The document covers the service life cycle, detailing stages from introductory to decline, and emphasizes the importance of developing new services through a structured new service development cycle. It discusses the concept of service quality, including the servqual model, service gaps, and quality dimensions, highlighting factors that influence customer perceptions and experiences. Additionally, frameworks for measuring service quality and strategies for minimizing gaps and improving service delivery are presented.

1. U N I T 3SERVICES MARKETING
Service Life Cycle – New service development – Service
Blue Printing – GAP model of service quality –
Measuring service quality – SERVQUAL – Service
Quality function development.
Unit III

2. SERVICE LIFECYCLE

4. INTRODUCTORY STAGE
• New service or new form of current service is in the
introductory stage when offered first time.
• Can be introduced on a small scale and expanded if
acceptance grows
• Small scale introduction reduces financial risk
• New services faces few or no direct competitors
• Introductory stage normally short
• Strategy to ensure new service accepted by consumers
is to have users of current service participate in new
service design.

5. GROWTH STAGE
• Industry growing rapidly
• Firms seeing positive cash flow
• Industry is expanding and demand is high – firms
offering service can normally increase their prices –
higher margins and greater profits.
• Thus more firms enter the market.
• Distinct market segments emerge
• Service providers need to develop a sustainable
competitive advantage.

6. MATURITY STAGE
• Sales level off.
• Competition becomes very intense – intense competitive
advantage required – results in overall industry profits.
• Weaker firms will be shaken out of the industry.
• At this stage in service life cycle, consumers see very
few distinguishable characteristics among the various
firms in a service industry.
• Requires strong marketing program

7. DECLINE STAGE
• Industry sales decline – because of new technology
development
• Because of decrease in demand – many companies
delete the service reducing competition
• Cash flow and profit for companies throughout the
industry have declined.
• Companies with the services in decline part of life cycle
have five options : Divest, harvest, Prune, Retrench or
rejuvenate

8. NEW SERVICE
DEVELOPMENT

9. NEW SERVICE DEVELOPMENT CYCLE

10. DEVELOPMENT
• Formulation of new service strategy and objectives
• Idea generation and screening
• Concept development and testing

11. ANALYSIS
• Business analysis
• Project authorization

12. DESIGN
• Service design and testing
• Process and system design and testing
• Marketing program design and testing
• Personnel training
• Service testing and Pilot run
• Test marketing

13. FULL LAUNCH
• Full scale launch
• Post launch review

15. FRONT END PLANNING
• Organization Mission and Goals
• Idea generation
• Identify modifiable risk and protective factors
• Identify consumer and provider preferences
• Concept development
• Develop intervention using effective behaviour change
methods
• Assess customer and provider acceptance of program and
features that will maximise acceptability
• Assess market for service, competition and feasibility of
delivery in the market

16. FRONT END PLANNING
• Business / Feasibility Analysis
• Test effects to improve socially valued outcomes;
mediators and moderators of effects
• Assess costs
• Develop procedure for implementation
• Test for profitability and feasibility

17. IMPLEMENTATION
• Prototype development and testing
• Identify core program components
• Identify factors that could negatively affect fidelity of the
delivery of the core program components
• Develop methods to minimize barriers to effective
implementation
• Test service prototypes with customers and providers
• Assess implementation, outcomes, subgroup
differences, cost and cost-benefit

18. IMPLEMENTATION
• Market Testing
• Test service and other marketing mix elements
• Introduction to market
• Develop marketing strategy : Brand? Promotion? Price?
• Identify factors that influence adoption such as attributes
of the innovation, social system readiness to adopt, etc.

19. IMPLEMENTATION
• Post introduction and Evaluation
• On-going evaluation of quality of program
implementation and program effects
• Identify organizational factors that influence
implementation
• Identify factors in training, monitoring, technical
assistance, etc. that affect implementation
• Identify factors related to sustaining program over time

20. SERVICE BLUEPRINT

21. SERVICE BLUEPRINT
• Components of blueprint
• Definition of standards for each front-stage activity
• Physical and other evidence for front-stage activities
• Principal customer actions
• Line of interaction
• Front-stage actions by customer contact personnel
• Line of visibility

25. SERVICE QUALITY

26. SERVICE QUALITY
• Quality Control - Goods
• QC is focused on the principle of ensuring quality during the
manufacturing process, on ‘getting it right the first time’ and
‘reducing end-of-production-line failures to zero’
• Delivering the right product to the right customer at the right time
(extends quality beyond the product itself and using external &
internal measures to assess quality)
• Quality – Service
• Servuction system depends on the customer as a participant in
the production process

27. CONCEPTUAL MODEL OF SERVICE
QUALITY

28. 7 SERVICE QUALITY GAPS

29. GAPS
• Service gap is between customers’ expectations of
service and their perception of the service actually
delivered
• Knowledge gap : difference between what consumers
expect of a service and what management perceives
that consumers expect
• Standards gap : difference between what management
perceives that consumers expect and the quality
specifications set for service delivery

30. GAPS
• Delivery gap : difference between the quality
specifications set for service delivery and the actual
quality of service delivery
• Communications gap : difference between the actual
quality of service delivered and the quality of service
described in the firm’s external communications such as
brochures and mass media advertising.

31. SERVICE GAP
• Before closing service gap, organization must close or
attempt to narrow knowledge gap, standards gap,
delivery gap and communication gap.
• Service gap is a function of the knowledge gap,
standards gap, delivery gap and communications gap.
As each of these gaps increases or decreases, the
service gap responds in a similar manner.

32. KNOWLEDGE GAP
• Mistakes
• Wrong facilities may be provided
• Wrong staff may be hired
• Wrong training may be undertaken
• Customers may not have use for the services provided
• Factors influencing Knowledge gap
• Firm’s research orientation – conducting consumer research
• Upward communication influences size of knowledge gap
• Levels of management – when levels of management increase,
the management tends to become more distant from customers
and the size of the knowledge gap increases.

33. STANDARDS GAP
• When developing standards, the firm should use a flow chart
of its operations to identify all points of contact between it and
its customers
• Detailed standards can be written for
• The way the system should operate
• The behaviour of contact personnel at each point in the system
• Hotel front-desk personnel Training
• Acknowledging the customer upon arrival,
• Establishing eye contact, smiling,
• Completing the proper paper work,
• Reviewing with the customer the available amenities and
• Providing the customer with keys to the room.

34. STANDARDS GAP
• Factors influencing Standards gap
• Belief that management can meet customer requirements for
service
• Management commitment to delivery of service quality
• Balance between cost-reduction strategies and prioritization of
service quality

35. DELIVERY GAP
• Factors influencing Delivery gap
• Employee’s willingness to perform the service
• Employee-job fit : qualified to do the job; sufficient training given
• Role conflict (what service manager expects employees to
provide and the service their customers actually want)
• Role ambiguity (not understanding their jobs well)
• Dispersion of control (employees not allowed to make
independent decisions without conferring with a manager, will
result in employee alienation)
• Inadequate support – not receiving training or technological /
other resources to perform their jobs in the best possible manner.

36. COMMUNICATIONS GAP
• Mistakes / Outcomes
• Advertising / sales promotions promise one kind of service and
the consumer receives a different kind of service
• Organization loses customer trust
• Factors influencing Communication gap
• Overpromise – occurs in highly competitive businesses
• Flow of horizontal communication (reduces gap)

37. MEASURING SERVICE
QUALITY

38. SERVICE QUALITY
• David Garvin : 5 perspectives on quality
Transcendent view
• Quality is synonymous with innate excellence - a mark of
uncompromising standards and high achievement.
People learn to recognize quality only through
experience gained from repeated exposure
Product based approach
• Quality is a precise and measurable variable. But this
fails to account for differences in tastes, needs and
preferences of individual customers and market
segments

39. SERVICE QUALITY
• David Garvin : 5 perspectives on quality
User based definitions
• Quality lies in the eyes of the beholder. This is subjective
and demand-oriented perspective. This recognizes that
different customers have different wants and needs.
Manufacturing based approach
• This supply-based, operations-driven approach focuses
on conformance to internally developed specifications,
which are often driven by productivity and cost-
containment goals.

40. SERVICE QUALITY
• David Garvin : 5 perspectives on quality
Value based definitions
• Quality is “affordable excellence”. It is a trade-off
between performance (or conformance) and price.

41. SERVICE - COMPONENTS OF QUALITY
• Valarie Zeithaml, Leonard Berry and A.Parasuraman
identified 10 criteria used by consumers in evaluating
service quality (discussed in subsequent slides) through
research
• Then they consolidated them into five broad dimensions
(by subsequent research)
• Tangibles (appearance of physical elements
• Reliability (dependable, accurate performance)
• Responsiveness (promptness and helpfulness)
• Assurance (competence, courtesy, credibility and
security)
• Empathy (easy access, good communications and
customer understanding)

42. SERVICE - COMPONENTS OF QUALITY
Generic dimensions used by consumers in evaluating
service quality
• Credibility : Trustworthiness, believability, honesty of the
service provider
• Security : Freedom from danger, risk or doubt
• Access : Approachability and ease of contact
• Communication : Listening to customers and keeping
them informed in language they can understand
• Understanding the customer : Making the effort to know
customers and their needs

43. SERVICE – COMPONENTS OF QUALITY
Generic dimensions used by consumers in evaluating service
quality
• Tangibles : Appearance of physical facilities, equipment,
personnel and communication materials
• Reliability : Ability to perform the promised service
dependably and accurately
• Responsiveness : Willingness to help customers and
provide prompt service
• Competence : Possession of the skills and knowledge
required to perform the service
• Courtesy : Politeness, respect, consideration and
friendliness of contact personnel

44. SERVQUAL
• Service quality compares perceptions of what a consumer should
expect from a firm that delivers high-quality services
• SERVQUAL is a diagnostic tool based on five service quality
dimensions
• Tangibles
• Reliability
• Responsiveness
• Assurance
• Empathy
• SERVQUAL is a 44 item scale that measures customer
expectations (22 items) and customer perceptions (22 items)
• Customers expectations are measured on a 7 point scale ‘not at all essential’ to
‘absolutely essential’
• Customers perceptions are measured on a 7 point scale ‘strongly agree’ to
‘strongly disagree’

46. CRITICISMS OF SERVQUAL
• Length of Questionnaire
• Suggestions : On a single scale ask respondents where they
would rate a high-quality company and their firm
• Validity of the 5 dimensions
• Predictive power of SERVQUAL

47. CONSIDERATIONS WHEN EXAMINING
SERVICE QUALITY
• Importance of Contact Personnel
• Process is as important as Outcome
• Consumer Perceptions are unpredictable
• Assessing the criticisms of SERVQUAL

48. SERVICE QUALITY FUNCTION
DEVELOPMENT