Basic four strategies of service.

Service firms vary widely in their abilities to serve different types of customers well. Hence rather than trying to compete in an entire market,each company needs to focus its efforts on those customers it an serve best.

The extent of a company’s focus can be described along two dimensions: market four and service focus

Market focus is the extent to which a from serves few or many markets, while service focus describes the extent to which a firm offers few or many services

Fully focussed - A fully focussed organisation provides limited range of services (perhaps just a single core product) to a narrow and specific market segment.
Developing recognized expertise in a well-defined niche may provide protection against would- be competitors and allows a firm to charge premium prices

Disadvantage - The biggest risk of the fully focussed strategy is that the market may be too small to get the volume of business needed for financial success other risks of the fully focused strategy include the danger that demand for the service ay decrease because of alternative products, new technologies offered by other providers or that purchasers in the chosen segment may be affected by an economic downturn

example - a) hospitals that operate only cataract or limb replacement (jaipur legs……. b) a popular newspaper (deccan ) which sells only news paper

Market focussed - (Narrow market but wide range of services) A market focussed company concentrates on a narrow market segment but has a wide range of services example a) Market for decoration stuff and firecrackers

Service focussed - ( Broad market but narrow range of services) Service focussed firms offer a narrow range of services to a fairly broad market. However as new segments are added , firms need to develop knowledge and skills in serving each segment

example - Starbucks coffee shops follow this strategy serving a broad customer base with a largely standardised product
Another example could be ‘Times of india’ servicing customers with news thru newspapers, online, TV

Unfocused - Many service providers fall into the unfocussed category because they try to serve broad markets and provide a wide range of services. The danger with this strategy is the unfocused firms often are “jacks of all trades and master of none”

A few departmental stores follow this strategy and as a result have been struggling to against more focussed competitors ( hypermarkets and speciality stores)

Disadvantage -
Firms should not use the unfocussed strategy as this will only dilute their efforts and cause them to spread their resources too thin when they try to do many things at the same time

Developing Right Service Concept for a Specific Segment

Service firms vary widely in their abilities to serve different types of customers well. Hence rather than trying to compete in an entire market,each company needs to focus its efforts on those customers it an serve best.

A Market segment is composed of a group of buyers who share common characteristics, needs, purchasing behaviour, or consumption patterns.

A target segment is one that a firm has selected from among those in the broader market and may be defined on the basis of several variables

(eg - a departmental store in a particular city might target residents of
-> the metropolitan area (geographic segmentation)
-> who have incomes within a certain range ( demographic segmentation)

->value personal service from knowledgeable staff and are not highly price sensitive (both reflecting segmentation according to expressed attitudes and behavioural intentions)

once a target segment has been selected, firms need to provide their market with the right service concept. for this formal research is often needed to identify which attributes of a given service are important to specific segments and how well prospective customers perceive competing organisations as performing against these attributes. however it should be noted that the same individuals ay set different priorities for attributes according to
The purpose of using the service who makes the decision the timing of use (time of day/wee/season) whether the customer is using the service alone or with a group and if the latter, the composition of that group example choosing a restaurant for lunch when (a) on vacation with family of friends (b) meeting with a prospective business client (c) gong for a quick meal with a co-worker

it is unlikely that one will choose the same type of restaurant in each instance, let along the same one.

Important versus Determinant Attributes

Consumers usually make their choices between alternative service offerings based on perceived differences between them
However Attributes that distinguish competing services from one another are not necessarily the most important ones

For instances, many travellers would undoubtedly rank ‘safety’ as their number one consideration in air travel however since safety is the most basic requirement a airline is expected to provide a traveller make his choice based on other factors which are of key value to them

for instance, convenience of departure ands arrival times, availability of frequent flyer miles and related loyalty privileges,quality of inflight service or the ease of making reservations might be the determinant characteristics for business travellers

Determinant attributes determine buyers’ choices between competing alternatives…often they may be down on the list
- often they may be down on the list Service characteristics that are important to purchasers - but they are the attributes on which Customers see significant differences between competing alternatives on these attributes .

The marketing reseachers task of course it to survey customers in the target segment, identify the relative importance of various attributes and then ask which ones have been detrimental during recent decisions involving a choice of service suppliers

———-—-

Designing a Service process

Services are usually defined with reference to a particular based on the core set of benefits and solutions delivered to the customers
The core product is the central component that supplies the principal, problem - solving benefits customers seek example - in case of a customer seeking good rest in a hotel, the core product would be the hotel room with at lease basic facilities such as comfortable bed, washroom etc

Supplementary services - Delivery of the core product is usually accompanied by a variety of other service- related activities referred to collectively as supplementary services
These services augment the core product, facilitating its use and enhancing its value and appeal to the customers overall experience

example - incase of a hotel supplementary services would include parking, porter, meal, room service, phone service etc
Adding supplementary services or increasing their level of performance should be done in ways that enhance the perceived value of the core product and enable the service provider to charge a higher price.

Delivery Process - refers to the processes used to deliver both the core product and each of the supplementary services. the design of the service offering must address the following issues;

How the different service components are delivered to the customer the nature of the customers role in the process how long the delivery last. the prescribed level and style of service to be offered

example - incase of a hotel, service components would include providing a room that suits the customers retirement whether the customer is expected to come to the buffet area or whether room service will be provided for what duration the service (rooms) will be provided (check in and out time) economy customer and VIP customers will be offered different services.

The Flower of service

Core products often share a range of similar supplementary service elements. There are 2 kinds…
Facilitating supplementary services , required for either service delivery or aid in the use of the core product
Enhancing supplementary service which add extra value for customers

Facilitating service

Information
(confirmation of services, direction to service site, prices, service hours, instructions to using core product, receipts and tickets)

Order taking Applications - membership in clubs, subscription services eg utilities)
Order entry - on-site order fulfilment, mail/telephone/web order) reservations - seats/tables/room vehicle or equipment rental professional appointment

Billing

Invoices for individual transactions periodic statements of account activity self- billing (computed by customer)

Payment

Self Service - electronic fund transfer, mail a check
Direct to payee or intermediary - cash handling, check handling, card handing, coupon redemption

Automatic deduction from financial deposits

Automated systems (machine readable tickets that operate entry gate)
Human systems (toll collectors , ticker inspectors)
Payment
Enhancing services
Hospitality
Consulting
Safekeeping

Enhancing Services

Hospitality
(Greeting, food and beverages, toilets and washrooms,, transport and security)

Consulting
(personal counselling, tutoring, management or technical consulting)

Safekeeping
(child care, pet care, baggage handling. storage space, safe deposit boxes, preventive maintenance,)

Exceptions elements

special requests in advance of service delivery childrens needs dietary requirements medical or disability needs

Handling special communications complaints, compliments, suggestions

problem solving warranties and gurantees resolving difficulties that arise from using the product

Restitution refunds and compensation free repair of defective goods
A hierarchy of new service categories

xerox copy of text book pfg 100 & 101

Creating Services as Substitutes for 
Owning and/or Using Goods

pfg 102 and 103