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Designing andDesigning and

Managing ServicesManaging Services

Designing andDesigning and

Managing ServicesManaging Services

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What is a Service?A service is any act of performance

that one party can offer another that

is essentially intangible and does notresult in the ownership of anything;its production may or may not be tied

to a physical product.

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Service Sectors

GovernmentPrivate

nonprofit

ManufacturingBusiness Retail

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Categories of Service Mix

Pure tangible good

Pure tangible good

Good w/ accompanying services

Good w/ accompanying services

Hybrid

Hybrid

Service w/ accompanying goods

Service w/ accompanying goods

Pure service

Pure service

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Service Distinctions Equipment-based or people-based

Service processes

Clients presence required or not Personal needs or business needs

Objectives and ownership

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Continuum of Evaluation forDifferent Types of Products

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Distinctive Characteristics

of Services1. Intangibility Strategies

Physical Evidence andPresentation

Place

People

Equipment Communicationmaterial

Symbols

Price

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2. Inseparability

3. Variability Strategies

Invest in good hiring and training

procedures

Standardize the service-

performance process

Monitor customer satisfaction

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4.PherishabilityMatching Demand and Supply

Demand side

Differential pricing

Nonpeak demand

Complementary

services

Reservation

systems

Supply side

Part-time employees

Peak-time efficiency

Increased consumer

participation

Shared services

Facilities for future

expansion

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Strategies for service

marketing In Addition to the stategies that

corresponds to different

characteristics, marketers can adoptthe holistic marketing strategy forservice marketing (see the figure)

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Three Types of Marketing

in Service Industries

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Service-Quality Model

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Gaps That Cause

Unsuccessful Service Delivery1. Gap between consumer expectation and

management perception2. Gap between management perception and

service-quality specifications3. Gap between service-quality

specifications and service delivery

4. Gap between service delivery andexternal communications5. Gap between perceived service and

expected service

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Service Companies should identifythese gaps and should try to remove

or at least minimize the gaps toimprove the quality of services.

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Determinants of Service

QualityReliability

Responsiveness

Assurance

Empathy

Tangibles

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Best Practices Strategic Concept Top-Management Commitment

High Standards Self-Service Technologies Monitoring Systems

Satisfying Customer Complaints Satisfying Employees