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Ko ç Un iversity. OPSM 405 Service Management. Class 13: Review. Zeynep Aksin zaksin @ku.edu.tr. Chapters covered from the book. Introduction Strategic positioning New Service Development (focused on tools: blueprinting, conjoint analysis) Managing Service Experiences : Starbucks

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opsm 405 service management

Koç University

OPSM 405 Service Management

Class 13:

Review

Zeynep Aksin

zaksin@ku.edu.tr

chapters covered from the book
Chapters covered from the book
  • Introduction
  • Strategic positioning
  • New Service Development (focused on tools: blueprinting, conjoint analysis)
  • Managing Service Experiences: Starbucks
  • Service Quality (tools: Poke Yoke, service guarantees)
from lecture notes
From lecture notes
  • Value proposition, focus strategy, strategic service vision, service profit chain: Shouldice, Southwest
  • Service encounters: Zipcar
  • Service guarantees
  • Customer relationship management: Starbucks
firms compete on product attributes this requires process capabilities
Firms compete on product attributes. This requires process capabilities.
  • Price (Cost) P
  • Quality Q
    • Customer service
    • Product quality
  • Time T
    • Rapid, reliable delivery
    • New product development
  • Variety V
    • Degree of customization

“order winners”

To deliver we need “capabilities”

management challenges

Low

Service Factory

Service Shop

High

Low: Taylorism

High: High performance

workplace

Degree of Workplace Empowerment (Process)

Management challenges

efficient technology

creating warmth

incentive design

quality control

Degree of Customization

process design

flexible technology

managing loyalty

managing people

Mass Service

Professional Service

recall the service value chain
Recall: The service value chain

internal

quality

customer

loyalty

$ $ $ Euro

$ $ $ YTL

customer

satisfaction

employee

satisfaction

employee

loyalty

Value

employee

productivity

the value profit chain schlesinger
The Value Profit Chain - Schlesinger
  • Determinants of employee and customer loyalty
    • cycle of failure - low wages, little training, => limited customer loyalty, high turnover
    • cycle of capability - share of profits, greater control, => highly productive employees, satisfied customers
strategic service vision the external view
Strategic service vision: the external view

Target Market Segments what are the market segments?

Positioninghow do customers view the service?

Service Concept what is the service bundle?

Value/Cost Leveragingperceived value-cost?

Operating Strategy investment / purchasing decisions?

Strategy/System Integrationis everything consistent?

Service Delivery System what are resource needs?

identifying quality shortfalls
Identifying quality shortfalls

word-of-mouth

personal needs

past experience

expected service

Gap 5

perceived service

Customer

Provider

service

delivery

Gap 3

Gap 1

Gap 4

external

communications

to customer

service quality

specifications

Gap 2

management

perceptions

sources of pleasure displeasure in service encounters
Sources of pleasure displeasure in service encounters
  • Recovery: how employees respond to service failure
  • Adaptability: employee response to customer needs and requests
  • Spontaneity: unprompted and unsolicited employee actions
  • Coping: employee response to problem customers
controlling customer behavior
Controlling customer behavior
  • Normative controls
  • Instrumental controls
slide12

Service guarantees: What is a good guarantee?

  • unconditional
  • easy to understand
  • meaningful
  • easy to invoke
  • easy and quick to collect on
slide13

Guarantees for professional services:marketing benefits

  • prices are high
  • negative consequences of unsolved problems are high
  • services highly customized
  • brand name recognition can be tough
  • buyer resistance is high
slide14

Guarantees for professional services:quality benefits

  • understanding customer needs
  • understanding service delivery process
  • forces firm to establish measures of customer satisfaction
  • a general emphasis and focus on service quality
slide15

Guarantees for professional services:the risks

  • co-production: double moral hazard
  • can be giving the wrong message
  • doesn’t always provide good feedback on quality
  • ethical issues: can’t guarantee outcomes
  • international setting: cultural differences
the full picture customer satisfaction customer retention and market share
The full picture:customer satisfaction, customer retention, and market share

Time

Enter

Them

Us

t-1

Leave

Enter

Us

Them

t

Leave

Enter

Us

t+1

Them

Leave

creating the process of customer experience

RELATIONAL

Learnable – Usable – Mutable

Social – Interaction

Increase Emotion & Cognition

PHYSICAL

Theme – Layout – Sensory

Increase Physical Interaction

& Cognition

CONTEXT

Increase

COMMITMENT & LOYALTY

ENGAGEMENT

TIME

ACTIVE

Educational

Escapist

Continuity

Dynamic

Entertainment

Esthetic

Memorabilia

PASSIVE

ABSORBTION

IMMERSION

Creating the Process of Customer Experience
defining terminology
Defining terminology

complexity vs. divergence

what is done? how is it done?

output analysis pc example source dolan
Output analysis: PC Example(source Dolan)

Weight

<= 2 lbs 1.2

2-5 lbs .9

>5lbs 0.0

BatteryLife

1 hr 0.0

2hrs 0.2

4hrs 1.5

8hrs 1.5

Resolution

Below avg 0.0

Avg. .4

Above avg. .5

Price

1000 1.0

2000 0.5

3000 0.0

Product A: 2 lbs 1hr below average 2000

Product B: 5 lbs 4hrs average 3000

ProductC: >5lbs 8 hrs average 1000

Share of preference approach:

Prob. of choosing A: 1.7/6.6=26%

Prob of choosing B: 1.9/6.6=29%

Prob. of choosing C: 3.0/6.6=45%

Value of A= 1.2+0+0+0.5=1.7

Value of B = 1.9

Value of C = 3.0

Sum = 6.6

Market share: average purchase

probability across all subjects

summary
Summary
  • Blueprints for documentation
  • Analyze for complexity & divergence for positioning
  • Understand links between positioning and costs (service delivery system)
  • Conjoint analysis to assess customer valuations
  • Use output from conjoint analysis to link valuation, purchase, aggregate market share and profitability