Service Marketing

MC 6061

Chapter: 03 – Extended Marketing Mix

People / Process / Physical Evidence

 Key factors to consider

 People in the service delivery process

 The service process design and delivery
 The physical service environment
 Organizing the distribution (place) of the service
 Pricing the service
 Communicating (promotion) the service
 People in the creation / management of the
service
 Managing role conflicts
 Managing role overload
 Managing role ambiguity
 Managing emotional labor

» Regulating or managing emotional

expressions with others
 Service sabotage behavior

 Deliberate misbehavior of employees in different service settings (Harris &

Ogbonna, 2002)
“Normality” of Service
Sabotage Behaviours

Routine
Customer-Private Service Sabotage Customer-Public Service Sabotage

e.g., Talking to guests like

e.g., Waiters serving smaller
young kids and putting them
servings, bad beer, or sour wine
down
“Openness” of Service
Covert Overt
Sabotage Behaviours
Sporadic-Private Service Sabotage Sporadic-Public Service Sabotage

e.g., Chef occasionally e.g., Waiters spilling soup onto

purposefully slowing down orders laps, gravy onto sleeves, or hot

plates into someone’s hands

Intermittent
 Employee/Customer Cycle of Failure

 A situation in a
service organisation
where employee
turnover is high and the
level of employee
morale is low due to
uncompetitive
compensation they
receive, inefficiencies
associated with
workplace and job
design, etc (John
Dudovskiy, 2012)
 Employee/Customer cycle of success

 It is possible for service

organisations to break free
from the “Cycle of Failure’.
 This would involve the
adoption of an opposite
stance known as the “Cycle
of Success”. The
compulsory condition for
the “Cycle of Success” is to
increase the level of
satisfaction of internal
customers through various
measures and initiatives
(John Dudovskiy, 2012)
Service employees and management issues

Selection

On role performance,
Right people – balance of
constantly update on changes
social and technical
about
skills to create experience
service standards

Rewards Effective Employee Management Training

Criteria to
For outstanding
evaluate
service experience
performance on service
creation
experience creation

Performances

Generalized staff management framework

Service employees and management issues -
Starbucks
Selection a. Recruit passionate people who love coffee
b. Select a diverse workforce that reflects the Starbucks’community

Rewards a. 20 hrs per week only

b. Healthcare programme
c. Opportunity to buy shares
d. Disability and life insurance

Training a. 24hrs training in the first 2 to 4 weeks on coffee knowledge, coffee history, drink preparation and a
4hr workshop called ‘brewing the perfect cup’
b. Management trainee for 8 to 12 weeks which covers details of store operation, information
systems and the basics of managing people

Performances a. Starbucks employee turnover rate 60% (average industry turnover 140%)
b. Low employee turnover – employee can become more familiar with the
clients and client preferences
The service delivery process – Issues to
consider in service design & delivery

Degree of technology
Degree of customization
Service process designing
Degree of visibility
Degree accessibility

Service Efforts of
Service process delivery Reliability
duration employees

Service product Customer experience

Issues associated with service design

 Service design process - Starbucks

Degree of Faster espresso machines, prepaid cards, Starbucks express (online payment)
technology
Degree of Setting of brewing process and preparation at ‘front office’, so that the customer can
experience the smell, noise and heat from coffee preparation
visibility

Degree of Different kinds of coffee and topping combinations

customization
Degree of 15,000 retail location in high-traffic areas, supermarkets, bookstores, hospitals, office
buildings, banks and served in the air by United Airlines
accessibility
 Key steps in developing service blueprinting

 Service blueprinting (service mapping): is a pictorial representation

of the service process with service events linked through a series of
lines which represent dependencies
 Key steps in developing service blueprinting
 Sequencing
 Visibility
 Timing
 Tolerance
Developing the service ‘blueprint’ for X-Ray
department
TIMING

Visible to
S customer
E TOLERANCE
Q
U
E Not visible
N to customer
C
E
 Redesigning Service Processes

 Redesign aims to achieve different performance measures

 Reduced number of service failures

 Reduced cycle time from customer initiation of a service process to its
completion
 Enhanced productivity
 Increased customer satisfaction
Process Redesign: Approaches and Potential
Benefits
Eliminating non-value-adding Streamline front-end and back-end processes of services
steps Improve productivity and customer satisfaction

Increase in productivity and service quality

Lower costs and perhaps prices
Shifting to self-service Enhance technology reputation
Differentiates company

Improve convenience for customers

Delivering direct service Productivity can be improved by eliminating expensive retail locations
Increase customer base

Involves grouping multiple services into one offer, focusing on a well-

Bundling defined customer group
services A better fit to the needs of target segment
Increase productivity with customized service

Focus on tangible elements of service process (facilities and equipment)

Redesigning physical aspects of Increase convenience
service process Enhance satisfaction and productivity of frontline staff
Cultivate interest in customers
 Self Service Technologies (SST)

 Many companies and government organisations seek to divert customers from

employee contact to Internet-based self-service

People love SSTs when… People hate SSTs when…

I. SST machines are conveniently located and
accessible 24/7– often as close as the nearest
computer!
II. Obtaining detailed information and completing
transactions can be done faster than through
face-to-face or telephone contact
I. SSTs fail – system is down, PIN numbers not
accepted, etc.
II. Customers themselves mess up–forgetting
passwords; failing to provide information as
requested; simply hitting wrong buttons

Key weakness: Few firms incorporate service recovery systems hence customers are still forced to make telephone calls or
personal visits
The physical evidence (Environment)

Managing reaction to varied

individual responses
(Approach vs. Avoidance)

Cognitively Emotionally Physiologically

based based based

Appreciating Environment to ‘take your Feeling cold or hot

functionality of the layout breath away’ or Stressed by noise/crowd
e.g. supermarkets, IKEA make you laugh
The physical evidence (Environment)

Orbit Hotel and Hostel, Los Angeles Four Seasons Hotel, New York
An Integrative Framework: The Servicescape
Model
 An Integrative Framework: The Servicescape
Model
 Identifies the main dimensions in a service environment and views
them holistically

 Customer and employee responses can be categorised into

cognitive, emotional, and physiological responses, which lead to
overt behavioural responses towards the environment

 Key to effective design is how well each individual dimension fits

together with everything else
 Managing the physical environment

Effect length
of stay, Convenience Spatial Layout
Atmospherics
vs.
Walking speed
enjoyment
in store

Design with purpose

Heat, light, sound
The service Hospital vs. hotel
music, colour, noise, smell
experience
Tangible service Market space
evidence

The internet as a
Build customer Encourage users to service environment
Signage, symbols expectations explore – approach – ease of navigation,
Rich curtains vs rather than avoid design aesthetics
of service
blinds experience