George Day observes: ―The diversity of ways a business can achieve a competitive advantage quickly defeats any generalization or facile prescriptions....First and foremost, a business must set itself apart from its competition. To be successful, it must identify and promote itself as the best provider of attributes that are important to target customers.‖
To position itself in the market any organization, company orfirm needs to have focus.In marketing terms, focus means providing a relativelynarrow product mix for a particular market segment –agroup of buyers who share common characteristics, needs,purchasing behaviour, or consumption patterns.
The extent of service company’s focus can be described alongtwo dimensions:Market Focus : A market focus company concentrate on anarrow market segment but offer a wide range of services.Service Focus: Service focused firms offer a narrow rangeof services to a fairly broad market.
BREADTH OF SERVICE OFFERINGS Narrow Wide ManyNUMBER OFMARKETSSERVED Few
Benefits from the Fully Focused In this few customers are served by the narrow service segment. Provide protection to the firm against would be competitors and allow firm to charge premium. Example Small courier service firm sever only one or two big clients, provide services based on their requirements.
Benefits from Service Focused In this segment narrow product line is served to many customers. Example Reliance CDMA services launched in year 2002
Benefits from Market Focused It offers the potential of selling multiple services to a single purchase. Example: Tour organizing firms like SOTC. They take care of their clients travelling ,lodging and food during the entire trip.
Major Service Innovations: New core products for previously undefined markets for example Fedex’s introduction to overnight express service in 1971.Major Process Innovations: Using new processes to deliver existing products with added benefits. Example University of Phoenix give lectures either online or in rented facility.Product Line Extensions: Addition to current product lines. Example Selling of Insurance Product by banks.Process-line Extensions: Alternative delivery proceduresSupplementary Service Innovations: Additions of new or improved facilitating or enhancing elementsService Improvements: Modest changes in the performance of current productsStyle Changes: Visible changes in service design or scripts
Service processes affect customers and also cost, speed, and productivity Reengineering – analyzing and redesigning processes to achieve faster and better performance Examination of processes can lead to creation of alternative delivery methods: ◦ Add or eliminate supplementary services ◦ Re-sequence delivery of service elements ◦ Offer self-service options
Goods and services may become competitive substitutes if they offer the same key benefits Provides an alternative to owning the physical good that can attain the desired outcome Any new good may create need for after-sales services now and be a source of future revenue stream
Own a Physical Good Rent Use of Physical Good Perform Work Oneself Drive Own Car Rent a Car and Drive it Use Own Computer Rent Use of ComputerHire Someoneto Do Work Hire a Chauffeur to Drive Hire a Taxi or Limousine Hire a Typist to Type Send Work out to a Secretarial Service
Services are not immune to high failure rates that plague new manufactured products In developing new services: ◦ core product is often of secondary importance, many innovations are in supplementary services or service delivery ◦ ability to maintain quality of the total service offering is key ◦ accompanying marketing support activities are vital ◦ market knowledge is of utmost importance
Market synergy ◦ Good fit between new product and firm’s image ◦ Advantage in meeting customers’ needs ◦ Strong support from firm during and after launch ◦ Understands customer purchase decision behavior Organizational factors ◦ Strong inter-functional cooperation and coordination ◦ Internal marketing to educate staff on new product and its importance
Market research factors ◦ Scientific studies conducted early in development process ◦ Product concept well defined before undertaking field studies
Blueprinting Services to Create Valued Experiences and Productive Operations
SERVICE BLUEPRINTA tool for simultaneously depicting the service process, the pointsof customer contact, and the evidence of service from thecustomer’s point of view. Process Points of contact Service Blueprint Evidence
DEVELOPING A BLUEPRINTDeveloping a Blueprint •Identify key activities in creating and delivering service •Define “big picture” before “drilling down” to obtain a higher level of detailA key characteristic of service blueprinting is that it distinguishes between what customers experience “front-stage” the activities of employees and support processes “back-stage”,Between these two lies the line of visibility.
KEY COMPONENTS OF A SERVICE BLUEPRINT Define standards for Specify physical Identify principal front stage activities evidence customer actionsObjectives:Identify fail points & risks of excessive Front stage actions waits Line of visibility by frontline Line of interaction personnelSet service standardsFail-proof process Backstage actions Support processes Support processes by customer contact involving other involving IT personnel personnel
BLUEPRINTING THE RESTAURANT EXPERIENCE: A THREE-ACT PERFORMANCE•Act 1: Prologue and Introductory Scenes•Act 2: Delivery of Core Product Cocktails, seating, order food and wine, wine service Potential fail points: Menu information complete? Menu intelligible? Everything on the menu actually available? Mistakes in transmitting information a common cause of quality failure Customers may not only evaluate quality of food and drink, but how promptly it is served or serving staff attitudes•Act 3: The Drama Concludes Remaining actions should move quickly and smoothly, with no surprises at the end Customer expectations: accurate, intelligible and prompt bill, payment handled politely, guest are thanked for their patronage
BLUEPRINT FOR EXPRESS MAIL DELIVERY SERVICE Truck Truck Packaging Packaging EVIDENCE CUSTOMER PHYSICAL Forms Forms Hand-held Hand-held Computer Computer Uniform Uniform Customer Customer Receive Calls Gives Package Package (On Stage) Line of interaction Driver Deliver Picks Up PackageCONTACT PERSON Package Line of visibilityBack Stage) Customer Service Order Line of internal interaction Dispatch Airport Fly to SUPPORT PROCESS Driver Receives Sort Fly to Unload & Load On & Loads Center Destinatio Sort Truck n Sort Load on Packages Airplane
ADVANTAGES OF BLUEPRINTINGAdvantages of Blueprinting •Distinguish between “front stage” and “backstage” •Clarify interactions and support by backstage activities and systems •Identify potential fail points; take preventive measures; prepare contingency •Pinpoint stages where customers commonly have to wait •Identify fail points •Analysis of reasons for failure reveals opportunities for failure-proofing to reduce/eliminate future errors •Need fail-safe methods for both employees and customers
REDESIGNING SERVICE PROCESSES ―Institutions are like steel beams—they tend to rust. What was once smooth and shiny and nice tends to become rusty.‖ Mitchell T. Rabkin, MD, Former President of Boston’s Beth Israel Hospital
WHY REDESIGN?Revitalizes process that has become outdated•Changes in external environment make existing practices obsolete and require redesign of underlying processesRusting occurs internally •Natural deterioration of internal processes; creeping bureaucracy; evolution of spurious, unofficial standards Symptoms: Extensive information exchange Data that is not useful High ratio of checking control activities to value-adding activities
WHY REDESIGN?Redesign aims to achieve these performance measures: Reduced number of service failures Reduced cycle time from customer initiation of a service process to its completion Enhanced productivity Increased customer satisfaction
PROCESS REDESIGN: APPROACHES AND POTENTIAL BENEFITS • Streamline front-end and back-end processes of Eliminating Non- servicesvalue-adding Steps • Improve productivity and customer satisfaction • Increase in productivity and service quality Shifting To Self- • Lower costs and perhaps prices service • Enhance technology reputation • Differentiates company • Improve convenience for customers Delivering Direct • Productivity can be improved by eliminating Service expensive retail locations • Increase customer base
PROCESS REDESIGN: APPROACHES AND POTENTIAL BENEFITS • Involves grouping multiple services into one offer, focusing on a well-defined customer Bundling group • A better fit to the needs of target segment Services • Increase productivity with customized service • Increase per capita service use • Focus on tangible elements of service process (facilities and equipment) Redesigning • Increase convenience Physical Aspects • Enhance satisfaction and productivity of Of Service Process frontline staff • Cultivate interest in customers
Q1.Identify some real-world examples of branding in financial services,such as specific type of retail bank account or insurance policies, anddefine their characteristics. How meaningful are these brands likely to be tocustomers?Q2.Prepare a blueprint of the service with which you are familiar. Uponcompletion consider(a) what are the indicators of quality from the customer perspective considering the line of visibility(b) whether all steps in the process are necessary(c) the location of the potential fail points and how could they be designed our of the process or what service recovery procedure could be used.(d) what are the potential measures of process performance(e) the extent to standardization is possible and advisable throughout the process