CHAPTER 10:

INTEGRATED
SERVICE
MANAGEMENT
8 P MODEL : COXSWAIN MODEL
8 P MODEL : COXSWAIN MODEL

PROCESS
PRODUCT

PRODUCTIVITY &
PLACE & TIME QUALITY

PEOPLE
PROMOTION &
EDUCATION

PHYSICAL
PRICE & EVIDENCE
OTHER COSTS
 A. PRODUCT

The term “product” is defined as a

bundle of attributes capable of
exchange or use, usually a mix of
tangible and intangible forms. It may
be an idea, a physical entity, or a
service, or any combination of these.
LEVELS OF SERVICES
LEVEL CONTENTS EXAMPLE
1 Basic Food

2 Basic+ minimum Kitchen, serving

conditions space, menu
availability
3 In addition to expected Sparkling floors,
Smiling employees,
ambience
4 Exceed expectations Welcome flowers,
Beyond the usual Welcome Drink
SUPPLEMENTARY SERVICES: SERVICE FLOWER

Locker
facility
Swimming
Card room

CORE: Shopping
Food and
Transport shelter
Casino
Medical
services Lounge

Supplementary
services
CORE AND PRODUCT SURROUND

BASIC
FEATURES

PRODUCT
SURROUND

CORE
PRODUCT

ADDED
VALUES
 Consists Impact Cost

Core Basic 30% 70%

product features

Product Added 70% 30%

surround values
CONTINUUM OF PRODUCT ATTRIBUTES
Most Goods Most Services

Easy Difficult
to evaluate to evaluate
Chair

Education
Foods
Clothing

Haircut
Motor vehicle

Legal services
Restaurant meals

Lawn fertilizer

Computer repair
Entertainment

Complex surgery
High in search High in experience High in credence
attributes attributes attributes
 TYPES OF NEW SERVICES
TYPE EXAMPLES

Major Innovation First broadcast TV. Service

Start up business ATM, Vending Machines

New service for Library starts a restaurant

currently served
market
Service Line New Courses, New Sectors, New dish
Extensions on menu
Service Extended Banking hours
Improvements
Style Changes New design on bank cheques
NEW SERVICE DEVELOPMENT PROCESS

1. Exploration & Idea Generation

2. Screening
3. Concept testing
4. Business analysis
5. Service development
6. Test marketing
7. Commercialization
8. Evaluation
PRODUCT LIFE CYCLE
 SERVICE PRODUCT DECISIONS
EXISTING PRODUCTS NEW PRODUCTS

EXISTING Market Product

MARKETS penetration development

NEW Market
MARKETS Development Diversification

IGOR ANSOFF`S PRODUCT GROWTH MATRIX

 B. PRICE
• Only element of the marketing mix which
generates revenue. All others generate cost

• Importance of income groups, Competition and

Government Regulations

• “Perceptions of quality”

• Influence of Pricing on service Sector

• Pricing Objectives
 METHODS OF PRICING
1) COST BASED:
 Basic Cost/ Cost Plus
 Contribution
 Working Back/ Expected Return/ Rate Of Return

6)MARKET ORIENTED/ DEMAND BASED:

 Skimming
 Penetration
 Price Discrimination (Customer, Product,
Location, Time, Quantity)
 Pricing to meet customer expectations
 Discounts and Sales
1) COMPETITION BASED:
 Destroyer Pricing
 Going Rate Pricing/ price matching
 Price bidding/ close bid pricing

6) VALUE STRATEGIES:

 Satisfaction Based:
 Service Guarantee
 Benefit Driven Pricing
 Flat Rate Pricing
 Convenience Pricing
A. Relationship Based:
 Long term contracts
 Price Bundling

C. Efficiency Pricing
 A. PLACE
a) Time: doctor 4-7 pm
pharmacy 24 hours

b) Method: Physical
Electronic

c) Speed and convenience: channel of distribution

must be short since services are intangible and
inseparable
PLACE OF INTERACTION/ OPTIONS FOR
SERVICE DELIVERY
Service
provider customer

Service customer
provider

Service customer
provider
S
CHANNEL DECISIONS
E
R DIRECT C
V
U
I
C S
E FRANCHISEES T
P O
R
ELECTRONIC CHANNELS M
O
V E
I
R
D
E
AGENTS AND BROKERS
R
MARKET COVERAGE STRATEGIES

1. Intensive Distribution
2. Selective Distribution
3. Exclusive Distribution
 D. PROMOTION
“Promotion is used in hope of influencing the
recipients feelings, beliefs or behavior, through
any form of communication.”

ICICI sindhoor campaign

Amity Education
Taj- “She” Campaign
GUIDELINES FOR SERVICE COMMUNICATION

 Provide tangible clues

 Make the service understood
 Communication continuity
 Promising what is possible
 Capitalizing on word of mouth
 Direct communication to employees
 ORIGINATING SOURCES OF MESSAGE
RECEIVED BY THE TARGET AUDIENCE

Messages originating
within the organization
Front-line staff

duc tion
Pro nels Service outlets
Chan A
Mark
U
Chan eting Advertising D
nels Sales promotions
Direct marketing
I
Personal selling E
Public relations N
C
E
Word of mouth
Messages originating Media editorial
outside the organization
 PROMOTION MIX ELEMENTS

1. Advertising
2. Personal selling
3. Sales promotion
4. Public relations
5. Word of mouth
6. Direct mail
7. Tele-marketing
8. E-marketing
 PROCESS OF COMMUNICATION

ENCODES SELECTIVE EXPOSURE

SENDER MESSAGE CHANNEL RECEIVER

DECODES

FEEDBACK

PRE TESTS AND POST TESTS

 E. PEOPLE

Who provide the Who receive the

service service

SERVICE SERVICE
PROVIDER RECEIVER/
CUSTOMER
 PEOPLE

EXTERNAL INTERNAL

Other Employees
customers

Students of Teachers
other divisions
ROLE OF EMPLOYEES IN SERVICES

High contact – Low contact services

Professional – Non- Professional Services

Primary Role
Facilitating Role
Ancillary Role
 INTERDEPENDANCE CYCLE/ THE SERVICE
MANAGEMENT TRINITY

Operations Marketing
Management Management

Customers

Human Resources
Management
 KEY CONCEPTS

• Recruitment
• Training and development
• Motivation
• Retaining
• Boundary spanning
• Emotional labour & Surface Acting
VIMP CONCEPT : EMPOWEREMENT
“Removing the barriers that prevent workers
from exercising judgment and creativity”

4. Suggestion involvement: Big Mac, Fedex

pay for suggestion schemes
5. Job involvement
6. High involvement
 PARTIAL EMPLOYEES
• Some service providers treat customers
as “partial employees” so as to improve
the service quality and productivity.

• Customer is both employee and customer

• Example: student council

 F. PHYSICAL EVIDENCE
“Physical evidence is the environment in which the
service is delivered and where customers and
firms interact. Any tangible commodities that
facilitate performance or communicate the
service are also physical evidence.”

ELEMENTS OF PHYSICAL EVIDENCE

 Exteriors
 Interiors
 Other tangibles
 PHYSICAL ENVIRONMENT

AMBIENT DESIGN SOCIAL

FACTORS FACTORS
FACTORS

Furniture
Smell in Tables Other
hospital patients
Operation theatres
Lights
 EVIDENCE

ESSENTIAL PERIPHERAL
EVIDENCE
EVIDENCE

Equipments in gym Brochure/ magazine

PURPOSE OF SERVICE ENVIRONMENT/
INFLUENCE ON BUYER BEHAVIOUR
 Message-creating Medium

 Attention-creating Medium

 Effect-creating Medium
G. PROCESS: VVVVIMP
“ It is the way of undertaking transactions,
supplying information and providing
services in a way that is acceptable to the
consumers and effective to the
organizations. Since service is
inseparable, it is the process through
which consumers get into interaction with
the service provider”
 FUNCTIONALTY

EASE OF DESIGN OF
USE SECURITY
PROCESS

ASTHETICS

EG. ATMS
 Tells us the actual sequence in which service flows
to every customer

Every service will have:

• Complexity: steps involved
• Divergence: variability in each step.

complexity divergence example

standard high low Airlines
customized Low high Doctors/
restaurants
 STAGES OF SERVICES
Pre-transaction Stage
•Observing
•Enquiring

Transaction Stage
•Meeting with agents
•Customization of service package
•Purchasing

Post-transaction Stage
•After sales service (e.g. Information,
Extra advice, Additional services).
 VIMP CONCEPTS
2. CRITICAL MOMENTS/ CRITICAL INCIDENTS/
MOMENTS OF TRUTH
3. SERVICE ENCOUNTERS
4. CIT
5. BLUE PRINTING
6. ROLE AND SCRIPT THEORIES
7. SERVICE MAPPING
8. CUSTOMER CONTACT WITH SERVICES
9. CUSTOMERS AS COPRODUCERS
1. CRITICAL MOMENT/ INCIDENTS/ MOT
“All those moments when you come in contact
with the service provider which leaves either a
satisfying or a dissatisfying experience for
either or both of them” Venn Diagram
- Carlzon (chief executive) Scandinavian Airlines
coined the term MOT
4. SERVICE ENCOUNTER
“Entire length/ duration/ period during which
customers interact directly with the service”
• Service encounters must meet the customers
expectation.
• Venn Diagram
1. Could be:

• Single encounter: restaurant

• Series/ multiple encounters: doctor/ consulting
• Different places/locations: airlines- baggage,
check in, etc
• Different employees: restaurant

2. Could be:
• Shorter period encounter
• Longer period encounter
3. CRITICAL INCIDENT TECHNIQUE :( CIT )

“Method to collect and categorize moments of truth

and critical moments”

Cit helps to find

Customer Customer
satisfaction dissatisfaction

CHANGES
 4. BLUE PRINTING
• “Process/ design needed to make sure that the
critical moments are encountered correctly”
• “A blue print is a visual portrayal of a service
plan. This is a technique used when planning
a new or a revised process and prescribes
how to function”
• Allows the service marketer to evaluate which
tasks are more important/ critical and which
are prone to failure.
• BP helps turn complaints into repeat business
 Stages in blue printing

1. Represent the service product in molecular

structural formula
2. Breaking down the process into logical steps
3. Recognizing the variability in the process
4. Identify the backstage elements in the process

Q) WHAT IS BLUE PRINTING. EXPLAIN WITH

AN EXAMPLE: 10 MKS. VVVVVIMP
EXAMPLE : AN OVERNIGHT STAY IN A HOTEL
 5. ROLE AND SCRIPT THEORIES
• Role: A set of behavior patterns learned through
experience and communication

• Role congruence: In service encounters, employees and

customers must act out defined roles for good outcomes

• Script: Predetermined stereotyped sequence of actions that

defines a well known situation. A script will have a set of
activities that has conventional roles, props, even
sequences, standard entering conditions and standard
outcomes
 Script tells a customer

Sequence Other
His role peoples
of events
actions

INTERACTION
BETWEEN ALL 3

“CUSTOMER SATISFACTION WILL ALWAYS

DEPEND ON WHETHER HE HAS RECEIVED
SERVICES AS PER THE SCRIPT”
 6. SERVICE MAPPING
“Service mapping is a technique which is used to
portray an existing service situation and provides
a useful tool to access and identify service
evidence opportunities.”

Service maps tell us:

• How to deliver a service
• Role of employee
• Interaction with customers

SM gives a visual picture of the entire organization

LAYERS AND FEATURES OF SERVICE MAPS: IMP
PROCESS

customer Line of
Front Stage
Interaction

Front line Line of

Service visibility
Structure employees Line of
Back stage
internal
Support interaction
staff
Line of
Management Impletation
Services
EG: educational institution- COLLEGE

Teaching

Students
Front Stage Line of
Teachers, (classrooms) Interaction
Professors,
Line of
Peons visibility
Service
Structure Staff Line of
Admissions
Office and Admin internal
& H. R. C.
Staff interaction
office
Line of
Principal’s Impletation
HSNC, Principal,
Vice Principal Office
 7. LEVELS OF CUSTOMER CONTACT
WITH SERVICES
• High contact: customers visit the service facility /
provider in person. Teacher.
• Medium contact: customer contact is limited. Travel
agency.
• Low contact: very little. Call center.

The 3 levels are based on:

• The extent of interaction with the service personnel
• The extent of interaction with the Physical elements
• The extent of interaction with both
Types of Customer Contact:

• Constant physical contact (barbers)

• Constant communication contact (call center)

• Sporadic physical contact (medical services)

• Sporadic communication contact (financial

services
8. CUSTOMERS AS COPRODUCERS (3
LEVELS OF CUSTOMER
PARTICIPATION)
• LOW- service is provided regardless of any
individual purchase. Theatre. Online buying.
Flight.

• MODERATE- Inputs required for service

creation. Restaurant.

• HIGH- Co-production. Service is created from

the customers purchase & active participation.
Counseling/ learning.
H. PRODUCTIVITY & QUALITY
PRODUCTIVITY: How inputs are transformed into
outputs : THE TRANSFORMATION PROCESS

QUALITY : Degree of satisfaction a customer gets

from a service, by meeting their needs, wants and
expectations

 Competitive advantage = Good quality

 Competitive disadvantage = Poor quality

 In services quality is perceived by – supplementary

services.( flower)
COMPONENTS OF SERVICE QUALITY

QUALITY

TECHNICAL FUNCTIONAL
QUALITY QUALITY

EXTRINSIC INTRINSIC
 GARVINS 5 PERSPECTIVES OF
QUALITY
Quality = excellence. Quality is synonymous with
Transcendental: innate excellence, a mark of uncompromising
standards & high achievements

Product-Based: Quality is precise and measurable

User-Based: Quality lies in the eyes of the beholder

Manufacturing- Quality is conformance to the firm’s developed

Based: specifications

Value-Based: Quality is a trade-off between price and value

DIMENSIONS/ DETERMINANTS OF QUALITY
1. Credibility:
2. Security: locker facility
3. Access: hotel answering in 3 rings
4. Communication: proper rates given
5. Understanding the customer: making customers
welcome at reception
6. Tangibles: car park
7. Reliability: airlines ensuring baggage
8. Responsiveness: willingness to help. Idbi.
9. Competence: Ability
10. Courtesy:
10 DIMENSIONS 5 DIMENSIONS
3. Tangibles 3. TANGIBLES

5. Reliability 5. RELIABILITY

7. Responsiveness 7. RESPONSIVENESS

9. Competence
10. Courtesy 10. ASSURANCE
11. Credibility
12. Security

14. Access
15. Communication 15. EMPATHY
16. Understanding the
customer
 SERVQUAL SCALE
• Includes the 5 dimensions of quality

• “Servqual is based on the premise that

customers can evaluate a firms service quality
by comparing their perceptions of its service
with their expectations”

• Servqual: Instrument developed by Parasuram,

Ziethaml and Berry Servqual to measure the
level of customer satisfaction with respect to
quality
SERVQUAL SCALE: RATER

A T E R
R

SERVICE QUALITY
 RATER: VIMP CONCEPT
• RELIABILITY: Ability to perform the required
service dependably and accurately

• ASSURANCE: Knowledge and accuracy of the

employees and their ability to convey trust and
confidence

• TANGIBLES: Appearance of physical facilities,

equipments, personnel and communication material

• EMPATHY: Caring individual attention to the

customer. It involves Customizing services

• RESPONSIVENESS: Willingness to help customers

and provide prompt service
 5 STAR OF QUALITY: VIMP

Reliability

Responsiveness Assurance

Empathy Tangibles
 QUALITY: HOUSING SECTOR
RELIABILITY Rahejas – know their construction
will be excellent
Delivery of house on time
ASSURANCE Trust the big names
Security, fire alarms
TANGIBLES Gate of bldg, surrounding area,
park, car park etc
EMPATHY Interior designer, architect,
watchman knowing residents
RESPONSIVENESS Real estate agent, plumber,
electrician of bldg come
immediately
 QUALITY SHORTFALLS

Customer expectations based on:

• Individual needs and wants
• Recommendations: word of mouth
• Service marketor/provider
• Past experience

Quality v/s expectations

8. Good quality: more than expectations
9. Adequate quality: within tolerance zone
10. Quality shortfall: outside/ below tolerance zone
GAPS IN SERVICES: GAP MODEL/ GAP
ANALYSIS
Customer needs CUSTOMER
and expectations

1. Knowledge Gap
Management definition
of these needs
MANAGEMENT
2. Standards Gap
Translation into
design/delivery specs

3. Delivery Gap

Execution of 4. I.C.Gap Advertising and

design/delivery specs sales promises

5. Perceptions Gap 6. Interpretation Gap

Customer perceptions Customer interpretation
of product execution of communications

7. Service Gap
Customer experience
relative to expectations

1, 6, 7 – external – between customer and organization

2,3,4,5 - between different functions and departments within organization
• The knowledge gap: The difference between what
the service provider believes the customers expect
and the customers actual needs and expectations

• The standards gap: The difference between

management perception of customer expectations
and the quality standards established for service
delivery

• The delivery gap: The difference between

specified delivery standards and the service
providers actual performance on these standards.
Eg. Pizza half hour delivery promise.
• The internal communication gap: The difference
between what the company's advertising & sales
personnel think are the products features,
performance & service quality level and what the
company is actually able to deliver

• The perception gap: The difference between what

is actually delivered and what customers perceive
they have received

• The interpretation gap: The difference between

what a service providers communication efforts
actually promise and what a customer thinks was
promised by these communications
• The service gap: The difference between what
customers expect to receive and their
perception of the service that is actually
delivered

Quality shortfall occurs here in 7th gap

No. Gap Remarks
Narrow
Kotak: “We believe the customer
wants the right product and quick
1 Knowledge claim settlements.”
Customer: “I need the right product and
want speedy settlements for every
claim.”
Negligible
Kotak meets the customers the
2 Standards customer’s expectations of high
quality service standards, that are at
par with the best in the industry.

Substantial
Customer’s usual expect speedy claim
3 Delivery
settlement. The processing time is often
longer than what the customers expect.

4 Internal communications
5 Perceptions
6 Interpretation
7 Service
Narrow
Kotak’s employees are well trained
to explain the features of the
products as mentioned on their
advertisements.
Negligible
Life insurance policies of Kotak
deliver exactly what the customer
perceives one to be.
Narrow
Kotak does not complicate its
advertisement campaigns and the
employees are trained well to explain
technicalities in a simple fashion.
Hence customers are able to
interpret communications.
Negligible-Narrow
 PRESCRIPTIONS FOR CLOSING
GAPS
1. Learn what customers expect
2. Establish the right quality standards
3. Ensure that the service performance meets
standards
4. Ensure communication promises are realistic
5. Explain to the customer what the service has
done for them
6. Pretest all advertising so there is no
communication gap
7. Try to match customers perception to what is
being delivered
 SERVICE GUARANTEE: VIMP
CONCEPT
• “Predefined standards where the customer is
entitled compensation in case of failures”

• “Is a promise to customers ensuring highest of

standards”

• Examples: Dominoes, Mc Donald's

ADVANTAGES OF GUARANTEES

• Force firms to focus on what customers want &

expect in each element of the service
• Set clear standards telling customers and
employees what the company stands for
• Require development of systems for generating
meaningful customer feedback and acting on it
• Force service organizations to understand why
they fail and encourage them to identify and
overcome potential fail points
• Reduce the risk of purchase decision and build
up long term loyalty
Service guarantee must be:
• Unconditional
• Easy to understand
• Meaningful
• Easy to invoke
• Quick and easy to collect

Service Guarantee types:

• Express/ stated/ explicit
• Implied/ implicit
• Satisfaction guarantee
• Service attribute guarantees

DIFFERENCE BETWEEN GURANTEE AND WARRANTY