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New service development
The document discusses several ethical issues related to marketing, including targeting vulnerable groups, excluding potential customers, price fixing, predatory pricing, deceptive advertising, and promoting unhealthy or unsafe products. It provides statistics on public opinions regarding regulation of content in television advertising. Key ethical considerations for marketing revolve around the four P's of marketing: product, price, placement, and promotion.
New service development
- 1. NEW SERVICE DEVELOPMENT BY:LIZA E. DAOANIS
- 2. NEW SERVICE DEVELOPMENT CYCLE Full Launch Design Analysis Develop -ment ExecutionStage Planning Stage People Products Tech- nology Systems
- 3. SERVICE INNOVATION • RadicalService Innovation • Requires a different process and design approach than incremental innovation • Innovative service firms require enablers to facilitate the process • Nature of change will dictate where resources are allocated • Radical innovations imply increased risk and resource investment
- 4. SERVICE SYSTEM DESIGN •Service Decision Factors • Facility Location (based upon proximity to customers) • Facility Layout (depends on the presence of the customer at the location) • Product and Process Design (Covers both the intangible and tangible aspects of the service offering) • Scheduling (how the workers are assigned to the service) • Quality Control, Measures and Time Standards (focus is on the needs of the customer)
- 5. SERVICE SYSTEM DESIGN •Service Decision Factors • Demand/Capacity Planning (depends on the type of service and the immediacy of matching supply to demand) • Customer Contact Level (physical presence and length of time that a customer spends with a service provider) • Industrialization (the substitution of technology for people) • Front Line Personnel Discretion (denotes the flexibility of the service employee while interacting with a customer)
- 6. SERVICE SYSTEM DESIGN •Service Decision Factors • Worker Skills (depend on service strategy and concept, customer contact level and industrialization level) • Sales Opportunities (coincide with high customer contact and employee discretion) • Standardization of Service Offering (level of uniformity provided in the service) • Customer Participation (substitution of consumer labor for provider labor)
- 7. SERVICE SYSTEM DESIGNAND INNOVATION • Supporting facilities must be in place prior to offering a service • Facilitating goods such as a product or other tangible features are part of the service • Sensual and psychological benefits are associated with the service offering • Services might be bundled into one supporting facility • Must differentiate between core and ancillary services
- 8. SERVICE SYSTEM DESIGNAND INNOVATION IndustrializationLevel Low High Face to Face Delivery Telephone or Courier Delivery Technology Based Self-Service Current Service Incremental Service Innovation Technology-Driven Service Innovation Radical Service Innovation Low High Standardization of Service Offering
- 9. SERVICE SYSTEM DESIGN TOOLS •Service Blueprinting • Design tool based on the process flow diagram • Delineate front office from back office operations • Determine standard or maximum execution times, materials and the exact process for each step • Identify potential failure points and generate mitigation plans to prevent or recover from a failure
- 10. SERVICE SYSTEM DESIGN TOOLS Lineof Visibility Take Drink Order Collect Payment Deliver DrinkMake Drink Order Supplies Prepare Mixes Materials (Coffee, flavors, milk, cups, etc.) Fail Poi nt Not seen by customer Seen by customer Service Blueprint for Espresso and Coffee Shop
- 11. SERVICE SYSTEM DESIGN TOOLS •Customer Utility Models • Success depends upon customer’s perceived utility or benefit provided by the service’s price or non-price attributes • Promise of customer utility measurement is the ability to optimize the design of a service • Satisfaction with the quality of service affects customer loyalty and repurchase intent
- 12. SERVICE SYSTEM DESIGN TOOLS •Customer Utility Models • Service quality can be measured along five principle dimensions • Reliability, responsiveness, assurance, empathy and the tangible aspect of the service • Improving reliability can result in increased labor and training costs • Responsiveness may be enhanced by reducing queue times • Empathy and assurance can be influenced by the ability of service providers to convey knowledge, courtesy and impressions of caring • Enhancing the tangible attributes of a service increases costs of consumables
- 13. SERVICE SYSTEM DESIGN TOOLS •Customer Utility Models • Conjoint analysis (CJA) and discrete choice analysis (DCA) are used to model customer behavior • Discrete choice experiments involve careful design of service profile choice sets • Design of a new airport restaurant requires the following • Identification of important attributes • Specification of attribute levels • Experimental design • Presentation of alternatives of respondents • Estimation of choice model
- 14. NEW SERVICE DESIGNFOR SNOWBIRD SKI RESORT Determine Appropriate Service Attributes (e.g., Price, Service Time, Intangible, & Tangibles) Determine all variables and costs related to Service Attributes & demand -capacity matching strategies Solve for Customer Segments and Utility Weights (βs) using multinomial Logit or regression analysis Collect Customer Attribute Information using choice-based or ratings-based conjoint analysis Feasibility Evaluate Market Share & Profit & Profit Profile N with attributes, price, and cost Customer waiting time
- 15. NEW SERVICE DESIGNFOR SNOWBIRD SKI RESORT Ski Area A Features Ski Area B Rugged terrain, sparsely forested, and dramatic rock peaks Physical Setting Rugged terrain, sparsely forested, and dramatic rock peaks 40 minutes drive from home Distance 40 minutes drive from home 70 inches Snow Base 70 inches 12 inches new powder New Snow 12 inches new powder 3,250 feet Vertical Drop 3,250 feet Groomed trails with glades and bowls Type of Runs Groomed trails only 35 ski runs Size of Area 35 ski runs 25% Advanced,, 50% Intermediate, 25% Beginner Challenge 25% Advanced,, 50% Intermediate, 25% Beginner Ski shops, restaurants, night life, boutiques, lodging Facilities Ski shops, restaurants, night life, boutiques, lodging $50 per day Ticket Price $20 per day 30 minutes at peak time Lift Line Wait 30 minutes at peak time Mostly triples and quads Type of Lifts Mostly triples and quads Not allowed Snowboards Not allowed Suppose the two ski areas described above were the only ones available for your next ski outing. Please check () one box below to indicate what you would most likely do: I would choose Ski Area A. I would choose Ski Area B. I would do something else and not ski.
- 16. SUMMARY • Challenges toservice design • Intangible nature of service encounters • Inability to prototype and test new concepts • Propensity to use ad-hoc methods • Innovations come through incremental and radical new services • The two approaches address the same factors (i.e. customer contact and industrialization)
- 17. ETHICAL ISSUES Ethics aremoral guidelines which govern good business practices/behavior. So behaving ethically is doing what is morally right. Behaving ethically in business is widely regarded as good business practice. Ethical Issues in Marketing: • revolves around the 4p’s of marketing: • product & packaging • price • placing (distribution) • promotion (advertising & branding)
- 18. 1. Product • Consumersafety • Product liability and reliability • Designing for special needs. 2. Packaging • Label information • Packaging safety • Environmental implication of packaging
- 19. 3. Price: •Supra competitivepricing •Price fixing • Price skimming • Price wars •Price collusion (agreeing with other competitors to set prices in a market to the detriment of competition and consumers •Predatory pricing
- 20. • Predatory pricing•Price war• Dumping (pricing policy)• Variable pricing 4 Placing (distribution) •Targeting the vulnerable (e.g. children, the elderly) •Excluding potential customers from the market (e.g. discouraging demand from undesirable market sectors or simply refusing to sell to certain customers
- 21. •Paying vendors tocarry a firms product rather than one of its competitors are also unethical. Most drug stores would give too many drugs without prescription from a qualified doctor are also unethical. Products are moved in unsafe vehicles ,are also unethical.
- 22. 5. Promotion (advertising&branding) Ethical Issues in Advertising • Puffery- False or exagerated praise • Advertising to Children • Promoting Unhealthy Products • Subliminal Advertising-the use by advertisers of images and sounds to influence consumers' responses without their being conscious of it. • Deceptive Advertising- issues over truth and honesty . Issues with violence, sex and profanity
- 23. FACTS AND TVSTATISTICS ( unethical issues about advertising) •A new survey conducted by the Pew Research Center showed that 75% of the 1,505 adults polled from March 17-21 would like to see tighter enforcement of government rules on broadcast content, particularly when children are most likely to be watching; 60% want broadcast TV indecency standards extended to cable TV; and 69% want higher fines for media companies.
- 24. In a recent(03.20.13) Time Magazine Poll 53In a recent (03.20.13) Time Magazine Poll 53 percent of respondents said that they thinkpercent of respondents said that they think the government should place stricter controlsthe government should place stricter controls on broadcast-channel shows depicting sexon broadcast-channel shows depicting sex and violence. 68 percent believe theand violence. 68 percent believe the entertainment industry has lost touch withentertainment industry has lost touch with viewers' moral standards. 66 percent saidviewers' moral standards. 66 percent said there is too much violence on open-air TV, 58there is too much violence on open-air TV, 58 percent said too much cursing and 50 percentpercent said too much cursing and 50 percent said there is too much sexual content on TV.said there is too much sexual content on TV. 49 percent say government regulation should49 percent say government regulation should be extended to cover basic cable.be extended to cover basic cable.
- 25. Ethical issues inMarketing 1. Market research: • invasion of privacy (e.g. obtaining research data without permission) •Stereotyping – drawing unfair or inappropriate conclusions
- 26. 2. Target customersand market: 2.1 Targeting the vulnerable (e.g. children, the elderly) 2.2 Excluding potential customers from the market (e.g. discouraging demand from undesirable market sectors or simply refusing to sell to certain customers
- 27. 3. Pricing 3.1 Pricefixing 3.2 Price wars 3.3 Price collusion (agreeing with other competitors to set prices in a market to the detriment of competition and consumers) 4. Advertising and promotion 4.1 Issues over truth and honesty 4.2 Issues with violence, sex and profanity
- 28. 4.3 Taste andcontroversy 4.4 Negative advertising Price fixing is illegal. It is considered to be anti-competitive as well as unethical •Agree prices with its competitors (e.g. it can't agree to work from a shared minimum price list) •Share markets or limit production to raise prices (e.g. if two contracts are put out to tender, one business can't agree that it will bid for one and let a competitor bid for the other)
- 29. • Impose minimumprices on different distributors such as shops • Agree with competitors what purchase price it will offer suppliers • Cut prices below cost in order to force a smaller or weaker competitor out of the market
- 30. • Advertising inthe UK is regulated by the Advertising Standards Authority, which regulates advertising across all media, including TV, internet, sales promotions and direct marketing. The ASA’s role is to ensure ads are legal, decent, honest and truthful by applying the Advertising Codes.