Service

Marketing
SUB CODE: 14MBA MM303
 CONCEPT :
The service sector is enormously large
and varied. It includes banking, transportation,
insurance, communication, education,
employment, healthcare, Legal service,
accounting, tourism, hospitality and
information services. Some of the services are
provided on a nonprofit basis, for example:
education and healthcare, while others are
provided on a commercial basis such as hotels,
professional consultants, solicitors etc.
 MEANING AND DEFINITION OF
SERVICE
A service is an act or performance offered by one party to another.
Although the process may be tied on a physical product, the performance is
transitory, often intangible in nature, and does not normally result in ownership
of any of the factors of production.

A service is an economic activity that creates value and provides

benefits for customers at specific times and places by bringing about a desired
change in, or on behalf of the recipient.

DEFINITION:

The American Marketing Association defines services as - Activities,

benefits and satisfactions which are offered for sale or are provided in
connection with the sale of goods.
 CHARACTERISTICS OF A SERVICE
1.Intangibility:

This is the most basic and often quoted difference between goods and
services. Unlike tangible goods, services cannot generally be seen, tasted,
felt, heard or smelled before being consumed. The potential customer is often
unable to perceive the service before(and sometimes during and after) the
service delivery. Also, it poses a unique challenge to those engaged in
marketing a service as they need to attach tangible attributes to an otherwise
intangible offering.

Eg: car service.

2. Heterogeneity/Variability:
Given the very nature of services, each service offering is
unique and cannot be exactly repeated even by the same service
provider. While products can be mass produced and be homogenous
the same is not true of services.
eg: All burgers of a particular flavor at McDonalds are almost
identical. However, the same is not true of the service rendered by
the same counter staff consecutively to two customers
3.Inseparability (or simultaneous production and consumption) :

There is a marked distinction between physical goods and services in terms of

the sequence of production and consumption:

Physical goods Services

Production Sold

Storage Produced and

Sold consumed at

Consumed the same time

4.Perish ability:
Services cannot be stored, saved, returned or resold once they
have been used. Once rendered to a customer the service is
completely consumed and cannot be delivered to another customer.
eg: A customer dissatisfied with the services of a barber cannot
return the service of the haircut that was rendered to him. At the
most he may decide not to visit that particular barber in the future ,
hotel rooms
5.Fluctuating Demand:

Generally the demand for services is fluctuating in nature. Demand for

certain services that may be high during peak seasons may be low during off-
seasons. Most service organizations have capacity constraints. So
simultaneous attempt to achieve closer match between demand and supply is
sought. The combination of perish ability and fluctuating demand offers
challenges to service company executives in planning, pricing and promotion
of services.

6.Ownership:

When you buy a product, you will become the owner of that product- be it
a car, bus, bike, pen, computer or shirt. But in the case of service, you may pay
for its use, not its ownership.
 TYPES OF SERVICES

Core Services:
A service that is the primary purpose of the transaction.
Eg: a haircut or the services of lawyer or teacher.

Supplementary Services:
Services that are rendered as a corollary to the sale of a
tangible product. Eg: Home delivery options offered by
restaurants above a minimum bill value.
 DIFFERENCE IN GOODS AND SERVICE IN MARKETING

Goods service
oA physical commodity o A process or activity

oTangible o Intangible

oHomogenous o Heterogeneous

oProduction and distribution are o Production, distribution and

separation from their consumption consumption are simultaneous
processes
oCan be stored o Cannot be stored
oTransfer of ownership is possible o Transfer of ownership is not
possible
oNonperishable o Perishable
oReturn ability o Non returnable
o Easy to judge or evaluate o Difficult to evaluate
ogoods are identical o Services are differed or diversified
 REASONS FOR GROWTH IN
SERVICE SECTOR
1)Increasing affluence(wealth) :

Here with the increasing affluence, there has been an increase in the
demand for those services, which the customers used to perform by
themselves. For example, service provided by the gardener, servants, car
driver etc.

2)More leisure(free time) time :

This factor has lead to an increase in those services which are related to
entertainment, because of increase in leisure time in today's people life. For
example tourism industry has grown because of more leisure time available
to the people .
3)Greater complexity of the product:

With the growing complexity of the product, there has been an increase in
the services which are indirectly supporting the maintenance of these complex
products. For example Air-conditioner, car, computer, and other complex
products require service every yearly of every half yearly.

4)Greater life expectancy(hope) :

With increase in the average life of the people, there has been an increase in
the service which is related to field of health care, for example medical
services, pathology laboratory, nursing homes. Health care services etc.
5.)Higher percentage of working women:

With the passage of the time, there has been an increase in the working
women. This has indirectly leaded to increase in the growth in the services
such as, domestic servants, baby sittings etc.

6.) Lifes complexity:

As the daily routine gets busier, individuals find it difficult to manage

things on their own. This leads to an obvious need for tax consultants, legal
advisors, property advisors, marriage bureau, consultants, placement services,
etc
7.) New young youth:
Every new generation has its own characteristics and enjoys a
different life style. There is a lot of difference between the
generations in respect to their living conditions/ styles, maturity,
thinking, attitudes, behavior, beliefs, satisfactions, performance
values and so on. Todays generation with all these changes provide
more opportunities to services like entertainment, fast food,
computers, travel, picnic resorts, educational institution, counseling,
retailing, etc
 8.)Increasing number of new products:

There are certain products which, if invented will lead to growth in the
service sector .computer being the invention of the 21stcentury has lead to
software industry which is totally a sieve industry.

In short, today one can find a large variety of services being offered in the
market by service providers. These services are extremely heterogeneous and
varied. GATS ( General Agreement on Trade in Services) identified as many as
155 activities as services and classified them in the

Following 11 Major Categories:

Business services, Communication, Construction and engineering , Distribution,

Education, Environment, Finance, . Health, Tourism, Recreation, Transport

.
Concept of service marketing triangle
1. External Marketing :

In an external marketing, marketers interact directly to the end users.

They try to understand the need of customers and satisfy them after fulfilling their
demands.
In an external marketing, marketers set the pricing policies and create
awareness about the products and design promotional strategies and techniques
that help to attract the customers towards their products and services.
They communicate with their customers directly and convince them to
buy their products. They involve in constructive group of activities that helps to
design excellent products that meet the customers demands efficiently. Their goal
is to create awareness about their products or services among users by
communicating with them directly. They also grab the attention of the market and
produce interest in their services.
External marketing is one of the important parts of service marketing
triangle.
2. Internal Marketing:

1.SWOT Analysis (interaction with employees)

2.communicate the objectives
3.effective reward system
4.training and development, motivation, group discussion ,team work
5.working environment
6.employees involvement in decision making
If employees of the company are satisfied with their job and performance
rewards, they can become an effective asset of any organization. Executives of the
organizations fully understand the service marketing triangle if they want to gain a
competitive advantage in the market.
3. Interactive Marketing:

Interactive marketing involves in the delivery of products or service to the

customers and front office employees of the company. It helps in long term and short
term relation with customers.

Customers who are highly satisfied with their products or services can become
regular customers of their brand.

Marketers who cannot compromise on quality and deliver high quality products to
their customers have a great community of loyal customers. Their loyal customers
always prefer them to buy products.

Service marketing triangle has great importance and its components are essential in
the success of any business. A well established business always follows the strategies of
service marketing triangle.

Today, marketers who know how to remove the companys weaknesses and increase
the.
 Service Marketing Mix
The service marketing mix is a combination of the different elements of
services marketing that companies use to communicate their organizational
and brand message to customers.
The mix consists of the seven P's i.e. Product, Pricing, Place, Promotion,
People, Process and Physical Evidence.
1.Product:
In case of services, the product is intangible, heterogeneous and perishable.
Moreover, its production and consumption are inseparable. Hence, there is scope for
customizing the offering as per customer requirements and the actual customer
encounter therefore assumes particular significance.
However, too much customization would compromise the standard delivery of
the service and adversely affect its quality. Hence particular care has to be taken in
designing the service offering.
Eg: branding,warranties,quality level

2.Pricing:
Pricing of services is tougher than pricing of goods. While the latter can be
priced easily by taking into account the raw material costs, in case of services attendant
costs - such as labor and overhead costs - also need to be factored in. Thus a restaurant
not only has to charge for the cost of the food served but also has to calculate a price for
the ambience provided. The final price for the service is then arrived at by including a
mark up for an adequate profit margin.
Eg: flexibility ,terms,discounts
3. Place:
Since service delivery is concurrent with its production and cannot be stored
or transported, the location of the service product assumes importance. Service
providers have to give special thought to where the service would be provided.
Thus, a fine dine restaurant is better located in a busy, upscale market as against on
the outskirts of a city. Similarly, a holiday resort is better situated in the countryside
away from the rush and noise of a city.
Eg: exposure, outlet locations, storage .
4. Promotion:
Since a service offering can be easily replicated promotion becomes crucial in
differentiating a service offering in the mind of the consumer. Thus, service
providers offering identical services such as airlines or banks and insurance
companies invest heavily in advertising their services. This is crucial in attracting
customers in a segment where the services providers have nearly identical offerings
Eg: media types, sales promotion, type of ads.
5. People:
People are a defining factor in a service delivery process, since a service is
inseparable from the person providing it. Thus, a restaurant is known as much for
its food as for the service provided by its staff. The same is true of banks and
department stores. Consequently, customer service training for staff has become a
top priority for many organizations today.
Eg: employees ,customers, teamwork.
6. Process:
The process of service delivery is crucial since it ensures that the same standard
of service is repeatedly delivered to the customers. Therefore, most companies have
a service blue print which provides the details of the service delivery process, often
going down to even defining the service script and the greeting phrases to be used
by the service staff.
Eg: Flow of activates, standardized ,customized .

7. Physical Evidence:
Since services are intangible in nature most service providers strive to
incorporate certain tangible elements into their offering to enhance customer
experience. Thus, there are hair salons that have well designed waiting areas often
with magazines and plush sofas for patrons to read and relax while they await their
turn. Similarly, restaurants invest heavily in their interior design and decorations to
offer a tangible and unique experience to their guests.
Eg: facility design,reports web page .
 Marketing challenges in service industry.
1.Clients cant see or touch services before they purchase them:
This makes services difficult to conceptualize and evaluate from the client
perspective, creating increased uncertainty and perception of risk. From the firms
perspective, service intangibility can make services difficult to promote, control
quality, and set price.

2.Services are often produced and consumed simultaneously:

This creates special challenges in service quality management that product
companies do not even consider. Products are tested before they go out the door. If
a product has quality problems while in production the company can fix them and
customers are none the wiser. Service production happens with the customer
present, creating a very different and challenging dynamic.

3. Trust is necessary:
Some level of trust in the service organization and its people must be
established before clients will engage services. This is as important, sometimes
more important, than the service offerings and their value proposition.
4.Differentiation:
customers only judge the quality of a service when they have used it. They
cannot inspect the service in the same way they can examine a product on a shelf.
Service firms must therefore find ways to differentiate
Firms aim to build their reputation by publishing authoritative articles or
speaking at industry seminars. Specialization can also create a point of difference. A
firm offering training services, for example: as financial assistance.

5.Service Development:
development costs for service firms are high compared to those of a product
company. Service firms cannot keep standard services in stock or take advantage of
economies of scale. They must create a new version of a service for each
assignment, customized to the needs of individual customers. To create a service, a
representative discusses the customers requirements, prepares a service
specification for the customers approval and brings together the elements needed
to deliver the service.

6.Value:
A service firm must demonstrate value to customers and prospects. Services such
as accountancy, computer maintenance and insurance are essential to the efficient
day-to-day operations of a business. However, services such as marketing, training
or consultancy are more peripheral. Service firms have to demonstrate that those
services can add value to the customers business
GAP models of service quality
 Gaps Model of Service Quality
Customer Gap:
difference between expectations and perceptions

Provider Gap 1:
not knowing what customers expect
Provider Gap 2:
not having the right service designs and standards
Provider Gap 3:
not delivering to service standards
Provider Gap 4:
not matching performance to promises

Part 1 Opener
 Gap One : listening gap
Gap one is the difference between what
customers expect and what management
understand those expectations.
Causes of gap one Strategies to reduce gap one

Firms lack an accurate understanding of Communicate with customers about

exactly what those expectations are. what they expect.

Inadequate customer research Conduct marketing research to learn

orientation what customers expect .

Lack of communication Encourage upwards communications

within the service organization .

Insufficient relation focus Decrease the number of layers of

management.
Inadequate service recovery
 Gap two : Service design and Standards gap.
Gap two is the difference between
managements perception of consumer
expectations and the developing of customer-
driven service designs and standards .customers-
driven standards are different from the
conventional performance standards that
companies establish for service in that pivotal
customers requirements that are visible to and
measured by the customers. This situation can be
caused by three factors: resource constraints,
market conditions, or management indifference .
Causes of gap two Strategies to reduce gap two

Resource constraints Top management commitment to

providing service quality

Market condition Develop service quality goals

Management indifference Standardization of tasks

Poor service ,absence of customer- Address feasibility of customer

driven standards expectations
 Gap Three : Service performance Gap
Gap Three is the difference between the
service quality specification and the delivery
of those specifications by the service provider
to the customer.
Causes of gap three Strategies to reduce gap three

Employees are unaware of service Enhance teamwork among the

employees
specifications
Employees do not have the skills to Ensure there is a good technology job-fit
perform the service specifications

Employees are unwilling to provide Provide employees some control on how

the service according to the service they can perform the service and power
specifications to modify the service to meet consumer
requests
Deficiencies in human resource Develop a supervisory control system
policies, failure to match supply that rewards employees for providing
and demand service according to the specifications.

Reduce employee role conflicts

 Gap Four : communication Gap
Gap four is the difference between the
service delivered to customers and the external
communication made about the service.
Promises are made to consumers by a firms
advertising, sales promotions, and sales staff.
These promises may be explicitly stated or
they may be implied. If the firm does not
provide the service that is promised, there is a
gap between what customers expected and the
service received.
Causes of gap four
Poor or lack of communication between
service personnel and what is promised
by advertising, marketing
communications, and salespeople.
Overpromising by sales staff and other
means of marketing communications .
Inadequate horizontal pricing
,inappropriate pricing.
Strategies to reduce gap four
Increase horizontal communications
between the marketing department and
service personnel.
Avoid the propensity to overpromise to
obtain sales. Be sure what is promised
can be provided.
Inform service personnel of promises
made by salespeople and marketing
communications.
 Myths about services
The first myth:
service economy produces services at the
expense of other sectors. The fact is that many
service industries are major purchasers of
manufactured goods. Take the example of
airlines, fast food outlets, educational
institutions, etc., which buy so much of
manufactured products.
 The second myth :
is that service production is primarily labour intensive. In fact, a
number of service sectors like health care, hospitality, etc., are capital
intensive. Productivity are therefore equally important in service
organizations as returns on capital employed will be one of the major
determinants of success.

The third myth :

is about services is that people satisfying their product needs before
the need for services. This is also not true. Research findings of a study
revealed that people value services as much as products; however, they
may buy services in a less cyclical way, as compared to goods.

The fourth myth :

about the services sector is that services businesses are cottage
industries and service jobs are low paying. If you check the list of fortune
500 companies you will be surprised to see the number of service
companies figuring in the list.
Consumer Behavior in
Services
 Meaning of Consumer Behavior in
Services
Consumer behavior is the process and activities people
engage in when searching for selecting, purchasing, using,
evaluating, and disposing of the products and service so as to
satisfy their needs and desires.

Factors influence consumer behavior:

1. Culture: (values,norms,roles and customs)
2. Sub-culture: (religion,ethnicity)
3. Social class: (society)
4. Reference groups:
5. Family
 Search, Experience and Credence property
Search Qualities:
Attributes that a consumer can determine/evaluated before purchasing a product,
It includes color, style, price, fit, feel, hardness &smell.
eg : In goods you can touch and feel them or evaluate their physical or other
properties. In service usually the experience is needed before you can evaluate
them.

Experience:
Attributes that can be discerned only after purchase or during consumption, It
includes taste & wear ability. Products such automobiles, clothing, furniture and
jewelry are high in search qualities because their attributes can be determined
before purchase.

Credence:
includes characteristics that the consumer may find impossible to evaluate even
after purchase & consumption. Eg: Appendix operation & brake relining on
automobiles.
GOODS/SERVICES CHARACTERISTICS
Goods high on search attributes
Service high on experience and credence attributes
 Consumer Expectation
Customers expectation :

is nothing but belief about delivering of service. It is against this belief that
performance is judged. Customers compare their perceptions of performance
with the actual performance delivered. Therefore knowing

what customers want is the first step for service provider. Not knowing
what customer wants could prove disaster and loss of customer.

Any amount of efforts to create positive disconfirmation by exceeding

customers expectations likely to fail if customer needs are not determined. the
knowledge of customer expectations from the firm at ever encounter level is
essential for providing direction to quality initiatives.
Customers is attracted to the system with a promise of
delivery of service.

Among the various aspects of expectation what we need to

explore is the following about service marketing:

a. what type of expectations do customers hold about

services ?
b. What factors most influence the formation of these
expectations?
c. How to meet the expectations?.
 Two levels of Expectation
1. Desired service Expectation :
This is the level of service which customer hopes to receive or wished for
level of performance. Desired service is a mixture of what customer believes CAN
BE and SHOULD BE.

Is the level of performance the customers want or hope to receive from a service.

E.g: Give a cloth to dry cleaner to remove dirt and stain. Desired service is to remove dirt
and stain. In the opinion of the customer this CAN BE DONE and SHOULD BE
DONE.

Classification of desired service:

1.Ideal expectation: the highest degree of customer service expectations. at this level
,customer does want to adjust a bit with his/her expectation.

2.Normative expectation: this is the second highest degree of expectations and this level
customer have a pre-decided mindset that service should be "beyond or at par with
respect to a particular expected level.
 Sources for desired service Expectation :

1. Personal need: The first, personal needs, are those states or conditions
essential to the physical or psychological well-being of the customer and
are pivotal factors that shape what customers desire in service.

2. Derived Service Expectation: Derived service expectation occurs, when

another person or group of people drives customer expectations.

3. Philosophy about Services: Service Philosophy comes from those

customers who are themselves in service business or worked for a service
business in the past. If you have ever been a waiter in a hotel, you are likely
to have a standard for restaurant services
2.Adequate service expectation:
is the minimum level of service the consumer will tolerate and accept without
being dissatisfied. According to these expectations ,the services ,at this point are
acceptable to customer but not so as desired by customer.
According to these expectations, the services, at this point are acceptable to the
customer but not so as desired by customers.

Classification of Adequate service expectation :

1.Experience Based Expectations:
customer makes expectations about services according to the past interaction
or experience about the services.

2.Acceptable expectation:
customers draw their own inferences about services due to some specific
reasons for acceptability.
3.Minimum tolerable expectations:
these are the boundary line of lowest level degree. Customers will not accept and
feel happy with the service.
Sources of adequate service expectation :

1. Perceived (become aware or conscious of (something) ) service alternatives:

are other providers from whom the customers can obtain service. if
customers believe they have multiple service providers to choose from,or if they
can provide the service for themselves (such as lawn care or personal
grooming),their levels of adequate service arte higher than those of customers
who believe it is not possible to get better service elsewhere.

2. Customers Self Perceived Service Role:

This means, that the customers expectation are partly shaped by how
well they believe they are performing their own roles in service delivery. One of
the key elements in the service is customers active participation. When
customer believes they are doing their part in delivery, their expectations of
adequate service is increases.
Eg. If your car needs a repair, prepare a list of items to be fixed. Give this list to the
mechanic. In this way you have played your role properly.
3. Situational Factors:
influenced by situational factors that are generally considered
contemporary in nature. one type is uncontrollable situational factors,
which include service performance conditions that customers view as
beyond the control of the service provider.
Eg: Earthquakes may lower service expectation for insurance customers in
other geographical locations because they recognize that insurers are
inundated with demands for their service .

4.Predicated Service:
This is the final factor which influences adequate service. In this
case, customers anticipate certain performance level. If customers predict
good services their level of adequate service are likely to be higher than if
the predicated service is poor.
Eg : when colleges are closed, for vacation, the expectation of the student is
that, that will be faster service in the canteen due to less students. This will
probably lead them to have higher standards for adequate service in the
canteen during vacation.
 ZONE OF TOLERANCE
Services are heterogeneous in that performance may vary across
providers, across employees from the same provider, and even with the same
service employee..

The extent to which customers recognize and are willing to accept this
variation is called the zone of tolerance

It is the range where customers do not particularly notice service performance

DESIRED SERVICE

ZONE OF
TOLERANCE

ADEQUATE SERVICE
 If the service drops below adequate service the minimum level considered acceptable
customers will be frustrated and most likely dissatisfied with the company.

If the service performance is above the zone of tolerance at the top end where
performance is exceeds desired service customers will be very pleased and probably
quite surprised as well. You might considered the zone of tolerance as the range in
which customers do not particularly notice service performance.

when it falls outside the range ( either very low or high), the service gets the
customers attention in either a positive or negative way.

Customers service expectations are characterized by a range of levels, bounded by

desired and adequate service, rather than a single level. This tolerance zone,
representing the difference between desired service and the level of service considered
adequate, can expand and contract within a customer
 Eg: An airline customers zone of tolerance will narrow when he or she is running
late and is concerned about making it in time for his or her plane. A minute seems
much longer, and the customers adequate service level increases. On the other
hand, a customer who arrives at the airport early may have a larger tolerance zone,
making the wait in line far less noticeable than when he or she is pressed for time.
This example shows that the marketer must understand not just the size and
boundary levels for the zone of tolerance but also when and how the tolerance zone
fluctuates with a given customer.
 Different customers possess different
zones of tolerance
Another aspect of variability in the range of reasonable services is that
different customers possess different tolerance zones.

Some customers have narrow zones of tolerance requiring a tighter range of

service from providers, whereas other customers allow a greater range of
service.

An individual customers zone of tolerance increases or decreases depending

on a number of factors, including company-controlled factors such as price.
When prices increase, customers tend to be less tolerant of poor service. In
this case, the zone of tolerance decreases because the adequate service level
shifts upward
 The fluctuation in a customers zone of tolerance is more a function of
changes in the adequate service level, which moves readily up and down
because of situational circumstance, than in the desired service level, which
moves upward incrementally because of accumulated experiences.

Desired service is relatively idiosyncratic and stable compare with adequate

service, which moves up and down and in response to competition and
other factors
 Zones of tolerance vary for service
dimensions
Customers tolerance zones also vary for different service attributes or
dimensions. The more important the factor, the narrower the zone of
tolerance is likely to be. In general, customers are likely to be less tolerant
about unreliable service (broken promises or service errors) than other
service deficiencies, which means that they have higher expectations for
this factor.
 Factors That Influence Customer expectation of
Service
1. Derived service expectation:
the employee of an organization is under pressure from derived service
expectations when he or she selects the venue for the year-end function of the
organization that he or she works for.

a.)Enduring service intensifiers:

employees' individual expectations are intensified because they experience
derived expectation from the rest of the personnel organization. This is a classic
situation where the individual carries the burden of all the employees service
expectation, because he or she will be held responsible if the venue does not live up
to them.

b.) Personal need:

The first, personal needs, are those states or conditions essential to the
physical or psychological well-being of the customer and are pivotal factors that
shape what customers desire in service.

Eg: former garage service manger will have different standards with regard to
service provided by the garage where he currently having the car service
2.Sources of adequate service expectation :

a.) perceived service alternatives:

are other providers from whom the customers can obtain service. if customers
believe they have multiple service providers to choose from,or if they can provide the
service for themselves (such as lawn care or personal grooming),their levels of adequate
service arte higher than those of customers who believe it is not possible to get better
service elsewhere.

b.) Customers Self Perceived Service Role:

This means, that the customers expectation are partly shaped by how well
they believe they are performing their own roles in service delivery. One of the key
elements in the service is customers active participation. When customer believes they
are doing their part in delivery, their expectations of adequate service is increases.

Eg. If your car needs a repair, prepare a list of items to be fixed. Give this list to the
mechanic. In this way you have played your role properly.
c.) Situational Factors:
influenced by situational factors that are generally considered contemporary in
nature. one type is uncontrollable situational factors, which include service performance
conditions that customers view as beyond the control of the service provider.
Eg: Earthquakes may lower service expectation for insurance customers in other
geographical locations because they recognize that insurers are inundated with demands
for their service .

d.) Predicated Service:

This is the final factor which influences adequate service. In this case, customers
anticipate certain performance level. If customers predict good services their level of
adequate service are likely to be higher than if the predicated service is poor.
Eg., when colleges are closed, for vacation, the expectation of the student is that, that will
be faster service in the canteen due to less students. This will probably lead them to have
higher standards for adequate service in the canteen during vacation.

e.) Transitory service:

Individual factors that make the customer more aware of the need for a service. this is
usually the case in emergency situations such as where the car you are driving breaks
down on the highway and need help urgently.
3.)Source of both Desired and Predicted service expectation:

a.) Explicit service performance:

the face-face and indirect statements made about the service by the
organization to the customer. Face-face promise are personal communication such
as those of a salesperson or a receptionist to a customers. Indirect or non-personal
communication are those made in the mass media.(tv,radio).explicit service promise
influence the desired service expectations

b.)Implicit service performance:

other service-related cues that lead to expectations about the quality of service
that will be received. Price is the most obvious example. most customers have a
positive inference between a higher price and the quality of service expected, which
will then also influence the desired service level.
c.) word of mouth:
what the people tell each other about the organizations. Because the
customers sees word of mouth as an unbiased source of information, if
influence the expected service levels to a great extent.

d.) past experience:

form of direct comparison between the level of service received the
previous time and currently.
 Factors affecting the customer
perception of service.
1. Service Encounters
2. Evidence of service
3. Image
4. Price
1.service Encounter:
From the customers point of view, the most vivid impression of
service takes place in the serve encounter, i.e., when the customer interacts
with the service firm. Customer estimate the service quality throughout
his/her interaction with service provider.

Eg., the customer goes to a Hotel and following are the encounters that he
needs to face. 1. Checking into the hotel, 2. Being taken to the room by an
attendant, 3.Eating a restaurant meal, 4. Requesting a wakeup call, 5.
Checking out of the hotel.
 It is in these encounters that customers get an idea of organizations
service quality. Each Encounter contributes to the overall satisfaction of the
customer and willingness to do business with the organization again. From
the organization point of view, each encounter presents an opportunity to
prove its quality of service and gain loyalty of customer.

Some services have few encounters and others have many.

Mistakes or problems that occur in the early level of service are particularly
critical, because a failure at this point results in greater risk for dis-
satisfaction at the next level.

An actual interaction between the customer and the service

provider.
Type of Service Encounters:

1. Remote Encounter:
First, encounter can occur without any direct human contact such as when a
customer interacts with the bank through A.T.M. System. Or a Ticketing Machine.
Remote encounter also occurs when the firm sends billing statements or
communications to customers by mail. (Although there is no direct human contact,
each represents an opportunity for the company to establish quality perception in the
minds of the customers. )In remote encounters the tangible evidence of the service and
the quality of technical process becomes the primary basis for judging the quality.

2. Phone Encounter/indirect personal:

In many organizations for eg. Insurance companies, Telecommunications,
the most frequent type of encounter between the customer and the company occurs
over the phone. Almost all companies relay on phone encounters in the form of
customer service, enquiry attending and order booking. The judgment of quality in
phone encounters is much more complex than in remote encounters. Because there is
a high possibility for variation in the interaction, such as Tone of voice, Employee
knowledge, Effectiveness in handing the customer.
3.Face to Face Encounter:

A third type of encounter is the one that occurs between the employee
and the customer in direct contact. This normally happens in a shopping
situation or in a hotel or any service organization. Determining an
understanding service quality issues in Face to Face context is very
complex. Verbal and Nonverbal behaviors are both important ingredients of
quality. Also other tangible things like dress, equipment, information
catalogue, physical settings are equally important. In a Face encounter the
customer also plays his role in communicating to the organization, what
is it that he is excepting for the present and for the future.
 Characteristic of Service Encounters.
1.Service encounters are purposeful:

Contact takes places for a particular reason so that at least one party can achieve a specific

goal. the specific purpose of many encounters may not be immediately obvious as it often

relates to deeper psychological goals .

Eg: doctor and patient.

2.In service encounter, prior Acquaintance (a person one knows slightly, but who is not a

close friend. )between participants is not required:

as consumers, can go into bar, hairdressers, shop or hotel and interacts with a service

employee without ever meeting them before. A special kind of stranger relationship that

operates within a certain set of limitations and boundaries.c

3.Service providers for their part are not generally humane : they
are providing a service because they are being paid to do so .

4.Service encounters are limited in scope ,with the scope of the

interchange being ,Restricted by the nature and content of the
service to be delivered.

5. In most encounters task related information exchange Dominates

6. Shapes the customers perception of service received

7.Implications on visitors satisfaction evaluation
2.Service Evidence:
Service are intangible ,customers are searching foe evidence of service in every
interaction they have within an organization.

The 3 major categories of evidence as experienced by the customer are:

1.People /service personnel: (should be enthusiastic, friendly and spontaneous will

make the service experience a pleasant one for customers.

2.Process of service delivery : (service delivery, operation activities ,number of

flexible or standards policies, technological and human modes)

3.Physical environment: (ambience, design of interiors or exteriors).

.
3.Organizational image:
Positive and negative image they holds in the
customers minds regarding the quality of service
they provide. Positive image creates a favorable
word of mouth communication. Neutral image may
not cause any harm but a negative image certainly
affects the business of the organization
4. price:
perception depends on the price of the
service.eg: if the service company prices a
product low then consumer may perceive it of low
quality whereas, if price is high ,consumer
expects high quality service.
customers frequently rely on price as a
surrogate indicator to develop expectations and
perceptions of a service because service are
intangibles.
 Customers satisfaction

Customer satisfaction is how happy a customer is with a product or

services.
customer satisfaction , a business term is a measure of how products and
services supplied by a company meet or surpass customer expectation.
Customer satisfaction= delivery-expectation.

customer satisfaction is influenced by specific product or service

features, perceptions of product and service quality , and price . In addition
,personal factors such as the customers mood or emotional state and
situational factors such as family member opinions influence satisfaction.
Factors influencing customer satisfaction:
1.Quality( what was expected or promised )
2.Value for money:
3. Reliability :( trust )
4. Responsiveness(individual attention ,speed, flexibility)
5.Access (reachable when needed arise)
6. Courtesy (politeness, respect, consideration,
friendliness)
7.Communication (language they understand)
8.Credibitity ( trust and honesty of service provider at
present creates positive image in customer mind for
future purchase)
 strategies for influencing customer
perceptions.

1. Aim for customer satisfaction in every encounter:

Because every service encounter is potentially critical to retain the
customer, many companies aim for zero defects or hundred persons
satisfaction. To do this all documentation with this regard to the
customers requirements should be available. The development of
understanding of customer expectation for each of these encounters is the
next step. Build strategies to meet the expectations of the customers.
Items like recovery, adoptability, spontaneity and coping will help the
organization to aim at Zero Defects.
2. Plan for effective Recovery
Service failures and sub sequent recovery create strong memories for customers. When
service customers have been disappointed on the first attempt. Doing it very right for the
second time is the essential to maintain customer loyalty. This means the service process and
systems need to analyzed to find out the root cause of failure, so that it can be rectified.
Therefore every organization must have a recovery system which should be known well to
every employee in the organization.

3. Facilitate adoptability & flexibility:

The customers perception of service quality depends on the flexibility of the service
provider. This means that the system must be flexible to suit the needs of the customers.
Also it is necessary that the system should be capable of explaining.
Why a particular request cannot be granted. Knowledge of service concept, service
delivery system enables employees to inform customers what happened, what can be done,
& why their needs are requests cannot be accommodated. Such knowledge and willingness to
explain will leave a lasting positive impression on customer, even when their specific request
cannot be met.
4. Encourage Spontaneity :
Memorable encounters occur for customers even when there is no
system failure and no special request. While employee behaviors would
appear to be somewhat random and uncontrollable, there are things that
organizations can do to encourage positive behavior and discourage
negative behavior.
Recruitment and selection procedures can be used to hire employees
with strong service orientation and who has natural tendency and service
minded .

5. Help employee cope with problem customers.

6. Manage dimension of quality at the encounter level .
7. Communicate realistically and use customers experience to reinforce
images.
8. Used price to enhance customer perception of quality & value.
THANK YOU .