Chapter 5 (1).pdf delivery process slideshare
- 2. 14-2 Learning Outcomes: • Examine the modes of service distribution in the modern context • Analyze the employee’s role in services delivery process of organizations • Evaluate the customer’s levels of participation in service production and delivery using examples • Ascertain the methods in managing customers as partial employees to increase productivity in service delivery process.
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- 4. 14-4 Service Distribution Direct Delivery Of Service. Delivery of Service through Intermediaries
- 5. 14-5 Direct Delivery of Service • Services are generally intangible & experimental in nature. • It allows the service principal (service producer) to deliver the service directly to the customer. • Example-IBM Global Services.
- 6. 14-6 Delivery of Service through Intermediaries • Intermediaries often deliver services & perform several imp. functions for service principals (service producer). • Services such as haircutting, dry cleaning, etc are produced by the intermediaries (the franchisee) using the process developed by the service principal. • The primary types of intermediaries used in service delivery are franchises, agents, brokers and electronic channels.
- 7. 14-7 Direct or Company–Owned Channels • In this services are distributed directly from provider to the customer. • Some of these are local services–doctors, dry cleaners and hairstylists (their area of distribution are limited). • Others are national chains with multiple outlets but are considered direct channels because the provider owns all the outlets. • Example- Starbucks, the popular chain of coffee shops in United States.
- 8. 14-8 Advantages Advantages & Disadvantages • The company has the complete control over the outlets and can maintain consistency in service provision. • Standards can be established & will be carried out as planned as the company itself monitors & rewards proper execution of the service. • A final benefit of the company-owned channels is that the company owns the customer relationship.
- 9. 14-9 Advantages & Disadvantages • The company must bear all the financial risk. • When expanding, the firm must find all the capital. • Partnering or joint venture is almost always preferred to company-owned channels. Disadvantages
- 10. 14-10 • Information and promotion flow — distribution of information and promotion materials relating to the service offer. • Negotiation flow — reaching an agreement on the service features and configuration, and the terms of the offer, so that a purchase contract can be closed. The objective is often to sell the right to use a service (e.g., sell a reservation or a ticket). • Product flow— many services, especially those involving people processing or possession processing, require physical facilities for delivery. What is being distributed?
- 11. 14-11 How should a Service be distributed? Three options are: 1. Customers Visit the Service Site 2. Service Providers Go to Their Customers 3. The Service Transaction Is Conducted Remotely
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- 19. 14-19 Channel as Partnership Cooperation Collaboration Relationship Marketing Coordination
- 20. 14-20 Franchising • A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system.
- 21. 14-21 Agents And Brokers • An Agent is an intermediary who acts on behalf of a service principal (such as real estate agent) or a customer and is authorized to make agreements between the principal and the customer. • A Broker is an intermediary who brings buyers and sellers together while assisting in negotiation. Brokers are paid by the party who hired them, rarely become involved in financing or assuming risk and are not long- term representatives of buyers or sellers. • Examples- Real estate brokers, Insurance brokers, Security brokers.
- 22. 14-22 Electronic Channels • Electronic channels are the only service distributors that do not require direct human interaction. • Examples- Telephone, Television channels, Internet and Web.
- 23. 14-23 Benefits • Consistent Delivery for standardized services. • Low Cost. • Customer Convenience. • Wide distribution. • Customer choice and ability to customize • Quick Customer feedback
- 24. 14-24 Challenges • Price Competition. • Changes in Consumer Behavior. • Security Concerns. • Refusal to deal. • Exclusive Territory.
- 25. 14-25 CUSTOMER COMPANY Service delivery Gap 3: The Service Performance Gap Customer-driven service designs and standards Provider Gap 3 11-25
- 26. 14-26 Key Factors Leading to Provider Gap 3 11-26
- 27. 14-27 Employees’ Roles in Service Delivery 11-27 Staff members play a big role in the creation of the competitive advantage of the company. To make the exercise of creating a competitive edge effective, it is the responsibility of the service delivery. Front-end executives are regarded as the most valuable resource for any service firm and are thus the most equipped to establish and maintain a competitive edge.
- 28. 14-28 CUSTOMERS’ ROLE IN SERVICE DELIVERY 1. Service is all about experience. 2. In “ The future of competition” Venkat Ramaswamy says active customer interaction creates a far higher value than a static product offer. Its not just about putting customer at the centre, but experience. Its about creating value together.
- 29. 14-29 CUSTOMERS’ ROLE IN SERVICE DELIVERY 3. Service delivery is all about customer driven approach, unlike the 4P’s approach which is product driven focusing on 4A’s : Awareness, Availability, Accessibility, Affordability • Customers play a very vital role in successful delivery of service as customers are often present in the place where service is produced (Delivered) • Customers alone can influence whether the delivered service is as per customer defined specifications. • Other customers who are present in the Service scape can also influence the Service positively or negatively.
- 30. 14-30 Customer Roles in Service Delivery Productive Resources Contributors to Quality and Satisfaction Competitors
- 31. 14-31 Customers as Productive Resources • “partial employees” – contributing effort, time, or other resources to the production process • customer inputs can affect organization’s productivity • key issue: – should customers’ roles be expanded? reduced?
- 32. 14-32 Customers as Contributors to Service Quality and Satisfaction • Customers can contribute to – their own satisfaction with the service • by performing their role effectively • by working with the service provider – the quality of the service they receive • by asking questions • by taking responsibility for their own satisfaction • by complaining when there is a service failure
- 33. 14-33 Customers as Competitors • customers may “compete” with the service provider • “internal exchange” vs. “external exchange” • internal/external decision often based on: – expertise – resources – time – economic rewards – psychic rewards – trust – control
- 34. 14-34 Levels Of Customer Participation
- 35. 14-35 THE IMPORTANCE OF CUSTOMERS IN SERVICE DELIVERY Low: Consumer Presence Required during Service Delivery Products are standardized Service is provided regardless of any individual purchase Payment may be the Only required customer Input. End Consumer Examples Airline travel Motel stay Fast-food restaurant Business–to Business Customer Examples Uniform cleaning service Pest control Interior greenery maintenance service Moderate: Consumer Input Required for Service Creation Client inputs customize a standard service Provision of service requires customer Purchase Customer inputs ( information materials) Are necessary for an adequate outcome, but the service firm provides the service Haircut Annual Physical exam Full-service restaurant Agency created advertising Campaigning Payroll service Freight transportation High: Customer Co creates the Service Product Active client participation guides the customized service. Service cannot be created apart from the customer’s purchase and active participation. Customer inputs are mandatory And cocreate the outcome. Marriage Counseling Personal training Weight reduction program Major illness or surgery Management consulting Executive Management seminar Installation of computer network. Level of Customer Participation:
- 36. 14-36 LEVEL OF CUSTOMER PARTICIPATION • The level of participation of customers varies from Service to Service. • In “High level of participation.” Eg. B to B projects like providing software solutions & consultancies. • In “Moderate level of participation” customers inputs are necessary to facilitate effective delivery of service.
- 37. 14-37 LEVEL OF CUSTOMER PARTICIPATION • In entertainment service very “low level of participation” is required. Service provider provides the Service & only the customer’s presence is required to avail the service • In many Service deliveries other customers also affect the service delivery in a positive or negative way. This can influence the customer’s perceptions of Service quality and affect customer satisfaction.
- 38. 14-38 HOW CUSTOMERS WIDEN GAP 3 • Lack of understanding of their roles • Not being willing or able to perform their roles • No rewards for “good performance” • Interfering with other customers • Incompatible market segments
- 39. 14-39 STRATEGIES FOR ENHANCING CUSTOMER PARTICIPATION
- 40. 14-40 STRATEGIES FOR ENHANCING CUSTOMER PARTICIPATION Define customers’ job 1. Helping oneself: through active participation, customers may become productive resources. 2. Helping others: mentoring programs in university. 3. Promoting the company: recommendation 4. Individual differences: not every one want to participate
- 41. 14-41 STRATEGIES FOR ENHANCING CUSTOMER PARTICIPATION Recruit, educate and reward customers 1. Recruit the right customers who are comfortable with roles and communicate responsibilities. 2. Educate and train customers through socializing org. values, abilities and skills, customer orientation (universities), customer education (hospitals) and customer information (McDonald's) 3. Reward customers for their contributions 4. Avoid negative outcomes of inappropriate customer participation
- 42. 14-42 STRATEGIES FOR ENHANCING CUSTOMER PARTICIPATION Manage the customer mix Compatibility management: a process of first attracting homogeneous consumers to the service environment, then actively managing both the physical environment and customer to customer encounters in such a way as to enhance satisfying encounters and minimizing dissatisfying customers. Strategies: 1. Homogeneous customers 2. Locational proximity 3. Codes of conduct ( dresses and smoking attitudes)
- 43. 14-43 Customers as Partial Employees