THE NATURE OF SERVICES

AASTHA BHARGAVA (001)

ABHISHEK DEV (002)
PRESENTED BY: ABHISHEK SINGH (003)
AJMAL MOHAMMAD (004)
AKSHAY BINDROO (005)
AKSHAY KUMAR (006)
LEARNING OBJECTIVES
Classify a service into one of four categories using the service process
matrix.

Describe a service using the four dimensions of the service package.

Discuss the managerial implications of the distinctive characteristics of a
service operation.

Discuss the insights obtained from a strategic classification of services.

Discuss the role of a service manager from an open-systems view of
service.
AN INTEGRATED APPROACH TO SERVICE
MANAGEMENT
The Eight Components:
Product Elements
Place, Cyberspace, and Time
Promotion and Education
Price and Other User Outlays
+ Process
+ Productivity and Quality
+ People
+ Physical Evidence

Require the Integration of Marketing, Operations, and Human Resources.
SERVICE/PRODUCT BUNDLE
Element
Core Goods
Example
Core Service
Example
Business Custom clothier Business hotel
Core Business suits Room for the night
Peripheral
Goods
Garment bag Bath robe
Peripheral
Service
Deferred payment plans In house restaurant
Variant Coffee lounge Airport shuttle
THE SERVICE PROCESS MATRIX

Degree of Interaction and Customization
Low High
Degree Service factory: Service shop:
of labor Intensity * Airlines * Hospitals
Low * Trucking * Auto repair
* Hotels * Other repair services
* Resorts and recreation

Mass service: Professional service:
* Retailing * Doctors
High * Wholesaling * Lawyers
* Schools * Accountants
* Retail aspects of * Architects
commercial banking


THE SERVICE PACKAGE
Supporting Facility: The physical resources that must be in place before a
service can be sold.
Eg: golf course, ski lift, hospital, airplane.

Facilitating Goods: The material consumed by the buyer or items provided
by the consumer.
Eg: food items, legal documents, golf clubs, medical history.

Information: Operations data or information that is provided by the
customer to enable efficient and customized service.
Eg: patient medical records, seats available on a flight, customer preferences,
location of customer to dispatch a taxi.
THE SERVICE PACKAGE (CONT.)
Explicit Services: Benefits readily observable by the senses. The essential
or intrinsic features.
Eg: quality of meal, attitude of the waiter, on-time departure.

Implicit Services: Psychological benefits or extrinsic features which the
consumer may sense only vaguely.
Eg: privacy of loan office, security of a well lighted parking
lot.
DISTINCTIVE CHARACTERISTICS OF SERVICES

Customer Participation in the Service Process: attention to facility
design but opportunities for co-production.

Simultaneity: opportunities for personal selling, interaction creates
customer perceptions of quality.

Perishability: cannot inventory, opportunity loss of idle capacity, need to
match supply with demand.

Intangibility: creative advertising, no patent protection, importance of
reputation.

Heterogeneity: customer participation in delivery process results in
variability.


STRATEGIC SERVICE CLASSIFICATION
(NATURE OF THE SERVICE ACT)

Nature of Direct Recipient of the service
the Service Act People Things
Peoples bodies: Physical possessions:

Health care Freight transportation
Passenger transportation Repair and maintenance
Tangible actions Beauty salons Veterinary care
Exercise clinics Janitorial services
Restaurants Laundry and dry cleaning

Peoples minds: Intangible assets:

Education Banking
Intangible actions Broadcasting Legal services
Information services Accounting
Theaters Securities
Museums Insurance





STRATEGIC SERVICE CLASSIFICATION
(RELATIONSHIP WITH CUSTOMERS)

Nature of Type of Relationship between Service Organization and Its Customers
Service Delivery Membership relationship No formal relationship

Insurance Radio station
Telephone subscription Police protection
Continuous delivery Electric Utility Lighthouse
of service Banking Public Highway



Long-distance phone calls Restaurant
Theater series tickets Pay phone
Discrete transactions Transit pass Toll highway
Sams Wholesale Club Movie theater
Airline frequent flyer Public transportation






STRATEGIC SERVICE CLASSIFICATION
(CUSTOMIZATION AND JUDGMENT)
Extent to Which Service Characteristics Are Customized
Extent to Which Personnel
Exercise Judgment in Meeting
Customer Needs High Low


Surgery Preventive health programs
High Taxi services Education (large classes)
Gourmet restaurant Family restaurant


Telephone service Public transportation
Hotel services Spectator sports
Low Retail banking Movie theater
Cafeteria Institutional food service


STRATEGIC SERVICE CLASSIFICATION
(NATURE OF DEMAND AND SUPPLY)
Extent of Demand Fluctuation over Time
Extent to which Supply
Is Constrained Wide Narrow

Electricity Insurance
Peak demand can Telephone Legal services
usually be met Police emergency Banking
without a major delay Hospital maternity unit Laundry and dry cleaning


Tax preparation Fast food restaurant
Peak demand regularly Passenger transportation Movie theater
exceeds capacity Hotels and motels Gas station


STRATEGIC SERVICE CLASSIFICATION
(METHOD OF SERVICE DELIVERY)
Availability of Service Outlets
Nature of Interaction
between Customer and
Service Organization Single site Multiple site

Customer travels to Theater Bus service
service organization Barbershop Fast -food chain

Service provider Taxi Mail delivery
travels to customer Pest control service AAA emergency repairs
Taxi

Transaction is at Credit card company Broadcast network
arms length Local TV station Telephone company


OPEN SYSTEMS VIEW OF SERVICES
CASE STUDY VILLAGE VOLVO
VILLAGE VOLVO SERVICE PACKAGE

Supporting Facility:
Owners occupied a new Butler building.
With 4 work bays, an office, waiting area and storage room.

Facilitating Goods:
The shop was built in suburban area.
Daily shuttle service for two or three times a day was considered.
Waiting room equipped with a television set, comfortable chairs, coffee, a
soft-drink vending machine, magazines and the local newspaper.

Information:
Village Volvo maintains a Custom Care Vehicle Dossier (CCVD), a
continuing file for each vehicle it services.

VILLAGE VOLVO SERVICE PACKAGE (CONT..)

Explicit services:
Provides quality repair on out of warranty Volvos at a reasonable cost.
High quality customer service.
Takes care to keep the car clean throughout the repair process.
The inside of car is vacuumed as a courtesy before pickup.

Implicit services:
Mechanic takes a short test drive with the client to be certain that both
understand the area of concern.
Client feels comfortable and satisfied.

VILLAGE VOLVOS DISTINCTIVE SERVICE
CHARACTERISTICS
Customer Comfort

Trust

Respect

Good service with additional service

Customer Participation in the Service Process

Good MIS

VILLAGE VOLVOS SERVICE CLASSIFICATION
The nature of the service act:
Clients car is the direct recipient of the service.

The relationship with customers:
Owners contact clients directly.
Owners are also considering to offer a mini course one Saturday morning
each month to teach clients what they can do to attain their 200,000-mile
Volvo medals.

Customization and judgment:
Ensure service quality.
E.g. the mechanic will discuss the problems the client has noticed during the
repair process.
VILLAGE VOLVOS SERVICE CLASSIFICATION
(CONT..)

The nature of demand and supply:
Owners have 22 combined years of training and experience with the local
Volvo dealer.
By this they have earned a respected reputation and a following of satisfied
customers.

The method of service delivery:
Ensure service quality.
Ensure consistency.
HOW TO MANAGE ITS BACK OFFICE WORK AS
A FACTORY?
Proper spare parts management .

Provide next service date and have a record with Village Volvo. It will help in
daily and weekly Planning.

Differentiate between emergency and routine repairs.

Implementation of 5S of quality.


HOW VILLAGE VOLVO CAN DIFFERENTIATE ITSELF
FROM OTHER VOLVO DEALERS?
Differentiation Through Service Excellence

Integrated Virtual Call Centre

Integrated Service Network

Proactive offer sales service

Customer Touch point Management

Smart Service agent

CASE STUDY - XPRESSO LUBE FACILITY
Supporting facility: tools and equipment, an equipment storage area, a
spacious waiting room, chairs, a service counter, street access and parking.
Facilitating goods: oil, filters, auto parts, coffee, snacks, cups, napkins,
sugar and milk.
Information: for regular customers a reminder card could be sent for
routine maintenance.
Explicit services: a car with new oil and filter, maintenance checks of the
car, and a cup of coffee.
Implicit services: trust, a feeling of not getting screwed, a feeling of
keeping the car maintained, the satisfaction that comes from taking care of
ones car, the good feeling that comes from recycling the old oil, a caffeine
lift, and the satisfaction of drinking good coffee while

XPRESSO LUBES SERVICE PACKAGE:
THE DISTINCTIVE CHARACTERISTICS OF A SERVICE
OPERATION ILLUSTRATED BY XPRESSO LUBE
Customer Participation in the Service Process: Customers bring their car to
Xpresso Lube and wait for the oil change. Customers are invited to inspect the
car while on the lift to observe other needed repairs.

Simultaneity: Using the coffee shop as a pleasant diversion allows Xpresso
Lube to partially reduce the need for immediately working on arriving cars.
Providing a shuttle service to nearby University and State Capital would further
allow scheduling oil changes.

Perishability: the number of car lifts at the shop limits Xpresso Lubes capacity.
This oil change business also owns an auto repair facility next door so the two
businesses can deploy mechanics between them to best utilize labor capacity.

Intangibility: Xpresso Lubes car lift design allows customers to watch its
service, which gives customers more assurance that their needs are being met.
Thus, the intangibility factor as in typical pits is taken care of.

Heterogeneity: Different cars provide some variability in the oil change routine.
Some customers even come for only the coffee.

CHARACTERIZE XPRESSO LUBE
Changing the oil is the primary function of Xpresso Lube. This is a tangible
action performed on the car, but the secondary service is serving coffee,
which recognizes the personal needs of the owners.

Xpresso Lubes service relationships consist of discrete, one-time
transactions, but the companys focus on fostering customer trust and a
pleasant waiting environment might lead to more long-term customers.

Fairly low customization is possible, but the accessibility of the service area
and the mechanics can lead to customization opportunities if there are
problems with the cars.


There is a significant demand fluctuation based on the obvious convenience of
having the work performed after work or during the weekend. This peaked
demand pattern can easily exceed Xpresso Lubes capacity. But Xpresso
Lubes service environment encourages people to accept longer waits and, by
providing transportation, it enables customers to drop off their cars in the
morning and retrieve them later in the day.
ELEMENTS OF XPRESSO LUBES LOCATION
CONTRIBUTING TO ITS SUCCESS
Xpresso Lube is located on the main thoroughfare leading to the University
of Texas and thus provides excellent visibility.

The immediate business area is a bustling and diverse that attracts a
broad spectrum of visitors.

Its also an area where customers dont mind waiting because they can
walk to a variety of popular shops (e.g., Wheatville Co-Op and Half-Priced
Books)

INDIAN SCENARIO: CARNATION AUTO
An initiative by former chief executive of Maruti Suzuki (Mr. Jagdish Khattar)
to provide Customization Service.

Indias Largest Integrated Multi Brand Auto Solution Network.

Services Provided By CARNATION:
New and Used car sales
Used car exchange
Car repair and service
Car accessories
Car Insurance

NATURE OF SERVICES - A DIFFERENT
PERSPECTIVE
????
Agri
Services
MFG
IT Microsoft

Mobile Manufacturers partner Service providers to offer products

Automobile Majors BMW, Audi, Benz, etc. have FinServ arms

Housing as a service

Support from Governments
Infrastructure Provisions
Civic Amenities
WHAT IS IN IT FOR GOVERNMENTS AND
COMPANIES?
Growth of Service Industries -produces less cyclic national Economies

Service Industries negotiate recessionary pressure with relative ease

Growth of services leads to better quality of life and often increases the
efficiency of the system as a whole
TRENDS THAT DRIVE SERVICE INDUSTRIES
Aging Population across the world

Unprecedented Growth of 2 income families

Increasing number of Singles

Consumerism - change in saving & expense pattern

Affordability and Reach of Services

CURRENT TREND EXPERIENCE ECONOMY(EE)
EE
Agri
Services
MFG
EXPERIENCE ECONOMY!?
Upcoming trend which is the successor of the Service Economy.

Highly customized service leaves an everlasting impression/experience
with the customer.

The experience is treated as the value proposition offered by such a
product.
EXAMPLES OF STAGED EXPERIENCE PRODUCTS
Airtels My Plan post paid offering

Audi Indias experience offering

Taj Hotels Outdoor catering services

Economic Times - Article on Recent trends in Service Offering

Thank You
TOPICS FOR DISCUSSION
What are the characteristics of services that will be most appropriate for
Internet delivery?

When does collecting information through service membership become an
invasion of privacy?

What are some management problems associated with allowing service
employees to exercise judgement in meeting customer needs?

What factors are important for a manager to consider when attempting to
enhance a service firms image?

What contributions to the management of professional service firms can a
business school graduate provide?