2014-15 Services Management Course : PGDM : Full Credit : Planning

Class on December 31st, 2014
2 sessions 
INTRODUCTION TO SERVICES

Self and Course Introduction 

NATURE OF SERVICES 

• 3 sectors : service pie increasing : affluence leads to increase in services because there is an upper limit on how much service can be consumed. Maslow connection.
• Why study service ? (A) Max employment opportunities (B) Service can be distinguishing factor when products are commoditized 
• HUL is a "Product Company" ? 50% cost comes from services
• Product - Service Continuum
• Tailored suit vis-v-vis vehicle loan : product service continuum
• Differences between products and services

DIFFERENCES BETWEEN PRODUCTS AND SERVICES 

• A product can be made "operationally" even if the customer is absent and can be stored and transported and distributed. Services are produced in a different way : the high contact services need the presence of a customer who demands customization and co-creation. Products are made in absence of the customer hence they are standardized and efficiency oriented and for such companies the marketing concept and voice of customer becomes important in product business. Services 
• are made in presence of the customer and are therefore intrinsically customer centric.
• But a service 
• Have a service radius
• Product can be m 

Dushyant Training Company
The concept of encounters
Architecture of an encounter
Hint that the encounter can be analyzed through blueprint

Products are bought in units which are inventoried. Services are bought in encounters of duration.

Where is the value embedded. In product or in the encounter.

Class on January 2nd 2015
2 sessions 
HOW IS VALUE CREATED IN SERVICES

Encounters ( Facility : 3 types of logic, People : Selection .., Process....Proof..blue printing)
Marketing Mix ( People, Process, Proof)


Class on January 5th 2015
2 sessions 
SERVICE CLASSIFICATION
IMPORTANCE OF PEOPLE IN SERVICE
Case : Coimbtore Finance Corporation

8 Differences :  High & Low Contact Services 

It is clear that the "cost to serve" per person is higher in high contact service.

High contact service is effective (satisfying) but not efficient

High contact service needs "broad band" providers and deft handlng

High contact service difficult to scale up

Processing of

1.       Materials

2.      Bodies

3.      Minds

4.      Information

5.      Ideas

Where

1.       On customer site

2.      At service center

3.      Mobile place

What customers expect ?

Product	Factory : Material and Processes	Machines
Service	Labour	People : Physical
Expertise	Providing solution	Qualification, Experience
Facility	Sensory Experience,
Access	Location, Speed, Conv	Real Estate
Reputation	Capability surrogate
Platform	Network	Others
Image	Who others use it
Performance	Talent	Recruitment
Total time spent	End to end	Process

Coimbtore Case 

- Profit can be improved  by attrition

- draw the individual profile LOS x Productivity

- draw the pyramid of wasted cost due to attrition 

- draw the service profit chain model

  

Services Marketing Syllabus

SERVICE AS A BUSINESS IS DIFFERENT : Service is basically a different business as compared to the product business

• The P&L structure is different
• How the business expands is different
• Core competencies are different
• Ways of differentiation are different and ways of sustaining this differentiation is different
• Levers of top line and bottom line improvements are different
• Consumer behavior is different.
• Marketing Process , Techniques, Mix  are different
• How service quality is measured
• Classification and type of services
• How service business grows

HIGH AND LOW CONTACT SERVICE MODELS

• The value creation in "High contact" is highly subjective and happens during "service encounters" driven interactively by customers having complex needs and scripts. Thus "High Contact" services need service providers who need to respond to them in real time and undertake complex problem solving using DDDD loops. High contact business is crucially dependent on your being able to bring the right customers in front of right service providers within the right service scape - selecting the customers and managing their expectations is very important and so is training the service providers extensively and intensively. High contact business requires the presence of the customer who is a part of the process
• The value creation in "Low contact" services is driven, only to a limited extent, by the customers whose needs have been "pre-productized" ( First 3 Ds already known) and built into the system and only the last D (Deployment and Delivery) remains. Low contact business is dependent on having a good supply of people and space and a layout which promotes the right process which can be carried out efficiently. In fact it helps if the customer is not on the premises to interfere.

IMPROVING EXISTING SERVICE BUSINESS : Customer satisfaction can be improved by

• "The Gap Model" is essentially a way of developing operating procedures to increase customer satisfaction by "managing expectations" and then delivering according to those expectations by reducing the 4 gaps
• "Service Profit Chain Model" is a way of focusing on employees and treating them as being "the first market" that should be addressed by the company and indicates the leadership practices of recruiting, training, motivating and building the service providers
• "The service iceberg model" gives tips regarding how the front line supervisors can contribute to the service improvement.
• A good "Service recovery" process adds a lot of value to improving the business 

CREATING NEW SERVICE BUSINESS : This section focuses on

• Positioning of a service business
• Translating positioning into marketing mix
• Creating a service-scape for the intended business using the "3 Logics" model
• Creating a service blue print for planning and review and to identify touch points and hot spots