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Chapter 2 Understanding Service (Public)


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Atomistic Model of service
Bases of Classification
Implication classification
The front stage
The back stage
The marketing system
Core and peripheral service

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Chapter 2 Understanding Service (Public)

  2. 2. UNDERSTANDING SERVICES (PUBLIC)  Atomistic model of service  Bases of classification  Implication classification  The front stage/ delivery system  The back stage/ technical system  The marketing system  Core and peripheral service
  3. 3. Atomistic Model of Service Lynn Shostack created a Atomistic model / molecular model that can be applied to goods or service .  Use chemical analogy to help marketers visualize and manage the term ‘TOTAL MARKET ENTITY’  At the center is the core benefit= Address basic customer need, with the link to a series of other characteristics.  Surrounding the molecules= represent PRICE, DISTRIBUTION, MARKET POSITIONING (communication message)  A change in one element may COMPLETELY alter the nature of the entity
  4. 4. EXAMPLE of 3 tailored travelling experience for 3 different markets. (VIRGIN AIRLINES)  For students/ backpackers or during bad economic conditions, what they want? ◦ reaching from one destination to the other ◦ cheap flights+hostels, bed and breakfast  For business travelers, what they want? ◦ schedule frequency along with comfort ◦ a comfortable travel + hotel with internet, office facilities.  For tourists with families what they want? ◦ in-flight and post-flight services (hotels) ◦ comfortable flight-but not too expensive + hotel near a tourist destination Various markets demand differently.  Air Asia offers low cost air travel : the travelers are not provided certain tangible elements such as food and drink in-flight.  Challenge : create an experience for each market ◦ to understand how consumers perceive a certain service ◦ what as a firm they should do to manage and meet the expectations
  5. 5. Bases of Classification Tangible Intangible People processing and possession processing. Mental stimulus processing and information processing. People Processing Customers must: • Physically enter the service factory • Co-operate actively with the service operation Managers should think about process and output from customer’s perspective • To identify benefits created and non-financial costs: • Time, mental, physical effort Possession Processing Customers are less physically involved compared to people processing services. Involvement is limited. Production and consumption are separable. T A N G I B L E
  6. 6. Mental Stimulus Processing Ethical standards required when customers who depend on such services can potentially be manipulated by suppliers Recipients should spend time but not necessarily be physically present in a service factory; just mentally in communication with information being presented. Core content of services is information-based that can be converted to digital bits, recorded or transformed into manufactured products Can be “inventoried” Information Processing Information is the most intangible form of service output. But may be transformed into enduring forms of service output. Customer involvement determined more by tradition or personal desire to meet face to face and not by the needs of the operational process. Line between information processing and mental stimulus processing may be blurred INTANGIBLE
  7. 7. Tangible People (people’s bodies) Possession (physical possession) • Passenger transport • Health care • Lodging • Beauty salons • Physical therapy • Fitness centers • Restaurants/bars • Haircutting • Funeral services • Cargo/Freight transport • Repair and maintenance • Warehousing/storage • Janitorial services • Retail distributrion • Laundry and dry cleaning • Refueling • Landscape/lawn care • Disposal/Recycling Intangible People (mental stimulus processing – people’s mind) Possession (information processing – intangible assets) • Advertising/PR • Arts and Entertainment • Broadcasting/cable • Management consulting • Education • Information services • Music concerts • Psychotherapy • Religion •Voice telephone • Accounting • Banking • Data processing • Data transmission • Insurance • Legal services • Programming • Research • Securities investment • Software consulting
  8. 8. Implication of Classification  Design of the service factory .  Alternative channels for service delivery.  Balancing demand and supply.  Make the most of information technology.  Clarifying the benefits delivered.
  9. 9. The Front Stage / Delivery System  Service process take place  Occurs at service encounter  High-contact service between customer & service provider (customer highly involve)  Customer also interact with environment, physical facilities & other customer  Moment of truth take place Mind set of front stage  Create good service experiences (ex: enjoyable, unique, responsive to their needs) Example  The waiter serve the food to the customer according to what customer order
  10. 10. The Back Stage / Technical System  Input are processed & element of service product is created  Invisible to the eye of the customers  What goes in back stage not the interest of the customer unless it effect the quality of front stage activities. Mindset of back stage  Follow different goals and technique  Strive for efficiency, standardization  Treat people as abstract actors Example  Chef at the kitchen cook the food order by the customer
  11. 11. The Marketing System What is marketing system?  Understanding service products, consumers and markets  Involve customer and service provider  Developing customer relationships  Applying the 8P’s  Striving for service excellence
  12. 12. Core and Peripheral Service Core service Peripheral Service Is the main service provided by the company Component related to how the customer is treated when finding, buying and using the service WHEN PRODUCT IS SERVICE Example Flying the passengers and their baggage safely from point A to point B Example How well customers are treated when they call up to compare fares/ make reservation, check in at the airport, take flight to the destination and pick up their bags at the end of the flight Product core: WHEN THE PRODUCT IS A TANGIBLE GOOD EX:TV SET Service component: HOW WELL THE BUYER ISTREATED WHILE SHOPPING, BUYING AND USING THETV SET