Lecture 5

CIB3006
 Amy’s Ice Cream
1. Describe the service organization culture at Amy’s
Ice Cream.
2. What are the personality attributes of the
employees who are sought by Amy’s Ice Cream?
3. Design a personnel selection procedure for Amy’s
Ice Cream using abstract questioning, a situational
vignette, and/or role playing.

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Amy’s Ice Cream Facility

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 AMY’S ICE CREAM
Abstract Questions

• What was your most rewarding past

experience and why?
• What are you looking for in your next job?
• What have you done in the past to irritate a
customer?
• What flavor of ice cream best describes your
personality?

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 AMY’S ICE CREAM
Situational Vignette
A particular customer has the irritating habit
of always showing up about two minutes
before closing and staying late. Often this
occurs on the night when weekly store
meeting are held after closing time. This
delays starting the meeting and furthermore
employees are on the clock waiting for the
customer to leave. What would you do?

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 AMY’S ICE CREAM
Situational Vignette
As a new employee at a busy store, you have
been performing routine clean-up tasks
(garbage removal and restroom cleaning).
Company policy dictates that these are tasks
to be shared. It has become clear that two
employees consistently avoid these jobs in
favor of more pleasant duties.
How would you handle this situation?

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• 1. Describe the service organization culture at Amy's Ice Cream.
• A corporate culture is a system of values and beliefs that are shared by the
members of an organization. Such a system defines acceptable work behavior
and when it is a healthy system, it contributes to the organization's success. Amy
Miller, the founder and president of Amy's, recognized very early in her career
that creating a strong group culture was crucial to her company's success,
because it offered a unique way to differentiate Amy's from the competition.
• Amy's values include individualism and self-expression in a team context, more
emphasis on intrinsic rewards than on monetary rewards, maximization of
autonomy and responsibility for all employees, job satisfaction, and making the
customer smile. Perhaps the most important value is employee empowerment.
These values are supported by the beliefs that the ice cream business is a "feel
good" one in which happy employees mean happy customers, that the service
encounter or "moment of truth" should be customized and entertaining, and the
facility design should support the personalities of the employees.
• 2. What are the personality attributes of the
employees who are sought by Amy's Ice
Cream?
• Amy's selection process is designed to identify
employees who are bright, innovative, and
energetic. Employees must be "performers"
who can express themselves freely and be
sensitive to the customers' needs.
• 3. Design a personnel selection procedure for Amy's Ice
Cream using abstract questioning, situational vignette,
and/or role-playing.
•
 
• Amy's strives to hire employees who are comfortable
performing for customers and who can sense how far the
kidding can be taken. In addition, the employees must be
responsible enough to perform well in an autonomous
environment. The following personnel selection processes
can be used to identify such employees.
Succeeding in a Mature Market

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 Discussion Questions
1. How has Enterprise Rent-A-Car (ERAC)
defined its service differently than the typical
national car rental company?
2. What features of this business concept allow
ERAC to compete effectively with the existing
national rental car companies?
3. Use the service profit chain to explain the
success of ERAC.

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 Enterprise Service Concept
• Target Market
• Customer Value
-convenience
-rates
-selection
• Corporate Culture
-hiring
-rewards

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 Enterprise Success Factors
• Virtual Car
• Relationship with repair shops
• Upgrade by replacement car customer
• On site dealer locations
• Fleet management
• Age of rental car fleet
• Motivated employees

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 Service Profit Chain
How Does Enterprise Rent-A- Car Illustrate the
Service Profit Chain?

• Operating strategy and service delivery system

(employees)
• Service concept (service value)
• Target market (customers)

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• 1. How has Enterprise Rent-A-Car (ERAC) defined its service differently than that of the
typical national car rental company?
• Enterprise Rent-A-Car (ERAC) offers a complete “service package” to its target market, the
local rental or “hometown” segment. This market includes two groups: the replacement
and the discretionary segments. ERAC differentiates itself from the typical national car
rental company by applying a personalized service philosophy in its business. This
principle is reflected in its service package:
• Supporting facility
• ERAC has 7000 offices and customers perceive them as being located nearby as opposed
to its competitors who are located at or near airports only.
• Some offices are strategically located next to or in car dealers or repair facilities, and offer
a convenient replacement car.
•  
• Facilitating goods
• ERAC offers a wide variety of cars, with a selection of more than 60 types of vehicles for all
tastes and needs (e.g. a car to impress clients or a reliable car for a long trip).
• Information
• Because ERAC picks up its customers from office or home, it acquires information that is useful in planning
future site locations.
• With an automated system, ARMS, customers are able to contact any North American office via an
exclusive 1-800 number.

 
• Explicit services
• Convenience in free pick-ups and drop-offs for the customer.
• Rates lower than those of the competition.
• Availability to customers of a 1-800 number that allows them to contact any of ERAC connected offices and
ARMS, which makes insurance companies’ (who are major clients) transactions more efficient.
• Comprehensiveness in its services through an end-to-end client’s fleet management arrangement offered
by an Account Services representative – this service includes activities such as acquisition, registration,
financing, fueling, maintenance management, and disposal.
 
 
• Implicit services
• Image and service attitude based on ERAC’s culture, which focuses on hiring people with abilities to deal
with customers and internal competition.
• Convenience by partnering with repair facilities and auto dealers for replacement cars.
• What features of its business concept allow ERAC to compete effectively with the
existing national rental car companies?
• Three main elements of ERAC’s service concept are the keys that allow it to
compete with national rental car companies – these keys are related to the
company’s service delivery system:
• A simple but personalized service delivery system relies on providing convenience
to customers through a unique 1-800 number and the picking-up and dropping-
off services free-of-charge. Despite these extra services ERAC offers a wide
selection of cars at attractive low prices.
• The number and location of ERAC’s offices facilitates the delivery system – it has
offices within 15 minutes of 90 percent of the U.S. population and repair facilities.
• Its service encounter emphasizes treating people like friends and neighbors and
hiring “people” people, (i.e.) those who have personalities and attitudes aligned
with the culture of the organization.
• 3Use the service profit chain to explain the success of ERAC.
• ERAC focuses on recruiting, hiring, and training people who have
the social skills required to succeed in the car rental business. The
competitive advantage of ERAC is not offering cars only but also
people offering a service. The quality service provided to
customers, along with the competitive nature of the personnel
and the reward and compensation system practiced by ERAC
generate satisfied employees, who commit to maintain or improve
the quality of their work and increase their productivity. The value
of the service provided by ERAC is reflected in satisfied customers,
who return or refer others to the business. Overall, its service
profit chain drives the profitability and the growth of the company.
 Tutorial 5
Exercise A

The assigned group comes up with an example

from each of the four organizational control
systems (i.e., belief, boundary, diagnostic, and
interactive)

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 Tutorial 5
Exercise B
• How does the historical image of service as servitude affect
today’s customer expectations and service employee
behavior?
• What are the organizational and marketing implications of
considering a customer as a
“partial employee”?
• Comment on the different dynamics of one-on-one service
and group service.
• How does use of a “service script” relate to
service quality?
• If the roles played by customers are determined by cultural
norms, how can services be exported?

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