a MBA Third Semester (Services Marketing) SPY, UNIT 2 Role of Process, People & Physical Evidence in Services Marketing . . SERVICE PROCESS 2.1.1. Introduction Process is an essential component of marketing mix of services and i the other elements of value chain are produ as a significant part of marketing objectives add some value to the services without incu ele. contribut then also less attention has been paid to it. The processes, which ing much cost, benefit the organisation as well as the customers. Performing transactions, delivering information, and offering a service in most suitable way to the customers as Well as to the company, is known as the process. Several disciplines such as decision theory, operations bat ne ment, computer programming, etc., define the term ‘process" in a different way by using different words put the basic concept behind it remains the same. All the disciplines believe that a process should comprise of logical sub-processes that can be used for making the process more efficient. Im case of manufacturing industry, itis not necessary for the marketers to keep informed about how the physical goods are being manufactured; rather the individuals who own the manufacturing unit are required to know this. On the other hand, in case of service industry, the marketer is expected to keep well-informed about all the Services and the process of manufacturing and delivering these services to the end customers. This is because the customers here are directly involved in the manner in which a service product is created and they may have some specific requirements regarding the services. Marketers also need to be involved in the design or the redesign of a service process as the same can influence the consumers. The customer views every service as an experience. For example, visiting a doctor or lodging a complaint at a call centre. On the other hand, organisations view services as a process which needs to be designed so that the required experience is delivered to the customer. The process is thus the backbone of the serviee. It is nothing but a method or sequence of activities which service organisations need to undertake and also co-ordinate in order to create value proposition for the customers. Jn today's customer-oriented business environment, all areas of manufacturing, engineering and computer Programming focus towards understanding the process through which a task is undertaken and the various steps involved in achieving the bottom-line results. This has given birth to various revolutionary concepts like “Just in Time’, ‘flexible manufacturing’, ‘lean production’ ‘efficient customer response system’, ete. ‘The companies have recently started giving so much importance to the process of delivering services and are using it as a strategic tool in gaining a competitive edge. 2.1.2. Types of Service Process ‘The different types of service process are as follows: 1) People Processing Services: As the name suggests, people processing services are directly targeted atthe individuals. Here, the customers need to physically enter the service environment to avail the service that he desires. An example of this is the Airlines, where the service is created a delivered through a combination Of people or technology (or both. Its also possible that the service provider may reach the customer along with the required tools for delivering services. The idea is to create a new set of values for the customers in the service industry. For example, banking services which are offered by personally visiting at the office or residence of the customer and completing the transactions and other services desired by the customers Scanned with CamScannerRole of Process, People & Physical Bvidence in Services Marketing (Unit 2) 35 2) Product Processing or Possession Processing: In product or possession processing services, the involvement of the customer in the service is comparatively less. Here, the role of the consumer is typically limited to calling the service provider for explaining the problems faced by him and making the necessary payment for the service. The pre and post sales services involved here are problems that need to be tackled through customer response management, ‘The marketer needs to understand the entire value chain of such services as these can add a Jot of value to the customer experienc For example, the logistics partner needs to understand how important his services are to the exporter in executing his orders on time:.The customer usually gauges the performance of the service in terms of delivery against the promised parameters of quality and time, The marketer, therefore, needs to take care that there is no divergence between what has been promised to the customer and what is actually delivered. 3) Mental Stimulus Processing: The kinds of services that get listed under this type are the entertainment, education and management consultancy services. It can also include various religious services offered by jes. This has a profound impact on the mental makeup of the consumer and helps to shape his attitudes, interests and opinions. The relationship between the marketer and the consumer can be considered to be one of dependence where the customer is dependent on the service provider. However, this can lead to malpractices like extortion, manipulation and other unethical practices. In order to avoid these problems, the organisations need to develop a code of conduct and ethical standards, ‘communicating the same to the customer. 4) Information Processing Services: In the case of information processing industries the marketer needs to learn that the ‘information’ is the most intangible type of service output. It is crucial from both customer as well as competitive perspective. The ease of access and retrieval of information has made it possible for consumers to seek information on as wide topics as medical research, accounting, legal issues, insurance, etc. The customer has a very high involvement in all these situations as the perceived risk in all these situations is quite high, ‘The risk associated here as per customer's viewpoint is highly risky service situation, huge financial and non-financiat costs, The customer tends to avoid going to service factory to buy the products & services and the challenge before the marketer is to motivate the consumers to purchase the product and hence reduce the risk perception that consumers have of the service situation. 2.1.3. Steps for Managing Service Processes ‘The steps involved in creating service processes are as follows: 1) Flowcharting: Flowcharting is a very simple manner of depicting the Flowcharting. various sequences that are involved in the service process. It explains the entire service experience of the customer in a very simple manner. The y sequence of expected customer encounters with the service industry is Service Blueprinting portrayed in this step. Marketers need to understand that a value proposition t that is offered to the customer may combine all or some of the intended Téentiying Fait Poins benefits that the firm is providing to its target customers. It is therefore essential to rationally integrate all service offerings so that the necessary ¥ value is delivered. Failure Proofing Flowcharting the process also helps the service marketer to understand those t elements of the service process which are core to service experience and [~ seuing Service Target distinguish these parameters from those ingredients which are supporting the core product. For example, in case of restaurants, food and beverage can be v regarded as core product. However, other facilities like reserving seats, place Redesigning Service for parking, menu, order placement, billing, etc. act as supplementary 2 t services supporting the core product. : ‘Managing Customers : Efectively When the flowchart for various services is drawn, it will be seen that the core |____-"EUS? _1 services that are being offered would differ widely but the supporting igure 2.1: Managing services (billing, reservations, order taking, etc.) would retain a certain Service Processes commonality and will keep repeating. Scanned with CamScanner36 MBA Third Semester (Services Marketing) SPPU 2) Service Blueprinting: In the case where the processes in offering serviées are complicated and involves high service encounters, it becomes significant for the organisations to gain insights about how the various service components are linked to each other. There are particularly three mdin elements of service blueprint: i) The functions that are involved in creating the service experience are identified. This includes the people who are responsible for creating the service. ii) Sequence and time relationship is represented graphically. This means the time when the service has to be performed and the order in Which it has to be performed are also noted. iii) The maximum deviation that is possible for each function is identified. This is that level of deviation which does not impact the quality of the service significantly and can be attributed to chance. 3) Tdentifying Fail Points: A successful blueprint should be able to identify the points in the service process which are the likely failure points or point at which the service can go wrong. In terms of the customer, the ‘most painful fail points would be those that prevent him from enjoying the service. They include things like the reservation process (Is a table available) seating (can a place be found where the customer can sit), order Placing (did the order placed at the table was accurate or the order taken was not noted wrongly by the waiter), etc. The service delivered to the customer takes some time; hence, there are also chances of delay. Tnordinate amounts of waiting time can end up annoying the customer. In reality, every step in the service Process — back end or front end can be a potential fail point. These failures increase the service and waiting time for the customer and can be a cause for major service dissatisfaction. 4) Failure Proofing: Once the potential failure points are identified the organisation needs to do a root cause analysis about why such failures happen. This equips the service provider with opportunities for making the service “failure proof”. One technique which is widely used in this regard is the Poka Yoke technique. 5) Setting Service Target: The service managers can gain an understanding of the expectations of the customer from the service process through formal research and by tracking on the job experiences of the service personnel. The customer expectations are typically in the form of a spectrum referred as zone of tolerance. There is an ideal service and then there are thresholds which are defined for every aspect of the service. The service manager should set appropriate standards and make every effort to satisfy the customers. In case this is not possible then the service managers need to modify the expectations of the customer. The various standards can include time taken to perform a service, the definition of a technically exact performance and also the various style features that should accompany the service. 6) Redesigning Service Process: The service redesign process is meant to stimulate new life in the service process which may have become outdated in the current scenario. However, this does not mean that there was a flaw in the initial process design. It is more likely that there may have been changes in other variables like technology, customer demographics, introduction of new features, trends and performance in market which may have put an excessive burden on the old process. Redesigning is considered as a feasible approach to development and growth of services. It is far better than discarding the outdated services in order to infuse service innovations. Service process redesign can be of the following types: i) Eliminating Non-value Adding Steps: There are many activities in the service process which are not adding value to the service experience. Service process redesign helps to identify such redundant activities and remove them. This heips the organisation to increase its productivity and also customer satisfaction. ii) Self-Service: Another approach is to make the customer adopt a productive role rather than a passive consumer of the services. The redesign, in this case, will aim at increasing the control of the customer, accessibility and better timing. Self-service kiosks or Internet services like Internet banking are some ‘examples of self-service. iii) Direct Service: In direct service, the service is brought to the customer and not the other way around. This means making the service available to the customers at their residence or office premises. For example, home delivery services which are offered by many restaurants, pet grooming services, home tutorials, training or home banking facilities which are offered to HNIs. iv) Pre-Service: This redesign aims at encouraging the part of service which activates the service request, typically the front end processes. For example, express check-in at many hotels or pre-payment of toll charges at the highways. Another example can be pre check-in boarding cards that are issued by many airlines. Scanned with CamScannerRole of Process, People & Physical Evidence in Services Marketing (Unit 2) 37 Dv \) Bundled Service: Serviges can also be bundled together and offered together. The customer gains by superior value especially if the services are synergistic in nature and deliver a greater value together than if they were consumed separately. vi) Physical Service: In the physical redesign, the focus is on adding value to customer's experience through tangibles related to the service or its physical surrounding. For example, Midway Express ‘Airlines has tried to recreate the customer experience by altering the interior design of the planes. This included features like new leather seats, china plates, cloth napkins, etc. Managing Customers Effectively: The service experience can also be augmented if the customers are treated as “partial employee”. This also has the benefit of decreasing customer induced service failures. ‘The steps involved are the same as that which involves the selection of the paid employees by HR. These are as follows: i) Recruitment and Selection: Human Resource management becomes successful when adequate emphasis is given towards the recruitment and selection process. This also applies to the “partial employees”. For example, if co-production requires specific skills then the marketing efforts of the company should target those new customers who have the necessary skills. ii) Job Analysis: A job analysis needs to be conducted for comparing the customer's present role in the ‘company against the roles that the company expects them to play. One should also ensure that the customers are aware of the performance expected by them and they hold required skills for reaching the expectations. iii) Education and Training: The next critical aspect is that of education and training. This is particularly true if the job analysis throws up a major gap in the skill sets of customers. ‘The education can be given in several ways, The advertisement for new services often has great content. The company can also employ automated machines which have instructions on how the tasks can be performed effectively. Websites also have a FAQ (Frequently Asked Questions) section which guides the customers on the critical aspects of the service. For example, e-commerce websites like Amazon, Flipkart, E-bay, etc. provide detailed instruction guide to their customers regarding how to auction an item on the website and how to purchase and make payments. iv) Motivate: Customers also need to be motivated by rewarding instances of good performance. For example, delivering high level customer satisfaction, enjoying the role as a participant, providing more customised services, etc. are some of the ways of motivating the customers. vy) Appraise: The performance of the customers need to be evaluated on regular basis. When the performance is not satisfactory then the customers need to be educated properly. vi) Ending: When the relationship between the service provider and the customer reaches a dead end then ending the same becomes the last resort. For example, Doctors have a duty to treat patients but this is, based on a relation of mutual trust and respect. Many times doctors encounter patients who are abusive ‘and uncouth, dishonest = in these situations, doctors can ask the patient to seek the services of some other physician. The process of terminating relationships has to be done properly. This may also mean that there are problems in the way the customers have been acquired or recruited in the first place. 2.1.4. Service Design Service design is the process through which the various components of service like people, process, communication, infrastructure, and other associated physical components are organised in an effective way. This surangement helps in enhancing the quality of inputs involved and improving interaction between service provider and customers. Methodologies involved in service design focuses on designing user-friendly services as per customer's needs. It also focuses on designing services which helps the organisation in gaining a competitive edge. Service design involves identifying the need for services and mapping them to obtain integrated services. It also helps in crafting designs for service assets which are used in delivering services. Service design can be utilised in the new service creation process or in enhancing existing services. This process helps 10 make the interface more customer-friendly, useful and relevant in the viewpoint of the customers. Besides these benefits, service design also helps in connecting the service provider, suppliers, and organisation to their customers in desirable way and developing brand affinity. It improves the service experience of the customers and influences them to develop a good opinion about the service brand. Service design also aids the organisation to understand the needs of the market, the experiences of the customers and design a more relevant service. Scanned with CamScanner38 ‘MBA Third Semester (Services Marketing) SPpU, 214.1. Service Desi; Service standards ean be exph Standards: Standardisation . -d in terms of hard and soft measures. These’have been described below: Se indards e Desig Hard Measures Sof Measures 2.1.4.2. Hard Measures Hard measures relate (o measurement aspects of the service ~ how many, with.what accuracy, with what speed, Cte Generally, two out of the five quality dimensions are open to hard measures. The first dimension being reliability of services is measured in terms of “right first time” or being “right on time”, For example, arrival of Rights or trains, scheduled appointment with doctor, delivery date given by dry cleaners, boutiques, etc. Similarly. responsiveness is another dimension which is given consideration while evaluating service design standards, Responsiveness tries to gauge the time the customer has to wait between asking for a service and setting it delivered. For example, waiting in the restaurant for the order or waiting for the electrician to come after placing the request for a defective electrical appliance, 2.1.4.3, — Soft Measures In comparison with hard measures, evatuating soft measures is relatively more difficult both factually and against a standard. They are often developed in response to customiers. For example: 1) How did the customer feel? 2) What was the level of information and consultation that was given to the customer? 3) How was the customer treated during the process? 2. Elements of Service Design Service design has following elements: 1) Structural Elements: It involves ‘components like delivery system, facility design, location, capacity planning, ete. i) Delivery System: The delivery system of services is significantly different from that of products. In the case of services, they cannot be separated from the service provider. Therefore the delivery channel for a service has to be short and easy. ii) Facility Design: Service provider needs to be alert in the way the service has been designed especially in cases where the customer is also taking part in the service process. Facility design comprises the physical environment in which the service is being given, the hygiene factors and how flexible or rigid the service architecture has to be. The physical environment or the servicescape needs to be understood carefully since it impacts the service a great deal. For example, infrastructure of cinema halls, restaurants, hospitals, beauty salons, spa centres, stores, ete. iii) Location: A service which is a Location-based service (LBS) is a type of information which ean easily be availed through mobile devices these days. It makes use of the geographical position of the mobile device in identifying routes from the location of the customer to the location of service facility. It has wide-ranging application sectors ranging from health, work issues, personal issues, entertainment, etc. For example, location services help in locating nearest bank or ATM from customer's current location. iv) Capacity Planning: Capacity planning refers to the capacity that the organisation requires producing the necessary product or service as per the changing needs and demands of customers. Capacity can also be defined as the maximum output that the organisation can deliver in a given period of time. It can be explained as : Capacity = (Number of Ma‘ ines or Workers) x (Number of Shifts) x (Utilisation) x (Efficiency). 2) Managerial Elements: Service encounter, quality, managing capacity and demand, information, etc, comes under managerial elements. : i) Service Encounter: The service encounter generally starts after the application is submitted, an order is placed or the request for a reservation is made by the customer. The interactions can be between customers and the service provider or can be between machines or computers. In many high contact services example restaurants, hotels, hospitals, etc. the customers may also get engaged with the service process. Scanned with CamScannerServices Marketing (Unit 2) 2” Role of Process, People & Physical Evidence ii) Quality: The term quality is often very difficult to define since it depends to a great deal on customer perception, The term qualty is widely sought while evaluating standards; however, it does not have any specific definition. iii) Managing Capacity and Demand: Lack of inventory is one of the major problems faced when analysing the supply and demand of services. In case of manufacturing firms, it is possible to keep stock of inventory in advance for meeting the contingent future demands. However, this is not possible in the case of service firms as services cannot be kept as inventory. This is because, services are created and consamied simultaneously, and are also perishable in nature, A train seat which is not sold expires. Similarly, an hour of a Doctor's visit cannot be carried over to the next day. It is also not possible to transport service from one place to another. This is also one major difference with products. iv) Information: Another managerial element in service design is information. Appropriate information regarding the customer helps in establishing loyal customes base that further benefits the organisation by acting as medium for word-of-mouth advertising, Sometimes, service firms use discounts and free services offers for attracting huge customer base. 2.1.4.5. Tools for Designing Service Processes ‘There ate many tools which help in designing a good service process. These are as follows: 1). Service Blueprinting: Service blueprinting is a customer-oriented technique which fosters innovation and improvement in the service process. Service blueprinting is a customer-oriented technique which fosters innovation and improvement in the service process. This includes elements like defining the customer target Sseement, the various processes that comprise the service, create a map of the various activities that are involved in the service process, identifying the various customer touch points that spearhead the service process. Service blueprinting highlights the role of the customer and identifies the soiirce of value in the service process. It also helps in finding the various service failure points which can derail the service as well as opportunities for service improvement. It aids in continuous evaluations ofthe service process and helps in identifying measures by which the service can be appraised. It also acts as a source of new service development. 2) Quality Function Deployment (QKD): QFD is a type of product development where the source is the Voice of the Customer (VOC). The VOC is used to identify service requirements, design specifications, the configuration and the process control. QFD is very structured where the needs of the customers are Understood and then converted into specific plans for producing the products or services for fulfilling these needs, In fact, it is more of a planning technique than a quality technique where teamwork is directed towards customer satisfaction. 43) Servicescape: The concept of servicescape is developed by Booins and Bitner. This concept tres to give credence 10 the physical environment in which service is created. The servicescape can be considered as a Service landscape. This landscape may comprise extemal and internal components of services. ‘The extemal Components involve landscape, design, and surrounding environment of service while the interior components fnvolve design of service area, ambience, layout, temperature, etc. Servicescape together with other tangible clements (like stationary, business cards, dress code, web pages, brochures, reports and documents) form the “Physical Evidence’ in marketing of services In order to design service process, the organisation should consider the servicescape as it involves all those elements which are encountered by the customers in first look. 4) Back Office and Front Office Processes: Manufacturing and service firms differ in several ways. The main focus of manufacturing firm is on the back office where all the operational acti related to production takes place. However, service firms mainly focus on the front office where interaction with the Customers in regards with service offerings is undertaken, Hence,’ the planning for front and back office processes may also act as an important tool in designing the service processes. 5) Waiting Line Analysis: Waiting lines are very important in’ management because they help in the - balancing of demand and supply. In general, a waiting line occurs when there is a mismatch between the excess demand and the supply. Waiting strategies are thus used to resolve uncertain capacity issues, Waiting line strategies or models use a set of mathematical formulas which is derived from the field of queuing theory. There are different queuing models and strategies for different types of queuing problems. However, this technique is very complex and difficult to understand. Hence, it is not very feasible in enhancing the service process. Scanned with CamScanner0 MBA Third Semester (Services Marketing) SPU 2.1.5. Mapping the Process oo The designing of service process is done to satisfy the customer. The rumours regarding the poor performance of @ service firm point out the failure of any process in delivering satisfied services to the customers, The customers are irritated with the frontline services in which he/she deals and sometimes the bad service experience is caused by the back office processes, Checking out is a frontline process in which customer are involved. It is a time-consuming and burdensome Process. In similar way, the credit card customers have various bad experiences about disappointments which they have to experience while getting across various departments using customer care number. The failure in back office services may destroy the frontline service. For example, it may be pleasant to order food from a restaurant which has excellent frontline process execution but the delivery of food may be late due to lack of back room services. A service system is usually broken down into several pans. In order to see the process or events that take place in back room, following experiences should be considered: 1) Ordering food from better restaurants. 2) Requesting loans from the bank employees. 3) Obtaining a mobile service connection. 4) Blood sampling for pathological test. 5) Ordering pizza from the mobile phone. 6) Receiving the money transferred from saving bank account to fixed account. From customer points of view, above action are easy and it is expected from them that the service firm deliver the satisfactory response all the time while delivering, Front end delivery is the result of complex process which is hidden from customer. To accurately standardised and identified process flow, the process required to blueprinted and mapped, 2.1.5.1. Mapping Process Vertically Interaction of the customer with the service system contributes to a series of effects which forms ripple effects. These effects are a set of activities that must be carried out to meet consumer expectations at the front end where customer gets interacted. For example, a situation in which customer take appointment to meet with the specialist for consultation either through telephone or face-to-face. This service component has implications for it service marketers in the design of processes. | Customer requests for an appointment with a specialist evaluative eriteria ~ waiting time, cesponse time, accuracy of Line of interactions Frontline contact person: eye contact, smile, welcome note, enquiry about customer request, politeness, empathy, voice , quality, precision of the given information, == S[a—ac he Tine vai ‘Visible operatonsprosess of contact person: explore Tog of i appointments, or contact doctors secretary fer possible appointment Tine oF nvemad interactions ‘Back room seoretary to the doctor explores possibility of appointment, time; duration, cals the specialist fora non- rovtine appointmeat ack room (Doctor/specialis): doctor-secretary conversation, doctor/specialist checks for non-routine case Figure 2.2: Customer Contact in Frontline and Back-Room Process Implications Here, the bank-end process should be designed in such manner that the frontline staffs are able to provide the ‘satisfactory responses in terms of criteria such as, responding the phone call on time, reducing waiting time in { waiting lounge, maintaining voice tone and interpersonal skills. : , Scanned with CamScanner41 sos Marketing ( Role of Process, People & Physical Evidence in Ser ‘Thus, to fulfil these criteria, the back-room process should be designed and executed accordingly (as shown in figure 2.2). Mapping the process vertically is important for the identification of the steps that occur internally én fa system and hidden from>the: customer. After the establishment of operations it is possible to set the responsibility of each of these points in the form of responsibility centre allocated to an individual Furthermore, specific set of operations with resource expectation and requirements can be defined at every point, This process series act as an assembly line as one workstation functions as an input to another workstation. The relationship chain and mutual interdependence is the symbol of dependency of a-system on their subsystems, ‘The good service marketer maps the time required for particular operation against the standard time to recognise the cause of deviation, so that corrective measures.are taken. Performance deviations reflect some differences in the process that hinder the process’s functioning according to the standard that are adopted. Front end is not always responsible for poor services, sometimes the default exists inside the:system which needs to be detected and fixed. 2.1.5.2. Mapping:-Process Horizontally In order to experience the service, customers have to follow a series of steps involved in process of service delivery. For example, travelling in airlines involves the series of actions or contact and these are projected horizontally. Here, customer interacts with the front-end activity which hides numerous back-end activities that take place vertically inside the system, : ‘Thus, these contacts constitute service. The value is built at each point. It is a challenge for service marketer to design an effective and efficient series of service delivery. A general horizontal service delivery process for an air travel is explained in figure 2.3. . ‘The horizontal mapping service is important because it helps in identifying the missing or excess act the process. Ideally, service delivery process needs to be in line with the expectations of the customer. This means that identifying the actions that are required for delivering the service. Thus the following two situation azises: 1) Extra Unnecessary Steps in the Process: Extra or unnecessary steps includes both monetary as well as non-monetary costs. This may reduce demand time, delivery and increase value of money. 2) Process Short on Steps: If the sub-process is not present, then it will create a shortage of service by depriving the price required to-deliver that service. For example, if the second security check is missing in the above process then, air travellers can be exposed to safety risks by that airline, Many circumstances need reengineering of this sequence of service delivery to achieve compliance with the current realities. Service processes are usually embedded at any given moment in business standards influenced by the market scenarios. For example, industry standard in the car service industry was designed to deliver the car to a service outlet on a given day. Whereas, a new customer may consider this as a time-consuming, unfriendly and burdensome activity. This problem is solved by a new reengineered car service where it is not required that the customer personally deliver the car to the service station. In this new reengineered car service, the customer can make a request of this service on the phone call and the service provider collects the car from customer's home and writes the job card when car is collected and delivered to the customer. ae [rene Lean a: Le Lf wm oo ewe ‘Losgoge be yi oe ee eee Figure 2.3: Genele Process for Aie Travel Scanned with CamScanner7 MBA Third Semester (Services Marketing) SPPU 2.1.6. Understanding Service Process wf To understand service process, three aspects are important. These are variety, in. process, value addition in process and task allocation, 2.1.6.1. Variety in Process The features of the variety relates to the concern that whether process is non-varying or fixed sequence of activity which leds to standard services, Process vatiety has implications on cos, operational flexibility and complexity. On the other hand, less variety in cost gives benefit of cost efficiency but has low flexibility. There are three types of processes which are identified with different degree of varieties in the process: 1) Runner: This process category is said to be standard set of activities. In this well-defined activity repeatedly perform with no variations. These deliver a process successfully with automation and control. For example, nowadays, railway enquiry of train departure and arrival or cheating in balance of bank account is done by computerised systems. The routine and standardised process leads to efficient operations. 2) Repeaters: This process category is almost similar with runners except that it occurs less frequently and is more complex in nature, Repeaters are existed because of the unexpected expansion of services. However, the runner process was framed for standardised services but now they are used to handle variety. For example, pizza restaurants expanded its menu by adding burgers to it. This expanded the limited services into variety. Repeaters require more resources and process adjustment. ; 3) Strangers: This process category is a non-standard process. This process is less frequently used. In case of strangers, it is difficult to forecast demand and requirement of resource is not defined. Whenever a firm adds a new service, stranger processes are added, which later tums into runners and repeaters. 2.1.6.2. Value Addition in Process ‘A service is a process. The service made by process also consists of several activities or sub-processes. The next step to understand the service process is to understand the value added in various parts of process. This gives the knowledge that which part of the process is significant for customer. : For example, in bank, it is important to find out that service provided to the customer while interacting with employee in customer contact area are more important or the back room process is more important. Thus, in this case, the back room process is more important because it provides reliability to the customer and it does not require direct contact with the customer. The opposite of above example can be seen in five-star hotels where frontline process is more important for value driving. 2.1.6.3. Task Allocation . ‘The tl step to understand the service process includes the allocation of task which is performed through the process. The tasks allocated must be dependent on the value-focus of the service process. The service process ae divided into two i.e, the back office and front office. The tasks must be divided on the basis of their importance. There should be knowledge that the task cannot be fixed for all futures time. 'As the concept of service changes, the allocation will also change. For example, the grocery stores in India serving local customers by focusing on frontline activities for building customer relationship. But now, due t© ‘emergence of twin worker families, the approaches seem to be less effective. . | Now, both the partners are working and they do not have time to interact with the seller. Thus, the concept of ' service is now shifting from face-to-face to remote selling, The customer gives more value to efficient exeoution of transactions over phone or other media rather than interacting with customers. This shift or change requires re-allocation of tasks. : Scanned with CamScannerRole of Process, People & Physical Evidence in Services Marketing (Unit 2) a 2.1.7. Importance of Process in Service Planning and understanding the Service process is important because of the following reasons: 1) Indispensable for Service Success: Service process is crucial for the successful delivery of competent services. In manufacturing scenario, the activity takes place on the shop floor away from the gaze of the customers, The manufacturing process is controlled by the operations team and is away from the influence of the customer. However, in services, the customer is an integral part of the service creation and consumption. The service’failures are often a result of faulty design of the service process. Their carefully planning the service process as per customers’ needs and demands become inevitable part of service firms. 2) Critical for Delivering Satisfying Response: The service process is designed keeping in minds the needs of the customer. This helps in achieving high customer satisfaction cate. However, there are many instances of service organisations which have failed because they have not kept the needs of the customer in mind. Many times, the customer gets annoyed by the bureaucratic processes at the front end. At other times the back end operations can cause a flaw in the design process. This may lead to failure of the servick 2.2. SERVICES SYSTEM 2.2.1. Introduction Though the term service system appears frequently, it is rarely formally defined. Service operations, service management, service engineering, services marketing and service design literature use the term ‘service system’ quite frequently. A configuration between the organisational network and technology designed to service delivery that satisfies the customer's need, wants or aspirations are defined as the service system. The service system may vary from individual person (architect having extensive skills) to centrelink in Australia (social services like Red Cross) or business like Kentucky Fried Chicken (KFC). National government, hospitals, cities, universities are defined as the service systems. ‘Service Organisation, Costomer Needs |-—>| Mission, Saescs,, Le] Environment Limiter” FS t t + Marketing f&——>[ Operations (——>{_tuman Resources y Design of Service Package ‘nd le Delivery System ¥ ‘Service Delivery System Front Room: Serve providers Processes Equipment Customers andlor Enhanced Customers (Customer Assets Line of Visibility [> handler Customer Asses Back Room Persone! Processes Equipment Figure 24: Service System, ‘The service system based on language, attitudes, norms and beliefs may change over the time as people adapt to new circumstances. This represents that the service system is a kind of system which is partially evolving and Partially designed. Services are often consumed by the service systems while they are designed to provide services. Each service system is both a multiple-service customer and a service provider. Services systems are often linked with the value network or value chain where every link is a value proposition because they are designed to both consume and deliver services. Management of business operations when developing service Scanned with CamScanner” MILA Thin Semester (Services Marketing) SPPU Systems strives to make use of partner or an economically complementary network to extend and develop the service rapidly, For exa vice system in which more businesses and people use intemet is ereated by the service providers. Both service providers and users of the service system get amore value through internet, ‘The business model or value proposition and demand 2.2.2. Components of Services System ‘There are five overlapping components of a good service system: © Sof Services System Bront Office tn I-{__ tack Office tmertace Operations [H{_Senice Detivery System 2.2.1. Front-Office Interface Front-office interface can be referred to the place where service encounters take place and in services it the core of the business. Location, layout and scheduling are the front office features of the service system which reflects the customer's physical presence. That part of the system which is visible and experienced to the customer i.e. the place where service is performed and is thus open to scrutinise the customers is referred to the front-office. For example, dining room of a hotel, Customer's co-creation and his/her consumption roles in a physical area are the two important things come when he/she moves in the service system. For example, a customer performs actions or roles required to experience the service when he/she enters in a bank physically. There is a confined area where customer can ‘move and beyond that area customers are not allowed to move. Both series of counters and customer's area are separated from each other in banks. Likewise, by being in the customer service area, customers can experience service in restaurants. Customer contact area or front-office is the visible part of service system and refers to the area where customer actions take place. ‘The type of actions that take place in the front office are as follows: 1) Customer Actions: Making choices, purchasing and consuming and at last the service evaluations are the undertaking steps involved in these areas. For example, a sequence of steps to order and collect the meal, making choices from the menu, selecting for a place to be seated, meal consumption and at last the service experience evaluation are the activities and actions performed by the customer when he/she enters into McDonald. 2) Employees Actions: Employee actions also take place in addition to the customer actions. There are different positions occupied by the employees in order to provide customer service. For example, employees in McDonald interact with customers, helps customers in enjoying their meal, correct exceptions, and cheer children while the employees at front-office welcome customers, take orders from them, prepare meal, assemble order, make deliveries, collect payments and bid goodbye. 2.2.2.2. Back-Office Interface Those actions which the customer does not have great deal, especially, the work related to record-keeping done by the computers and improvements in productivity are all included in the back-office interface. The factories where the main product is manufactured and there is little or no direct contact between the customer and production process are the back-office activities for manufacturing firms. ‘That part of the system from where the physical presence of the customer is excluded is the back-office. For example, customers are not allowed to see the activities in hotel kitchens as they are a part of the manufacturing side of the service. ‘There is number of actions that take place in the back office. Kitchen operations are’performed in the back office of a hotel in the same manner as strategy development, fund management, treasury operations, etc., are performed in the back office of a bank. Scanned with CamScannerRole of Process, People & Physical Evidence in Services Marketing (Unit 2) 45 The audiences are not able ‘to see the backstage of the theatres, Acti 's related to the preparation for frontstage performance are curried out in the backstage. There are various staff and equipment (stage crews, wardrobe personnel, lighting, sound and music) that help in the performance of front stage. Usually, the frontstage and back stage are distinct and divided from ech other. Since, the exposure of backstage may not be d oppose the performance expected that is why by the backstage and ractive, rable to the audience and indicates disruptive clues which t is hidden, The improper beh ‘of the people may be shown 2.2.2.3. Operations System System made up of technology, organisational networks and people to deliver services to the customers to satisfy their needs are refers to the service operations system, ‘The value that results from the interactions between the service systems, whether it is between the nations, businesses or people, the service system is frequently characterised. The system for service packaging and delivery in coordination with the human resources, finances and marketing are designed by the operations system. Daily running of the system, resources organisation to carry out the services and input for employee training are the other activities included in the service operations system. In a theatre play, the component of service operations that are visible may be related to actors or a service staff, or may be related to stage set, equipment, physical facilities, and other tangibles. The customers are least interested in knowing the backstage operations. They make production evaluations on those components that are experienced during the delivery of services and on the results perceived from these services, just like any other audience would do. The customer will notice the variations in the qualities of the front-stage activities if the system and employees at backstage have failed to perform the backstage activities such as ordering, billing, account keeping, and so on. For example, if the customer orders fish but are told that it is not available or the food is overcooked then the customer may feel disappointed. Incorrect hotel billings, not receiving course grades due to failure of computer in the registrar's office of college or delayed flight, as the aircraft was taken ‘out of service for engine repairs are the other examples of backstage failure. Depending upon the customer contact’s level, the visible portion of the overall service operation varies. The visible portion of the component of service operations appears to be significant as the physical person of the customer is directly involved in the high-contact service. Low-contact services aim to reduce customer interaction with the service provider, so that much of the service activity aspect is confined to a remote backstage location mainly referred to as a technical core. Mail and telecommunication contacts are the activities to which the front-stage components are limited. A person generally has no idea about the location of exchange of telephone company he uses. Likewise, one's transactions are likely to be assessed far from where he lives if he has a credit card 2.2.2.4. Service Delivery System Supplies, procedures, regulations, rules, organisational culture, processes, programmes, equipment are the Various elements included in the service delivery system. Many organisations believe that the customer's satisfaction is also ensured if their functions or departments are arranged to operate in a most effective and efficient way as per the well-established principles of the significant field. When, where and how the services are delivered to the customers are the main concerns of the service system. Both the exposure to the other pahtomers and the visible components of service operating system like building, equipment and employee can be embraced by the service delivery system. The distinction between low-contact and high-contact facilities can be contrasted with the discrepancies between drama made for television and a live show on a stage using the theatrical analogy. Usually, the Gistomers at most use telephone to talk with the service provider or problem-solver and never see the factory Where the work is performed. The judgements regarding the service quality must be made by the customers on the basis of the case of accessing telephone followed by the customer service representative's voice and ‘sponse without buildings and furnishings or even the appearance of the personnel to provide tangible cues, Scanned with CamScanner46 ‘MBA Third Semester (Services Marketing) SPPU Almost no traditional aspects of delivery systems are involved in service deliyery system when service is provided via impersonal electronic networks, such as automated calls on telephone {o a central computer, self= service devices, or through the computer owned by the customer. Companies by playing music, installing moving colour graphics on video screens, giving their machines names, adding sounds and establishing interactive capabilities based on computers to give more human feeling to experience, can compensate for this Traditionally, operations managers have the responsibility for designing and managing the service delivery system, But marketing also needs to be involved in researching how consumers behave during service delivery and making sure the system is tailored to their needs and concerns. 2.2.2.5. Service Marketing'Systems a According to marketers, service marketing system is the collection of visible part of service delivery, service operations and other contacts points. This imitates different ways the customer can think about the company question and experience it, Clues regarding the nature and quality of the service product is offered by each of these components because services are experiential. The credibility of the organisation may be weakening in the eyes of the customers due to the inconsistency among the various components. By the telephone calls and service personnel letters, billing from the accounting department, advertising and sales departments, news editorials in the mass media, participation in the market research studies, word-of-mouth comments from current or potential customers and even random exposures to service personnel and facilities, this service marketing includes communication efforts. 2.2.3. Servuction System ‘The concept of service business as a system that integrated marketing, operation and customers is firstly explained by the French researcher Pierre Eiglier and Erie Langeard. By combining the terms service and production, they coined the term ‘servuction system’ in order to explain the visible physical environment of the organisation and is experienced by the customers. In Figure 2.5 the servuction model shows all the interactions in a high-contact service which constitute a typical customer experience. Customers communicate with the service atmosphere, service staff, and even other customers present during the service encounter. Through these interactions, the value can be destroyed e.g., someone is blocking one’s view in movie theatre, or it can be created eg., friendly and competent employees, other customers who are intersecting to observe a pleasant environment. And in order to ensure that the customer can get the service experience for which they came for, the organisations have to engineer all the interactions. Service Delivery System ‘Service Operations System] Tnanimare },____,[ Customer A Personnel [Customer B | Back Stage Front Stage visible) (isible) Figure 2.5: The servuetion system ‘Technical core and service delivery system are the two subsystems servuction system consists of: 1) Technical Core: The sub-system where inputs are processed and service products elements are created is the technical core. It is generally not visible for the customers and is the back-stage. For example, restaurant’s kitchen. The visible component is termed as front office or front-stage while the invisible component is termed as back office or backstage in a theatre. Unless the backstage action directly affects the front-stage activity, what goes on backstage is not of customer’s interest. For example, the diners will be disappointed in a kitchen reads orders wrongly. 2) Service Delivery System: The sub-system in which visible part of the service operations system is included and where the final assembly takes place’ and product is delivered to the customer is referred to as the service delivery system. Using the theatre as an example, the live theatre is a visible front office to the customer where service experienced is staged. Scanned with CamScannerRole of Process, People & Physical Evidence in Services Marketing, (Unit 2) ” As per the customer's conicl'Tevel, there is a variation in the proportion of whole service operation that i visible to customer. Most of the service operation system components are backstage in low-contaet ser whereas the visible element’of-the whole service operations is significant for the services of high-contact in which customers are directly involved. Online, telephones, or mail orders are the actions upto which the front- stage components are limited. ‘The design and management of facilities becomes easier for the fictory us customers usually not see where the work is being performed. For example, customers transact online and may talk only to a service employee on the phone is case of any problem and cannot visit the bank physically if they have credit card 2.3. SERVICE BLUEPRINT 2.3.1. Introduction Blueprint is generally referred to the design of a plan, Similarly, service blueprinting is a technique which used when planning a new or revised process and prescribing how it ought to function. The process of service delivery is broken down into individual elements through a step-by-step mapping. This technique helps the organisations in designing, monitoring, controlling and improving the service process on a regular basis. ‘The service blueprint can also be referred as a visual representation of the service delivery process. It can be linked toa detailed map or flowchart. Service blueprinting is a customer-oriented approach that aims at creating service improvement and innovative. Practices. It aims to chart out the entire service experience. It also identifies the customer segment that is being targeted, the sequence of actions that are involved in creating the service and also the various touchpoints and likely service failures that are expected in the service process. The service blueprint helps to highlight the customer’ role and also points the value that exists in the experience that is being created. It also helps to identify the likely service failures that can derail service process. It can be used as a means of designing a new service, It aids in the designing of customer-oriented matrices which can be used to gauge how efficiently the service is performing. 2.3.2. Components of Service Blueprint A service blueprint has five components which are as follows: ‘Components of Service Blueprint Customer Actions (Onstage/Visible Contact Employee Actions Backstage/Invisible Contact, Employee Actions Support Processes Physical Evidence 1) Customer Actions: Customer actions mean all the activities of the customer as a part of the service delivery process. The blueprint at its top mentions the activities of the customers in a systematic manner. It is different from other flowcharting processes because it makes the customer's activities central to the creation of the blueprint, Other functions in blueprint support the value proposition offered to the customers. 2) Onstage/Visible Contact Employee Actions: Another critical component of the blueprint is ible contact employee actions” which is separated from the customer by the line of interaction. ‘The activities of the front line staff in the form of face to face to encounters are depicted on the service blueprint as onstage contact employee actions. Every such. interaction between the customer and the employee is considered a moment of truth, 3) Backstage/Invisible Contact Employee Actions: The next vital component of the service blueprint is the backstage or the invisible employee actions. Everything seen above the line can be seen by the customers whereas everything below the line is not visible to the customers. The activities which are below the line of visibility are explained. These can be in the form of tele-calling activities or activities that employees engage in to cater to customers as a part of their job roles. Scanned with CamScanner48 MBA Third Semester (Services Marketing) SPPU 4) Support Processes: Support processes are another vital component of service blueprint, An internal line of interaction separates these processes from contact employees. These support activities are performed by entities in the organisation who are not contact employees but such support activities are important for successfully delivering the services. The supporting activities are shown in the form of vertical lines which originate from the support area and connect with other functional areas. These vertical lines also represent the total support required by the service firm in delivering its services to the end customers. 5) Physical Evidence: The last part of the service blueprint is the physical evidence. This comprises all the tangible elements of the service which are essential to influence the quality perception of the customers. ‘These elements of the physical evidence are necessary at every moment of truth. 2.3.3. Process of Service Blueprint The process of service blueprinting is different for new and existing services. This has been explained below in detail: Service Blueprint for New Services Service blueprinting process for client-oriented new services involves four steps: Step 1: Depiction of the Service Process from the Client’s Point of View: The very first step in the creation of the service blueprint is identifying and delimitating the service. The modeling of the service is done keeping the perception of the customer as central. The whole process I is arranged emphasising on achieving maximum customer satisfaction. For various target segments, the optimum definition of service is different. Its, | Temifcation of Front and Back End therefore, necessary to make a separate blueprint for each customer Inegrtion. segment. Also, additional blueprint needs to be prepared for meeting the v needs of additional target groups. For example, older customers prefer a [Resource Definition, Time Standards face to face interaction with the service staff whereas the younger staff and Tolerance typically initiates their service requests through apps or the internet. ‘The activities of the service blueprint are shown with help of flow diagrams. The actions here are shown by rectangles; process transitions by arrows; starVend points by rounded rectangles and the decisions & ramifications by a diamond shape. In the simplest form, service blueprint appears as a linear process comprising steps following a sequence. Generally, the service blueprints are generated with the help of softwares. Depiction ofthe Service Process {rom the Client's Point of View Idlenification of Client Contact Points Step 2: Identification of Client Contact Points: The blueprinting firstly focuses on defining the difference between the actions of clients and the service provider. In the next step, the point of contact between the clients and the service firm is determined. Those steps which are performed solely by the clients are located above the interaction line. The part of the process that deals with the interaction between the clients and the service firm are located between the interaction line and the line of visibility. In the final step, the customer-oriented activities performed by the firm which do not necessarily imply contact with the customer are included in the service blueprint. For example, in restaurants, the ordering of meal involves direct interaction with the clients. However, determining the restaurant's ‘menu is a customer-oriented process but does not involve direct contact with the customers. Step 3: Identification of Front- and Back-End Integration: Once those activities are identified which can be perceived by the customers, the next step is to identify the unperceivable activities. The process steps for these will be placed between the interaction line and the visibility line, Sometimes a service blueprint also includes two lower planes (support and control) depending on its objectives. For example, in many cases of household repair of gadgets like washing machines the repair activity is not possible at customer’s home address. Also, many times the spare parts of the washing machine are ordered in advance. In both cases, the process is invisible or unperceivable from client's end. Step 4: Resource Definition, Time Standards and Tolerance: The next step in the service blueprint is to define the timeframe of the process. This is done by determining the employee count,-labour time and other costs involved in the process. The requisite time for each process is calculated and then the resource for the same is allocated. Possible deviation in estimated time should also be taken into consideration in order to derive accurate results. This helps in testing the criticality of a service in terms of time and determining whether the services can be delivered within the stipulated time given by the customers. Scanned with CamScannerRole of Process, People & Physical Evidence in Services Marketing (Unit 2) 49 For example, in the case of household repair of electrical appliances the required time and resources for the repair activity are calculated based’on experience. This is utilised later when the simulation of the service is done. In this manner, it is possible to work out the ideal work quantity that an individual employee should do and also the number of employees that will be required. Service Blueprint for Existing Services By understanding and analysing the present status of service process, Senice Documentation and new innovation opportunities can be identified within the existing | Decomposition into Component Processes services. Service blueprinting of existing services involves following Tt steps: Step 1: Service Documentation and Decomposition into Degicin ol be Svea Component Processes: The first step in service processing of z existing services is service documentation and decomposition. It [—poemmination of Resources and Time involves creating a record of the various service processes through a Standards process of documentation or monitoring the service transactions. T From the perspective of clients, the process can be carried out using the Critical Incident Method, Structured interviews and workshops | _ Anelysis and Service Improvement are some of the most suitable methods for documenting the internal service processes. As we have seen that service blueprinting involves representation of the process in sequential format; hence, this representation must be integrated with the decomposition of service process. This needs to be followed by resource and time documentation. Step 2: Depiction of the Service Process: In case, the documentation cannot be synchronised with the service blueprint or cannot be represented in form of flowchart with ordered process steps and interaction planes, then the conversion of the same into service blueprint needs to be changed. A software package can be used for undertaking this process. Step 3: Determination of Resources and Time Standards: This is the third step where the actual process roles ‘must be transmitted to the service blueprint. Each process step can be integrated with executable roles that are pre-defined. In case of large organisations, RACI-Model (Responsible, Accountable, Consulted and Informed) can be used. Besides the information about the service process, the roles of the advisor and the information piovider also need to be detailed. Finally, the sequence of the service steps is determined and the time taken to complete the process is computed. Step 4: Analysis and Service Improvement: Last but not the least step involved in the process of service blueprint is analysis and service improvement. Various methods can be used for analysing the services. Any changes that are deemed necessary after the analysis of the process are incorporated and same is included in the service blueprint. Figure 2.6 given below shows the service blueprint for a household maintenance service. This has two main objectives, The first part tries to capture the various customer interactions that happen in the service activity whereas the second part tries to capture the various cost elements that are associated with the service. ‘The service process gets initiated when the machine suffers a breakdown. The client at this stage contacts the service company. The client will try to explain his problem and will schedule an appointment with the service technician. The technician then visits the client's home. In the likely event that the client is not at home, a second appointment is scheduled. The technician inspects the fault in the machine and then makes an estimate of the prospective expenses in getting the machine repaired, Tn case the repairs do not require purchase of additional parts then the technician gives an on the spot estimate of the cost, which if found suitable, initiates the repair activity. However, a follow-up appointment is given if any additional part or special tool is required by the technician. Once the repair activity is carried out successfully the firm gives an invoice to the customer. The follow-up activity of the service is considered as Part of distinct service function. Figure 2.6 shows that ali activities in the blueprint are not at the same level. Activities like the description of the problem, fixing up a technician visit or making a payment are done by the client and not the service provider, The onstage activities can be perceived by the customer as he is directly involved in the process, However, the backstage activities like spare part order, preparation of the invoice, travelling of technician, etc., are unperceivable. Scanned with CamScanner