Today ’ s Agenda

1. Today’s Agenda • Service Audit • Customer Expectation • Customer Perception

2. Five Questions to Think Over for Next Class Discussion • Is Nepal already in the service economy? Yes or No Justify your answer with data. Do proper research to answer these questions, substantiate with data and examples. Don’t give random answers.

3. Five Questions to Think Over for Next Class Discussion • Do you normally consider the service of private institutions in Nepal good or bad? What is the reason behind it? Do proper research to answer these questions, substantiate with data and examples. Don’t give random answers.

4. Five Questions to Think Over for Next Class Discussion • What is your service experience with the public institution of Nepal? Why things are happening that way? Do proper research to answer these questions, substantiate with data and examples. Don’t give random answers.

5. Five Questions to Think Over for Next Class Discussion • What to you think about Nepali service culture? Can service culture be taught, if yes how? Think from organizational perspective and our general life perspective. Do proper research to answer these questions, substantiate with data and examples. Don’t give random answers.

6. Five Questions to Think Over for Next Class Discussion • Can service be the differentiating factor in an organization? What is its contribution in brand building? Do proper research to answer these questions, substantiate with data and examples. Don’t give random answers.

7. Service is Everybody’s business

8. Examples of Service Industries • In these examples, value is co-created. • Hospitality • restaurant, firm/motel, bed & breakfast • ski resort, rafting • Health Care • hospital, medical practice, dentistry, eye care • Professional Services • accounting, legal, architectural • Financial Services • banking, investment advising, insurance • Travel • airline, travel agency, theme park • Others • hair styling, pest control, plumbing, lawn maintenance, counseling services, health club, interior design • What do customers value more the good or the service?

9. Services defined • Customers purchase SERVICES that they cannot touch or taste. • Services are PERFORMANCES, employees as actors. • Services are DEEDS, legal right to stay in a firm, to use a car, to have a seat on a specific flight. • Services ENHANCE peoples’ lives, but they are not essential to human life.

10. Service Challenges • Without touch, taste, smell, a consumer’s ability to JUDGE the quality of services is limited. • Every service has RISK, which consumers want to minimize before purchase. • Customers look for clues/evidence to judge the quality of a service. • A firm needs to provide evidence (information) so that customers can judge the quality of a service.

11. Tangibility Spectrum Clues of quality— How would you signal quality to customers? Services Goods

12. Search, Experience, and Credence Qualities 1-12

13. Why are services so important?

14. Relevance of Service Marketing in today’s world… • Nepal • GDP - composition by sector • agriculture: 38.1% • industry: 15.3% • services: 46.6% (2012 est.) • US • GDP - composition by sector • agriculture: 1.2% • industry: 19.1% • services: 79.7% (2012 est.)

15. Why Services Matter • Services dominate U.S. and worldwide economies • Services are growing dramatically • Service leads to customer retention and loyalty • Service leads to profits • Services help manufacturing companies differentiate themselves

16. Contributions of Service Industries to U.S. Gross Domestic Product

17. Changing Structure of Employment as Economic Development Evolves Share of Employment Agriculture Services Industry Time, per Capita Income Source: IMF, 1997

18. Why do firms focus on Services? • Services can provide higher profit margins and growth potential than products • Customer satisfaction and loyalty are driven by service excellence—not simply selling goods • Services can be used as a differentiation strategy in competitive markets

19. How Services differ from goods & challenges

20. Characteristics of Services Compared to Goods WAI WAI Vs. Yeti Airlines’ Service Intangibility Heterogeneity Simultaneous Production and Consumption Perishability

21. Implications of Intangibility • Services cannot be inventoried • cannot be easily patented • cannot be readily displayed or communicated. • Mass production of services is difficult • Pricing is difficult • You have to make the intangible-tangible

22. Implications of Heterogeneity • Service delivery and customer satisfaction depend on employee and customer actions • Service quality depends on many uncontrollable factors • There is no sure knowledge that the service delivered matches what was planned and promoted—especially at the front-line! • Customers want homogeneous services-you have to standardize services

23. Implications of Simultaneous Production and Consumption • Customers participate in and affect the transaction • Customers affect each other • Employees affect the service outcome • Decentralization may be essential • Mass production is difficult • You have to try to keep the right customer mix in your firm!

24. Implications of Perishability • It is difficult to synchronize supply and demand with services • Crowding is a negative • Crowding is a positive • Services cannot be returned or resold • Guarantees are difficult, can services be guaranteed?

25. Comparing Goods and Services

26. Today’s Discussion • Service Marketing Mix • 4 Ps to 7Ps • People • Process • Physical Evidence

27. Any queries till now?

28. Chapter 2 The Gaps Model of ServiceQuality – A little recap • The Customer Gap • The Provider Gaps: • Gap 1 – The Listening Gap • not knowing what customers expect • Gap 2 – The Design and Standards Gap • not having the right service designs and standards • Gap 3 – The Performance Gap • not delivering to service standards • Gap 4 – The Communication Gap • not matching performance to promises • Putting It All Together: Closing the Gaps

29. How to conduct service audit of your company?

30. Service Audit of Yeti Airlines

31. The Customer Gap

32. Customer Gap Key Factors Leadingto the Customer Gap Customer Expectations Customer Perceptions

33. Customer expectation of service

34. Service Expectations Factors that Influence Customer Expectations of Service Issues Involving Customers’ Service Expectations 3-34

35. Customer Expectations

36. What do your customers expect from you, the Service provider?

37. When you’re a customer, what matters to you At the hospital In the examination room In the waiting room When calling your doctor Leaving the doctor’s office Customer Expecations

38. Customer expectations?

39. Customer expectations?

40. When a client visits your health center: It’s primarily for you’re your technical quality Clients may expect polite staff, attentive, pleasant If expectations are not met, the client leaves dissatisfied Customer expectations

41. Possible Levels ofCustomer Expectations 3-41

42. Dual Customer Expectation Levels 3-42

43. The Zone of Tolerance 3-43

44. The Zone of Tolerance ← Delights Desired Service Zone of Tolerance ← Desirables ← Musts Adequate Service 3-44

45. The range of expectations between desired and adequate… can be wide or narrow can change over time can vary among individuals may vary with the type of product/service Zones of Tolerance 3-45

46. Zones of Tolerance for DifferentService Dimensions 3-46

47. Factors That Influence Desired Service 3-47

48. Factors That InfluenceAdequate Service 3-48

49. Factors That Influence Desired and Predicted Service 3-49

50. Exercise – Glacier Bear Lodge