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Designing and
Managing Services

              Chapter 13

            Daiki “Derek” Shimizu
                May 11, 2012



    www.daiki-shimizu.blogspot.com
Outline: Designing and
  Managing Services
1. Service Sectors
2. Categories of Service Mix
3. Distinctive Characteristics
   of Services
4. Matching Demand and Supply
5. Improving Service Quality




     www.daiki-shimizu.blogspot.com
Outline: Designing and
  Managing Services
6. Factors Leading to Customer
    Switching Behavior
7. Gaps that Cause Unsuccessful
    Service Delivery
8. Determinants of Service Quality
9. Developing Brand Strategies
    for Services
10. Customer Worries




      www.daiki-shimizu.blogspot.com
Concept 1

    Service Industries are
    Everywhere




Government      Private nonprofit   Business




  Manufacturing             Retail
       www.daiki-shimizu.blogspot.com
Concept 2

       There are 5 categories of
       offerings


Pure tangible good                     Good with
                                       accompanying services


                     Service with
                     accompany goods


     Hybrid                                  Pure service
              www.daiki-shimizu.blogspot.com
Concept 3

       Services have four distinctive
       characteristics




Intangibility   Inseparability   Variability   Perishability

            www.daiki-shimizu.blogspot.com
Concept 4

        Strategies to match between
        demand and supply well
Demand side




Differential        Nonpeak   Complementary   Reservation
pricing             demand    services        systems

               www.daiki-shimizu.blogspot.com
Concept 4

      Strategies to match between
      demand and supply well
Supply side




Part-time     Peak-time    Increased       Shared     Facilities for
employees     efficiency   consumer        services   future
                           participation              expansion
            www.daiki-shimizu.blogspot.com
Concept 5

   Solutions to Customer Failures

•Redesign processes and redefine customer
roles to simplify service encounters
•Incorporate the right technology to aid
employees and customers
•Create high-performance customers by
enhancing their role clarity, motivation, and
ability
•Encourage customer citizenship where
customers help customers



       www.daiki-shimizu.blogspot.com
Concept 5

        We can solve Customer Failures
        by these




Redesign and redefine   Incorporate   Create   Encourage


              www.daiki-shimizu.blogspot.com
Concept 6

   Factors Leading to Customer
   Switching Behavior
•Pricing
•Inconvenience
•Core Service Failure
•Service Encounter Failures
•Response to Service Failure
•Competition
•Ethical Problems
•Involuntary Switching




       www.daiki-shimizu.blogspot.com
Concept 6

           Why do customers swith
           behavior?



  High price           Wait for service     Billing errors        Impolite
 •Pricing           •Inconvenience          •Core Service      •Service Encounter
                                            Failure            Failures




 No response                                     Unsafe            Provider closed
•Response to        Found better service                          •Involuntary
Service Failure     •Competition           •Ethical Problems      Switching

                  www.daiki-shimizu.blogspot.com
Concept 7

Gaps that Cause Unsuccessful
Service Delivery




    www.daiki-shimizu.blogspot.com
Concept 7

        We can find Gaps that Cause
        Unsuccessful Service Delivery in

                    Medical check every
                    day is too often!
Need oranges


                                           More than 30
                                           minutes!




Need apples           Please meet
                      the standard!




      difference


                   www.daiki-shimizu.blogspot.com
Concept 8

  Determinants of Service
  Quality
•Reliability
•Responsiveness
•Assurance
•Empathy
•Tangibles




      www.daiki-shimizu.blogspot.com
Concept 8

      We can find determinants
      based on


Provide service
                             Service promptly    Customers feel safe
as promised
•Reliability           •Responsiveness             •Assurance




      Individual attention
                                        Modern equipment
        •Empathy             •Tangibles
          www.daiki-shimizu.blogspot.com
Concept 9

   Developing Brand Strategies
   for Services
•Choosing brand elements
•Establishing image dimensions
•Devising branding strategy




       www.daiki-shimizu.blogspot.com
Concept 9

     We can develop Brand by

Choosing brand   Establishing image   Devising branding
elements         dimensions           strategy




         www.daiki-shimizu.blogspot.com
Concept 10

   Customer Worries

•Failure frequency
•Downtime
•Out-of-pocket costs




       www.daiki-shimizu.blogspot.com
Concept 10

      Customers are worried about
Failure frequency    Downtime         Out-of-pocket costs

 Break down again?   I need it NOW.     How much is it




          www.daiki-shimizu.blogspot.com
Summary
1.   Service Industries are Everywhere
2.   There are 5 categories of offerings
3.   Services have four distinctive characteristics
4.   Strategies to match between demand and supply well
5.   We can solve Customer Failures
6.Factors Leading to Customer Switching Behavior
7.Gaps that Cause Unsuccessful Service Delivery
8.Determinants of Service Quality
9.Developing Brand Strategies
    for Services
10. Customer Worries Failure frequency, Downtime, Out-
    of-pocket costs




        www.daiki-shimizu.blogspot.com
Designing and
Managing Services

              Chapter 13

            Daiki “Derek” Shimizu
                May 11, 2012



    www.daiki-shimizu.blogspot.com

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Ch13 designing and managing services shimizu

  • 1. Designing and Managing Services Chapter 13 Daiki “Derek” Shimizu May 11, 2012 www.daiki-shimizu.blogspot.com
  • 2. Outline: Designing and Managing Services 1. Service Sectors 2. Categories of Service Mix 3. Distinctive Characteristics of Services 4. Matching Demand and Supply 5. Improving Service Quality www.daiki-shimizu.blogspot.com
  • 3. Outline: Designing and Managing Services 6. Factors Leading to Customer Switching Behavior 7. Gaps that Cause Unsuccessful Service Delivery 8. Determinants of Service Quality 9. Developing Brand Strategies for Services 10. Customer Worries www.daiki-shimizu.blogspot.com
  • 4. Concept 1 Service Industries are Everywhere Government Private nonprofit Business Manufacturing Retail www.daiki-shimizu.blogspot.com
  • 5. Concept 2 There are 5 categories of offerings Pure tangible good Good with accompanying services Service with accompany goods Hybrid Pure service www.daiki-shimizu.blogspot.com
  • 6. Concept 3 Services have four distinctive characteristics Intangibility Inseparability Variability Perishability www.daiki-shimizu.blogspot.com
  • 7. Concept 4 Strategies to match between demand and supply well Demand side Differential Nonpeak Complementary Reservation pricing demand services systems www.daiki-shimizu.blogspot.com
  • 8. Concept 4 Strategies to match between demand and supply well Supply side Part-time Peak-time Increased Shared Facilities for employees efficiency consumer services future participation expansion www.daiki-shimizu.blogspot.com
  • 9. Concept 5 Solutions to Customer Failures •Redesign processes and redefine customer roles to simplify service encounters •Incorporate the right technology to aid employees and customers •Create high-performance customers by enhancing their role clarity, motivation, and ability •Encourage customer citizenship where customers help customers www.daiki-shimizu.blogspot.com
  • 10. Concept 5 We can solve Customer Failures by these Redesign and redefine Incorporate Create Encourage www.daiki-shimizu.blogspot.com
  • 11. Concept 6 Factors Leading to Customer Switching Behavior •Pricing •Inconvenience •Core Service Failure •Service Encounter Failures •Response to Service Failure •Competition •Ethical Problems •Involuntary Switching www.daiki-shimizu.blogspot.com
  • 12. Concept 6 Why do customers swith behavior? High price Wait for service Billing errors Impolite •Pricing •Inconvenience •Core Service •Service Encounter Failure Failures No response Unsafe Provider closed •Response to Found better service •Involuntary Service Failure •Competition •Ethical Problems Switching www.daiki-shimizu.blogspot.com
  • 13. Concept 7 Gaps that Cause Unsuccessful Service Delivery www.daiki-shimizu.blogspot.com
  • 14. Concept 7 We can find Gaps that Cause Unsuccessful Service Delivery in Medical check every day is too often! Need oranges More than 30 minutes! Need apples Please meet the standard! difference www.daiki-shimizu.blogspot.com
  • 15. Concept 8 Determinants of Service Quality •Reliability •Responsiveness •Assurance •Empathy •Tangibles www.daiki-shimizu.blogspot.com
  • 16. Concept 8 We can find determinants based on Provide service Service promptly Customers feel safe as promised •Reliability •Responsiveness •Assurance Individual attention Modern equipment •Empathy •Tangibles www.daiki-shimizu.blogspot.com
  • 17. Concept 9 Developing Brand Strategies for Services •Choosing brand elements •Establishing image dimensions •Devising branding strategy www.daiki-shimizu.blogspot.com
  • 18. Concept 9 We can develop Brand by Choosing brand Establishing image Devising branding elements dimensions strategy www.daiki-shimizu.blogspot.com
  • 19. Concept 10 Customer Worries •Failure frequency •Downtime •Out-of-pocket costs www.daiki-shimizu.blogspot.com
  • 20. Concept 10 Customers are worried about Failure frequency Downtime Out-of-pocket costs Break down again? I need it NOW. How much is it www.daiki-shimizu.blogspot.com
  • 21. Summary 1. Service Industries are Everywhere 2. There are 5 categories of offerings 3. Services have four distinctive characteristics 4. Strategies to match between demand and supply well 5. We can solve Customer Failures 6.Factors Leading to Customer Switching Behavior 7.Gaps that Cause Unsuccessful Service Delivery 8.Determinants of Service Quality 9.Developing Brand Strategies for Services 10. Customer Worries Failure frequency, Downtime, Out- of-pocket costs www.daiki-shimizu.blogspot.com
  • 22. Designing and Managing Services Chapter 13 Daiki “Derek” Shimizu May 11, 2012 www.daiki-shimizu.blogspot.com