A Project Report On Service Marketing Una

A project report on service marketing of
Una Industrial Traders
Una industrial traders [05/10 9:10 PM] Preeeti Jiju: *Our Mission:~*
To provide superior specialty contracting services by creating
mutually rewarding relationships in a safe, inspiring and open
environment & To achieve our vision through fairness, business
ethics, global reach, technological expertise, building long term
relationships with all our associates, customers, partners, and
employees *Our Vision:* Creating connections that empower
people & "To be a globally recognized corporation that provides
best electrical solutions, delivered by best-in-class people." [06/10
10:06 AM] Preeeti Jiju: Objectives:- I.teamwork Believing in ‘One for
all and all for One’ thereby working together to exceed our
expectations in achieving organisational objectives. II. To be a
customer focussed company providing state-of-the-art products &
solutions at competitive prices, meeting the demands of quality,

delivery & service. III.To generate internal resources for profitable
growth.
SERVICES MARKETING
Services are deeds, processes and performances.Services include
all economic activities whose output is not a physical product or
construction, isgenerally consumed at the time it is produced, and
provides added value in forms (such as convenience,amusement,
timeliness, comfort or health) that are essentially intangible
concerns of its first purchaser.Ex.: Transportation, Communication,
Educational services etc.Services Vs Customer ServiceCustomer
service is the service provided in support of a company’s core
products. This core productcould also be a service.Services tend to
be more intangible than manufactured products and manufactured
products tend to bemore tangible than services. 31% 24% 46%1970
36% 26% 38%19801995 41% 31% 31%2005 61% 19% 20% SERVICES
NDUSTRY AGRICULTURE % AGE OF GDP IN INDIAThus we see in
India over the years the services are contributing more towards the
GDP as compared towhat it was couple of decades ago.
2Projectsformba.blogspot.com Services Marketing
Tangibility Spectrum Salt Soft drinks Detergents Automobiles
Cosmetics Fast food outlets Intangible DominantTangible Dominant
Fast food outlets Advertising Agencies Airlines Investment
Management Consulting TeachingThe above diagram shows us that
there are no pure products or pure services. Instead services tend
to bemore intangible than manufactured products, and
manufactured products tend to be more tangible thanservices.
Differences between Goods and Services Goods Services Resulting
Implication
Tangible Intangible Services cannot be inventoried Cannot be
readily displayed or communicated Pricing is difficultProduction
separate Simultaneous Customers participate in and affect thefrom
consumption transaction. Customers affect each other. Employees
affect service outcome. Decentralization may be essential. Mass
production is difficult.Standardized Variability/ Heterogeneous

Service delivery and customer satisfaction depend on employees
actions. Service quality depends on many uncontrollable factors.
There is no sure knowledge that the planned and promoted.Non-
perishable Perishable It is difficult to synchronize supply and
demand with services. Services cannot be returned or resold.
The Service Marketing Triangle“Building service relationships: It’s
all about promises.” COMPANY Internal Marketing (Enabling
promises) External Marketing (Making promises) PROVIDERS
CUSTOMERS Interactive marketing (Keeping promises) The Services
Triangle and Technology Company Technology Providers Customers
“Understanding and leveraging the role of customer service in
external, interactive and internalmarketing.” Expanded Marketing
Mix for ServicesProduct PlacePhysical Good Features Channel
TypeQuality Level ExposureAccessories IntermediariesPackaging
Outlet LocationsWarranties TransportationProduct Lines
StorageBranding Managing ChannelsPromotion PricePromotion
Blend FlexibilitySales People: Price Level Number Terms Selection
Differentiation Training Discounts Incentives AllowancesAdvertising

Targets Media Types Types of Ads Copy thrust Sales Promotion
PublicityPeople Physical Evidence ProcessEmployees Facility
Design Flow of activities Recruitment Equipment Standardized
Training Signage Customized Motivation Employee Dress No. of
steps Rewards Other tangibles Simple Teamwork Reports
ComplexCustomers Business cards Customer Involvement
Education Statements Training Guarantees
Expanded Mix for ServicesApart from Product, place, promotion and
price, for Services we have People, Physical Evidence andProcess
1) People: All human actors who play part in service delivery and
thus influence the buyers perceptions namely, the firms personnel,
the customer and other customers in the service environment. 2)
Physical evidence: The environment in which the service is
delivered and where the firm and the customer interact, and any
tangible component that facilitate performance or communication
of the service. 3) Process: The actual procedures mechanisms, the
flow of activities by which the service is delivered- the service
delivery and operating system.Marketing of Services: Issues and
Challenges 1. Performance itself is the product. 2. Services are

produced after they are sold. 3. Core benefit in services is
intangible. 4. Producers of service play the dual role of marketers. 5.
Differentiating is difficult in services. 6. Service quality has many
dimensions. 7. People factor is important. 8. Customer’s behavioral
response affects service quality. 7Projectsformba.blogspot.com
Services Marketing
CONTINUUM OF EVALUATION FOR DIFFER TYPES OF
PRODUCTSHIGH IN SEARCH HIGH IN EXPERIENCE HIGH IN
CREDENCEQUALITIES QUALITIES QUALITIES
GAPS MODEL OF SERVICE QUALITY EXPECTED SERVICE Customer
Gap 5 PERCEIVED SERVICE GAP 1 SERVICE EXTERNAL DELIVERY
COMMUNICATIONS TO CUSTOMERS GAP 3 GAP 4 CUSTOMER-
DRIVEN SERVICE DESIGNS AND STANDARDS GAP 2 COMPANY
PERCEPTIONS OF CONSUMER EXPECTATIONS
THE CUSTOMER GAP EXPECTED SERVICE CUSTOMER GAP
PERCEIVED SERVICEThe Provider GapsGap 1- Not knowing what
customers expects.Gap 2 - Not selecting the right service designs &
standardsGap 3 - Not delivering to service standardsGap 4 – not
matches performance to promises 10Projectsformba.blogspot.com
Services Marketing
CATEGORIES IN CONSUMER DECISION MAKING AND EVALUATION
OF SERVICES. INFORMATION EVALUATION OF SEARCH
ALTERNATIVES USE OF PERSONAL EVOKED SET SOURCES
EMOTION AND MOOD PERCEIVED RISK CULTURE Values & Attitudes
Manners & Customs Material culture Aesthetics Educational &

social institution Language PURCHASE & CONSUMPTION POST
PURCHASE SERVICE PROVISIO AS EVALUATION DRAMA
ATTRIBUTION OF SERVICE ROLES AND DISSATISFACTION SCRIPTS.
INNOVATION DIFFUSION COMPATABILITY OF BRAND LOYALTY
CUSTOMERS
SERVICES: CATEGORIES IN THE DECISION-MAKING PROCESSF or
Services the sequence of information search, Evaluation of
alternatives, Purchase and consumption &Post purchase evaluation
do not occur in a linear sequence the way they most often do in
purchase of goods.
INFORMATION SEARCH: - • Use of personal source For purchasing
goods use of both personal and non-personal sources is done as
both effectively convey information about search qualities. For
services, consumers rely to a great extent on personal sources for
several reasons. As mass media can convey about search qualities
but can communicate little about experience qualities. • Perceived
risk Compare to good more risk would be involved in purchase of
services. - Intangible nature - Since services are non-standardized

always more uncertainty would accompany about the outcome each
time it is purchased. - Services not accompanied by any warranties.
EVALUATION OF SERVICE ALTERNATIVESEVOKED SET
The evoked set of alternatives –that group of products a consumer
considers acceptable options in a givenproduct category -is likely to
be smaller with services than goods.Reasons 1. Difference in
retailing between goods and services • Retail outlet would display
competing brands in close proximity • To purchase services on other
hand, the consumer visits an establishment (e.g. a bank, a
drycleaner or a hair salon) that almost always offer only a single
“brand” for sale
. Consumers are unlikely to find more than one or two businesses
providing the same services in a given geographic area, whereas
they may find numerous retail outlets carrying the identical
manufacture’s product. 3. Difficulty to obtain adequate prepurchase
information about services. 4. Or non professional services
sometimes the consumer may perform the services for himself e.g.
cleaning homes themselves against hiring housekeepers, tax

preparation etc. Hence customers’ evoked set frequently includes
self provision of the service.SERVICE PURCHASE AND
CONSUMPTION
Emotion and mood are feeling states that influence people’s (and
therefore customers) perceptions andevaluations of their
experiences.Moods are transient feeling states that occur at
specific time and in specific situations.Emotions are more intense
stable and pervasive.Any service characterized by human
interaction is strongly dependent on the moods and emotions of
theservice providers, the service customers and the other
customers, and other customers receiving servicesat the same
time.Ways in which mood can affect the behavior of service
customer • Positive moods can make customers more obliging and
willing to participate in behaviors that help service encounters
succeed. • Moods and emotions influence service encounters is to
bias the way they judge service encounters and providers.
Evaluation of service is consistent with the polarity (positive or
negative) mood or emotion. • Moods and emotion affect the way
information about service is absorbed and retrieved.Service
marketers need to be aware of the moods and emotions of

customers and service employees andshould attempt to influence
those moods and emotions in positive ways.
SERVICE PROVISION AS DRAMA
Both service provision and drama aim to create and maintain a
desirable impression before an audience.The drama metaphor offers
a useful way to conceive of service performances.Among the
aspects of a service that can be considered in this way are: •
Selection of personnel (auditioning the actors) • Training of the
personnel (rehearsing) • Clearly defining the role (scripting the
performance) 13Projectsformba.blogspot.com Services Marketing
Creating the service environment (setting the stage) • Deciding
which aspect of the service should be performed in the presence of
customer (on stage) • Which should be performed in the backroom
(back stage) Importance Of Service Actors Increases When: •
Degree of personal contact increases (as in hospital, restaurant or
resort) • Services involve repeat contact and service actors have
the discretion in determining the nature of the service and how it is
delivered ( as in education, medical services, legal services)
SERVICES ROLES AND SCRIPTS

Roles are defined as combinations of social clues that guide and
direct behaviors in a given setting.The success of any service
performance depends in part on how well the “role set” or players-
bothservice employees and customers- act out their roles.Service
employees need to perform their roles according to expectations of
the customers. The customer’srole must also be performed well. If
customers are informed and educated about the expectations
andrequirements of the service.If customer cooperates with the
service provider to deliver the best possible service, the
serviceperformance is likely to be successful.One of the factors
that most influences the effectiveness of role performance is a
script.A script is a coherent sequence of events expected by the
individual, involving her either as a participantsor as an
observer.Conformance to scripts is satisfying to the customer while
deviations leads to confusion anddissatisfaction.THE
COMPATIBILITY OF SERVICE CUSTOMERS
The mere presence of customers in churches, restaurants, bars and
spectacular sports is important.If no one else shows up, customers
will not get to socialize with others, one of the primary expectations
inthese types of services.However if number of customers becomes

so dense that crowding occurs, customers may also
bedissatisfied.Customers can be incompatible for many reasons – •
Difference in beliefs • Values • Experience • Abilities to pay •
Appearance • Age, health etc. 14Projectsformba.blogspot.com
Services Marketing
The service marketer must anticipate, acknowledge and deal with
heterogeneous customers who have thepotential to be
incompatible.The service marketer can also bring homogeneous
customers together and solidify relationships
betweenthem.Customer compatibility is a factor that influences
customer satisfaction, particularly in high contactservice.POST
PURCHASE EVALUATION • Attribution Of DissatisfactionWhen a
customer is dissatisfied with the services they purchased they may
attribute their dissatisfaction toprovider and also to themselves (as
they participate in the service process)e.g. disappointed from a
haircut ,the customer may blame -The stylist (for lack of skill) - Or
herself (choosing the wrong style or not communicating her own
needs)The quality of many services depends on the information the
customer brings to the service encounter.e.g. - Doctor’s diagnosis

depends greatly on this - Dry cleaner’s success in removing a spot
depends on the customer’s knowledge of its cause(Incase of
products consumer’s main form of participation is the act of
purchase. Consumer may attributefailure to receive satisfaction to
her own decision-making error, but hold the producer responsible
forproduct performance.)Hence consumers may complain less
frequently about services than about goods.• Innovation
DiffusionThe rate of diffusion of an Innovation depends on the
Consumer’s Perceptions of the innovation withregard to Five
Characteristics: • Relative Advantage • Compatibility •
Communicability • Divisibility • Complexity
Services as a group are less communicable, less divisible, more
complex and probably less compatiblethan goods.Consumers adopt
innovations in services more slowly than they adopt innovations of
products.Marketers may need to concentrate on incentives to trial
when introducing a new service.• Brand LoyaltyThe degree to which
consumers are committed to particular brands of goods or services
depends on anumber of factors: • Cost of changing brands

(switching cost) • Availability of substitutes • Perceived risk
associated with the purchase • Degree to which they obtained
satisfaction in pastConsumers are more brand loyal with services
than products.Brand loyalty has two sides.The fact that a service
provider’s own customers are brand loyal is not a problem.The fact
that customers of the provider’s competition are difficult to
capture , however creates specialchallenges.Brand loyalty is
described as a “ Means of economizing decision effort by
substituting habit for repeated,deliberate decision.”This functions
as a device for reducing the risk of consumer decision. The Role Of
Culture In ServicesCulture is learned, shared, and transmitted from
one generation to the next, and is multidimensional.Culture would
include: 1. Language (both verbal and non verbal) 2. Values and
attitudes 3. Manners and customs 4. Material culture 5. Aesthetics
6. Education and social institutions These cultural universals are
manifestations of the “way of life” of any group of people. Service
marketers must be particularly sensitive to culture because of
customer contact and interaction with employees.

Culture is important when we consider international services
marketing – taking the service from one country and offering them
in others; but it is also critical within countries. •
VALUES AND ATTITUDES DIFFER ACROSS CULTURES Values and
attitudes help to determine what member of a culture think is right,
important, and / or desirable. Consumer behaviors flow from values
and attitudes; service marketers who want their services adopted
across cultures must understand these differences. E.g. US brands
have ‘exotic’ appeal to other cultures, but USA cannot take it as a
long-term strategy. As nationalism in some cultures could work
against this. • MANNERS AND CUSTOMS Manners and customs
represent a culture’s views of appropriate ways of behaving. It is
important to monitor differences in manners and customs, because
they can have direct affect on the service customer. E.g. Central
and western European employees are perplexed by western
expectations that unhappy workers put on a “happy face” when
dealing with customers. • MATERIAL CULTURE Material culture
consists of tangible products of culture. It is “the stuff we own” Why
people own and how they use and display material possessions
varies around the world. E.g. Zoos in Japan very cramped compared
to USA Mortgages in Japan for houses 100yrs USA 30yrs India 20yrs
• AESTHETICS Aesthetics refers to cultural idea about beauty and
good taste. These are reflected in music, art, drama, and dance as
well as appreciation of color and form. E.g. Earthy tones of
Japanese restaurants as against glossy red evident in their Chinese
competitor’s establishments.
EDUCATIONAL AND SOCIAL INSTITUTIONS
Both kinds of institutions are affected by and are transmission
agents of culture. Education includes the process of transmitting
skills and knowledge, and thus may take place in school and in less
formal ‘training’ circumstances. The structure and functioning of
each are heavily influenced by culture. Culture manifests itself most
dramatically in the people contact or our social institutions E.g.
Western way of imparting education in a session whenever you have
a doubt you would ask from the instructor. But in traditional eastern
set up the students would learn by being with the instructor and
asking questions was not encouraged.
CUSTOMER EXPECTATIONS OF SERVICE

Customer expectations are beliefs about service delivery that
function as standards or reference point against which performance
is judged. Knowing what customer expects is the first and possibly
most critical step in delivering quality service.
EXPECTED SERVICE: - two levels of expectations a. Desired service:
- the service customer hopes to receive - the “wished for” level of
performance. b. Adequate service: - the level of service the
customer will accept. Desired Service Zone of Tolerance Adequate
Service Dual customer expectation levels & the zone of tolerance
DESIRED SERVICE expectations seem to be the same for that
defined by the customer E.g. Desired expectation of 1. Expensive
restaurant a. Elegant surroundings b. Gracious employees c. Candle
light d. And fine food 2. Fast food restaurant a. Quick b. Convenient
c. Tasty food in clean setting The adequate service expectation
level however is likely to vary for different firms within a
category.E.g. Within fast food restaurant, a customer may hold
higher expectations for Mac Donald’s than for Wimpy’s.
ZONE OF TOLERANCEAs
service are heterogeneous in that performance may vary across
providers, across employees from thesame provider, and even within
the same service employee.The extent to which customer
recognizes and are willing to accept this variation is called the zone
oftolerance.The zone of tolerance can be considered as the range or
window in which customers do not particularlynotice service
performance. When it falls outside the range (either very low or very
high), the services getcustomer’s attention in either a positive or
negative way.Note: Marketer must understand not just the size and
boundary levels for the zone of tolerance but alsowhen and how the
tolerance zone fluctuates within a give customer.
DIFFERENT CUSTOMERS POSSESS DIFFERENT ZONES OF
TOLEREANCEE.
Busy customers who are pressed for the time and therefore desire
short wait times in general would alsohold a constrained range for
the length of acceptable wait times.An individual customer’s zone
of tolerance increases or decreases depending on a number of
factorsincluding company-controlled factors such as price.“Price
increases don’t really drive up expectations. But tolerance level will
become more stringent / lessflexible with the increase.”ZONES OF

TOLERANCE VARY FOR SERVICE DIMENSIONCustomer’s tolerance
zones also vary for different service attributes or dimensions. The
more importantthe factor, the narrower the zone of tolerance is
likely to be.In general customers are likely to be less tolerant about
unreliable service (broken promises, serviceerrors) than other
service deficiencies. 20Projectsformba.blogspot.com Services
Marketing
Desired Service Desired Service Level of expectatio Zone of
Tolerance Zone of Adequate Service Tolerance Adequate Service
Most important factors Least important factors Zone of tolerance
for different servicesZONE OF TOLERANCE VARY FOR FIRST-
TIMEAND RECOVERY SERVICEFIRST-TIME SERVICE Outcome
ProcessRECOVERY SERVICE Outcome Process Low High
Expectations 21Projectsformba.blogspot.com Services Marketing
The fluctuation in the individual customer’s zone of tolerance is
more a function of changes in adequateservice level which moves
readily up and down due to situational circumstances than in
desired servicelevel, which tends to move upward incrementally due
to accumulated experiences.
Nature & Determinants Of Customer Expectations Of Service

sensitivity to service.Enduring Service Intensifiers Explicit Service
PromisesDerived Expectations AdvertisingPersonal Service
Philosophies Personal Selling Contacts Other
CommunicationsPersonal needs Implicit Service Promises
TangiblesTransitory Service Intensifiers PriceEmergenciesService
Problems Word Of Mouth PersonalPerceived Service Alternatives
Desired Service “Expert” (Consumer Report Publicity
Consultants)Self Perceives Service Role Expected Service Zone of
Tolerance Past ExperienceSituational FactorsBad Weather Adequate
ServiceCatastrophe Predicted ServiceRandom Over Demand Gap 5
(Customer Gap) Perceived Service 23 Projectsformba.blogspot.com
Services Marketing
FACTORS INFLUENCING DESIRED SERVICES ENDURING SERVICE
INTENSIFIERS EXPECTED SERVICE DESIRED SERVICE PERSONAL
NEEDS ZONE OF TOLERANCE ADEQUATE SERVICE
Personal Needs:- Those states or conditions essential to the
physical or psychological well being ofthe customer, are pivotal
factors that share the level of desired service Personal needs fall
into Physical, social and psychological functional
categories.Enduring Service Intensifiers:- Are individual stable

factors that lead the customer to aheightened sensitivity to service
Two factors under this are Derived Service Expectations Personal
Service PhilosophyDerived Service Expectations:- When customer
expectations are driven by another person orgroup of
peoplePersonal Service Philosophy:- The customer’s underlying
generic attitude about the meaning ofservices and the proper
conduct of service providers Customers who have themselves been
in service business would in general have strongservice
philosophies.
CUSTOMER PERCEPTIONS OF SERVICE
Perceptions are always considered relative to
expectations.Customers perceive services in terms of the quality of
the service and how satisfied they are overallwith their
experiences.Satisfaction is generally viewed as a broader concept
whileService quality assessment focuses on dimensions of
service.Internal and External Customer Perceptionse.g. A telephone
repair person depends on services provided by the dispatchers
vehicle maintenance crew, the repair person is the Internal
Customer for the dispatchers and the vehicle maintenance crew.
Any customer who calls up for the repair of his equipment is the
External Customer for the service repair person. RELIABILITY
SITUATIONALRESPONSIVENESS FACTORS SERVICE
QUALITYASSURANCE CUSTOMER PRODUCT SATISFACTION
QUALITYEMPATHYTANGIBLES PRICE PERSONAL FACTORS
USTOMER PERCEPTIONS OF QUALITY AND CUSTOMER
SATISFACTION CUSTOMER SATISFACTION
Satisfaction of the customer’s evaluation of a product or service in
terms of wherher that product orservices has met their needs and
expectations.Failure to meet needs and expectations is assumed to
result in dissatisfaction with the product orservice.CUSTOMER
SATISFACTION IS INFLUENCED BY:-1 PRODUCT AND SERVICE
FEATURES:- Influence significantly customers satisfaction. 1.e.g.
For service such as resort hotel, important features might include
the pool area, restaurants, room comfort and privacy, helpfulness
and courtesy of staff, room price and so forth Through focus,
companies would determine what the feature and attributes are for
their service and the measure perceptions of those features as well
as overall satisfaction level. Customer would make trade offs among
different service features (e.g. price level V/s. quality V/s.
friendliness of personnel) depending on the type of service being

evaluated and the criticality of the service.2 CONSUMER
EMOTIONS:- Consumer’s emotions can also affect their perceptions
of satisfaction with products and services. These emotions can be
stable, pre-existing emotions mood state.e.g. When you are at a very
happy stage in your life (such as when you are on vacation), and
your good happy mood and positive frame of mind has influenced
how you feel about the services you experience.3. ATTRIBUTIONS
FOR SERVICE SUCCESS OR FAILURE:- Attributions – the perceived
causes of events- influence perception of satisfaction as well.e.g. In
a weight loss organization if a customer fails to lose weight as
hoped for, she will likely search for the causes – was it something
that she did, was the diet plan ineffective, or did circumstances
simply not allow her to follow the diet regimen.
For many services, customer’s atleast take partial responsibilities
for how things turn out.4 PERCEPTIONS OF EQUITY OR FAIRNESS:-
customer satisfaction is influenced by perception of equity and
fairness.e.g. Have I been treated fairly compared with other
customers?
OUTCOMES OF CUSTOMER SATISFACTIONRELATION SHIP BETWEEN
CUSTOMER SATISFACTION AND LOYALTY INCOMPETITIVE
INDUSTRY 100 80 60 40 20 1 2 3 4 5 Very Dissatisfied Neither
Satisfied Very Dissatisfied satisfied nor Satisfied dissatisfied
RELATIONSHIP BETWEEN CUSTOMER SATISFACTION AND LOYALTY
INCOMPETITIVE INDUSTRYSERVICE QUALITY
Service quality is a focused evaluation that reflects the customer’s
perception of specific dimensionsof services:- Reliability,
Responsiveness, Assurance, Empathy, Tangibles.PROCESS VERSUS
TECHNICAL OUTCOME QUALITYUltimately the consumers judge the
quality of services on their perceptions of the technical
outcomeprovided and on how that outcome was delivered.e.g.
Restaurant customer will judge the service on her perceptions of
the meal (technical outcome quality) and on how the meal was
served and how the employees interacted wit her (process
quality)When outcome is difficult to evaluate the customer will base
their judgment of quality on processdimensionsIn most of the legal
service or service where face to face interaction was their, courtesy
was anextremely powerful signal and the level of courtesy

accounted for at least 60% of the variation inhow happy or angry a
respondent was with the attorney.SERVICE QUALITY
DIMENSIONResearch suggests that customers do not perceive
quality as a unidimensional concept. That is,customer’s assessment
of quality include perception of multiple factors.Researchers have
found that consumers consider five dimensions in their assessment
of servicequality; • RELIABILITY:- Ability to perform the promised
service dependably and accurately. • RESPONSIVENESS:-
Willingness to help customers and provide prompt service. •
ASSURANCE:- Employee’s knowledge and courtesy and their ability
to inspire trust and confidence • EMPATHY:- Caring, individualized
attention given to customers • TANGIBLES:- Appearance of physical
facilities, equipment, personnel, and written material
EXAMPLES OF HOW CUSTOMERS JUDGE THE FIVE DIMENSIONS OF
SERVICEQUALITY CAR REPAIR INFORMATION (COMSUMER)
PROCESSING(INTERNAL)Reliability Problem fixed the first time
Provides needed information and ready when promised when
requestedResponsiveness Accessible; no waiting; Prompt response
to requests; responds to requests not “Bureaucratic”, deals with

problems promptlyAssurance Knowledge mechanics Knowledge
staff: well trained; credentialsEmpathy Acknowledges customers by
Knows internal customers as name; remembers previous
individuals; understands problems and preferences individual and
departmental needsTangibles Repair facility; waiting area; Internal
reports; office area; uniforms; equipment dress of
employeesBUILDING BLOCKS OF SATISFACTION AND SERVICE
QUALITYThe service encounter or the moment of truth.Interactive
marketingThis is where the promises are kept or broken. Real time
marketingIt is from these service encounters that customers build
their perceptions.SERVICE ENCOUNTER OR “MOMENTS OF
TRUTH”From a customer’s point of view, the most vivid impression
of service occurs in the serviceencounter, or the “moment of truth”.
e.g. For a hotel customer service encounters are checking into the
hotel, being taken into the roomby a bell boy, eating a restaurant
meal, requesting a wake up call, checking out.From the
organizations point of view, each encounter thus presents an
opportunity to prove itspotential as a quality service provider and to
increase customer loyalty.For Disney Amusement park – 74

customer encountersFor Mariott Hotel - 4 of the top 5 factors come
into play in the first 10 minutes of the guest stay.THE IMPORTANCE
OF ENCOUNTERS CHECK IN BELL PERSON TAKES TO ROOM
RESTAURANT MEAL WAKE UP CALL CHECK OUTA SERVICE
ENCOUNTER CASCADE FOR A HOTEL VISITTYPES OF SERVICE
ENCOUNTERSA service encounter occurs every time a customer
interact with the service organization:There are three types of
service encounters:- 1) REMOTE ENCOUNTER 2) PHONE 3) FACE-TO-
FACE1) REMOTE ENCOUNTER:- Encounters which occur without any
direct human contacts (e.g. ATM, Co having sent a bill). In this
encounters the tangible evidence of the service and the technical
process and systems become primary basis for judging.
What could or should have been done differently?On this basis of
thousands on service encounter stories, four common themes- 1)
RECOVERY (after failure) 2) ADAPTABILITY 3) SPONTANIETY 4)
COPINGHave been identified as the sources of customer
satisfaction / dissatisfaction in memorable serviceencounter. 1)
RECOVERY : Employee response to service delivery system pailures
2) ADAPTABILITY: Employee response to customer needs and

requests 31Projectsformba.blogspot.com Services Marketing What
resulted that made you feel the interaction was satisfying (or
dissatisfying)?  Exactly what did the employee (firm) say or do? 
What specific circumstances led up this situation?  When did the
incidence happen?  Think of a time when, as a customer you had a
particularly satisfying (or dissatisfying) interaction with – 2)
PHONE ENCOUNTERS:- There is a greater potential variability in the
interaction compared to remote encounter Tone of voice, employee
knowledge, and effectiveness / efficiency in handling customer
issues become important criteria for judging quality in these
encounters.3) FACE-TO-FACE ENCOUNTERS:- this is direct contact
between an employee and a customer. Determining and
understanding service quality issues in face-to-face counters is the
most complex of all. Both verbal and non verbal behaviors are
important determinants of quality, as are tangible cues such as
employees dress etc.SOURCE OF PLEASURE AND DISPLEASURE IN
SERVICE ENCOUNTERSCritical incidence technique is used to get
customers and employees to provide verbatim storiesabout
satisfying and dissatisfying service encounters they have

experienced.With this technique, customers (either internal or
external) are asked the following questions:
RESPONTANEITY: Unprompted and unsolicited employee action 4)
COPING: Employee response to problem customersGENERAL
SERVICE BEHAVIORS – DO’S AND DON’TTHEME DO DON’TRecovery
Acknowledge problem Ignore customer blame explain causes
apologize customer leave customer to “fend for him/herself”
Compensate / upgrade Downgrade layout options Act as if nothing
Take responsibility “Pass the buck”Adaptability Recognize the
seriousness Ignore of the need acknowledge Promise, but fail to
follow Anticipate through show unwillingness to try Attempt to
accommodate Embarrass the customer Adjust the system laugh at
the customer avoid responsibility “pass Explain rules / policies the
buck” take responsibilitySpontaneity Take time be attentive Exhibit
impatience ignore anticipate needs listen yell / laugh / swear steal
provide information show from customer empathy
discriminateCoping Listen Take customer’s dissatisfaction
personally Try to accommodate Let customer’s dissatisfaction
affect others Explain let go of the customer

BUILDING CUSTOMER RELATIONSHIPRELATIONSHIP MARKETING
There has been a shift from a transactions to a relationship focus in
marketing.Customers become partners and the firm must make
long-term commitments to maintaining thoserelationships with
quality, service and innovation.Relationship marketing essentially
represents a paradigm shift within marketing-Away from an
acquisitions / transactions focus toward a retention / relationship
focus.Relationship marketing (or relationship management) is a
philosophy of doing business, a strategicorientation, that focuses on
keeping and improving current customers, rather than acquiring
newcustomers.Historically, marketers have been more concerned
with acquisition of customers, so a shift to arelationship strategy
often represents :• Change in mind set• Organizational culture• And
employee reward systems.GOALS OF RELATIONSHIP
MARKETINGThe primary goal of relationship marketing is to build
and maintain a base of committed customerswho are profitable for
the organization.To achieve this goal, the firm will focus on the
attraction, retention and enhancement of customerrelationships.
ENHANSING RETAINING SATISFYING ACQUIRING

CUSTOMER GOALS OF RELATIONSHIP MARKETING Loyal customers
not only provide a solid base for the organization, they may
represent growthpotentials.BENEFITS OF CUSTOMER / FIRM
RELATIONSHIPSBoth parties benefit i.e., customer / firm from
customer retention. It is not only in the best interest ofthe
organization to build and maintain a loyal customer base, but
customers themselves also benefitfrom long-term
associations.BENEFITS FOR CUSTOMERSCustomers will remain
loyal to a firm when they receive greater value relative to what they
expectfrom competing firmsValue represents a trade-off for the
consumer between the “given” and the “get”
components.Consumers are more likely to stay in a relationship
when the gets (quality, satisfaction, specificbenefits) exceed the
gives (monetary and non monetary costs)Beyond the specific
inherent benefits of receiving service value, customers also benefit
in otherways from long term associations with firm.Research has
uncovered specific types of relational benefits, these are:- •
CONFIDENCE BENEFITS • SOCIAL BENEFITS • SPECIAL TREATMENT
BENEFITSCONFIDENCE BENEFITSThese benefits comprise feelings
of trust or confidence in the providers, alongwith a sense of

areduced anxiety and comfort in knowing what to expect.Across all
of the services studied in the research just cited, confidence
benefits were the mostimportant to customers.e.g. Child Care
ProviderOnce the child care has been identified and established a
satisfying relationship with a goodcaregiver family stress is reduced
and the quality of life improved.SOCIAL BENEFITSOvertime,
customers develop a sense of familiarity and even a social
relationship with their serviceproviders.
In some long-term customer / firm relationship a service provider
may actually become part of thecustomer’s social support system.A
quote from the research where a customer describes her hair
stylist: “I like him….. he’s reallyfunny and always has lots of good
jokes. He’s kind of like a friends now…..it’s you’re used to. Youenjoy
doing business with them”.SPECIAL TREAMTEMT BENEFITSSpecial
treatment includes such things as getting the benefit of doubt,
being given a special deal orprice, getting preferential
treatment.e.g. Doctor asking you to come is minutes before starting
his consultation with the customers.BENEFITS FOR THE
ORGANISATIONSThe benefits to an organization of maintaining and

developing a loyal customer base are numerous.They can be linked
directly to the firm’s bottom line. • INCREASING PURCHASES •
LOWER COSTS • FREE ADVERTISING THROUGH WORD OF MOUTH •
EMPLOYEE RETENTIONLIFE TIME VALUE OF A CUSTOMERLife time
value of a customer is a concept or calculation that looks at
customer from the point ofview of their lifetime revenue and
profitability contributions to a company.ESTIMATING LIFETIME
VALUEIf companies knew how much it really costs to lose a
customer, they would be able to makeaccurate evaluations of
investments designed to retain customers.e.g. Tom Peters
calculated lifetime value of his small firm (20 person office) as a
customer ofFederal Express as followsBusiness from Tom Peters
office per month $ 1500Assuming a 10-year average lifetime for a
customer in the express mail industry, the value $ 1500 /month x 12
month / year x 10 years = $180000Going further, a happy customer
will create at least one new customer via word of mouth$ 180,000 x
2 (New customers) = $ 360,000 35Projectsformba.blogspot.com
Services Marketing
Thus the value of his company’s business for Federal Express was
about $ 360,000It is estimated that the average fed ex delivery

person stops at 40 business the size of Peter’sbusiness each day $
360,000 / company x 40 companies $ 14,000,000Thus the average
employee of Federal Express is managing a $ 14,000,000 portfolio of
lifetimebusiness for the company.THE CUSTOMER ISN’T ALWAYS
RIGHTTHE WRONG SEGMENT: A company cannot target its services
to all customers; some segmentswill be more appropriate than the
others. It would not be beneficial to either the company or
thecustomer to establish a relationship with the customer whose
needs the company can’t meet.e.g; a resort company which gets the
old people and young crowd together at the same time at
theresort.NOT PROFITABLE IN THE LONG TERM : some segments of
the customers will not beprofitable for the company even if their
needs can be met by the services offered.e.g; a credit card
company will not like deal with the customer who doesn’t pay the
bills on time orsomeone who doesn’t uses it to an extent the
company expect.DIFFICULT CUSTOMER: some customers put huge
demands on the company and as suchcompany would not be
Interested in such customer.Eg. Some ad agencies say that some
clients would make them do lot many presentations and finallyat

times award the contracts to someoneelse who is known to them.
SERVICE RECOVERY
Service Recovery refers to the action taken by an organization
response to a service failure.Failure occurs for all kinds of reasons-
The service may be unavailable when promised- It may be delivered
late or too slowly- The outcome may be incorrect or poorly
executed- Employees may be rude or uncaringAll of these types of
failures bring about negative feelings and responses for the
customers.Left Unfixed- They can result in customers leaving-
Telling other customers about their negative experiences- Even
challenging the organization through customers rights organizations
or legal channelsResearch has shown that resolving customer
problems effectively has a strong impact on- Customer satisfaction-
Loyalty- Bottom line performanceIt has been observed that
customers who experience service failures, but are ultimately
satisfiedbased on recovery efforts by the firm, will be more loyal
than those whose problems are notresolved.Those who complain
and their problems resolved quickly are much more likely to
repurchase thanare those whose complaints were not

resolved.Those who never complain are likely least likely to
repurchase 37Projectsformba.blogspot.com Services Marketing
Unhappy Customers 9%who donotcomplain 37%Unhappy
customerswho do complain 19%Complaints notresolved 46%
54%Complaints 70%resolvedComplaints resolved 82%quickly 95%
Percentage of Customers who will buy again
An effective Service Recovery strategy can- Increase customer
Satisfaction and Loyalty- Generate positive Word of MouthA well
designed, well documented services strategy also provides
information that can be used toimprove service as part of a
continuous improvement effortIneffective Service Recovery
Strategies can lead to customers who are so dissatisfied they
become“Terrorist”, actively pursuing opportunities to openly
criticize the company.Repeated Service Failures without an
effective Recovery Strategy in place can aggravate even thebest
employees.The costs in Employee Morale and even lost employee
can be huge.THE RECOVERY PARADOXIt is suggested that
customers who are dissatisfied, but experience a high level of
excellent servicerecovery, may ultimately be even more satisfied

and more likely to repurchase than are those whowere satisfied I
the first place.The logical but not very rational conclusion is that
companies should plan to disappoint customersso that they can
recover and gain even greater loyalty from them as a result.This
idea has become known as the RECOVERY PAPADOX.Recovery
Paradox is more complex than it may seem on the surface.1 It is
expensive to fix mistakes.2 Empirical Research suggests that only
under the very highest levels of customers’ Service Recovery
ratings will we observe increased satisfaction and loyalty.It is safe
to say that “ Doing it right the first time “ is still the best and safest
strategy.However, when a failure does occur, then every effort at a
superior Recovery should be made tomitigate its negative effects.In
cases where the failure can be fully overcome, the failure is less
critical, or the Recovery Effort isclearly superlative, it may be
possible to observe evidence of the Recovery Paradox.
How Customers Respond To Service Failures Service Failure
Dissatisfaction/ Negative Emotions Complaint Action No Complaint
ActionComplain to Negative word Third Party Provider of mouth

Action Exit/Switch Stay Exit/Switch Stay 40
Projectsformba.blogspot.com Services Marketing
Customer Complaint Action Following Service FailureVariety of
negative emotions can occur following a service failure, including
such feelings as anger,discontent, disappointment, self pity and
anxiety.These initial negative responses will affect how customers
evaluate the Service Recovery effort andpresumably their ultimate
decision to return to the service provider or not.Many customers are
very passive about their dissatisfaction, simply saying or doing
nothing.It is known that those who donot complain are least likely
to return.For companies, customer passivity in the face of
dissatisfaction is threat to future success.TYPES OF CUSTOMER
COMPLAINT ACTIONS
If customers initiate actions following service failure , the action
can be of various types as shownin the Fig.From company’s point of
view any customer who complains on the spot is the best case
scenario.Company has the chance to respond immediately.If they
don’t complain immediately, customers may choose to complain
later to the provider byphone or in writing, or even write or call the
corporate offices of the company.In all the above cases, the

company has a chance to recover.These Proactive types of
complaining behavior is preferred as voice responses or Seeking
Redress.TYPES OF COMPLAINERSFour categories on how the
customers respond to failures have been identifies.These
categories are:(1) Passives (2) Voicers (3) Irate (4)Activist(1)
Passives: This group of customers is least likely to take any action .-
They are unlikely to say anything to the provider- Less likely than
others to spread negative Word of Mouth, unlikely to complain to
third party.- They often doubt the effectiveness of complaining,
thinking the consequences will not merit the time and the effort
they will expend.
Voicers: These customers actively complain to the service provider-
Less likely to spread the negative word of mouth, to switch
patronage, or to go to third parties with their complaints.- These
customers to be viewed as the service providers friend.- Actively
complain and give company a second chance.- They believe
complaining has social benefits and therefore don’t hesitate to
voice their opinion.(3) Irates: These customers are more likely to
engage in negative word of mouth to friends and relatives and to
switch providers than are others.- They feel alienated from the
market place.- They are angry with the service provider although
they do believe that complaining to the service provider can have a
social benefits.- They are less likely to give the service provide a
second chance.(4) Activists: These consumers are characterized by
above average propensity to complain on all dimensions.- They will
complain to the provider, they will tell others, and they are more
likely than any other group to complain to third parties.- They have a
very optimistic sense of the potential positive consequences of all
types of complaining.
WHY DO ( AND DON’T) PEOPLE COMPLAIN?
The categories just described suggest that some customers are
more likely to complain than others.As individuals, these customers
believe that positive consequences may occur and that there
aresocial benefits of complaining, and their personal norms support
their complaining behavior.They believe they will and should be
provided compensation for the service failure in some form.They
believe that fair treatment and an good service are their due, and
that in case of service failure,someone should make good.In some
cases they feel a social obligation to complain – to help others avoid
similar situations or topunish the service provider.A very small

number of consumers have “ complaining” personalities – they just
like to complain orcause trouble.Those who are unlikely to take any
action hold the opposite beliefs. 42Projectsformba.blogspot.com
Services Marketing
They often see complaining as a waste of their effort .WHEN THEY
COMPLAIN, WHAT DO CUSTOMERS EXPECTCustomers want justice
and fairness in handling their complaintsCustomers are looking for:
OUTCAME FAIRNESS PROCEDURAL FAIRNESS INTERACTIONAL
FAIRNESS1. Outcome Fairness: They expect equity in the exchange-
i.e. they want to feel that the company has “Paid” for its mistakes in
a manner at least equal to what the customer has suffered. The
company’s “ punishment should fit the crime”. They also appreciate
it when a company gives them choices in terms of compensation.
E.g. A hotel guest should be offered the choice of a refund or free
upgrade to a better room in compensation for a room not being
available on arrival. On the other hand, customers can be
comfortable if they are overly compensated. E.g. Domino’s Pizza
offered not to charge if the driver arrived after 30 minutes
guarantee delivery time. Many customers were not comfortable

asking for this level of compensation, especially if the driver was
only few minutes late.2. Procedural Fairness: In addition to fair
compensation, customers expect fairness in terms of policies, rule
and timeliness of the complaint process. They want easy access to
the complaint process and they want things handled quickly,
preferably by the first person they contact. Fair procedures are
characterized by clarity, speed and absence of hassles. Unfair
procedures are those that customers perceive as slow, prolonged
and inconvenient. Customers also feel it is unfair if they have to
prove their case- when the assumption seems to be they are wrong
or lying until they can prove otherwise.3. Interactive Fairness:
Customers expect to be treated politely, with care and honesty. This
form of fairness can dominate the others if customers feel the
company and its employees have uncaring attitudes and have done
little to try to resolve the problem. Often rude and uncaring behavior
of employees is due to lack of training and empowerment- a
frustrated, frontline employee who has no authority to compensate
the customer may 43Projectsformba.blogspot.com Services
Marketing easily respond in an aloof and uncaring manner,
especially if the customer is angry and/or rude. SWITCHING VERSUS

STAYING FOLLOWING SERVICE RECOVERY Ultimately, how a
Service Recovery failure is handled and the customer’s reaction to
recovery effort can influence future decisions to remain loyal to the
service provider or to switch to another provider. The more serious
the failure, the more likely the customer to switch no matter what
the recovery effort. The nature of the Customer’s Relationship with
the firm may also influence whether the customer stays or switches
providers. There are three types of relationships viz. -“True
Relationships” where the customer has had repeated contact
overtime with the same service provider. These customers are more
forgiving of poorly handled service failures and are less likely to
switch than others. - “First Time Encounter” Relationship is where
the customer has had only one contact, on a transaction basis, with
the provider. These customers are more likely to change. - “Pseudo
Relationship” is one where the customer has interacted many times
with the same company, but with different service provider (people)
each time. Individual customer’s attitude towards switching will
strongly influence whether he or she ultimately stays with the
provider. Thus certain customers will have greater propensity to
switch service providers no matter how their Service Failure

situations are handled. Finally, the decision to switch to a different
service provider may not occur immediately following service
failure or poor service recovery, but may follow an accumulation of
events. The service switching can be viewed as a process resulting
from a series of decisions and critical service encounters overtime,
rather than one specific moment in time when a decision is made.
This process orientation suggests that companies could potentially
track customer interactions and predict the likelihood of defection
based on a series of events. By intervening earlier in the process
companies can prevent at time customer’s decision to switch.
SERVICE BLUEPRINTING Services commonly lack concrete
specifications. Products on the other hand are produced with
concrete and detailed plans, written specifications and engineering
drawings. A Service ,even a complex one, might be introduced
without any formal, objective depiction of process. A Service
Blueprint is a picture or map that accurately portrays the service
system. This is to assume that the different people involved in
providing it can understand and deal with it objectively regardless
of their individual points of view. Blueprints are particularly useful

at the design and redesign stage of development. A Service
Blueprint visually displays the service by simultaneously depicting
the process of service delivery, the points of customer contact, the
roles of customers and employees, and the visible elements of the
service. Process Service Points of Contacts Blueprint Evidence
Service BlueprintingBlueprint ComponentsThe key components of
Service Blueprints are shown in the fig.They are Customers actions,
“ On Stage” Contact Employee Actions, “BackStage”
ContactEmployee Action and Support processes.
Physical Evidence Customer Actions Line of Interaction On Stage
ContactEmployees ActionsLine Of VisibilityBack Stage
ContactEmployee ActionsLine of Internal InteractionSupport
Processes SERVICE BLUEPRINT COMPONENTS The customer
actions area encompasses the steps, choices, activities and
interactions that the customer performs in the process of
purchasing, consuming and evaluating the service. E.g. Ina legal
services the customer actions might include a decision to contact
an attorney, phone calls to the attorney, face to face meetings,
receipt of documents and receipt of bill. Onstage Employee actions

are the steps and activities that the contact employee performs
that are visible to the customer. Backstage employee actions are
the steps and actions that occur behind the scenes to support the
on stage activities. 46Projectsformba.blogspot.com Services
Marketing
The support processes cover the internal services, steps and
interactions that take place to support the contact employees in
delivering the service. Line of Interaction represents the direct
interactions between the customer and the organization. Anytime a
vertical line crosses the horizontal line of interaction, a direct
contact between the customer and the organization or a service
encounter has occurred. Line of Visibility separates all service
activities that are visible to the customer from those that are not
visible. Line of Internal Interaction separates contact employee
activities from those of other service support activities and people.
Vertical Lines cutting across the line of Internal Interaction
represent internal service encounters. MARKETING INFORMATION
SYSTEM
Marketing Information System is defined as an assembly of inter-
related information subsystems:receiving, processing and

disseminating information on a continued basis to help make
marketingdecision.Type of Research Primary Research
ObjectivesComplaint solicitation To identify/attend to dissatisfied
customers To identify common service failure pointsCritical incident
studies To identify “best practices” at transaction level To identify
customers requirements as input for qualitative studies To identify
common service failure points To identify systemic strengths and
weaknesses in customer-contact servicesRequirements To identify
customer requirements as input forresearch qualitative
researchTrailer calls To obtain immediate feedback on performance
of service transactions To measure effectiveness of changes in
service delivery To assess service performance of individuals and
teams To use as input for process improvements To identify common
service failure pointsService expectation meetings and reviews To
create dialogue with important customers To identify what
individual large customers expect and then to assure that it is
delivered To close the loop with important customersProcess
checkpoint evaluations To determine customer perceptions of long
term professional services during service provision To identify
service problems and solve them early in the service

relationshipMarket –oriented ethnography To research customers in
natural settings To study customers from cultures other than your
home country 48Projectsformba.blogspot.com Services Marketing
Type of Research Primary Research ObjectivesMystery To measure
individual employee performanceshopping for evaluation ,
recognition and rewards To identify systemic strengths and
weaknesses in customer-contact servicesCustomer To monitor
changing customer expectationspanels To provide a forum for
customers to suggest and evaluate new service ideasLost customer
research To identify reasons for customer defectionDatabase
marketing research To identify the individual requirements of
customers using information technology and database
informationFuture expectations To forecast future expectations of
customersresearch To develop and test new service ideas
EMPLOYEES’ ROLE IN SERVICE DELIVERY CUSTOMER Service
Delivery COMPANY Service Performance Gap Customer-Driven
Service Designs and StandardsThe Critical Importance of Service
EmployeesIt is very important to focus on employees because : •
They are the service • They are the organization in the customer’s
eyes • They are the brands • They are the marketers
In many cases , the contact employee is the service – there is
nothing else. E.g. in most personal andprofessional services (like
haircutting, physical trainers, child care , cleaning /maintenance
etc.) thecontact employees provide s the entire service single
handedly. The offering is the employee. Thusinvesting in the
employee to improve the service parallels making a direct
investment in theimprovement of a manufactured product.Because
contact employees represent the organization and can directly
influence customersatisfaction, they perform the role of marketers.
They physically embody the product and are thewalking billboards
from the promotional point of view.Whether acknowledged or not ,
actively selling or not, service employees perform
marketingfunctions. They can perform these functions well, to the
organization’s advantage, or poorly to theorganization’s
detriment.Employee Satisfaction, Customer Satisfaction and
ProfitsThere is a concrete evidence that satisfied employees make
for satisfied customers (satisfiedcustomers can, in turn, reinforce
employees’ sense of satisfaction in their jobs). Some have gone

sofar as to suggest that unless service employees are happy in their
jobs, customer satisfaction will bedifficult to achieve.Research has
shown that both a climate for service and a climate for employee
well-being arehighly correlated with overall customer perceptions of
service quality. The Service Profit ChainBOUNDARY-SPANNING
ROLESThe front-line service employees are referred to as boundary
spanners because they operate at theorganization’s boundary. They
provide link between the external customer and environment and
internal operations of the organization. They serve the critical
function in understanding , filteringand interpreting information and
resources to and from the organization and external
constituencies.Who are these boundary spanners? What type of
people and positions comprise critical boundary-spanning roles?
Their skills and experience cover the full spectrum of jobs and
careers.In industries such as fast food, hotels, telecommunication,
and retail, the boundary spanners are theleast skilled, lowest paid
employees in the organization. They are order takers, front
deskemployees, telephone operators, store clerks, truck drivers, and
delivery people.In other Industries, boundary spanners are well

paid, highly educated professionals – for example,doctors, lawyers,
accountants, consultants, architects, and teachers.No matter what
the level of skill or pay, boundary-spanning positions are often high-
stress jobs.These positions require: • Mental Labor • Physical Labor
• Emotional LaborEmotional LaborThis refers to the labor that goes
beyond the physical or mental skills needed to deliver
qualityservice. It means delivering smiles, making eye contact,
showing sincere interest, and engaging infriendly conversation with
people who are essentially strangers and who may or may not ever
seeagain.Friendliness, courtesy, empathy, and responsiveness
directed towards customers all require hugeamount of emotional
labor from the front-line employees who shoulder the responsibility
for theorganization.Emotional Labor draws on people’s feeling (often
requiring them to suppress their true feelings) tobe effective in their
jobs. A front-line service employee who is having a bad day or isn’t
feeling justright is still expected to put on the face of the
organization when dealing with customers.The organizations need
to carefully selecting the people who can handle emotional stress,
trainingthem in needed skills (like listening and problem solving),
and teaching or giving them copingabilities and strategies (via job

rotation, scheduled breaks, teamwork or other
techniques).SOURCES OF CONFLICTFront-line employees often face
interpersonal and interorganizational conflicts on the job.
Theirfrustration and confusion can, if left unattended, lead to
stress, job dissatisfaction, a diminishedability to serve customers,
and burnout.
As these employees represent the customer to the organization and
often need to manage a numberof customers simultaneously, front
liners inevitably have to deal with conflicts, includingperson/role
conflicts, organization/client conflict, and inter-client conflicts.1.
Person/Role Conflicts : In some situations the front-line employees
feel conflict between whatthey are asked to do and their own
personalities, orientations, or values.Person/role conflict also arises
when employees are required to wear specific clothing or
changesome aspect of their appearance to confirm to the job
requirements. E.g A young lawyer, just out ofcollege may feel an
internal conflict with his new role when his employer requires him
to cut hislong hair and trade his casual clothes for three piece
suit.2. Organization/Client Conflict : A more common type of conflict
for front-line serviceemployees is the conflict between their two

bosses, the organization and the individual customer.Service
employees are typically rewarded for following certain standards ,
rules, and procedures.Ideally these rules and standards are
customer based. When they are not, or when a customersmakes
excessive demand, the employee has to choose whether to follow
the rules or satisfy thedemands.So an employee has two bosses one
customer and one in the organization to whom he is reporting.These
conflicts are especially severe when service employees depend
directly on the customer forincome. E.g. employees who depend on
tips or commissions are likely to face greater levels
oforganization/client conflict because they have even greater
incentives to identify with the customer.3. Interclient Conflict :
Sometimes conflict occurs for boundary spanners when there
areincompatible expectations and requirements from two or more
customers. This occurs most oftenwhen the service provider is
serving the customers in turn (a bank teller, a ticketing agent, a
doctor)or is serving many customers simultaneously (teachers,
entertainers).In case of serving customers in turn , the service
provider may satisfy one customer by spendingadditional time,
customizing the service , and being very flexible in meeting the

customer’s needs>Meanwhile, waiting customers are becoming
dissatisfied because their needs are not being met in atimely
manner.Beyond the timing issue, different clients may prefer
different modes of service delivery. Having toserve one client who
prefers personal recognition and a degree of familiarity in the
presence ofanother client who is all business and would prefer little
interpersonal interaction can also createconflict for the employee.In
the case of serving many customers at the same time, it is often
difficult or impossible to servethe full range of needs of a group of
heterogeneous customers simultaneously. This type of conflictis
readily apparent in any college classroom where the instructor must
meet a multitude ofexpectations and different preferences for
formats and style.
Strategies for Closing GAP 3A complex combination of strategies
is needed to ensure that service employees are willing and ableto
deliver quality services and that they stay motivated to perform in
customer-oriented, serviceminded ways. These strategies for
enabling service promises are often referred to as
internalmarketing .Even during slow economic times, the
importance of attracting, developing, and retaining goodpeople in

knowledge and service based industries cannot be
overemphasized.By approaching human resource decisions and
strategies from the point of view that the primarygoal is to motivate
and enable employees to deliver customer-oriented promises
successfully, anorganization will move towards closing gap3.To
build a customer-oriented ,service-minded workforce, an
organization must : • Hire the right people • Develop people to
deliver service quality • Provide the needed support systems •
Retain the best people 54Projectsformba.blogspot.com Services
Marketing
HUMAN RESOURCE STRATEGIES FOR CLOSING GAP3
Hire for service competencies Compete and service Be the for the
inclination preferred best employer people Measure and Train for
reward strong Hire the right technical and service people
interactive skills Develop Treat Retain the Customer- people to
employees best Oriented deliver Empower as people Service
service employees customers Delivery quality Provide needed
Include Promote support employees systems teamwork in the
company’s vision Develop service- Provide Measure internal

oriented supportive service quality internal technology processes
and equipment
CUSTOMER’S ROLES IN SERVICE DELIVERY
Service customers are often present in the “factory” (the place the
service is produced and/orconsumed), interacting with employees
and with other customers.E.g In a classroom or training situation,
students (customers) are sitting in the factory interactingwith the
instructor and other students as they consume the educational
services.Since these customers are present during service
production, customers can contribute to or detractfrom the
successful delivery of the service and to their own satisfaction.The
Importance of Customers in Service DeliveryCustomer participation
at some level is inevitable in service delivery. Services are actions
orperformances, typically produced and consumed simultaneously.
In many situations employees,customers and even others in the
service environment interact to produce the ultimate
serviceoutcome. 55Projectsformba.blogspot.com Services
Marketing
Because the customers receiving the service participates in the
delivery process, he or she cancontribute to gap 3 through

appropriate or inappropriate, effective or ineffective , productive
orunproductive behaviors.Customers who are unprepared in terms
of what they want to order can soak up the customerservice
representative’s time as they seek advice. Similarly, shoppers who
are not prepared withtheir credit cards can “put the representative
on hold” while they search for their credit cards or goto another
room or even out of their cars to get them. Meanwhile, other
customers and calls are leftunattended, causing longer wait times
and potential dissatisfaction.The level of participation – low,
medium, high – varies across services. In some cases, all that
isrequired is the customers physical presence (low level of
participation), with the employees of thefirm doing all of the service
production work, as in case of a ghazal concert. The listeners must
bepresent to receive the entertainment service.In other cases,
consumer inputs are required to aid the service organization in
creating the service(moderate level of participation). Inputs can
include information, effort or physical possessions.All three of these
are required in case for a CA to prepare a client’s income tax return
effectively.Information in the form of tax history, marital status, and
number of dependents. Effort in puttingthe information together in a

useful fashion. Physical Possessions such as receipts and past
taxreturns.Incase of long term consulting engagements involvement
of the customers high as they co create the service.

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A project report on service marketing of

Una Industrial Traders

To provide superior specialty contracting services by creating

mutually rewarding relationships in a safe, inspiring and open

environment & To achieve our vision through fairness, business

ethics, global reach, technological expertise, building long term

relationships with all our associates, customers, partners, and

employees *Our Vision:* Creating connections that empower

people & "To be a globally recognized corporation that provides

best electrical solutions, delivered by best-in-class people." [06/10

10:06 AM] Preeeti Jiju: Objectives:- I.teamwork Believing in ‘One for

expectations in achieving organisational objectives. II. To be a

customer focussed company providing state-of-the-art products &

solutions at competitive prices, meeting the demands of quality,

Services are deeds, processes and performances.Services include

all economic activities whose output is not a physical product or

construction, isgenerally consumed at the time it is produced, and

provides added value in forms (such as convenience,amusement,

timeliness, comfort or health) that are essentially intangible

concerns of its first purchaser.Ex.: Transportation, Communication,

Educational services etc.Services Vs Customer ServiceCustomer

service is the service provided in support of a company’s core

products. This core productcould also be a service.Services tend to

be more intangible than manufactured products and manufactured

products tend to bemore tangible than services. 31% 24% 46%1970

NDUSTRY AGRICULTURE % AGE OF GDP IN INDIAThus we see in

2Projectsformba.blogspot.com Services Marketing

Tangibility Spectrum Salt Soft drinks Detergents Automobiles

Cosmetics Fast food outlets Intangible DominantTangible Dominant

Fast food outlets Advertising Agencies Airlines Investment

Management Consulting TeachingThe above diagram shows us that

there are no pure products or pure services. Instead services tend

to bemore intangible than manufactured products, and

manufactured products tend to be more tangible thanservices.

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Differences between Goods and Services Goods Services Resulting

Tangible Intangible Services cannot be inventoried Cannot be

readily displayed or communicated Pricing is difficultProduction

separate Simultaneous Customers participate in and affect thefrom

consumption transaction. Customers affect each other. Employees

affect service outcome. Decentralization may be essential. Mass

production is difficult.Standardized Variability/ Heterogeneous

actions. Service quality depends on many uncontrollable factors.

There is no sure knowledge that the planned and promoted.Non-

perishable Perishable It is difficult to synchronize supply and

demand with services. Services cannot be returned or resold.

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The Service Marketing Triangle“Building service relationships: It’s

all about promises.” COMPANY Internal Marketing (Enabling

promises) External Marketing (Making promises) PROVIDERS

CUSTOMERS Interactive marketing (Keeping promises) The Services

Triangle and Technology Company Technology Providers Customers

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“Understanding and leveraging the role of customer service in

external, interactive and internalmarketing.” Expanded Marketing

Mix for ServicesProduct PlacePhysical Good Features Channel

TypeQuality Level ExposureAccessories IntermediariesPackaging

Outlet LocationsWarranties TransportationProduct Lines

StorageBranding Managing ChannelsPromotion PricePromotion

Blend FlexibilitySales People: Price Level Number Terms Selection

Differentiation Training Discounts Incentives AllowancesAdvertising

PublicityPeople Physical Evidence ProcessEmployees Facility

Design Flow of activities Recruitment Equipment Standardized

employees Our Vision: Creating connections that empower