentiator

Driver of gen X Business model

Economic significance • Increasing contributor to GDP – e.g. india ~ 60%, USA ~75 %

• Greater employability age 16 to 60 • V High productivity and gross national savings. • Greater sectoral opportunity for global leadership – e.g. indian IT, Healthcare, tourism

Emerging strategic differentiator • Greater component of the product service mix – Domino , Taj , Jet , Maruti –service station anywhere – Vodaphone – the network follows

• Redefines the brand. – CCD , a lot can happen over coffee..nobody disturbs you

Emerging strategic differentiator • Increasing importance with greater product commoditisation – maruti total lifetime value – the eureka salesman

• Provides new business advantages to the core brand – Mcdonald ..the offers / mctikki aloo burger..customised for India – HUL laundromat – virgin airlines –the way Richard Branson promotes it .

. Managerial uniqueness • Issues – standardisation of productivity – delivery and shape – person specific, simultanity of production and consumption, – thus variability of quality, cost and time

. Managerial uniqueness • controls – specify the sizzle eg mcdonalds – Aligned to corporate strategy • suzuki dealer servicing norms • 30 minutes or free • the fedex next day delivery.

– internal marketing to all. – Feedback loops from all stakeholders – Personnel performance aligned

Driver of gen x business model • lower entry barriers eg sks microfinance • personal skill based eg google, microsoft • build the idea eg IPL

Key imperatives/challenges Inseparability

Intangibility

heterogenity

Perishability

Lack of ownership

Intangability • You cannot hold or touch a service unlike a product. • the experience consumers obtain from the service has an impact on how they will perceive it. • What do consumers perceive from customer service? The location, and the inner presentation of where they are purchasing the service?

Inseparability • Services cannot be separated from the service providers. • A product when produced can be taken away from the producer. • a service is produced at or near the point of purchase. • Take visiting a restaurant, you order your meal, the waiting and delivery of the meal, the service provided by the waiter/rest is all apart of the service production process and is inseparable, the staff in a restaurant are as apart of the process as well as the quality of food provided.

Hetrogeneity • It is very difficult to make each service experience identical. • If travelling by plane the service quality may differ from the first time you travelled by that airline to the second, because the airhostess is more or less experienced. • A concert performed by a group on two nights may differ in slight ways because it is very difficult to standardise every dance move. Generally systems and procedures are put into place to make sure the service provided is consistent all the time, training in service organisations is essential for this, however in saying this there will always be subtle differences.

Perishability • Services last a specific time and cannot be stored like a product for later use. – If travelling by train, coach or air the service will only last the duration of the journey. – The service is developed and used almost simultaneously. – Again because of this time constraint consumers demand more

Lack of Ownership • You cannot own and store a service like you can a product. • Services are used or hired for a period of time. • when buying a ticket to the USA the service lasts maybe 9 hours each way , but consumers want and expect excellent service for that time. Because you can measure the duration of the service consumers become more demanding of it.

eg… The 5S in Services Industry

The Application • In services industry… • Back office • Front office • Human resources • Data collected / recorded

Drive Quality SEISO SEIRI Arrange Properly  Distinguish between those things that are needed and not needed  Keep only needed materials at the job site  Throw away all unneeded items immediately

SEITON Orderliness  Put things in right order in designated areas  Store all materials and information in an orderly fashion at all times  Organized according to frequency  Place for everything and everything in its place

Cleanliness  Problems are more visible when everything is neat and clean  Find minor defects while "sweeping clean”

5s

SEIKETSU Always Clean  Clean tools, equipment and job site immediately after use  Equipment that is kept clean runs better

SHITSUKE Discipline  Use and follow standard procedures  Follow company rules and regulations  Follow safety procedures at all times

The Back office of a bank’s branch

SEIRI The Cleaning up / Sorting

• An almirah was storing files and stationery • But…. • All was hap-hazard

After Seiri • All files were checked for relevance on the following grounds… • Usage within last four months • Condition of usability

• It was found that many files of the year 2002 were also in these almirahs and were of no use as such • Some stationery was not in conditions of use

Seiton :

Maintain Orderliness

• A place for everything and everything is in its place

• All these files as well as racks were labeled • Unnecessary files were send to the archives section • A list was sticked outside the almirah to make search easy and quick • More frequently used files were kept in 2nd and 3rd racks …while stationery was in the 4th and 5th racks

SEISO : Cleaning

• Rules were set to clean up the almirahs every weekend in the order prescribed

SEIKETSU: Standarisation • Standards were set for a regular practice of 5s to be imbibed among employees • For eg. Labeling new file, putting them in the sequence of months, and in the appropriate rack

SHITSUKE: Making it a Habit • It was required to be followed strictly, regularly and by everyone right from top to bottom… • Everyone was oriented towards the consecutive benefits and how important is everyone’s role in its implementation

5S in a Hospital • Government hospitals project the image of a poorly equipped, low-morale, and badly maintained organization. • 5S could help in the basic quality improvement

SEIRI • Department established disposal standards and policies. • Each hospital employee will initially be asked to take out unnecessary items in his area of work and dispose it properly.

Seiton :

Maintain Orderliness

• They were further asked to re arrange the items as per the convenience of user. • Stored items must be properly labeled to facilitate retrieval • Warning signs are applied on items needing safety precautions.

SEISO : Cleaning • Participants were to allot three to five minutes a day for cleaning his/her own assigned area. • All work activities must be coordinated

SEIKETSU: Standarisation • Standards have been developed for the numerous work processes and procedures. • Standards for dressing oneself at workplace were set and were to be strictly followed

SHITSUKE: Making it a Habit • It was instilled in people to give due consideration to others and strictly abides by the rules and standards of the organization. • With first 3S implemented successfully, Shitsuke becomes incorporated as a habit.

5S in Retail Sector

SEIRI • The areas of application – The store room – Display racks

Before

Seiton • All items were placed in labeled racks.

Seiso, Seiketsu & Shitsuke • Maintain • Train • Habitualise

Computer Service Centre

• • • • •

Seiri Seiton Seiso Seiketsu Shitsuke

Before 5s

After 5s

Hope …. • Charles Revlon – made a famous comment regarding the business of Revlon Inc.: – `In the factory we make cosmetics. In the store we sell hope.' Most successful companies attribute at least 60-70% sales from their existing happy customers

(services marketing) remaining 30% new customers are a result of other marketing initiatives.