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MBM 4th Semester

Service Marketing, MKT 541

Unit-2: Marketing Mix Elements for Services

Service Mix

Marketing Mix Elements for Services

The service marketing mix is also known as an extended marketing mix and is an integral part of a
service blueprint design. The service marketing mix consists of 7 P’s as compared to the 4 P’s of
a product marketing mix. Simply said, the service marketing mix assumes the service as
a product itself. However it adds 3 more P’s which are required for optimum service delivery. The
extended service marketing mix places 3 further P’s which include People, Process and Physical
evidence. All of these factors are necessary for optimum service delivery.

1. Product: The product in service marketing mix is intangible in nature. Like physical
products such as soap or a detergent, service products cannot be measured. Tourism industry or
the education industry can be an excellent example. At the same time service products
are heterogeneous, perishable and cannot be owned.
2. Pricing: Pricing in case of services is rather more difficult than in case of products. If you were a
restaurant owner, you can price people only for the food you are serving. But then who will pay
for the nice ambiance you have built up for your customers? Who will pay for the band you have
for music?
3. Place: Place in case of services determine where the service product is going to be located. The
best place to open up a petrol pump is on the highway or in the city. A place where there is
minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be
better placed in a business hub with a lot of companies nearby rather than being placed in a town
or rural area. Read more about the role of business locations or Place element.
4. Promotion: Promotions have become a critical factor in the service marketing mix. Services are
easy to be duplicated and hence it is generally the brand which sets a service apart from its
counterpart. You will find a lot of banks and telecom companies promoting them rigorously.
Why is that? It is because competition in this service sector is generally high and promotions are
necessary to survive.
5. People: People are one of the elements of service marketing mix. People define a service. If you
have an IT company, your software engineers define you. If you have a restaurant, your chef and
service staff defines you. If you are into banking, employees in your branch and their behavior
towards customers define you. In case of service marketing, people can make or break an
organization.
6. Process: Service process is the way in which a service is delivered to the end customer. Lets take
the example of two very good companies – Mcdonalds and Fedex. Both the companies thrive on
their quick service and the reason they can do that is their confidence on their processes. On top
of it, the demand of these services is such that they have to deliver optimally without a loss
in quality. Thus the process of a service company in delivering its product is of utmost
importance.
7. Physical Evidence: The last element in the service marketing mix is a very important element.
As said before, services are intangible in nature. However, to create a better customer
experience tangible elements are also delivered with the service. Take an example of a restaurant
which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice
music along with good seating arrangement and this also serves good food. Which one will you
prefer? The one with the nice ambience. That’s physical evidence. Several times, physical
evidence is used as a differentiator in service marketing.
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Concept of Core Services and Supplementary Services

A service product comprises of all elements of service performance, both tangible and intangible,
that create value for customers. Service products consist of:
 Core Product: central component that supplies the principal, problem- solving benefits
customers seek.
 Supplementary Services: augments the core product, facilitating its use and enhancing its value
and appeal.
 Delivery Processes: used to deliver both the core product and each of the supplementary
services.

 The core service should deliver the consequences expected by the customer justifying the
associated real or nominal charges.  For example, a voice messaging service should allow for
the reliable storage or voice messages of a certain size (e.g. measured in minutes) for a certain
period of time (e.g. measured in days). Users should be able to spontaneously retrieve and
listen to their messages, be able to retain those messages, and be able to delete them as
preferred. Customers are willing to pay different prices for corresponding service levels defined
by measures such as storage capacity and retention period, based on the value produced for
their business.

 Supplementary services either facilitate the use of the core service or enhance it. Facilitating or
support services are taken for granted by customers (more likely by users) who expect these to
be bundled with the core service and not be additionally charged. For example, installation,
activation, registration, and technical support for the voice messaging service ensure its timely
availability and uninterrupted use. Supplementary service can be graphed into eight
categories: information, consultation, order- taking, hospitality, safekeeping, exceptions, billing
and payment. Not every core product – whether a good or a service – is surrounded
by supplementary elements from all eight clusters, of course.

Planning of Services

The service plan details the strategy that a company will use to market its services to customers.
Service planning is the work of setting up objectives for service marketing activities and of
determining and scheduling the steps necessary to achieve such objectives. Thus, under service
marketing planning first of all service marketing objectives are set-up and then service marketing
activities like – purchase-sale, service planning and development, advertisement, sales-promotion
and scheduled policies and programme to carry out these activities are prepared.

Steps Involved in Planning Process of Services

1. Scanning the Marketing Environment: First of all, the external marketing environment factors
should be analysis and scanning in micro level. Study of service marketing environment analysis
helps to locate marketing opportunities and discover unsatisfied consumer demand. It also
undertakes customer sensing, reactions of the customer to its services and tries to locate the causes of
the customers patronage of a particular brand and who remain closest to the customer, and why.

2. Internal Scanning: Internal scanning is the process of assessing the firm’s strength and
weaknesses and identifying its core competencies and competitive advantages. While environmental
scanning may help to identify the various possible opportunities in areas of interest to the firm, the
firm obviously cannot tap all the identified opportunities. It has to be selective and decide on the
opportunities it has to tap and the business it has to pursue. It also has to build defences against
impending problems.
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3.  Setting Marketing Objectives: The very purpose of setting objectives is to provide clear cut
direction to the business regarding its future course of action. Objectives are set in all the key areas
of service marketing such as sales volume, market share, market standing, innovation, productivity,
profit etc. The business unit has to develop its marketing objectives after weighing the opportunities
available in the environment, the threats, the forces of competitions, the resources and capabilities of
the unit and its marketing organisation.
For example, service marketing objectives may be set as follows:
 The distribution costs of the service will be reduced by 10% in the current financial year.
 Market share of the service product will be increased by 10% during the next financial year.
 The sales volume of the service product will be increased by 15% during the coming
financial year.
4.  Formulating Marketing Strategy: service marketing strategy formulation is the core of service
planning. Service marketing strategy is a set of objectives, policies and rules that guide over time
marketing efforts of the concern. Stated in simple terms, service strategy is the complete and
unbeatable plan designed specifically for attaining the service marketing objectives of the firm, the
service marketing objectives indicate what the firm wants to achieve, and the service strategy
provides the design for achieving them.
5.  Developing Functional Plans: Once the service marketing strategy is formulated, the next step is
elaborating the service strategy into detailed plans and programmes. The detailed functional plans
will emanate from and be in tune with the service marketing objectives and strategy of the firm. Even
the best service strategy may turn out to be a failure in the marketplace, if the detailed functional
plans are drawn up in a haphazard manner. A plan may have to be developed for each marketing
function.

Branding and Positioning Service Products

 A service brand as “a name, term, sign, symbol or design, or a combination of them intended
to identify the service product of one seller or group of sellers and to differentiate them from
those of other sellers. Branding is the process of creating, maintaining, strengthening or
changing a brand. Branding is a powerful and sustainable marketing strategy that we use to
influence and manage the way people perceive and respond to your brand, and thereby
influence their buying decisions.
 Service product positioning means “relating a service product to the market.” In simple
words, group of customers with common characteristics are first identified. It also involves
analysis of service product strengths and weaknesses and competitor’s ability to meet
customer needs. In addition, service product positioning is the creation of a clear image in the
minds of consumers within the targeted segment about the nature of the service product and
the benefits to be gained from purchasing the service product. Positioning is the compliment
of segmentation.

Branding and positioning are two important marketing terms. But while they are related to each
other, they have very distinct meanings important for business leaders to understand. Even the
smallest companies need to spend time considering how they would like to be perceived by their
desired market segments. The first step, of course, is determining which markets to serve, who is
already serving those markets and how these competitors may differ. Then organizations need to
consider how they wish to be perceived by certain market segments, understand how they are
currently perceived and take steps to close those gaps.
Positioning: Identifying Target Market Segments

Positioning involves claiming a position or reputation in a market--or several markets--for a

service product. The first step in positioning is specifically identifying the markets to be served;
these can be local, regional, national or even international. Within geographic areas, marketers
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might segment by other factors, such as age, gender, income, or areas of personal or professional
interest. The more clearly these target market segments can be identified, the more specifically
marketers can design programs to reach out to an influence those who occupy each segment.

Positioning: Differentiating From the Competition

Positioning also involves identifying ways in which your company's offerings differ from
competitors' offerings. Based on the target market areas, companies will identify competitors in
those markets, learn as much about those competitors as possible (in terms of product offerings,
pricing, distribution channels and promotional efforts) and determine how the company might
claim a different position based on its own marketing attributes. Once a desired position has been
established, companies will work to establish and strengthen a brand identity designed to claim
that position within the marketplace.

Branding: A Product Identity

In very simple terms, a brand is a personality. While the personality of a service product is
ultimately determined by the target market, companies will often identify how they wish to be
perceived and then take steps to influence consumer perceptions based on product, price,
distribution and promotional elements of the marketing mix. For instance, two different ends of a
branding spectrum might reflect a desire to be seen as the upscale provider of fine wines or the
low-cost distributor of reasonably priced casual beverages.

Branding: Claiming a Brand Position

Companies will claim a brand position based on their actions. Just like individuals' personalities
are determined based on how they are viewed over time by others, the same is true of companies
and service products. Claiming a brand position requires ongoing efforts to convey a consistent
image to target audiences through all company activities, from the attributes of the service product
itself to the company's service to the company's employees and through promotional activities. It is
consistency over time, reflected through actual performance that will help a company effectively
claim a brand position.

Development of New Services

Service development is the end-to-end process of developing and launching a new service to be sold
to customers.
This typically includes market research, service strategy, customer experience, marketing, operations
and launch of a new service. The following are common process of new service development.

Process of Development of New Services

1. New Service Strategy Development: The product portfolio strategy and a defined organizational
structure for new service product development are critical for the foundation of success.

 
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The framework allows an organization to identify possible directions for growth. Offerings are some
of the most common approaches.
 There should be formal mechanism for ensuring an ongoing stream of new service
possibilities. 
 The mechanism may include a formal new service development department with
responsibility for generating new ideas, suggestion boxes for employees, customers, new
service development teams to identify new services.
 
2. Idea Generation: Formal brainstorming, solicitation of ideas from employees and customers,
lead-users researchers and learning about competitors.
 
3. Service Concept development and evaluation: After clear definition of the concept, it is
important to produce a description of the service that represents its specific features and then to
determine initial customer and employee responses to the concept.

4. Business Analysis: Assuming the service concept is favorably evaluated by customers and
employees at the concept development stage, the next step is to determine its feasibility and potential
profit implications. This stage will involve preliminary assumptions about the costs of hiring and
training personnel delivery system enhancements, facility changes.

5. Service development and testing: It involves construction of product prototype and testing for
consumer acceptance. During this phase, the concept is refined to the point where a detailed service
blueprint representing the implementation plan for the service can be produced.

6. Market testing: The new service may be offered to employees of the organization and their
families for a time to assess their responses to variations in marketing mix. At this stage, pilot study
has to be done for the service, to be sure that the operational details are functioning smoothly.

7. Commercialization: At this stage, the service goes live and introduced to the market place. The
first is to build and maintain acceptance of the new service among large numbers of service delivery
personnel who will be responsibility day-to-day for service quality. To monitor all aspects of the
service during introduction and through the complete service cycle.

8. Post introduction evaluation: At this stage, the information gathered during commercialization
of the service can be viewed and changes made to the delivery process, staffing or marketing –mix
variables on the basis of actual offering to the market response.

Role of People in Service

One of the essential elements of the marketing mix is people. This includes everyone who is
involved in the product or service whether directly or indirectly.  Not all of these people get in touch
with the customers.  But all these people have their own roles to play in the production, marketing,
distribution, and delivery of the services product to the customers.
1. The 5th  P in the  marketing mix: Modern marketing theories place people as the 5 th P in the
marketing mix, joining the other 4 Ps namely:  product, promotions, price, and place.  Without
people, all these other Ps will not complete a successful marketing formula.  This aspect refers
to those who are employed by the company to: design, develop, and manufacture services
product; do market research to establish demand and determine customer needs; manage the
supply chain to ensure timely delivery; provide support services; and serve as touch points for
customer interaction among others.
2. People who make the service products: Aside from the management team, there are people
down the line who are responsible for coming up with the services product of the company. 
Companies should take time to hire people who have the competence and expertise in the
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particular industry they are operating in.  This is true for people in the entire organization, from
the managers down to the ordinary workers.  Investing in high caliber people will allow
businesses to come up with the best products and services for their target customers.  Having
these people represent the company will also give the company a positive image in the eyes of
the consumers.  It goes without saying that such positive image attracts sales.
3. People who bring the service products to the customers: These are the people who are
supposed to know what the customers want and what the best way is for these customers to get
what they want.  Marketing efforts are focused on generating leads and attracting prospects. 
When the prospects are ready to buy, these people make sure that the products and services are
accessible to them in the most convenient and affordable manner.  When these people fail in
their responsibility, the company will not be able to build a substantial customer base to keep
their business profitable.
4. People who talk to the customers: Companies no matter how big or small require customer
service to support their products and services.  They should have the right kind of people
manning their customer touch points.  For a lot of customers, this could actually make or break a
deal.  Customers always want to be assured that they can talk to people who are willing and able
to help them in case they have problems or concerns with the products they bought or the
services they availed of.  Companies should ensure that they have customer-friendly people who
are ready to serve their customers’ needs.
5. The overall customer experience: It goes without saying that people definitely have an impact
on the overall customer experience.  In the realm of marketing, giving customers nothing but the
best experience in using their services product and dealing with their people is the key to
gaining more new customers and keeping more of the existing customers.  Patronage and loyalty
are end results of great customer experience brought about by the entire marketing mix.
6. Build customer relationship: People play an important part in the customer relationship.
People underpin the customer relationship between the company and the consumer. Remember
that people buy from people and that the relationship between the people you are dealing with
and yourself add much value to the transaction.

Role of Frontline Staff in Service Delivery

Frontline staffs are Employees who directly interact with customers. The frontline role is usually the
first port of call for the customer. Frontline employees are in the trenches, handling problems,
overcoming obstacles and representing your brand. They’re everywhere; they can work face-to-face,
on the phone, or via all sorts of mediums – email, instant messenger or social media. Frontline staffs
are trained differently to other members of staff; they have to be. They’re the face of company's
brand and they represent values of company. Whether it’s sales, customer services, or social media
executives; training your front liners is not an instant process. It’s a never-ending learning curve. 

Examples of Frontline Roles:

The role of a frontline staff member varies wildly. Here are just a few examples:

 Field Sales Executives

 Service Personnel
 Customer Service Agents
 Consultants
 Receptionists
 Retail Assistants
 Bank Clerks
 Complaints Handlers
 Social Media Executives
 Hospitality Personnel
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1. Frontline Staffs Create Satisfied Customers: Frontline staffs produce satisfied customers.
Businesses that focus their efforts on their frontline staff are investing in the people who are
providing customer service and who are actively turning leads into customers.
2. Frontline Staff Members Are the Face of the Company: Your frontline employees are the
face of company. This means that the actions of frontline employees reflect directly on
company’s vision, mission, culture, and values.
3. Frontline Staff Knows and Understands Customers’ Pain Points: Frontline employees
interact with customers every single day and they have first-hand insights from these
interactions. The frontline workers, who by definition are the employees who directly deal
with the customers, see their behavior every single day and have valuable data and insights to
provide. 
4. Frontline Staff Creates a Bottom-up Culture: Long gone are the days of the old top-down
style management where the most important attribute of an employee was the ability to follow
orders. Today’s workplace requires creativity, fast decision-making, and innovation from
employees and you can’t accomplish that by managing frontline employees in a top-down
only culture. A bottom-up culture revolves around the inclusion of employee ideas, insights,
and perspectives (perceptions) to make the most informed decisions.

Use of Customers to Enhance and Promote the business

These potential customers are influenced by other customers way more easily than they are by
advertisements and branded messages. In fact, 90% of people trust brand recommendations from
friends, and 70% rely on consumer opinions. What does this mean for your business? Your
customers are your greatest assets. Here are some of the major benefits of getting your
customers to promote your business for you.
1. You can significantly lower your customer acquisition costs (CAC). This refers to the cost
incurred when acquiring new customer. Your ability to keep these costs low has everything to
do with how profitable your business will be. The great news? If your customers are driving
conversions for you, it means your CAC will be minimal.
2. You can drive massive demand for your products and services . As more of your customers
advocate for your brand, the interest and demand for your offers go up. The result? More sales
and revenue for your business.
3. You can multiply your social capital. When customers use their social networks to promote
your business, their sphere of influence automatically becomes yours. They will be utilizing
their online assets to drive brand awareness, distribute your content, and power your overall
marketing efforts. Considering that many marketers are consistently missing their targets, it’s a
great idea to tap into your customers’ influence. Did you know that 79% of leads never convert
to a sale? Your customers can help with that!
4. You can have one of the most sustainable marketing models . Customer advocacy is an
evergreen marketing strategy. It means that it will keep bearing fruit for years down the line.
That’s way more than you can say about strategies like influencer marketing. Sure, you may
experience a massive boost when an influencer promotes your brand. But how committed are
these outsiders to your business? Compared to your customers, they’re no match.
It looks like consumers agree. A whopping 92% trust brand advocates over influencers!

Service Leadership and Culture

What is service leadership?

Service leaders are those firms that stand out in their respective markets and industries. But it still
requires human leaders to take them in the right direction, set the right strategic priorities, and ensure
that the relevant strategies are implemented throughout the organization. Much of the literature on
leadership is concerned with turn a round's and transformation. It is easy to see why poorly
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performing organizations may require a major transformation of their culture and operating
procedures in order to make them more competitive; but in times of rapid change, even high-
performing firms need to evolve on continuing basis, transforming themselves in evolutionary
fashion.
Leading a Service Organization
JohnKotter, perhaps the best-known authority on leadership, argues that in most successful change
management processes, people need to move through eight complicated and often time-consuming
stages:
 Creating sense of urgency to develop the impetus for change
 Putting together a strong enough team to direct the process
 Creating an appropriate vision of where the organization needs to go
 Communicating that new vision broadly
 Empowering employees to act on that vision
 Producing sufficient short-term results to create credibility and counter cynicism
 Building momentum and using that to tackle the tougher change problems
 Anchoring the new behaviors in the organizational culture

Characteristics of service leaders

The service leaders or firms who excelled in service quality had the following
1. Service Vision: Service leaders believe that service quality is crucial for gaining a competitive
advantage and for corporate growth. These leaders see service as a never –ending journey which
has to be kept always by everyone in the organization.
2. High Standards: Service leaders set high, at times legendary, standards for service. They believe
that good service alone may not be enough to differentiate them from competitors. They are
interested even in the smallest and most trivial of issues like cleanliness at the place of delivery of
the service. They are zealous about doing the service right the first time. They value the goal of zero
defects and strive to continuously improve the reliability of their service.
3. In the field Leadership Style: It has been found that service leaders do not lead their teams from
their glass chambers. They go out where the action is, are visible to their people and coach,
appreciate showing the correct way of doing things, and also observe, probe and listen. They believe
in the two-way communication process. They are team builders and challenge everyone in the
organization to excel.
4. Integrity: These men and women are examples of high personal integrity. The best service leaders
value, doing the right thing even when it is inconvenient or costly. They believe in being fair, honest,
sincere, consistent and truthful. For these are the tenets of building trustworthy relationships. And
trust is the only basis of the Supplier-Customer relationship.

In the above research of some firms which are the market leaders show following additional
characteristics:
(a) Concern of Customers: These organizations placed customers over and above everything else in
the organization. They believe that by encouraging customers to give a feedback and then by
listening to it, they will be able to learn and understand customer expectations and problems. This
can help them to be more competitive and better satisfy customer needs. They have performance
benchmarks culled from the best service firms in the world market. They penalize themselves if they
are not able to meet these benchmarks.
(b) Use Technology to Promptly Serve Customer: Research such as in case of HDFC bank, where
they reduce the cost of operation but to serve the customer promptly. HDFC also provides online
service to customers who want housing loans or deposit money in fixed deposit. But the other firms
like Indian Airlines, Indian railways etc where computers help employees to perform their jobs more
efficiently and also help to prevent malpractices in reservations.
(c) Involve Customers in Organization Growth: The service leaders actively solicit feedback from
their customers and use it to smoothen out the rough corners in the organization that cause irritation
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to their customers. They don’t seek feedback mechanically but put their heart in it and let
customer know they genuinely believe in it.
(d) Flat Organizations: These are relatively flatter in structure and are able to respond faster to
customer needs. They are decentralized and encourage individual employees to take risks. They
value the individual employee autonomy and encourage interdependence rather than dependence on
the top management for problem solving. These characteristics in service leader firms helped them
empower their employees and create a highly motivated team of people who shared the organizations
goal of customer happiness.
(e) Training of Employees: Service leaders have used training strategies to create a shared value of
100% customer satisfaction. They train the employees to use the technology and management system
to create a satisfied customer. The training is given to the individual to improve its inter-personal
skills.
Thus, winners in customer service are those who have made this an integral part of their corporate
strategy. They reach out to achieve 100% customer satisfaction. They create an organizational
climate which fosters excellence in customer service.

Physical Evidence in Service

Meaning and Nature of Physical Evidence of a Service

As a component of the marketing mix, physical evidence is the location and environment where the
customer purchases and/or consumes the service product. It is the environment where the company
and customer interact in the exchange of the service product.

Originally, this was most pertinent to service products, but the lines have become blurred between
service products and physical products. Companies of both service products and physical products
want to control the physical evidence of the product, as it contributes to the overall customer
experience. It is a way to control and add value through the presentation of intangible elements of a
product.

A distinction is made in services marketing between two kinds of physical evidence:

(a) Peripheral evidence;
(b) Essential evidence.
(a) Peripheral Evidence: Peripheral evidence is actually possessed as part of the purchase of a
service. It has however little or no independent value. Thus a bank cheque book is of no value unless
backed by the funds transfer and storage service it represents.

An admission ticket for a cinema equally has no independent value. It merely confirms the service. It
is not a surrogate for it. Peripheral evidence ‘adds to’ the value of essential evidence only as far as
the customer values these symbols of service.

The hotel rooms of many large international hotel groups contain much peripheral evidence like
directories, town guides, pens, notepads, welcome gifts, drink packs, soaps and so on. These
representations of service must be designed and developed with customer needs in mind. They often
provide an important set of complementary items to the essential core service sought by customers.

(b) Essential Evidence: Essential evidence, unlike peripheral evidence, cannot be possessed by the
customer. Nevertheless essential evidence may be so important in its influence on service purchase it
may be considered as an element in its own right. The overall appearance and layout of a hotel; the
‘feel’ of a bank branch; the type of vehicle rented by a car rental company; the type of aircraft used
by a carrier are all examples of physical evidence.
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Contribution of Physical Evidence to Service Understanding

Physical evidence is the goods and services that are physically evident where they are delivered
to the customers. These are tangible goods and services that help the customers to form an
opinion regarding the enterprise

 Physical evidences are factors that are part of marketing and services and are physically
available for the customers. These are goods and services which are packed and delivered to the
customers and it relates with the satisfaction level of the customers.
 Physical elements are the part of the services which have been completed for the potential
customers and they are able to form their judgments and opinion on the product and the services. The
physical evidence helps in proving the the services that have taken place
 The physical evidence is important for the services industry since it is part of the marketing
package that entails the services provides which are physically evident.

Customers of service organisations may be influenced by a range of factors in their decisions to

purchase or use a specific service. One factor which is assuming more importance is the role played
by physical evidence. Physical evidence can assist in creating the ‘environment’ and ‘atmosphere’ in
which a service is bought or performed and can help shape customer perceptions of a service.
Customers form impressions of a service organisation partly through physical evidence like
buildings, furnishings, layout, colour and goods associated with the service like carrier bags, tickets,
brochures, labels and so on. Many service marketers neglect this aspect of service design and fail to
take account of how they can use such physical evidence to shape the image of their organisation and
its services: ‘Because of product marketing’s biases, service marketers often fail to recognise the
unique forms of evidence that they can normally control and fail to see that they should be part of
marketing’s responsibilities.

Services Process

Concept of Services Process

Process is an element of the extended marketing-mix of services marketing. A process outlines the
procedures and methods to be followed to produce and deliver a service. It also determines the extent
of customer involvement and participation required in service creation and delivery. Therefore,
process explains a series of activities, their sequence and the role to be played by the service
provider, the intermediaries and the customer. It plays an important role in determining the quality of
service design, production and delivery.

It is not possible to differentiate production from delivery in services as they are inseparable in
nature. Therefore, process includes all the activities related to production as well as delivery of the
service. Further, processes need complete dedication and commitment of the service personnel in
order to be completed successfully.

Companies, not only in the manufacturing sector, but in the service sector as well, gain competitive
advantage over other players with improved processes. A well-designed and well-executed process
increases operational efficiency, offers convenience to customers, reduces the cost of offering
services, and improves the efficiency of service delivery. Effectively, it helps in achieving the goal of
customer satisfaction.
Steps for Managing Service Process

Step 1. Flowcharting: Flowcharting, a technique for displaying the nature and sequence of the
different steps involved in delivering a service to customers, offers an easy way to understand the
totality of the customer’s service experience. We can gain valuable insights into the nature of an
existing service by flowcharting the sequence of encounters customers have with a service
organisation. Recognising that a value proposition may embrace all or part of the whole cluster of
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benefits a firm offers to its target market, service marketers need to create a coherent offering in
which each element is compatible with the others and all are mutually reinforcing.

Step 2. Service Blueprinting: It is important for an organisation to gain a holistic view of how the
elements of the service relate to each other, when the service production processes are complex and
involve multiple service encounters. Blueprinting’ according to Shostack, is a graphical approach,
designed to overcome problems that occur where a new service is launched without adequate
identification of the necessary support functions.

Step 3. Identify Failure Points: A good blueprint will bring out the key elements in service delivery,
highlighting risks which can go wrong. The most serious fail points are those that will result in
failure to access or enjoy the core product, from the customer’s view point.

Step 4. Failure Proofing: Once the points that seem negative have been identified then a careful
analysis for the reasons for failure need to be evaluated in service processes. The analysis done often
points outs the prospect for “failure proofing” certain activities in order to reduce or even eliminate
the risk of errors. Poka-Yoke technique is widely used in fail-safe service processes.

Step 5. Setting Service Targets: Service managers can learn the nature of customer expectations at
each step in the process, through both formal research and on-the-job experience. The expectations
of customer’s vary from the desired level to the threshold level of merely adequate service. At each
step service providers should design standards to satisfy and make the customers happy else they will
have to modify the customer’s expectations. These standards might include time parameters, the
script for a technically correct performance, and prescriptions for appropriate style and demeanor.

Step #  6. Service Process Redesign: The processes that have been out dated, get a fresh lease of life
but this does not mean that in the first place the processes were poorly designed. Rather, changes in
technology, customer needs, added service features, and new offerings may have made existing
processes crack and creak. Instead of getting rid of outdated services and replacing them with a new
innovations, redesigning of existing services should be considered.

Step 7. Managing Customers Effectively: Managing customers effectively as partial employees is

another way to enhance customer performance in service processes and to reduce customer-induced
service failures.

Concept of Service Quality

Service quality is generally viewed as the output of the service delivery system, especially in the case
of pure service systems. Moreover, service quality is linked to consumer satisfaction. Although there
is no consensus in the research community about the direction of causality relating quality and
satisfaction, the common assumption is that service quality leads to satisfied customers.

It is a combination of two words, Service and Quality where we find emphasis on the availability of
quality services to the ultimate users. The term quality focuses on standard or specification that a
service generating organisation promises. We can’t have a clear-cut boundary for quality. However,
Service quality has been defined keeping in view at least four perspectives:

1. Excellence – Although the mark of an uncompromising student and high achievement, the
attributes of excellence may change dramatically and rapidly. Excellence is often externally
defined.
2. Value – It incorporates multiple attributes, but quality and value are different constructs—one the
perception of meeting or exceeding expectations and the other stressing benefit to the recipient.
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3. Conformance to Specifications – It facilitates precise measurement, but users of a service may

not know or care about internal specifications.
4. Meeting and/or Exceeding Expectations – This definition is all-encompassing and applies
across service industries, but expectations change and may be shaped by experiences with other
service providers?
Most marketing and researchers have concentrated on the last perspective. The Gaps Model of
Service Quality reflects that perspective and offers service organizations a framework to identify
services in the form of the gaps that exceed (or fail to meet) customers’ expectations.

Factors which Contribute the Quality Perception of Services

Service Quality – 5 Important Dimension
Service quality is a perception of the customer. Customers, however, form opinions about service
quality not just from a single reference but from a host of contributing factors. Service marketers
need to understand all the dimensions used by customers to evaluate service quality.

Dimension 1. Reliability:
This dimension is shown to have the highest influence on the customer perception of quality. It is the
ability to perform the promised service dependably and accurately. Sahara Airlines, an upcoming
domestic air carrier within India, has been striving to protect itself as a reliable airline. It hopes to
differentiate itself from other airlines Indian Airlines. To protect this reliability, Sahara Airways has
a scheme of full refund plus a coupon of Rs.3,000 to every passenger on delay of flights by more
than 59 minutes.

Dimension 2. Responsiveness:
It is the willingness of the service firm’s staff to help customers and to provide them with prompt
service. The customers may have queries, special requests, complaints, etc. In fact, each customer
may have problems of his or her own. While the front- end employee may have been trained or
equipped to deliver standardised services, the customers want them to go beyond this limit. It is the
willingness to help the customer or willingness to go that extra distance that is responsiveness.

Dimension 3. Assurance:
It defined as the ability of the company to inspire trust and confidence in the service delivery. It
refers to knowledge and courtesy of the service firm’s employees and their ability to inspire trust and
confidence in the customer toward the company. This dimension is considered vital for services that
involve high risk as customers may not be able to evaluate all the uncertainties involved in the
process by them.

Dimension   4. Empathy:
It refers to the caring, individualised attention the service firm provides each customer. When service
provider puts himself in the shoes of the customers, he may see the customer’s viewpoint better.
When customers feel that the provider is making his best effort to see their viewpoint, it may be good
enough for most. Example, a lady customer with a young child arrives slightly late at the check-in
counter and requests the agent for a seat along the aisle and near the toilet.

Dimension 5. Tangibles:
It refers to physical facilities, equipment, and appearance of a service firm’s employees. The job of
the tangible and physical evidence of a service is multifunctional. When a patient in the waiting
room of a clinic sees the doctor’s certificate, he becomes aware of the quality of service he is about
to receive.

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