Services Marketing Session 10

7/30/2019 Services Marketing Session 10

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Planning The Service Environment

Services Marketing - SZABIST


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Comparison of Hotel Lobbies

The servicescape is part of the value proposition!


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Elements of Service Environment

Exterior facilities

Facade

Vehicles

Corporate design

General interior

Colors Furniture and fixtures

Textures

SoundsServices Marketing - SZABIST


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Elements of Service Environment

Store layout

In line with service blueprint

Online store layout

Interior displays

Corporate communication

Brand communication Product display

Social dimensions

Services Marketing - SZABIST


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The Purpose of Service Environments

The service environment influences buyer behavior in 3ways

Message-creating Medium: symbolic cues to communicate thedistinctive nature and quality of the service experience.

Attention-creating Medium: to make the servicescape stand outfrom other competing establishments, and to attract customers

from target segments.

Effect-creating Medium: colors, textures, sounds, scents and

spatial design to enhance the desired service experience,and/or to heighten an appetite for certain goods, services or

experiences


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The Mehrabian-Russell Stimulus-

Response Model (Figure 10.2)

Response

Behaviors:

Approach/

Avoidance &

Cognitive

Processes

EnvironmentalStimuli & Cognitive

Processes

Dimensions ofAffect:

Pleasure and

Arousal


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The Mehrabian-Russell Stimulus-

Response Model Simple and fundamental model of how people

respond to environments

Peoples conscious and unconscious perceptions

and interpretation of the environment influencehow they feel in that environment

Feelings, rather than perceptions or thoughts drivebehavior

Typical outcome variable is approach oravoidance of an environment, but other possibleoutcomes can be added to the model as well


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The Russell Model of Affect

Arousing

Pleasant

Sleepy

Unpleasant

Exciting

RelaxingBoring

Distressing


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The Russell Model of Affect

Emotional responses to environments can be

described along two main dimensions, pleasure

and arousal.

Pleasure is subjective depending on how much theindividual likes or dislikes the environment

Arousal quality of an environment is dependent on

itsinformation load

, i.e., its degree of

Novelty (unexpected, surprising, new, familiar) and

Complexity (number of elements, extent of motion or

change)


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Behavioral Consequence of Affect

Basically, pleasant environments result inapproach, and unpleasant environments result inavoidance

Arousal acts as an amplifier of the basic effect of

pleasure on behaviour If the environment is pleasant, increasing arousal

can lead to excitement and stronger positiveconsumer response. If the environment is

unpleasant, increasing arousal level will moveconsumers into the Distressing region

Feelings during the service encounter is also animportant driver of customer loyalty


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An Integrated Framework Bitners

ServiceScape ModelEnvironmental

Dimensions

Perceived

ServiceScape

Ambient

Conditions

Space/

Function

Signs,Symbols &

Artefacts

Cognitive

Emotional

Psychological

Customer

Response

Moderator

EmployeeResponses

Approach

or

Avoid

Approach

or

Avoid

Social Interaction

Between

Customers &

Employees

Holistic

Environ-

ment

Moderators Internal Responses Behaviour

Customer

Responses

Employee

Response

Moderator

Cognitive

Emotional

Psychological


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An Integrated Framework Bitners

ServiceScape Model(cont)

Identifies the main dimensions in a serviceenvironment and views them holistically

Customer and employee responses classified

under, cognitive, emotional and psychologicalwhich would in turn lead to overt behaviortowards the environment

Key to effective design is how well eachindividual dimension fits together witheverything else


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Dimensions of the Service

Environment

Ambient Conditions Music (e.g, fast tempo and high volume increase arousal levels)

Scent (strong impact on mood, affect and evaluative responses,

purchase intention and in-store behavior)

Color (e.g, warm colors associated with elated mood states and

arousal but also increase anxiety, cool colors reduce arousal but

can elicit peacefulness and calm)

Service environments are complex and have many designelements. The main dimensions in the servicescape model

includes:


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Dimensions of the Service Environment

(cont)

Spatial Layout and Functionality Layout refers to size and shape of furnishings and the ways it is

arranged

Functionality is the ability of those items to facilitate performance

Signs, Symbols and Artifact Explicit or implicit signals to communicate the firms image, help

consumers find their way and to convey the rules of behavior


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Aromatherapy: The Effects of

Fragrance on PeopleFragrance Aromathe

rapyAromatherapy Class

Traditional Use

Potential PsychologicalImpact on People

Orange Citrus Calming Soothingagent,astringent

Calming and relaxing effectesp. for nervous people

Lavender Herbaceous

Calming,balancing,soothing

Musclerelaxant,soothingagent

Relaxing and calming, helpscreate a homey andcomfortable feel

Jasmine Floral Uplifting,balancing

Emollientsoothingagent

Helps makes people feelrefreshed, joyful, comfortable

Peppermint Minty Energizing,stimulating

Skincleanser

Increase attention level andboosts energy


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Common Associations and Human

Responses to ColorsColor Degree of

WarmthNatureSymbol

Common Association andHuman Responses to Color

Red Warm Earth High energy and passion; canexcite, stimulate, and increasearousal and blood pressures

Orange Warmest Sunset Emotions, expressions, and warmth

Green Cool Grass

andTrees

Nurturing, healing and

unconditional love

Blue Coolest Sky andOcean

Relaxation, serenity and loyalty


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Selection of Environmental Design

Elements There is a multitude of research on the perception and

impact of environmental stimuli on behaviour,

including: People density, crowding

Lighting

Sound/noise

Scents and odours

Queues

No standard formula to designing the perfectcombination of these elements. Design from the customers perspective

Design with a holistic view!


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Tools to Guide in Servicescape Design

Keen Observation of CustomersBehavior and Responsesto the service environment by management, supervisors,branch managers, and frontline staff

Feedback and Ideas from Frontline Staff and Customers

using a broad array of research tools ranging fromsuggestion boxes to focus groups and surveys.

Field Experiments can be used to manipulate specificdimensions in an environment and the effects observed.

Blueprinting or Service Mapping - extended to include thephysical evidence in the environment.


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Managing People for Service

Advantage

l l f


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Frontline Service Personnel: Source of

Customer Loyalty and Competitive

Advantage

Frontline is an important source ofdifferentiation and competitive advantage. It is: a core part of the product

the service firm

the brand

Frontline also drives customer loyalty, with

employees playing key role in anticipatingcustomer needs, customizing service deliveryand building personalized relationships


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Boundary Spanning Roles

Boundary spanners link the inside of the organization

to the outside world

Multiplicity of roles often results in service staff having

to pursue both operational and marketing goals

Consider management expectations of restaurant

servers:

deliver a highly satisfying dining experience to their

customers be fast and efficient at executing operational task of serving

customers

do selling and cross selling, e.g. We have some nice desserts

to follow your main course


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Role Stress in the Frontline

Person vs. Role: Conflicts between what jobs require andemployees own personality and beliefs

Organization vs. Customer: Dilemma whether to followcompany rules or to satisfy customer demands

Customer vs. Customer: Conflicts between customers thatdemand service staff intervention

3 main causes of role stress:


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Emotional Labor

The act of expressing socially desired emotions duringservice transactions (Hochschild, The Managed Heart)

Three approaches used by employees

surface acting

deep acting

spontaneous response

Performing emotional labor in response to societys or

managements display rules can be stressful Good HR practice emphasizes selective recruitment,

training, counseling, strategies to alleviate stress


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The Cycles of Failure, Mediocrity and

Success

Too many managers make short-sighted assumptionsabout financial implications of:

Low pay

Low investment (recruitment, training)

High turnover human resource strategies

Often costs of short-sighted policies are ignored:

Costs of constant recruiting, hiring & training

Lower productivity & lower sales of new workers

Costs of disruptions to a service while a job remains unfilled

Loss of departing persons knowledge of business and

customers

Cost of dissatisfied customers


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Cycle of Failure

Customerturnover

Failure to developcustomer loyalty

No continuity inrelationship for

customer

Customerdissatisfaction

Employees cantrespond to customer

problems

Employeesbecome bored

Employee dissatisfaction;poor service attitude

Repeat emphasis onattracting new customers

Low profitmargins Narrow design of

jobs to accommodatelow skill level

Use of technology

to control quality

High employee turnover;poor service quality

Payment oflow wages

Minimization ofselection effort

Minimizationof training

Emphasis onrules ratherthan service


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Service Sabotage

Customary-Private ServiceSabotage

Sporadic-Private Service

Sabotage

Customery-Public ServiceSabotage

Sporadic-Public Service

Sabotage

Openness of Service Sabotage BehaviorsCovert Overt

Normality

ofServiceSabo

tageBehaviors

Routiniz

ed

In

termittent

e.g. Waiters serving smaller

servings, bad beer or sour winee.g. Talking to guests like

young kids and putting them

down

e.g. Chef occasionally

purposefully slowing down

orders

e.g. Waiters spilling soup onto

laps, gravy onto sleeves, or hot

plates into someones hands


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Cycle of Mediocrity

Good wages/benefits

high jobsecurity

Other suppliers (if any)seen as equally poor

Customers tradehorror stories

Service not focused

on customers needs

Employees spendworking life

in environmentof mediocrity

Narrow designof jobs

Success =

not making

mistakes

Complaints met byindifference or

hostility

Employeedissatisfaction

(but cant easily quit) Emphasison rules

vs. pleasingcustomers

EPromotionand pay

increases basedon longevity,

lack of mistakes

Initiative isdiscouraged

Jobs are boring andrepetitive; employees

unresponsive

Resentment at inflexibility and

lack of employee initiative;

complaints to employees

No incentive for

cooperative relationship

to obtain better service

Training emphasizes

learning rules

Customer dissatisfaction


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Cycle of SuccessLow

customerturnover

Customerloyalty

Continuity inrelationship with

customer

High customersatisfaction

Extensivetraining

Employee satisfaction,positive service attitude

Repeat emphasis oncustomer loyalty and

retention

Higherprofit

marginsBroadened

job designsLowered turnover,high service quality

Above averagewages

Intensifiedselection effort

Train, empower frontline

personnel to control quality

Source: Heskett and Schlesinger


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How to Manage People for Service

Advantage?

1. Hire the right people

2. Enable your people

3. Motivate and energize your people

Staff performance is a function of both ability and motivation.How can we get able service employees who are motivated toproductively deliver service excellence?


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Hire the Right People

The old saying People are your most

important assetis wrong.

The RIGHT people are your most

most important asset.

Jim Collins


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Recruitment

The rightpeople are a firms most important asset:

take a focused, marketing-like approach to recruitment

Clarify what must be hiredversus what can be taught

Clarify nature of the working environment, corporate

values and style, in addition to job specs

Ensure candidates have/can obtain needed

qualifications

Evaluate candidates fit with firms culture and values

Fit personalities, styles, energies to the appropriate

jobs


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Select And Hire the Right People:

(1) Be the Preferred Employer

Create a large pool: Compete for Talent Market Share

What determines a firms applicant pool?

Positive image in the community as place to work

Quality of its services The firms perceived status

There is no perfect employee

Different jobs are best filled by people with different skills,

styles or personalities

Hire candidates that fit firms core values and culture

Focus on recruiting naturally warm personalities

Select and Hire the Right People:


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Observe Behaviour

Hire based on observed behavior, not words you hear

Best predictor of future behavior is past behavior

Consider group hiring sessions where candidates given group

tasks

Personality Testing

Willingness to treat co-workers and customers with courtesy,consideration and tact

Perceptiveness regarding customer needs

Ability to communicate accurately and pleasantly


(2) How to Identify the Best

Candidates

S l d Hi h Ri h P l


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(3) How to Identify the Best

Candidates Employ Multiple, Structured Interviews

Use structured interviews built around job requirements

Use more than one interviewer to reduce similar to meeffects

Give Applicants a Realistic Preview of the Job

Chance to have hands-on with the job

Assess how the candidates respond to job realities

Allow candidates to self select themselves out of the job


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The Organizational Culture, Purpose and Strategy Promote core values, get emotional commitment to strategy

Get managers to teach why, what and how of job.

Interpersonal and Technical Skills Both are necessary but neither is sufficient for optimal job

performance

Product/Service Knowledge

Staffs product knowledge is a key aspect of service quality Staff need to be able to explain product features and to

position products correctly

Train Service Employees


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Factors Favoring Employee

Empowerment Firms strategy is based on competitive differentiation and on

personalized, customized service

Emphasis on long-term relationships vs. one-time transactions

Use of complex and non-routine technologies

Environment is unpredictable, contains surprises

Managers are comfortable letting employees work independently for

benefit of firm and customers

Employees seek to deepen skills, like working with others, and are

good at group processes


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Control vs. Involvement Model of

Management

Information about operating results and measures of

competitive performance

Rewards based on organizational performance (e.g. profit

sharing, stock ownership)

Knowledge/skills enabling employees to understand and

contribute to organizational performance

Power to influence work procedures and organizational direction

(e.g. quality circles, self-managing teams)

Control concentrates 4 key features at top of organization;Involvement pushes them down:


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Suggestion involvement

Employee recommendation

Job involvement

Jobs redesigned

Employees retrained

Supervisors facilitate

High involvement

Information is shared

Employees skilled in teamwork, problem solving etc. Participate in decisions

Profit sharing and stock ownership

Levels of Employee Involvement


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Motivate and Energize the Frontline

Job content Feedback and recognition

Goal accomplishment

Use the full range of available rewards effectively,including:


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The Inverted Organizational

Pyramid

FrontlineStaff

TopMgmt

MiddleMgmt

Traditional

Organizational PyramidInverted Pyramid with a

Customer & Frontline Focus

Customer Base

Frontline Staff

Middle Mgmt& Top Mgmt

Support Frontline

h h l f f l


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The Wheel of Successful HR in

Service FirmsLeadership that:

Focuses the entire organization

on supporting the frontline

Fosters a strong

service culture with

passion for service

and productivity

Drives values that

inspire, energize

and guide service

providers

1. Hire the

Right People3.Motivate &

Energize Your People

2. Enable Your People

Be the preferred

employer & compete

for talent market share

Intensify the

selection

process

Empower Frontline

Build high performance service

delivery teams

Extensive Training

Utilize the full

range of rewards

Service Excellence

& Productivity

Services Marketing Session 10

Documents

Transcript of Services Marketing Session 10