Service Life cycle - new service development - Service blue print - Gap model of service quality - measuring service quality - SERVQUAL - Service quality function development

1. U N I T 3SERVICES MARKETING
Service Life Cycle – New service development – Service
Blue Printing – GAP model of service quality –
Measuring service quality – SERVQUAL – Service
Quality function development.
Unit III

2. SERVICE LIFECYCLE

4. INTRODUCTORY STAGE
• New service or new form of current service is in the
introductory stage when offered first time.
• Can be introduced on a small scale and expanded if
acceptance grows
• Small scale introduction reduces financial risk
• New services faces few or no direct competitors
• Introductory stage normally short
• Strategy to ensure new service accepted by consumers
is to have users of current service participate in new
service design.

5. GROWTH STAGE
• Industry growing rapidly
• Firms seeing positive cash flow
• Industry is expanding and demand is high – firms
offering service can normally increase their prices –
higher margins and greater profits.
• Thus more firms enter the market.
• Distinct market segments emerge
• Service providers need to develop a sustainable
competitive advantage.

6. MATURITY STAGE
• Sales level off.
• Competition becomes very intense – intense competitive
advantage required – results in overall industry profits.
• Weaker firms will be shaken out of the industry.
• At this stage in service life cycle, consumers see very
few distinguishable characteristics among the various
firms in a service industry.
• Requires strong marketing program

7. DECLINE STAGE
• Industry sales decline – because of new technology
development
• Because of decrease in demand – many companies
delete the service reducing competition
• Cash flow and profit for companies throughout the
industry have declined.
• Companies with the services in decline part of life cycle
have five options : Divest, harvest, Prune, Retrench or
rejuvenate

8. NEW SERVICE
DEVELOPMENT

9. NEW SERVICE DEVELOPMENT CYCLE

10. DEVELOPMENT
• Formulation of new service strategy and objectives
• Idea generation and screening
• Concept development and testing

11. ANALYSIS
• Business analysis
• Project authorization

12. DESIGN
• Service design and testing
• Process and system design and testing
• Marketing program design and testing
• Personnel training
• Service testing and Pilot run
• Test marketing

13. FULL LAUNCH
• Full scale launch
• Post launch review

15. FRONT END PLANNING
• Organization Mission and Goals
• Idea generation
• Identify modifiable risk and protective factors
• Identify consumer and provider preferences
• Concept development
• Develop intervention using effective behaviour change
methods
• Assess customer and provider acceptance of program and
features that will maximise acceptability
• Assess market for service, competition and feasibility of
delivery in the market

16. FRONT END PLANNING
• Business / Feasibility Analysis
• Test effects to improve socially valued outcomes;
mediators and moderators of effects
• Assess costs
• Develop procedure for implementation
• Test for profitability and feasibility

17. IMPLEMENTATION
• Prototype development and testing
• Identify core program components
• Identify factors that could negatively affect fidelity of the
delivery of the core program components
• Develop methods to minimize barriers to effective
implementation
• Test service prototypes with customers and providers
• Assess implementation, outcomes, subgroup
differences, cost and cost-benefit

18. IMPLEMENTATION
• Market Testing
• Test service and other marketing mix elements
• Introduction to market
• Develop marketing strategy : Brand? Promotion? Price?
• Identify factors that influence adoption such as attributes
of the innovation, social system readiness to adopt, etc.

19. IMPLEMENTATION
• Post introduction and Evaluation
• On-going evaluation of quality of program
implementation and program effects
• Identify organizational factors that influence
implementation
• Identify factors in training, monitoring, technical
assistance, etc. that affect implementation
• Identify factors related to sustaining program over time

20. SERVICE BLUEPRINT

21. SERVICE BLUEPRINT
• Components of blueprint
• Definition of standards for each front-stage activity
• Physical and other evidence for front-stage activities
• Principal customer actions
• Line of interaction
• Front-stage actions by customer contact personnel
• Line of visibility

25. SERVICE QUALITY

26. SERVICE QUALITY
• Quality Control - Goods
• QC is focused on the principle of ensuring quality during the
manufacturing process, on ‘getting it right the first time’ and
‘reducing end-of-production-line failures to zero’
• Delivering the right product to the right customer at the right time
(extends quality beyond the product itself and using external &
internal measures to assess quality)
• Quality – Service
• Servuction system depends on the customer as a participant in
the production process

27. CONCEPTUAL MODEL OF SERVICE
QUALITY

28. 7 SERVICE QUALITY GAPS

29. GAPS
• Service gap is between customers’ expectations of
service and their perception of the service actually
delivered
• Knowledge gap : difference between what consumers
expect of a service and what management perceives
that consumers expect
• Standards gap : difference between what management
perceives that consumers expect and the quality
specifications set for service delivery

30. GAPS
• Delivery gap : difference between the quality
specifications set for service delivery and the actual
quality of service delivery
• Communications gap : difference between the actual
quality of service delivered and the quality of service
described in the firm’s external communications such as
brochures and mass media advertising.

31. SERVICE GAP
• Before closing service gap, organization must close or
attempt to narrow knowledge gap, standards gap,
delivery gap and communication gap.
• Service gap is a function of the knowledge gap,
standards gap, delivery gap and communications gap.
As each of these gaps increases or decreases, the
service gap responds in a similar manner.

32. KNOWLEDGE GAP
• Mistakes
• Wrong facilities may be provided
• Wrong staff may be hired
• Wrong training may be undertaken
• Customers may not have use for the services provided
• Factors influencing Knowledge gap
• Firm’s research orientation – conducting consumer research
• Upward communication influences size of knowledge gap
• Levels of management – when levels of management increase,
the management tends to become more distant from customers
and the size of the knowledge gap increases.

33. STANDARDS GAP
• When developing standards, the firm should use a flow chart
of its operations to identify all points of contact between it and
its customers
• Detailed standards can be written for
• The way the system should operate
• The behaviour of contact personnel at each point in the system
• Hotel front-desk personnel Training
• Acknowledging the customer upon arrival,
• Establishing eye contact, smiling,
• Completing the proper paper work,
• Reviewing with the customer the available amenities and
• Providing the customer with keys to the room.

34. STANDARDS GAP
• Factors influencing Standards gap
• Belief that management can meet customer requirements for
service
• Management commitment to delivery of service quality
• Balance between cost-reduction strategies and prioritization of
service quality

35. DELIVERY GAP
• Factors influencing Delivery gap
• Employee’s willingness to perform the service
• Employee-job fit : qualified to do the job; sufficient training given
• Role conflict (what service manager expects employees to
provide and the service their customers actually want)
• Role ambiguity (not understanding their jobs well)
• Dispersion of control (employees not allowed to make
independent decisions without conferring with a manager, will
result in employee alienation)
• Inadequate support – not receiving training or technological /
other resources to perform their jobs in the best possible manner.

36. COMMUNICATIONS GAP
• Mistakes / Outcomes
• Advertising / sales promotions promise one kind of service and
the consumer receives a different kind of service
• Organization loses customer trust
• Factors influencing Communication gap
• Overpromise – occurs in highly competitive businesses
• Flow of horizontal communication (reduces gap)

37. MEASURING SERVICE
QUALITY

38. SERVICE QUALITY
• David Garvin : 5 perspectives on quality
Transcendent view
• Quality is synonymous with innate excellence - a mark of
uncompromising standards and high achievement.
People learn to recognize quality only through
experience gained from repeated exposure
Product based approach
• Quality is a precise and measurable variable. But this
fails to account for differences in tastes, needs and
preferences of individual customers and market
segments

39. SERVICE QUALITY
• David Garvin : 5 perspectives on quality
User based definitions
• Quality lies in the eyes of the beholder. This is subjective
and demand-oriented perspective. This recognizes that
different customers have different wants and needs.
Manufacturing based approach
• This supply-based, operations-driven approach focuses
on conformance to internally developed specifications,
which are often driven by productivity and cost-
containment goals.

40. SERVICE QUALITY
• David Garvin : 5 perspectives on quality
Value based definitions
• Quality is “affordable excellence”. It is a trade-off
between performance (or conformance) and price.

41. SERVICE - COMPONENTS OF QUALITY
• Valarie Zeithaml, Leonard Berry and A.Parasuraman
identified 10 criteria used by consumers in evaluating
service quality (discussed in subsequent slides) through
research
• Then they consolidated them into five broad dimensions
(by subsequent research)
• Tangibles (appearance of physical elements
• Reliability (dependable, accurate performance)
• Responsiveness (promptness and helpfulness)
• Assurance (competence, courtesy, credibility and
security)
• Empathy (easy access, good communications and
customer understanding)

42. SERVICE - COMPONENTS OF QUALITY
Generic dimensions used by consumers in evaluating
service quality
• Credibility : Trustworthiness, believability, honesty of the
service provider
• Security : Freedom from danger, risk or doubt
• Access : Approachability and ease of contact
• Communication : Listening to customers and keeping
them informed in language they can understand
• Understanding the customer : Making the effort to know
customers and their needs

43. SERVICE – COMPONENTS OF QUALITY
Generic dimensions used by consumers in evaluating service
quality
• Tangibles : Appearance of physical facilities, equipment,
personnel and communication materials
• Reliability : Ability to perform the promised service
dependably and accurately
• Responsiveness : Willingness to help customers and
provide prompt service
• Competence : Possession of the skills and knowledge
required to perform the service
• Courtesy : Politeness, respect, consideration and
friendliness of contact personnel

44. SERVQUAL
• Service quality compares perceptions of what a consumer should
expect from a firm that delivers high-quality services
• SERVQUAL is a diagnostic tool based on five service quality
dimensions
• Tangibles
• Reliability
• Responsiveness
• Assurance
• Empathy
• SERVQUAL is a 44 item scale that measures customer
expectations (22 items) and customer perceptions (22 items)
• Customers expectations are measured on a 7 point scale ‘not at all essential’ to
‘absolutely essential’
• Customers perceptions are measured on a 7 point scale ‘strongly agree’ to
‘strongly disagree’

46. CRITICISMS OF SERVQUAL
• Length of Questionnaire
• Suggestions : On a single scale ask respondents where they
would rate a high-quality company and their firm
• Validity of the 5 dimensions
• Predictive power of SERVQUAL

47. CONSIDERATIONS WHEN EXAMINING
SERVICE QUALITY
• Importance of Contact Personnel
• Process is as important as Outcome
• Consumer Perceptions are unpredictable
• Assessing the criticisms of SERVQUAL

48. SERVICE QUALITY FUNCTION
DEVELOPMENT