1. The document discusses key considerations for service innovation, including involving customers and employees in the design process and employing service design principles like user-centered design.
2. It also covers the important roles that service employees and customers play in service delivery. Service employees are often the embodiment of the service and directly influence customers' perceptions of quality. Customers also play roles as productive resources, contributors to quality, and potential competitors.
3. Finally, it discusses strategies for developing people to deliver quality like training, empowerment, and support systems as well as enhancing customer participation in the service process.
Customer Behaviour in Service Encounters (C2)M.docxalanrgibson41217
Customer Behaviour in Service Encounters (C2)
Marketing of Services
*
Developing Effective Service Marketing Strategies
Understanding Customer Needs, Decision Making, and Behaviour in Service Encounters
BA 3371
Building the Service Model
Managing the Customer Interface
Implementing Profitable Service Strategies
*
Developing Effective Service Marketing Strategies
Two Key Themes in Part I of the
Services Marketing Strategy Framework:
Differences among Services Affect
Customer Behaviour
Three-Stage Model of Service Consumption
BA 3371
Prepurchase Stage: Search, evaluation of alternatives, decision
Service Encounter Stage: Role in high-contact vs. low-contact delivery
Post-Encounter Stage: Evaluation against expectations, future intentions
*
Learning ObjectivesUnderstanding the Service Act is key to satisfied customersDetermine the service management challenges of the 4 categories of the service actBetter manage service encounters by understanding service consumption, expectations and perceived risksExamine key elements of the customer service encounter
BA 3371
*
Differences in Services Affect Customer BehaviourConsumers often involved in service production and may have preferences for service deliveryService marketers need to understand how customers interact with service operationsBased on differences in nature of service act (tangible/intangible) and who or what is direct recipient of service (people/possessions), there are four categories of services:People processingPossession processingMental stimulus processingInformation processing
BA 3371
*
Four Categories of Services
BA 3371
Information processing
(services directed at intangible assets): Accounting Banking
Nature of the Service Act
People
Possessions
Tangible Actions
People processing
(services directed at people’s bodies): Barbers Health care
Who or What Is the Direct Recipient of the Service?
Possession processing
(services directed at physical possessions): Refueling Disposal/recycling
Mental stimulus processing
(services directed at people’s minds): Education Advertising/PR
Intangible Actions
*
People ProcessingCustomers must:Physically enter the service factoryCo-operate actively with the service operationManagers should think about process and output from customer’s perspective To identify benefits created and non-financial costs:
Time, mental, physical effort
Four Categories Of Services
BA 3371
*
Possession Processing
Possession ProcessingCustomers are less physically involved compared to people processing servicesInvolvement is limitedProduction and consumption are separable
BA 3371
*
Mental Stimulus Processing
Mental Stimulus ProcessingEthical standards required when customers who depend on such services can potentially be manipulated by suppliersPhysical presence of recipients not requiredCore content of services is information-basedCan be “inventoried”
BA 3371
*
Informatio.
Introduction of Services Marketing • Services Marketing Concept, Distinctive Characteristics of Services, Services Marketing Triangle, Purchase Process for Services, Marketing Challenges of Services • Role of Services in Modern Economy, Services Marketing Environment • Goods vs Services Marketing, Goods Services Continuum • Consumer Behaviour, Positioning a Service in the Market Place • Variations in Customer Involvement, Impact of Service Recovery Efforts on Consumer Loyalty • Type of Contact: High Contact Services and Low Contact Services • Sensitivity to Customers’ Reluctance to Change
Management information systems (MIS) can be applied in various areas including manufacturing, services, decision support, and performance monitoring. In manufacturing, MIS is used for personnel, financial, production, materials, and marketing management. It processes transaction documents and allows for accounting, querying, analysis, and control. In services, MIS tracks customer profiles, occupancy levels, and expectations. It is also used in hotels, hospitals, banking, and more. Decision support systems and knowledge management help with decision making, performance evaluation, and validating decisions through analysis. Organizational performance monitoring uses MIS to measure productivity, effectiveness, and control performance through financial reports, information systems, benchmarking, and balanced scorecards. Information security and controls are also important to
This document discusses services marketing and the key aspects involved. It defines services as activities that satisfy customer needs through intangible benefits. Services have characteristics like being inseparable from the provider, variable, perishable, and intangible. Managing service quality involves measuring customer expectations and the gap between expectations and perceptions. The marketing mix for services includes pricing strategies like cost-plus pricing. Distribution considers location for easy access. Promotion uses symbols to demonstrate the service encounter and builds word-of-mouth. People, physical evidence, process, and participation are also important elements to consider in the services marketing mix.
1st Module of Services Marketing
Reasons for the growth of the services sector and its contribution; the difference in goods and service marketing; characteristics of services; the concept of service marketing triangle; service marketing mix; GAP models of service quality.
Consumer behavior in services: Search, Experience and Credence property, consumer expectation of services, two levels of expectation, Zone of tolerance, Factors influencing customer expectation of services.
Customer perception of services-Factors influencing customer perception of service, Service encounters, Customer satisfaction, Strategies for influencing customer perception.
The document discusses key concepts in services marketing. It begins by defining services and providing examples. It then distinguishes between goods and services. Key features of services are discussed, including intangibility, perishability, inseparability, heterogeneity, and simultaneity. The 7Ps marketing mix framework for services is introduced, comprised of product, price, place, promotion, people, physical evidence, and process. Relationship marketing and its goals and strategies are summarized. Finally, the document discusses market segmentation in services marketing.
The document provides an overview of services marketing concepts including:
1) It defines services and identifies key differences between goods and services such as intangibility, perishability, and simultaneous production and consumption.
2) It introduces the services marketing triangle and expanded 7Ps marketing mix framework for services.
3) It discusses models for understanding service quality like the gaps model and challenges in consumer behavior related to services like higher perceived risk and difficulty evaluating service alternatives.
The document provides an overview of services marketing concepts including:
1) It defines services and identifies key differences between goods and services such as intangibility, perishability, and simultaneous production and consumption.
2) It introduces the services marketing triangle and expanded 7Ps marketing mix framework for services.
3) It discusses models for understanding service quality like the gaps model and challenges in consumer behavior related to services like higher perceived risk and difficulty evaluating service alternatives.
The document provides an overview of services marketing concepts including:
1) It defines services and identifies key differences between goods and services such as intangibility, perishability, and simultaneous production and consumption.
2) It introduces the services marketing triangle and expanded 7Ps marketing mix framework for services.
3) It discusses models for understanding service quality like the gaps model and challenges in consumer behavior related to services like higher perceived risk and difficulty evaluating service alternatives.
This document provides an overview of key concepts in services marketing. It begins with defining services marketing and outlining its characteristics. It then discusses the evaluation and growth of the service sector. Key topics covered include the nature and classification of services, challenges in services marketing, assessing market potential, and the marketing mix. The document also examines segments like service design, delivery, pricing, promotion, and strategies for different industries like healthcare, hospitality, and tourism.
The document discusses key concepts in services marketing. It begins by defining a service and the characteristics of services marketing. It then covers the growth and classification of the service sector. Some of the main challenges in services marketing are the intangible and perishable nature of services. The document also examines aspects of service design such as the service lifecycle, developing new services through tools like service blueprints, and identifying gaps in service quality.
12th Jeddah Marketing Club (Principles of Service Marketing) by Dr.wael EisaMahmoud Bahgat
#Mahmoud_Bahgat
#Marketing_Club
Join us by WhatsApp to me 00966568654916
*اشترك في صفحة ال Marketing Club* عالفيسبوك
https://www.facebook.com/MarketingTipsPAGE/
*اشترك في جروب ال Marketing Club* عالفيسبوك
https://www.facebook.com/groups/837318003074869/
*Marketing Club Middle East*
25 Meetings in 6 Cities in 1 year & 2 months
Since October 2015
*We have 6 groups whatsapp*
*for almost 600 marketers*
From all middle east
*since 5 years*
& now 10 more groups
For Marketing Club Lovers as future Marketers
أهم حاجة الشروط
*Only marketers*
From all Industries
No students
*No sales*
*No hotels Reps*
*No restaurants Reps*
*No Travel Agents*
*No Advertising Agencies*
*Many have asked to Attend the Club*
((We Wish All can Attend,But Cant..))
*Criteria of Marketing Club Members*
•••••••••••••••••••••••••••••••••••••
For Better Harmony & Mind set.
*Must be only Marketer*
*Also Previous Marketing experience*
●Business Managers
●Country Manager,GM
●Directors, CEO
Are most welcomed to add Value to us.
■■■■■■■■■■■■■■■■
《 *Unmatched Criteria*》
Not Med Rep,
Not Key Account,
Not Product Specialist,
Not Sales Supervisor,
Not Sales Manager,
●●●●●●●●●●●●●●●●●●
But till you become a marketer
you can join other What'sApp group
*Marketing Lover Future Club Group*
■■■■■■■■■■■■■■■■
《 *Unmatched Criteria*》
For Conflict of Intrest
*Also Can't attend*
If Working in
*Marketing Services Provider*
=not *Hotel* Marketers
=not *Restaurant* Marketers
=not *Advertising* Marketer
=not *Event Manager*
=not *Market Researcher*.
■■■■■■■■■■■■■■■■
■■■■■■■■■■■■■■■■
*this Club for Only Marketers*
Very Soon we will have
*Business Leaders Club*
For Sales Managers & Directors
Will be Not for Markters
●●●●●●●●●●●●●●●●●●●●
■ *Only Marketers* ■
*& EPS Marketing Diploma*
●●●●●●●●●●●●●●●●●●●●
Confirm coming by Pvt WhatsApp
*To know the new Location*
*#Mahmoud_Bahgat*
00966568654916
*#Marketing_Club*
http://goo.gl/forms/RfskGzDslP
*اشترك بصفحة جمعية الصيادلة المصريين* عالفيسبوك
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*#Legendary_ADLAND*
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This document discusses key concepts in services marketing. It begins by providing examples of service businesses and defining what a service is. It then discusses that 50% of India's GDP comes from services. The document outlines the nature of services, how they differ from goods, and classifications of services. It covers strategic aspects of service marketing including segmentation, targeting, and positioning. Finally, it discusses the 7Ps of services marketing - product, price, place, promotion, process, people, and physical evidence - as well as concepts like service quality, the gaps model of service quality, and customer delight.
1) The document discusses the service sector in India and worldwide. It notes that the service sector now accounts for over half of India's GDP and a majority of employment. Services are growing faster than other sectors in most developed economies.
2) Key characteristics of services are discussed, including intangibility, inseparability, heterogeneity, and perishability, which present unique challenges for marketing services. Factors driving growth of the global and Indian service sectors are also summarized.
3) The document provides definitions of services from various scholars and organizations. Services are generally defined as activities or benefits that are intangible and do not result in ownership.
Services marketing refers to promoting and selling intangible products or services. It involves understanding customer needs, developing effective strategies, and delivering high-quality services. The key characteristics of services are that they are intangible, variable, perishable, and inseparable from the provider. Maintaining service quality requires defining standards, training employees, collecting feedback, using technology, and continuous improvement.
The document discusses key concepts related to marketing services. It defines services and their unique characteristics such as intangibility, inseparability, and variability. It also covers the 7 P's of the service marketing mix - product, price, place, promotion, people, process, and physical evidence. The document categorizes different types of services based on what is processed (people or objects) and the nature of the process (tangible or intangible actions). It also discusses service positioning, encounters, and the purchase process for services.
This document provides an introduction and overview of services marketing. It discusses how services have become increasingly important in the global economy. It defines what services are, highlights some key features of services such as intangibility and inseparability, and discusses how these features necessitate distinct approaches to marketing services. It also covers various ways of classifying services and some common problems in marketing services. Finally, it discusses important aspects of services marketing such as service design, forms of measuring service capacity, and techniques like blueprinting and service mapping.
This document provides information about E*Trade, an online brokerage firm. It discusses that E*Trade provides brokerage services for various markets and financial products. However, it is facing issues with customer satisfaction and meeting customer expectations. Some customers find the services difficult to use or are concerned about prices. The document proposes several recommendations to address these issues, including redesigning services to be more user-friendly, conducting promotional campaigns, training employees, empowering employees to improve customer service, educating customers, and forming a team to implement and evaluate the action plan.
This document provides an overview of services marketing. It defines services and differentiates between goods and services. Services are intangible, inseparable from their production and delivery, variable in quality, and perishable. They also involve customer participation and no transfer of ownership. The growth of the service sector has led to service economies where services contribute over 50% of GDP. Services marketing faces challenges due to the intangible nature of services and difficulty in ensuring consistent quality. It also discusses measuring productivity and customer expectations in services.
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Digital marketing typically refers to online marketing campaigns that appear on a computer, phone, tablet, or other device. It can take many forms, including online video, display ads, search engine marketing, paid social ads and social media posts. Digital marketing is often compared to “traditional marketing” such as magazine ads, billboards, and direct mail. Oddly, television is usually lumped in with traditional marketing.Digital marketing encompasses all marketing efforts that utilize electronic devices and the internet. It includes various online channels such as search engines, social media, email, websites, and mobile apps to connect with current and prospective customers. Key components of digital marketing include:
Search Engine Optimization (SEO): Optimizing websites to rank higher in search engine results pages (SERPs) to increase organic (non-paid) traffic.
Search Engine Marketing (SEM): Using paid advertising on search engines like Google to drive traffic to websites through paid search listings.
Social Media Marketing: Utilizing social media platforms (e.g., Facebook, Instagram, Twitter, LinkedIn) to connect with audiences and promote products or services.
Content Marketing: Creating and distributing valuable, relevant, and consistent content to attract and engage a target audience.
Email Marketing: Sending personalized messages to a targeted audience via email to promote products, services, or events.
Affiliate Marketing: Partnering with other businesses or individuals to promote products or services and earning commission based on sales generated.
Influencer Marketing: Collaborating with influencers (individuals with a dedicated social following) to promote products or services to their audience.
Online PR (Public Relations): Managing a brand's online presence and reputation through various online channels.
Analytics and Data-driven Marketing: Utilizing data and analytics tools to measure and optimize marketing campaigns' performance.
Mobile Marketing: Targeting users on mobile devices through mobile-optimized websites, apps, SMS, and other mobile channels.
Digital marketing offers businesses a cost-effective way to reach a global audience, measure campaign effectiveness in real-time, and adjust strategies based on data and insights. It continues to evolve with advancements in technology and changes in consumer behavior, making it essential for businesses to stay updated with current trends and best practices.
Digital marketing uses digital channels to promote a product or service.
Using digital marketing techniques and strategies helps businesses reach their target audience, engage with them, and ultimately convert them into customers.
Examples of digital marketing include SEO, PPC, social media marketing, content marketing, and leveraging traditional offline media for advertising.
Offline digital marketing includes out-of-home advertising, TV marketing
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nKfTqcvSQSG6QFQahXOO_SERVICE MARKETING - FULL SET OF NOTES.ppt
1. TOPIC # 1 AN INTRODUCTION TO SERVICES
Understanding the Concept of Service
The Servuction System
The Services Marketing Triangle
The Services Marketing Mix
The PBZ 5 Gap Model
The Five Dimensions of Service Quality
REQUIRED READING: Chapters 1 & 2 of Services
Marketing; integrating Customer Focus Across the
Firm 4/e by Zeithaml, Bitner & Gremler
2. UNDERSTANDING THE CONCEPT OF SERVICE
A service is an act or performance offered by one
party to another. Although the process may be tied
to a physical product, the performance is essentially
intangible and does not result in the ownership of
any of the factors of production.
Services are economic activities that create value
and provide benefits for customers at specific times
and places, as a result of bringing about a desired
change in – or on behalf of – the recipient of the
service.
Services lie at the very heart of economic activity in
any modern, industrialised economy. Economic
activity flows between three principal sectors of an
economy; Extractive (Mining and Farming),
Manufacturing and Service.
3. The service sector itself can be divided into five
subgroups;
i. Business Services – Consulting, Finance, Banking,
Design etc.
ii. Trade Services – Retailing, Maintenance,
Construction, Repair etc.
iii. Infrastructure Services – Communications,
Transportation, Energy, Water etc.
iv. Social / Personal Services – Restaurants,
Hospitality, Health Care, Entertainment etc.
v. Public Administration – Education, Government,
Security etc.
*Infrastructure Services are the essential links between the
sectors of the economy and are a prerequisite for an economy to
successfully industrialise.
4. Inherent differences between goods and services
exist and these differences result in unique, or at
least different, management challenges for
service businesses and for manufacturers that
offer services as a core offering. These differences
can be clustered under four main headings;
Intangibility; Heterogeneity; Simultaneity;
Perishability
Because of these basic differences between goods
and services, marketers of services face some
very real and distinctive challenges. The
challenges revolve around understanding
customer needs and expectations of service,
tangibilising the service offering, dealing with a
myriad of people and delivery issues and keeping
promises made to customers.
5. Source: A. Parasuraman, V.A. Zeithaml, and L. L. Berry, “A Conceptual Model of Service Quality and Its
Implications for Future Research,” Journal of Marketing 49 (Fall 1985), pp. 41–50.
6. Answers to questions such as those that follow
continue to challenge service marketers;
How can service quality be defined and improved
when the “product” is intangible and non-
standardised?
How can new services be designed and tested
effectively when the service is essentially an
intangible process?
How can the firm be certain it is communicating a
consistent and relevant image when so many
elements in the marketing mix communicate to
customers and some of these elements are the
service providers themselves?
How does the firm accommodate fluctuating demand
when capacity is fixed and the service itself is
perishable?
7. How can the firm best motivate and select service
employees who, because the service is delivered in
real time, become a critical part of the product
itself?
How should prices be set when it is difficult to
determine actual costs of production and price may
be inextricably intertwined with perceptions of
quality?
How should the firm be organised so that good
strategic and tactical decisions are made when a
decision in any one of the functional areas of
marketing, operations and human resources may
have significant impact on the other two areas?
How can the organisation protect new service
concepts from competitors when service processes
cannot be legally patented?
8. How does the firm communicate quality and value
to consumers when the offering is intangible and
cannot be readily tried or displayed?
How can the organisation ensure the delivery of
consistent quality service when both the
organisation’s employees and customers
themselves can affect the service outcome?
9. The Service Package is defined as a bundle of
goods and services provided in some service
production and delivery environment. It consists
of four features:
i. Supporting Facility - the physical resources that
must be in place before a service can be offered.
ii. Facilitating Goods - the material purchased,
consumed and / or items provided by the
customer.
iii. Explicit Services - the benefits that are readily
observable by the senses and consist of the
essential or intrinsic features of the service.
iv. Implicit Services - psychological benefits that the
customer may sense only vaguely/subconsciously.
10. THE SERVUCTION SYSTEM MODEL
What the consumer purchases when he or she
purchases a service is an experience. The
Servuction System is what creates the experience
and it is the experience that creates the perceived
benefit.
The implications of the system are;
In order to receive the benefit, the consumer must
be part of the system. (remote services?)
Service managers must manage a variety of
disparate interactions and variables.
The benefit bundle is a function of a variety of
inputs, some less controllable than others.
11. Back Stage
Organisation and
System
[This component of
the system is not
visible to the
customer]
The
Servicescape /
Physical
Evidence
Contact
Personnel
[Visible to the
customer]
Customer
A
Other
Customers
Bundle of Service Benefits
peceived by Customer A
12. Personal Artifacts Signage Style, Decor
Layout Equipment Furnishings
TemperatureAir Quality Noise
Music Odors
The Servicescape - the inanimate, non-living physical
evidence used to create the service environment
Ambient Conditions
Space/Function
Signs, Symbols, Artifacts
13. Boundary Spanning Personnel (BSPs) are the public
face and “the permeable surface” of the service
organisation
Apathy: DILLIGAD (Do I look like I give a damn)
Brush-off: Dismisses the customer completely
Coldness: Doesn’t care what the customer wants
Condescension:You are the customer, you must be stupid
Robotism: Customers are inputs to be processed
Rulebook: Adheres to rules which make no sense
Runaround: Passes off to another service provider
14. Other Customers – can enhance or detract from an
individual’s service experience through Active
Influence (e.g. unruly customers, crying children)
Passive Influence (e.g. customers who show up
late for appointments).
Invisible Organization and Systems – People,
Processes, Equipment, Procedures [Hard and
Soft Technology]
15. THE SERVICES MARKETING TRIANGLE
The Services Marketing Triangle shows the
three interlinked groups that work together to
develop, promote and deliver services.
Interactive Marketing
(keeping promises)
External Marketing
(making promises)
Internal Marketing
(enabling promises)
Service
providers
Customers
Management
Adapted from
Bitner 1995
16. THE SERVICES MARKETING MIX
Acknowledgement of the implications of the specific
characteristics of services has led service marketers
to adopt the concept of an expended marketing mix
for services;
Product,
Price,
Marketing Communications,
Logistics,
People,
Physical Evidence,
Process.
17. People; All human actors who play a part in
service delivery and thus influence the buyer’s
perceptions; namely, the firm’s personnel, the
customer, and other customers in the service
environment.
Physical Evidence; The environment in which the
service is delivered and where the firm and
customer interact, and any tangible components
that facilitate performance or communication of
the service.
Process; The actual procedures, mechanisms and
flow of activities by which the service is delivered
- the service delivery and operating systems.
18. Word of Mouth
Communication
Personal Needs Past Experience
Expected Service
Perceived Service
Service Delivery
(including pre-
and post- contacts)
Translation of
Perceptions into
Service Quality
Specs.
Management Perceptions
of Consumers Expectations
External
Communications
to Consumers
Provider
Gap 1
Gap 2
Gap 3
Gap 4
Gap 5
THE PBZ FIVE GAP MODEL
19. Managing customer satisfaction;
Perceived service, not actual service, is all that
matters (Perception is Reality).
Possible to manage expectations to produce
satisfaction without altering the service.
Importance of customer satisfaction;
Without customers the firm does not exist.
Service businesses must engage in proactive
customer satisfaction observation.
Waiting for complaints is simply too slow.
Expected service < performance = satisfied customer
Expected service > performance = unsatisfied
customer
Expected service is a ƒ(past experiences, marketing
communications, peers, etc.)
Performance = ƒ(expected service, perceived service)
20. Why do people switch (or defect)?
0
5
10
15
20
25
30
35
40
45
40% service
8% price
21. 1 in 4 unhappy
customers
switch
1 in 27 unhappy
customers
complain
23. It is easier and five
to seven times
cheaper to keep a
customer than to
gain a new one
24. Three Common Mistakes:
Customer service as
cost rather than an
investment.
Customer service is a
constantly rising bar.
Failure to link
customer satisfaction
to the bottom lines.
26. TOPIC # 2 SERVICE CONSUMER BEHAVIOUR
Introduction
Service Consumer Decision-Making
The Role of Culture in Services
REQUIRED READING: Chapters 3, 4 & 5 of Services
Marketing; integrating Customer Focus Across the
Firm 4/e by Zeithaml, Bitner & Gremler
27. INTRODUCTION
Service organisations must follow and successfully
deliver on the Marketing Concept.
To achieve this, service marketers need to
understand how consumers choose and evaluate
their market offerings. The unique characteristics of
services necessitate different consumer evaluation
processes from those used in assessing tangible
goods. Recognising these differences and thoroughly
understanding consumer evaluation processes are
critical for the customer focus on which effective
services marketing is based.
Search Qualities are attributes of a market offering
that a consumer can determine before purchasing it.
Experience Qualities are attributes that can only be
discerned after purchase or during consumption.
Credence Qualities are characteristics that the
consumer may find impossible to evaluate even after
purchase and consumption.
28. Difficult to evaluate
Easy to evaluate
High in search
qualities
High in experience
qualities
High in credence
qualities
Most
Goods
Most
Services
Market offerings high in search qualities are easiest to evaluate
prior to purchase. As we move to the right of the continuum,
evaluation becomes more difficult.
29. Because experience and credence qualities
dominate in services, consumers deploy different
evaluation processes than those they use with
tangible goods, where search qualities dominate.
Specific areas where the characteristics of services
lead to divergent evaluation processes and altered
consumer behaviours are;
Information search,
Evaluative criteria,
Size and composition of the evoked set,
Perceived risk,
Adoption of innovations,
Brand loyalty,
Assessment of value,
Attribution of dissatisfaction.
30. SERVICE CONSUMER DECISION-MAKING
Using an adaptation of the basic consumer
decision-making process, we can investigate
service consumer behaviour under four major
headings;
I. Information Search.
II. Evaluation of Alternatives.
III. Purchase and Consumption.
IV. Post-purchase Evaluation.
In the purchase and consumption of services,
these steps do not occur in a linear sequence
as they do in the purchase of tangible goods.
32. THE ROLE OF CULTURE IN SERVICES
Culture is learned, shared, transmitted from one
generation to the next, and is multidimensional.
Culture is important in services marketing because
of its effects on the ways customers evaluate and
use service. Also influences the way companies &
their service employees interact with customers.
Culture is important when we consider
international services marketing but it is also
critical within countries. More and more, individual
countries are becoming multicultural, making the
need to understand how this factors affects
evaluation, purchase, and use of services critical.
Definitions of the elements of culture vary, but a
simple list of the major areas would include;
Language (both verbal and nonverbal), Values and
Attitudes, Manners and Customs, Material Culture,
Aesthetics, Education and Social Institutions.
33. TOPIC # 3 CUSTOMER EXPECTATIONS OF SERVICE
Introduction
Factors that influence Customer Expectations of
Service
Current Issues involving Expectations of Service
Customers
REQUIRED READING: Chapter 3 (3/e) or Chapter 4
(4/e) of Services Marketing; Integrating Customer
Focus Across the Firm by Valarie A. Zeithaml and
Mary Jo Bitner
34. INTRODUCTION
Customer expectations are beliefs about service
delivery that function as standards or reference
points against which performance is judged.
Because customers compare their perceptions of
performance with these reference points when
evaluating service quality, thorough knowledge
about customer expectations is critical to service
marketers.
Zeithaml, Berry and Parasuraman (1993) have put
forward a methodology for understanding customer
service expectations which recognises that; [A]
Customers hold different types of expectations
about service (Desired & Adequate Service), [B]
Customers are willing to accept a level of variation
in service; a so-called Zone of Tolerance exists, [C]
Zones of Tolerance vary for different service
dimensions and [D] Zones of Tolerance vary for
First-time and Recovery Service.
35. [A] Dual Customer
Expectation Levels
Adequate Service
Desired Service
Zone of
Tolerance
[B] The Zone of Tolerance
Adequate Service
Desired Service
Zone of
Tolerance
36. [C] Zones of Tolerance for Different Service Dimensions
Most Important Factors Least Important Factors
Level
of
Expectation
Source: Berry, Parasuraman, and Zeithaml (1993)
Adequate Service
Desired Service
Zone of
Tolerance
Desired
Service
Adequate
Service
Zone
of
Tolerance
Desired Service
Adequate Service
37. [D] Zones of Tolerance for First-Time and Recovery Service
First-Time Service
Outcome
Process
Outcome
Process
Recovery Service
Expectations
LOW HIGH
Source: Parasuraman, Berry and Zeithaml (1991)
38. FACTORS THAT INFLUENCE CUSTOMER
EXPECTATIONS OF SERVICE
“Service expectations are formed by many
uncontrollable factors, from the experience of
customers with other companies and their
advertising to a customer’s psychological state
at the time of service delivery. Strictly
speaking, what customers expect is as diverse
as their education, values and experience. The
same advertisement that shouts “personal
service” to one person tells another that the
advertiser has promised more than it can
possibly deliver”. (Davidow and Uttal 2000)
39. Factors that Influence Desired Service
Desired
Service
Adequate
Service
Zone
of
Tolerance
Enduring Service
Intensifiers e.g. Personal
Service Philosophy, Derived
Service Expectations
(family, peers)
Personal Needs;
Physical, Social,
Psychological,
Functional.
40. Factors that Influence Adequate Service
Desired
Service
Adequate
Service
Zone
of
Tolerance
Self-Perceived
Service Role
Situational
Factors
Perceived Service
Alternatives
Transitory Service
Intensifiers
Predicted Service
41. Enduring Service Intensifiers are long term individual
factors that make a customer more aware of the need
for good service and the quality of service received
e.g. personal service philosophy, derived Service
expectations (family, peers, experience, education)
Transitory Service Intensifiers are temporary, usually
short-term, individual factors that make a customer
more aware of the need for service e.g. breakdown in
office equipment during a busy period, auto
insurance when car has been written off.
Perceived Service Alternatives are other providers
from whom the customer can obtain service. If
customers have multiple service providers to choose
from, or if they can provide the service for
themselves, their levels of adequate service are
higher than those of customers who believe it is not
possible to get better service elsewhere.
42. Customer’s Self-perceived Service Role is a
customers perceptions of the degree to which
customers exert an influence on the level of service
they receive. In other words, customers’ expectations
are partly shaped by how well they believe they are
performing their own roles in service delivery i.e. in
specifying the level of service expected, in assuming
the responsibility for complaining when service is
poor. Customers’ Zones of Tolerance expand when
they sense they are not fulfilling their roles.
Situational Factors are service performance
conditions that customers view as beyond the control
of the service provider. Customers who recognise
that these contingencies are not the fault of the
service company may accept lower levels of adequate
service given the context. In general, situational
factors temporarily lower the level of adequate
service, widening the zone of tolerance.
43. The final factor that influences adequate service is
Predicted Service, the level of service customers
believe they are likely to get. This type of service
expectation can be viewed as predictions made by
the customers about what is likely to happen during
an impending transaction or exchange. If customers
predict good service, their levels of adequate service
are likely to be higher than if they predict poor
service.
When consumers are interested in purchasing
services, they are likely to seek or take in information
from several different sources. In addition to active
and passive types of external search for information,
consumers may conduct an internal search by
reviewing the information held in memory about the
service.
44. Factors that Influence Predicted Service & Desired Service
Desired
Service
Adequate
Service
Zone
of
Tolerance
Predicted
Service
Explicit Service
Promises
Implicit Service
Promises
Word-of-Mouth
Past Experience
45. Explicit Service Promises are personal and non-
personal statements about the service made by the
organisation to customers. The statements are
personal when they are communicated by
salespeople or service or repair personnel. They are
non-personal when they come from advertising,
brochures or other written publications. Explicit
service promises are one of the few influences on
expectations that are completely in the control of the
service provider.
Implicit Service Promises are service-related cues
other than explicit promises that lead to inferences
about what the service should and will be like. These
quality cues are dominated by price and the tangibles
associated with the service. In general, the higher
the price and the more impressive the tangibles, the
more a customer will expect from the service.
46. The importance of Word-of-Mouth (WOM)
Communication in shaping expectations of service is
well documented. These personal and sometimes
non-personal statements made by parties other than
the organisation convey to customers what the
service will be like and influence both predicted and
desired service. WOM tends to be very important in
services that are difficult to evaluate before purchase
and direct experience of them. Development of WOW
Past Experience, the customer’s previous exposure
to service that is relevant to the focal service, is
another force in shaping predictions and desires. In a
general sense, past experience may incorporate
previous experience with the focal brand, typical
performance of a favourite brand, experience with
the brand last purchased or the top-selling brand, as
well as the average performance a customer believes
represents a realistic level of service to expect.
47. CURRENT ISSUES INVOLVING EXPECTATIONS OF
SERVICE CUSTOMERS
Four key questions are at the forefront of modern
services marketing;
i. What does a service marketer do if customer
expectations are “unrealistic”?
ii. How does a company exceed customer service
expectations?
iii. Do customer service expectations escalate?
iv. How does a service company stay ahead of
competition in meeting customer expectations?
48. TOPIC # 4 CUSTOMER PERCEPTIONS OF SERVICE
Introduction
What is Customer Satisfaction?
Service Quality
Building Blocks of Satisfaction & Service Quality
Critical Service Encounters Research; The Critical
Incident Technique
The Evidence of Service
Influencing Customer Perceptions
REQUIRED READING: Ch. 4 (3/e) or Ch. 5 (4/e)
of Services Marketing; Integrating Customer
Focus Across the Firm by Zeithaml and Bitner
49. INTRODUCTION
Understanding how customers perceive services, how
they assess whether they have experienced quality
service and whether they are satisfied is at the heart
of successful services marketing. In gaining this
understanding it is essential to remember that the
entire issue of quality & satisfaction is based on
perception of service – not some predetermined
objective criteria of what service is and should be.
A tendency exists to use the terms satisfaction and
quality interchangeably but the two concepts are
fundamentally different in terms of their underlying
causes and outcomes. While they have things in
common, satisfaction is generally viewed as a
broader concept while service quality assessment
focuses specifically on dimensions of service. In other
words perceived service quality is a component of
customer satisfaction as illustrated over page.
51. WHAT IS CUSTOMER SATISFACTION?
“Satisfaction is the consumer’s fulfillment response.
It is a judgement that a … service feature, or the …
service itself, provides a pleasurable level of
consumption-related fulfillment”.
(Oliver 1997)
In essence this means that satisfaction is the
customers’ evaluation of a service in terms of
whether that service has met their needs and
expectations. Failure to meet needs and expectations
is disconfirmation and thus assumed to result in
dissatisfaction with the service.
Service customer satisfaction will be influenced by
specific service features and by perceptions of service
quality as seen in the earlier diagram.
52. Service customer satisfaction will also be influenced
by;
Customer emotions; mood state, life satisfaction.
Attributions for Service Success or Failure; i.e. the
perceived cause of the events leading to service
failure or success.
Perceptions of Equity or Fairness; treated equitably
and fairly relative to other customers?
Outcomes of service customer satisfaction are;
Increased customer retention
Positive word-of-mouth communications
Increased revenues
53. SERVICE QUALITY
Technical and Functional (Process) Service Quality.
Research suggests that customers do not perceive
service quality as a uni-dimensional concept but
rather that customers’ assessments of service quality
include perceptions of multiple factors.
Reliability; the ability to perform the promised
service dependably and accurately.
Assurance; knowledge and courtesy of employees
and their ability to convey trust and confidence.
Tangibles; physical facilities, equipment, and
appearance of personnel.
Empathy; caring, individualized attention the firm
provides its customers.
Responsiveness; willingness to help customers and
provide prompt service.
54. Providing service as promised
Dependability in handling customers’ service
problems
Performing services right the first time
Providing services at the promised time
Maintaining error-free records
Keeping customers informed as to when
services will be performed
Prompt service to customers
Willingness to help customers
Readiness to respond to customers’ requests
RELIABILITY
RESPONSIVENESS
Employees who instill confidence
in customers
Making customers feel safe in
their transactions
Employees who are consistently
courteous
Employees who have the
knowledge to answer customer
questions
ASSURANCE
Giving customers individual
attention
Employees who deal with
customers in a caring fashion
Having the customer’s best
interest at heart
Employees who understand the
needs of their customers
Convenient business hours
EMPATHY
Modern equipment
Visually appealing facilities
Employees who have a neat, professional
appearance
Visually appealing materials associated
with the service
TANGIBLES
55. BUILDING BLOCKS OF SATISFACTION AND
SERVICE QUALITY; SERVICE ENCOUNTERS
From the customer’s point of view, the most vivid
impression of service occurs in the service encounter,
at the Moment of Truth, when the customer interacts
with the service firm. (Interactive Marketing)
It is in these encounters that customers receive a
snapshot of the organisation’s service quality, and
each encounter contributes to the customer’s overall
satisfaction and willingness to do business with the
organisation again.
Types of encounters: (1) remote encounters
(2) phone encounters (3) face-to-face encounters
Each service encounter is an opportunity for the
service organisation to: build trust; reinforce quality;
build brand identity; increase loyalty
56. CRITICAL SERVICE ENCOUNTERS RESEARCH; THE
CRITICAL INCIDENT TECHNIQUE
GOAL - understanding actual events & behaviors that
cause customer dis/satisfaction in service encounters
METHOD - Critical Incident Technique (CIT)
DATA - stories from customers and employees
OUTPUT - identification of themes underlying
satisfaction and dissatisfaction with service encounters
Questions employed in CIT research:-
Think of a time when, as a customer, you had a particularly
satisfying (dissatisfying) interaction with an employee of .
When did the incident happen?
What specific circumstances led up to this situation?
Exactly what was said and done?
What resulted that made you feel the interaction was satisfying
(dissatisfying)?
57. 1. Recovery: 2. Adaptability:
3. Spontaneity:
4. Coping:
Employee Response
to Service Delivery
System Failure
Employee Response
to Customer Needs
and Requests
Employee Response
to Problem Customers
Unprompted and
Unsolicited Employee
Actions and Attitudes
On the basis of thousands of service encounter stories, four
common themes have been identified as the sources of customer
satisfaction / dissatisfaction in memorable service encounters. The
themes encompass service behaviours in encounters spanning a
wide variety of industries.
58. THEME #1 RECOVERY
• Acknowledge problem
• Explain causes
• Apologize
• Compensate/upgrade
• Lay out options
• Take responsibility
• Ignore customer
• Blame customer
• Leave customer to
fend for him/herself
• Downgrade
• Act as if nothing is
wrong
DO DON’T
59. THEME #2 ADAPTABILITY
• Recognize the
seriousness of the need
• Acknowledge
• Anticipate
• Attempt to
accommodate
• Explain rules/policies
• Take responsibility
• Exert effort to
accommodate
• Promise, then fail to
follow through
• Ignore
• Show unwillingness to
try
• Embarrass the
customer
• Laugh at the customer
• Avoid responsibility
DO DON’T
60. THEME #3 SPONTANEITY
• Take time
• Be attentive
• Anticipate needs
• Listen
• Provide information
(even if not asked)
• Treat customers fairly
• Show empathy.
• Acknowledge by name
• Exhibit impatience
• Ignore
• Yell/laugh/swear
• Steal from or cheat a
customer
• Discriminate
• Treat impersonally
DO DON’T
61. THEME #4 COPING
• Listen
• Try to accommodate
• Explain
• Let go of the
customer
• Take customer’s
dissatisfaction
personally
• Let customer’s
dissatisfaction affect
others
DO DON’T
62. THE EVIDENCE OF SERVICE
Because services are intangible, customers are
searching for evidence of service in every
interaction they have with an organisation.
The diagram over page depicts the three major
categories of evidence as experienced by the
customer : People, Process and Physical Evidence.
These categories together represent the service and
provide the evidence that tangibilises the market
offering.
All of these evidence elements, or a subset of them,
are present in every service encounter a customer
has with a service firm and are critically important
in managing service encounter quality and creating
customer satisfaction.
63. Evidence of Service from the Customer’s Point of View
People
Process
Physical
Evidence
Contact employees
Customer him/herself
Other customers
Operational
flow of
activities
Steps in
process
Flexibility vs.
standard
Technology
vs. human
Tangible
communication
Servicescape
Guarantees
Technology
64. INFLUENCING CUSTOMER PERCEPTIONS
Measure and manage Customer Satisfaction and
Service Quality. (Service Quality Information
System - SQIS)
Aim for Customer Quality and Satisfaction in every
service encounter. (Zero defects)
Plan for effective Service Recovery. (Theme #1)
Facilitate Adaptability and Flexibility. (Theme #2)
Encourage Spontaneity. (Theme #3)
Help employees Cope with Problem Customers.
(Theme #4)
Manage the Evidence of Service to reinforce
perceptions.
65. REQUIRED READING: Chapter 6 of Services
Marketing; integrating Customer Focus Across the
Firm 4/e by Zeithaml, Bitner & Gremler
The Services Marketing Information System/SQIS.
In services, as with any offering, a firm that does no
marketing research will suffer marketing myopia
and will fail to fulfill the marketing concept.
Marketing research must focus on service issues
such as what features are most important to
customers, what level of these features customers
expect, and what customers think the company can
and should do when problems occur in service
delivery.
TOPIC # 5 SERVICE MARKET RESEARCH
66. COMMON SERVICE RESEARCH OBJECTIVES
• To identify dissatisfied customers.
• To discover customer requirements or expectations.
• To monitor and track service performance.
• To assess overall company performance compared
to competition.
• To assess customer expectations/perceptions gaps.
• To gauge effectiveness of changes in service.
• To appraise service performance of individuals and
teams for rewards.
• To determine expectations for a new service.
• To monitor changing expectations in an industry
• To forecast future expectations.
67. CRITERIA FOR AN EFFECTIVE SERVICES RESEARCH
PROGRAMME
A Services Research Programme can be defined
as the composite of separate studies and types
needed to address research objectives and
execute an overall measurement strategy.
Myriad types of research could be considered in
a research programme but certain criteria must
be met if the programme is to be effective and
efficient.
Understanding these criteria will help a
company evaluate different types of research
and chose the ones most appropriate to its
research objectives.
68. CRITERIA FOR EFFECTIVE SERVICES RESEARCH
Research
Objectives
Includes
Perceptions
and
Expectations
of
Customers
Includes
Measures
of
Loyalty or
Behavioral
Intentions
Includes
Statistical
Validity
When Necessary
Measures
Priorities
or
Importance
Occurs
with
Appropriate
Frequency
69. ELEMENTS IN AN EFFECTIVE SERVICES
MARKETING RESEARCH PROGRAMME
A good services marketing research programme
includes multiple types of research studies.
The composite of studies and types of research
will differ by company, and the particular
portfolio for any company will match company
resources and the particular services marketing
issues being addressed.
All service organisations require a rich,
multifaceted flow of information to operate
successfully.
70. A Selection of Services Research Techniques.
Customer Complaint
Solicitation
“Relationship” Surveys
Post-Transaction Surveys
Customer Focus Groups
Identify dissatisfied customers to
attempt recovery; identify most
common categories of service
failure for remedial action
Obtain customer feedback while
service experience is still fresh; act on
feedback quickly if negative patterns
develop
Use as input for quantitative
surveys; provide a forum for
customers to suggest service-
improvement ideas
Assess company’s service performance
compared to competitors; identify
service-improvement priorities; track
service improvement over time
Primary Research Objective Type of Research
71. Future Expectations Research
To forecast future expectations of
customers
To develop and test new service
ideas
Determine the reasons why
customers defect
Measure internal service
quality; identify employee-
perceived obstacles to improve
service;
Track employee morale and
attitudes
Measure individual employee
service behaviors for use in
coaching, training, performance
evaluation, recognition and
rewards;
Identify systemic strengths and
weaknesses
in service
Lost Customer Research.
Employee Surveys.
“Mystery Shopping” of
Service Providers.
72. TOPIC # 6 SERVICE RECOVERY
Service failure is inevitable even for the best of firms,
with the best of intentions and even for those with
“world class” service systems.
To fully understand and retain their customers, firms
must understand what customers expect when
service failures occur, and implement effective
strategies for service recovery.
Service Recovery refers to actions taken by an
organisation in response to service failure.
Service Failure occurs for all kinds of reasons.
An effective service recovery strategy has multiple
potential impacts. It can increase customer
satisfaction and loyalty and generate positive word-
of-mouth.
A well-designed, well-documented service recovery
strategy also provides information that can be used
to improve service as part of a continuous
improvement effort.
73. By making adjustments to service processes,
systems and outcomes based on learning points from
service recovery experiences, companies increase
the likelihood of “doing it right the first time” (zero
defects). In turn this reduces costs of failures and
increases initial customer satisfaction. There are
tremendous downsides to having no service recovery
or ineffective service recovery strategies.
Poor recovery following a bad service experience can
lead to customers who are so dissatisfied they
become “ terrorists”, actively pursuing opportunities
to openly criticise the company.
Repeated service failures without an effective
recovery strategy in place can aggravate the best
employees. The costs in employee morale and lost
employees can be huge, but are often overlooked.
The Service Recovery Paradox.
74. CUSTOMER RESPONSE FOLLOWING SERVICE FAILURE
Service Failure
Do Nothing
Take Action
Stay with Provider
Switch Providers
Complain to
Provider
Complain to Family
& Friends
Complain to
Third Party
Stay with Provider
Switch Providers
75. TYPES OF COMPLAINERS
Research suggests that people can be grouped into
categories based on how they respond to service
failures. Four categories of response types have
been identified by Singh (1990);
Passives; least likely to take action, less likely to
engage in WOM. Personal values are anti-
complaining.
Voicers; actively complain, less likely to engage in
negative WOM or switching behaviour. S.O.’s “best
friends”.
Irates; above average in propensity to complain,
prone to WOM and switching behaviour.
Activists; above average propensity to complain and
participate in WOM. Can become “terrorists”.
76. CUSTOMER COMPLAINT EXPECTATIONS
When they take the time and effort to complain,
customers generally have high expectations. They
expect to be helped quickly, to be compensated for
the grief and hassle of being inconvenienced, and to
be treated nicely in the process.
Specifically, customers want justice and fairness in
handling their complaints. Brown et al (1998) have
documented three specific types of justice sought
by complaining customers:
Outcome Fairness; matched level of dissatisfaction.
Procedural Fairness; fairness of rules and policies.
Interaction Fairness; hassle free, speedy, honest.
78. CAUSES BEHIND
SERVICE SWITCHING
Service
Switching
Behavior
• High Price
• Price Increases
• Unfair Pricing
• Deceptive Pricing
Pricing
• Location/Hours
• Wait for Appointment
• Wait for Service
Inconvenience
• Service Mistakes
• Billing Errors
• Service Catastrophe
Core Service Failure
• Uncaring
• Impolite
• Unresponsive
• Unknowledgeable
Service Encounter Failures
• Negative Response
• No Response
• Reluctant Response
Response to Service Failure
• Found Better Service
Competition
• Cheat
• Hard Sell
• Unsafe
• Conflict of Interest
Ethical Problems
• Customer Moved
• Provider Closed
Involuntary Switching
79. SERVICE GUARANTEES
Service organisations are beginning to
recognise that guarantees serve not only as a
marketing tool but as a means for defining,
cultivating and maintaining quality throughout
an organisation.
guarantee = an assurance of the fulfillment of
a condition (Webster’s Dictionary).
for products, guarantee often done in the form
of a warranty.
services are often not guaranteed
cannot return the service
service experience is intangible, (so what do
you guarantee?)
80. Characteristics of an Effective Service Guarantee
Unconditional
The guarantee should make its promise unconditionally -
no strings attached.
Meaningful
It should guarantee elements of the service that are
important to the customer.
The payout should cover fully the customer's
dissatisfaction.
Easy to Understand and Communicate
For customers - they need to understand what to expect.
For employees - they need to understand what to do.
Easy to Invoke and Collect
There should not be a lot of hoops or red tape in the way
of accessing or collecting on the guarantee.
Source: Christopher W.L. Hart, “The Power of Unconditional Guarantees,” Harvard Business
Review, July-August, 1988, pp. 54-62.
81. Why a Good Guarantee Works:
forces company to focus on customers.
sets clear standards.
generates feedback.
forces company to understand why it failed.
builds “marketing muscle”.
Does everyone need a guarantee?
Reasons companies do NOT offer guarantees:
guarantee would be at odds with company’s
image.
too many uncontrollable external variables.
fears of cheating by customers.
costs of the guarantee are too high.
82. Service guarantees work for companies who are
already customer-focused.
Effective guarantees can be BIG deals - they put
the company at risk in the eyes of the customer.
Customers should be involved in the design of
service guarantees.
The guarantee should be so stunning that it
comes as a surprise -- a WOW!! Factor.
“It’s the icing on the cake, not the cake”
REQUIRED READING: Chapter 8 of Services
Marketing; integrating Customer Focus Across
the Firm 4/e by Zeithaml, Bitner & Gremler
83. TOPIC # 7 SERVICE DEVELOPMENT & DESIGN
Introduction
Risks of Verbalisation
Service Blueprinting
Benefits of Service Blueprinting
Building a Service Blueprint
Components of a Service Blueprint
Application of Service Blueprints
Service Process Characteristics
Service Positioning through Structural Change
New Service Development Process
REQUIRED READING: Chapter 9 of Services
Marketing; integrating Customer Focus Across
the Firm 4/e by Zeithaml, Bitner & Gremler
85. INTRODUCTION
Because services are intangible, they are difficult to
describe and communicate. Because services are
typically people-intensive they are heterogeneous.
Because services cannot be touched, examined or
tried out (due to lack of search qualities), people
frequently resort to words in their efforts to describe
them.
“Verbal and/or written descriptions are inadequate for
understanding service systems. Dependence on words leads to
communication problems at every level in the service
organisation, creating confusion, misunderstanding and poor
decision-making. Blueprinting provides an objective, visual and
quantitative method for describing service systems down to the
lowest level of detail. Through Blueprinting, all parties involved in
services marketing, management and planning, can gain greater
awareness of the complexities of service systems, a common
ground for communication, and a mechanism for capturing and
sharing information across functional and organisational lines on
an ongoing basis to help improve decisions & actions”.
(Shostack 1992)
86. RISKS OF VERBALISATION
Oversimplification.
Incompleteness.
Subjectivity.
Biased Interpretation.
Service Blueprinting
is a methodology for
overcoming these problems.
87. SERVICE BLUEPRINTING; WHAT IS IT?
Service Blueprinting is a mapping technique
designed to fully and accurately portray any
service system in it’s entirety so that the
system can be understood objectively and
dealt with by all components of the service
organisation on the same basis.
It allows the service organisation to
simultaneously depict the service process, the
points of customer contact, and the evidence
of service from the customer’s point of view.
88. BENEFITS OF SERVICE BLUEPRINTING
Macro and micro-benefits – Kingman-Brundage
& Gummesson (1991) from course text.
One of the greatest benefits of Service
Blueprinting is how educational it can be;
1. It forces people to confront exactly how little
they know about their service system.
2. The effort to visualise the entire system makes
one consider the system in a new and more
comprehensive way.
3. The difficulties and explorations that
Blueprinting creates are, in their own right, an
important contribution to the knowledge every
service manager and marketer needs in order to
effectively deal with the challenges of the job.
89. 4. Service Blueprints have an equally great
benefit in managing and planning services on
a day-to-day basis. They provide a means for a
group of people to communicate and share
knowledge, debate and refine their
understanding, and prioritise and focus their
efforts by having a visible map as a reference
point.
5. Service Blueprints also bring bias and
interpretation issues out into the open where
resolution on the basis of facts rather than
subjective opinion is possible.
90. BUILDING A SERVICE BLUEPRINT
Creating a Service Blueprint begins with developing
a picture of the entire service system at an
overview level. Services are integrated systems that
can be broken down into three basic components
and all services can be understood in their entirety
by understanding these three elements;
First are the steps, tasks and activities necessary to
the rendering of the service i.e. the service process.
Next are the means by which the tasks are
executed, typically some combination of people
interactions and tangible goods.
Finally, the evidence presented to the consumer
which is everything he / she experiences sensorially
that relates to the service.
91. Step 1
Identify
the
process
to be
blue-
printed.
Step 2
Identify
the
customer
or
customer
segment.
Step 3
Map the
process
from the
customer’
s point of
view.
Step 4
Map
contact
employee
actions,
onstage
and back-
stage.
Step 5
Link
customer
and contact
person
activities to
needed
support
functions.
Step 6
Add
evidence
of service
at each
customer
action
step.
92. COMPONENTS OF A SERVICE BLUEPRINT
CUSTOMER ACTIONS
line of interaction
“ONSTAGE” CONTACT EMPLOYEE ACTIONS
line of visibility
“BACKSTAGE” CONTACT EMPLOYEE ACTIONS
line of internal interaction
SUPPORT PROCESSES
93. Driver
Picks
Up Pkg.
Dispatch
Driver
Airport
Receives
& Loads
Sort
Packages
Load on
Airplane
Fly to
Destinatio
n
Unload
&
Sort
Load
On
Truck
Express Mail Delivery Service
SUPPORT
PROCESS
CONTACT
PERSON
(Back
Stage)
(On
Stage)
CUSTOME
R
PHYSICAL
EVIDENCE
Customer
Calls
Customer
Gives
Package
Truck
Packaging
Forms
Hand-held
Computer
Uniform
Receive
Package
Truck
Packaging
Forms
Hand-held
Computer
Uniform
Deliver
Package
Customer
Service
Order
Fly to
Sort
Center
94. Overnight Hotel Stay
SUPPORT
PROCESS
CONTACT
PERSON
(Back
Stage)
(On
Stage)
CUSTOMER
Hotel
Exterior
Parking
Cart for
Bags
Desk
Registration
Papers
Lobby
Key
Elevators
Hallways
Room
Cart for
Bags
Room
Amenities
Bath
Menu Delivery
Tray
Food
Appearance
Food
Bill
Desk
Lobby
Hotel
Exterior
Parking
Arrive
at
Hotel
Give Bags
to
Bellperson
Check in
Go to
Room
Receive
Bags
Sleep
Shower
Call
Room
Service
Receive
Food
Eat
Check out
and
Leave
Greet and
Take
Bags
Process
Registration
Deliver
Bags
Deliver
Food
Process
Check Out
Take Bags
to Room
Take
Food
Order
Registration
System
Prepare
Food
Registration
System
PHYSICAL
EVIDENCE
95. APPLICATION OF SERVICE BLUEPRINTS
New Service Development;
• concept development.
• market testing.
Supporting a “Zero Defects” Culture;
• managing reliability.
• identifying empowerment issues.
Service Recovery Strategies;
• identifying service problems.
• conducting root cause analysis.
• modifying processes.
96. Blueprints Can Be Used By:
Service Marketers;
creating realistic customer expectations, service
system design, promotion.
Operations Management;
rendering the service as promised, managing fail
points, training systems, quality control.
Human Resources;
empowering the human element, job
descriptions, selection criteria, appraisal
systems.
System Technology;
providing necessary tools, system specifications,
personal preference databases.
97. SERVICE PROCESS CHARACTERISTICS
There are two complementary ways to describe
service processes:
i. According to the steps and sequences that
constitute the process i.e. the complexity of the
process. We can define a service’s complexity by
analysing the number and intricacy of the steps
required to perform it.
ii. According to the executional latitude or variability
of those steps and sequences. The degree of
freedom / choice allowed or inherent in a process
step or sequence can be thought of as its
divergence. High divergence – a largely
customised service. Low divergence – largely
standardised.
98. Services therefore can be classified and analysed
according to their overall complexity and
divergence;
Highly complex, highly divergent: Physician,
Professions.
High complexity, low divergence: Hotel,
Telecoms company.
Low complexity, high divergence: Entertainment.
Low complexity, low divergence: Car wash, Fast
food.
99. SERVICE POSITIONING THRU STRUCTURAL CHANGE
Once a service has been documented accurately it
can be analysed for opportunities either to increase
or decrease one or both variables.
Four generic strategic restructuring alternatives;
1. Reduced divergence. 2. Increased divergence.
3. Reduced complexity. 4. Increased complexity.
It is critically important to recognise that any shift
in overall complexity or divergence, or the
introduction of any new service design, must be
implemented with a clear understanding of the
potential impact on the people and facilitating
goods dimension of the service process.
100. TOPIC # 8 PHYSICAL EVIDENCE & THE SERVICESCAPE
Introduction
Elements of Physical Evidence
The S-O-R Paradigm
Types of Servicescapes
Servicescapes – Mary Jo Bitner 1992
Roles of the Servicescape
Framework for Understanding Servicescape Effects
on Behaviour
Guidelines for Physical Evidence Strategy
REQUIRED READING: Chapter 11 of Services
Marketing; integrating Customer Focus Across the
Firm 4/e by Zeithaml, Bitner & Gremler
101. INTRODUCTION
Because services are intangible, customers often
rely on tangible cues, or physical evidence, to
evaluate the service before its purchase and to
assess their satisfaction with the service during and
after consumption.
The heart of the service product is the experience of
the consumer which takes place in real time and
with the consumer’s involvement in production.
This means that in many service situations the
consumer is “in the factory”. For this reason,
service marketers must pay consideration to the
promotional and evaluative dimensions of “the
factory” or servicescape.
102. ELEMENTS OF PHYSICAL EVIDENCE
Servicescape Other tangibles
Facility exterior
Exterior design
Signage
Parking
Landscape
Surrounding environment
Facility interior
Interior design
Equipment
Signage
Layout
Air quality/temperature
Business cards
Stationery
Billing statements
Reports
Employee dress
Uniforms
Brochures
Internet/Web pages
103. THE S-O-R PARADIGM
Environmental psychology has provided a valuable
model for studying the effects of atmospherics on
consumer behaviour.
Using a stimulus-organism-response model
Mehabrian, Russell and Pratt offer a description of
environments, intervening variables and
behaviours relevant to service settings.
The S-O-R model has the following requisites:
A stimulus taxonomy.
A set of intervening or mediating variables.
A taxonomy of responses.
104. RESPONSE TAXONOMY: The model postulates
that all responses to an environment can be
considered as approach or avoidance behaviours;
i. A desire to enter / stay in (approach) or to get out
of (avoid) the environment.
ii. A desire or willingness to look around and to
explore the environment (approach) versus a
tendency to avoid moving through or interacting
with the environment or a tendency to remain
inanimate in the environment (avoidance).
iii. A desire or willingness to communicate with
others in the environment (approach) as opposed
to a tendency to avoid interacting with others or
to ignore communication attempts from others
(avoidance).
iii. Satisfaction or dissatisfaction with the
environmental experience and a desire to revisit
(approach) or decision not to return (avoidance).
105. EMOTIONAL STATES AS INTERVENING VARIABLES:
The model posits that any environment will
produce an emotional state in an individual that
can be characterised in terms of three PAD
dimensions which are “factorially orthogonal” i.e.
Pleasure / displeasure (joyful, happy).
Arousal / non-arousal (relaxed, stimulated etc.).
Dominance / submissiveness (perceived control).
106. STIMULUS FACTORS:
Visual,
Aural,
Olfactory,
Tactile.
Stimulus.
Organism
State.
Response.
Exercise; Apply the above SOR Model in the context
of your responsibilities as Market Development
Manager for a large suburban retail mall.
107. TYPES OF SERVICESCAPES
Organisations differ in terms of who the
servicescape will actually have an effect on i.e. who
actually comes into the service facility and thus is
potentially influenced by its design – customers,
employees, or both groups.
Three types of service differ on this dimension; self-
service, interpersonal services and remote services.
The second factor that influences servicescape
management is the complexity of the servicescape.
Some service environments are very simple, with
few elements, few spaces and few pieces of
equipment. Such environments are termed lean.
For lean servicescapes, design decisions are
relatively straightforward.
Other servicescapes are very complicated, with
many elements and many forms. They are termed
elaborate environments and require more
considered and careful management.
108. Complexity of the servicescape evidence
Servicescape
usage
Elaborate Lean
Self-service
(customer only)
Golf Land
Surf 'n' Splash
ATM
Ticketron
Post office kiosk
Internet services
Express mail drop-off
Interpersonal
services
(both customer and
employeee)
Hotel
Restaurants
Health clinic
Hospital
Bank
Airline
School
Dry cleaner
Hot dog stand
Hair salon
Remote service
(employee only)
Telephone company
Insurance company
Utility
Many professional services
Telephone mail-order desk
Automated voice-messaging-
based services
109. By locating itself in the appropriate cell of the
typology, an organisation can start to answer the
following questions:
I. Who should be consulted in making servicescape
and other evidence decisions? (customers
primarily, employees primarily, both parties).
II. What organisational goals might be targeted
through servicescape design? (customer goals
primarily, employee goals primarily, some mix of
both)
III. How complex is the set of decisions regarding
the servicescape? (elaborate or lean
servicescape)
110. SERVICESCAPES – MARY JO BITNER 1992
“Because services generally are purchased and
consumed simultaneously, and typically require
direct human contact, customers and employees
interact with each other within the organisation’s
physical facility. Ideally therefore, the
organisation’s environment should support the
needs and preferences of both service employees
and customers simultaneously”.
A clear implication of this line of thinking is that
the physical setting can aid or hinder the
accomplishment of both internal organisational and
external marketing goals and objectives.
111. Bitner’s research throws up some interesting
propositions;
i. For interpersonal services positive (negative)
internal responses to the servicescape enhance
(detract from) the nature and quality of social
interactions between and among customers and
employees.
ii. Optimal design for encouraging employee
(customer) approach behaviour may be
incompatible with the design required to meet
customer (employees) needs and / or facilitate
employee – customer interactions.
112. iii. Perceptions of the servicescape and associated
positive (negative) cognitions can lead to positive
(negative) beliefs and attributions associated
with the organisation, its people and its market
offerings.
iv. Perceptions of the servicescape influence how
people categorise the organisation; thus, the
service environment serves as a mnemonic in
differentiating among service firms.
v. The servicescape’s influence on beliefs,
attributions and categorisation of the
organisation is stronger for inexperienced
customers, or new employees, and when few
intrinsic cues are available on which to categorise
or base beliefs.
113. ROLES OF THE SERVICESCAPE
An examination of the variety of roles the
servicescape can play, and how they interact,
makes clear how strategically important it is to
provide appropriate physical evidence of the
service;
Package; physically wraps the service.
Facilitator; efficiency from signage, traffic flow,
ambient light and temperature.
Socialiser; open-plan, comfortable.
Differentiator; branding through colour etc.
114. FRAMEWORK FOR UNDERSTANDING
SERVICESCAPE EFFECTS ON BEHAVIOUR
The framework overpage builds on the basic
SOR model already covered. In the framework
the multidimensional environment is the
STIMULUS, consumers and employees are the
ORGANISMS that respond to the stimuli, and
behaviours directed at the environment are
the RESPONSES.
Dimensions of the servicescape will impact
customers and employees and they will behave
in certain ways depending on their internal
reactions to the servicescape.
115. Source: Adapted from Mary Jo Bitner, “Servicescapes.”
PHYSICAL
ENVIRONMENTAL
DIMENSIONS
HOLISTIC
ENVIRONMENT
INTERNAL
RESPONSES
BEHAVIOR
Ambient
Conditions
Space/Function
Signs, Symbols,
and Artifacts
Perceived
Servicescape
Cognitive
Emotional
Physiological
Cognitive
Emotional
Physiological
Employee
Responses
Customer
Responses
Individual
Behaviors
Social
Interactions
between and
among customer
and employees
Individual
Behaviors
116. GUIDELINES FOR PHYSICAL EVIDENCE STRATEGY
I. Recognise the Strategic Impact of Physical
Evidence; It is an integral part of Strategic
Services Marketing & the Services Marketing Mix.
II. Map the Physical Evidence of Service; Blueprint.
III. Clarify Roles of the Servicescape.
IV. Assess and Identify Evidence Opportunities.
V. Be Prepared to Update and Modernise the
Evidence.
VI. Work Cross-Functionally; H.R. Manager ( e.g.
uniforms), Operations Manager., Architect,
Marketing Communications Manager all involved.
117. TOPIC # 9 MANAGING PEOPLE IN SERVICE
ORGANISATIONS; AN INTRODUCTION TO SHRM IN
SERVICE ORGANISATIONS
Introduction
Emotional Labour
Service Human Resource Strategies
Internal Marketing
REQUIRED READING: Chapter 12 of Services
Marketing; integrating Customer Focus Across the
Firm 4/e by Zeithaml, Bitner & Gremler
119. INTRODUCTION
The old adage “People are your most important
asset” is wrong. The right people are your most
important asset.
Among the most demanding jobs in service
businesses are so-called boundary spanning
positions, where employees are expected to be fast
and efficient at executing operational tasks as well
as courteous and helpful in dealing with customers.
As a result, many service encounters have the
potential to be a three-cornered fight among the
needs of partially conflicting parties; the customer,
the server, and the service firm.
If the job is not designed carefully or the wrong
people are picked to fill it, there is a real risk that
employees may become stressed and unproductive.
120. Most of the published research in service
management tends to focus on employees in high-
contact environments. This is not entirely surprising
because the people in these jobs are so visible.
But a growing number of service jobs are being
created in telephone-based call centres and
internet-based retail and information centres.
And what of the numerous service employees who
appear to have no customer contact at all, but
instead fulfill an internal service role?
Effective service performance is just as important in
these remote and back-stage services as it is in
face-to-face services and the people-management
challenges and the human resource task are
essentially the same.
121. Findings from research on service quality have
contributed to greater awareness among top
management of the key role that service employees
play in both creating customer satisfaction and
working toward service recovery when things go
wrong.
There is also greater awareness in management
circles of the competitive advantage inherent in a
dedicated, enthusiastic, motivated set of employees
who support the corporate mission, understand how
their individual work activities contribute – directly
and indirectly – to customer satisfaction, and have
the tools and skills needed to be both productive
and quality oriented.
122. Service Employees are the essence of the service;
Representation; the firm in the
customer’s eyes.
Information Transfer.
Marketers (Interactive Marketing).
Their importance is evident in;
The Services Marketing Mix (People), The
Servuction System, The Services Triangle.
Who are they?
Boundary Spanners, Back Stagers & Subordinate
Service Roles.
What are these jobs like?
Many sources of potential conflict: Person vs. Role
(Emotional Labour), Organisation vs. Client, Client
vs. Client, Quality vs. Productivity.
123. EMOTIONAL LABOUR
Service encounters entail more than just correct
execution of a task. They also involve such human
elements as personal demeanor, courtesy and
empathy. This brings us to the notion of emotional
labour; the act of expressing socially desired
emotions during service transactions e.g.
friendliness, sincerity, compassion, self-effacing .
The problem is the employee may not feel such
emotions. Trying to conform to customer
expectations on these dimensions can prove to be a
psychological burden for some service workers when
they perceive themselves as having to act out
emotions they do not feel. At worst, policies that
impose such requirements raise troubling ethical
questions about how far it is appropriate for
organisations to control & shape social aspects of
work.
124. Customer-contact employees comply with so-called
Display Rules through both acting and the
expression of spontaneous and genuine emotion.
Display rules generally reflect the norms imposed
by society – which may vary from one country to
another – and by specific occupations and
organisations. Customer expectations may also
reflect the nature of a particular encounter.
Surface Acting requires employees to simulate
emotions that they do not actually feel,
accomplished by careful presentation of verbal and
non-verbal cues, such as facial expression, gestures
and vocal tone. Within limits, such acting skills can
be taught; some people are natural actors.
125. Deep Acting goes further; it involves trying to psych
oneself into actually experiencing the desired
emotion. One way to do this in a service context is
to try to imagine how the customer is currently
feeling.
HR managers in service organisations need to be
aware that performing emotional labour, day after
day, can be stressful for employees as they strive to
display toward customers feelings that may be false.
The challenge for HR managers is to determine what
customers expect, recruit the most suitable
employees and train them well. Investment in such
HR strategies is most worthwhile for service
situations in which exchanges between employees
and customers take place in the context of long-
term relationships.
126. SERVICE HUMAN RESOURCE STRATEGIES
Customer-
oriented
Service
Delivery
Hire the
Right People
Provide
Needed Support
Systems
Retain the
Best
People
Develop
People to
Deliver
Service
Quality
Hire for
Service
Competencies
and Service
Inclination
Provide
Supportive
Technology
and
Equipment
Treat
Employees
as
Customers
Empower
Employees
127. INTERNAL MARKETING
The Internal Marketing Concept states that the
internal market of employees is best motivated for
service-mindedness and prepared for customer-
oriented performance by an active, goal-oriented
approach where a variety of activities and processes
is used internally in an active, marketing-like and
coordinated way. In this way, internal relationships
between people in various departments and
processes (customer contact employees, internal
support employees, team-leaders, supervisors and
managers) can best be enhanced and geared
towards service oriented management and
implementation of external relationships with
customers and other parties.
Internal Marketing is the management philosophy
of treating employees as customers.
128. The objective of Internal Marketing is to create,
maintain and enhance internal relationships
between people in the organisation, regardless of
their position, so that they first feel motivated to
provide services to internal customers as well as to
external customers in a customer-oriented and
service-minded way, and second, have the skills
and knowledge required as well as the support
needed from managers and supervisors, internal
service providers, systems and technology to be
able to perform in such a manner.
Such internal relationships can only be achieved if
employees feel that they can trust each other, and
above all, trust the firm and its management to
continuously provide the physical and emotional
support required to deliver service excellence.
129. If internal marketing activities are implemented
purely as a campaign, or, even worse, as separate
activities without connections to other
management factors / functions, the risk that
nothing enduring will be achieved is overwhelming.
The three pre-requisites for successful internal
marketing are;
Internal marketing has to be considered an integral
part of strategic management.
The internal marketing process must not be
counteracted by the organisational structure of a
firm or by a lack of management support.
Top management must constantly demonstrate
active support for the internal marketing activity.
130. Typical internal marketing activities include;
Training – functional and technical, developing and
enhancing favourable attitudes towards service.
Management support and internal dialogue –
active encouragement, feedback, coaching.
Internal communication and information support –
brochures, memos, intranet, appropriate access to
the MKTIS & SQIS.
Proactive HRM – status of preferred employer,
recruitment and selection of “service enthusiasts”.
Development of systems and technology support –
internal complaint and internal recovery systems,
internal service quality monitoring systems.
Internal market research and segmentation.
131. EMPLOYEE EMPOWERMENT
“It is necessary to “dehumiliate” work by
eliminating the policies and procedures (almost
always tiny) of the organisation that demean and
belittle human dignity. It is impossible to get
peoples best efforts, involvement and caring
concern for things you believe important to your
customers and the long term interests of your
organisation, when we write policies and
procedures that treat them like thieves and
bandits”. (Tom Peters)
“To free someone from rigorous control by
instructions, policies and orders and to give that
person freedom to take responsibility for his ideas,
decisions and actions is to release hidden resources
that would otherwise remain inaccessible to both
the individual and the organisation.” (Jan Carlson)
132. Under the right conditions, providing employees
with greater discretion (and training in how to use
their judgement) may enable them to provide
superior service on the spot without referring to rule
books or taking time to seek permission from higher
authority.
From a humanistic standpoint, the notion of
encouraging employees to exercise initiative and
discretion is an appealing one. Empowerment looks
to the performer of the task to find solutions to
service problems and to make appropriate decisions
about customising service delivery.
It depends for its success on what is sometimes
called enablement – giving workers the tools and
resources they need to take on these new
responsibilities.
133. TOPIC # 10 SERVICE MARKETING COMMUNICATIONS
The Communication Process
Tools of Marketing Communications
The Marketing Communications Process
REQUIRED READING: Chapter 16 of Services
Marketing; integrating Customer Focus Across
the Firm 4/e by Zeithaml, Bitner & Gremler
137. TOPIC # 11 SERVICE PRICING
Introduction; Defining Price
Setting Price Policy
REQUIRED READING: Chapter 17 of Services
Marketing; integrating Customer Focus
Across the Firm 4/e by Zeithaml, Bitner &
Gremler
138. INTRODUCTION; DEFINING PRICE
Price is the sacrifice that one party pays another
to receive something in exchange.
Price is a monetary value charged by an
organization for the sales of its products.
Pricing decisions are complex - not solely driven
by cost, or demand, or public perception. A range
of factors may influence the pricing decision:
Competitive pressures.
Buyer Power.
Life Cycle Stage.
Environmental factors (Economic, Legal etc.)
Internal company factors (cost structure,
servuction system capacity, market positioning
strategy etc.)
139. SETTING PRICE POLICY
Setting Price can be viewed as a 6 step process;
SELECTING THE PRICING OBJECTIVE; Skimming,
Penetration, Survival
DETERMINING DEMAND
ESTIMATING COSTS
ANALYSING COMPETITORS’ COSTS, PRICES AND OFFERS
SELECTING A PRICING METHOD; Perceived Value, Mark-up,
Target Return
SELECTING THE FINAL PRICE
140. TOPIC # 12 THE FIVE GAPS MODEL
If one accepts the view that quality entails
consistently meeting customers’ expectations,
then the service manager’s task is to balance
customer expectations and perceptions and to
close any gaps between the two. Zeithaml, Berry
and Parasuraman (1988) identify four potential
shortfalls within the service organisation that
may lead to a gap between what customers
expect and what they receive;
I. Not knowing what customers expect.
II. Specifying service quality standards that do not
reflect what management believes to be
customers’ expectations.
III. Service performance does not match
specifications.
141. IV. Not living up to the levels of service performance
that are promised through the service
organisation’s marketing communications
activities.
The Five Gaps Model, as subsequently developed
by Parasuraman, Berry and Zeithaml, positions
the key concepts, strategies and decisions in
services management and marketing in a manner
that begins with the customer and builds the
organisation’s tasks around what is needed to
close the gap between customer expectations and
perceptions.
The central focus of the gaps model is the
customer gap, the difference between customer
expectations and perceptions. Firms need to close
this gap in order to satisfy their customers and
build long-term, mutually beneficial, relationships
with them.
To close this all-important customer gap, the four
provider gaps need to be closed.
142. Word of Mouth
Communication
Personal Needs Past Experience
Expected Service
Perceived Service
Service Delivery
(including pre-
and post- contacts)
Translation of
Perceptions into
Service Quality
Specs.
Management Perceptions
of Consumers Expectations
External
Communications
to Consumers
Provider
Gap 1
Gap 2
Gap 3
Gap 4
Gap 5
The PBZ Five Gap Model
Customer
143. GAP # 1: NOT KNOWING WHAT CUSTOMERS EXPECT
KEY FACTORS LEADING
TO GAP #1;
Inadequate Marketing
Research Orientation:
Insufficient marketing
research.
Research not focused on
service quality.
Inadequate use of
market research.
CUSTOMER
EXPECTATIONS.
COMPANY
PERCEPTIONS
OF CUSTOMER
EXPECTATIONS.
144. II. Lack of Upward Communication
Lack of interaction between management and
customers.
Insufficient communication between contact
employees (BSPs) and managers.
Too many layers between contact personnel
and top management.
III. Insufficient Relationship Focus:
Lack of market segmentation.
Focus on transactions rather than
relationships.
Focus on new customers rather than
relationship customers.
IV. Inadequate Service Recovery.
145. GAP # 1 PRESCRIPTION:
LEARN WHAT CUSTOMERS EXPECT
Get a better understanding of customer
expectations through survey research, complaint
analysis, customer panels, individual depth
interviews etc.
Increase direct interactions between service
managers and customers to improve empathy and
understanding.
Improve upward communication from contact
personnel (BSPs) to management and reduce the
number of levels between the two.
Turn information and insights into action (avoid
paralysis by analysis).
146. GAP # 2: NOT SELECTING THE RIGHT SERVICE
DESIGNS AND STANDARDS
KEY FACTORS
LEADING TO GAP
#2;
Poor Service Design:
Unsystematic new-
service development
process.
Vague, undefined
service designs.
Failure to connect
service design to
service positioning.
CUSTOMER-DRIVEN
SERVICE DESIGN &
STANDARDS.
MANAGEMENT
PERCEPTIONS OF
CUSTOMER EXPECTATIONS.
147. II. Absence of Customer-Defined Standards:
Lack of customer-defined service standards.
Absence of process management to focus
on customer requirements.
Absence of formal process for setting
service quality goals.
Inappropriate Physical Evidence and
Servicescape.
Visual.
Aural.
Olfactory.
Tactile.
148. GAP # 2 PRESCRIPTION:
ESTABLISH THE RIGHT SERVICE QUALITY STANDARDS
Ensure that top management displays continuing
commitment to quality as defined from the
customers’ point of view.
Get middle management to set, communicate and
reinforce customer-oriented service standards for
their work units.
Train managers in the skills needed to lead
employees to deliver quality service.
Become receptive to new ways of doing business
that overcome barriers to delivering quality
service.
149. Standardise repetitive work tasks to ensure
consistency and reliability by substituting hard
technology for human contact and improving
work methods (soft technology).
Establish clear service quality goals that are
challenging, realistic and explicitly designed to
meet customer expectations.
Clarify to employees which job tasks have the
biggest impact on quality and thus should
receive the highest priority.
Ensure that employees understand and accept
(have bought into) goals and priorities.
Measure performance and provide regular
feedback.
Reward managers and employees for attaining
quality goals.
150. GAP # 3: NOT DELIVERING TO SERVICE STANDARDS
KEY FACTORS LEADING TO
GAP #3:
Deficiencies in Human
Resource Policies;
Ineffective recruitment.
Role ambiguity and role
conflict.
Poor employee-technology
job fit.
Inappropriate evaluation and
compensation systems.
Lack of empowerment,
perceived control and
teamwork.
SERVICE
DELIVERY.
CUSTOMER-
DRIVEN
SERVICE DESIGN
& STANDARDS.
151. II. Failure to Match Supply and Demand
Failure to smooth peaks and valleys of
demand.
Inappropriate customer mix.
Over-reliance on price to smooth demand.
III. Customers not Fulfilling Roles
Customers lack knowledge of their roles and
responsibilities.
Customers negatively affect each other.
IV. Problems with Service Intermediaries
Channel conflict over objectives and
performance.
Channel conflict over costs and rewards.
Difficulty controlling quality and consistency.
Tension between empowerment and control.
152. GAP # 3 PRESCRIPTION:
ENSURE THAT SERVICE PERFORMANCE MEETS
STANDARDS
Clarify employee roles.
Ensure that all employees understand how their jobs
contribute to customer satisfaction.
Match employees to jobs by selecting on the basis of
the abilities and skills needed to perform each job
well.
Provide employees with the technical training
needed to perform their assigned tasks effectively.
Develop innovative recruitment and retention
methods to attract the best people and build loyalty.
Enhance employee performance by selecting the
most appropriate and reliable technology and
equipment.
153. Teach employees about customer expectations,
perceptions and problems.
Train employees in interpersonal skills, especially
for dealing with customers under stressful
conditions.
Eliminate role conflict among employees by
involving them in the process of setting service
quality standards.
Train employees in priority setting and time
management.
Measure employee performance and tie
compensation and recognition to delivery of
quality service.
Develop reward systems that are meaningful,
timely, simple, accurate and fair.
154. Empower managers and employees in the field by
pushing decision-making power down the
organisation; allow them greater discretion in the
methods they use to reach goals.
Ensure that employees working at internal
support jobs provide good service to customer
contact / boundary spanning personnel.
Build teamwork so that employees work well
together, and use team rewards as incentives.
Treat customers as “partial employees”; clarify
their roles in service delivery, train and motivate
them to perform well in their roles as co-
producers.
155. # 4: NOT MATCHING PERFORMANCE TO PROMISES
KEY FACTORS LEADING
TO GAP #4:
I. Lack of Integrated
Marketing
Communications
Tendency to view each
external communication
as independent.
Not including interactive
marketing communication
in communications plan.
Absence of strong
internal marketing
programme.
SERVICE
DELIVERY.
EXTERNAL
COMMUNICATIONS
TO CUSTOMERS.
156. II. Ineffective Management of Customer
Expectations
Not managing customer expectations through all
forms of communication.
Not adequately educating customers.
III. Over-promising
Over-promising in advertising, personal selling
and through physical evidence cues.
IV. Inadequate Horizontal Communications
Insufficient communication between sales and
operations.
Insufficient communication between advertising
and operations.
Differences in policies and procedures across
branches and units.
157. GAP # 4 PRESCRIPTION: ENSURE THAT SERVICE
DELIVERY MATCHES PROMISES
Seek inputs from operations personnel when new
marketing communications programmes are being
created.
Develop advertising that features real employees
performing their jobs.
Allow service providers to preview advertisements
before customers are exposed to them.
Get sales staff to involve operations staff in face-to-
face meetings with customers.
Develop internal educational, motivational and
advertising campaigns to strengthen links between
marketing, operations and human resource
departments / functions.
158. Ensure that consistent standards of service are
delivered across multiple locations.
Ensure that advertising content accurately
reflects those service characteristics that are
most important to customers in their encounters
with the organisation.
Manage customers’ expectations by letting them
know what is and is not possible – and the
rationale behind such determinations.
Identify and explain uncontrollable reasons for
shortcomings in service performance.
Offer customers different levels of service at
different prices, explaining the differences
between these levels and the logic underpinning
the associated alternate prices.