Nature of services Services are everywhere Service is ‘an act or performance that one party can offer to another; That is essentially intangible; And does not result into the ownership of anything. Production may/may not be tied to a physical product.
Nature of services Service Mix Pure tangible goods; e.g. Phenyl Tangible good + accompanying service; cars Hybrid; restaurants Service + accompanying goods; travel Pure service; education, consulting
Nature of services Equipment based (ATMs) / people based (consulting, cleaning) Requires the client’s presence (brain surgery); car washing doesn’t. Services for personal or business needs. Profit/non profit; public/private ownership.
Characteristics of Services Intangibility No idea of the outcome of the service. Therefore, ‘tangibilize the intangibles’. Through physical evidence and presentation. Place People Equipment Price Communication materials.
Characteristics of Services Inseparability Produced and consumed simultaneously. The client is present when the service is produced. The provider becomes a part of the service. Variability Human behavior cant be standardized. Try to hire good people.
Characteristics of Services Perishability Services can’t be stored Can’t store for peak demands Differential pricing Reservation systems Increased consumer participation
Managing Service Quality Gap 1: Consumer expectation and management perception Gap 2: Management Perception and service-quality specification
Managing Service Quality Gap 3: Service quality specification and service delivery Gap 4: Service delivery and external communications Gap 5: Perceived service and expected service
Managing Service Quality Reliability Ability to perform promised service accurately Responsiveness Willingness to help customers, prompt service Assurance Knowledge and courtesy of employess
Managing Service Quality Empathy Caring, individualized attention Tangibles Appearance of physical facilities, equipment, personnel, etc.
Best Practices Strategic concept: be “customer -obsessed” Top management commitment Set high standards Self-service technologies (SSTs) – ATM, IRCTC Monitoring Systems Satisfying employees as well as customers
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