Designing and Managing Services by Ram, Saurabh, Rishikesh and Chinmaya 1
DEF: services are intangible elements which
satisfy the needs of the consumer
Services marketing: process of identifying
needs and wants of customers then designing
the service along with the strategies to deliver
satisfaction to the consumers profitably
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Services are said to have four key characteristics
The 4 I’s:
Intangibility-no physical attributes
Inseparability-cannot be separated from the
Inconsistency –tend to vary
Inventory- (simultaneous production
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Services cannot be inventoried.
Services cannot be patented.
Services cannot be readily displayed or
Pricing is difficult.
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• Service delivery and customer satisfaction depend on
• Service quality depends on many uncontrollable
• There is no sure knowledge that the service delivered
matches with what is planned and promoted.
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• Customers participate in and affect the transaction.
• Customers affect each other
• Employees affect the service outcome.
• Decentralization may be essential.
• Mass production is difficult.
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• It is difficult to synchronize
supply and demand with services
• Services cannot be returned or
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Goods Services Resulting Implications
Tangible Intangible Services cannot be inventoried.
Services cannot be patented.
Services cannot be readily displayed or communicated.
Pricing is difficult.
Standardized Heterogeneous Service delivery and customer satisfaction depend on
Service quality depends on many uncontrollable factors.
There is no sure knowledge that the service delivered
matches what was planned and promoted.
Production Simultaneous Customers participate in and affect the transaction.
separate from production and Customers affect each other.
consumption consumption Employees affect the service outcome.
Decentralization may be essential.
Mass production is difficult.
Nonperishable Perishable It is difficult to synchronize supply and demand with
Services cannot be returned or resold.
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“enabling the “setting the
“delivering the promise”
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Product Price Place
Promotion People Process
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PRODUCT PLACE P R O M O T IO N P R IC E
P h y s ic a l g o o d C h a n n e l ty p e P ro m o tio n F le x ib ility
fe a tu re s b le n d
Q u a lity le v e l E x p o s u re S a le s p e o p le P ric e le v e l
A c c e s s o rie s In te rm e d ia rie s A d v e rtis in g T e rm s
P a c k a g in g O u tle t lo c a tio n S a le s D iffe re n tia tio n
p ro m o tio n
W a rra n tie s T ra n s p o rta tio n P u b lic ity A llo w a n c e s
P ro d u c t lin e s S to ra g e
B ra n d in g
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PEO PLE P H Y S IC A L PROCESS
E V ID E N C E
E m p lo ye e s F a c ility d e s ig n F lo w o f a c tiv itie s
C u s to m e rs E q u ip m e n t N u m b e r o f s te p s
C o m m u n ic a tin g S ig n a g e L e v e l o f c u s to m e r
c u ltu re a n d v a lu e s in v o lv e m e n t
E m p lo ye e re s e a rc h E m p lo ye e d re s s
O th e r ta n g ib le s
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GAP 4 to Customers
GAP 1 GAP 3
Designs and Standards
Company Perceptions of
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Services are of different types address
towards different types of customers
depending upon the type of benefit
1.By market –segmentation
3.By Goal of Services
4.By Labour intensiveness
5.By Customer Contact
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By Skills:- By Goal of Services:-
1.Professional Services 1.Profit Making
E.g.. Engineering, E.g.. Commercial Co.,
Medical, Management Export-Import oprns.
2.Non-Professional 2.Non-Profit Making
E.g.. Domestic E.g.. NGO,
By Labour Intensiveness:- By Customer –Contact:-
1.Labour Based Services 1.High-Contact
2.Equipment Based Services 2.Low-Contact
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Relates more to service
Relates to the way in which accessibility.
service is provided and perceived.
Models in this aspect are
Models in this aspect are empirical analytical and typically originate
in nature and originate from social in operations research (queuing
sciences and marketing theory)
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Queues in service operations are often the
arena where customers, service providers
(servers, or agents) and managers establish
contact, in order to jointly create the service
Process-wise, queues play in services much
the same role as inventories in
manufacturing. But in addition, “human
queues” express preferences, complain,
abandon and even spread around negative
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The simplest and most-widely used such model is the M/M/s queue
the simplest queuing model of a call center requires the estimation of
calling rate and mean service (holding) times.
Moreover, the performance of call centers in peak hours is extremely
sensitive to changes in its underlying parameters.
It follows that an extremely accurate estimation/forecasting of
parameters is a prerequisite for a consistent service level and efficient
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Multi-channel queuing model
Several service stations(s)
Random arrival and service rates
Customers are served on first come first served basis
Any no of customers can be accommodated in the queue
Customer population is also infinite
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