B34 C5 and C6 Services Marketing Elective

Important concepts taught

• High and low contact service
• Gap Model
• Service encounter
• Managing expectations and disappointments and complaints
• Marketing Mix 7 Ps
• 3 values in services :
• Service Management Trinagle
• Service Profit Chain Model
• Transactional vs relationship marketing
• complaints handling

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Course Outline : Service Marketing Elective in PGEMP 

10-12 Sessions over Contact 5 and Contact 6:  Prof S K Palekar : 2013

Why study service marketing?

Services is the largest sector in the GDP of any nation and in India the services account for more than 50% of the GDP. The remaining pie is divided between manufacturing and agriculture. Services are everywhere.

• They get offered, and paid, as a separate product.  Example : pest control service.
• They get bundled along with products. As it happens in a restaurant.

 You do not know even know that you are purchasing services when you buy a computer - the advertising that is necessary to sell the product, the transportation and distribution that brings the product from China to the shop where you reach, the display and explanation provided by the retailer – all of these are services that are used by you but paid for by the manufacturer.

Being so ubiquitous, you must understand how services need to be marketed. It is indeed very different from the marketing of physical products because the services cannot be examined before they are purchased. They do not have touch and feel qualities that a product has.   

What Will Be Covered

We plan to cover only the essentials that you will need for the marketing of services. Of course the text book given to you has an ample coverage of the topic and will satisfy your curiosity for more. The full richness of the service marketing as a subject is revealed when you consider that a satisfactory outcome of a “service encounter” is subject to too many variables : both the customer and the service-giver have different expectations from each other. We shall use both B2C and B2B contexts. And we shall use different business contexts, low-end services as well as high end services, pre-sales as well as after-sales services, real time servicing through personal contact as well as phone.   

Expectations From The Students

The students are expected to come to the class after reading and preparing as stated. During class the use of cell phones is prohibited. Students should arrive in time, pay attention to the class and participate in the discussions. If anyone wants to speak, s/he must raise a hand and speak only when asked.  You are encouraged to bring reality into the class from your past experiences, from your market visits and from reading newspapers and journals.

Course Evaluation

Assignments    (2)                                            40% weight

Class Participation                                          10% weight

Examination                                                       50% weight

Module 1 :  How “value” is created in services for the customers Sessions 1 and 2 : Learning Objective : The principle mechanism of value creation (hence price realization) in a ervice business.

• Case : “Dushyant Corporate Trainers” : B2B Service
• The difference between products and services
• 7Ps Marketing Mix for service business

Module 2 :  How marketers address the issues created
by the unique behavior exhibited by customers when they buy services 

Session 3 and 4 : This module will be essentially conceptual and woven around how buyers behave when they are buying services and how the service marketing strategies change accordingly.

• How buyers behave when they buy services
• What do the marketers do in response to these unique behaviors
• Management challenges in service business

Module 3 :  Good Operating Practice in service business

Session 5 and 6 : The B2C Service case of “Xeta Motor Car Company” will be discussed in order to teach how service marketing problems are prevented or corrected.

• “Gap Model” of services
• How service quality is managed
• Employees are key to service business

Module 4 :  How People Are Managed

Session 7 and 8 : The case of “Coimbtore Financial Corporation” will be discussed in the class to teach practical issues in managing people  :  

• Service Management Triangle
• Service Profit Chain

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B34C6 Assignments

1. Please apply the service profit chain model (already on the blog or easily available on the net : go into google images and search for "service profit chain") to an actual situation in your company and indicate what specific decisions can the management take to improve customer satisfaction?
2. We had a lively class discussion on your companies not giving proper attention to handling of complaints in terms of recovering customers and using the complaints data to improve performance. In both these areas please indicate - in the context of your company - what needs to be done?

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Service Primer For Executives
Covered in B34C5

Case of Dushyant Corporate Trainers

( Case of Dushyant Training Corporation was used - but it is not necessary to know the case to understand the following )

• Financial  numbers are a dashboard of the business and NOT the business itself. 
• Do not try to do the business by the numbers alone without understanding the business reality underneath those numbers : why are those numbers what they are. 
• Was it not surprising for you to realize that, in the process of making profit, you kept your discussion restricted only to the numbers in P&L account? None of you actually even asked very basic questions that a good marketing man asks in a situation like this. 
• These (obvious) questions are related to the fundamental fact - Is (and how do we know it is a fact that ) value getting created for the customers? What is the mechanism for value creation adopted by the company? 

The process of marketing is focused essentially on the fundamental question raised above :  Is value getting created for the customers and what is the mechanism for value creation adopted by the company? We saw that the "marketing process" is a standard template for a company to help it create value for its customers. The steps are :

1. Collect market information (5Cs) : Customers, Competitors, Collaborators, Company, Context
2. Strategy formulation ( MVG ) :Chosen market, chosen value proposition, chosen channel (go-to-market)
3. Customer Acquisition Contacting customers and bringing business
4. Customer FulfillmentSatisfying acquired customers
5. Outcome of marketing : Profit for the company and satisfaction of the customer

We saw clearly how Dushyant was not following any of these processes and no wonder, in the absence of the systematic marketing process, the company was making losses.

An exercise : how market oriented are you ? 

is to ask yourself which of these marketing processes are

 properly planned and implemented in  your company?

• How often do you collect market information? How well do you know about your Customers, Competitors, Collaborators, Company and the Context? Is this done periodically, systematically and discussed in open regarding how things are changing outside your business and how you should change?
• Have you systematically analyzed which customers you want to serve ? And which customers you will not want to serve? Have you blindly assumed that you should serve the same customers just because your competitors are serving them?
• Have you systematically analyzed and then decided what should be the positioning, fetures and prices of your offerings and products ? Or are you blindly copying the same product line of your competitors?
• Are you using the same pricing, advertising and sales channels that your competitors are doing? Are these strategies consistent with your choice of markets, your choice of competitors and your products?  
• Do you measure only the sales or do you measure the satisfaction too? Do you know which customers are loyal and which are not.

TYPES OF SERVICES

• AUTOMATABLE SERVICES : Simple services which can be automated (shoe shine, vending packaged products, ticketing on the net, giving cash against cards)
• LOW END SERVICES : Routine services that can be performed by almost anyone with little training. (cleaning, guard duty, door keeping)
• MID-END SERVICES : Technical services based on knowledge of technology. (nursing, tailoring, repairing). Or Customer care services involving personality and social skills (air hostess, handling complaints, salespersons, reception)
• HIGH-END SERVICES: Professional services needing high level of education and experience (architects, doctors, professors, lawyers, pilots)

CURRENT FOCUS : we shall speak mainly about the last 3 types of “mid end” and "high end" services. It is clear that the most important part in delivering good services of this kind is having the right people in the first place. The "Service Providers" (employees) are to the service business what machines are to the product business.  Unless you have the right machines, you cannot produce certain kinds of products. In the same way, unless you have the right kind of employees, you cannot provide the right kind of service.  In fact the employees are more complex than the machines : they have moods, they behave differently with different people, they behave differently under different bosses, they respond differently to different working conditions. They have all the advantages and disadvantages of being human. 

WHAT MAKES THE SERVICE BUSINESS WORK : As such, the leadership provided from the top is an extremely valuable input in the working of a service business. Some of the great service organizations have become so because of the way they 

• select employees
• induct them on the job
• train them
• motivate them
• provide social glue 
• recognize them
• incentivize them
• promote them
• develop them   

 You may have noticed that most of these things that are listed are not easily amenable to measurement. Therefore, the leaders in a service business need a different approach to their business. In product business the leaders can be driven by systems, structure and numbers but in a service business they need to be also sensitive to the individuality of people, sensing their motivations and moods and be able to create a "service culture" in their organization.

An exercise for you : how good are your people practices ?

is to ask yourself which of these people practices

your company is adopting?

Are your operations people involved in defining and selecting employees and training them - or is this left entirely to the HR department ? Do you select employees only based on their qualifications but do not check if they have the right attitude needed for service? Do you have good practices of identifying, motivating, recognising, incentivising, promoting and developing high potential employees?

PLANNING OF SERVICE MARKETING

In service business, the customers remember / perceive the quality of the service by the extent to which their expectations are met by the service provided. Therefore the main keys to ensure customer satisfaction are as follows and these are explained below in detail later: 

1.      Alignment of expectations

2.      Service design

3.      Service delivery mechanism

4.      Dealing with dissatisfied customers

5.      Reducing the service gap

Managing The Alignment of expectations

so that they can be exceeded during actual delivery creating customer delight which generates reputation and creates further business. This can be done by many practical ways  

• creating an admission / filtration process ensuring acceptance of only those customers whose expectations can be serviced properly against their expectation 
• communicating with the customers such that the expectations of the customers are brought in line with what can be delivered 
• rejecting the customers whose expectations cannot be met 

Having a Good service design 

in such a way that it meets or exceeds the expectations. The service design means having the right service-scape (Location, Layout, Equipment, Fittings, Furnishings, Signage, colors, Lighting, Temperature etc) which matches 3 types of expectations of (a) customers (b) employees (c) technical and legal demands.

Planning / executing good service delivery

means having the right marketing mix of 7Ps

standard 4 Ps of products 

o    Physical / Material product

o    Price 

o    Place (location)

o    Promotion  ( communication to attract customers, manage expectations and inform at site)

3 Ps of services 

o    People ( front line service providers, front line supervisors, leaders up the line)

o    Processes (of discovering needs, diagnosing what needs to be done, designing a solution and deploying the solution)

o    Proofs (because service is intangible, customers need evidence and proof)

Dealing with dissatisfied customers

Service being intangible, there is an ample scope for interpretation and subjectivity on both sides - provider and receiver - and hence complaints is a normal phenomenon in the marketing of services.  How complaints are handled is a very important part of service marketing. Complaints - if not handled well - can lead to loss of customers but if they are handled well, they can lead to customers who spread good word about the company. This is called service recovery.

Constantly trying to reduce the "service gap"

The customer's "gap" between expected service vis-a-vis actual service (dissatisfaction) can be explained on the service provider's side in terms of 4 gaps and the marketers need to constantly work on 4 fronts

1. Knowledge Gap : is between what the customer really wants vis-a-vis what the service provider thinks he wants
2. Planning Gap : is between what the service provider knows he must deliver
   vis-a-vis what he has planned to deliver
3. Delivery Gap is between what the service provider has planned to deliver
   vis-a-vis what he lands up delivering
4. Promise Gap is between what the service delivers  vis-a-vis what he promises to deliver.

An exercise for you : How well are you marketing?

is to ask yourself which of these marketing practices

your company is adopting?

• How well do you align the customer expectations to your ability to deliver through (a) an admission / filtration process (b) communicating with the customers (c) rejecting the customers.  
• How good is your service design and your service-scape? How will does it align with expectations of customers, employees and the technical and legal demands?
• How well planned is your product, Price, location, communications aimed to attract customers, manage expectations and signage at site, front line service providers, front line supervisors, leaders up the line, Process of discovering needs, process of diagnosing what needs to be done, process of designing a solution and the process of deploying the solution.
• Remember that the services in intangible. Do you provide a proof to the customers of having come to the right place, being in contact with the right people, having chosen the right product,  and having got the right output?
• Do you regularly monitor what are the “touch points” (positive encounters) and “Hot spots” (negative encounters)? How easy is it for your customers to complain and suggest? How well you undertake service recovery? Is there an effort to use customer feedback to improve your service?
• Do you constantly strive to reduce your knowledge gap? planning gap? Doing gap? And promise gap?

IMPORTANCE OF RIGHT PEOPLE IN SERVICE BUSINESS

An important point in service business is to recruit the right people in the first place who have a flair for the kind of service you are providing. In fact some argue that the people in service business be selected based on attitudes and not based on academic qualifications. Selecting the right people, inducting them, providing them leadership and motivation are important practices in improving productivity and efficiency.   

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SUMMARY OF WHAT YOU SHOULD KNOW

ABOUT SERVICES  

How is service different from products?

• Intangible : Products can be inspected before purchasing. Services cannot be inspected : they can be experienced or believed
• Inseparable : Pproducts can be produced in one place and transported to the customers : services are produced when the customer too is present
• Perishable : Products can be made at one location and time and sold in another location and time : Services are made only in response to customer demand and in her presence hence it is necessary for the customer to be present at the same location and time at the service location.

Is a tailored suit a product ? Is a vehicle loan a service ?

Service is crucially dependent on the service provider using his human skill / judgement / touch / process / talent in order to co-create / customize and result into a customer satisfaction. A product on the other hand is crucially dependent on using of right materials, processes and machines in order to efficiently manufacture a standard product that will lead to customer satisfaction. In most cases a real life product is a bundle of products and service.

1. The fabric is product but “tailoring” is a service : for many people the latter is more important : hence a tailored suit is largely a service : dependent on human skill / judgement / touch / process / talent.  
2.  The loan amount and interest rate is standard and does not depend on human skill / judgement/ touch / process / talent. The only service that matters is expediting of application and sanction. Hence a vehicle loan is largely a product.

Crucial dependence on human skill / judgement / touch / talent

Any business that crucially depends on human skill / judgement / touch / process / talent is a service business. It cannot be scaled up quickly because it means developing / training many  service providers who can be used in the business. On the other hand mfg businesses are easy to scale up because factories can be put up relatively faster and the production can be transported to different geographies. Service needs opening different locations and deploying trained staff in these locations. Examples of service businesses

1)      Restaurants ( Depends crucially on trained chefs and waiters )

2)      Schools ( Depends crucially on teachers )

3)      Hospitals ( Depends crucially on doctors and nurses )

4)      Ad agencies ( Depends crucially on copy writers and art directors )

5)      Theatre groups ( Depends crucially on actors, directors, dialogue writers )

6)      Army ( Depends crucially on brave soldiers and natural leaders )

In service : machines assist employees to serve customers

In products : workers assist machines to make products

3 qualities that customers want

1. “Search Qualities” can be pre-inspected before buying : “Product Qualities”
     Example : shirt, shoe, TV set
2. “Experience Qualities” can be felt during buying / use : “Service Qualities”
     Example : restaurant service, how well a singer sings, how well a teacher teaches
3. “Credence Qualities” : cannot be judged  even after purchase : “Faith Qualities”
     Example : Lawyer’s advice, surgical operation,

The “risk” of going wrong is the lowest in “1” and highest in “3”.

Products

• Products are designed for standard tasks ( non standard tasks need “solutions”)
• Products are pre-designed, pre-produced and transported.
• Quality of products depends on materials, machines and  processing.
• Mfg science reduces variations, facilitates flow of materials through work centres.
• Language : batch, assembly, specs,  rework, downtime, moulds, packaging, price list
• “Line of sight” with customers is poor

Service 

• Service is custom-designed-and-delivered designed for individual needs
• Service is co-created - designed and produced – in consultation with the customer
• Quality of service depends a lot on experiential and belief qualities
• Service focuses on readying to serve customers so as to bring smiles on their face
• “Line of sight” with customers is high among front liners

Language of service marketing : locations, parking, waiting, front office, back office, employee areas, collection, complaints, utilities, traffic, trained employees, difficult customers, recovery, intervention

Is Hindustan Lever a Product Company or a Service Company?

HUL makers products but its customers buy services along with them. HUL spends over 40% of its money on buying services for its customers ( advertising, transportation, distribution, retailing)

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B34C6
2 sessions on June 8, 2013

Main lessons : Profit opportunities hidden in the people costs in service businesses. How to capitalize on such opportunities.

We discussed the case of Coimbtore Financial Corporation Limited (CFCL) and the search for their CEO for the missing profit of Rs 61 Crores. In service business - where the costs related to the employees are #1 costs - it is necessary to consider "wastes" hidden in employee costs. 

For CFCL the main cost is of frontline sales employees and it is possible to think of 4 types of wastes: 

1. Loss of revenue - due to vacancies
   Because the organization has not been able to fill the position
2. Loss of revenue -  due to the employee being on bench
   Because the company cannot find work for an employee which costs every month
3. Costs that could have been saved - of recruitment and on-boardinglike the cost of advertising, communications, interviewing etc
   Only if the attrition was  not very high ( reasons for attrition are complex)
4. Costs incurred because the salespersons whose productivity is below breakeven.
   This could be due to two reasons:
   4A : Because the new recruits are under training ( side effect of attrition )
   4B : Tolerating low performance from trained sales persons (hoping against hope>)

Does this throw any light on where are the Rs 61 Crores hidden? The case data clearly shows that tackling attrition and improving the training itself would save more than Rs 61 Crores for the company

• The salary cost of 5000 front liners should have been 200 Crores - but the actual cost is Rs  250 Crores - means Rs 50 crores are being incurred extra - to pay the people who were with the company for less than 1 year ! (Note : we have no data about how many people contributed to this Rs 50 Crores. Was it 1250 people who stayed almost 1 year Was it 2500 people who stayed for 6 months ? Was it 5000 people who stayed for 3 months? We will not know based on the case data) But we know that for each person who left and for each vacancy several costs got incurred  - advertising, sorting out responses, calling selected people for interviews, shortlisting, reference checking, negotiating salaries, giving appointment letters etc. It is quite possible that, to fill the 2500 vacancies created during the year, the HR function may have had to handle the "recruitment funnel"
• 10000 shortlisted
• 8000   called for interview
• 6000   turned up for interview
• 4000   found suitable and appointment letters were sent
• 2500   actually joined

• And when these 2500 people joined and left without staying in the company, two additional costs got incurred
• The costs of their salaries and activity when they were under training (below break-even point) and hence not profitable for the company
• The costs of  discontinuity in the market (A) the lost sales revenue (B) Long term of effect of damaged relationships (C) errors that may happen when the person has not fully learnt through self experience.

It is evident that the solutions lie essentially in the two areas

1. Reducing the attrition
2. Reducing the "on-boarding period" when productivity is below par

This will result into less people recruited every year , less costs of recruitment and interviewing and administration, and of course even the costs pf travel, supervision and management will also come down. 

This is where Service Profit Chain model comes useful.
  

This shows that in service business, the "1st market" are the employees. Unless they are satisfied, the "external customers market" will not be satisfied.  And "marketing to the employees" is as important, if not more than,  "marketing to the external customers". And how to create value for this market? 

1. Leaders to exhibit vision, values, energy, openness, concern and discipline
2. workplace design, job design and latitude, selection and development processes,
   reward and recognition, communication &information
   and tools for servicing customers.

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2 sessions on June 9, 2013

Main lessons : the main value in a service business is produced by front line service providers. Being intangible, each service encounter - when the customer and provider meet and when service is produced on the spot in response to customer inputs - is subject to unique customer with unique  expectations chancing upon a unique provider - and everything depends upon the moment, the mood, the setting and the expectations. It is not easy to  anticipate what will happen. Instead of looking at an individual encounter and trying to correct it (as Ramnik Doshi in the case below does) it is best to follow good operating processes and practices. What are such practices? The class asked me about 4 specific practices and the answers were given as below.

The session began with the case of "Xeta Motor Car Company" which contained the daily diary of Ms Priya Jain.  The class gave many views and suggestions but my recommendation was that the problem should not be tackled at the individual episode level but at a systemic level and I introduced them to the concept of GOP (Good Operating Practice) in service business. In this context I gave the following sheet to the class and asked them to mark off 5 most important issues that are hurting their companies.

Exercise in Elective Service Marketing class

 Here are some of the issues where service organizations can improve their performance.

Select the 5 which apply in your company

1.   Front line service employees are inadequately prepared to meet the customers

2.   The “Moments of Truth” - neither observed by - nor reported to – the senior management

3.   More focus on transactions; and not relationships

4.   More focus on new customers; and not on old customers

5.   Not enough avenues for customers to give feedback : satisfaction or complains

6.   Managers avoid dealing with irate customers : it is left to the “complaints department”

7.   No management analysis of complaints :  no recovery; no improvement

8.   Servicescape does not take into account needs of (a) customers (b) employees (c) work

9.    The role is not well designed (a) workload (b) location (c) reporting (d) information

10.  The traits / personality of many service employees unsuitable for the job they handle

11.  Inadequate process of induction and training

12.  Inadequate reward and recognition programs

13.  Serving employees do not come to know all changes that affect their work

14.  Inadequate tools for servicing the customers

15.  Service offering is not linked to strategy / positioning

16.  Service standards are not customer driven

17.  Standard Operating Practice (SOP) not defined

18.  Maintenance of Servicescape not planned

19.  Poor fit of people with customers and technology

20.  Poor  Performance Measurement System

21.  Lack of empowerment and teamwork

22.  Customers who lack knowledge of their roles and scripts

23.  Customers negatively impact each other

24.  Problems with service intermediaries

25.  Demand and supply not matched.

26.  Internal marketing program is absent

27.  Inadequate customer education

28.  No attempt to manage all communications in a consistent and coordinated fashion

29.  Over-promising to customers

30.  Poor horizontal communication : sales ßà operations ßà communications

31.   Poor communication across units and branches

As a collective opinion of the class the following 5 issues emerged as being major for them 

Nearly half of the class had a problem that their existing focus was on transactional marketing and not on relationship marketing. My take is as follows :   Relationship marketing aims to increase (a) communication (b) personalization (c) rewarding right behaviors. Hence it is an expensive form of marketing and should be used only for those customers where the costs of all these activities will be worthwhile. For example, you may want to maintain relationship only with customers who will exhibit some or all of these characteristics (1) existing customers who exhibit record of high value purchases (2) existing customers who exhibit record of loyalty in terms of multiple purchases and providing referrals (3) potential customers who exhibit characteristics of becoming the above two types of customers.   

In other words you need to undertake the following steps even before you undertake CRM

1. Step 1 : You need to decide what data about your customers you need to capture in order to create, develop and maintain relationship - birthday, number of rooms, type of car owned, holiday habit, hobbies, purchases, contacts, referrals etc data
2. Step 2 : You need to implement the system so that you begin capturing the data each time the customer comes in touch with you
3. Step 3 : You need to analyze the captured data so that you can do ABC analysis so that the segment of specific customers with whom you want to develop relationship can be identified
4. Step 4 : you need to decide how will you differentiate between various types of customers and what communication, personalization and rewards you will offer to them. In fact you may want to create a separate wing within your company who focus their full attention only one one type of customers.
5. Step 5 is a continuous process of creating outbound campaigns to communicate the right messages to the right customers and continuously improve the effectiveness and efficiency.   

Apart from this "data base" side of CRM implementation, another important side is "internal enablement". You need to create a system inside your company so that every time the customer comes in touch with someone in your company, the concerned employee can quickly understand the classification of the customer and what concessions or offers can be given to the customer.  But please remember that personal data maintenance in computerized databases is a sensitive issue. Many companies have privacy policies these days and you may also want to formulate one. Also note that some customers will refuse to share some of their information  making it more difficult to take full advantage of the concepts behind customer relationship marketing. Protecting personal data is costly because electronic security measures must be executed. 

Nearly half of the class also had a problem that their companies do not analyze complaints  and hence lose out on a major source of data on improvements and innovations and also what needs to be fixed. My take is as follows :   To me the most important point is that the senior management of the company does not want to go anywhere near a complaining / irate customer. It is not a very pleasant experience for them and yet, if the complaint data is compiled and analyzed well, it can be a free gold mine of ideas which are a preserve of senior management 

• how the customer expectations are changing 
• what are the new expectations of the emerging customers
• what new product or services are needed 
• what is broken and needs to be fixed inside the company

To tap this gold mine you need to take following steps

1. Step 1 : Make it easy for a customer to complain 24 x 7 in whatever form he wants to : leave a telephonic message, write an e mail, go to an app on the net, call a call center etc.
2. Step 2 : You need to clearly allocate the responsibilities inside the company regarding fast response to these complaints. Many complaints can be guessed and answered systematically in terms of FAQs. Send circulars and conduct trainings. 
3. Step 3 : Two types of responses are needed for each complaint : one is from the front line and the second is from the management.
   • recovery response : the where front line employees intervene to see that the complaining customers is satisfied and - if the customer has left - they bring him  back. You can use a customer classification system (as mentioned under CRM above) to decide the type and speed of response to each complaint. 
   • preventive response : this is expected from the management : they analyze and think for each complaint : whether it shows a flaw in the internal system which needs to be fixed : or whether it shows a gap in the products / services which needs to be filled.

A well-implemented complaint collection and redressal system brings many and immediate benefits to the organization.

Again a large number of executives in the class saw that there was a problem of over-promise by the front line sellers. At the time of taking the order, many things were promised to the customer which will be difficult / costly to implement at the time of fulfillment. My take is as follows :   In most companies the sales force is trained mainly in the technical and product areas. The other, and equally important part of training, is not done as well. The sales force - or anyone who is likely to come in touch with potential / existing customers - need to be thoroughly trained in the types of customers they are likely to come across ( Buyer Personas) and what are their needs and behaviors. The actual steps and sequence of buyer needs / actions for each persona. What are the types of objections that can come from each type at each stage. A clear list of what the sales force is forbidden to take order without the superior's consent.

Lastly, many executives said that the standards of service that are set in their company are not as rich as the standards they set in the area of their product quality. My take is as follows :   This is clearly an area where the top management needs to be educated about the fact that, many times, the service is the real product.  For example, for a working housewife, a non working fridge is a disaster and she will not be able to live without it.  She may not care if a particular fancy feature (air circulation) is not there but a servicing time of more than one day is clearly not acceptable. Here, the service lead time is the real product.

The problem is that a product quality is more tangible and easier to see and achieve. Service quality is more difficult to visualize and bring about. 

Following are some of the important slides I showed :