Lesson 12 E-SERVICES

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SESSION OBJECTIVES SERVICE MARKET CHARACTERISTICS IMPACT ON INTERNET ADDING VALUE TO SERVICES SERVICE QUALITY

EARLY SERVICE MARKETERS APPLIED CLASSIC FMCG MARKETING WITH MIXED RESULTS RECOGNITION THAT SERVICE MARKETS HAVE UNIQUE CHARACTERISTICS PRODUCTS ARE INTANGIBLE USE PLACE, PEOPLE AND PROCESS EQUIPMENT TO SUPPORT TANGIBILITY

ON-LINE MODELS NEED TO MEET CUSTOMER NEEDS PEAPOD.COM OFFERING AT-HOME SHOPPING AND DELIVERY STREAMLINE DELIVERING TO AT-HOME SERVICE DROP OFF BOX INTERNET PROVIDES TIME AND CONVENIENCE TO SERVICE OFFERING

MANY SERVICE MARKETS REQUIRE SUPPLIER / CUSTOMER INTERACTION VARIATION IN NEEDS OF CUSTOMER AND ABILITIES OF SUPPLIER EMPLOYEES MANY SERVICE GOODS ARE HIGHLY PERISHABLE (E.G. UNSOLD AIRLINE SEAT) USE VARIOUS DEMAND AND SUPPLY MECHANISMS TO BALANCE MARKET (E.G. DIFFERENTIAL PRICING TO SHIFT DEMAND)

COMMODITISATION MINIMAL DIFFERENCE BETWEEN MANY SERVICES MEANS INTERNET MOVES MARKET TOWARDS PRICE-BASED COMPETITION OFF-LINE CUSTOMERS NOT ABLE TO RAPIDLY PRICE COMPARE ON-LINE SERVICES PROVIDE INSTANT PRICE INFORMATION MANY MARKETS (E.G. CAR INSURANCE, BANKING) WILL SEE INTERNET CAUSING SERVICES TO BECOME COMMODITY GOODS

SURVIVORS WILL OFTEN BE THOSE USING TECHNOLOGY TO REDUCE OPERATING COSTS ALTERNATIVE IS TO UPGRADE SERVICE TO DIFFERENTIATE COMPANY DELL’S PERSONALISED DESIGN AND CUSTOMER SERVICE OPERATION BUILD CLOSE TECHNOLOGICAL LINKS BETWEEN SUPPLIER AND CUSTOMER OPERATIONS (E.G. FEDEX SYSTEM FOR CISCO)

FIGURE 12:1 AN E-COMMERCE PRICE/VALUE MATRIX

SERVICE GAPS PARASURAMAN ET AL’S 5 VARIABLES IMPACTING SERVICE EXPECTATIONS: 1. RELIABILITY 2. TANGIBLES 3. RESPONSIVENESS 4. ASSURANCE 5. EMPATHY

DEFINED 5 GAPS: 1. CUSTOMER EXPECTATIONS AND PERCEPTIONS 2. DEFINITION OF QUALITY STANDARDS 3. INTERNAL OPERATION 4. MARKET COMMUNICATION 5. COMBINATION OF GAPS 1-4

DELL EXCEEDS CUSTOMER EXPECTATION THEREBY ABOLISHING GAP 1 FEDEX HAS CLEAR MEASURABLE STANDARDS ABOLISHING GAP 2 USAA HAS AUTOMATED INSURANCE DOCUMENTATION MANAGEMENT TO ABOLISH GAP 3 CAR WEB-SITES PROVIDING ACCURATE INFORMATION ABOLISHING GAP 4

RESOURCE DRIVING SERVICE PROVISION OF: – CONTACT PERSONNEL – PHYSICAL RESOURCES TO PRODUCE SERVICE – CUSTOMER GRONROOS PROPOSES THAT REQUIRE: – EXTERNAL MARKETING ACTIVITIES – INTERACTIVE MARKETING AT INTERFACE – INTERNAL MARKETING INSIDE ORGANISATION ERRORS BY BOTH INTERFACE STAFF AND INTERNAL PROCESSES IMPACT QUALITY AUTOMATION

LEVITT BELIEVES IN MANUFACTURING (OR STANDARDISED) ORIENTATION (E.G. McDONALDS APPROACH) OTHERS ARGUE FOR FLEXIBLE AN EMPOWERED WORKFORCE PROBABLY CAN USE EITHER (E.G. FEDEX VERSUS UPS IN PARCEL DELIVERY) ANOTHER SOLUTION IS TO REDUCE HUMAN INVOLVEMENT

BANKS INTRODUCED EDI FOR BANK-TO- BANK OPERATIONS, A.T.M.s AND ON-LINE BANKING NEED TO ENSURE AUTOMATION IS APPROPRIATE TO SITUATION EXAMINE CUSTOMER PERCEPTION OF TRANSACTION COMPLEXITY NUMBER OF ALTERNATIVE PROVISION CHANNELS

FIGURE 12:2 AN E-COMMERCE SERVICE PROVISION MATRIX

NEED TO ENSURE AUTOMATED SERVICE LINKS TO PERSONAL ASSISTANCE TECHNOLOGIES SUCH AS VOICE-OVER INTERNET (VOIP) STILL FACES OPERATING PROBLEMS WILL IMPROVE AS TECHNOLOGICAL PROBLEMS OVERCOME TO CREATE SEAMLESS SERVICE

ORGANISATIONAL FORM NEED TO BUILD HIGHLY RESPONSIVE AND FLEXIBLE SYSTEMS USE PEOPLE AND TECHNOLOGY WORKING IN PARTNERSHIP FEDEX REDUCED ORGANISATIONAL LAYERS TO ONLY FIVE BY INTRODUCING I.T. PROFESSIONAL FIRMS NEEDING TO CAPTURE EXPERTISE OF INDIVIDUAL STAFF EMERGENCE OF VIRTUAL ORGANISATIONS

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