Marketing of Services

Services: A service is any act or performance, one party can offer to another, that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.

Customer Service: It is the service provided in support of a company’s core products. It includes, answering questions, taking orders, handling complaints, repairs etc. These are for building customer relationships and not the ones provided for sale by a company.

Service Marketing Mix: The service marketing mix comprises off the 7’p’s. These include:• Product • Price• Place• Promotion• People• Process• Physical evidence.

People: An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organization wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with.

Process: Refers to the systems used to assist the organization in delivering the service.

Physical Evidence: It is the element of the service mix which allows the consumer again to make judgments on the organization. If you walk into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first class you expect enough room to be able to lay down! Physical evidence is an essential ingredient of the service mix, consumers will make perceptions based on their sight of the service provision which will have an impact on the organizations perceptual plan of the service.

Tangibility Spectrum: Essentially services are intangible but sometimes they may involve the use of some tangible goods. In such cases the title of the goods doesn’t change from the service provider to the customer. But again some services do have a tangible component. There are four types of offer involving goods and services

1. pure tangible goods2. tangible goods with accompanying services

3. major services accompanying minor goods

4. a pure service

Characteristics of Services: The services have unique characteristics which make them different from that of goods. The most common characteristics of services are:Intangibility.Inseparability.Perish ability.VariabilityIntangibility: Services are activities performed by the provider, unlike physical products they cannot be seen, tasted, felt, heard or smelt before they are consumed. Inseparability: Services are typically produced and consumed simultaneously. it cannot be separated from the service provider. Thus, the service provider would become a part of a service. Inseparability of production and consumption increases the importance of the quality in services.

TangibleDominant

IntangibleDominant

SaltSoft Drinks

DetergentsAutomobiles

Cosmetics

AdvertisingAgenciesAirlines

InvestmentManagementConsulting

Teaching

Fast-foodOutlets

Fast-foodOutlets

Perish ability: Services are deeds, performance or act whose consumption take place simultaneously; they tend to perish in the absence of consumption. Hence, services cannot be stored. The services go waste if they are not consumed simultaneously i.e. value of service exists at the point when it is required.Variability: Services are highly variable, as they depend on the service provider, and where and when they are provided. Service marketers face a problem in standardizing their service, as it varies with experienced hand, customer, time and firm.

Service Process: A service is essentially a process and not a physical product. The process is directed at different ends depending upon the nature of service. Some services process people and some may process objects. This leads to an important classification on the basis of two important dimensions:

1. What is processed? Object or a Person

2. How is it processed? What is the Nature of Process? Tangible or Intangible actions

People Processing : Here the customers must physically enter the system (like Transportation) and they must be prepared to spend time actively cooperating with the service operation. The level of involvement and output quality may vary.

Possession Processing: Here the service is more directed towards the goods or other possession rather towards the customer. People are less physically involved and usually there is no real need for them to enter the service for example dry cleaning. The output in each instance should be a satisfactory solution to a stated problem.

Mental Stimulus Processing: these Services interact with people’s mind like education. Recipients should spend time but not necessarily be physically

present in a service factory; just mentally in communication with information being presented.

Information Processing: Most intangible form of service output. The customer involvement determined more by tradition or personal desire to meet face to face and not by the needs of the operational process.

Classification Of Services1. Nature of the organization : at the first level the purpose, structure and

type of the service is identified. 2. Nature of the service : the second level, addresses the nature of the

service in terms of degree of tradability and merchantability 3. Customer relationship : at the third level relationship is established it can

be formal or informal4. Nature of demand : in terms of the fourth level, nature of demand, its

demand and supply, and demand trend is being analyzed5. Service package : it addresses the group of services and goods offered by

a service firm6. Delivery method : it deals with the delivery of the services

detail in page 14-15

Positioning of Services :Services can be positioned in 6 different ways.

1. Service attributes : it involves positioning the services in terms of what it does best. Example, Federal Express tries to position itself as the best firm for overnight delivery

2. Use or application : fitness centers are often positioned in this way, some cater to individuals who want to reduce weight, while others position themselves who want to exercise for fitness

3. Price/quality relationship : Kingfisher Red has positioned itself as the low price, no frills airline in the leisure travel market.

4. Service class : pizza hut is positioned as a dine in restaurant and not a fast food restaurant

5. Service users: Business class of Jet Airways offers the highest level of service quality to the business airline travelers

6. Competitors :

Service Encounter: A service encounter has been defined as a social interaction involving one human being interacting with other. Given the high degree of person-to-person interaction and, quite frequently the absence of an exchange of tangible goods, the service encounter becomes a critical component of service quality. There are three key players involved in a service encounter that shape the outcome of any encounter: The service firm, which sets policies and guidelines; The employees, who enact the policies of the firm; and the customer, who seeks to satisfy a range of needs and wants.

Moment of truth occurs any time and every time the customer interacts with the firm or the service provider. All encounters put together form a cascade. The cascade can potentially be critical in determining customer satisfaction and loyalty.

Self-Service Technologies: These are technological interfaces that enable customers to produce a service independent of direct service employee involvement. Advantages of SSTs

SSTs can improve service quality perceptions, offer flexibility and customize services to individual consumer needs

Successful implementation of SSTs leads to operational cost reduction; increasing customer satisfaction and loyalty; and reaching of new markets.

SSTs allow staff to be relieved from routine duties and concentrate on aspects of the service delivery where personal touch is more valuable.

Disadvantages of SSTs The limitations of SSTs from a service provider perspective are

related to investment expenses, and staff and consumer. If the service technology does not gain adoption with consumers, the company may face increased expenses because it needs to keep the operational staff, as well as pay for the new technology.

SSTs also reduce the points of customer contact during the service delivery process which leaves fewer chances for early detection of complaints and opportunities for service recovery

Even people who have favorable attitudes towards technology may avoid SSTs because they can not replace the personal interaction.

SSTs also require higher levels of consumer participation and responsibility, so they are perceived as riskier than personal services

Purchase Model for Services: It has got three distinct phases: Pre-Purchase Phase: It is when the purchase options are considered and decisions are actually made. During, this phase consumers weigh

the alternatives available to them and the benefits to each alternative. The decision making process is influenced by four different factors:

Internal Factors: four internal factors impact a consumer’s decision during the pre- purchase phase. These factors are individual needs and wants of consumers, past experience, expectations and level of involvement.

External Factors: Three external factors influence the purchase decision during the pre purchase phase: the competitive options available to the consumer, the social context of the purchase, and word of mouth communications.

Firm Produced Factors: Promotions, Pricing and the distribution system are firm produced factors that impact the purchase decisions.

Perceived Risk: Risk has two components: 1. Uncertainty (probability that a particular outcome or consequence will occur) 2. Consequences (the degree of importance that a particular importance and danger of the outcome itself).

There are six types of perceived risk:

Functional - Will the product perform as I expect? If the customer is buying sweet corn, this means, "Will this corn be as good as what I remember from last year or what I had last week?" If the customer is buying petunias, the risk is, "Will they make my garden look the way I want it to look?"

Physical - Can the product hurt me, my children or my pets? The use of pesticides in the production of food crops is frequently the concern here, but ornamentals that bear poisonous fruit can also be a concern.

Social - What will my peers think? If customers are buying sweet corn to eat in the privacy of their home, the risk here is low. If they buy petunias and plant them in the front yard and petunias are socially out this year, it's like having a big sign in your yard for five months saying, "geek lives here".

Psychological - Am I doing the right thing? This can be a strong motivator in plant sales for the environ-mentally concerned or an impossible obstacle for the truly paranoid.

Financial - Can I afford the purchase? This is not a major problem for most people buying sweet corn or petunias. It is a major obstacle for customers consider-ing a specimen plant or flowering trees that may cost $60 to $100.

Time - How much time and effort may I expend to make this purchase? This may be the greatest perceived risk for the plant and produce retailer to overcome. Picture your potential customer in their car thinking, "Do I want to pull into that crowded parking lot? Do I want to stand in that line for a dozen ears of corn?" This is scary! Many of the stands I visit fail to overcome this perceived risk. Their potential customers drive by.

Risk Reduction strategies

Performance risk: to reduce the uncertainty of performance risk, service firms must increase the perceived probability the service will perform as consumers desire. This can be done through communication, branding, and certification. To reduce the consequences of performance risk, firms should ensure that the service provider follow uniform quality control standards and procedures. By doing this chances of service failure are reduced

Financial Risks: to reduce the uncertainty of financial risk, service firms should offer trial purchases, sampling and promotional incentives, as it allows the customers to evaluate the service provider with no financial risk. To reduce the consequence of financial risk, service firms can offer money back guarantees.

Time loss and opportunity risk: uncertainty can be reduced by branding, the presence of the brand name will reduce the perceived chances of poor service performance, which in turn will reduce the perceived chances of time loss n the part of the consumer. To reduce the consequences of time loss risk, service firms can offer some kind of compensation in the case of service failure, and for opportunity risk, the firm must ensure that there are quality control standards and procedures in place and that these are followed by service personnel.

Psychological and social risk: uncertainty can be reduced by branding and communication. Recognized brand names carry the assuarance to the customer that the service will coincide with the consumers self image and will be well recived by his or her social group. Whereas communication aimed at the customer through advertising and interaction with service personnel can reduce the uncertainty of psychological and social risk. Consequences can be reduced by following strict quality control standards and procedures, thus reducing variability of service

Physical risk: uncertainty is reduced by adhering to strict safety standards, instructions and communications. Consequences are reduced by establishing and following safety standards.

Service Encounter :

Post Purchase Phase: the third phase of the purchase process is the post purchase phase. During this phase, customers make an evaluation of the service quality they received and their overall level of satisfaction or dissatisfaction. For satisfied customers post purchase actions include

Repeat purchases Counter loyalty Positive word of mouth communication

For dissatisfied customers, these actions include: Switching vendors Negative word of mouth communication

Managing Customer ExpectationPre Purchase Phase: Managing customer expectations during the pre purchase phase consist of three steps: 1st learn what customer expects2nd tell customers what they can expect 3rd consistently provide the service that customers expect

Service Recovery: three strategies can be used during the service encounter to manage customer expectations 1st service personnel must communicate with the customer during the service encounter2nd if possible, service provider should modify service to meet the customers expectations3rd if the service cannot bee modified the service personnel must explain why the customers expectations cannot be meet.

Post Purchase Phase: strategies that can be used after service has completed1st companies should communicate with customers immediately after the service has been completed2nd firms can use follow up program 3rd develop a procedure for dealing with dis-satisfied customers.

Porter's Generic Competitive Strategies (ways of competing)

A firm's relative position within its industry determines whether a firm's profitability is above or below the industry average. The fundamental basis of above average profitability in the long run is sustainable competitive advantage. There are two basic types of competitive advantage a firm can possess: low cost or differentiation. The two basic types of competitive advantage combined with the scope of activities for which a firm seeks to achieve them, lead to three generic strategies for achieving above average performance in an industry: cost leadership, differentiation, and focus. The focus strategy has two variants, cost focus and differentiation focus.

1. Cost Leadership

In cost leadership, a firm sets out to become the low cost producer in its industry. The sources of cost advantage are varied and depend on the structure of the industry. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A low cost producer must find and exploit all sources of cost advantage. if a firm can achieve and sustain overall cost leadership, then it will be an above average performer in its industry, provided it can command prices at or near the industry average.

2. Differentiation

In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. It is rewarded for its uniqueness with a premium price.

3. Focus

The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. The focuser selects a segment or group of segments in the industry and tailors its strategy to serving them to the exclusion of others.

The focus strategy has two variants.

(a) In cost focus a firm seeks a cost advantage in its target segment, while in

(b) differentiation focus a firm seeks differentiation in its target segment.

Both variants of the focus strategy rest on differences between a focuser's target segment and other segments in the industry. The target segments must either have buyers with unusual needs or else the production and delivery system that best serves the target segment must differ from that of other industry segments. Cost focus exploits differences in cost behavior in some segments, while differentiation focus exploits the special needs of buyers in certain segments.

Service Recovery: The goal of service recovery is to identify customers with issues and then to address those issues to the customers' satisfaction to promote customer retention.  However, service recovery doesn't just happen.  It is a systematic business process that must be designed properly and implemented in an organization.  

Service Recovery in an organization progresses through a series of stages, shown in the nearby diagram.

Stage 1 Moribund.  There is no complaint handling.  Angry customers are ignored. Letters to VPs and even the CEO about a damaged shipment go unanswered.Stage 2: Reactive. Customer complaints are heard, and a response is made. But it's a haphazard process with no defined goals for the response and no one owning this business process.  Stage 3: Active Listening.  At this stage, the response to issues voiced by customers is structured.  Specific people have the responsibility to respond to complaints and guidelines are in place for the response.  However, it is still reactive.Stage 4. Solicitous.  The critical change from Stage 3 to 4 is the move from reactive to proactive solicitation of customers with issues.  The reason this is so important is that most customers don't bother to complain.  They just move on to other suppliers of products.   The solicitous role is accomplished by encouraging customer to voice their complaints.  Event surveys (also known as transactional or transaction-driven survey) are a commonly used technique to get issues voiced.  Stage 5: Infused.  The pinnacle of Service Recovery Practices is achieved when the complaint identification merges with business process improvement or six sigma programs to support root cause identification and resolution.  The owners of business processes that cause customer issues are notified of the occurrences to prompt reexamination of the process design.  

Steps to Service Recovery

Service recovery includes all the actions people take to get a disappointed customer back to a state of satisfaction. There are six caring actions that combine to make service recovery systematic, memorable, and satisfying.

1) Apologize The point is not to determine who's to blame. It's to solve the problem. The first step to problem solving is to acknowledge the fact that – at least in the customers' eyes—a problem exists. So start by having employees tell them, personally and sincerely, "I'm sorry."

2) Listen and empathize: This is not the time to instruct customers in the finer points of what they should have done to avoid the problem in the first place. Customers resent being lectured to. What they mostly want customers service reps people to do is just listen. Listening and empathizing helps customers unwind, get it out of their systems, and feel they're talking to someone who really cares about taking care of things.

3) "Fair fix" the problem. After listening (so they know exactly what's at issue), employees people can work to resolve the problem. Usually, what customers want now is what they wanted originally—and the sooner the better.

4) Offer atonement. A recovery system will earn high marks from customers if it includes, even symbolically, some form of atonement that, in a manner appropriate to the issue at hand, says, "I'd like to make it up to you. Of course, the bigger the service breakdown—and the more valued the customer—the more impressive the atonement will have to be to restore aggrieved customers to a state of satisfaction.

5) Keep your promises: .Recovery time is double jeopardy "where the stakes are doubled and the scores can really change." Your system has already failed once. If employees make promises they can't keep in trying to get the business back in the customer's good graces it will be throwing gas on the fire. Employees need to know how to be realistic about what they can and can't deliver, and how quickly.

6) Follow-up. In a few days, or a few weeks, employees should check back to make sure things really did work out to the customer's satisfaction. That kind of thoroughness and demonstrated concern builds loyalty that can weather future storms—and helps set the organization apart from competitors.

Customer Expectations of Service: Pretrial beliefs a consumer has about the performance of a service that are used as the standard or reference against which service performance is judged. Consumer expectations consist of 5 levels:

1. Ideal Service level: Consumers wished for level of service2. Desired Service level: level of performance customers want or hopr to

receive from a service3. adequate level of service: minimum level of service a consumer will

tolerate and accept without being dissatisfied 4. predicted service level: level of service consumers actually expect from

service firm

Service Failure: these are instances when a service either is not performed or is performed poorly. Service failure do not automatically result in firm switching behaviour and negative word of mouth communications. Customers can often be recovered. The manner in which post service failures are handled will have a greater impact on future purchase behavior then the level of dis satisfaction of the original service experience.

Customer Complaints and Types of Customers: The handling of customer complaints is an important component of providing Superior Customer Performance. Three important aspects of the complaint process are actively seeking customer complaints, recognizing the type of customer that is complaining, and responding appropriately based on the type of complainer.

Actively Seeking Customer Complaints: It is important to realize that organizations that are totally customer-focused do not just respond effectively to customer complaints; they actively seek them out. What specific activities does the organization utilize to provide customers with easy opportunities to register their dissatisfaction? Are these activities sufficient. Many dissatisfied customers just quietly take their business elsewhere. Therefore, organizations that are truly committed to delivering Superior Customer Performance work hard at providing their customers opportunities to complain.

Types of Complainers and How to Respond EffectivelyAt least five types of complainers can be identified. Each type is motivated by different beliefs, attitudes, and needs. Consider the following definitions of the types of complainers.

The Meek Customer/ Passive Customer : Generally, will not complain. The Aggressive Customer / Voicers : Opposite of the Meek Customer.

Readily complains, often loudly and at length. The High-Roller Customer. Expects the absolute best and is willing to pay

for it. Likely to complain in a reasonable manner, unless a hybrid of the Aggressive Customer.

The Rip-Off Customer. The goal is not to get the complaint satisfied but rather to win by getting something the customer is not entitled to receive. A constant and repetitive "not good enough" response to efforts to satisfy this customer is a sure indicator of a rip-off artist.

The Chronic Complainer Customer. Is never satisfied; there is always something wrong. This customer's mission is to whine. Yet, he is your customer, and as frustrating as this customer can be, he cannot be dismissed.

Zone of Tolerance: The zone of tolerance is usually defined as the range of customer perceptions of a service between desired and minimum acceptable standards. In essence it is the range of service performance that a customer

considers satisfactory. Performance below the zone is seen as dissatisfying and performance above the zone is seen as delighting.

The importance of this zone of tolerance is that customers may accept variation within a range of performance, and any increase or decrease in performance within this area will only have a marginal effect on perceptions. Only when performance moves outside this range will it have any real effect on perceived service quality. If a customer's zone of tolerance is narrow, then he or she may be highly sensitive to the service experience, with a greater likelihood of dissatisfying or delighting outcomes. Conversely, if a customer has a wide zone of tolerance, then he or she may be much less sensitive to the service experience, thus increasing the likelihood of a satisfactory or acceptable outcome.

Service Blueprinting : A service blueprint describes a service in enough detail to implement and maintain it carefully. Service blueprints need to describe time in a service. This includes the sequence of events of a service experience, its durations and timings. A blueprint should graphically and narriatively describe this time element. It also describes the service process, the points of customer contact, and the evidence of service from the customer’s point of view.

Components of Service Blueprints: There are five components of a typical service blueprint

• Customer Actions,• Onstage/Visible Contact Employee Actions,• Backstage/Invisible Contact Employee Actions,• Support Processes, and• Physical Evidence.

Customer actions include all of the steps that customers take as part of the service delivery process. What makes blueprinting different from other flowcharting approaches is that the actions of the customer are central tothe creation of the blueprint, and as such they are typically laid out first so that all other activities can be seen as supporting the value proposition offered to or co-created with the customer.

Onstage/visible contact employee actions : separated from the customer by the line of interaction. Those actions of frontline contact employees that occur as part of a face-to-face encounter are depicted as onstage contact employee actions. Every time the line of interaction is crossed via a link from the customer to a contact employee (or company self-service technology, etc.), a moment of truth has occurred. Backstage/invisible contact employee actions: separated from the onstage actions by the very important line of visibility. Everything that appears above the line of visibility is seen by the customer, while everything below it is invisible. Below the line of visibility, all of the other contact employee actions are described, both those that involve non- visible interaction with customers (e.g.,

telephone calls) as well as any other activities that contact employees do in order to prepare to serve customers or that are part of their role responsibilities.

Support processes separated from contact employees by the internal line of interaction. These are all of the activities carried out by individuals and units within the company who are not contact employees but that need to happen in order for the service to be delivered. Vertical lines from the support area connecting with other areas of the blueprint show the inter-functional connections and support that are essential to delivering the service to the final customer.

Finally, for each customer action, and every moment of truth, the physical evidence that customers come in contact with is described at the very top of the blueprint. These are all the tangibles that customers are exposed to that can influence their quality perceptions.

Servicescape : The concept of a servicescape was developed by Booms and Bitner to emphasize the impact of the physical environment in which a service process takes place. Booms and Bitner defined a servicescape as:

"The environment in which the service is assembled and in which the seller and customer interact, combined with tangible commodities that facilitate performance or communication of the service"

It can be classified in two dimensions:

Servicescape usage Complexity of the servicescapes

I. The usage takes into account as to how organizations differs in terms of who the servicescape will actually have an effect on when they come in contact with the service facility-customers, employees, or both groups which gives rise to three situations:

Self-service (customers only)

Interpersonal services (both, customer and employee)

Remote services (employee only)

Remoteservices (employee only)

2. The complexity of the servicescape has two environments:

Lean (simple, few elements, few spaces, and few pieces of equipments)

Elaborate (very complicated, many elements, and many forms)

For lean servicescapes, design decisions are relatively straightforward, especially in self-service or remote service situations in which there is no interaction among employees and customers.For elaborate servicescapes, the full range of marketing and organizational objectives can be approached through careful management of the servicescape.

Roles of Servicescape: 1. Package: wrap the service and convey an external image. It extends to the appearance of contact personnel through their uniforms or dress and their elements of their outward appearances.

2. Facilitator: Aiding the performances of persons in the environment. Make service a pleasure to experience from the customer’s point of view and a pleasure to perform from the employee’s.

3. Socializing: Aid in socializing of both employees and customers by conveying the expected roles, behaviors, and relationships through office assignments, quality of furnishings and location in organization.

4. Differentiator: Exclusive positioning as differentiated from its competitors and signal the market segment the service it intends to provide. Use of colors, music, sprice differentiation through variation of physical luxurious settings and sittings.s

The Services Marketing Triangle: The Services Marketing Triangle model focuses upon making and keeping promises to customers and suggest three structural relationships as the mode by which this occurs.

Company Management

Internal Marketing External Marketing “Enabling the promise” “setting the promise”

service environment the service product

Employees Customers

Interactive Marketing

“Delivering the promise” service delivery

The model is applied to the example of a typical university registry.

The Model University/Registry

Company Management DirectorateRegistry managers/management team

Employees All registry staff

Customers StudentsUniversity staffExternal bodies

External Marketing“Setting the promise”the service product

Consultation with Customers to identify needs and obtain feedback on performance: Course Organisers Forum Student Union Liaison meetings Student Services Committee Undergraduate Student Questionnaire Enrolment review

Service Statements/Plans:

Service Provision Statement Departmental Plan

Internal Marketing“Enabling the promise”the service environment

Culture & philosophyStaff recruitmentStaff development/trainingMotivation and involvement in planningTeam meetings/briefingsTechnical resources

Interactive Marketing“Delivering the promise”service delivery

The serviscape and service encounter:Delivery of servicePhysical environmentMeetingsTelephone

Customer Satisfaction and Service Quality

Satisfaction: It is a customers feeling of pleasure and disappointment that result from comparing a products perceived performance to their expectations.

If performance < expectations = Dissatisfied If performance = expectations = Satisfied

If performance > expectations = Highly delighted

Quality: Service quality is an assessment of the quality dimensions made by the service consumer during service consumption over time, spanning multiple transactions and interactions with the service provider and its services. Service quality is based on expectations across the five dimensions of a service.

Service quality for a service and satisfaction for any service encounter arises from perceptions made by users around one or more of the following five dimensions also known as the Service Quality Dimension:

1. Tangibles: Appearance of physical facilities, equipment, personnel, and communication materials.

2. Reliability: Ability to perform the promised service dependably and accurately.

3. Responsiveness: Willingness to help customers and provide prompt service.

4. Assurance: Knowledge and courtesy of employees and their ability to convey trust and confidence.

5. Empathy: Caring, individualized attention the firm provides its customers.

Quality and satisfaction are different things altogether, yet many confuse these basic concepts; contributing to the ever-widening gap between business and IT.

The difference between these concepts is that one may be satisfied and still feel that service quality is low. Vice versa, one may be dissatisfied and feel that service is of high quality. Service quality is a complex judgment about the overall superiority of a service whereas satisfaction is related to contentment regarding a specific transaction.

Customer Gap/ Service Delivery Gap

Five areas of GAP that causes unsuccessful delivery of service are:

1. GAP 1: Gap between consumer expectation and management perception: management does not always perceive what customer want. Hospital administrators may think patients want better food, but patients may be more concerned with nurse responsiveness

2. GAP 2: Gap between management perception and service quality specification: management might correctly perceive customers wants but not set a performance standard. Hospital administrators may tell the nurses to give fast service without specifying it in minutes

3. GAP 3: Gap between service quality specifications and service delivery: personnel might be poorly trained, or incapable of or unwilling to meet the standard; or they may be held to conflicting standards, such as taking time to listen to consumers and serving them fast.

4. GAP 4: Gap between service delivery and external communications; consumer expectations are affected by statements made by company representatives and ads. If a hospital brochure shows a beautiful room, but in reality the room is cheap and tacky looking, external communication has distorted the customer’s expectations.

5. GAP 5: Gap between perceived service and expected service : this gap occurs when the consumer misperceives the service quality. The

physician may keep visiting the patient to show care, but the patient may interpret this as an indication that something really is wrong.

Strategies for reducing Customer GAP

Reducing GAP 1: service firms has four strategies available to them to reduce the size of GAP 1. These strategies are : communicating with the customers, conducting marketing research, encouraging upward communication in he organization, and decreasing the layers of management. Reducing GAP 2:

1. service firms must have the commitment of top management, 2. setting service quality goals, these goals must be set with the customer,

the service contact provider and management in mind.3. Task standardization also reduces the GAP, this can be achieved through

hard technology( substituting machines or computers for people) or soft technology ( improving work methods)

Reducing GAP 3: 1. Ensuring teamwork among the employees2. Ensure there is good technology job fit3. Developing a supervisory control system that reward employees for

providing service according to the specifications.

Reducing GAP 4:1. Increase horizontal communications between the marketing department

and service personnel2. Avoid the propensity to over promise to obtain a sale3. Inform service personnel of promises made by salespeople and marketing

communications

Reducing GAP 5: ROQ analysis page no 103 Customer Service Guarantee

A customer service guarantee is a set of two promises: a commitment by a company to its customers to make good on a

promised level of service and a commitment to compensate its customers when the first promise is

not met.

Successful companies promote their service guarantees to everybody. The classic service guarantee example is Fed-Ex: “If you want your package absolutely, positively to be at someone's doorstep the next day, then Fed-Ex it!” The company even guarantees a specific time for their overnight deliveries to reach the customers, or the delivery is free.

5 Key Success Factors

Your customer service guarantees must contain the following five key success factors:

1. Must be unconditional : A good service guarantee has no conditions. They are for every customer, first-time or long-standing. If you cannot guarantee all elements of a specific service unconditionally, don't bother developing one.

2. Must be specific and easy to understand : A good service guarantee is written in simple, concise language that pinpoints the promise.

3. Must be meaningful : A good service guarantee process is meaningful in two respects. It guarantees those aspects of your service that are most important to your customers, and it has financial significance to your customers by providing a payout when a service promise is not kept.

4. Don't over-promise: It's important to offer customer service guarantees within your capacity to deliver. If you can't consistently meet your service guarantee, it will advertise to your customers that you have a service weakness.

5. Provide employee service guarantee training: Before introducing your service guarantees to your customers, you must first provide thorough customer service guarantee training to all your employees. Every employee should be encouraged and empowered to administer customer service guarantees.