This document provides an overview of services marketing. It discusses four categories of services: people processing, possession processing, mental stimulus processing, and information processing. It also discusses the traditional marketing mix (product, price, place, promotion) applied to services, as well as the extended services marketing mix of physical evidence, process, and people. Key characteristics of services are discussed, including intangibility, inseparability, heterogeneity, and perishability. The document also covers consumer behavior models for services, including the three-stage model of service consumption and the servuction model. It defines factors that influence customers' expectations and perceptions of service quality. Finally, it discusses differentiated and undifferentiated marketing strategies and how they relate to market

1. UNIT 1
Understanding
Service Products: New perspective on marketing in
service industry- Four board categories of services,
Traditional marketing mix applied to Services. The
extended services marketing mix for managing the
customer interface, Characteristics of services- Product
vs Services-Tangibility Spectrum; Services Sector in
Indian Economy-Characteristics of Services Sector
Industries.
Services are a form of product that consists of activities, benefits, or
satisfactions offered for sale that are essentially intangible and do
not result in the ownership of anything.
1. There are total Four categories of Services
Main two categories: Tangible and Intangible
In Tangible two part: People and Possession
In Intangible two part: Mental Stimulus and Information
(1) People Processing
• The action/work/ service do on direct on people body,
with equipment and without equipment
• A physical location where people or machines/ both,
create and deliver service benefits to customers.
• In People Process service customer must prepare for co-
ordination with the service operator, for example, Hair
cutting, customer must follow instruction given by
barber. Follow the instruction given by doctor during the
check-up patient body
• Time required of customers in people processing services
varies widely. Customer satisfied after completed
services, to reach his/her destination, satisfied his hunger
or is now sporting clean and stylishly cut hair or has a
good night's sleep away from home or is now in
physically better health
• Example of people processing
o Passenger transportation
o Health care
o Lodging
o Beauty Salons
(2) Possession Processing
• The service directed at physical possession
(work/action/service do on customer's physical good's)
• Customers are less physically involved with this type of
service.
• Example of Possession Processing
o Freight transportation
o Repair and maintenance
o Warehousing/Storage
o Office cleaning services
(3) Mental Stimulus Processing
• The work/activity/service with effect human mind.
(Intangible)
• In this service customer must investment of time and
mental effort.
• It can be inventoried. For example, customer's favourite
movies/songs download from source and can store in
their own gadgets and use it when they want.
• Example of Mental Stimulus Processing
o Advertising/PR (Personal Relations)
o Arts and entertainment
o Broadcasting/cable
o Management consulting
(4) Information Processing
• Information is the most intangible form of service
output, but it may be transformed into more enduring,
tangible forms such as letters, reports, books, CD-ROMs,
or DVDs.
• That are highly dependent on the effective collection and
processing of information are financial service and
professional services such as accounting, law, marketing,
research, management consulting, and medical diagnosis
• Example of Information Processing
o Accounting
o Banking
o Data processing
o Data transmission
2. Services Marketing Mix
As we discussed in the lesson on services, there are a series of
fundamental characteristics such as intangibility, inseparability,
heterogeneity and perishability which are unique to a service. The
traditional marketing mix which includes product, place, price and
promotion could be stretched to compensate for these factors.
However the services marketing mix is an adaptation of the
traditional 4Ps to address these characteristics and it sees the
addition of another 3Ps which are physical evidence, process and
people. We will also consider how the traditional mix alters for a
service with sections below on pricing for services, product for
services, place for services, and promotion for services.
Pricing for services
Pricing needs to take in account two factors in relation to services.
The first issue is what is the unit which we are pricing? Do we sell a
hotel room based on its area or upon how long you use it for?
Would you cost dental surgery by the amount of time you sat in

2. the dentist’s chair or by the actual procedure that was
undertaken? Secondly if a price is based upon a bundle of sub
services then how do you price it as a whole? An example of this
would be an all-you-can-eat menu priced at a single point e.g. €20,
or would you charge for each item on the menu individually and
add-on a service charge?
Product for services
In this instance our product and service are pretty much the same.
However, as we have discussed our service is intangible etc. One-
way dealing with this is to consider that: service = product +
process. So, we need to focus upon the process. For example,
when you arrive at a hotel people process you to ensure that you
are registered and your baggage is taken to a room. This is an
example of people processing. Another type of processing is
possession processing, and an example would be where you take
your dog to be groomed, or you organise a service for your car i.e.
your possessions are processed. Both of these are examples of
product in relation to service.
Place for services
Where you consume the service is a central part of the services
marketing mix. With the place element the marketer considers
convenience, location, footfall, number of outlets, and timing.
Consider an event which takes place over a weekend. If you have a
food trailer which sells organic salads to the public you need to
make sure that you are actually booked at the event, that people
will walk past your trailer and be able to stop and queue, and that
you are able to sell to the people when they want to eat. Simply
scale this up for businesses like Pizza Express.
Promotion for services
Obviously, services are more difficult to assess in terms of
attributes in comparison to tangible products. The marketer needs
to be more innovative, and clear when it comes to the benefits to
the target market of his or her service. The marketer can try a
number of techniques which include:
• Emphasising any tangible cues e.g. telecommunications
companies will use symbols such as Mercury to
emphasise speed. Burger King will use boxes and
packaging which emphasise its marketing
communications.
• Exploiting celebrity to provide information about the
service. There are many examples of well-known public
faces telling us on TV how they purchase life assurance
or organise their final will.
• Branding is everything to service. Starbucks does sells
coffee and cake but much of its offering is its service.
Starbucks’ logo, its location, the ambience of their stores
and the whole service experience is all part of the brand
Starbucks. There are many other examples of this
including KFC and McDonalds. Can you think of
anymore?
Extended service marketing mix
Physical Evidence
(Physical evidence is) . . . The environment in which the service is
delivered, and where the firm and customer interact, and any
tangible components that facilitate performance or
communication of the service.
Process
(Process is) . . . The actual procedures, mechanisms, and flow of
activities by which the service is delivered – this service delivery
and operating systems.
People
(People are) . . . All human actors who play a part in service
delivery and thus influence the buyers’ perceptions; namely, the
firm’s personnel, the customer, and other customers in the service
environment.
Characteristics of Services
Some of the important characteristics of services are as follows: 1.
Perishability 2. Fluctuating Demand 3. Intangibility 4. Inseparability
5. Heterogeneity 6. Pricing of Services 7. Service quality is not
statistically measurable.
1. Perishability:
Service is highly perishable and time element has great significance
in service marketing. Service, if not used in time is lost forever.
Service cannot be stored.
2. Fluctuating Demand:
Service demand has high degree of fluctuations. The changes in
demand can be seasonal or by weeks, days or even hours. Most of
the services have peak demand in peak hours, normal demand and
low demand on off-period time.
3. Intangibility:
Unlike product, service cannot be touched or sensed, tested or felt
before they are availed. A service is an abstract phenomenon.
4. Inseparability:
Personal service cannot be separated from the individual and some
personalised services are created and consumed simultaneously.
For example, hair cut is not possible without the presence of an
individual. A doctor can only treat when his patient is present.
5. Heterogeneity:

3. The features of service by a provider cannot be uniform or
standardised. A Doctor can charge much higher fee to a rich client
and take much low from a poor patient.
6. Pricing of Services:
Pricing decision about services are influenced by perishability,
fluctuation in demand and inseparability. Quality of a service
cannot be carefully standardised. Pricing of services is dependent
on demand and competition where variable pricing may be used.
7. Service quality is not statistically measurable:
It is defined in form of reliability, responsiveness, empathy and
assurance all of which are in control of employee’s direction
interacting with customers. For service, customers satisfaction and
delight are very important. Employees directly interacting with
customers are to be very special and important. People include
internal marketing, external marketing and interactive marketing.
Service Sector of Indian Economy contributes to around 55 percent
of India's GDP during 2006-07. This sector plays a leading role in
the economy of India, and contributes to around 68.6 percent of
the overall average growth in GDP between 2002-03 and 2006-07.
There has been a 9.4 percent growth in the Indian economy during
2006-07 as against a rise of 9 percent in the same during 2006-06.
During this growth in Indian economy, the service sector witnessed
a rise of 11 percent in the year 2006-07 against the 9.8 percent
growth in 2005-06. The service sectors of Indian economy that
have grown faster than the economy are as follows:
• Information Technology (the most leading service sectors
in Indian economy)
• IT-enabled services (ITeS)
• Telecommunications
• Financial Services
• Community Services
• Hotels and Restaurants
There has been a 13 percent hike in the service sectors of trade,
hotels, transport and communication in India's economy as
compared to the 10.4 percent rise in the previous year. The
financial services that comprise of banks, real estate, insurance,
and business services witnessed a rise of 11.1 percent during 2006-
07 against the 10.9 percent growth in the previous year. Service
sectors including community, social, and personal services
experienced a growth of 7.8 percent during 2006-07 as against 7.7
percent growth in the previous year.
The service sector of India has also witnessed a remarkable rise in
the global market apart from the Indian market. It has experienced
a rise of 2.7 percent in 2006 from that of 2 percent in 2004. The
broad-based services in the trade sector has undergone a large-
scale rise. A statistic concerning the growth of India's service
sectors are listed below:
• The software services in Indian economy increased by 33
percent which registered a revenue of USD 31.4 billion
• Business services grew by 82.4 percent
• Engineering services and products exports grew by 23
percent and earned a revenue of USD 4.9 billion
• Services concerning personal, cultural, and recreational
had a growth of 96 percent
• Financial services had a rise of 88.5 percent
• Travel, transport, and insurance grew by 23 percent
The software services in Indian economy along with the export of
products is growing at a massive pace and thereby witnessed an
alarming rise of 35.5 percent and reached a lumpsum amount of
USD 18 billion. The IteS and BPO sectors grew by 33.5 percent and
earned a revenue of USD 8.4 billion. The service sector of Indian
economy has been the most high-powered sector in India's
economy. It has also been focusing in various investments of late.
As Indian economy is looking forward for more liberalization,
sectors like banking are on its way to loom large and occupy a
more significant position in India's economy.

4. UNIT II
Consumer Behaviour in Services Context- Three stage model
of Service consumption- Servuction Model - Expectation
Development by Consumers- Zone of Tolerance-
Determinants of Maximum Service Level, Minimum Service
Level, Maximum and Minimum Service Levels, Service
Perception; Market Segmentation in Services Sector –
Undifferentiated marketing, differentiated marketing, Bases
of Market Segmentation- Services Attributes and levels-
Developing and effective positioning strategy.
THREE-Stage Model of Service Consumption
1) Pre-purchase Stage
- Awareness of Need
- Information Search
- Evaluation of alternatives
- Purchase decision
2) Service Encounter Stage
- Service encounters range from high to low contact
- Understanding the Servuction System
- Theatre as metaphor for service delivery (Role & Script theories)
3) Post-purchase Stage
- Evaluation of service performance
- Future intentions
2. Servuction Model
Servuction Model
Every day we as a society frequent many businesses whether to
purchase a good or a service. During our visit we encounter either
good or bad customer service. In service marketing, marketers use
the servuction model to help breakdown the service that one does
get.
The servuction model is basically used to illustrate factors that
influence service experience, including those that are visible and
invisible to the consumer[1]. When a servuction model is done on
any given business, it is important to know the four factors of it.
The four factors are: service scope, contact personnel/service
providers, other customers and organizations and systems.
1. Servicescape is basically the physical evidence or all non-
living features that are used to design the service
environments. The bottom line is to think of anything
that is plainly visible to the consumer and anything that
consists of ambient conditions, inanimate objects, and
other physical evidence. Recently I went to the movie
theatres and I can understand how the service scope can
influence my overall experience. The proper placement
of the movie advertisements (i.e. stand-ups, posters,
etc.) as well as ticket booths and other non-living objects
like game machines and such can affect my service
experience if I have to walk around them. To me it would
seem as if they used this model because they properly
displayed and placed everything to where it catches my
attention but doesn’t ruin my movie experience.
2. Contact personnel/service providers are actually two
areas that can affect the service experience bundled up
into one category. Contact personnel are the employees
other than the primary service provider who briefly
interact with the customer. Service providers are the
primary providers of a core service, such as a waiter or
waitress, dentist, physician, or college instructor
3. Other customers are basically those that receive the
service alongside yourself perhaps through a bundle of
benefits created through service experience.
4. Organizations and systems are the invisible part of the
model that reflects the rules, regulations, and processes
upon which the organization is based.
3. Zone of tolerance
The service quality/disconfirmation model has three outcome
states on a variable scale. The three states are
“dissatisfaction”, resulting from poor perceived quality
(negative disconfirmation), “delight” from high quality
(positive disconfirmation) and “satisfaction” from adequate
quality (confirmation). It is this satisfaction state that is
sometimes defined as the zone of tolerance
Berry and Parasuraman (1991) also defined the zone of tolerance in terms of
the customer’s evaluation of in-process service performances. “The zone of
tolerance is a range of service performance that a customer considers
satisfactory. A performance below the tolerance zone will 3 engender
customer frustration and decrease customer loyalty. A performance level
above the tolerance zone will pleasantly surprise customers and strengthen
their loyalty”.
4.Factors that influence Maximum service level
• Personal Needs- Expectation arose due to the
personal wants or needs of the customer
• Personal Service Philosophy- It means the customers
underlying generic attitude about the meaning of service

5. and the proper conduct of the service. In general,
customers who are themselves in service business or have
worth for them in the past seem to develop strong service
philosophies.
• Desired Service expectation- Occurs when customer
expectations are driven from other customers or
group of customers.
5.Factors that influence minimum service level
• Perceive service alternative
• Situational factors
• Personal Situational factors
• Predicted service expectation
Factors affecting adequate and desired service level
• Explicit promises (personal and nonpersonal statements about the service made by the
org. to the customer)
• Implicit service promises
• Word-of-Mouth communication
• Past experience
What Is the Difference Between Differentiated & Undifferentiated
Marketing Strategies?
Simply defined, marketing is the process by which you
communicate the value of your products and services to
consumers. Your primary challenge is to choose which consumers
to communicate with and the best strategy for reaching them with
your message. Differentiated and undifferentiated strategies each
have their place in effective marketing. The one likely to work best
for your business depends on your target market and its needs.
Target Market and Segmentation
Your target market is the collective group of consumers who might
have a need for your products or services. It serves as a launching
point for the development of a marketing strategy. Segmentation
divides your target market into groups that share demographic,
psychographic or other common traits. Each segment has
distinctive needs and purchasing behaviours.
Marketing Mix
A marketing mix consists of the four P's: product, price, placement
and promotion. Product is not only the goods or services you sell
but also the traits that make them attractive to consumers, such as
design and packaging. Price considers list price as well as discounts,
financing and options, such as leasing, according to QuickMBA.
Placement refers to distribution -- the locations where your
products will be sold and the process you use to get them there.
Promotion communicates the benefits and features of your
product to consumers through advertising and public relations and
the media you use to execute them. At the centre of the marketing
mix is the target market. Each part of the mix is optimized to
generate a response from the target.
Undifferentiated Marketing Strategy
The undifferentiated marketing strategy focuses on an entire
target market rather than a segment of it. This strategy employs a
single marketing mix -- one product, one price, one placement and
a single promotional effort -- to reach the maximum number of
consumers in that target market. "Marketing," by William M. Pride
and O. C. Ferrell, gives commodities says sugar and salt are
examples of products that might be marketed effectively through
an undifferentiated strategy, as many consumers in the overall
market have similar needs for the products. Pride and Ferrell note,
however, that success with undifferentiated marketing also
depends on the marketer having the resources and skills necessary
to reach a very large audience.
Differentiated Marketing Strategy
A differentiated marketing strategy targets different market
segments with specific marketing mixes designed especially, to
meet those segments' needs. Each mix includes a product, price,
placement and promotional program customized specifically for a
particular segment. For example, a company that manufactures
vitamin supplements might identify gender-based market
segments. It could produce one multivitamin formula for women
and another for men. It could further differentiate by segmenting
the gender groups by life stage and creating different marketing
mixes around each one. Differentiated marketing is best suited for
markets with readily identifiable segments, each with distinctive
needs.
Concentrated Marketing Strategy
The concentrated strategy provides a third-way solution that
allows marketers to target a single market segment with a single
marketing mix. The ability to specialize to this degree has the
advantage of allowing a company to focus its resources on meeting
the needs of a single, well-defined and well-understood market,
which makes it more competitive against larger companies. On the
downside, a concentrated marketing strategy can pigeonhole a
company into a single product and market and leave it vulnerable
to the effects of changing conditions within that market.
What are the main ways of segmenting a market?
There are quite a number of potential market segmentation bases
(also referred to as segmentation variables), which an organization
could effectively utilize to construct market segments. As a simple
guide, segmentation bases can be classified into five major
categories:
• geographic,
• demographic,
• psychographic,
• behavioural, and
• benefits sought.
By using any of these segmentation bases, either individually or in
combination, an organization can construct market segments for
evaluation to help them select appropriate target markets.
LEVELS OF Service
Core or generic:
For consumer or industrial products this consists of the basic
physical product, i.e. 2 kg of sugar, a packet of self-tapping screws,
or a camera. The core elements for a camera, for example, consists
of the camera body, the viewer, the winding mechanism, the lens

6. and the other core basic physical components which make up the
transactional utility in the form of deposits and withdrawals.
Expected:
This consists of the generic product together with the minimal
purchase conditions which need to be met. When a customer buys
a video cassette recorder they expect an instruction book which
explains how to programme it, a warranty for a reasonable period
should it break down, and a service network so that it can be
repaired.
Augmented:
This is the area which enables one offer to be differentiated forms
another. For example, IBM has a reputation for excellent customer
service although they may not have the most technologically
advanced core product. They differentiate by ‘adding value’ to the
core, in terms of service reliability and responsiveness.
Potential:
This consists of all potential added features and benefits that are or
may be of utility to some buyers. The potential for redefinition of
the product gives advantages in attracting new users or ‘locking in’
existing customers. This could make it difficult or expensive for
customers to switch to another supplier.
The Total Product Concept
Thus, a firm’s offer is a complex set of value-based promises.
People buy to solve problems and they attach value to any offer in
proportion to this perception of its ability to achieve particular
ends. In other words, values are assigned by buyers in relationship
to the perceived benefits they receive matched against their
expectations.
UNIT III
Service Demand Management: Demand Situation- Demand Patterns,
Demand Variations- Demand Forecasting Methods Demand
Management –Capacity Management; Developing service products:
Planning and creating service products- The flower of service -
Branding service products and experiences - New Service
Development-Steps in development of a New Service. The Service
Product Mix-Service Differentiation-Service Lifecycle Management.
There are three characteristics in a society that are needed to
generate demand for a service. These are desire, affordability and
willingness to purchase. Every product, including services will have
a minimum demand, but the minimum demand may not be
adequate enough to the marketer to achieve organizational
objectives. One of the primary responsibilities of a marketing
organization is to manage demand to a desirable level.
Demand situations
1. Negative demand: the market response to an offer of a service
firm can be negative. People are aware of features of the service and
the benefits offered, but the evaluation of offer might lead them to
take a decision that is not is favor of a service offer. Passenger
refusing a bus conductors call to board the bus
2. No demand: this demand situation exists either due to
unawareness, insufficient information about the service due to
consumers indifference. Marketer should focus on promotional
campaign and communicating the right reason for preferring
services offered by the firm.Bus with no passenger in it.
3. Latent demand: in any given environment it is impossible to have
a set of products that are capable of offering total satisfaction to all
the needs and wants of a society. There exists the gap between
desirable and available. Latent gap is nothing but the gap between
desirability and availability. Latent demand is a business opportunity
and services firm should orient themselves to identify such
opportunities and exploit them at the right time.
4. Seasonal demand: some services will find demand only during a
particular season in year. Seasonal demand creates many problems
to service organisations. These include idling the capacity, fixed cost
and excess expenditure on promotion.
Demand Patterns
1. Irregular Demand
2. Falling/Declining demand
3. Demand Exceeding Capacity
4. Demand below the capacity
5. Excess demand
6. Demand to the level of optimal capacity
Demand Forecasting Methods
A prediction, projection, or estimate of some future activity, event,
or occurrence, in his case it is the systematic and scientific
evaluation of the future demand of a product or a service.
TYPES OF FORECASTING METHODS
Qualitative methods: These types of forecasting methods are based
on judgments, opinions, intuition, emotions, or personal
experiences and are subjective in nature. They do not rely on any
rigorous mathematical computations.
Quantitative methods: These types of forecasting methods are
based on mathematical (quantitative) models, and are objective in
nature. They rely heavily on mathematical computations.

7. • Mean (simple average) method: The forecast for next
period (period t+1) will be equal to the average of all past
historical demands.
Simple moving average method: The forecast for next
period (period t+1) will be equal to the average of a
specified number of the most recent observations, with
each observation receiving the same emphasis (weight).
• Weighted moving average method: The forecast for next
period (period t+1) will be equal to a weighted average of
a specified number of the most recent observations.
• Exponential smoothing method: The new forecast for next
period (period t) will be calculated as follows: New
forecast = Last period’s forecast + (Last period’s actual
demand – Last period’s forecast)
• Trend projection method: This method is a version of the
linear regression technique. It attempts to draw a straight
line through the historical data points in a fashion that
comes as close to the points as possible
• Graphical Method
• Barometric Method: It is developed to forecast the trend
in overall economic activities by forecasting the demand
prospects and not the actual demand.
• Econometric Method: Making use of statistical tools and
economic theories together to forecast the intended
values.
Demand Management
Demand forecasting and planning (also referred to as demand
management) is a critical function that drives out inefficiencies in
the supply chain and affects all facets of a company across the
enterprise.
We have examined the significant improvement in short-term
tactical demand forecast accuracy using demand-sensing. Demand
sensing is the translation of downstream data with minimal latency
to understand what is being sold, who is buying the product
(attributes), and how it is affecting demand. Companies like P&G
and Kimberly-Clark are able to further improve forecast accuracy
when using downstream data as part of their short-term statistical
forecast. The business benefits have been compelling.
In addition to improving operational efficiency, companies have
found downstream data useful to flag operational issues that would
otherwise affect revenue and service levels. For example,
downstream data alerted one company to an unusually high bias
toward a large customer at a high-volume distribution center. As it
turned out, there was a problem with the ordering system, and
orders had not been placed for several days. The advance warning
by downstream data gave the company the visibility to resolve the
issues before out-of-stocks became a problem.
Critical Success Factors
Companies like P&G and Kimberly-Clark work hard to build a joint
value equation with their customers. Because of this approach,
customers can share their downstream data because they can
articulate how the data can be used and, how it will drive business
results and build value for both the CPG manufacturer and the
retailer.
Customer support is critical to CPG companies. Customers will share
downstream data if CPG companies can demonstrate their maturity
in using downstream data and articulate how the data will be used
to create value. Having a clear supply chain vision also is critical.
Knowing where demand sensing fits within your supply chain
processes is important, and believing in the short-term statistical
forecast is essential.
P&G and Kimberly-Clark continue to add customers to improve
demand-sensing capabilities, and both companies continue to
expand their downstream data capabilities to more business units.
These CPG companies will improve their transportation planning
and enhance customer collaboration using downstream data.
Integrating their suppliers to a demand signal brings interesting
challenges and opportunities for future success.
Key Learnings
Knowing what products to make when needed is a competitive
advantage for CPG companies. Leaders in the CPG industry use
demand-sensing capabilities to delight customers, improve supply
chain performance and create value with trading partners. P&G and
Kimberly-Clarks sense demand work helps them make what they
hoped would sell. In an age where demand volatility remains high
and companies struggle to predict demand during economic
uncertainty, the larger risk may be the inability to sense an upturn.
Companies with the ability to sense and respond to demand using
downstream data are best suited to meet the inevitable surge and

8. capture upside revenue while maintaining high customer service
levels and lowering inventories, waste, and working capital.
Demand shaping is the ability to increase or decrease the future
volume and profits of goods sold by orchestrating a series of
marketing, sales and product tactics and strategies in the
marketplace. There are several key levers that can be used in the
development of demand-shaping strategies.
These levers are:
• New product launch (including the management of
categories)
• Price management (optimization)
• Marketing and advertising
• Sales incentives, promotions, trade policies/deals
• Product life cycle management strategies
Based on recent industry research, demand shaping, just like
demand sensing, includes three key elements:
1. Ability to increase or decrease volume and profit of goods sold by
changing sales, product and marketing tactics and strategies
2. Supply plan/supply supportability analysis
3. Demand shifting (steering)
There are two types of demand shifting.
Demand shifting at the point of sale occurs when a company
influences a customer to purchase an alternative product using sales
and marketing incentives when a product is out-of-stock, or back-
logged.
Demand shifting at the point of supply is when the operations
planning and manufacturing teams negotiate with the sales and
marketing teams during the sales & operations planning (S&OP)
process to shift unconstrained demand into the future due to supply
capacity constraints.
Branding in Services :
A brand is an identification Of certain products & services, on the
basis Of certain attributes Of the products & services. Simply. a
name is given to the attributes for easy identification, generation Of
confidence repute.
I. Types Of Branding : There are a few types Of branding. they are
a. This type Of branding is Whether the brand is owned by
the manufacturer/original service provider or the licensed franchise.
Some companies allow their brands to be used by their franchisees
on the basis Of some agreement. Others don’t, they have only
dealers.
b. Multi-Product branding strategy is where the company
the brand for
all its products & services. Even some group companies (like Tata
group, Reliance group) use the same brand name for all its
companies & products.
c. Multi-Branding strategy is where the company has
different trend names for its different products, like LICI has given
different brand names to its different products - Jeevan Suraksha,
Jeevan Dhara, Jeevan Sanchay. etc.
Combination brand name strategy is where the company brand
name is combined With the product brand name like, SBI Gold Card,
SBI Silver Card. SBI Kissan Card. etc.
New Service Development Process
It's seen generally, that the fixed costs are low & the variable costs
are high for the goods, but for the services it's the reverse because
Of some inherent nature Of the services. Stating in the context of
costing, the break-even point is lower in case Of goods than in case
Of services. Hence, it becomes more critical to plan & develop a new
idea of services. The service marketers need to analyse several
factors and adhere to some logical Steps Of procedures for this. They
are given below :
1. Generation Of Ideas: The first thing is to generate an idea
Of a service that is to be developed. For this the help Of
market research (external) can be taken, or the
opinions/suggestions Of the employees (internal) Of the
firm can be accepted & analysed.
2. External Source : This is obtained from market feedback.
market trend, consumers' feedback & information, their
satisfaction, likings, etc. Market survey, market research
can help in this regard. A well maintained MIS & marketing
database can be also of immense importance.
3. Internal Source : The firm employs several people Who
have developed a fair knowledge about the services, the
customers, market, etc. They should be encouraged to
give their suggestions & opinions for development Of new
ideas or for improvement Of the existing services.
4. Screening: This is the second Step, where all the ideas thus
generated are pooled & all the information available are
recorded. The advantages. disadvantages. available
resources, expected return on investment, possible
Obstacles. the current market scenario. market demand.
competition, all these are put to detailed screening &
discussion. Finally the apex decision making body Of the
management selects & approves the service.
5. Testing the concept: If the MR is already used in the earlier
steps, then the concept is tested. but if it is not. then the
MR now can be used for knowing the customers' or the
market segment's reaction to this service. Today MR is
highly specialized for good price the firm can hire the best
services to find out the market response to the new
service.
6. Business Analysis & Design of Service: If everything is
positive till now the idea Of a new service is put to critical
business analysis. The following are the important Steps:
a. Analyse all the seven Ps of marketing mix,
b. Next. analysing the target market segment. existing
customer trends, current future potential of demand, external
influencing factors, etc.
c. Analysis & design of the final service: Risk awareness &
analysis are very important in this stage. The following risk areas
related to service description have been envisaged by Lynn
Shostack. Which need to be tackled properly :
d. Oversimplification: While communicating with the
internal customers as well as external customers, oversimplification
must be avoided in describing the benefits & features Of the services
to be Offered.

9. e. Incompleteness: The management. employees, and the
customers should try to understand all the aspects in a service
description. An incomplete or incompletely understood service
description Will adversely affect the service delivery & consumption.
f. Subjectivity There is a possibility Of the service
description getting limited to the knowledge Of the person
presenting it. This is due to the inadequate knowledge or bias Of the
presenter.
g. Biased Interpretation : This happens when there is a
misrepresentation Of words Whether intentionally or inadvertently,
between the management & the service personnel or between the
service personnel the customer.
Hence it is suggested that the service design description should
contain both verbal &
visual clues and representation.
7. Test Marketing This Step is used for further reducing the
risk. Test marketing should be done before the actual
launch Of the services. This is known as a pilot project in
the context Of MR. The company may choose a smaller
portion Of the target segment (known as the test market)
for this service where consumer feedback can be
Obtained immediately. Depending on the feedback, the
firm can make pre-launch adjustments, modifications.
rectifications. If the test market is successful, then the
launch takes place. If the launch is successful in particular
segment, then the firm can try another segment. This is
known as a roll-out process. At this Stage firms should take
another precaution. They should watch their competitors
- when a firm develops new things, the competitors don't
sit idle, they know & develop matching services or Other
new ones. Thus the Whole situation changes.
8. Infrastructure Development : These are needed for the
new products - they may be new / additional facilities.
equipment, premises. capacities: hiring, training,
redeploying, Of personnel: pricing, promotional,
packaging designs; etc.
9. Service Launch : This is the last Stage Of new service
launch. If everything goes well at each Step, the service is
finally "launched". Thus the product life cycle Starts,
where the service earns revenue & slowly the retune
maximises. At some point the cost is fully covered. This is
known as the product/service life cycle.
MANAGING DEMAND CAPACITY
Concept of demand in services
Since the services can't be stored as an inventory for future use. and
since services are perishable, hence the demand becomes critical.
Once the demand is not catered, it's lost forever. The best a
marketer can do is to minimize to some extent by careful planning
& adopting some strategies. The following are the factors Which
affect demand fluctuation :
1. Contraction & Recession : Contraction refers to a
decrease in growth Of economy or in economic activity. This are
visible when we have more unemployment more inflation, IOW
GDP, IOW production, etc. It happens due to the depression in the
economy. Which is known as depression. In such a State, people
have less purchasing power, and demand for goods & services is
less. Some people may have money, but they prefer to spend less &
save more for the uncertainties Of the future.
2. Expansion or Boom This is just the reverse Of
contraction boom, where the economic activities are more. overall
economic growth is there. If it remains for a longer period. we call it
boom. People have more purchasing power, less unemployment,
the feel good factor is there, and the demand for the services
increases.
3. Technological Developments This is one of the biggest
source Of demand in goods & services. In the last 15-18 years the
world has seen the fastest development in three areas - Computers.
Internet Telecommunications. Which have revolutionalized the way
we live. This needs no elaboration.
4. Demographics: The best example is the BPO Industry in
India, because (I) Inexpensive & (2) skilled man power, (2) English
speaking workforce. We have a huge BPO Industry here giving
services to the developed world.
5. Natural & Other Disasters: Another important factor is
the natural calamities disaster. like big accidents. terrorist attacks,
cyclone. floods. breakout of dreaded diseases, wars, etc. These have
tremendous affect not only to the sufferers, but also to the potential
consumers for fear of consequence.
Capacity Constraints :
Capacity Of a company is defined as the ability to meet the demand
and the extent to Which it can do it. For production Of goods this
can be expanded or contracted easily. But for services it is difficult.
as four critical factors are involved. This are done With utmost care,
planning, cost effective measures.
.Time : Time is limited and mostly specialised professionals have this
constraints. they can't take up more than the time permits end have
to be idle if there are none. This can be tackled by business houses
by opening shop for extended hours when the demand is more &
vice versa. Say doctors can have more consulting hours when there
is demand. The service providers must be Willing to accept the
change in situation. (Types Of Services - Legal, Consulting,
Accounting, Medical)
Labour : Labour or workers are another area Of constraint. Beyond
the full work load it's hard to cater to more. On the Other hand
temporary employment is not available sufficiently in skilled
category. This can be tackled by out sourcing the workers to a
contractors Who has a large work force With him. He can adjust
between several companies, but again the difference in the skill is a
bottleneck. (Types Of Services -
Law Firm, Consulting Firm. Accounting Firm. Health Clinic)
Equipment : Like machinery, transport etc. are needed more in no.s
where there is a bigger demand. For a limited period a company
can't buy extra equipment or machinery. But these can be managed
by careful planning - like having sufficient equipment for the
minimum level in cycle say a year With down/maintenance time.
and Out sourcing the additional demand by accurate prediction as
far as possible.
(Types Of Services - Delivery services, Telecommunications, Network
Services, Utilities. Health Club)
5. Facility : Thae are mostly the infrastructure like pranises.
building, hotel rooms, restaurant tables. class rooms. etc.,
Which can't be increased easily or quickly. But to some
extent they can be enhanced, like two shifts in the class
rooms. adding a few tables rearranging them in a
restaurant, adding more compartments in a train more
flights for air travel. etc. (Types Of Services - Hotels,
Restaurants, Hospitals, Airlines, Theatres. Schools)

10. UNIT IV Managing the Customer Interface: Flowcharting customer
service process- Service Blue prints – Physical Evidence-
Servicescapes- Types of Servicescapes- Mehrabian-Russell Stimulus
Response Model- Russel’s Model of Affect Servicescape Model-
Dimensions of Service Environment-Service Quality Management-
Service Perception –Determinants of Service Quality- Service Quality
Audit-GAP Model of Service Quality-SERVQUAL- Total Quality
Services Marketing- Service Excellence
Customer service process flow chart
The customer service process flow chart should allow the
development of the basic structure for customer relation
management. Similarly, you should ensure that you can monitor
the contacts of users.
These customer complaints and requests flowchart controls,
diagnoses and provide solutions. In some cases, the process of care
will have to trigger an escalation to other service levels, so that
conflicts are managed, and flows follow without interruption or
unnecessary delay.
his customer service process flow chart is drawn into a pool, but
because of its complexity, it was necessary to develop 4 lanes,
which discriminate the following:
1. Client: The individual that wants something from the
company.
2. Clerk: The customer service team. Its mission involves
both solving the demands as well as looking for other
team members to help resolving the problem.
3. Customer Care Department: If the clerk cannot solve a
customer demand, an internal agent of this department
should be made responsible for finding the solution.
4. Process owner: This is the employee who bears the
responsibility for managing the process in question.
Let’s look deeper into some of the most important details of the customer
service process:
• The customer completes a job request form based on their data
and information.
• A notification is sent to the attendant.
• The clerk must analyze and categorize the request that was
reported in the customer’s form. If there is insufficient
information, they should return to the user asking for more
details.
• After that, the attendant will have to take some actions: by
using the knowledge base accumulated by the company to
resolve the issue, or by sending information to the contact agent
to record the additional information that will help the internal
agent to solve the problem (if requested the help of an internal
agent).
• If the service agent has solved the problem by referring to the
database, they must submit a closure notice.
• Next, a satisfaction survey is sent to the client to evaluate the
quality of service and possible improvements.
• If the internal agent has asked for help, classify the call again
and make adjustments if necessary.
• It determines if the problem is known or if a solution should be
looked for.
• If the service agent has solved the problem by referring to the
database, they must submit a closure notice.
• Next, a satisfaction survey is sent to the client to evaluate the
quality of service and possible improvements.
• If the internal agent has asked for help, classify the call again
and make adjustments if necessary.
• It determines if the problem is known or if a solution should be
looked for.
What Is a Service Blueprint?
Definition: A service blueprint is a diagram that visualizes the
relationships between different service components — people,
props (physical or digital evidence), and processes — that are
directly tied to touchpoints in a specific customer journey.
Think of service blueprints as a part two to customer journey maps.
Similar to customer-journey maps, blueprints are instrumental in
complex scenarios spanning many service-related offerings.
Blueprinting is an ideal approach to experiences that are
omnichannel, involve multiple touchpoints, or require a cross
functional effort (that is, coordination of multiple departments).
A service blueprint corresponds to a specific customer journey and
the specific user goals associated to that journey. This journey can
vary in scope. Thus, for the same service, you may have multiple
blueprints if there are several different scenarios that it can
accommodate. For example, with a restaurant business, you may
have separate service blueprints for the tasks of ordering food for
takeout versus dining in the restaurant.
Service blueprints should always align to a business goal: reducing
redundancies, improving the employee experience, or converging
siloed processes.
SERVICE SCAPE
 Service scape is a model developed by Booms & Bitner to
emphasize the impact of physical environment.
 It refers to the use of physical evidence to design the
service environment.
 It consist of ambient conditions such as music ,light ,
furniture etc..
 The service scape includes the facility’s exterior, interior
& other ambient conditions.
 In addition to its effects on customer’s individual
behaviors, the service scape influences the nature &
quality of customer &employee interactions.
SERVICE SCAPE USAGE
❑ SELF SERVICE
Customer only
Eg: ATM ,Golfcourse
❑ INTERPERSONAL SERVICES
Interaction/contact between customer & employees.
Eg:Hotel, Resturants
❑ REMOTE SERVICE
Employee only

11. Eg: Insurance Company
COMPLEXITY OF SERVICE SCAPE
❑ LEAN SERVICE SCAPES
Environments that comprise relatively few spaces,
contain few elements & involve few interactions between
customers & employees.
Eg: kiosks, fast food outlets, self service retail outlets.
❑ ELABORATE SERVICE SCAPES
Environments that comprise multiple spaces, are rich in
physical elements & symbolism, involve high contact services with
many customer interactions between customers and employees.
Designing elaborate environments requires skilled design teams
who are fully apprised of the desired behavioral outcomes.
Eg: International hotels with guest accommodation, Gymnasiums
PHYSICAL EVIDENCE IN SERVICE
 Physical evidence is the environment in which the service
in delivered and where the firm and the customer
interact and any tangible commodities that facilitate
performance or communication of the service.
 Physical evidence include service scape , a term used to
describe the physical facilities, where the service is
produced and / or delivered.
Role of physical evidence
 PACKAGING THE SERVICES
1 Conveys expectations
• Physical evidence =quality cues=image development
2 Influences perception
• Image development=reduces perceived risk= reduces
cognitive dissonance after purchase
 FACILITATES THE FLOW OF THE SERVICE DELIVERY
PROCESS
1. provides information
2. facilitating the ordering process
3. manages consumers
 SOCIALIZES EMPLOYEES AND CUSTOMERS
➢ uniform
• identify the firms personnel
• Physical symbols that embodies the group ideals and
attributes
• Implies a coherent group structure
• Assist in controlling deviant members
 PROVIDES MEANS FOR DIFFERENTIATION
➢ Well dressed persons are perceived as:
❑ more intelligent
❑ Better work
❑ More attractiveness
SERVICE QUALITY MANAGEMENT
• Service quality management encompasses a variety of
processes used to assess the quality of services according
to customer expectations. It also includes the

12. maintenance and long-term monitoring of all of the
services offered to customers, as to track developments
in quality and measure the efficiency of improvement
efforts.
• By measuring the size of the gap between expectations
and reality, companies are delivered with actionable
suggestions and ideas for targeted improvements, and
profit from the additional benefit of getting to know their
target audiences much better along the way. Moreover,
it enables companies to identify and reduce sources of
errors and customer complaints.
DETERMINENTS OF SERVICE QUALITY
• UNDERSTANDING – It involves knowing customers by
making more efforts to understand the
customers requirements and wants
• TANGIBLES – It encompasses the physical evidence of the
service
• SECURITY – It is the liberty from doubts or danger risks.
• CREDIBILITY – It is nothing but honesty , believability
and trust worthiness.
• COMMUNICATION -It is the process where customers are
informed in their own understandable language as well
as it encompasses listening to customers communication
means that the business has to make several
adjustments for various customers that in turn results in
increasing the sophistication level with a well educated
customer as well as speaking
• COURTESY – It involves friendly attitude as well as
nature of personal politeness
• ACCESS – It involves availability as well as easy method of
contact.
• COMPETENESS - It means possessing the needed skills
and knowledge for the purpose of performing services.
• RELIABILITY - It involves dependability and performance
consistency. Reliability means that the services is done
correctly the very initial time by the business and it also
means the business honors its promises
• RESPOSIVENESS -It means the willingness of a worker for
the sake of providing service. Responsiveness
encompasses timeliness of service.
DIMENSIONS OF SERVICE QUALITY ENVIRONMENT
The 5 Dimensions Defined
After extensive research, Zeithaml, Parasuraman and
Berry found five dimensions customers use when evaluating
service quality. They named their survey instrument SERVQUAL.
The five SERVQUAL dimensions are:
• 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
• ASSURANCE-Knowledge and courtesy of employees and
their ability to convey trust and confidence
• EMPATHY-Caring, individualized attention the firm
provides its customers
SERVICE PERCEPTION
GAP MODEL OF SERVICE QUALITY
The Gap Model of Service Quality (aka the Customer Service Gap
Model or the 5 Gap Model) is a framework which can help us to
understand customer satisfaction.
The model shows the five major satisfaction gaps that
organizations must address when seeking to meet customer
expectations. The model was first proposed by A. Parasuraman,
Valarie Zeithaml, and Leonard L. Berry in 1985.
In the Gap Model of Service Quality, customer satisfaction
is largely a function of perception. If the customer perceives that
the service meets their expectations then they will be satisfied. If
not, they’ll be dissatisfied. If they are dissatisfied then it will be
because of one of the five customer service “gaps”.
Gap 1: Knowledge Gap
The knowledge gap is the difference between the customer’s
expectations of the service and the company’s provision of that
service.
Essentially, this gap arises because management doesn’t know
exactly what customers expect. There are a number of reasons this
could happen, including:
• Lack of management and customer interaction.
• Lack of communication between service employees and
management.
• Insufficient market research.
• Insufficient relationship focus.
• Failure to listen to customer complaints.
Gap 2: The Policy Gap
The policy gap is the difference between management’s
understanding of the customer needs and the translation of that
understanding into service delivery policies and standards.
There are a number of reasons why this gap can occur:
• Lack of customer service standards.
• Poorly defined service levels.
• Failure to regularly update service level standards.
Gap 3: The Delivery Gap
The delivery gap is the difference between service delivery policies
and standards and the actual delivery of the service.
This gap can occur for a number of reasons:
• Deficiencies in human resources policies.
• Failure to match supply to demand.
• Employee lack of knowledge of the product.
• Lack of cohesive teamwork to deliver the product or
service.
Gap 4: The Communication Gap
The communication gap is the gap between what gets promised to
customers through advertising and what gets delivered. Again,
there are a number of reasons why this can happen:
• Overpromising.

13. • Viewing external communications as separate to what’s
going on internally.
• Insufficient communications between the operations and
advertising teams.
• Communication gaps lead to customer dissatisfaction.
This happens because what they receive isn’t what
they were promised. In the worst case, it may cause
them to turn to an alternative supplier
Gap 5: The Customer Gap
The customer gap is the difference between customer
expectations and customer perceptions. This gap occurs because
customers do not always understand what the service has done for
them or they misinterpret the service quality.
Many organizations can be completely blind to this gap. This
gap can happen because of one of the other four gaps,
or simply because the customer perceives the quality of the
service incorrectly. In a worst-case scenario, it could lead to a
business losing a large proportion of their customers
overnight. Although the company thought there was no gap, the
reality was that their customers were just waiting for someone to
fill their perceived gap.
SERVQUAL is a multi-dimensional research instrument, designed to
capture consumer expectations and perceptions of a service along
the five dimensions that are believed to represent service quality.
SERVQUAL is built on the expectancy-disconfirmation paradigm,
which in simple terms means that service quality is understood as
the extent to which consumers' pre-consumption expectations of
quality are confirmed or disconfirmed by their actual perceptions
of the service experience
SERVICE QUALITY AUDIT
Quality audit is the process of systematic examination of a quality
system carried out by an internal or external quality auditor or an
audit team, in this case ensuring the quality of services. It is an
important part of an organization's quality management
system and is a key element in the ISO quality system standard, ISO
9001.
Quality audits are typically performed at predefined time intervals
and ensure that the institution has clearly defined internal system
monitoring procedures linked to effective action. This can help
determine if the organization complies with the defined quality
system processes and can involve procedural or results-based
assessment criteria.
Audits are an essential management tool to be used for verifying
objective evidence of processes, to assess how successfully
processes have been implemented, for judging the effectiveness of
achieving any defined target levels, to provide evidence concerning
reduction and elimination of problem areas. For the benefit of the
organization, quality auditing should not only report non-
conformances and corrective actions, but also highlight areas of
good practice. In this way other departments may share
information and amend their working practices as a result, also
contributing to continual improvement.
What does Service Life Cycle Management (SLM) mean?
Service life cycle management (SLM) refers to a strategy that
supports service organizations and helps them recognize their gross
income potential. This is done by examining the service
opportunities proactively as a life cycle instead of a solitary event or
set of discrete events. This helps to combine every service-based
operation into a solitary, but complex, set of workflows and
associated business processes. SLM is defined by industry analyst
firm AMR Research.
As powerful worldwide competition cuts down product sales
margins, global vendors are beginning to understand and appreciate
the significance of customer-centric business. This has led many
businesses to search for better ways to distinguish their products
and gain long-lasting customer loyalty, as well as discover new profit
sources. This movement triggered the growth of SLM, which is an
initiative tailored to servicing a business's after-market. Service life
cycle management is different from product life cycle management
(PLM), which examines the entire life cycle of a product, rather than
the organization as a whole.
Service management software used in SLM lets manufacturers plan
their service resources. It also helps them to efficiently handle
responsibilities, partners and costs of offered services. These
solutions also empower staff by making additional actionable data
promptly available, both in the office and in the field.
SLM includes the following vital elements:
• Workforce administration
• Components planning and forecasting
• Enterprise asset management
• Reverse logistics
• Knowledge administration
• Contract management
• Returns and repair management

14. UNIT V
Delivery of Services: Delivering Service through
intermediaries-distribution growth options-
Internationalization in distribution.
Service Failures and Recovery: Types of service encounters-
Deviations in services - Types of service encounters -
Customer response to failures - Service Failures - Failure
types - Complaint Management- Service Recovery – Service
Guarantee.
SERVICE CHANNEL INTERMEDIARIES
• Wholesalers
• Retailers
• Agents and Brokers
• Franchise operators
• Electronic channels
SERVICE RECOVERY
• Service Recovery in simple words an: actions taken by
the service
• provider in response to the service failures.
• Service recovery is a procedure for dealing with
customers problems and complaints. An effective and
timely recovery procedure will turn a complaining
customer into a satisfied, loyal customer most of the
time. Impacts customer loyalty and future profitability.
• Service failures can happen when service organization
fails to deliver as per customer expectations
• When a service failure occurs, service recovery strategics
will be needed to be implemented by service
organizations. This long term strategy will be embedded
as part of organization's overall service strategy.
Service recovery is about the combination of a variety of strategies
to solve the specific context of the problem. Service recovery plays
on impor1ant rule in nowadays relationship marketing. Today, many
organizations are facing challenges in the area of customer service
or service delivery. It has been found that as the cost of attracting a
new customer is more than retaining an existing customer,
therefore, organisations are striving to build long term relationships
with existing customers.
SERVICE RECOVERY STRATEGIES
1.Fail safe your service .Do it right the first time.
2.Welcome and encourage complaints.
3.Treat Customers fairly.
4.Act quickly
5.Learn from recovery experience
6.Learn from lost customers
SERVICE GUARANTEE
A service guarantee is a particular type of recovery tool.
As service guarantee is a commitment that the service provider
fives to the customer concerning all or part of the service process
and may also include a compensation for the customer if the
commitment is not honoured.
Guarantee is an assurance of the quality of or length of use to be
expected from product offered for sale, often with a promise of
reimbursement.
BENEFITS OF SERVICE GUARANTEE
• Focus on customers requirement.
• Set clear standards of service.
• Good source of feedback
• Helps in understanding failure points.
• Acts as a marketing tool
Three fairness dimensions
Recovery outcomes, procedures and interactional treatment have a
joint effect on post-recovery satisfaction. Customers evaluate the
effectiveness of a service recovery with three main dimensions
which are distributive, procedural and interactional fairness. These
three fairness dimensions are driven by different viewpoints of the
service recovery process from customers.
Distributive Justice and procedure
Distributive justice refers to the perceived expectations
Procedural fairness
Procedural fairness involves the processes, policies and rules which
arc made by recovery effort decisions. Procedural fairness is likely
to influence people's reactions especially when organisational
outcomes are unfeasible. It hints that fair procedures make it
easier for people to accept types of negative organisational
outcomes.
Interactional Fairness
This focuses on the interactional treatment during the service
recovery process. including an apology, helpfulness, politeness,
and sympathy of the service contact ·staff in dealing with the
recovery to the customer.
p
SERVICE ENCOUNTER
Service encounter is a transactional action in which one person
provides a service or good to another person.
A periods of time during which a customer directly interacts with
the service.
Types of Service Encounter
1. Remote Encounters
2. Phone Encounters
3. Face to face encounters
SERVICE PERCEPTION
It is the customers judgement of overall excellence of the service
provided in relation to the quality that was expected process
customer quality are both important.
SELECTIVE PERCEPETION PROCESS
It is the process by which individuals perceive what they want to in
media messages while ignoring opposing viewpoints. They only
seem to see things based on their particular frame of reference.
Steps -
I. Service Exposure
II. Service attention
III. Service Comprehension
IV. Service Retention
COMPLAINT MANAGEMENT PROCESS
I. Designate a location to receive complaints– Costumers need to
know where and how to fill complaints so select a place to receive
complaints in the company.
2. Develop a system of record keeping
i. Prepare forms for recording and categorizing and filling
complaint records.
ii. Communicating complaint to top management

15. 3 Process and record complaints – Log in,
categorize and assign the complaint for
resolving.
4 Acknowledge the complaint – Talk to the
person who gave complaint and personalize
the response
5 Investigate and analyse the complaint - Be fair,
listen to both sides and keep records of
everything.
6 Resolve the problem with company policy –
Forward the complaint to the appropriate level
of authority for resolution with company policy
And inform the progress report to the
consumer who gave the complaint
7 Follow up
8 Prepare and file a report and periodically
analyse and summarize complaints
COMPLAINT MANAGEMENT
It is a system which includes a set of parameters used in
organizations to address complaints and resolve disputes.
It is a process of recording and processing complaints
effectively. It is a part of customer relationship management.
The goal of complaint management is
TO establish the satisfaction who files the complaint.
To reinforce customer relationship.
It means responding systemically and professionally to complaints
and try to improve service quality continuously
It reflects the overall improvement of the company
A successful complaint management is not only recording and
processing complaints, bit also communication of detailed solution,
management and monitoring of all activities that are carried out
with respect to complaints.
SERVICE FAILURE
Defined as when a service performance fails to meet customers
expectations.
Reasons –
1. Unsuccesfull business or low quality and high price of products
2. Lack of knowledge and training of the customer service and sales
personnel
3. Companies ignore customer opinions
TYPES OF SERVICE FAILURE
1. Group 1 Failures
Core Service Failures – Slow service
or unavailability of service
2. Group 2 Failures
Unprompted employee action due to
cultural norms etc.
3. Group 3
Responses to implicit/explicit request
1. Special needs – Failed to
satisfy
2. Customer preferences –
Failed to meet
3. Customer error
4. Disruptive errors
4. Group 4
Employee reported incidents or
problematic consumer behaviour
1. Drunkedness
2. Verbal and physical abuse
3. Breaking company policies
or laws
4. Uncooperative customers