SMB I
SMB I
Chapter
1. Evolution and Growth
Evolution and the Growth of the Service Sector - 1.1; Activities Coming
under Services 1.3; the Crawling Out Stage (Prior to 1980) 1.4:
Scurrying about Stage (1980-85) 1.4; Walking Erect Stage (from
1986) 1.4; Reasons for the Growth of the Service Sector-1.5;
Demographic changes 1.5; Economic Changes 1.5; Social changes
1.6; Political and Legal changes 1.6; Technological changes 1.7;
Impact of social environment on the growth of Services Marketing 1.7;
Impact of social environment on the growth of Services Marketing 1.7;
Significance of Services Marketing 1.8; Generation of employment
opportunities 1.8; Optimum Utilization of Resources 1.9; Capital
Formation 1.9; Increasing the Standard of Living 1.9; Use of
Environment-friendly Technology 1.10; Summary 1.10; Objective
Type Questions 1.11; Review Questions 1.13.
2. The Concept of Services
Meaning and Definition of Services 2.1; Components of Service 2.3;
The Physical product 2.4; Service product 2.4; Service Environment
2.5; Service Delivery 2.5; Characteristics of Services 2.6;
Intangibility 2.7; Inseparability 2.7; Heterogeneity (Individuality or
Variability) -2.9; Perishability 2.9; Ownership 2.10; Absence of
Quantitative measurement 2.10; Classification of Services 2.10;
Classification of Services by Adrian Payne 2.11; Classification of
Services by Christopher Lovelock 2.11; Nature of Service Act 2.11;
Type of relationship a service organization should have with customers
2.12; Relationship with Customer Nature of Delivery System 2.13;
Scope for Customization and Judgment in Delivery System 2.13;
Nature of demand and Supply for the Service 2.13; Methods of
Services 2.14; Consumer Service 2.14; Industrial Services 2.14;
Classification of Services 2.15;Philip Kotlers Classification of Services
2.16; Differences between Goods and Services 2.17; A Comparison
between Services and Goods 2.22; Summary 2.24; Objective Type
Questions 2.24; Review Questions 2.26.
3. Service Design
Design and Delivery Components 3.1; Factors to be considered in
Designing Service Process 3.3; guiding Principles in Service Design
3.5; Management model for the service design 3.7; Services Marketing
System 3.10; The Service operation system 3.12; The Service
delivery system 3.13; Basic technological decision - 3.15; Conversion
The evolution of services marketing may also be studied from the view
points of Fisk, Brown and Bitner. They have identified the following stages in
the evolution of services marketing.
1. The Crawling out Stage (prior to 1980)
2. The Scurrying about Stage (1980-86)
3. The Walking Erect Stage (From 1986 onwards)
1. The Crawling Out Stage (Prior to 1980)
The first and foremost stage in the evolution of services
marketing is known as Crawling out stage. During this stage, the
existence of a distinct body of literature was found imperative in order
to solve the problems in the service sector. Services marketing suffered
from the paucity of marketing theories. The marketing strategy that
could serve the specific need of services sector was not existing.
According to Donnelly, there are vast differences between the channels
used for services and those used for physical goods. The argument that
the service organizations need not have separate body of theory was
found baseless. The increased competition generated by the
Multinational Corporations called for the application of modern
marketing principles in service organization. They were convinced that
then only they could grow and make a significant contribution to the
economic development. It is in this context, the experts thought in
favour of practicing marketing principles in service sector.
2. Scurrying about Stage (1980-85)
Having realized the importance of application of modern
marketing principles in service organizations, adequate attention was
paid to the crucial issues of managing quality in service operations.
Zeithaml, Berry and Parasuraman developed a pioneering model known
as Gaps Model for services. The interpersonal aspects of service,
relationship marketing and international marketing were the other areas
found relevant to services marketing. Marketing mix (price, place,
promotion. People, process, physical evidence) was developed by
Dooms and Binter by taking into account the distinctive characteristics
of services in the crawling out stage, the study of characteristics of
have paved the way for the growth of old age homes, health care
centres, nursing, tourism and hospitality services. Apart from
these, there has been a structural shift among people. Migration
of people form rural areas to urban areas has led to the
development of new towns of regions. This has increased the
need for providing infrastructure and support services. Since
1960s, services of numerous varieties have emerged. Hotels and
restaurants, beauty parlours and laundries, lodging, transport,
insurance, banking finance, communication (telephone and
postal), advertising and promotion, engineering, consultancy
services, tourism and travel and many other professional
services have grown in importance due to demographic changes.
(2)Economic Changes
The economic factors play a crucial role in the development of
the service sector. With the advent of globalization of business,
the world market has grown fast. The internationalization of
service companies has created a greater demand for services
such as communication, transport and information services.
Airlines and Air cargo companies which were predominantly
domestic have established extensive foreign route networks.
Besides the above, advertising agencies, hotel chains, fast food
restaurants, car rentals, accounting firms etc., operate on
several continents.
The revolution in information technology has also contributed to
the tremendous growth of the service sector. The IT sector is
contributing substantially to customers of late. In India, even a
common man can have access to facilities such as internet,
Multimedia and various computer applications now. This demand
for vital services has encouraged the Growth of professional
units engaged in services marketing. Thus, economic changes
have led to the development of specialized services and their
marketing as a distinct part of the every economy.
(3)Social Changes
The increased role of women in the workforce has led to the
growth of several services. Working women supplement the
income level of the family. With the increased income, the
demand for child care services, travel, beauty parlours, fast food,
etc., has increased. A part from this, twin-income households
demand consumer services including retailing, real estate and
personal financial service. International travel for visiting friends
and relatives settled abroad is responsible for several consumers
becoming more sophisticated. Consumers now-a-days demand a
Service Market
1.
Consumer Affluence
2.
3.
4.
Complexity of life
5.
Youth
6.
Corporate Crowd
7.
Product Innovation
8.
Growing product
Expert, advice,
Complexities
specialists.
Table 1.2 Impact of Environment on the growth of service sector
2.
3.
4.
2. Business
4. Public Administration
2. (d)
4. (c)
False
False
True
True
True
2. False
4. True
6. False
8. True
10. False
REVIEW QUESTIONS
Section A
1.
2.
3.
4.
5.
Define services.
What do you mean by services marketing?
Give any four reasons for the growth in service sector.
State few service sectors.
How does services marketing increase the standard of living of the
people?
Section B
Chapter 2
11.
Any organization that considers itself to be a service operator can
utilize the range of research that has been developed specially to deal
with problems related to services.
12.
Products that are primarily intangible are classified as services.
Components of Service
Understanding the nature of the service is the first task in services
marketing. The nature of service gives useful clues on the benefits expected
by customers from it. Having found out the needs of the customers, the
marketer has to ascertain whether his products meet customers
specifications. Generally, customers needs are rarely satisfied by physical
products alone. The intangible element of a product is a key element in
maintaining a satisfied customer. The services may be divided into four
components, namely, (1) Physical product, (2) Service product, (3) Service
environment and (4) Service delivery. These components must be properly
managed in order to meet customers needs. Figure 2.1 shows the
components of a service.
topic in production process. So, the thrust is more for tailoring the
service to meet the needs of individual customers. While deciding the
method of service delivery the following questions should be
considered.
(i) Should the service be delivered at a single site or through
multiple outlets?
(ii) What is the most convenient type of transaction for customers?
(iii) If the type of interaction is changed, would the service quality
improve or deteriorate?
(iv) Is it possible to use suitable intermediaries to achieve multiple
outlets?
Services with multiple outlets help ensure quality and consistency in
the service offering. There are two types of interaction between
customer and service organization (i) Customer goes to service
organization and (ii) Service organization comes to customers.
When services require the customers to come to the supplier, there
is a great scope for exercising control over the delivery of service,
For example, when a patient visits a dentist, he may be favorably
influenced by the dcor of the waiting hall, courtesy of the
receptionist, etc.
Super
market
-Goods
Service
Service
Product
Environment
-Courses
-Lecture
Guidanc
halls
-Libraries
e
-Laboratorie
-Placement
s
Employm
-Language
ent
Lab
-Playground
-Canteen
-Hostels
-Display
Sales Floor
-Assortment Racks
-Assistance
Service Delivery
-Teaching
Performan
ce
-Tutorial
system
-Counseling
-Placement
-Speed
-Friendliness
-Market
-Credit
-Inventory
Hotels
Couriers
-Stay
-Food
Communicat
ion
-Bill
settleme
nt
-Messages
- Wake-up
calls
-Service
time
-Collection
Centres
-Information
-Lobby
-Parking
Space
-Rooms
Reception
-Waiting hall
-Sorting
space
-Parcel
Office
-Laundry
-Transport
Arrangem
ent
-Multi
cuisines
-Room
Service
-Room
Cleaning
-Promptness
in
Delivery
-Billing
section
Characteristics of Services
Every product is a bundle of physical (tangible) and non-physical
(intangible) attributes. Products which are intangible in nature are classified
as services. Goods are produced while services are performed. The special
nature of service comes from many distinctive characteristics. These
characteristics of services call for marketing programmes that are
substantially different from those found in product marketing. So, it is
essential for the service marketers to carefully study the characteristics of
services. These are give below:
(1)Intangibility
(2) Inseparability
(3)Heterogeneity
(4) Perishability
(5)Ownership
(6) Pricing of Services.
1. Intangibility
Services are essentially intangible. So, it is impossible for customers to
see, feel, taste, hear or smell services before they are bought. This
feature of services makes their nature an abstract phenomenon. So, the
sales force or a companys promotional programme, while selling or
promoting the sale of a service should concentrate entirely on the
benefits to be derived from the service. An insurance company
promotes service benefits such as guaranteed payment of childs
education expenses, or a retirement income. Promotion of package
holidays focuses on use of an aircraft, a transfer coach and a hotel
room. The strategies developed by the service providers for
(iv)
Intangible Actions
Recipient of Services
People
Things
Health care
Freight,
Beauty Saloons
Transportation
Restaurants
Dry cleaning
Education
Veterinary Services
Information
Banking
Legal Services
Services
Entertainment
Insurance
in the process. This offers enormous scope for tailoring the service to
meet the needs of individual customers, through customization.
Customization means making services customer-oriented. So, the
service marketer should decide to what extent the service offer should
be customized. For example, and educational institution can offer
English lessons via a one-to-one tutor relationship or by mail through
the provision of audio or video tapes and tutorial books. Airlines offer
first class, business class and economy class. Hotels offer luxurious
suites, double rooms and single rooms.
Banks and Housing finance companies offer home loans for repayment
periods varying between 5 years and 20 years. The repayment of loan
by way of equated monthly installment (EMI) varies considerably.
Consequently, availing a loan needs a careful assessment in delivery
system of the banks and housing finance companies. The following
Table illustrates this point.
SI.
No.
1.
2.
3.
4.
5.
6.
Bank
Bank of
Baroda
HDFC
ICICI Bank
SBI
Syndicate
Bank
Union Bank
India
Period of Repayment
5 Years
10 Years
Rs.
Rs.
2,168
1,240
2,016
1,201
2,028
1,214
2,028
1,240
1,992
1,201
2,004
1,227
15 Years
Rs.
980
942
956
985
956
985
20 Years
Rs.
884
821
837
884
852
868
Consumer Service
1. Food Services, 2. Hotels and Motels, 3. Personal Care Services, 4.
Car Service firms (Garages), 5. Entertainment Services, 6.
(II)
Tangibility,
Heterogeneity,
Resale,
Small Firm Size
2. Transportability,
4. Existence,
6. Storage,
8. Difficult quality control,
9. Labour Intensity,
10. Legal and Ethical Barriers,
11.
Fluctuating demand,
12. Sampling,
13.
Restricted Applicability of a Portfolio Theory 14. Establishment of
Large Market Shares.
(1)Tangibility
Tangibility
Tangibility means anything which can be viewed or touched or felt.
Services are intangibles as they cannot be seen tasted, felt, heard or
smelt before they are bought. Services are intangibles as it is not
possible to view them. But goods are tangible economic objects. They
are capable of being seen, touched, tasted, heard or smelt. We can only
realize the services used by us. A service by nature is an abstract
phenomenon and carries intangible perceptions. According to Carman
and Uhl, A buyer of products has an opportunity to see, touch, hear,
smell or taste them before they buy. But these things are not possible
in case of services.
(2)Transportability
Goods can be transferred from one place to another. Manufacturers
transport goods form factory to the market. Customers carry home
goods bought by them. So, there is transfer of goods from the point of
sale to the point of use. Thus, transferability of goods necessitates a
physical distribution channel. But it is not possible to physically transfer
the services from the point of sale to the point of use. Many service
businesses either use electronic channels (computer, TV, Radio) or
contact the customers personally. As physical distribution channel is
absent in case of services, there is no need of intermediaries like
wholesalers or retailers as in the case of goods.
(3)Heterogeneity
Services are heterogeneous in nature. For the diagnosis of the
physician, the physical presence of the patients is essential. Services
vary according to the customers as services are created according to
the specific needs of the customers. The heterogeneity of service
makes it difficult to establish standards. However, the variability of
service is less in case of machine oriented service. Due to services
variability, the service provider is not able to provide a consistent
quality in operation. This heterogeneous nature is not true with goods
or products. Use of technology has made possible large scale
production of goods in anticipation of future demand. The quality of
goods produced is identical.
(4)Existence
Services are non-existent in nature. They can only be realized by
availing them at the time of their production. But goods are existent.
So, the goods produced at one point are distributed by others at other
points. Since goods are existent, they are produced, sold and then
consumed. But services are sold, produced and then used.
(5)Resale
Goods manufactured at one point are made available for distribution at
different centres. Physical inspection of goods is possible before they
are bought. The physical attributes of goods such as colour, size, shape,
taste, etc., can be determined in advance of their purchase. But it is
highly difficult for the customer to evaluate in advance the quality of
service. Moreover, when goods are sold, the ownership is transferred in
favour of the buyer. But sale of service does not result in transfer of
ownership. So these two attributes, namely, physical inspection and
transfer of ownership permit the intermediaries such as wholesalers
and retailers to purchase goods for resale.
(6)
Storage
As services are perishable, they cannot be stored. Service value exists
only at the time it is produced. Unutilized or underutilized services are
regarded a waste. Vacant rooms in a lodge, vacant beds in a hospital,
unsold seats in the aircraft, unbooked marriage hall all represent a
permanent loss. If the service provider fails to sell the services, it may
be lost forever. But products like machines, equipment, soap,
toothpaste can be preserved till they are sold.
(7)Small firm Size
As services are not transportable, many service firms remain small in
size. As a matter of fact, the small size does not permit marketing
sophistication. Though service organizations like accounting and
advertising agencies tend to be big, they are divided into smaller
branch offices. Efficient service companies are known for adopting a
marketing plan. They respond positively to the ever changing market
conditions. The marketing process employed by them is the same as in
the case of tangible products. Service firms being small and single unit
operations are not able to fully realize the economies of scale. But
organizations marketing tangible goods are generally big in size and are
able to realize the economies of scale.
(8)Difficult Quality Control
Quality should be the mantra and be included in all operations of the
organization. It is difficult to define the quality concept. The service
provider can exercise quality control through standards or specification
in the manufacturing process. From the point of view of customer,
quality occurs only when the services provided to them satisfy their
needs. The idea of quality is, thus, strongly linked to the needs and
expectations of the customers. It is very difficult to achieve quality in
resell them. Products like groceries, grains, rice etc., are popular for
sale by sample. But we cannot do the same with services. If we book a
room in a hotel, we do not have the right of reselling it. Goods are
tangible economic products that are capable of being seen and
touched, heard or smelt. By examining a small portion of the
agricultural produce like grains, the characteristics of the whole lot can
easily determined. This facilitates sale of tangible goods through
sample.
(13)
Measurement of Service Quality
In case of tangible goods, their quality can be assessed by examining
them. If products do not conform to specifications, they can be rejected.
But services cannot be measured or verified before sale. Since service
is inseparable from the service provider, the delivery of service greatly
influences its quality. The intangibility of most services do not allow
assessment and evaluation of service quality. Moreover, setting
standards is difficult as services vary from person to person.
(14)
Establishment of Large Market Share
Generally, goods are produced before they are sold while services are
sold before they are produced. Further, services marketing has a limited
influence on consumers before the purchase is made. Normally,
customers must experience the intangible services in order to have
sufficient information about the service. So, services marketing starts
with the critical needs identification in the market. But the entry into
market for intangible services is comparatively easier when compared
with tangible goods. Service industries present fewer barriers to enter
the market. Thus, competitors may easily gain an entry into the service
market. Thus, competitors may easily gain an entry into the service
market, being lured by the profitability of a particular kind or service. As
a result , there will be a mushroom growth of service firms marketing
similar services. The existence of a large number of fast food
franchisers is an example of this fact. Moreover, service firms being
small in size are not able to realize economies of scale by acquiring a
large market share.
The following is a comparison between services and goods on aspects such as
(A) Characteristics; (B) Market Planning; (C) Marketing Strategy; (D)
Operations; and (E) Organization.
A Comparison between Services and Goods
Dimensions
A. Characteristics
1. Entity
Services
Goods
Intangible
Tangible.
2. Storage
3. Quality
4. Producer
Status
5. Labour
Intensity
6. Life
B. Market Planning
7. Demand
8. Supply
9. Title
10. Seasonality
11. Consumer
reaction
12. Pricing
13. Need
satisfied
14. Basis of
Competition
15. Channels
16. Repairs
17. Replacement
18. Forecasting
19. Forecast
20. Image
21. Physical
movement
22. Cost
allocation
C. Marketing
Strategy
23. Orientation
24. Focus
25. Approach
D. Operations
26. Production
27. Customer
involvement
28. Physical
Presence of the
customer
29. Physical
Surrounding
Not Possible
Varies with time and
person
Inseparable from
service
High
Stillborn
Possible
Standardized
Separable from goods
Low
Longer
Fluctuating
Constrained
No ownership
Present
Spontaneous
Labour-based
More emotional
Personalization
Stabilized
Flexible
Possibility of ownership
Goods Specific
Delayed
Material-based
More physical
Technology
Shorter Direct
Impossible
Rare
Short run
Consumer behavior and
arrival time
Corporate
Of the provider
Difficult
Easy
External and Internal
Customer Expectation
Focused
Internal
Customer needs
Can be diffused
Spontaneous
High
Time spread
Low/absent
Essential
Hardly necessary
Very important
Not so important
All over
30. Standardizati
on
31. Facility
Location
32. Facility
Design
33. Product
Design
34. Process
Design
Close to customers
To accommodate
physical or
psychological needs
Environment plays a
vital role
Immediate effect on
Consumers
As per customer interest
Smoothing results in
losses
Near supply
To enhance production
Only physical product
Customers not involved
Completion date
Possible
Raw Material
Fixed
Zero defect
Technical
Tight
Average
Unit based
Generally hard
Separate from
production
35. Scheduling
36. Production
Personnel
Planning
Variable Standards
37. Inventory
Zero defection
38. Quality
Interaction
Control
Loose
39. Quality
Fluctuation
Objective
Time based
40. Worker skill
Generally soft
41. Time
Along with production
Standard
42. Capacity
Planning
43. Wage
payment
44. Type of
technology
45. Delivery
Summary
E. Organization
46. Structure
Flatter
Taller
Services
is taking
place
all
over
the
world.
Today, we live in an
47. revolution
Role of higher
Supportive
Demanding
economylevels
which is service-oriented. A service is an activity or benefit that one
48.
Communicati
party offers
to another that
is essentially intangible and
does
not result in the
Criss-cross
Mainly
vertical
on
ownership of anything. ItsOrganic
production possesses certain
characteristics that
Rational
49.
Desired
suggest some marketing approaches for the adoption of service providers.
design
The characteristics
of services include intangibility, inseparability,
(Source:
Services
Marketing
Management,
By B. Balaji,
Chand &
heterogeneity, perishability, and
non-transfer
of ownership
etc.S.Further,
inCo.
order
Ltd.,
PP19-20)
to have a better understanding of services, they are classified on suitable
basis. As such, the broader classification of services is consumer services and
industrial services. It is comparatively difficult to conceive a pure service or
pure good. A pure good gives benefit containing no elements of good.
Likewise, a pure service would contain no element of service. Goods can be
physically touched and verified. But services are intangible and only their
effects could be known. The effects of services include pleasure,
entertainment, relief from ailment etc. The primary differences between
II.
III.
4. Perishability
2. (a)
3. (a)
4. (d)
5. (a)
2. True
3. False
6. True
7. False
4. True
5. True
8. True
9. True
True
10. True
11. True
12.
REVIEW QUESTIONS
Part A
1. Define services.
2. State the characteristic features of services.
3. Name few service sectors.
4. What are pure services?
5. What do you mean by intangibility of service?
6. What do you mean by heterogeneity of service?
7. Write a short note on perishability of service.
8. Mention any four bases for classification of services.
9. Mention any four bases for classification of services.
10.
What do you mean by customization of services?
Part B
1. Explain the reasons for fluctuations in demand for services.
2. Explain the classification scheme for services on the basis of the nature
of the services.
3. Describe the classification scheme for services on the basis of the types
of relationship between the service organization and its customers.
Part C
1.
2.
3.
4.
5.
Chapter 3
Service Design
A service involves creation and delivery of core benefits in order to
satisfy an identified need of the customer. As a process, it refers as to how a
service is provided or delivered to a customer. In a competitive market, the
importance of the actual process in service delivery has been recognized. The
service providers have developed the service process as a tool for gaining
competitive advantage. Use of technology has enabled the service sector to
design the processes effectively. Service design depends upon customers
expectations from the service and performance standards required to satisfy
them. Organized efforts are undertaken to solve issues relating to location,
facility and design layout for definitions for service providers. The concept of
service design can be understood clearly by looking into its components.
Figure 3.1 shows design and delivery components.
The management model for the service design consists of eight stages,
namely, (i) defining design attributes (ii) Specifying design performance
standards (iii) generating and evaluating design concept (iv) developing
design details (v) implementing the design (vi) measuring performance (vii)
assessing satisfaction; and (viii) improving performance. Figure 3.3 shows the
various stages involved in the management model for the service design.
SERVICE DESIGN
Figure 3.3 The service design and Management model
The above model involves several stages which are explained below:
1. Designing design attributes
The various operations undertaken while defining attributes include the
following:
(i)
Identification of key customers for the service.
(ii)
Determination of the needs of the customers and how services
fulfill these needs.
(iii) Giving priority to the needs of the customers.
(iv) Specifying the attributes of the service which satisfy these needs.
(v)
Creating quantitative measures for the design attributes.
(vi) Establishing the relationship between the needs and attributes.
(vii) Finally, deciding the most important attributes.
2. Specifying design performance standards
The second step in the management model for the service design is
specifying design performance standards. Performance standards for
the design attributes are determined as follows:
(i)
Identifying the performance level desired by the customer in
relation to reach attribute of the service design.
(ii)
Studying the performance of competitors.
(iii) Establishing the relationships between the performance and
customer satisfaction.
(iv) Specifying performance standards for each design attribute.
3. Generating and evaluating design concepts
After specifying the performance standards, the design concept is
generated and evaluated. This step consists of the following activities:
(i)
Defining the key functions required for the provision of the
service.
(ii)
Assembling these key functions into processes.
(iii) Documentation of these processes with the help of flow charts.
(iv) Creation of alternative design concepts for the service.
(v)
Selection of a concept for detailed design.
4. Developing design details
While designing a service process system, factors such as location, facility design, layout
for customer and work flow, customer involvement, equipment selection, adequate service
capacity etc., should be carefully considered. After the service becomes operational, service
delivery system may be suitably modified in order to promote the overall service quality. A part
from these factors, the service planning involves consideration of certain strategic decisions.
Figure 3.8 shows the various strategic decisions involved in the matters related to service process
planning.
service are arranged according to the steps involved in the service process. The
customers to be served receive the service on a continuous basis without any
interruption. It also provides sufficient room for the installation of special
purpose equipment needed for the performance of a specific task.
(ii)
Operational and strategic tradeoffs in equipment selection
The process of equipment selection is governed by strategic tradeoffs between the
factors affecting the service process. For example, equipment are selected on the
basis of their capacity to serve customers. A fleet of small vehicles for carrying
passengers may be compared against a single large capacity vehicle remaining
partially idle till the demand from passengers ripens. In civil aviation, purchase of
wide bodied aircraft reduces the operating cost. On the other hand, several smaller
aircraft may ensure more options to the customers in terms of flights, destinations
and schedules.
(iii)
Equipment capabilities and operational requirements
There are two important aspects connected with equipment, namely, equipment
capability and operational requirement. A machine is capable of performing certain
physical activities which are better described as equipment capabilities. Capacity,
materials, range of activities and quality of output are some indicators of
equipment capabilities. Another factor defining the way the equipment is operated
is known as operational requirements. They reflect how a machine is started,
stopped, changed over from one product item to another, regulation of the speed,
etc. Further, operational requirement will have influence upon human input
(number of workers and their skills), space, utility, material input etc.
(iv)
Life cycle cost
Experts consider life cycle cost in the selection of equipment because equipment
cost determines the economies of service business. Equipment cost includes all the
expenses incurred initially such as purchase price of the equipment, installation
costs and operating costs such as labour, material, maintenance and utilities. The
entire cost of the machine after deducting the salvage value is spread over the
economic life of the machine. Reduction in salvage value on account of changes in
technology, reduced operating capacity with the passing of years and obsolescence
caused by the changes in technology are given due consideration. The net cash
outflow of money on account of investment and inflow of cash in the form of
returns from the investment are, then, discounted for the time value of money.
4. Process flow decision
Deciding on the process flow is very critical to the success of the provision of a service. In
fact, it is obviously related to the conversion decisions and specific equipment decisions.
Process involves sequencing of operations for achieving an end result in a service
organization. The equipment and people involved in the production process perform
certain operations. These operations are arranged in a sequence in order to facilitate a
smooth work flow. With a critical review of the proposed process flow, the selection of
conversion process or equipment may be suitably revised. The process flow decisions are
based on the flow process charts, blue prints, layouts and benchmarking.
5. Decision on People
The people element is very important is service marketing. It includes the service
personnel and customers who play an important role in service delivery. Since the
production and consumption of service cannot be separated, customers come into contact
with service delivery. Service organizations should also decide over the number of people
to be employed and the skills required for the effective provision of service. After
understanding the customers and the benefits they derive from the services offered, the
labour cost relative to the capital cost in the long run is decided. To a great extent, the
decision on people must be closely related to equipment and process flow decisions. The
relationship between men and machines is understood in terms adaptability. While
machines have limited adaptability of change, men are quick to adapt to changing
environment. The capabilities of machines are predetermined but people can be trained to
perform many tasks as demanded by the changing environment. Knowledgeable and
motivated workforce is always essential to have a better adaptability. Structuring the
content of service personnel is another important area of decision making. Their
responsibilities should be redefined from the view point of customers. This will win the
support of the customers over the service process of the firm.
Blueprinting
Basically, a service blueprint is a flow chart of the service process. It conveys the service
concept by showing all the elements or activities and their sequencing and interaction. It is
pictorial description of the service system showing the service at an overview level. It explains
how each job or department functions in relationship to the service as a whole. Blueprinting was
developed by Shostak in 1987. Blueprinting is a technique which enables one to understand the
totality of service as a process. As a management tool, it serves the management in the following
ways:
1. It highlights the importance of service design.
2. It focuses attention on process modeling.
3. It encourages the development of other diagrammatic techniques such as service mapping,
PERT (Programme, Evaluation and Review Technique) and CPA (Critical Path Analysis).
Flow charting is helpful in visualizing input, output and interactive process.
4. Blueprinting identifies those stages of the service that have a high statistical probability of
generating problems. Having identified the problem areas, the stages of the services can be
possibly redesigned.
5. Blueprint helps objective graphical depiction of the service. Lynn Shostack developed the
rationale behind the service blueprinting which is evident from figure 3.9.
blood bank (c) operating complex; and (d) recovery cell or intensive care unit.
Considering another example of a small restaurant, the operations involved are as follows:
(i)
A customer arrives and sees whether a table is available.
(ii)
He orders at the table by going through the menu.
(iii)
Serving and consumption is repeated for each item ordered.
(iv)
Customer takes dessert (any sweet dish like pie, tart, ice cream) at the end of a
meal or coffee.
(v)
Table cleaning.
(vi)
The service finishes with the presentation of the bills.
Thus, the entire operations may take between 20 and 40 minutes. Care is needed to ensure
that customers do not wait unnecessarily. Proper procedures should be developed to ensure
this. The time taken for the operations can be useful in determining how many diners can
be served in one evening with existing staff levels.
3. Recognize the variations in the process.
The service personnel should carefully identify the variability in the process of providing
service. Variability may be of two types: Planned and controlled by the service provider
and unplanned. Planned services can be understood with a simple example. When the
customer asks for the type of hair dressing offered, the hairdresser plans to offer only a
limited number of options or a range of latest styles. Though customers need to know
different styles, the variability of the customer needs is controlled by the hairdresser. In
case of unplanned services, the customers do not have any pre-conceived idea about the
variability in service. They are influenced by the style followed by other customers.
Figure 3.12 Blueprint for floating hospital service to aid hurricane victims *Source: the
Hindu, September 2, 2005, Page 22)
4. Identify the backstage actions in the process.
Backstage activities are not visible to customers. But in case of service organizations like
banks, housing societies etc., the back office is visible to the customers. The front office is
that part of the system which is directly experienced and back office responsibilities is a
difficult exercise. The backstage elements are essential for providing satisfactory services.
The service provider can enhance the utility of services by properly using the blueprint.
The identification of backstage activities plays a crucial role in designing the blueprint.
Uses of service blueprint
A blueprint helps understand the totality of a service as a process. It provides a graphical
depiction of the services. The service system blueprint simplifies service complexities by
displaying the operation of an existing system. The benefits of service blueprinting can be
explained as follows:
materials, information or people in providing the service and the relationships among the
processes. Relationships among the processes are established by ascertaining the actions which
are to be performed first, which can be performed in parallel and what has to be completed before
the next step begins. Flow process chart employs some standardized pictorial symbols to describe
the process. The important symbols include operations, customer contact, travel delay and
inspection. Figure 3.13 shows the category of symbols used and their description.
S No.
1.
2.
3.
4.
5.
Symbol
Operation
Symbol
Description
An operation
performed by the
server off-line or
customer self-service.
It is a possible service
failure point.
Customer contact
An occasion when
server and customer
interact. An
opportunity to
influence customer
service perceptions.
Travel
The movement of
customers, servers or
information between
operations.
Delay
Delay resulting in a
queue and a need for
waiting space for
customers.
Inspection
An activity by
customer or server to
measure service
quality.
Figure 3.13 services process chart categories and symbols
Process flowcharts are employed to track the flow of products, customers or information.
Figure 3.14 shows process flow chart for mortgage application and approval.
Figure 3.14 Flow process chart for mortgage application and approval
systems. If they feel comfortable with a certain system, it is probably service-oriented. On the
other hand, if they feel that they are forced to adjust to a system, then it is not service oriented.
Second, the system and routines have an internal impact on employees. If a certain system is
considered not service-oriented, they will get frustrated. So, the layout of service organization
should be considered from the viewpoints of both the customer and employees of the service firm.
For example, while designing the layout of a hospital, it is necessary to consider the relationships
among the location of reception, different wards, operating theatres and departments such as
radiology, pharmacy, pathology etc. In the layout of the hospital, the concern might be staff
convenience or patient convenience. Figure3.15 shows a scheme of layout decision-making.
Product layout is commonly followed in service units engaged in car servicing, processing
documents, preparing fast food etc. In these cases, services become complete only when they pass
through distinct stages in the servicing process. After identifying the requirements of a specific
group of customers, resources are established in a sequential order. Customers, who are to be
served, move from one stage to another until the service is complete. For example, in car
servicing cars are washed, dried and waxed and the interiors are vacuum cleaned. Each stage is
equipped with necessary resources (equipment) in order to avoid any possible delay in rendering
the service. Queues do not form since the time spent at each stage is the same for each customer.
Product layout suffers from some disadvantages, it assumes that time spent at each stage is the
same for each customer. But depending upon the individual needs of the customers, the time spent
at each stage varies considerably.
Group layout
Group layout places resources together to serve the customers with similar needs. For
example, a restaurant located at busy centres have different serving areas, the first for hot drinks,
the second for cool drinks and the third for snacks. In banks separate counters are opened for
collection of bills and cheques, issuing cash, demand draft purchase, cash credit etc. Group layout
enables the performance of a wide variety of jobs in the same premises, thus building stronger
links with the customers. Figure 3.17 shows group layout of a restaurant situated on a highway.
Application of benchmarking
Figure 3.18 shows the application of benchmarking in practical situations.
Service productivity: Productivity stands for the measure of relationship between input
and output. Such relationship is arrived at by dividing the output with input (output\input).
It is easier to measure productivity on an assembly line than, a service business whose
product represents customers intangible experiences. Again services themselves vary in
terms of their susceptibility to measurement. Experts have experienced considerable
difficulty in applying productivity measures in service firms. For example, quantitative
input and output measures and the relationships prevailing between them are not readily
available for a transportation service. Service productivity can be better understood by
studying the following service production concepts. (i) Efficiency (ii) Effectiveness (iii)
Economy (iv) Production function; and (v) Capacity utilization.
(i)
Efficiency: Efficiency signifies the rate at which inputs are converted into outputs.
Efficiency in provision of service enables the service provider to secure the
maximum output from the minimum input. For example, in a fast food efficiency
in operation. Because waiting in line for service can be boring or cause irritation,
especially when one is hungry. Consumer inputs (information and materials) are
necessary for an adequate outcome in services such as marriage counseling,
personal training, dissertation, advising, weight-reduction programmes, etc.
Services can be created only by dealing with the customers efficiently.
(ii)
Effectiveness: The difference between efficiency and effectiveness is very
important for a service provider. Efficiency is doing things right while
effectiveness is doing right things. The interpretation of this statement amounts to
say that efficiency is the rate at which inputs are converted into outputs and
effectiveness, the extent to which purposes are being achieved. While efficiency
places and emphasis on quantitative measurement, effectiveness stresses
qualitative measurement. A service organization is more effective, if everyone is
working to accomplish the same goals. The service strategy should amply indicate
to the employees and customers exactly what the organization is, what the
organization does, and what the organization believes in. To be effective, the
service strategy must also identify the customers who will be served and the value
they will receive.
3. Economy
In service industries, productivity is achieved with the pursuit of economy in operations.
The form of simplifying work routines, hiring workers as cheaply as possible to perform
repetitive tasks, reduction in employee turnover, reducing the negative aspects of jobs,
recruiting and retaining the best available employees, use of technology to control quality,
minimization of training etc., are some devices for attaining economy in operations.
4. Production function
The service sector will show more progress than manufacturing sector in productivity
improvement, There are encouraging signs that service are beginning to catch up with an
emphasis on productivity. Using technology to replace laour, permitting customer-selfservice, reengineering of processes for avoiding unnecessary steps and speeding up
operations etc., have resulted in effective utilization of resources, The capacity to produce
relevant service has led to a perceived value in appreciating the quality and convenience of
services.
5. Capacity utilization
Productive capacity refers to the resources or assets that a firm can employ to create goods
and services. Capacity utilization is measured with the ratio of intermediate output to final
output. For example, the capacity utilization in a restaurant is measured by the percentage
of seats occupied up by customers. The number of hours that facilities, labour and
equipment are productively employed in revenue operation and the percentage of available
space that is actually utilized in revenue operations are the important measures of capacity
utilization. Many service firms have constraints in the form of limited facilities. Number
of rooms in the hotel and hospital number of seats in the aircraft, number of seats in the
course offered by colleges etc., are limited and they constrain the capacity of the service
firms. Understanding the primary capacity constraint, a service firm should make full
utilization of its capacity.
White collar Productivity
Workers may be divided into two categories, namely, blue collar worker and white collar
worker. The blue collar worker belongs to a category in which tasks are standardized and
repetitive. Railway porter, catering assistant, bus driver etc., are blue collar workers. The details
of a working day for a blue collar worker are clearly determined in advance. The particulars of
tasks to be accomplished and time taken to perform them are specified. As regards the blue collar
work, the tasks to be performed and time taken to do them are left to the own judgment of white
collar workers. The white collar worker performs a variety of jobs involving different sets of
authority, responsibility and duties. The process of measuring white collar productivity is fraught
with the following difficulties (i) difficulties in deciding white collar productivity (ii) undue
importance given to measurement of activities rather than the results (iii) hogged effect in the
sense that input may not show up in output until sometime later (iv) difficulties in determination
of quality of output (v) not maintaining the difference between efficiency and effectiveness
(efficiency is doing things rightly while effectiveness is doing right things. Naturally, the white
collar worker is efficient at developing reports but ineffective by attending meetings and work
outside the area of expertise (vi) tendency of the white collar workers towards measurements is
that they are not accustomed to being measured.
Though difficulties are experienced in measuring white collar productivity, they can be
overcome by giving work. The issues which are worthy of consideration include: (i) the inputs
should be straight forward by prescribing the number of hours worked, number of hours paid,
resources issued, etc. (ii) Understanding the creativity of while collar employees in developing
and implementing new ideas. (iii) Knowing how far the working day is efficient and effective (iv)
knowing the extent of satisfaction derived by the customers from the white collar worker (v)
knowing the capabilities of the white collar worker in crisis management and his ability to handle
non-standard situations (vi) studying the communicative skills and success of the white collar
worker in keeping others properly informed.
Productivity indicators
The term productivity stands for the measure of relationships between an input and output,
namely, productivity = Output/input. For the manufacturing industry as whole, total productivity
is measured as follows: Total productivity = Total output/sum of all inputs while measuring total
productivity, the specific measures used include:
P = [Production / machine hours]
P = [Production / number of employees]
P = [Sales / number of square feet]
P = [Passenger miles / number of guards]
The figure 3.19 shows productivity indicators of hospitals.
total price. In services it is extremely difficult to increase output with machines. Only
people are needed in a large number to generate an increased output. Further quality also
depends upon people. In other words, only service personnel by using technology can
satisfy customers with right quality of service. Mere use of technology cannot assure
customers quality.
Improving Productivity
Raising the productivity in service industries it the single greatest challenge the managers
are facing at present. Peter Drucker considers the diversity in knowledge, skill, responsibility,
social status and pay essential for raising the productivity of knowledge of service workers. He
further views that mere replacement of labour with technology does not raise productivity. Three
fundamental questions need to be answered in raising productivity of the service sector. What is
task? What are we trying to accomplish? Why do we do it at all?
Reengineering aims at improving various processes in order to meet the customers
requirements of quality, speed, innovation, customization and services. Nowadays, Business
Process Reengineering (BPR) is attracting the attention of large service organizations.
Reengineering involves reinventing the process to achieve a higher level of customer satisfaction.
It enables the service provider to redesign the business process by taking advantage of the
enormous potential of the computers and information technology. It strives to breakaway from the
old rules about how a service provider organizes and conducts his business. BPR simplifies the
work flow, reduces the number of stages involved in the process, speeds up customer service and
involves fewer staff.
In order to improve the productivity of a service organization, its employees may be asked
to air their views on matters affecting their work. Giving importance to the views of subordinates
will encourage them to work positively for the betterment of the service organization. It will
prove to be an important source of feedback for everyone concerned with the service. Employees
can evaluate the role of their boss by contributing their views on performance of the boss,
improvement of the existing systems, initiating action on urgent issues, keeping people well
informed and handling a disruptive employee.
The service manager should carefully decide as to what to appraise and how to do it.
Appraisal by subordinates may be encouraged since they are directly affected by the management
performance. The views of subordinates may be compared against those of management. In
concise, the following steps may be taken to improve productivity in terms of efficiency and
effectiveness.
Steps to be taken for improving productivity
(i)
(ii)
(iii)
(iv)
explains the strategy adopted by the organization to bring supply and demand into
better balance.
Technology and service productivity
Service organization can improve their productivity by introducing systems and
technology in their operations. Under the systems approach to services marketing technology,
engineering and management sciences are implemented into service industries. The systems
approach looks at the task as a whole, the systems approach identifies the key operations to be
performed, devises new ways of performing each operation, eliminates superfluous practices
though new methods and improves the coordination of processes within the system. Also system
approach lays emphasis on alternative layouts, better job design and consideration of overall costs
of the system. The pace of technological developments in recent years has had a major impact on
service delivery process and practices. Service technologies deliver lowest cost outputs and
maximize customization for customers. Technology enables the service organizations to handle
larger volume of services, to offer multitude of services, to provide prompt service and to permit
more efficient management. Use of technology in provision of service not only achieves cost
effectiveness and customer satisfaction but makes front employees more efficient as well. They
start working faster and smarter. Employees become more capable of meeting customer needs
even the service personnel who are inexperienced can perform the sophisticated tasks quickly.
Application of technology to service activities
Technology can be applied to service activities in three ways as shown by Figure 3.21.
by hand is both laborious and time consuming. But automatic car wash can serve a large
number of customers within a limited time.
2. Soft technology
Soft technology means substituting pre-planned systems for individual service operations.
Though the systems involve some technology, the basic characteristic is the system itself.
Use of soft technologies is quite common in service firms such as fast food restaurants,
safe materials, restaurants, open tool rooms in factories, open stack libraries, pre-packaged
vacation tours etc.
Fast food restaurants such as MC Donald, Wendy, Pizza Hut, Kentucky Fried
Chicken follow rationale division of labour. Use of soft technologies in these
organizations ensures the benefits in the forms of high quality, cost control, speed and
efficiency, cleanliness and low prices. Prepackaged vacation tours eliminate the need for
time consuming personal selling.
3. Hybrid technology
Hybrid technologies combine hardware with carefully engineered systems to bring greater
efficiency, order and speed to the service process. Use of hybrid technologies is commonly
found in truck routing and scheduling, banking, retailing, insurance, railways, pre order
shipment, computerized repair facilities courier service, postal services, construction, etc.
The cost of energy can be substantially saved by careful programming for types
and grades of roads location of stops, congestion of roads, toll road costs and missing
point access. A new generation of automatic teller machines will allow customer access to
personalized in information on mortgages or insurance with on the spot quotations,
information on standing orders and direct debits, travelers cheques and foreign currency
and travel insurance. Many supermarkets have installed Electronic point of sale scanning
systems. This system provides detailed information on which products are selling best and
how fast. The electronic Data interchange (EDI) system transfers orders and invoices
between computers in the retailers depots and those in their suppliers warehouses at the
press of a button. The EDI system replaces the labourious paper work replenishing orders
automatically. The insurance industry has benefited by the use of Direct line insurance
software. The telesales personnel sell the policy by incorporating underwriting decisions
in the computer software. Particulars of the caller such as age, address and the type of the
vehicle owned by him are keyed into the software programme and a quotation is produced.
Introduction of hybrid technologies in the insurance industry leads to rapid response to
customer enquiries, a good quality service and a greater degree of control. Railways make
use of electronic signal box which gives the benefits of computer based automation. It
replaces the labourious tasks of a signalman. The pre order shipment system copes with
the increased consumption of lemonade caused by high temperatures. Expecting the raise
of temperature, loads of lemons are sent in train even before orders are placed. Use of selfdiagnosing machines and modular manufacturing has helped the provision of repair
service. Courier service benefits from introduction of Technology. For example, Federal
Express uses machines which weigh a parcel, call for parcel pick up, print shipping labels
calculate the cost, invoice the customer and charge back that cost to the user department.
There is an electronic fund transfer from the customers bank to Federal express Bank in
payment of the invoice. Postal services use automated sorting and barcodes. Use of these
devices has enabled the postal services to offer a fast and reliable service. Construction
units use computer Assisted Design (CAD) technology which has decreased the design
and revision time.
Role of technology in service process
Technology is influencing the practice of services marketing. It has resulted in tremendous
potential for new service offerings. It is shaping the field of service enabling both customers and
employees to get and provide customized services. The technology has been the basic force
behind the service innovation. Automated voice mail, interactive voice response systems, fax
machines, ATMs etc., are possible only because of new technology. The role of technology and
physical aids in service delivery system are summarized below:
1. Easy accessibility of service
Internet based companies find that internet makes offer of new services possible. The Wall
street Journal offers an interactive edition where customers organize the newspapers
content according to their needs. Internet based bill paying service ensures convenience to
the customers while availing services. The connected car will allow people to access all
kinds of services while on the road. Cars are equipped with map and routing software
which direct drivers to specific locations. Accessing the Web via cell phones is possible
nowadays. Thus, technology is a vehicle for delivering existing services in more useful
ways.
2. New ways to deliver service
In addition to providing new service offerings, technology has introduced new ways of
delivering service. It is providing vehicles for delivering existing services in more
convenient ways. It is true to say that technology facilitates basic customer service
functions like bill paying, checking accounts records, tracking orders, seeking
information, etc. The face of customer service has changed with the influx of technology.
Before the development of technology every customer service was provided face to face
through direct personal interaction between employees and customers. Nowadays, large
organizations centralize their customer service functions. It is possible by establishing a
few large call centres that could be located anywhere in the world. IBMs customer service
calls are typical example for consolidation call centres by the large organizations.
Introduction of automated voice response system has improved the customer service in
telecommunications. Ford Motor Companys technology allows customers to set their own
service appointments and monitor the status of their vehicles through online. Also, a good
number of websites offer health related information.
3. Close link with customers
Financial service companies achieve a close link with their customers by employing the
latest technology. Computers are linked into clients information system. Companies
engaged in goods distribution instal order terminals, inventory control terminals of other
equipment at their customers premises. This provides the client with better service by
facilitating an integrated client relationship. Financial companies provide online financial
services. Services are provided on the basis of online orders which go directly into the
information management system without human intervention.
4. Higher level service
Technology enables both customers and employees to be more effective in receiving and
providing service respectively. Self-service technologies enable customers to serve access
to their accounts, check balances, apply for a loan and transfer money among various
accounts. Computer information system allows banks and insurance companies to furnish
data to their customers without delay. By having immediate access to information about
their service offerings, the employees are able to serve their customers well. This allows
employees to customize their services to fit the customers needs. Technology provides
tremendous support in making the employees more efficient in delivering service.
Customer relationship management and sales support software aid frontline employees in
providing better service.
5. Global reach of service
Infusion of technology in service industry offers enormous scope for reaching out to
customers around the globe. The internet is just one big service which knows no
boundaries. Information, customer service and transactions can move across countries.
The service provider can reach any customer who has access to the web. Technologybased service can be extended to the customers living around the globe.
6. Cost rationalization
Customer expectations are high because of the excellent service they receive from some
companies. They expect high quality of service at reasonable cost. Just as in the
manufacturing sector, technology can be used in the service industries. It can replace less
skilled people working in frontline service jobs. This substitution reduces the costs of
services. For example, automatic car wash and automatic cash dispenser are desired by the
customers for their promptness in work. Websites providing answers to specific disease,
drug and treatment details are another standing example for cost rationalization.
SERVICE MAPPING
Service maps show the process and structure of providing the service. Preparation of
service maps is essential in large organizations in order to enable the employees to understand the
service logic. A service map has four dividing lines namely, (i) the line of interaction (ii) the line
of visibility (iii) the line of internal interaction and (iv) the line of implementation.
The line of interaction denotes the difference between the customers and frontline
employees parts in the service encounter. The work of frontline employee is above the line of
visibility. But the work carried out below the line of visibility is out of sight of the customer. The
frontline employees and the operations support staff work in the service organization in
fulfillment of the needs of the customers. The division between these staff members is represented
by the line of interaction. The internal interactions among these members are not in the sight of
the customers. The line of implementation represents the division between operations staff and
general management services. They are not directly involved in implementing the service. Figure
3.22 denotes the four lines in the service map.
(ii)
(iii)
Service maps explain how customers interact with the service organization. The
actions of the customers and the response of the service personnel are clearly shown
by service maps.
Basically, a service map is a visual representation of the structure of the service. The
additional vertical layers drawn in the diagram vividly explain the structure of the
service.
There are some backstage activities in service organization which are not visible to the
customers. These backstage activities are divided into those provided by frontline
employees, support staff and management services.
BUILDING SERVICE ASPIRATIONS
The service generating organizations build service aspirations in the process of generating
demand for the services. The aspirations may be generated in two ways, namely, generating
aspirations to serve the users and generating aspirations to use the services. Service aspirations
of organization engaged in generating services focus on offering quality services. Quality is
generally conceptualized as an attitude towards service. Customer satisfaction with service quality
can be defined by comparing perceptions of service received with expectation of service desired.
The organizations build up service aspirations in such a way that promised services are made
available to the customers. When expectations of the customers are met, then quality is regarded
satisfactory. When expectations are not met, then service quality is unacceptable. The gap
between the services promised and services offered represents the inefficiency of the organization
in building service aspirations. Generally, the professionals working in the organizations are
responsible for building service aspirations. The employees engaged in offering the services
should work with the aim of offering quality service to the customers. Lack of employeeorientation and lack of training to employees are some of the important reasons which cause a gap
between the services promised and the services offered. Employees are oriented through training
and motivation. Figure 3.23 shows the process of building service aspirations.
Figure 3.24 Interface between marketing management, operations management and human
resource management
The development of human resources paves the way for the formation of human capital. If
we do not mange people properly, the efforts for innovating the technology and improving quality
of services would become futile. So, the management experts all over the world give importance
to the management of human resources. Apart from obtaining subjective knowledge about human
resources, emphasis should be placed on realization of right and wrong, fair and unfair, ethical
and unethical practices.
Summary
The service process refers to how a service is provided to or delivered to a customer.
Designing a service4 delivery system is a creative process. Designing a service process
system involves issues such as location, facility, design and layout for effective work flow, etc.
the design consists of four related components namely, service product design, service
facility design, service operations process design and customer service process design. The
management model for the service design consists of eight stages namely, (1) defining
design attributes, (2) specifying performance standards, (3) generating and evaluating design
concept, (4) developing design details, (5) Implementing the design (6) measuring
performance, (7) assessing satisfaction and (8) improving performance. While designing a
service process system, various strategic decisions are involved in the matters related to
service process planning. These include basic technological decisions, material decisions,
specific equipment decision, process flow decisions and people decision. A service blue print
is a flow chart of the service process. It convevs the service concept by showing all the
elements or activities and their sequencing and interaction. It also explains how each job or
department functions in relationship to the service as a whole. The preparation of a blueprint
involves certain stages. (1) put the service in the form of its molecular structure (2) divide the
process into logical steps (3) recognize the variability in the process; and (4) Identify the
backstage elements in the process Apart from service blueprint organizations use service lay
outs which include (1) process layout (2) products layout; and (3) group layout.
Benchmarking finds out the best performers in an area as that one could match ones own
performance with them and even surpass them. The measure of relationship between input
and output is called productivity measurement. It is related to service production concepts
such as efficiency effectiveness economy, production function and capacity utilization. There
are certain reasons for low productivity in service industries. In order to improve productivity,
certain steps must be taken by the service firms. Service organizations can improve their
productivity by introducing systems and technology in their operations. Service maps show
the process and structure of providing the service. The service generating organizations build