SERVICE

Service is the action of doing something for someone or

something. It is largely intangible (i.e. not material). A product is
tangible (i.e. material) since you can touch it and own it. A service
tends to be an experience that is consumed at the point where it is
purchased, and cannot be owned since is quickly perishes. A person
could go to a café one day and have excellent service, and then return
the next day and have a poor experience. So often marketers talk
about the nature of a service as:

Inseparable - from the point where it is consumed, and from the

provider of the service. For example, you cannot take a live theatre
performance home to consume it (a DVD of the same performance
would be a product, not a service).

Intangible - and cannot have a real, physical presence as does a

product. For example, motor insurance may have a certificate, but the
financial service itself cannot be touched i.e. it is intangible.

Perishable - in that once it has occurred it cannot be repeated in

exactly the same way. For example, once a 100 metres Olympic final
has been run, there will be not other for 4 more years, and even then it
will be staged in a different place with many different finalists.

Variability- since the human involvement of service provision

means that no two services will be completely identical. For example,
returning to the same garage time and time again for a service on your
car might see different levels of customer satisfaction, or speediness of
work.

Right of ownership - is not taken to the service, since you

merely experience it. For example, an engineer may service your air-
conditioning, but you do not own the service, the engineer or his
equipment. You cannot sell it on once it has been consumed, and do
not take ownership of it.

Western economies have seen deterioration in their traditional

manufacturing industries, and a growth in their service economies.
Therefore the marketing mix has seen an extension and adaptation
into the extended marketing mix for services, also known as the 7P's -
physical evidence, process and people.
 SERVICES MARKETING MIX
In this part we will discuss the special issues concerning the
marketing of services. This is not to imply that the principles of
marketing covered in the previous chapters of this Handbook do not
apply to services rather it reflects the particular characteristic of
services in addition to those typical for products.

Cowell states that what is significant about services are the

relative dominance of intangible attributes in the make-up of the
“service product”. Services are a special kind of product. They may
require special understanding and special marketing efforts.

The provision of the continuing education contains the element of

the tangible and intangible. It usually provides a learning materials
(physical good) and also numbers of the service activities (teaching
processes, contact with customers, organisation of the courses, etc.).
The distinction between physical and service offering can, therefore, be
best understood as a matter of degree rather that in absolute terms.
The continuing education is service –based since the value of this
product is dependent on the design and delivery of the CE courses
rather than the cost of the physical product (teaching materials, CDs,
etc.).

The services marketing mix is an extension of the 4-Ps

framework. The essential elements of product, promotion, price and
place remain but three additional variables – people, physical
evidence and process – are included to 7–Ps mix. The need for the
extension is due to the high degree of direct contact between the CE
providers and the customers, the highly visible nature of the service
process, and the simultaneity of the production and consumption.
While it is possible to discuss people, physical evidence and process
within the original-Ps framework (for example people can be
considered part of the product offering) the extension allows a more
thorough analysis of the marketing ingredients necessary for successful
services marketing.

People – because of the simultaneity of production and

consumption in services the CE staff occupy the key position in
influencing customer’s perceptions of product quality. In fact the
service quality is inseparable from the quality of service provider. An
important marketing task is to set standards to improve quality of
services provided by employees and monitor their performance.
Without training and control employees tend to be variable in their
performance leading to variable service quality. Training is crucial so
that employees understand the appropriate forms of behaviour and
trainees adopt the best practises of the andragogy.

Physical evidence – this is the environment in which the service

is delivered and any tangible goods that facilitate the performance and
communication of the service. Customers look for clues to the
likely quality of a service also by inspecting the tangible evidence. For
example, prospective customers may look to the design of learning
materials, the appearance of facilities, staff, etc.

Process – this means procedures, mechanism and flow of

activities by which a service is acquired. Process decisions radically
affect how a service is delivered to customers. The service in CE
includes several processes e.g. first contact with customers,
administrative procedure regarding course delivery, preparation,
delivery and evaluation of the courses. The following guideline can be
useful for successful CE management:

• ensure that marketing happens at all levels from the marketing

department to where the service is provided
• Consider introducing flexibility in providing the service; when
feasible customize the service to the needs of customers
• Recruit high quality staff treat them well and communicate
clearly to them: their attitudes and behavior are the key to
service quality and differentiations
• Attempt to market to existing customers to increase their use of
the service, or to take up new service products
• Sep up a quick response facility to customer problems and
complaints
• Employ new technology to provide better services at lower costs
• Use branding to clearly differentiate service offering from the
competition in the minds of target customers

IT refers to the systems used to assist the organisation in delivering the

service. Imagine you walk into Burger King and you order a Whopper
Meal and you get it delivered within 2 minutes. What was the process
that allowed you to obtain an efficient service delivery? Banks that
send out Credit Cards automatically when their customers old one has
expired again require an efficient process to identify expiry dates and
renewal. An efficient service that replaces old credit cards will foster
consumer loyalty and confidence in the company.
 SERVICE PROCESS
It refers to how a service is provided or delivered to a customer.
Delivery system is a creative process. It begins with a service concept
and strategy to provide a service. In order to achieve these objectives
various alternatives must be analyzed and identified before a decision
is made .designing a service process involves issues such as location
facility, design and layout for effective design layout and workflow,
procedure and job definitions for service quality, equipment selection
and adequate service capacity

According to clovelock there are 7 operational issues which have to b

considered while designing the service quality process.

1) In order to achieve economics of scale and perform consistently the

operation people would prefer to cater to individuals so that the
customer feels as being treated specially.

2) The decisions on design and facility layout should satisfy the

objectives on both.

3) Operational people are interested to improve the productivity as the

cost of production per unit will reduce.

4) Manage the queues in such a way that it is possible to use the

available space.

5) Operational employees feel that the job design should shrink error
and standardise tasks, making efficient use of approach.

 Designing service process:

The following factors are to be considered inthe service process
design and implementation.

• The service itself:

It is necessary to understand whether the service itself is process

dependent. Most of the equipment based services like laundry and
lawn care as well as services with highly intangible attributes like
insurance and banking are process dependent.

• Customer participation:

In case of most service system the customer is present when the

service is being performed. The customer can be made a productive
labour Instead of being a passive bystander. Productivity can be
increased by shifting some the service activities On to the customer. A
spectrum of service delivery system is possible depending on the
degree of customer involvement from self service to complete
dependence on a service provider.

• Degree of customer contact:

It refers to the physical presence of the customer in the system.

The degree of customer contact can be measured by the amount time
the customer is present in the system in relation to the total service
time. In case of low contact system consumer have a direct influence
on the production process because they are not present.

• Degree if divergence:

A standardised service with low divergence is designed for high

volumes with a narrowly defined and focused service. Since the tasks
are routine it require a workforce with relatively low levels of technical
skills. For customised services more flexibility and judgement are
required to perform the service tasks. In addition to this more
information is exchanged between the customer and the social worker.
In order to achieve Customer satisfaction, decision making is delegated
to service workers.

• Location of service delivery:

The service delivery process should be located either at the

service provider’s premises or carried out at the customer place. Incase
of the services like painting carpet cleaning etc. The service has to be
delivered at home. Many services are being delivered without the
customer and the supplier meeting their destiny.

• Complexity of service:

Complexity of services reflects the number of steps that are

involved in delivering the services .by looking at the blueprint it can
easily determine whether the services are high or low in complexity
and its divergence can be determined by having a look at its blueprint.

SERVICE PROCESS
PLANNING
The following are the strategic decision and design elements
must be considered in the service process planning

1. Basic technological decision

2. Conversion/ Market decision
3. specific equipment decision
4. Process flow decision
a. Blue Prints
b. Flowchart
c. Front and Back office
d. Layouts
e. bench marks

5. People decision

1. Basic Technological Decision

In some, technology exists but not only in customerised

form. So the question arises :whether the technology available can
be developed to provide the raw material, process and equipment
to deliver the service? For example , at one time it was possible to
design printed electronic circuits on small chips, but the
technology and specific equipment required to produce the chips
are beyond the state of act.

In the same way telephone was invented in 1876, but the

technology came into use after 15 years from the invention of
telephone dial.

2. Conversion/ Market Decision

The decision on conversion process is complex as it depends

upon the technology and market factors, as well as economic
conditions. There are many alternative processes and material that
will satisfy the design specification. When each person or service
supplying a service is dedicated to providing that particular service
efficiency is achieved. However effectiveness is achieved with the
flexibility in the conversion process. In other words the broadest
range off service is to be provided by the service provider.
 3. Specific Equipment Decision

Technology section is an important decision for any service

provider. It should fully support the demand of the product or
services as it creates the demand and the requirements for all other
parts of the operating system.

It is necessary for a manager to be able to ‘visualise’ the

physical process taking place in order to make intelligent decision
about the equipment and process technology.

Types of basic conversion system

The selection of equipment is dependent upon the type of

conversion systems that is chosen.

a. Fixed position
b. Process based and
c. Product or Service based

Fixed position conversion is often characteristic of custom, high

quality personal service .Example: Beauty treatment, landscaping etc.

Higher education is a good example of process based conversion

or batch production in services. Students move in batches from class to
class.

The conversion system is said to be service based if the equipment

required to serve a customer is arranged in a sequence according to
the steps in the service process

(4) Process Flow Decision:

It is related to conversion/materials decision and specific

equipment decision. The process flow decision is developed on the
basis of flow process charts, blue prints, and layouts and
benchmarking.

(a) Service Blue Print:

A service blue print is a flowchart of the service process. It is a

picture of a service system. It conveys the service concept by showing
the service at an overview level. It shows how each job or department
functions in relation to the service as a whole.

In preparing a service blue print the following important steps are

taken:

Identify the activates involved in developing the service and prevent

them in a diagrammatic form.

Identify the failure points. Develop a system and procedure to reduce

the likelihood of their occurring in the first instance.

Set standards for measuring the performance.

Analyze the profitability of the service delivered.

The blueprinting exercise also gives the managers the opportunity to

identify the potential point of failure and design “foolproof” procedure
so that they may not occur again.

Thus, a blue print is a precise definition of the service delivery

system that allows the management to test the service concept before
final commitments are made. By identifying potential points of failure
and highlighting opportunities to enhance customer’s perception of the
service, the blue print facilitates problem solving and creative thinking.

Uses of Service Blue Prints:

Managers employ the concept of blue prints to assist in the

decision making activities associated with strategy setting, allocation of
resources, integration of service functions and overall evaluation of
performance. Blue Prints are used by marketing managers in
developing advertising and sales promotion campaigns. Details service
blue prints are useful to marketing and communication people.

The marketing managers can employ them in consumer

research. They can also use them as a starting point for development
of consumer material in order to convey invisible actions.

When it is time to shift the new services from R & D into routine
operation, the marketing manager performing an R & D function can
use detailed blue prints in order to communicate operational details.
Detailed service blue prints can be used by human resources managers
in preparing job description, selection criteria, and performance
appraisal system and compensation schemes.

(a) Service Mapping/Flow Charting:

Flowcharting can be applied to any type of service when a

management needs to gain a better understanding of how the service
is created and delivered. Its is also known as service mapping when
portraying an existing situation and service blueprinting, when
planning a new or revised process and prescribing how it ought to
function.

Developing a flow chart begins by identifying each interaction

that a particular type of customer has while using a specific service.
Managers should distinguish between the core products and
supplementary elements.

The next stage is to pull at these interactions linearly into the

sequence in which they occur. The service delivery process is like a
river, some activities take upstream and others downstream.

It is seen that flowcharting provides a means for managers to

gain understanding of the underlying services processes and is the first
step necessary in exercising control over such procedures.

(b) Front and Back Office:

The front office is that part of the system which is directly

experienced and visible to the customer. This is the place where the
actual service is performed.

That part of the system from which the office is excluded is the
back office. E.g. Kitchen in a restaurant. It is the manufacturing side of
the service that is not visible to the customer. There are certain
services like banks where the back office is visible to the customer.

The layouts of a service organization can be process layout,

Product layout or Group layout. In process layout the resource are
arranged according to the particulars state in the process that is to be
applied to the customer. It allows the servers to specialize at particular
tasks.
 In product layout the requirements of specific group of customers
are identified and only than the resources that resources are
sequentially set-up so that the customers flow through the system and
move from one system to another until the service is complete. E.g.
Car servicing.

(c) Benchmarking:

Benchmarking is defined as measuring the performance of a

business against that of the strongest competition in order to establish
“best practice”.

It can be applied at three levels. Internal Benchmarking can be

carried out on the large organization by way of comparisons between
operations units.

Thus, a financial institution might bench mark across branches,

different hospitals under the same health authority, different colleges
under the same education authority etc.

At the second level competitive Benchmarking can be used.

Competitive Benchmarking is used where comparisons are made
directly with the competitive organizations. Here the owner or the
director can pose as a customer and directly participate in the process.
However this is done in an informal way. A comparative impression is
gained of the service without examining the different facets.

The third approach is functional or generic Benchmarking. It

compares specific functions such as distribution and after sales service.
In this the advantage is that the information is easier to obtain than
when competitors.

In order to measure the performance care has to be taken in

selecting the dimensions and scales to be used. This has been seen in
education where, on occasions there has been focus on output
measure i.e. the number of external examination passes. The concept
of value addition can introduce in this situation examining the
difference between output and input.

The Benchmarking process is shown in the figure below:

 Determining parameters to measure

Identify best competition

Determining data collection method

Compare competitor’s performance with

organization performance

Identify factors which contribute to the

performance gap

Establish action plans to close the gaps

Set targets to measure progress

Implement action plans

Monitor performance against targets

Repeat

The Benchmarking Process

(5) People Decision

The decision regarding people means determining the number of

people, their skills, and labour cost.

Many at times people decision are made on the assumption that people
may be hired any way. The need to have knowledgeable, continuous
and motivated workforce is overlooked.

A firm may have sophisticated technology but it is the people who

manage them and therefore in people decision knowledgeable and
motivated workforce cannot be overlooked.