MKT610 Supplements Lectures 13-14

Characteristics of Service Quality to Delight Customers

A customer of The Container Store completed her purchase and headed for her car, children in tow. She placed her package on the ground as she put the children in the car and then drove off forgetting the package. Realizing her mistake just a few minutes late, she returned to the parking lot, but the package was gone. She re-entered the store hoping that someone had turned in her package, but no one had. Salesperson James Castleberry remembered the customer and asked her what she had bought. He then proceeded to gather up the products, handed them to the customer without charge, and said “Your day will get better”. And it did, starting that moment.

Special Expeditions market offer is wondrous nature in its most authentic and - weather permitting – most glorious state. It provides total experience rather than only entertainment. Travellers interact with nature so closely that their experience often changes their lives. Special Expeditions ship The Sea Lion, was suffering a problem with the steering controls. The Engineers worked through the night but the ship would be late getting to Vancouver to pick up the passengers. The company owner, Mr. Sven-Olof Lindblad, called an old friend, the renowned wildlife artist Robert Bateman, who has a home overlooking the water at Fulford Harbour. Passengers were ferried from Vancouver to Fulford Harbour, fed dinner, and entertained at the Mr. Bateman home. The Sea Lion arrived and everyone boarded a little after midnight in the greatest of spirits.

In both the examples above, we see a common thread. Motivated and empowered staff determined to make their customers happy by providing good service. A service which is intangible and perishable. However effects of experienced service/ service encounters can be remembered long by their customers and word of mouth can bring in more customers.

Let us explore more about the role, growth, impact of services in our daily lives and unique nature of services.

Role, Growth and Impact of Services in Our Lives

Service activities are absolutely necessary for the economy to function and to enhance the quality of our life. Consider, for example, the importance of a banking industry to transfer funds and a transportation industry to move food products to areas that cannot produce them. Government also plays a critical role in providing services such as public education, health care, well-maintained roads, safe drinking water, clean air, public safety etc. Service touches our lives of every person everyday.

In the early 1900s, only 3 of every 10 workers in the United States were employed in the service sector. By 1950, employment in services accounted for 50 percent of the workplace. Today, services employ about 8 out of 10 workers. See figure below. Scenario in other countries including U.A.E. is no different. The appetite of services, especially innovative ones, is insatiable. Thus, services are no longer peripheral activities but rather form an integral part of our society and today lie at the heart of national economy.

Trend in U.S.

Employment by

Sector, 1850-2000

From US Department of Commerce, Bereau of the Census, Historical Statistics of the United States, 1975. p137 and US Department of Commerce, Bureau of the Census, Statistical Abstract of the United States, 2003 p.619

Mr. James Fitzsimmons, Author of “Service Management” defines service as “a timeperishable, intangible experience performed for a customer acting in the role of coproducer.”

Services are ideas and concepts; products are things. Customers experience tangible products (like toothpaste, wrist watch) differently than intangible services (like air transportation). Customers can see and touch wrist watch, tube of tooth paste. In contrast service is intangible and is a promise. They must trust the service company to deliver on its promise and conduct itself honourably. Customer buys the service prior to experiencing it. Services are performed directly for customers (e.g. Health care, Education) or for the customers’ property (e.g. vacuum cleaner repair, dry cleaning, tailoring). Services performed directly for customers require customer’s participation during the performance. Service providers interact with customers like cutting their hair, serving a meal, delivering a lecture, singing them a song, opening a bank account. Service depends on friendliness, competence, responsiveness and motivation of the service providers.

Recognising the unique nature of services, role and impact of service in our day to day life, ensuring service quality in delivery is becoming increasingly significant, important and a key differentiator in market place as buyers reliable, responsive and caring service as one of the key differentiator while making a buying decision,

Distinctive Characteristics of Services Vis a Vis Products

Fundamentally services differ from products in terms of how they are produced, consumed, and evaluated. Some of the key characteristics unique to service are:

a. Intangibility:

Services are basically intangible. The intangible nature of services also presents a problem for customers. When buying a product, the customer is able to see it, feel it, and test its performance before purchase. For a service, however, the customer must rely on the reputation of the service firm.

b. Inseparability:

Production and consumption of many services are inseparable e.g. delivering a lecture. Quality in services often occurs during service delivery whereas quality in products is usually engineered at the manufacturing plant and delivered intact to the customer. Unlike goods producers, service providers do not have the benefit of a factory serving as a buffer between production and consumption. Service customers are often in the service factory, observing and evaluation the production process as they experience the services e.g. in KFC outlet.

c. Heterogeneity:

Services especially those with a high labor content-are heterogeneous. Their performance often varies from producer to producer (performer to performer), from customer to customer, and from day to day. The quality of the interactions that bank tellers, flight attendants and insurance agents have with customers can rarely be standardized to ensure uniformity the way quality of goods produced in a manufacturing plant can.

d. Differing Standards and Criteria of Service:

Services, as performances are difficult for customers to evaluate prior to purchase. The criteria customers use to evaluate service quality may be more difficult for the marketer