Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

Master of Business Administration - MBA Semester 4

Services Marketing and Customer Relationship Management - ML0015 Assignment Set - 1
Q1. What do you understand by customer defined service standards? Explain its relevance in services marketing. A. Customer Defined Service Standards Hard and Soft: Standards of service are shortened to form service standards. Service standards are not only concerned with service delivery and waiting times. It is also associated with customer expectations of service, cost of service, and remedial action when the service is not up to the mark. The five essential elements of service standards that service providers must follow are: Describe the service and the benefits that the customers are entitled to. Explain the quality of service based on the principles of the company. Set delivery targets that help in maintaining timelines. Calculate costs involved in service delivery. Form complaints and service recovery mechanisms that the company can use when the service delivered is not up to the standards. Service standards can be of two types, company defined service standards and customer defined service standards. Productivity implication, cost implication, company process blueprint and company view of quality are the basis for company defined service standards. Customer defined service standards are the ones that are based on customer expectation and reflect the view point of customers. The sources of customer service defined standards are customer expectations, customer process blueprint, customer experience and observations. Customer defined standards are the standards that close the provider gap. Company defined service standards are internal and based on productivity, efficiency, costs, and technical quality. Customer defined service standards are based on the requirements that are assessed and measured by customers. There are two types of customer defined standards namely hard and soft. These two types will be discussed in the next two sections. Hard customer defined standard The services that can be counted, timed or observed through audits are known as hard customer defined standards. Customers emphasise on reliability and fulfilment of promises. In order to provide reliable service, the firms adopt the policy of do it right the first time and honour your promises. An example for do it right the first time would be that a customer receives exactly what he ordered for without any damage. Right on time would refer to a delivery that would take place on time. Hard customer defined standards need to be adapted according to the different countries. This is because what is considered a prompt service in one country may not be the same in another country.

Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

For hard customer defined standards, let us consider the example of a service station for vehicles. The following can be considered as hard customer defined services: Appointment for servicing available within a single day of customer placing request. Within a minute of inquiry service status is provided. The vehicle is serviced at the first visit. The serviced vehicle is delivered exactly on the mentioned delivery date. Soft customer defined standard Opinion based measures that cannot be observed and must be collected by talking to customer. This is purely based on the input obtained from customers. Soft customer defined standards are known as second category of customer defined standards. These standards are opinion based and cannot be measured. Soft standards are established by talking to customer, employees and so on. Direction guidance and feedback are obtained by soft customer defined standards. Customer perceptions and beliefs are measured in defining soft standards. Soft standards are important for person to person selling of processes. For soft customer defined standards let us consider the example of a service station for vehicles. The following can be considered as soft customer defined services. Customers are asked about the service requirements and they are recorded on a repair form. Explaining clearly to customers about the work done and the costs involved.

Meeting Customer Defined Service Standards: Firms need to take the necessary action to meet the customer defined service standards. The following steps can be used to meet the customer defined standards: Identify existing or desired service encounter sequence: Firms need to identify the manner in which customer prefer to do business with the firm. Translate customer expectations into behaviours/actions: This involves research on customer expectations. The ultimate decision should be made by an inside department or research firm by gathering information on behaviours.
Select behaviours/actions for standards: This step is concerned with prioritising behaviours and actions. Focus is given to what is important to customers and customer defined standards. Set hard and soft standards: It involves deciding if soft or hard standards should be used to determine the behavioural action. Develop feedback mechanisms: Feedback mechanism ensure that the performance is captured from the customers point of view. Establish measures and target levels: This involves the company setting certain standards for establishing target levels. Track measures against standards: Processes are continually checked and measures are taken to improve their performance. Provide feedback about performance to employees: The company provides immediate feedback to employees based on what the companies expect and their performance levels. Update target levels and measures: This involves upgrading the target level, meeting, customer requirement s and targets and keeping up with their expectations.

Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

Q2. Explain the concept of service design and service delivery in services marketing. A. Service design Service design is the process of arranging and organising persons, infrastructure, communication, and material elements of a service to improve its quality and to facilitate interaction between service provider and customers. It is a multi-disciplinary field. It helps to innovate and improve existing services to make them useable and desirable for clients and effective for organisation. For example, a restaurant might opt for a service design agency which asks them to change the way menu is written or room layout to attract more customers.
Service design is a continuous process that works with components, projects, and workshops to integrate innovative service practices into organisation. Service design adapts well to organisational requirements and can be converted into business structures and processes. It helps in unveiling opportunities, generating ideas, resolving problems and implementing productive solutions. It generates specifications, strategies, and guidelines. It uses different methods to explain and share complex structures and procedures. .It makes use of prototyping to test results and process maps to implement solutions. In short, it includes stating and constructing technically networked social practices. Design of a service includes organising or re-organising the activities that are offered by service provider. This also involves internal processing of queries/letters sent by customers and redesigning media used by customers to contact service provider. For example, website, telephone, blog, in-person and so on. Process is performed based on service users insights. This technique provides more insights into usability of a service and is more effective than surveys. These collected ideas are captured in sketches or in service prototypes. Service design is used by many of public sector organisations as a method to change customer requirements with regard to service experience. Service design agencies implement new tools and techniques in order to improve their existing services or to create new ones. Service design has its own characteristics. It is difficult to prescribe exact result of an interaction between customers and service providers. It is impossible to state the form and characteristics of an emotional value produced by the service. In services marketing, active involvement of customers stresses need for a proper design activity that systematise interaction between them and employees of organisation. Involvement of customers implies that service design can be analysed not only from functional side, but also from emotional side. Challenges in service design: As services are intangible, it is difficult to communicate and describe service design. There is an increase in their complexity if services are delivered after a long period. Services are variable as employees deliver it to customers. As per experts, there are four risks involved in describing services. First risk is over simplification as words would become in adequate to describe a complex service system. Second risk is incompleteness. This means employers or managers tend to omit service aspects, which are not familiarised. Third risk is subjectivity where a person describing services will be influenced by his or her own personal experiences with service. Fourth risk is biased interpretation as word flexibility or responsiveness is likely to be misinterpreted by employees. Below figure explains various risks involved in explaining services.

Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

Various Risks in Explaining Services

Service Delivery:
Organisations will have to offer innovative operational methods, as part of its strategies for attracting customers and delivering quality services. They can implement their own innovative operational methods for delivering quality service, and use it as a key component in its competitive strategy. Let us see the manner in which various service firms embrace operational competitiveness in following four stages: 1. Available for service: In this stage, operations department attempts to avoid errors and reduce back office support in order to reduce costs. They also attempt to minimise technological investment and investment in training for front-line personals. 2. Journeyman: when operations department reach this stage, the level of competitiveness would have increased. Organisation seeks feedback from clients on costs and perceived quality of service. At this specific point, operations department become more outward looking and focus on benchmarking. 3. Achieving of competitiveness: In this stage, service operations reach a point where organisation master service and realise complexity of changing such operations. The back office will be seen as valuable as front office personal and technology will be used to improve the quality of delivery process to customers.

Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

4. World class service delivery: To maintain high quality level of performance, organisation will have to not only excel, but also be fast and innovative. The back office must be proactive, develop capabilities and generate opportunities. Involvement of customer in production process Customers are an integral part of service process irrespective of whether their participation is active or passive. Customer involvement reduces risk and accelerates speed with which new products or services are developed. The dual roles played by customer as a provider, as well as, a consumer during service delivery process also helps to prohibit companies from getting responses from customers in advance. Involving customers reduces cost of R&D and increases probability of success. The presence of customer in factory ensures that changes made to product will be visible to them. For example, when convenience stores in US were opened initially, gasoline was not part of the product offering. Advent of gasoline brought new challenges to customer. Customer had to learn the way in which a gas pump works. This forced gas pump manufacturers and convenience store owners to build up gas pumps and monitor procedures for this self-service operation. The thought of purchasing gasoline from the place where food products were sold resisted manufacturers from going for it. Managers of service firms should understand interactive nature of services and significance of consumer involvement in the production process. Customers will have a framework of themselves for services that are often used. Changes in service factory indicate changes in consumer script. New developments coming from customer and factory indicate a change in both factory and in customer. In addition, it helps organisation to provide differential services compared to its competitors, improve market acceptance, and also establish a long term relationship with customers.

Q3. Mention the different types of services with few examples and briefly give a note on service sector. A. Service is classified on the basis of service operations, tangibility level, customer employee presence, and customisation or empowerment. It has several dimensions such as: Whether the service is more focussed on people, that is, banker or ATM.
Extent of customisation. For example, the dental services designed to meet the requirements of individual clients. Whether the service is product focussed. Services are classified into three categories on the basis of class of service process. The categories are as shown below: Professional: The features of this category of service are that it is more focused on people and has higher contact time, customisation, and higher power of empowerment. The volume of customers is very low in this service. Service shop: This category of service is more process oriented. It possesses medium level of contact time, customisation, and medium level of empowerment. In this, the volume of customers is medium. Mass services: It has more focus on equipment. Its level of empowerment is low with contact time and customisation being low. It has an added back office value and higher volume of customers.

Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

Level of intangibility Services can be classified on the basis of goods and services. If a product is tangible, the evaluation can be done on the basis of quality, suitability, and so on. If it is an intangible product, the evaluation becomes much more difficult. Figure 1.1 explains the product allocation on the basis of a product tangibility scale. As per this, the service providers focus mainly on the concerns of the customer regarding the product.

Scale of Market Entities

As per Booms and Bitner, service organisations are classified as:

Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

Self Service where only customer is present. This can be found in the playing of squash. Interpersonal services where both customer and employee is present. This can be found in dry cleaning services. Remote services where only employees are present. This can be found in insurance providers. Customisation and empowerment Lovelock suggested five different classifications for services. This combines two dimensions put forward by Silverstro with three additional dimensions. Below table explains the classification done by Lovelock, which has been adopted from the book Classifying Services to Gain Strategic Marketing Insights, Journal of Marketing.
Classification of Service by Lovelock Empowerment of Employees

Level of customization of service Low High

Low

Food retailing superstore

Telephone banking

High

National health dental

Accountant

Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

As per the marketing researches, the services have been classified based on various yardsticks. Below tables explain the classifications for the services for the period 1964-80 and 1983-89.
Schemes for Classifying Services (1964-80)

Author
Kotler (1980)

Proposed Classification
The degree of customer contact needed in service delivery are in High contact, which is found in healthcare, hotels and restaurants. Low contact found in postal services and wholesaling

Comment
Synthesis in previous work identifies variations in the objective of services organisations.

Lovelock (1980)

People based versus product based Degree to which the clients presence is essential.

Create previous clas-siication and adds new schemes

Public versus private for profit versus non profit Basic demand features

Suggest several classifications within each category.

Object served (persons versus property) Degree of demand or supply Discrete versus continuous relationships between clients and service providers. Service content and benefits Multisided versus single site delivery Allotment of capacity Independent versus combined con-sumption Definite time versus task defined Transactions Extent to which customers must be present during service delivery.

Concludes that business needs that define the served object are the most fundamental classify-cation scheme

Suggests that valua-ble marketing insights would come from the combination of two or more classification schemes.

Schemes for Classifying Services (1983-1989)

Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

Author
Lovelock (1983)

Proposed Classification Schemes

The nature of the service act o Tangible actions to people or things o Intangible actions to people or things Relationships with customers o Continuous delivery o Discrete transactions o Membership relationships o No formal relationships Customisation and judgment in ser-vice delivery o Judgment exercised by customer contact persons o Customisation of services Nature of demand in relation to supply o Extent to which supply is con-strained o Extent of demand fluctuations

Comment
Provides a sequence of classifications that together exemplify the nature of service and give helpful backdrop information regarding the managerial purposes.

Methods of service delivery o Single or multisided delivery o Service delivered on providers or customers premises Degree of consumer/producer interaction o Lower o Higher Vandermerwe and Chadwick (1989)

Identify the services that are more modi-fied and involve a higher amount of labour intensity and might help the reader to understand the strategic and planned options available.

Relative involvement of goods o Pure services o Services with some goods or delivered through goods o Services embodied in goods

Recognises that some services and role of goods compo-nents in service business.

Service Sector The economy of a country can be divided into three sectors namely primary sector, secondary sector, and tertiary sector. It is also known as the three sector hypothesis that was developed by Colin Clark and Jean Fourasti. Agriculture, fishing, and mining come under primary sector, manufacturing of goods, machinery, equipments and so on falls under the secondary sector and service or service industry forms the tertiary sector of the economy. Service sector involves activities where people share their knowledge and dedicate their time for improving the productivity, performance, potential, and sustainability. The first two (primary and secondary) sectors of the economy are the wealth producing sectors, where as the tertiary sector is the wealth consuming sector. This is because the primary characteristic of the service sector is that individuals and businesses produce services to customers. Here people interact with other people to provide services instead of end products or

Name : Revathi S Murthy ID : 521033347 Centre Code : 02908

Course Semester

: MBA : 4th

goods. The soft part of the economy such as tourism, education, retail industry, banking and so on together form the service sector. Service sector covers a major area of finance, insurance, transportation, public utilities, health care, trade, personal services and so on. Following are the service sectors of Indian economy that have grown faster than the economy: Information Technology is the most leading service sectors in Indian economy. The software services marked a 33% increase in the services sector. IT-enabled services (ITeS). This marked a 27 percent growth in the services sector in the year 2010. Telecommunications sector marked a 21 percent growth in the service sector in the year 2010. Hotels and Restaurants The hotel industry is witnessing a growth of 15 percent per year. Financial Services Financial services sector witnessed a growth of 9.7 percent in the year 2009-10. Community Services It marked a growth of 5.6 percent in the year 2009-10.

Q4. Construct a service gap for an imaginary service based company assuming that there are several gaps found in its functioning. A. Q5. Examine the recent issues in services marketing. A.

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