Service delivery-210420094116786453.pptx

Service delivery-210420094116786453.pptx

1. Service Delivery

2. References Services Marketing by Jochen Wirtz, Christopher Lovelock, Jayant Chatterjee; Services Marketing by Valarie A Zeithaml, Mary Jo Bitner, Dwayne D. Gremler , Ajay Pandit; Services Marketing by Prof M.K Rampal , Dr. Rajeshwari Malik; https://www.marketing-schools.org/types-of-marketing/services-marketing/ http://www1.ximb.ac.in/users/fac/MNT/mnt.nsf/23e5e39594c064ee852564ae004fa010/0f7c7e867eb152b465257011001ec050/$FILE/Services%20Marketing.ppt https://www.marketing-schools.org/types-of-marketing/services-marketing/ https://acquire.io/blog/customer-service-is-the-new-marketing/

3. Content Introduction to service delivery. The flow model of service distribution. What is being distributed. How should a service be distributed. Where should a service facility be located. The role of Intermediaries. Major intermediaries for service delivery. Conclusion.

4. Introduction The service because of inseparability characteristics are distinguished through channels which are most short and simple. The place or distribution of services refers to availability of a service. The following questions become important:- The place or distribution of services is discussed in light of these questions.

5. Distribution in Service Context What? How? Where? When? Responses to these four questions form the foundation of any service distribution strategy. They determine the customer’s service experience, which is a function of how the different elements of Flower of Service are distributed and delivered through physical and electronic channels. Information Consultation Order Taking Hospitality Safekeeping Exceptions Billing Payment CORE

6. Place: Distribution of Services 4 I’s of characteristics of service (i.e., intangibility, inventory, inconsistency and inseparability ) have led to the typical form of availability of service for distribution. The service are simply rented or consumed . This make it essential for availability and accessibility before consumption . This need a distribution system. The distribution system may be defined as channels or means used by which the service provider gains access to potential buyers of the service product.

7. Place: Distribution of Services (Cont.…) Before the formulation of channel structure following aspects of service distribution must be taken into consideration: Actual tangible product which is being distributed. It involves consumer’s movement to the service location. As consumer is part of the service operation, the method of selling and environment within which service product purchase is made becomes part of service experience. The intermediaries/agents play a key role in recommending services to consumers. The service organization has to devise promotional/distribution strategies suiting customer coming directly, through agents or other modes.

8. The Flow Model of Service Distribution

9. WHAT “What flows through the channel?” Information & Promotion flow (e.g., promotional materials) Negotiation Flow (e.g., make a reservation or sell a ticket). Product Flow (e.g., core & remaining supplementary services) HOW “How Should services reach the customer?” 1. Customer visit the service site. 2. Service providers go to their customers. 3. Transaction is conducted remotely (e.g., via the internet, telephone, mail, and mail) 4. Channel integration is key. Where “Where should service be delivered?” 1.Strategic location consideration(e.g., customer needs and type of service). 2. Tactical considerations (i.e., specific location characteristics). 3. Location constraints (e.g., due to required economies of scale). When “When Should services be delivered?” 1.Customers needs. 2. Economics of incremental opening hours (fixed vs. variable cost. 3. Availability of labor. 4. Use of self-service facilities.

10. Intermediaries “What task should be delegated to Intermediaries?” Roles Benefits Cost (e.g., of franchises, agents and distributors) Distribution Service Internationally “How should the service be distributed?” Export the service concept Import customers/possessions Delivery remotely Entering International Markets “How can the value-add be protected?” Export the service Licensing, franchising, joint venture Foreign direct investment

11. What is Being Distributed?

12. In a typical service sales cycle, distribution embraces three interrelated flows, which partially address the question of what is being distributed:

13. Core Services A service that is the primary purpose of the transaction. It actually brings value to the customers. It’s a service which is KEY from organization’s perspective as well. E.g., for banking customers, the core services will be provided will be all financial services. Core Services may vary from industry to industry. Supplementary service may be a Core Service for some businesses. E.g., Providing customer support service is supplementary service for Banking Industry but it’s a Core Services for BPO firms which provide customer assistance support to other Industries.

14. Supplementary Services The additional services offered by organizations to augment the core product/service are called supplementary services. The kind of supplementary services offered by organizations differs from one service industry to another. According to Lovelock, different supplementary services can be clustered under eight heads. The eight heads are consultation, hospitality, safe-keeping, information, order-taking, exceptions, billing and payment. Some supplementary services like information and order-taking facilitate effective utilization of the core-service by customers while some supplementary services like hospitality and safe-keeping augment the core product/service.

15. Supplementary Services (Cont..) The use of supplementary services in organizations requires managers to make difficult choices and decisions. Some of the implications of supplementary services for managers are designing special packages, outsourcing of non-core services and converting supplementary services into core services. Sometimes, organizations develop the necessary expertise in a particular supplementary service so that they can adapt it to be a core service. They can increase their revenues by rendering this service to other organizations which prefer to outsource it.

16. How Should a Service be Distributed?

17. In this a key question is: Does the service or the firm’s positioning strategy requires customers to be in direct physical contact with its personnel, equipment, and facilities or not? If so, do customers have to visit the facilities of the service organization, or will the service organization and personnel and equipment to Customers own sites? Alternatively, can transactions between provider and customer be completed at arm's length through the use of either telecommunications or physical channels of distribution? For each of these three option, should the firm maintain just a single outlet or offer to serve customers through multiple outlet at different locations?

18. Nature of Interaction Between Customer and Service Organization Availability of Service outlets Single Site Multiple Sites Customer goes to service organization Theater Car Service Workshop Café house chain Car rental Chain Service Organization comes to customer House Painting Mobile car wash Mail Delivery Auto Club Road Delivery Customer and Service organization transact remotely (mail or electronic communication) Credit card Company Local TV stations Broadcast network Telephone Company

19. Customers Visit the Service Site When customers have to visit the service site, key factors that need to be considered include cost (e.g., rental), customer catchment areas, and the convenience of service outlet locations for customer.

20. Service Providers Go to Their Customers For some types of services, the service provider visits the customer. They must visit the customer's site because the need is location-specific . When should service providers go to their customers? Going to the customer's site is unavoidable whenever the object of the service is some immovable physical item such as installed machinery to be repaired, or a house that requires pest control treatment.

21. Service Providers Go to Their Customers (Cont..) In other instance, going to the customer is optional. because it’s more expensive and time-consuming for the service firm to send personnel and their equipment to travel to the customer than vice-versa. There may be a profitable niche in serving individuals who are willing to pay a premium for the convenience of receiving personal visits or home delivery. Such as some doctors built business around house calls to visit see the patient, as customers are glad to pay extra for service that not only saves the time but is less stressful for the patient.

22. The Service Transaction is conducted Remotely Development in telecommunication, online technology, and sophisticated logistics solutions have spurred many new approaches to service delivery. A customer may never see the service facilities or meet service personnel face to-face when dealing with a service firm through remote transactions. Service encounters with service personnel are more likely via a customer contact centre. mail, email, chat, or Twitter, and should physical products, documents or other tangibles (e.g., credit cards or membership cards) need to reach a customer, logistics providers offer service firms integrated, reliable, and cost-effective solutions.

23. The Service Transaction is conducted Remotely (Cont.…) When we look at the eight petals of the Flower of Service, no fewer than five supplementary services are information based. Information, consultation, order-taking, billing, and payment (e.g., via credit card) can all be transmitted using online channels. Even service businesses that involve physical core products, such as retailing and repair, are shifting delivery of many supplementary services to the Internet, closing physical branches, and relying on speedy business logistics to enable a strategy of arm's-length transactions with their customers. Information Consultation Order Taking Hospitality Safekeeping Exceptions Billing Payment CORE Information process Physical process

24. Web and app-delivered services are becoming increasingly sophisticated, but also more user-friendly. They often simulate the services of a well-informed sales assistant in steering customers toward items that are likely to be of interest. Some even provide the opportunity for "live" email or chat dialog with helpful customer service personnel. Facilitating searches is another useful service on many sites, ranging from browsing available books by a particular author, to finding flight schedules between two cities on a specific date, Important factors that attract customers to use online services are: Convenience. Ease of search (obtaining information and searching for desired items or services) A broader selection. Potential for better prices 24/7 service with prompt delivery This is particularly appealing to customers whose busy lives leave them short of time.

25. Channel Preference Vary Among Customer The use of different channels to deliver the same service not only has vastly different cost implications for a service organization, it also drastically affects the nature of the service experience for the customer. Banking services, for instance, can be delivered remotely through computer mobile phone, a voice response system, a call centre, ATMs face-to-face in a branch, and through a direct visit to a wealthy customer's home in the case of private banking. Although electronic self-service channels tend to be the most cost-effective, not all customers like to use them. This means that if we want to migrate customers to new electronic channels, we may require different strategies for different segments. We also need to recognize that some proportion of customers will never voluntarily change from their preferred high-contact delivery environments.

26. Channel Preference Vary Among Customer (Cont..) Recent research has explored how customers choose among personal, impersonal, and self-service channels and has identified the following key drivers: For complex and perceived high risk services people tend to rely on personal channels. For example, customers are happy to apply for credit cards using remote channel, bur prefer a face-to-face that action when obtaining mortgage. Individuals with higher confidence and knowledge about a service and/or the channel are more likely to impersonal and self-service channels. Customers who look for the functional aspects of a transaction prefer more convenience. This often means the use of impersonal and self-service channel. Customer with social motives tend to use personal channels. Convenience is a key driver of channel choice for the majority of consumer Service convenience means saving time and effort rather than saving money A customer's search for convenience is not just confined to the purchase of core products but also extend to convenient times and places. People want easy acres to supplementary services too- especially information, reservations. and problem solving.

27. Channel Integration is Key

28. Finally:

29. Where Should a Service Facility be Located?

30. Today’s consumer is convince oriented, a good location is essential when the service is distributed directly from originator to consumer. Some service marketers, in an attempt to reduce inseparability factor, have broadened their distribution base by extending their locations. E.g., ATM’s are located at various places at convenient location, away from the main bank to facilitate service delivery. Many courier companies have opened distribution and collection centers at different parts of the city. Health care organizations provides mobile units for X-Rays, blood examination through mobile vans. Delhi Public Library has set up a mobile library which is covering various parts of Delhi. Indian Oil Ltd. started a mobile services for providing fuels at your doorsteps.

31. How then should service managers make decisions on the places where service is delivered? Frequently, a two-step approach is used:

32. Strategic Location Consideration The site location is an integral part of the overall service strategy, it must be at a location that is consistent with its marketing strategy and target segments for an extended period of time. To develop a location strategy, start by understanding customer needs and expectations, competitive activity, and the nature of the service operation. T he distribution strategies used for some of the supplementary service elements may differ from those used to deliver the core product itself. For instance, as a customer, you're probably willing to go to a particular location at a specific time to attend a sporting or entertainment event. But you probably want greater flexibility and convenience when reserving a seat in advance, so you may expect the reservations service to be open for extended hours, to offer booking and credit card payment by phone or the Internet, and to deliver tickets through postal or electronic channels.

33. Strategic Location Consideration (Cont..) In general, firms have to trade-off between ease of access and convenience for their customers versus the cost of providing that access and convenience! Markets can often be segmented by accessibility preferences and price sensitivity. There will always be segments that are willing to pay premium for ease of access and convenience (even if that applies only to certain consumption situations such as the occasional pizza TV dinner at home for home delivery services), and segments that are willing to travel and spend time for a lower price.

34. Tactical Location Considerations In the second step for selecting a specific site, key factors that need to be considered include: Population size and characteristics (i.e., to assess the density and number of target customers that could be served with this site). Pedestrian and vehicular traffic and its characteristics (i.e., to assess the number of target customers passing a site that could be served with this outlet). Convenience of access for customers (e.g., public transportation, availability of parking). Competitors in this area. Nature of nearby businesses and stores. Availability of labour. Availability of site locations, rental costs, and Contractual conditions (e.g., length of lease, legal restrictions) and regulations (e.g., on zoning and opening hours).

35. Locational Constraints Airports, for instance, are often inconveniently located relative to traveller’s homes, offices, or destinations. Because of noise and environmental factors, finding suitable sites for construction of new airports or expansion of existing ones is a very difficult task. But to make airport access more convenient the DMRC installed fast rail link like the Airport express line. Major hospitals offer many different healthcare services at a single location, requiring a very large facility. Customers requiring complex, in-patient treatment must go to the service factory rather than be treated at home. However, an ambulance or even a helicopter - can be sent to pick them up. Medical specialists, as opposed to general practitioners, often find it convenient to locate their offices close to a hospital because it saves them time when they need to treat their patients. Although customer convenience is important, the need for economies of scale and operational requirements may restrict choice of locations.

36. Innovative Location Strategies Innovative distribution strategies can be at the core of powerful new service models. M ini-stores and related location strategies, and locating in multi purpose facilities are one of the best examples for Innovative location strategies. Mini-stores. An interesting innovation among multisite service businesses involves creating numerous small service factories to maximize geographic coverage Examples include: Automated kiosks are one example. ATMs offer many of the functions of a bank branch within a self-service machine that can be located within stores, hospitals, colleges, airports, and office buildings. Automated vending machines for stamps purchase and payment of bills is another example

37. Innovative Location Strategies (Cont..) Another approach results from separating the front and back stages of the operation Taco Bell's innovative K-Minus strategy involves restaurants without kitchens Food preparation takes place in a central location. The meals are then shipped to restaurants (which can now devote more of their expensive floor area to customer use) and to other "points of access" (such as mobile food carts), where the food can be reheated before serving. Increasingly, firms offering one type of service business are purchasing space from another provider in a complementary field. Perhaps you've noticed small bank branches inside supermarkets, and food outlets such as Dunkin Donuts and Subway sharing space with a fast-food restaurant such as Burger King.

38. Innovative Location Strategies (Cont..) Locating in Multi-Purpose Facilities: The most obvious locations for consumer services are close to where customers live or work. Modern buildings are often designed to be multi-purpose, featuring not only office or production space but also services such as a bank (or at least an ATM), a restaurant, a hair salon, several stores, and maybe a health club. Some companies even include a children's day-care facility to make life easier for busy working parents. The most obvious locations for consumer services are close to where customers live or work. Modern buildings are often designed to be multi-purpose, featuring not only office or production space but also services such as a bank (or at least an ATM), a restaurant, a hair salon, several stores, and maybe a health club. Some companies even include a children's day-care facility to make life easier for busy working parents.

39. The Role of Intermediaries

40. The next part is Who should be involved in delivering which part of the service. (i.e., information, negotiation, and the core and remaining supplementary services) to the customer. Should a service organization deliver all aspects of its service itself, or should it involve intermediaries to take on certain parts of service delivery? In practice, many service organizations find it cost-effective to outsource certain aspects of distribution. There are three types of participants, i.e., service provider, intermediaries and customers. All the organizations or people participating in distribution process are known as channels of distribution. Direct channel of distribution is common for some of the services while in services additional channels are used to achieve better growth and to fill the unutilised capacity. Intermediaries are now playing an important role in delivering the services.

41. Splitting Responsibility for Service Delivery The core product and certain supplementary elements such as information, consultation, and exception are delivered by the original supplier. The delivery of other supplementary services is delegated to an intermediary to complete the offering as experienced by the customer. In other instances, several specialist outsourcers might be involved as intermediaries for specific elements. The challenge for the original supplier is to act as the guardian of the overall process, ensuring that each element offered by the intermediaries fits the overall service concept in order to create a consistent and seamless branded service experience.

42. Splitting Responsibility for Service Delivery (Cont..) CORE CORE CORE As Created by Originating Firm As Enhanced by Distributors As experienced by Customers Core Products with some supplementary services Supplementary Services Total experience and Benefits

43. Benefits & Cost of Alternative Distribution Channel In addition to outsourcing certain tasks to intermediaries, they are frequently used to achieve reach and generate business. Each channels offers different benefits and also has vastly different costs. The lowest cost distribution channel would b the service firm’s own website. The most expensive channels are often online distribution

44. Key Hospitality Industries Customers Hotels Cruise Lines Airlines Car Rental Theme Parks Entertainment Restaurants Alternative Sales Channels in Hospitality Industry Tour Operator Travel Agent Travel Agent Tour Operator Online Intermediary Direct Sales via Local Operations

45. The Role and Value-add (i.e., benefits) and costs of every intermediary has to be carefully considered when designing a firm’s distribution strategy.

46. Major Intermediaries for Service Delivery

47. Major Intermediaries for Service Delivery

48. Franchising It is a type of contractual vertical marketing system that involves a continuing relationship in which a franchisor (parent company) provides the right to use a trademark plus various forms of management assistance in return for payments from franchisee (the owner of the individual business unit). The Franchise System in the combination of franchisor and franchises.

49. Types of Franchising Product Franchise : Manufacturers use the product franchise to govern how a retailer distributes their product. The manufacturer grants a franchisee the authority to distribute goods by the manufacturer. The franchisee must pay a fee or purchase a minimum inventory of stock in return for these rights. Examples or Product Franchises include Baskin Robbins, Ford Motors Company.

50. Types of Franchising Business Format Franchising: The business format franchisee also gets to use the franchisor’s trademark, but more importantly, it gets the entire system to operate the business and market the product and/or service. The franchisor offers a detailed plan and procedures on almost every aspect of the business, provides initial and ongoing training and support. The company will usually provide a significant amount of assistance to the business owner in starting and managing the company. The franchisee pays a fee or royalty in return.

51. Types of Franchising Manufacturing Franchises: These types of franchises provide an organization with the right to manufacture a product and sell it to public, using the franchisor’s name and trademark. This type of franchise is found most often in the food and beverage industry but can be applied to other industries

52. Agents & Brokers Unlike merchant wholesaler, agents and brokers do not take title to the merchandise. In service environment, their primary function is to sell services, in return for which they get a commission from the service provider. Agents Agents are wholesalers that do not take title of products. They work for commission or fee as payment for their services and are comprised of manufacturers/service provider’s agent, selling agents and commission merchants.

53. Services Providers Agents They work for two or more related services from non competing service creators in a specific geographic territory. E.g., a travel agent represents all Airlines and does the booking for passengers travelling by Airlines for a fee or commission and may also provide booking for tour related services for a tour operator. A service may employ agents (LIC Agents) each with a unique product-territory mix. Agents have limited association with the marketing program or price structure of the service.

54. ii) Selling Agents Selling agents sell full range of services of a service provider and are responsible for all aspects of marketing of those services under a contractual agreement. In fact they are empowered to negotiate on behalf of the service providers. They perform the function of wholesaling without taking the title of the product. They mostly work for small firms. e.g., A travel agent who is authorized selling agent of a hotel may negotiate a block booking on behalf of the hotel under contractual obligation.

55. Brokers Brokers do not have any affiliation with any particular service provider. They specialize in certain areas and bring buyers and seller together to negotiate the contract. E.g., real estate broker does not have the title of the property but brings, property owner who wants to sell and a customer who wants to buy, together for negotiation. He gets a fee/commission of their deal. A broker may represent many non-competing brands in a metropolitan area. Brokers are very common in financial service industries. E.g., Commercial stock brokers are licensed sales representatives who advise business client, take orders and then acquire stocks for the clients. For these services, they get the brokerage or commission.

56. Electronic Channels Number of technological advances have taken place due to immense use of EDI (Electronic data interchange). These advances led to: Increased use of self service operations e.g., many marketing firms have put their services on the website and those who need get it by self service e.g., all publishers have a website giving details of the books published. Providing data bank services e.g., a service provider may require information to make a mailing list to target a specific audience. Electronic banking, m-banking, app-based banking. Online booking, online payment cancellation etc..

57. Electronic Channels (Cont..) Distribution of service through electronic channel is without any direct human interaction because services are distributed through a service distribution system. This channel requires a pre-designed service and system to deliver it. Delivery of service through alternate channels, like ATMs , Call centers, Internet and Kiosks is growing at an ever-increasing pace.

58. Conclusion What? How? Where? When? Responses to these four questions from the foundation of any service distribution strategy. The customer’s services experience is a function of how the different elements of services are distributed and delivered through selective physical and electronic channels. In addition to “what” and “how”, service marketing strategy must address issues of place and time, paying as much attention to speed, scheduling, and electronic access as to the more traditional notion of physical location. Here, the rapid growth of the Internet and broadband mobile communications is especially exciting for service firms, and many elements of service are informational in nature.

59. References Services Marketing by Jochen Wirtz, Christopher Lovelock, Jayant Chatterjee; Services Marketing by Valarie A Zeithaml, Mary Jo Bitner, Dwayne D. Gremler , Ajay Pandit; Services Marketing by Prof M.K Rampal , Dr. Rajeshwari Malik; https://www.marketing-schools.org/types-of-marketing/services-marketing/ http://www1.ximb.ac.in/users/fac/MNT/mnt.nsf/23e5e39594c064ee852564ae004fa010/0f7c7e867eb152b465257011001ec050/$FILE/Services%20Marketing.ppt https://www.marketing-schools.org/types-of-marketing/services-marketing/ https://acquire.io/blog/customer-service-is-the-new-marketing/