Service Strategy

1. Service Strategy

2. The Service Process Matrix

3. Challenges for Service manager • Low Labor Intensity: • Capital decisions • Technological advance • Managing demand peaks/off-peaks • Scheduling service delivery • High Interaction/Customization: • Fighting cost increases • Maintain quality • Response to customer interactions • Gaining employee loyalty • Low Interaction/Customization: • Marketing • Making service “warm” • Attentions to physical surroundings • Maintaining SOP • High Labor Intensity: • Hiring • Training & Method of development • Employee’s welfare • Scheduling workforce

4. Strategic Service Classification (Relationship with Customers) Type of Relationship between Service Organization and Its Customers Nature of Service Delivery“Membership” relationship No formal relationship Insurance Radio station Telephone subscription Police protection Continuous delivery College enrollment Lighthouse of service Banking Public Highway American Automobile association Long-distance phone calls Restaurant Theater series subscription Mail service Discrete transactions Commuter ticket or transit pass Toll highway Sam’s Wholesale Club Movie theater Egghead computer software Public transportation

5. Strategic Service Classification (Method of Service Delivery) Availability of Service Outlets Nature of Interaction between Customer and Service OrganizationSingle site Multiple site Customer goes toTheater Bus service service organizationBarbershop Fast-food chain Service organizationLawn care service Mail delivery comes to customerPest control service AAA emergency repairs Taxi Customer and service organization transact atCredit card company Broadcast network arm’s length (mail or Local TV station Telephone company electronic communications)

6. The Strategic Service Vision • Target market segment  Dimensi yang digunakan untuk segmentasi • Service concept  Elemen terpenting dari jasa yang ditawarkan • Operating strategy  Bagaimana kualitas & biaya dikendalikan • Service delivery system  Teknologi yang digunakan, tata letak, prosedur

7. Competitive Environment of Services • Hambatan masuk yang relatif rendah • Economies of scale yang terbatas • Biaya transportasi yang tinggi • Fluktuasi penjualan • Tanpa kekuatan berhadapan dengan pembeli atau pemasok • Produk substitusi • Kesetiaan pelanggan yang tinggi • Exit Barriers

8. Competitive Services Strategies Major Competitive Dimensions • Cost—”make It Cheap” • Product Quality & Reliability—”make It Good” • Delivery Speed—”Make It Fast” • Delivery Reliability—”Deliver It When Promised” • Coping with Changes in Demand—”Change Its Volume” • Flexibility & New product Introduction—”Change It” • Other Product-Specific Criteria—”Support It” (technical liaison and support, meeting a launch date, supplier after-sale support)

9. Competitive Services Strategies Generic Competitive Strategies (Michael Porter) • Overall Cost Leadership  Requires efficient-scale facilities, tight cost, overhead control, and innovative technology. • Differentiation  Creating service that is perceived as being unique such as brand image, technology, features, customer service, and dealer network. • Focus  Servicing a particular target market very well by addressing customer’ specific needs. Application of differentiation and/or overall cost leadership to a particular market segment rather than the entire segment.

10. Competitive Service Strategies (Overall Cost Leadership) • Seeking Out Low-cost Customers • Standardizing a Custom Service • Reducing the Personal Element in Service Delivery • Reducing Network Costs • Taking Service Operations Off-line

11. Competitive Service Strategies (Differentiation) • Making the Intangible Tangible • Customizing the Standard Product • Reducing Perceived Risk • Giving Attention to Personnel Training • Controlling QualityNote: Differentiation in service means being unique in brand image, technology use, features, or reputation for customer service.

12. Competitive Service Strategies (Focus) • Buyer Group • Service Offered • Geographic Region

13. Customer Criteria for Selecting a Service Provider • Availability (24 hour ATM) • Convenience (Site location) • Dependability (On-time performance) • Personalization (Know customer’s name) • Price (Quality surrogate) • Quality (Perceptions important) • Reputation (Word-of-mouth) • Safety (Doing things to people) • Speed (Avoid excessive waiting)

14. Order Winning Criteria--Service Purchase Decision • Service Qualifier: Dimensi yang harus ada pada jasa saat memasuki pasar. Examples are cleanliness for a fast food restaurant or safe aircraft for an airline. • Service Winner: Dimensi persaingan yang digunakan konsumen memilih di antara provider yang ada. Example is price or reputation, or convenience. • Service Loser: Failure to deliver at or above the expected level for a competitive dimension. Examples are failure to repair auto (dependability), rude treatment (personalization) or late delivery of package (speed).

15. Competitive Role of Information in Services Strategic Focus Competitive Use of Information On-line Off-line (Real time) (Analysis) Creation of barriers to entryData base asset External Reservation system Selling information (Customer) Frequent user club Development of services Switching costs Micro-marketing Revenue generationProductivity enhancement Internal Yield management Inventory status (Operations) Point of sale Data envelopment Expert systems analysis (DEA)