People as Strategy: Managing Chapter 10 People as Strategy: Managing

Chapter Objectives Understand the importance of the consumer in the production of a service and the impact consumer performance can have on both the operational efficiency of the business and customer satisfaction. Understand that there can be “novice” and “expert” consumers in their production role, and that the service firm has to cope simultaneously with both. Understand the steps management must take to manage service consumer performance rather than consumption. Understand how the inseparability of consumers can change the roles of marketing, operations and HR managers. ©2011 Cengage Learning. All rights reserved.

Opening Vignette: Wendy’s How to order a Wendy’s Hamburger ©2011 Cengage Learning. All rights reserved.

Expert and Novice Consumers The spectrum of performance ability; not all consumers are equally proficient. Novice customer does not know what to do and how to perform. Expert consumers: individuals who have expertise in the purchase process for a particular good or service. Expert performers: individuals who are expert in the service production process ©2011 Cengage Learning. All rights reserved.

Consumer Performance and Operational Efficiency The extent to which the consumer is part of the process is regarded as the dominant constraint on the efficiency of the service system. Buffering of the technical core High and low contact systems ©2011 Cengage Learning. All rights reserved.

Consumer Performance and Information Technology Information Technology has revolutionized the end-to-end process of taking an airlines trip! ©2011 Cengage Learning. All rights reserved.

Consumer Satisfaction and Consumer Performance Expected script is the script the consumer carries with them into the service setting; what they expect to happen and the benchmark against which they will evaluate the experience. ©2011 Cengage Learning. All rights reserved.

Service Encounter as a Theatrical Drama Scene is set by the creation of the physical setting in which the performance is to be played. There are two kinds of actors: employees and consumers. Actors are assigned roles in which they have to play in the “production”. The performance is scripted with each actor receiving instructions and works to the extent that all the actors “know their parts.” Individuals have a deep-set need for control and predictability. ©2011 Cengage Learning. All rights reserved.

Managing Customer Performance Script Audit your consumer performance expertise Increase your share of expert consumers Increase customer loyalty Manage script changes carefully Create systems to cope with novices and experts Manage your customer and service mix Use service provider strategies on your consumers. ©2011 Cengage Learning. All rights reserved.

Figure 10.1 Managing Consumer Performance Script ©2011 Cengage Learning. All rights reserved.

Principles of Waiting Lines Unoccupied time feels longer than occupied time Preprocess waits feel longer than in-process waits Anxiety makes the wait seem longer Uncertain waits are longer than known finite waits ©2011 Cengage Learning. All rights reserved.

Principles of Waiting Lines Unexplained waits are longer than explained waits Unfair waits are longer than equitable waits The more valuable the service, the longer the customer will wait Solo waits are longer than group waits ©2011 Cengage Learning. All rights reserved.

Consumer Inseparability and the Role of Marketing and Operations The greater the extent of consumer participation in the production of their own service, the greater is the need to manage consumer performance. ©2011 Cengage Learning. All rights reserved.

Copyright © 2011 Cengage Learning. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2011 Cengage Learning.  ©2011 Cengage Learning. All rights reserved.