service marketing

Amity Business School

Service Culture

A culture where an appreciation for good service exists, and where giving good

service to internal as well as ultimate,

external customers, is considered a natural

way of life and one of the most important

norms by everyone in the organization.

- Christian Gronroos (1990)


The Critical Importance of Service

Employees They are the service.

They are the organization in the customers eyes.

They are the brand.

They are marketers.

Their importance is evident in: the services marketing mix (people) the service-profit chain the services triangle


The Services Marketing Triangle

Internal Marketing

Interactive Marketing

External Marketing

Company(Management)

CustomersEmployees

Enabling the promise

Delivering the promise

Making the promise

Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler


Service Triangle Management Model

The framework has the following six relationships

Communication of service firms strategy to the customers

Communication of service firms strategy to the employees

Consistency in service strategy and supporting systems

Impact of organisational systems on customers Importance to employee initiative and empowerment

along with systems

Importance of the interaction between the customer and service provider(MOT)

4


Ways to Use the

Services Marketing Triangle

Overall Strategic Assessment

How is the service organization doing on all

three sides of the triangle?

Where are the weaknesses?

What are the strengths?

Specific Service Implementation

What is being promoted and by whom?

How will it be delivered and by whom?

Are the supporting systems in place to deliver the

promised service?


The Service Profit Chain


Service Employees

Who are they?

boundary spanners

What are these jobs like?

emotional labor

many sources of potential conflict

person/role

organization/client

interclient

quality/productivity tradeoffs


Human Resource Strategies for Delivering Service Quality through People

Provide

needed support

systems

Hire the

right people

Retain the

best

people

Develop

people to

deliver

service

quality

Hire for service

competencies and

service

inclinationCompete for

the best

people

Measure and

reward strong

service

performers

Treat

employees

as

customers

Include

employees in

the

companysvision

Develop

service-oriented

internal

processes

Provide

supportive

technology

and

equipment

Measure

internal service

quality

Promote

teamwork

Empower

employees

Train for

technical and

interactive

skills

Be the

preferred

employer

Customer-

Oriented

Service

Delivery


Strategies for Delivering Service Quality through People

Hire the Right People Compete for the Best People Hire for Service Competencies and Service Inclination Be the Preferred Employer

Develop People to Deliver Service Quality Train for Technical and Interactive Skills Empower Employees Promote Teamwork

Provide Needed support systems Measure Internal Service Quality

Provide Supportive Technology and Equipment Develop Service-Oriented Internal Processes

Retain the best People Include Employees in the Companys Vision Treat Employees as Customers Measure and Reward Strong Service Performers


Empowerment Benefits:

quicker responses to customer needs during

service delivery

quicker responses to dissatisfied customers during

service recovery

employees feel better about their jobs and themselves

employees tend to interact with warmth/enthusiasm

empowered employees are a great source of ideas

great word-of-mouth advertising from customers

Drawbacks:

potentially greater dollar investment in selection and

training

higher labor costs

potentially slower or inconsistent service delivery

may violate customers perceptions of fair play

employees may give away the store or make bad decisions


Traditional Organizational Chart

Manager

Supervisor

Front-line

Employee

Customers

Front-line

Employee

Front-line

Employee

Front-line

Employee

Supervisor

Front-line

Employee

Front-line

Employee

Front-line

Employee

Front-line

Employee


Customer-Focused Organizational Chart

Manager

Supervisor

Front-line

Employee

Customers

Front-line

Employee

Front-line

Employee

Front-line

Employee

Supervisor

Front-line

Employee

Front-line

Employee

Front-line

Employee

Front-line

Employee


Service Culture

A culture where an appreciation for good service exists, and where giving good

service to internal as well as ultimate,

external customers, is considered a

natural way of life and one of the most

important norms by everyone in the

organization.

- Christian Gronroos (1990)


The Critical Importance of Service

Employees They are the service.

They are the organization in the customers eyes.

They are the brand.

They are marketers.

Their importance is evident in: the services marketing mix (people) the service-profit chain the services triangle


Perceived

Service

Expected

ServiceCUSTOMER

COMPANY

Customer

Gap

Gap 1

Gap 2

Gap 3

External Communications

to CustomersGap 4Service

Delivery

Customer-Driven Service Designs and

Standards

Company Perceptions of Consumer Expectations

Gaps Model of Service Quality


Provider Gap 1: Not knowing what customers expect

Provider Gap 2: Not selecting the right service designs and standards

Provider Gap 3: Not delivering to service standards

Provider Gap 4: Not matching performance to promises

Customer

Expectations

Customer Perceptions

Key Factors Leading to the Customer Gap

Customer

Gap


Customer Expectations

Company Perceptions of Customer Expectations

Inadequate marketing research orientation Insufficient marketing research Research not focused on service quality Inadequate use of market research

Lack of upward communication Lack of interaction between management and customers Insufficient communication between contact employees and managers Too many layers between contact personnel and top management

Insufficient relationship focus Lack of market segmentation Focus on transactions rather than relationships Focus on new customers rather than relationship customers

Inadequate service recovery Lack of encouragement to listen to customer complaints Failure to make amends when things go wrong No appropriate recovery mechanisms in place for service failures

Key Factors Leading to Provider Gap 1

Gap

1


Customer-Driven Service

Designs and Standards

Management Perceptions of Customer Expectations

Poor service design Unsystematic new service development process Vague, undefined service designs

Failure to connect service design to service positioning Absence of customer-driven standards

Lack of customer-driven 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 Failure to develop tangibles in line with customer expectations Servicescape design that does not meet customer and

employee needs Inadequate maintenance and updating of the servicescape


Gap

2


Service Delivery

Customer-Driven Service

Designs and Standards

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

Customers who do not fulfill roles Customers who lack knowledge of their roles and responsibilities Customers who negatively impact each other

Problems with service intermediaries Channel conflict over objectives and performance Difficulty controlling quality and consistency Tension between empowerment and control

Failure to match supply and demand Failure to smooth peaks and valleys of demand Inappropriate customer mix Overreliance on price to smooth demand


Gap

3


Service Delivery

Lack of integrated services marketing communications Tendency to view each external communication as independent Not including interactive marketing in communications plan Absence of strong internal marketing program

Ineffective management of customer expectations Absence of customer expectation management through all forms of

communication Lack of adequate education for customers

Overpromising Overpromising in advertising Overpromising in personal selling Overpromising through physical evidence cues

Inadequate horizontal communications Insufficient communication between sales and operations Insufficient communication between advertising and operations Differences in policies and procedures across branches or units

External Communications to

Customers


Gap

4

Documents

service marketing