Understanding Service Understanding Service PhenomenonPhenomenon

Myths about Services IndustriesMyths about Services Industries

Service Production is primarily Labour- IntensiveService Production is primarily Labour- Intensive People satisfy their product need before the People satisfy their product need before the

need of servicesneed of services Service businesses are “Cottage industries” & Service businesses are “Cottage industries” &

service jobs are low-payingservice jobs are low-paying Services are only offered by Govt. SectorServices are only offered by Govt. Sector

Reasons for Growth & Current Reasons for Growth & Current StatusStatus

AffluenceAffluence Leisure TimeLeisure Time Life ExpectancyLife Expectancy Dual Earning Couples/ Working wivesDual Earning Couples/ Working wives Product Complexity/ Evolved ProductsProduct Complexity/ Evolved Products Life’s ComplexityLife’s Complexity

Service PhenomenonService Phenomenon

Definitions of services provided by different Definitions of services provided by different scholars which highlight that services are:scholars which highlight that services are:

IntangibleIntangible Do not include transfer of ownershipDo not include transfer of ownership Produced & Consumed simultaneouslyProduced & Consumed simultaneously VariableVariable

The Service ExperienceThe Service Experience

Sum- total of all the Sum- total of all the encountersencounters between the between the customer & the service provider while customer & the service provider while usingusing the the service, service, feelingsfeelings about the encounter about the encounter immediately immediately after the eventafter the event or or recollections recollections after after a period of time.a period of time.

Popular ways of looking at services:Popular ways of looking at services: Moments of truth-Moments of truth- Popularized by Jan Carlson Popularized by Jan Carlson Servuction Model- Servuction Model- BatesonBateson

The Service ExperienceThe Service Experience

Servuction ModelServuction Model

There are two components- the visible & the There are two components- the visible & the invisible – on the service provider’s end (people invisible – on the service provider’s end (people & inanimate environment)& inanimate environment) Customer interacts with the the visible or tangible Customer interacts with the the visible or tangible

partsparts Since large parts of services is intangible, there is a Since large parts of services is intangible, there is a

tendency to draw conclusion about service quality tendency to draw conclusion about service quality based on tangiblesbased on tangibles

The Service ExperienceThe Service Experience

Service theatreService theatre

Implies comparing the experience of service Implies comparing the experience of service planning, design & delivery to that of theatrical planning, design & delivery to that of theatrical performanceperformance

Actors Visible service providersActors Visible service providers

Teamwork of front-stage & backstage peopleTeamwork of front-stage & backstage people

Success of performance (Service Task)Success of performance (Service Task)

Segmentation of service marketSegmentation of service market

GeographicGeographic DemographicDemographic PsychographicPsychographic BehaviouralBehavioural

Segmenting Institutional CustomersSegmenting Institutional Customers

Volume of purchaseVolume of purchase Amount of Paper work involvedAmount of Paper work involved Decision-making typeDecision-making type Price Sensitive vs Quality ConsciousPrice Sensitive vs Quality Conscious Technically aware vs UnawareTechnically aware vs Unaware

Positioning a Service BusinessPositioning a Service Business

Positioning by FeaturesPositioning by Features Positioning by ComparisonPositioning by Comparison Positioning by benefitPositioning by benefit Positioning through GuaranteesPositioning through Guarantees Positioning as a LeaderPositioning as a Leader Positioning through Emotions, Concern for Positioning through Emotions, Concern for

EnvironmentEnvironment

Service Characteristics & Marketing Service Characteristics & Marketing ImplicationsImplications

CharacteristicsCharacteristics M. ImplicationsM. Implications StrategiesStrategies

IntangibilityIntangibility Difficult to sample, Difficult to sample, judge & valuejudge & value

Physical Physical EvidenceEvidenceWOMWOMCorporate ImageCorporate Image

InseparabilityInseparability Requires presence Requires presence of providerof providerGeographically Geographically limited marketlimited market

Work in larger Work in larger groupsgroupsMulti-site Multi-site LocationsLocations

Service Characteristics & Marketing Service Characteristics & Marketing ImplicationsImplications

CharacteristicsCharacteristics M. ImplicationsM. Implications StrategiesStrategies

VariabilityVariability Difficult to Difficult to StandardizeStandardize

TrainingTrainingBenchmarkingBenchmarkingMechanizationMechanization

PerishabilityPerishability Cannot be storedCannot be stored Establish better Establish better match between match between supply & demandsupply & demand