What is a service?• …any act or performance that 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
Characteristics of services• Intangibility• Inseparability• Variability• Perishability
Service quality• Customers compare the perceived service with the expected service.• If perceived service is less than expected service, customers are disappointed ; may switch• If both match, customers are likely to return• Successful companies do not just satisfy customers, they delight them
Model of service quality Parameswaran, et. al• Five determinants of service quality, in order of importance:i) Reliability- the ability to perform the promised service dependably and accuratelyii) Responsiveness-The willingness to help customers and to provide prompt serviceiii)Assurance-The ability of employees to convey trust, confidence and competenceiv)Empathy-Caring , individualized servicev) Tangibles
“Moment of truth”• The importance of creating a great, unforgettable customer experience at a critical or significant service point• Also referred to as a ‘touch point’• Popularized by Jan Carlson of SAS
Service blueprinting as a technique for innovation• Services are processes• Services as customer experiences• Service development and design• 5 components of a typical service blueprint:i) Customer actionsii) Onstage/ visible contact employee actionsiii) Backstage/invisible employee actionsiv) Support processesv) Physical evidence(Bitner, M., Ostrom, A.,and Morgan,F.,2007)
Service excellence• Create a strategic concept• Top management commitment to quality• Set high standards• Self service technologies• Systems for monitoring service performance and customer complaints• Emphasis on employee satisfaction
Internationalization of services• Services are the fastest growing part of international trade• Most literature on internationalization deals with products; very little on services• Whatever little research has been done on internationalization services suggests it is a highly risky move to make
Hard vs Soft servicesSoft services Hard servicesRequire little or no local Require major presence bypresence the exporting firm or local representativeArchitectural design Food servicesEducation? HealthLife insurance LaundryMusic Hotels and hospitality
5 Main strategies• Direct export• Systems export• Direct entry• Indirect entry• Electronic strategies
Key issues• Regardless of what entry mode a firm chooses, customers must accept services from an international firm• Openness to foreign cultures , may support international services while patriotism and conservatism may inhibit customer acceptance• Younger and educated customers are more likely to accept international services• Role of local/ national culture critical
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