Service Sector Management Full Notes

Chapter I SERVICE SECTOR MANAGEMENT WHAT IS SERVICES Services include all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced and provides added value in forms (such as convenience, timeliness, comfort or health). That is essentially intangible concerns of its first purchaser. 1.2 DIFFERENCES BETWEEN SERVICES AND CUSTOMER SERVICES Companies like IBM offers repair and maintenance service of equipment, consultancy, training services etc. These services may include a tangible product like a report or train manual. Customer Services , however is the service provided in support of a company’s core product –like answering question , taking orders ,dealing with billing issue , handling complaints etc .Typically there is no charge for customer service is essential for building customer relationship .Customer services are hence different from services provided for sale by a company. Federal Express market and delivers services. It also provides a high level of customer services. Its services are overnight package delivery, and logistics services. Its customer services include well trained staff who can answer all question on telephone, on line tracking of parcels etc. 1.3 CONCEPT OF ‘SERVICE MARKETING’ The perception of service marketing focuses on selling the services in the best interest of users/customers. Marketing a service is meant marketing something intangible. It is marketing a promise. It is more selling yourself. In the marketing of services, we go through a number of problems directly or indirectly influencing the business index. The problems like market segmentation, marketing information system, behavioural management are studied minutely which simplify the task of formulating a sound mix for marketing, such as Product mix, Promotion mix, Price mix and the Place mix. It is important to mention that we find “People” an important mix of marketing services. If we market the services in a right direction, the available opportunities can be capitalized on optimally and also it contributes substantially to the process of development. In view of the above, we observe the following key points regarding the concept or perception of services marketing: •

It is a managerial process of managing the services.

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It is an organized effort for providing a sound foundation for the development of an organization.

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It is a social process helping an organization to understand the emerging social problem and to take part in the social transformation process to justify its existence in the society.

1.4 SERVICE MANAGEMENT Service Management is : 1)

To understand the utility the customers rceicve by consuming or using the service offering of the organization

2)

To understand how the organization (personnel, technology, physical resources, systems and customers)will b able to produce and deliver this utility

3)

To understand how the organization should be developed and managed so that the intended quality can be achieved

4)

To make the organization function so that this quality can be delivered on a continuous basis

1.5 GOODS SERVICE CONTINUUM As per Theodore Levit “There is no such things as service industries. There are some service industries whose service component are greater (or less) than those of other industries”. Everybody is in service. The point that Leavitt was trying to put across is that with almost every tangible physical product an intangible service component is associated. Therefore every body is in service. He has further put that goods can be put into two categories (a) Search goods – Goods which the customer can see, evaluate and try them prior to purchase (soap and shampoo etc.) (b) Experienced goods – Goods which one can see or evaluate only after the purchase, while being consumed (Holiday, travel etc)

Search goods

Prior purchase / use

Tangible

Experienced goods: goods, which one can see or evaluate after the purchase like (holidays, travel etc.) Experienced goods

After purchase / use

In Tangible

Search goods are tangible goods and the experienced goods are intangible.

Philip kotler suggests 4 categories 1) Pure tangible (salt) 2) Major tangible with minor intangibles (soap) 3) Minor tangible with major intangibles (consultancy) 4) Pure service (teaching)

Salt

Soft Deterge Automo Cosmet drinks nts bile ics

Tangible Dominant

Fast Ad food Airlines agency outlet

Investm ent Consult Teachin Manage ancy g ment

Intangible Dominant

The above diagram shows the Service – goods continuum – some goods being tangible dominant others being service dominant. The fast food outlets has almost 50/50 of tangible and intangible parts i.e. in this case both tangible factors such (food) and intangible such as (services) is important. That is the reason it come in the middle. In case of other products like salt there services won’t play any important role so it is more towards tangible and in case of teaching profession it is purely service dominated. We never known about service with out experiencing and in this manner various goods fall in place according to its category i.e. less service oriented or more service oriented.

1.6 GOODS AND SERVICES GOODS

SERVICES

RESULTING IMPLICATION

TANGIBLE.

INTANGIBLE.

Goods are objects, which can be seen, felt, sensed easily.

Services are performance or actions, which cannot be tasted, felt, touched.

Services cannot be inventoried. It cannot be patented nor readily displayed or communicated. Pricing of services is very difficult.

HOMOGENOUS/STANDA RDISED

HETEROGENOUS.

Goods have their own standards & many goods are alike.

PRODUCTION AND DISTRIBUTION ARE SEPERATED FROM CONSUMPTION Goods are produced first, then sold, then consumed.

E.G. health care services. (Treatment, surgery) Services are frequently produced by human beings so no two services will be alike. E.G. two different clients have different service experience from the same tax accountant. SIMULTANEOUS PRODUCTION AND CONSUMPTION. Most services are sold first and then produced and consumed simultaneously. E.G. restaurant services are sold first dinning experience is produced and consumed.

NON-PERISHABLE.

PERISHABLE.

Goods can be stored in inventory or resold or even returned.

Services cannot be saved, stored or returned. E.G. bad haircut.

CORE VALUE PRODUCED IN FACTORY

COREVALUE PRODUCED IN BUYER SELLER INTERACTIONS.

CUSTOMERS DO NOT PARTICIPATE IN PRODUCTION PROCESS.

CUSTOMERS PARTICIPATE IN THE PRODUCTION.

TRANSFER OF OWNERSHIP A THING

NO TRANSFER OF OWNERSHIP.ANACTIVITY/PROCES S

Service delivery and customer satisfaction depends on employee actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what is planned. Customers participate in & affect the transaction. customers affect each other. Employees affect the service outcome. Decentralization may be essential. Mass production is difficult.

It is difficult to synchronize supply and demand in services. Right quality has to be delivered in the first instance.

1.7 SOME DEFINITIONS : ** American Marketing association has defined services as “activities, benefits or satisfactions, which are offered for sale or provided in connection with sale o goods”. This definition took a limited view of services as it proposed that services are offered only in connection with sale of goods. ** Robert Judd defined services as “ a market transaction by an enterprise or entrepreneur, where the object of market transaction is other than the transfer of ownership of a tangible commodity” This recognised three broad areas of services  The right to possess and use a product (rented goods service)  The customs creation, repair, or improvement of a product (owned goods service)  No product elements but rather experience or what might be termed as experiential possession (non-goods service) ** Blois defines services, as “a service is an activity offered for sale which yields benefits and satisfactions without leading to physical change in the form of a good” ** Kotler and Bloom defines services as “an activity or benefit that one party can offer to another that is essentially intangible and dos not result in the ownership of any thing. Its production may not my not be tied up to a physical product”. ** Gummesson says, “ Services is something which can be bought and sold but which you cannot drop on your foot”. ** According Gronross “a service is an activity or series of activities of more or less intangible in nature that normally, not necessarily, take place in interactions between the customer and the service employees and/or physical resources or goods and/or system of the service provider, which are provided as solution to customer problems.” From this it follows that  Services are by and large activities, or a series of activities rather than things  As a result they are intangible  They take place in interaction between the customer and service provider – which means that services are produced and consumed simultaneously  Customer has a role to play in the production process as services are provided in response to the problems of customers as a solution. 1.8 Characteristics of Services and its Marketing Implications The main Characteristics of Services are :  Intangibility  Inseparability  Heterogeneity

 Perishability Intangibility Services are actions and hence they are intangible. Due to this it is not possible to stock services and hence fluctuations in demand becomes difficult to manage. Hotels have same number of rooms all through the year but the customers requiring the room are always varying with some months seeing very few customers while other months seeing a rush of customers. Further services cannot be patented and any new concept can be easily copied by competitors. These cannot be readily displayed or easily communicated, and hence it will be difficult for the consumers to assess the quality. This also creates a problem for what to include in advertisements and promotional materials. Further the actual cost of “unit service” is difficult to determine and hence pricing becomes difficult. Inseparability Services are generally created or supplied simultaneously. They are inseparable. For e.g., the entertainment industry, health experts and other professionals create and offer their service at the same given time. Services and their providers are associated closely and thus, not separable. Donald Cowell states ‘Goods are produced, sold and then consumed whereas the services are sold and then produced and then consumed.’ A service is produced when it is consumed eg. a dinning experience. Thus the customers are present when the service is produced thus other customer play an important role in satisfaction. The service producer also plays an important role in quality. Thus mass production is impossible, it is not possible to get economy of scale by centralisation, operations has to be decentralised to deliver to the consumer directly at convenient locations. A “problem customer” can result in disruption of service production process creating a dissatisfaction for himself, other customers and also to the service producer. Heterogeneity As services are produced by humans, hence no two services can be identical. Further no two customers are precisely alike and hence their experiences of the same service are different. Even the same customer can be with different frame of mind at different times – which results in differing satisfactions from the same service at different times. Eg. A tax consultant may provide different a service experience to two different customers on the same day depending upon their needs and on whether the consultant is meeting the customer when he is fresh in the morning or tired at the end of the day. Because of this ensuring a consistent quality becomes a challenging job. The quality depends upon a number of factors like the customer, service provides, other customers (their presence or even absence) etc., hence the service provider cannot know if the service is delivered in a manner which has been originally planned and promoted. Sometimes services are provided by a third party further increasing the heterogeneity. Perishability Services cannot be stored, saved, resold or returned. A bad haircut cannot be returned or resold to another customer. Hence demand forecasting and creative planning to meet the demand is a problem. Further one has to be right the first time or if things go wrong one should have strong recovery strategies to retain the customer goodwill.

Due to these characteristics of services the marketeers face a major challenge in marketing of Services.

SERVICE CHARACTERISTICS INTANGIBILITY

INSEPARABILITY

HETEROGENEITY

PERISHABILITY

MARKETING IMPLICATIONS

STRATEGIES TO DEAL WITH IMPLICATIONS

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Cannot be stored

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Tangible clues

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No Patents

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Personal sources

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No ready display

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Organizational image

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Communication problems

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Cost accounting for prices

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Pricing difficulties

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Post purchase communication

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Consumer involved in production

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Selection training of contact person

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No mass production

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Manage consumer

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Supply demand match

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Multisite location

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Employees affect the service outcome.

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Standardization difficult

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Industrialized

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Quality control difficult

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Customize

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No sure knowledge if service delivered matches what was planned & promoted.

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No inventorisation

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Difficult to synchronize supply and demand.

Cope with fluctuating demand

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Differential pricing

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Non-peak demand can be developed

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Complementary services

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Reservation systems

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Part-time employees

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Peak time efficiency routines.

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Consumer participation

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Expandable facilities can be planned.

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Shared services.

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Better match through process.

Chapter II

SERVICES & GROWTH IN ECONOMY 2.1 REASONS FOR THE GROWTH OF SERVICE INDUSTRY It is obvious that the growth in the services sector has been substantive. The reasons for this growth are quite a few, some of which are summarized as follows. •

Affluence: - The increase in per capita income from Rupees 238.8 in 1950 to Rupees 11,934.5 in 1998 is an indicator of he increase in general affluence has given rise to service like pest-control, personal security, interior designer, etc.

•

Leisure time: - People do get some time to travel and holiday and therefore there is a need for travel agencies, resorts, hotels, and entertainment. There are other’s who would like to utilize this time to improve their career prospects and therefore there is a need for adult education/distance learning/part time courses.

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Life expectancy: - The health programmed have significantly contributed to an increase in life expectancy given rise to services like old age homes, nursing homes, health care, etc.

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Working wives: - As more and more women have started working, the need for day care for children has increased, and so is the care with packed food and home delivery.

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Product complexity: - A large no. of products are now being purchased in households which can be serviced only by specialized persons like water purifies, micro wave ovens, home computers, etc. giving rise to the need for services like after sales service agents for durables, maintenance service providers, etc.

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Life complexity: - As the daily routine gets busier, individuals find it difficult to manage things on their own. Their leads to an obvious need for tax consultants, legal advisors, property advisers, etc.

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Resource scarcity and ecology: - As the natural resources are depleting and need for conservation is increasing, we have seen the coming up of service providers like pollution control agencies, car, pools, water management, etc.

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New products: - the development in information technology has given rise to services like PCOs, Pager service providers, Web Shoppe, etc

2.2 CONTRIBUTION OF SERVICE INDUSTRY TO INDIAN ECONOMY AND WORLD ECONOMY WORLD SCENARIO •

as economy shifts from developing to developed stage, they will show more and more shift toward services

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today, the fastest growing segments of the US economy is services

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in 1948 54% of the GDP of US was generated by services which is 80% now

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employment in this sector which was 55% in 1950 is now 83%

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the US balance of trade in goods has remained in the red for many years, but there has been a trade surplus in services

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today service sector dominates the economics of many developed nations. As countries develop the role of agriculture in the economy declines and that of services increase.(china has 50% GDP from service, 35% from industry, and 15%from agriculture)

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during recession it has been seen that service output declines less than industrial output – the service employment is less sensitive to business cycle fluctuation

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globalisation as strategy for service firm is becoming more important

Chapter III UNDERSTANDING THE CONSUMER 3.1 KNOWLEDGE OF THE BUYER In buying decisions many times other people also influence the decision. In services these roles are played by many persons. In purchase of any service six distinct roles are played 

Initiator : The person who has a specific need and proposes to buy a service



Influencer : The person or group of persons whom the decision maker refers to or who advice the decision maker.

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Gate Keeper : The person or organization or promotional material, which act as filter on the range of services which enter the decision choice

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Decider : The person who makes the buying decision

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Buyer : The person makes the actual purchaser

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User : The actual user.

For example if a sales executive wants to do a market tour ……. His boss may be the initiator The travel agency may act as a Gatekeeper The finance department may be the influencer The administrative department the buyer The executive the user. In this case the user may have no role in the buying process. Hence while targeting a customer the service provider may have to influence other persons. 3.2 CONSUMER DECISION MAKING. The consumer’s decision to purchase or reject a product or service is the moment of final truth for the marketer. It signifies the marketing strategy has been wise, insightful and effective, whether it was poorly planned and missed the mark. Marketer are, therefore, interested in the consumer decision-making process by which a consumer selects an alternative amongst the lot available. The decision not to buy is also an alternative. A simple consumer decision-making model, ties together the psychological, social and cultural concepts into an easily understood framework. The decision model has three distinct sets of variables: 1. Input Variables, 2. Process Variables, 3. Output Variables.

Input Variables:Input variables are those variables which affect the decision making process and include commercial marketing efforts as well as non-commercial influences from the consumer’s socio-cultural environment. •

Decision Variables:-

The decision process variables are influenced by consumer’s own psychological fields, which affect their recognition of a need, their pre-purchase search for information and their evaluation of alternatives. •

Output Variables:-

The output phase of the model includes the actual purchase (either trial or repeat purchase) and post-purchase evaluation. Both pre-purchase and post-purchase evaluation feed back in the form of experience into the consumer’s psychological field and serves to influence future decision processing. (On a holiday a customer may change hotels in between his stay). Factors Influencing The Buying Behaviour Situational Factors : Time, Store’s atmosphere, Marketing Stimuli (the occasion) Personal Factors : Personality, life style, Other demographic factors like age, gender, occupation etc. Social Factors : Culture, reference group, family Psychological Factors : Perception, attitude, motivation 3.3 CONSUMER EVALUATION OF SERVICES AND THE QUALITIES INFLUENCING CONSUMER EVALUATION For ‘consumer’ evaluation process the concept of “goods” has to be considered, as service characteristics have definite implication on the consumer evaluation process. Therefore for service industry, the service provider must understand how consumers choose and evaluate their offerings. There are three types of products: •

Search product: - search qualities are those attributes of a product which the customer can determine before the purchase. This is more common in physical goods.

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Experience product: - experience qualities are those attributes which can only be determined after the purchase, or during the period of consumption.

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Credence product: - it is being said that certain products have such characteristics which the consumer cannot evaluate even after consumption or purchase. Such characteristics exist invariably in services. e.g.: wheel aligning of the car, astrology etc.

TEN SUCH QUALITIES WHICH INFLUENCE THE EVALUATION OF SERVICES (Quality Dimensions of Services)

CONSUMER’S

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Consistency: - it involves consistency and reliability of performances and dependability. It means that the firm performs the service right the first time. It also means that the firm honours its promises especially in terms of accuracy in billing, record keeping and performing the service at the designated time.

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Concern:-it is the willingness or responsiveness of employees to provide the service. It involves timeliness of service or giving prompt service, calling the customer back quickly or mailing the transaction slip immediately.

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Competence: - it means having the required skills and knowledge to perform the service. It involves knowledge and skill of the contact personnel, knowledge and skill of operating support personnel and research capability of the organization. E.g. securities brokerage firm.

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Contact:- it involves approachability, access and ease of contact. It means that the service is easily accessible by telephone; waiting time to receive the services is not extensive, convenient hours of operation and convenient location of service facility.

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Courtesy:- it involves politeness, report, consideration and friendliness of contact personnel. It includes consideration for the consumer’s property. Clean and neat appearance of public contact personnel. E.g. no muddy shoes on the carpet, proper telephone operators etc.

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Communication:- it means keeping consumers informed in a language that they can understand and listen to them. It may mean that the company has to adjust its language for different consumers – increasing the level of sophistication with a well educated consumer and speaking simply and plainly with a novice. It involves explaining the service itself and how much the service will cost explaining the trade-off between service and cost and assuring the customer that a problem will be handled.

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Credibility: - it involves trustworthiness, believability, honesty. It involves having the customer’s best interest at heart thus contributing to credibility, company name and reputation, personal characteristics of the contact personnel and degree of hard sell involved in interaction with the customer.

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Confidentiality: - the security and the freedom from risk or doubt, involving physical safety, financial security or confidentiality.

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Customer knowledge: - it involves making the effort to understand the customer’s needs, i.e. learning the customer’s specific requirements, providing individualized attention and recognizing the regular customer.

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Tangibles: - it includes physical evidence of the service, physical facilities, and appearance of personnel tools or equipments used to provide the service, physical representations of the service such as a plastic credit card or a bank statement and other customers in the service facility.

CHAPTER IV THE SERVICE ENCOUNTERS (“MOMENT OF TRUTH.”) 4.1 MOMENTS OF TRUTH From the customer’s point of view, the most vivid impression of service occurs in the service encounter or “Moment Of Truth,” when the customer interacts with the service firm. This is the foundation to “Satisfaction of Service Quality” – it is where the promises are kept or broken. This concept was put forth by Richard Norman, taking the metaphor from Bull Fighting. Most services are results of social acts, which take place in direct contact between the customer and the service provider. At this stage the Customer realises the perceived service quality. 4.2 ENCOUNTER CASCADE Every Moment of Truth is Important – according to Scandinavian Airlines, each one of their 10 million customers come in contact with 5 employees. Thus the airlines say there 50 million moments of truth – each one is managed well and “They prove they are the BEST”. However some encounters are more critical. The encounter cascade refers to a series of encounters right from the time a customer comes to take the service. The encounter cascade can be important as any encounter can be critical, as it determines customer satisfaction and loyalty. If it’s the first interaction of the customer then the initial interaction will be the first impression. So, these interactions have to be given importance, as they are critical and influences customer’s perception of the organization. Example:

A customer calling for the repair service may switch to some other company if he is put on hold for a long time or even treated rudely. Even if the technical quality of that firm is superior, the firm may not get a chance to prove themselves in front of the customer. When the customer has had many interactions with firm, each encounter will be important as it will create a combined image of that firm. Many positive experiences will give an image of High Quality and many negative experiences will represent a bad image. Combination of positive and negative interactions will leave the customer confused about the Quality. It is suggested that not all encounters are equally important in building long-term relations. For every organization, certain encounters can act as a key to customer satisfaction. For example: for MARRIOT hotels, it is the early encounters that are important. In a hospital context, a study of patients revealed that encounters with the nursing staff were more important in predicting the customer satisfaction. As it is rightly said “one bad apple can ruin the whole basket of apples.” The same applies in this too; one negative encounter can drive the customer away, no matter how many encounters had taken place in the past. So a firm has to give a lot of importance to such encounters. “A customer who has been using a bank for nearly 15 years is quite happy with the service. He has a huge deposit and many accounts. One fine morning, when he comes out of the bank the watch man asks Rs. 10 for parking charges of his car. He goes inside the bank and informs the clerk at the counter, who directs him to the officer. The officer directs him to the Manager, who says he is helpless as this is a new policy of the bank. The customer who was so happy with the bank services decides to close all his accounts – “Some encounters can be very Critical”.

A Service encounter cascade for a hotel visit

Check- In Bell person Takes to Room

Among the service encounters a hotel customer experiences are checking in, being taken to the room by a bell person, eating a restaurant meal etc as shown in the figure. It is in Restaurant these encounters that the customer receives an overall view of the organizations service quality and encounter contributes to customer Meal satisfaction and willingness to do business with the organization again. As for the company, each encounter represents an opportunity to prove its potential as a quality service provider and to increase customer Wake-Up Call loyalty. Some services have few service encounters and others have many. Mistakes or problems that occur in the early levels of the service cascade can e critical because failure at one point results in greater risk of dissatisfaction in the long run. MARRIOTCheckout Hotels learned this through their extensive customer survey to determine what service element

contributes to customer loyalty. They found that 4 out of 5 factors came into play in the first 10 minutes of the guest’s stay.

IMPORTANCE OF ENCOUNTERS Although early events in the encounter cascade are likely to be especially important, any encounter can potentially be critical in determining customer satisfaction and loyalty. If a customer is interacting with the hotel for the first time, the initial encounter will create a first impression of the hotel. In these first encounter situations, the customer frequently has no other basis for judging the hotel, and the initial phone contact or face – to – face experience with the customer can take on excessive importance in the customer’s perceptions of quality. Even when the customer has hade multiple interactions with the hotel, each individual encounter is important in creating a composite image of the hotel in the customer’s memory. Many positive experiences add up to a composite image of high quality, whereas many negative interactions will have a positive effect. On the other hand, a combination of positive and negative interactions will leave the customer feeling unhappy of the hotels quality, doubtful of its consistency in service delivery, and vulnerable to the appeals of competitors. A large corporate customer of an institutional food provider that provides food service in all of its company dining rooms and cafeterias could have a series of positive encounters with the account manager or the sales person who handles the account. These experiences could be followed by positive encounters with the operation staff that actually set up food service facilities. However, even with these positive encounters, later negative experiences with the staff who serve the food or the accounting department that administers the account and billing procedures can result in a mixture of quality impressions. This variation in experience could result in the corporate customer wondering about the quality of the hotel and unsure of what to expect in the future. Each encounter with different people and department representing the food service provider adds to or detracts from the potential of continuing relationship. 4.3 TYPES OF ENCOUNTERS A service encounter occurs every time a customer interacts with the service organization. There are three general types of encounters - remote encounters, phone encounters, and face – to – face encounters. A customer may experience any of these types of encounters, or a combination of all three in his or her relations with a service firm. Types of Service Encounters. Encounters Remote Encounters

Phone Encounters

Face-to-Face Encounters

Remote Encounter:Encounter can occur without any direct human contact is called as Remote Encounters. Such as, when a customer interacts with a bank through the ATM system, or with Ticketron through an automated ticketing machine, or with a mail-order service through automated dial-in ordering. Remote encounters also occur when the firm sends its billing statements or communicates others types of information to customers by mail. Although there is no direct human contact in these remote encounters, each represents an opportunity for a firm to reinforce or establish perceptions in the customer. In remote encounter the tangible evidence of the service and the quality of the technical process and system become the primary bases for judging quality. EXAMPLE:Services are being delivered through technology, particularly with the advent of Internet applications. Retail purchases, airline ticketing, repair and maintenance troubleshooting, and package and shipment tracking are just a few examples of services available via the Internet. All of these types of service encounters can be considered remote encounters. Phone Encounters:In many organizations, the most frequent type of encounter between a customer and the firm occurs over the telephone is called as phone encounter. Almost all firms (whether goods manufacturers or service businesses) rely on phone encounters in the form of customer-service, general inquiry, or order-taking functions. The judgment of quality in phone encounters is different from remote encounters because there is greater potential variability in the interaction. Tone of voice, employee knowledge, and effectiveness/efficiency in handling customer issues become important criteria for judging quality in these encounters. Face-to –Face Encounters:A third type of encounter is the one that occurs between an employee and a customer in direct contact is called as Face-to-Face Encounter. In a hotel, face – to – face encounters occurs between customers and maintenance personnel, receptionist, bellboy, food and beverage servers and others. Determining and understanding service equality issues in face – to –face context is the most complex of all. Both verbal and non-verbal behaviours are important determinants of quality, as are tangible cues such as employee dress and other symbols of service (equipments, informational brochures, physical settings). In face – to – face encounters the customer also play an important role in creating quality service for herself through her own behaviour during the interaction. At Disney theme parks, face-to-face encounters occur between customer and ticket-takers, maintenance personnel, actors in Disney character costumes, ride personnel, food and beverage servers, and others. For a company such as,

IBM, in a business-to-business setting direct encounters occur between the business customers and salespeople, delivery personnel, maintenance representatives, and professional consultants. Of all determining and understanding service quality issues in face-to-face context is the most complex. Both verbal and non-verbal behaviours are important determinants of quality, as are tangible cues such as employee dress and other symbols of service (e.g., equipment, informational brochures, and physical settings). In face-to-face encounters the customer also plays a role in creating quality service for herself through her own behaviour during the interaction.

CHAPTER V SERVICE FAILURES AND RECOVERY 5.1 SERVICE FAILURES Even with the Best organizations failures can just happen – they may be due to the service not available when promised, it may be delivered late or too slowly (some times too fast ??), the outcome may be incorrect or poorly executed, or employees may be rude or uncaring. All these types of failures bring about negative experiences. If left unfixed they can result in customers leaving, telling others about the negative experiences or even challenging through consumer courts. Research has shown that resolving the problems effectively has a strong impact on the customer satisfaction, loyalty, and bottom-line performance. Customers who experience service failures, but are ultimately satisfied based on recovery efforts by the firm, will be more loyal. THE RECOVERY PARADOX. It is suggested that customers who are dissatisfied, but experience a high level of excellent service recovery, may be more satisfied and more likely to repurchase than are those who are satisfied at the first place. For example:A hotel customer who arrives & finds there is no room available. In an effort to recover, the front-desk person immediately upgrades this guest to a better room at the same price. The customer is so thrilled with this compensation that he is extremely satisfied with this experience, is even more impressed with the hotel than he was never before, and vows to be loyal into future. The logical, but not very rational, conclusion is that companies should plan to disappoint customers so they can recover &gain even greater loyalty from them as a result. This idea is known to be as Recovery Paradox. The recovery paradox is more complex than it seem. First of all it is expensive to fix mistakes and would appear ridiculous to encourage service failure-as reliability is the most important aspect of service quality. According to a research it is observed that a customer weight their recent experiences heavily in their decision to buy again. If the experience is negative, overall feelings about the company will decrease and repurchase

intentions will also reduce. If the recovery effort is absolutely superlative then the negative impression can be overcome. Then there is a recent study which shows no support to recovery paradox. It shows the overall satisfaction was consistently lower for those customers who had experienced a service failure than for those who had experienced no failure, no matter what the recovery effort is. The explanation for why no recovery paradox is suggested by the magnitude of the service failure in this study it is-a three hour airplane flight delay. This type of failure may be too much to be overcome by any recovery effort. Considering mixed opinions on if recovery paradox exists it is safe to say “doing it right the first time” is the best and safest strategy. When a failure does occur then every effort at superior recovery should be made. In cases where the failure can be fully overcome the failure is less critical, or the recovery effort is clearly superlative, it may be possible to observe evidence of the recovery paradox.

HOW CUSTOMERS RESPOND TO SERVICE FALIURE If customers initiate action following service failure, the action can be various types. A dissatisfied customer can choose complaint on the spot to the service provider, giving the company the opportunity to respond immediately. Thos is often the best-case scenario for the company it has the second chance right at that movement to satisfy the customer, keep his or her business in the future, and potentially avoids any negative word of mouth. Some customer chooses not to complaint directly to the provider but rather spread negative word of the mouth about the company to friend, relatives, and coworkers. This negative word of mouth can be extremely detrimental because it can reinforce the customer’s feeling of negativism and spread that negative impression to other as well. Further, the company has no chance to recover unless the negative word of mouth is accompanied by a complaint directly to the company.

Service Failure Dissatisfaction/

Negative emotion

No complain t CUSTOMER COMPLAINT ACTION FOLLOWING SERVICE FAILURE Action Complaint Action

Complain To provider

Exit/ Switch

Negative Word-of-mouth

Third-party Action

Stay

Exit/ Switch

Stay

When there is a failure, customer can respond in a variety of ways as illustrated in the figure. It is assumed that following are the failure, dissatisfaction at some levels will occur for the customer. In fact, research suggest that variety of negative emotion can occur following service failure, including such feeling as anger, discontent, disappointment, self- pity and anxiety. Many customers are very passive about their dissatisfaction, simply saying or doing nothing, take action or not, at some point the customer will decide weather to stay with that provider or switch to a competitor.

Fail safe the services

Welcome and encourage complaints

SERVICE RECOVERY STRATEGY

Learn from lost customer

Act Quickly

Treat customer Fairly

Learn from Recovery experiences

1) Fail Safe Your Service :The first rule of service quality is to do it right the first time. In this way recovery is unnecessary, customer get what they expect, and the costs of redoing the service and compensating for errors can be avoided. Even more fundamentally, it is important to create a culture of zero defections to ensure doing it right the first time. Within a zero defections culture, everyone understands the importance of reliability. Employee’s and managers aim to satisfy every customer and look for ways to improve service. Employees in a zero defection culture fully understand and appreciate the “lifetime value of a customer” concept. Thus they are motivated to provide quality service every time and to every customer. Dick Chase, noted service operation expert, suggests that services adopt the TQM notion of Poka Yokes to improve service reliability. Poka Yokes are automatic warnings or controls in place to ensure mistakes are not made; essentially they are quality control mechanisms, typically used on assembly lines. In a hospital setting numerous Poka Yokes ensure that procedures are followed to avoid potentially life-threatening mistakes. For example, trays for surgical instruments have indentations for specific instruments, and each instrument is nested in its appropriate spot. In this way surgeons and their staff know that all instruments are in their places prior to closing the patients’ incision. FAIL- SAFE YOUR SERVICE- DO IT RIGHT THE FIRST TIME 2) Welcome & Encourage Complaints:Even in a Zero defections organizations that aims for 100 % service quality, failures occur. A critical component of a service recovery strategy is thus to welcome and encourage complaints. Complaints should be anticipated, encouraged, and tracked. The complaining customer should truly be viewed as a friend. There are a number of ways to encourage and track complaints. Customer research can be designed specifically to do this through satisfaction surveys, critical incidents studies, and lost customer research. Part of encouraging complaints also involves teaching customers how to complain. Sometimes they have no idea whom to speak to, what the process is, or what will be involved. It is best to make this process as simple as possible the last thing customers want when they are dissatisfied is to face a complex, difficult to access process for complaining. One way that the complaining process has been simplified for customers is through technology. New technologies have resulted in easier access for customers to sales and service representatives. Toll-free call canters, e-mail, and pagers are all used to facilitate, encourage, and track complaints, Software application in a number of

companies also allow complaints to be analysed, sorted, responded to, and tracked automatically. British Airways, encourages, facilitated and tracks customer as a critical component of its effective service recovery process. It is apparent that British Airways is highly dependent on information technology to implement its strategy. In some cases technology can anticipate problems and complains before they happen, allowing services employees to diagnose problems before the customer recognizes they exist. This is the case at companies such IBM and Caterpillar, where information systems are being implemented to anticipate equipment failures and send out an electronic alert to the local field technician with the nature of the problem as well as which parts and tools will be needed to make the repair. 3) Act Quickly:Complaining customer want quick response. Thus if the company welcomes, even encourages, complaints, it must be prepared to act on them quickly. This requires systems and procedures that allow quick action, as well as empowered employees. Following are some guide lines to act quickly : Take Care of problems on the Front Line:Customers want the persons who here their complaints to solve their problems whether a complaints is registered in person, over the phone or via the Internet. The Ritz-Carlton insists that the first person to hear a complaint from a customer “owns” that complaint until he or she is sure it is resolved. That means that if a maintenance employee hears a complaint from a customer while the employee is in the middle of fixing a light in the hotel corridor, he owns that complaint and must be sure that it is handled appropriately before returning to his work. Empower Employees:Employees must be trained and empowered to solve problem as they occur. The company uses customer knowledge database as the key source for immediate problem solving by its customer service representatives. These representatives are empowered to solve the customer’s problem, but at the same time they must adhere to stringent requirements necessary in the health and pharmaceutical administration business. For service employees, there is a specific and real need for recovery training. Because customers demands that service recovery take place on the spot and quickly, frontline employees need the skills, authority, and incentives to engage in effective recovery. Effective recovery skills include hearing the customer’s problem, taking initiative, identifying solutions, improvising and perhaps bending the rules from time to time. Allow Customer to Solve Their Own Problem:Another way that problem or complaints can be handled quickly is by building systems that allow customers to actually solve their own service needs and fix their own problems. Typically this is done through technology. 4) Treat Customer Fairly:-

In responding quickly, it is also critical to treat each customer fairly. Customers expect to be treated fairly in terms of the outcome they receive, the process by which the service recovery takes place, and the interpersonal treatment they receive. 5) Learn from Recovery Experiences:“Problem- resolution situations are more than just opportunities to fix flawed services and strengthen tie with customers. They are also a valuable – but frequently ignored or underutilized – sources of diagnostic, prescriptive information for improving customer’s services. By tracking service recovery efforts and solutions, managers can often learn about systematic problems in the delivery system that needs fixing. By conducting rootcause analysis, forms can identify the sources of the problem and modify processes, sometimes eliminating almost completely the need for recovery. At the Ritz-Carlton employees record every service recovery opportunity and how it was handled; the employee who gets the complaint is required to do this. This information is then entered into the customer database and analyzed for patterns and systematic service issues that need to be fixed. If needed, a project team is assigned to a problematic area to develop a solution. In addition, the information is entered into the customers personal data file so that when that customer stays at the Ritz- Carlton again (No matter what hotel), employees can be aware of the previous experience, ensuring that it doesn’t happen again for that particular customer. 6) Learn from Lost Customer:Another key component of an effective service recovery strategy is to learn from the customer who defect or decide to leave. Formal market research to discover the reasons customers have left can assist in preventing failures in the future. This type of research is difficult, even painful for companies, however. No one really likes to examine their failures. Yet this is essential for preventing the same mistakes and losing more customers in the future. This is most effectively done by depth interviews, administered by skilled interviewers who truly understand the business. It may be best to have this type of research done by senior people in the company, particularly in business to business contexts where customers are large and the impact of even one lost customer is great. The type of depth analysis often requires a series of “Why” question or “tell me about that” questions to get at the actual, core reason for the customer’s defection. In conducting this kind of research, it is important to focus on important or profitable customers who have left not just everyone who has left the company. An insurance company in Australia once began this type of research to learn about their lost customers, only to find that the customers they were losing tended to be their least profitable customers anyway. They quickly determined that depth research on how to keep these unprofitable customers would not be a good investment. 7) Return To “Doing It Right” The set of strategies described follows the figure and leads directly back to the beginning: “fail – safe the service and do it right the first time”. By integrating all of the strategies, hotels will find less and less of a need for service recovery. Yet, when those

situations do occur, they will be prepared to impress the customer and keep their business anyway. GUEST RELATIONS The front office should anticipate guest complaints and devise strategies that help staff effectively resolve the situation. The visibility of the front office means that front desk agents are frequently the first to learn of guest complaints. Front desk agents should be especially attentive to guests with complaints and seek a timely and satisfactory resolution to the problem. Nothing annoys guests more than having their complaints ignored, discounted, or overlooked. While most front office staff do not enjoy receiving complaints, they should understand that very few guest actually enjoy complaining. Employees should also realize that guest who does not have the opportunity to complaint front office staff often tell their friends, relatives, and business associates instead. When guests find it easy to express their opinions, both the hotel and the guests benefit. The hotel learns of potential or actual problems and has the opportunity to resolve them. For a guest, this can mean a more satisfying stay. When problems are quickly resolved, guest often feels that the cares about his or her needs. From this perspective, every complaint should be welcomed as an opportunity to enhance guest relations.

CHAPTER VI EIGHT COMPONENTS OF INTEGRATED SERVICE MANAGEMENT 6.1 The Marketing Mix (THE 5 P’s OF SERVICES MARKETING) In order for your business to sell its products and services as successfully as possible, you need to look at what products you are selling in detail to ensure they will be attractive and needed; the price to ensure it is not too cheap or too expensive; where you are best distributing your product; and finally, how you can create interest and awareness for your products. All these elements need to be targeted at the right people at the right time. In order for your business to tackle this correctly, you need to get the right type of mix (marketing mix), the mix should include four main elements: Product, Price, Place and Promotion, by examining each and carefully and adapting them to your customer's needs, you will continue to produce and needed products and services 1) Product element: Managers must select the feature of both the core product (either a good or service) and the bundle of supplementary service elements surrounding it, with reference to the benefit desired by customers and how well competing products perform. In short, they must be attentive to all aspects of the service performance that have the potential to create value for customers

2) Price and other user costs: - This components addresses management of the expenditures and other outlays incurred by customers in obtaining benefits from the service product. It is not only related to traditional pricing tasks of establishing selling price to customers, setting trade margins and getting credit terms but also, how to minimize other burdens of customers while purchasing such as time, mental and physical efforts and unpleasant sensory experiences such as noises and smells. 3) Place , cyberspace and Time:- Delivering product elements to customers involves decisions on the place and time of delivery as well as on the methods and channels employed. Delivery may involve physical or electronics distribution channels or both),depending on the nature of the service being provided. 4) Promotion and education:- No marketing program can succeed without effective communications. This component plays three vital roles: a)Providing needed information and advice (awareness). b)Persuading target customers of the merits of a specific product. (Concentrating on a particular segment of the market). c) Encouraging to take action at a specific time (purchase). Communication is educational in nature for new customers. Communication can be delivered by individuals such as sales people and trainers, media such as TV, radio, newspaper, magazines, postures, websites etc. This promotion is usually used as incentives to catch customer’s attention and to motivate them to act. The above four are the traditional marketing mix. The EXTENDED marketing mix for services marketing is as follows :

5) People: - Many services depend on the direct, personal interaction between customers and a firm’s employees (such as getting a haircut or eating at a restaurant). This interaction strongly influences the customer perception of service quality. So, successful service firm devote significant effort to recruitment, training and motivating their personnel. 6) Physical evidence:- The appearance of buildings, landscaping, vehicle, interior furnishing, equipment, staff members, signs, printed materials, and other visible cues all provide tangible evidence of the firms service quality. The service firms need to manage physical evidence carefully because it can have a profound impact on customers’ impression as the service itself is intangible. A tangible element such as insurance and advertising is often employed to create meaningful symbols. E.g.: - umbrella may symbolize protection and a fortress, security.

7) Process: - It is the method and sequence of actions in which service operating system works. Badly designed process: - annoys customers which leads to likelihood of service Failures. 8) Productivity and quality: - Productivity relates to how inputs are transformed into outputs that are valued by customers. Improving productivity keeps costs under control. Quality refers to the degree to which a service satisfies customers by meeting their needs, wants and expectations. Service quality helps in product differentiation and building customer loyalty. Invest in quality profitably i.e. by considering incremental cost and incremental revenue. Thus, these are the 8ps of service management, which are the essence of it. The integration of each p’s is necessary for the successful service management Collectively these are the tools organizations uses to develop offerings to satisfy their target market(s) ... the only tools at their disposal. Remember: If your marketing mix doesn't meet their needs they will not be satisfied - and if they aren't satisfied you are unlikely to meet your objectives. The marketing mix should be viewed as an integrated and coordinated package of benefits that reflect the characteristics of customers and various targeted publics and satisfy their needs, wants, and expectations. Note that the elements of the marketing mix should be integrated because each element of the mix usually has some impact, direct or indirect, on the other three. For example, if you improve the product or service you probably have to change the price because it costs more to produce. Although you may not have to change where the product is delivered to the customer, you will almost certainly have to change the promotion or communication with the customer because you need to tell the customer about the changes you have made in the product and how the changes will make it more desirable and satisfying. One problem in many organizations is that different divisions may be responsible for different elements of the marketing mix. This happens even in well-managed organizations. The result is that the offering is confusing to the target market. Lack of communication among divisions makes this problem worse. And if they don't share the same view of organizational objectives, the problem is worse still.

6.2 PRODUCT MIX 6.2.1 Introduction ‘Product’ includes name, design, features, quality, operational case, packaging, warranties, appearance, range and size. It also includes pre-sale and post-sale services like training, repairs, maintenance and replacements. According to Philip Kotler “a product is anything that can be offered to market for attention, acquisition use or consumption that satisfy a want or need. It includes physical objects (TV), service (banking), person (political person), place (holiday resort), organization (red cross) and idea (aid awareness).” Conventionally, a product is an object, which is delivered and consumed. However, in services there is no or very little tangible elements. Hence, what is offered for sale is benefits. Service is a bundle of benefits and has relevance for a specific target market. Hence, the package of benefits should have a customer’s perspective. 6.2.2 Levels of product: Kotler has identified 5 levels of a product 1)

Core product

2)

Basic product

3)

Expected product

4)

Augmented product

5) Potential product Kotler suggested that a product should be viewed in three levels. Level 1: Core Product. What is the core benefit your product offers? This is the fundamental benefit or service that the customer is buying. For eg. A customer going to a Hotel is buying rest, sleep etc. Level 2 Basic Product: Basic functional attributes. All Hotels provide rest and sleep. The aim is to ensure that your potential customers purchase your one service. Thus the functional attributes like Room, Bed, Bath are important. Level 3 : Expected product : Set of attributes that the buyer expects (Clean room, large towels, quietness) Level 4: Augmented product: What additional non-tangible benefits can you offer? This meets the customer’s desires beyond his expectations – (Prompt room service, music, aroma etc) Level 5 : Potential product : The possible evolutions that can be made to make the product a distinguished offer (all suite room)

In a Bank these can be Core Product (Safety of deposits, Interest, Easy loans Basic product : Savings deposit, FD, Recurring deposit Expected product : Correct transaction records, timely service, convenient timing Augmented product : Congenial waiting room, Water cooler Potential product : Greetings for New Year, 24 hour banking

The service concept Corporate Image, Word of mouth

A Accessibi lity of Services

Core services Consumer Facilitating participation services Supporting services

Interaction

Marketing communication Acce The PACKAGE CONCEPT of Service product – suggests that what you offer to the market si a bundle of different services – tangible and intangible. There is a core service and around it are built the auxiliary or facilitator service. Without this the service would collapse (a bell boy in a Hotel). Yet another service is the supporting service – it is used to increase the product value (a car rental in a hotel). The basic product is not equivalent to the service product which the customer perceives, which is in fact based on customer’s experience and evaluation. Therefore there is a need for an augmented product – like Accessibility (number and skills of personnel, convenient timing, location, infrastructure etc.,) Interaction with service organization (Between employees and customer, with physical and technical resources, with other customers)

Consumer participation.(how well the customer is aware about the process of service delivery, his willingness to share information and use service equipments) The package should also include the management of service image through encouraged word of mouth and market communication. 6.2.3 Product Decisions When placing a product within a market many factors and decisions have to be taken into consideration. These include: Consumer benefits – assess what benefits the consumer looks for Service concept – To translate it to suitable service offer Develop augmented offer

6.2.4 BRANDING: One of the most important decisions a marketing manager can make is about branding. The value of brands in today’s environment is phenomenal. Brands have the power of instant sales; they convey a message of confidence, quality and reliability to their target market. Brands have to be managed well, as some brands can be cash cows for organizations. In many organizations they are represented by brand managers, who have huge resources to ensure their success within the market. A brand is a tool, which is used by an organization to differentiate itself from competitors. Ask yourself what is the value of a pair of Nike trainers without the brand or the logo? How does your perception change? Increasingly brand managers are becoming annoyed by ‘copycat’ strategies being employed by supermarket food retail stores particular within the UK. Coca-Cola threatened legal action against UK retailer Simsbury after introducing their Classic Cola, which displayed similar designs and fonts on their cans. Internet branding is now becoming an essential part of the Generic names like Bank.com and Business.com have been within the UK banking industry we have seen the introduction cahoot.com and marbles.com the task by brand managers is understand that these brands are banks!

branding strategy game. sold for £m’s. (Recently of Internet banks such as to insure that consumers

Branding of Services and its Importance Philip Kotlar defines a brand as “a name, a term, a symbol, or a designed or a combination of them which is intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of competitors”.

Brand decision is important for tangible goods. But in the case of service offering branding is still in its infancy, there importance is expected to rise due to the following reason. 1. Service market is getting more competitive and there is as increasing proliferation of brands in the service sector. 2. It is five times cheaper to retain customer than to attract new ones. 3. As a new service development assumes greater importance, the risk of product launch is reducing in the context of umbrella branding. 4. As service itself does not offer unique tangible benefits, brand development tangibilises the service. Customer gives more significance to the service provider than the individual service products that the provider offers. Therefore, this leads to branding the service providers cooperate image. Banks especially have recognized the importance of corporate image and identity and have used slogans, logos and other means to brand themselves. Ones the corporate brand is developed it is found that service firms move with relative easy to other service product categories. Primarily companies resorts to corporate brand building with a goal of maximizing market capitalization and creating shareholders wealth. In case of service firms corporate branding reflects the service itself. Airlines, fast-food restaurants, banks, professional firm are usually differentiated on the basis of their corporate name and reputation rather than the specific service they offer. The service organization brand name is reinforce by courteous employees, professional looking uniform, advertising etc. However no matter how good the corporate brands may be the quality of service determines the success of the image. There are instance where the service itself is branded. Example Suvidha Account of Citibank, the various schemes of LIC like Jeevan Kishore, Jeevan Mitra etc. Advantages of branding services 1. To tangibilise the intangible. 2. To support the positioning strategy. 3. Offers a powerful tool for relationship building. 4. To create an image of quality and consistency. 5. To reduce price comparison. 6. Keeps current customers satisfied by developing and sustaining a unique service advantage. 7. Encourages repeat usage using sales promotions. 6.3 PRICE MIX 6.3.1 Introduction: This element of the marketing mix is related to the decision influencing the fee structure, rate of interest, commission charged and paid by the service generating organizations. It

is considered to be the most critical component of the marketing mix. Both from economic and social standpoint, the management of pricing is important but at the same time more critical and challenging. We find pricing decisions important because the pricing decisions are to influence the maintenance, development and expansion plans of an organization. 6.3.2 Guidelines for service pricing: 1) 2) 3)

Pricing strategy should enable handling demand fluctuations successfully. As services cannot be inventoried, pricing should encourage customers to use the service during period of low demand. As services need to have some tangible element attached to it, service pricing should be based on costs so as to take into account the tangible clues. Service price as an indicator of quality: Services not having specific brand names to indicate quality, customers use price as an indicator of quality. This in particular in some cases, where the price variation is too much with in a particular class of service (e.g. Tour operators). Also, where the risk associated with the service is high (e.g. Heart surgery). Price is taken as an indicator of quality. Thus pricing too low can give wrong signals and pricing too high can set expectations that the firm may find it difficult to match in service delivery. Because goods are dominated by search qualities. Price is normally not used to judge quality.

4) Pricing strategy should cope-up with the degree of competition operation with in certain geographic and time zone. E.g. Bus operators will have to consider prices of train. It also includes the stage of strategic low pricing to attract first time customers. 6.3.3 Approaches to pricing services: The 3 approaches to pricing services are: 1) Cost-based pricing 2) Competition-based pricing. 3) Demand–based pricing.

1)

Cost-based pricing:

In cost-based pricing, a company determines expenses from raw materials and labor, adds amounts or percentages for overhead and profit, and thereby arrives at the price. This method is widely used by industries such as utilities, contracting, wholesaling and advertising. The basic formula for cost-based pricing is Price = Direct costs + Overhead costs + Profit margin Direct costs involve materials and labor that are associated with the service, overhead costs are a share of fixed costs, and the profit margin is a percentage of full costs (direct + overhead)

Problems in cost-based pricing services: a) It is difficult to define the units in which a service is purchased. Thus the concept of price or unit is vague. Thus many services are sold in terms of input units rather than units of measured output. E.g. consultant, teacher etc. b) Where a firm provides multiple services. The costs being a major component of employee time are difficult to allocate. c) Service cost may not represent true value. For e.g. a darner charging same price for a expensive suit and an ordinary pant. 2)

Competition-based pricing:

This approach focuses on the prices charged by other firms in the same industry or market. Competition-based pricing does not always imply charging the identical rate others charge but rather using others prices as an anchor for the firm’s price. This approach is used predominantly in two situations: (a) When services are standard across providers, such as in the dry industry.

cleaning

(b) In oligopolies where there are a few large service providers, such as in the airline. Problems in competition-based pricing: (a) Small firms may charge too little and not make margins high enough to remain in business. (b) Heterogeneity of services across and within providers makes this approach complicated. E.g. Banks charge different rates of commission for drafts and other services. 3) Demand-based pricing: The first two approaches of pricing are based on the company and its competitors rather than on customers. Neither approach takes into consideration that customers may lack reference price, may be sensitive to non-monetary prices and may judge quality on the basis of price. All of these factors can and should be accounted for in a company’s pricing decisions. The third major approach to pricing, demand-based pricing, involves setting prices consistent with customer perceptions of value: prices are based on what customers will pay for the services provided.

Problems in demand-based pricing:

(a) There is an element of non-monetary costs and benefits which must be considered while calculating perceived value. E.g. services requiring time, inconvenience, psychological and search costs should be priced lower. It is difficult to convert this non-monetary cost into monetary cost. (b) Information on service may be less available to customer, making it difficult to assess the price. 6.4 THE PLACE MIX. 6.4.1 INTRODUCTION Another important element of the marketing mix is place mix, which focuses our attention on the offering of services by the providers to the ultimate users and the place of location for the service generating organizations. In some of the cases we find that providers have no option but to locate the units/branches as per the instructions of the apex body. Some of the essential features are taken into consideration such as easy and convenient accessibility, safety or protection availability of the infrastructural facilities, attractive and healthy surroundings or so. Due to the intangibility, services cannot be stored, transported and inventoried. Hence the traditional channels of product marketing like wholesalers cannot be used. Eevn retailing cannot be an independent activity. Similarly because of inseparability they have t be produced and sold simultaneously. Due to this tehe channels of distribution are made very short. At the most there can be one agent like in the case of insurance, travel agency, courier eyc. The better thing is direct selling. Agents when employed can have two types of functions – either they market the services lke travel agents, insurance agents etc, who market the tangible part of the service offering OR there can be agents who are trained to provide the service Like a Shahnaz Hussain Beauty parlour. Further as there is no actual transfer of ownership, the creation of time and place utility is very important. Hence proper location to cover maximum cuxtomers becomes important. Banks often have extension counters or use money collectors. 6.4.2 Capacity Planning. It is not sufficient that we are interested only in managing our present. It is much more significant that we keep our eyes open, minds active to know about the future and continue to enrich our potentials to manage the future. The organizations not managing the future fail in managing the demand and supply position, make it difficult to optimize the development of marketing resources to cope with the changing requirements, make possible a contraction in their resistance power and both on quantitative and qualitative fronts, we find them moving backward. By capacity planning, our emphasis is on the management of strength. Capacity planning is known as planning the capacity in the face of future. This throws light on both the aspects-first, the organizations are supposed to know the demand

position so that the potentials are enriched to increase the quantity or capacity of generating the services and second, the organizations are also required to know about the likes and dislikes, preferences, expectations, attitudes which make an advocacy in favor of quality generation. If the users expect sophistication in services, the organizations need to use sophisticated technologies to fulfill their expectations and this is not possible unless we think in favor capacity planning. The strategic plan would make the ways for the mobilization of financial resources to cater to their increasing requirements. We can’t deny the fact that if an organization succeeds in maintaining the process of profit generation, the financial health of that organization becomes so sound that the task of satisfying the employees and investors is simplified considerably. If an organization is strong, the task of facing the challenges and threats in the markets is simplified considerably. It is against this background that strategic planning assumes a place of outstanding significance. When we talk about capacity planning, our prime focus is on strategic planning since the process of enriching strength can’t be made possible within a couple of days. 6.4.3 Capacity Scheduling. How much of what (service) will be needed to achieve its pre-determined goals is an important consideration that makes an advocacy in favor of capacity planning and scheduling. There are a number of critical variables requiring due consideration in the process such as, goals of the service firm, availability of capital and the quality of human resources, market segments served and the level of service quality aimed at. A detailed scheduling of man, materials, money and machines (four M’s) is essential for each element of the service mix. 6.5 PROMOTION MIX 6.5.1 INTRODUCTION: The promotion mix is found instrumental in informing, sensing and persuading the prospects or customers. The marketers bear the responsibility of using the different components of promotion in such a way that the measures adopted for promoting the goods or services are found productive. The promotion communicates to customer’s information on the other elements of marketing mix, such as product, pricing and place. The advantage of product itself, details on the place through which it is sold and details on the pricing are transmitted through promotion. 6.5.2 COMPONENTS OF THE PROMOTION MIX: 1)

Advertising:

Advertising is paid form of persuasive promotion since it plays an effective role in informing and sensing the customers. The creativity is found to be an essential aspect of advertising, which increases the importance of professional excellence in making the advertising processes productive. 2)

Publicity/public relations:

All the organizations need to develop and strengthen the public relation activities to promote their business. This component of promotion is found effective though the organization don’t make any payment for publicity. The most important thing in the

context of public relations is the instrumentality of executives in projecting a positive image of the services offered. They should have the potentials to throw a positive imprint on the prospects. It is also significant that they know the art of developing rapport with the media people. 3)

Personal selling:

The personal selling is found instrumental in promoting the business of service generating organizations. Personal selling is a process of informing the customers besides persuading them to purchase products being influenced by personal communication. It is just a process of communication in which an individual exercises his or her personal potentials, tact, skill and ability to influence the impulse of prospects and to transform them into customers. Personal selling is basically a method of communication. It involves not only individual but the social behavior too; each of the person in face-to-face contact, salesman and prospect influence the other. Thus we find personal selling a personal communication, seller-buyer interaction, inter-personal communication and more so direct selling. The following facts are observed regarding the personal selling:

4)

a)

It is a direct personal relation between the buyer and seller.

b)

It is an oral presentation in conservation.

c)

It is two-way communication.

d)

It is personal and social behavior.

e)

It is an exercise for selling the goods and services.

f)

It is found more effective in the service generating organizations.

g)

It is based on the professional excellence of an individual.

h)

It is an important element of the promotion mix.

Sales promotion:

Marketing activities other than personal selling, advertising and publicity that stimulate customers and dealers effectively, such as display shows, exhibitions, demonstrations and various non-recurrent selling efforts not in the ordinary routine are the sales promotion measures. Sales promotional activities are devices aimed at reaching the consumer at home or in his business establishment. The tools are generally in the form of samples, contest, demonstrations and coupons. Sales promotion directed at consumers may be done with a view to increase the products rate of use among existing customers or to attract new customers to the company’s product. Tools of sales promotion: a) Gift b) Contest c)

Discount and commission

d) Entertainment e)

Travel and tours

f)

Additional allowance

g) Fairs and shows These are some of the tools of sales promotion offered to both, the providers as well as the users. The motives are increasing the selling activities, touching the target, excelling the competition, increasing the market share, clearing the old products to be declared absolute in the near future. 5)

Word-of-mouth promotion:

Much communication about the performance of the service generating organizations actually takes place by word-of-mouth information, which is also as word-of-mouth promotion. The word-of-mouth recommendations the hidden sales force make the process of communication effective. The growing sensitivity of the words and experiences of hidden sales force simplify the task of promoting the business. The advertisements, sales promotion measures, the personal selling may of course be effective but the wordof-mouth recommendations are found acceptable in all the conditions by almost all the prospects.

6)

Telemarketing:

Telemarketing is found instrumental in promoting the business. The telemarketing helps in activating the process of advertisement in addition to its instrumentality in increasing the sale. The service generating organizations in general and the banking, insurance, transport, hotel, tourism organizations in particular have been found using telemarketing with the two-fold objectives of selling and advertising. The instrumentality of telephones and televisions are found effective in the process of promoting the business. The instrumentality of telemarketing in persuading the users is substantially influenced by the quality of personnel supposed to discharge the responsibility. The telemarketing minimizes the dependence of service generating organizations on the sales people since just a counter or a center listed in the call numbers serves multi-dimensional purposes. 6.5.3 PROMOTION OBJECTIVES 1)

Develop personal relation with client

2)

Make a strong impression of competency, honesty and sincerity

3)

Should be able to use indirect selling techniques (create a derived demand – mobile companies give free sim card)

4)

Manage to maintain a fine image by positive word of mouth

5)

Packing and customization of service offering

6.5.4 TARGET AUDIENCE 1)

Buyer (or user/influencer/gatekeeper)

2)

Employees (discussed in detail under people)

6.5.5 PLANNING THE PROMOTION MIX

1)

Advertisement should have positive effects on contact personnel

2)

It should be able to capitalise on word of mouth

3)

It should provide tangible clues to the customers

4)

It should make the service offering easily understandable

5)

It should promise only what is possible to deliver

6)

It should contribute to the continuity

6.5.6 CONSUMER PROMOTION IN SERVICE MARKETING 1)

Sampling is less frequently used compared to Goods (Sampling gives consumer a free trial – though now becoming popular)

2)

Gift premiums are frequently used to give an element of tangibility

3)

Price/quantity promotions can be used to get long term commitments from consumer (frequent flyer programme or group booking in Hotels)

4)

Use of coupons are less frequent (coupon with straight price cut OR discount or fees waiver for one or more purchases with original purchase OR Discounts on augmented products – like a free wax polish with car wash)

5)

Future discounts are less frequent

6)

Prize promotions are frequently used (prize for mobile bank use etc)

6.5.7 GUIDELINES FOR SELLING SERVICES 1)

It is personal relationship rather than the service itself that results in satisfaction

2)

Buyer’s confidence in the seller’s ability to deliver the results is important – hence make a strong impression of competency, sincerity, and honesty.

3)

As what is sold is intangible – indirect selling techniques have to be adopted (Hotels selling tour programmes)

4)

As word of mouth is important – building up a favourable is image is essential.

5)

A service provider sells “services” and not just a single service – hence ability to customise the service offering is important (Jain food in Air-lines Hotels etc)

6)

Public relations becomes important – particularly in industries where advertisement cannot be used as a promotional tool like Hospital industry.

6.6 PEOPLE MIX

6.6.1 INTRODUCTION The employees of an organization represent the organization in the eyes of the customers. If they are not give proper training in representing the organization and its goals the service efforts will fail. Hence the most important marketing strategy is to market the service first to the organization’s employees. There are two types of contact personnel – HIGH CONTACT PERSONNEL and LOW CONTACT PERSONNEL (eg .in a hospital a nurse is a high contact personnel and ward

boy may be a low contact personnel) In addition there can be a NON CONTACT PERSONNEL (say the Hospital administrative manager). All these people are important from the service angle

Physical Support Non Contact Personnel

SERVICE

Customer

Contact Personnel

Not Visible to the Customer

Visible to the Customer

6.6.2 SERVICE TRIANGLE

COMPANY Internal Marketing Enabling Promises

External Marketing Making Promises

PROVIDER

CUSTOMER Interactive Marketing Keeping Promises

When company makes efforts to do external marketing, it should have strategies of Internal marketing. External marketing is nothing but promises made,which needs to be fulfilled – this needs internal marketing enabling the comapany to keep up the promises made. Unless the employees are able and willing to deliver, the servicepromises will fail.

This will result in proper interaction of thecustomers with the service providers which helps the organization to keep the promises (Interactive marketing)

3 EMPLOYEE SATISFACTION, CUSTOMER SATISFACTION, AND PROFITS There is concrete evidence that satisfied employees make more satisfied customers (and satisfied customers can, in turn, reinforce employees’ sense of satisfaction in their jobs). Some have even gone so far as to suggest that unless service employees are happy in their jobs, customer satisfaction will be difficult to achieve. The underlying logic connecting employee satisfaction and loyalty to customer satisfaction and loyalty and ultimately profits is illustrated by the service profit chain shown in the figure. The service profit chain suggest that there are critical linkages among internal service quality; employee satisfaction; productivity; the value of services provided to the customers; and ultimately customer satisfaction; retention and profits. Service profit chain researchers are careful to point out that the model does not cause customer satisfaction; rather the two are interrelated and feed ff each other. The model does imply that companies that exhibit high levels of success on the elements of the model will be more successful and profitable than those who do not. The Service Profit Chain

Employee retention Internal service quality

Employee satisfaction Employee Productivity

Externa l service value

Customer satisfaction

Customer loyalty

4 HUMAN RESOURCE STRATEGIES: Human resources decisions and strategies primary goal is to motivate and enable employees to deliver customer-oriented promises successfully. The strategies presented here are organized around four basic themes. To build a customer-oriented, serviceminded workforce, an organization must: 1)

Hire the right people

Revenue growth

Profitability

2)

Develop people to deliver service quality

3)

Provide the needed support systems

4)

Retain the best people

1) Hire the right people: One of the best ways to close gap 3 is to start with the right service delivery people from the beginning. This implies that considerable attention should be focused on hiring and recruiting service personnel. a) Compete for the best people: To get the best people, an organization needs to identify them and compete with other organizations to hire them. The firm act as marketers in their pursuit of the best employees, just as they use their marketing expertise to compete for customers. Thinking of recruiting as a marketing activity results in addressing issues of market (employee) segmentation, product (job) design, and promotion of job availability in ways that attract potential long-term employees. b) Hire for service competencies and service inclination: Once potential have been identified, organizations need to be conscientious in interviewing and screening to truly identify the best people from the pool of candidates. It has been suggested that service employees need two complementary capacities: they need both service competencies and service inclination. Service competencies are the skills and knowledge necessary to do the job. Achieving particular degrees and certifications validates competencies, such as attaining a doctor of law degree and passing the relevant state bar examinations for lawyers. Service competencies may not be degree related, but may instead relate to basic intelligence or physical requirements. c) Be the preferred employer: One way to attract the best people is to be known as the preferred employer in a particular industry or in a particular location. Other strategies that support a goal of being the preferred employer include providing extensive training, career and advancement opportunities, excellent internal support and attractive incentives and offering quality goods and services that employees a proud to be associated with. 2) Develop people to deliver service quality: To grow and maintain a workforce that is customer oriented and focused on delivering quality, an organization must develop its employees to deliver service quality. That is,

once it has hired the right employees, the organization must train and work with these individuals to ensure service performance. a)Train for technical and interactive skills: To provide quality service, employees need ongoing training in the necessary technical skills and knowledge and in process or interactive skills. Examples of technical skills and knowledge are working with accounting systems in hotels, cash machine procedures in a retail store, underwriting procedures in an insurance company, and any operational rules the company has for running its business. Most service organizations are quite conscious of and relatively effective at training employees in technical skills. Companies are increasing their use of information technology to train employees in the technical skills and knowledge needed on the job. Service employees also need training in interactive skills that allow them to provide courteous, caring, responsive, and empathetic service. b) Empower employees: Empowerment means giving employees the desire, skills, tools, and authority to serve the customer. While the key to empowerment is giving employees authority to make decisions on the customer’s behalf, authority alone is not enough. Employees need the knowledge and tools to be able to make these decisions and they need incentives that encourage them to make the right decisions. Organizations are well suited to empowerment strategies to ones in which (1) the business strategy is one of differentiation and customization, (2) customers are long-term relationship customers, (3) technology is nonroutine or complex, (4) the business environment is unpredictable, and (5) managers and employees have high growth and social needs and strong interpersonal skills. c) Promote teamwork: The nature of many service jobs suggests that customer satisfaction will be enhanced when employees work as teams. Because service jobs are frequently frustrating, demanding and challenging, a teamwork environment will help to alleviate some of the stresses and strains. Employees who supported and that they have a team backing them up will be better able to maintain enthusiasm and provide quality service. By promoting teamwork an organization can enhance the employee’s abilities to deliver excellent service while the camaraderie and support enhance their inclination to be excellent service providers. 3) Provide need support systems: To be efficient and effective in their jobs, service workers require internal support systems that are aligned with their need to be customer focused. Without customerfocused internal support and customer-oriented systems, it is nearly impossible for employees to deliver quality service no matter how much they want to. In examining customer service outcomes researchers found that internal support from supervisors, teammates, and other departments as well as evaluations of technology used on the job were all strongly related to employee satisfaction and ability to serve customers. a) Measure internal service quality:

One way to encourage supportive internal service relationships is to measure and reward internal service. By first acknowledging that everyone in the organization has a customer and then measuring customer perceptions of internal service quality, an organization can begin to develop an internal quality culture. Internal customer service audits and internal service guarantees are two strategies used to implement a culture of internal service quality. Through the audit, internal organizations identify their customers, determine their needs, measure how well they are doing, and make improvements. b) Provide supportive technology and equipment: When employees don’t have the right equipment, or their equipment fails, they can be easily frustrated in their desire to deliver quality service. To do their jobs effectively and efficiently, service employees need the right equipment and technology. having the right technology and equipment can extend into strategies regarding workplace and workstation design. c) Develop service-oriented internal processes: To best support service personnel in their delivery of quality service on the front line, an organization’s internal processes should be designed with customer value and customer satisfaction in mind. In other words, internal procedures must support quality service performance. In many companies internal processes are driven by bureaucratic rules, tradition, cost efficiencies, or the needs of internal employees. Providing service and customer oriented internal processes can therefore imply a need for total redesign of systems. This kind of wholesale redesign of systems and processes has become known as “process reengineering.” 4) Retain the best people: An organization that hires the right people, trains and develops them to deliver service quality, and provides the needed support must also work to retain the best ones. Employee turnover, especially when the best service employees are the ones leaving, can be very detrimental to customer satisfaction, employee morale, and overall service quality. Some firms spend lot of time attracting employees but then tend to take them for granted, causing these good employees to search for job alternatives. a) Include employees in the company vision: For employees to remain motivated and interested in sticking with the organization and supporting its goals, they need to share an understanding of the organization’s vision. People who deliver service day in and day out need to understand how their work fits into the big picture of the organization and its goals. b) Treat employees as customers: If employees feel valued and their needs are taken care of, they are more likely to stay with the organization. Many companies have adopted the idea that employees are also

customers of the organization, and thus basic marketing strategies can be directed at them. The products that the organization has to offer its employees are a job and quality of work life. To determine whether the job and work life needs of employees are being met, organizations conduct periodic internal marketing research to assess employee satisfaction and needs. c) Measure and reward strong service performers: If a company wants the strongest service performers to stay with the organization, it must reward and promote them. Often the reward systems in organizations are not set up to reward service excellence. Reward systems may value productivity, sales or some other dimension that can potentially work against good service. Reward systems need to be linked to the organization’s vision and to outcomes that are truly important. 6.6.5 IMPORTANCE OF EMPOWERING PEOPLE IN SERVICES An organization that emphasizes customer service needs people at the frontline to do the service, to use discretions be concerned about the customer, to take initiative to provide satisfaction through exceptional service. The person at the front must fell empowered to do in the circumstances. Empowering cannot be done through a formal delegation of authority. A person with authority may not exercise that authority, if he does not feel empowered. Example A peon who takes responsibility to direct the fireman in a burning office to areas housing the most important documents is acting without formal authority. He feels empowered to do so, meaning that feels a sense of dedication to the organization, that he feels it is his duty to save the organization as much as possible , that he is doing the right thing . Following are the importance of empowering the people in services:1) An empowered employee focuses on results. He is not inhabitant by formalities of position , authority or function . 2) He does not consider himself bound by rules and procedure. 3) He believes that the organization expects him to be aware of the ends to be achieved and to act in furtherance thereof. He “sees” constraints but not does not feel prevented thereby , from what is to be done , instead he tries to overcome the constraints. 4) He believes that the organization will not find fault with him for having one something new and unusual. On the contrary, he believes that the organisation will applaud him for having done something that had to be done. 5) He believes that he is expected to take the initiative and ensure that the customer needs are met and thereby maintain and enhance the reputation of the organization. 6) He feels that he is dedicating to satisfy the customer to upgrade organization reputation

7) An empowered employee may be willing to challenge company policies at meetings with sensors. Employee must be trained and empower to solve problems as they occur. The company uses customer knowledge database as the key sources from immediate problem solving by its customer service representatives. These representatives are empower to solve the customer’s problem, but at the same time they must adhere to stringent requirement necessary in the healthy administration business. Sometimes employees can even anticipate problem before they arise and surprise customer with solution. For e.g. Flight attendants on a flight severely delayed due to whether anticipated everyone’s hunger, particularly young children’s. Once the flight, they announced to the harried travellers,” thanking you for your extreme patience in waiting with us. Now that we are on the way, we’d like to offer you complementary beverage and dinner because we have no. of hungry children on board , we’d like to serve tm first, if that’s ok with all of you.” The passengers nodded and applauded their efforts, knowing that hungry, crying children cold make the situation even worse. The flight attendants had anticipated a problem and solved it before it escalated.

6.6.6 ROLE OF CUSTOMERS The following sections examine 3major roles played by customers in service delivery: 1. customers as productive resources 2. customers as contributors to quality & satisfaction 3. Customers as competitors. 1) Customers As Productive Resources: Service customers have been referred to as “partial employees” of the organization human resources who contribute to the organization’s productive capacity. if customers contribute effort, time or other resources to the services production process, they should be considered as part of the organization. Customer’s inputs can affect the organization’s productivity through both the quality of what they contribute and the resulting quality and quantity of output generated. E.G. research suggest that in an IT consulting context , clients who clearly articulate the solution they desire, provide needed information in a timely manner communicate openly, gain the commitment of key internal stake holders, and raise issues during the

process before it is too late will get better service. In turn the consulting firm will spend less time redoing the service or waiting for information, allowing it to be more productive overall. The contributions of the client thus enhance the overall productivity of the firm in both quality & quantity of service. Customer participation in service production raises a number of issues for organization because customer can influence both the quality and quantity of production because customers can influence both the quality and quantity of production; some experts believe the delivery system should be isolated as much as possible from customer inputs in order to reduce the uncertainty they can bring into the production process. This view sees customers as a major source of uncontrollability of their attitude and actions. The conclusion is that any service activities that do not require customer contact or involvement should be performed away from customers. The less direct contact there is between the customers and the service production system, the greater the potential; f or the system to operate at peak efficiency. 2) Customers As Contributors To Service Quality & Satisfaction: Another role customers can play in service delivery is that of contributors to their own satisfaction and the ultimate quality of the service they receives. Effective customer participation can increase the likelihood that needs are met and that the benefits the customers seeks are actually attained. E.G. about services such as health care, education, personal fitness, and weight loss, where the service outcome is highly dependent on customer participation. In there cases, unless the customers perform their roles effectively, the desired service outcomes are not possible. Research suggests that customers who believe that they have done their part to be effective in service interactions are more satisfied with the service. Customers contribute to quality service delivery when they ask questions, take responsibility for their own satisfaction and complain when there is service failure. In addition to their own satisfaction by improving the quality of service delivered to them, some customers simply enjoy participating in service delivery. These customers find the act of participating to be intrinsically attractive. E.G. they enjoy using the internet to attain airline tickets or they may like to do all of their banking via ATMs and automated phone systems, o to pump their own gas. Often customers who like self service in one setting are predisposed to serving themselves in other setting as well. 3) Customers As Competitors: A final role played by service customers is that potential competitor. If self service customer can be viewed as resource of the firm, or as “ partial employees”, self service customers could, in some cases partially perform the service or perform the entire service for themselves and not need the provider at all.customes thus in a sense are competitors of the companies that supply the service. Whether to produce a service for themselves.

E.G. child care, home maintenance, car repair or have someone else provide the service for them is a common dilemma for consumers. Similar internal versus external exchange decisions are made by organizations firms frequently choose to outsource service activities such as payroll, data processing, research, accounting, maintenance and facilities management. They find that it is advantageous to focus on their core businesses and leave these essential support services to other with geater expertise, alternatively, a firm may decide to stop purchasing services externally & bring the service production process-in-house. The important thing to remember from this is that in many service scenarios customers can and do choose to fully or partially produce the services themselves. Thus, in addition to recognizing that customers can be productive resources and concretors of quality and value, organizations also need to recognize the customers’ role as a potential competition.

Strategies For Enhancing Customer Participation (I) Define: Customer’s job: The customers job: Helping himself The Customers job: Helping others The Customers job: Promoting the Company. Individual difference: Not everyone wants to Participate. (II) Recruit ,Educate and Reward Customers. Recruit the right Customers. Educate & Train Customers to perform effectively.

(III) Manage the Customer mix. The level and nature of /customer participation in the service process are strategic decisions that can impact an organization productivity, its positioning relative to competitors, its service quality, and its customer participation. Let us examine the strategies captured for involving Customers effectively in the service delivery process. The overall goals of a customer participation strategy will typically be to increase

productivity and customer satisfaction while simultaneously decreasing uncertainty due to unpredictable customer participation is self-service often facilitated by technology. (i) Define customer jobs: In developing strategies for addressing customer involvement n service delivery, the organization first determines what type of participation it wants from customer, thus beginning to define the customers job. Identifying the current level if participation can serve as a starting point, Customer’s job role may be partially predetermined by the nature of the service, it may be that the service requires moderate level of input from the customers in the form of effort o information (e.g. Haircut, tax preparation) on it may require the customer to actually co create the service outcome (e.g. fitness training, consulting). The organization may decide that it is satisfied with the existing level of participation it required from customers but wants to make the participation more effective. Alternatively, the organization may choose to increase the level of customer participation, which may reposition the service in the customer’s eyes. Experts have suggested, that higher levels of customer participation are strategically advisable when service production and delivery are inseparable; marketing benefits (oss selling , building loyalty) can be enhanced by in site contract with the customer and customers can supplement for the labour and information provided by employees. The Customer’s job: helping himself: In many cases the organization may decide to Increase the level if customer involvement in service /delivery through Active participation. In such situations the customer becomes a productive resource, performing aspects of the service heretofore performed by employees or others. Many of the examples presented in this chapter are Illustration of customers “helping themselves” (e.g. IKEA of Sweden, Charles Schwab, Kaiser Permanente, Group Health of Puget sound.) In each of these Cases, the customer has particular tasks that must be performed to fulfill his or her role. Te result may be increased productivity for the firm and/or increased value, quality & satisfaction for the customer. The Customer’s job: helping others: sometimes the customer may be called or to help others who are experiencing the service. A child At a day care center might be appointed “buddy of the day” To help a new child acclimate into the environment. Long time residents of retirement communities often assume comparable roles to welcome new residents. Many membership organizations also rely heavily although often informally, on current members to help orient new members and make them feel welcome. In performing these types of role, customers are again performing productive functions for the organization, increasing customer satisfaction & retention. Acting as a mentor o facilitator can have every the role & is likely increase or her loyalty as well. The customer’s job: promoting the company

In some cases the customers job may include a sales or promotional Element. As you know, service customers rely heavily on word of mouth endorsements in deciding which providers to try. They are more comfortable getting a recommendation from someone who has actually experienced the service them from addressing the service than from advertising alone. A positive recommendation from a friend, relative, colleague or even

an acquaintance can pave the way for a positive service experience. Many service organizations have been very imaginative in getting their current customers to work as promotes or Sales people. Individual difference: Not everyone wants to participate. In defining customers job it is important to remember that not everyone will want to participate. Some customers segments enjoy self service whereas others prefer to have the service performed entirely for them. Foe e.g. In health care, it is clear that some patients want lot of information and want to be involved in they own diagnosis and treatment decisions. Others simply want the doctor to tell them what to do. Despite these, there are still large numbers of customers who prefer human high- contact delivery rather than self-service., Because of these differences in preferences, most Companies find they need to provide service delivery rather than self service. Because of these differences in preferences most companies delivery choices for different markets segments. Often an organization can customize its service to fit the needs of this different segment those want to participate & those who prefer little Involvement. (ii) Recruit Educate & reward Customers. Once the custom’s role id clearly defined the organizations can think in terms of facilitating that role. In a sense, the customer becomes a “partial employee” of the organization at some level, and strategies fog managing customer behaviors in service production and delivery can mimic to some degree the efforts aimed at service employees suggest that behaviour is determined by role, clarity ability to perform & motivation. Similarly, customer behaviour in service production. & Delivery situation will be facilitated when (1) Customers understand their roles and how they are expected to perform. (2) Customers are able to perform as expected and (3) there are valued rewards for performing Recruit the right customers. Before the Company begins the process of educating and socializing customers for their roles, it must attract the right customers to fill those roles. The organization should seek to attract the customers who will be able comfortable with the roles. To do this, it should clearly communication messages. By previewing their roles and what is required of them in the service process. Customers can self selection should result in enhanced perceptions of service quality from the /customers point if view & reduce uncertainty for the organizations. To illustrate a child care center that requires parent participation on the site at least on half day per week needs to communicate that expectation before it ensures many child in its program. Whatever the case the expected level of participation needs to be communicated clearly in order to attract customers who are ready & willing to perform their roles. Educate & Train Customers Effectively: Customers needed to be educated, or in essence “socialized” so that they can perform their role effectively. Through the socialization process, it is possible for service customers to gain an appreciation of specific organizational values, develop the abilities necessary to function within a

specified context, understand what is expected of them and acquire the skills & knowledge to interact with employees and other customers. Many services offer “Customer orientation” programmes to assist customers in understanding their roles and what to expect from the process before experiencing it. Universities offer orientation programmes for new students, and often for their parents as well, to preview the culture, university procedure, & expectation of students. Customer education can also be accomplished through written literature and customer “handbook” that describe customer’s roles & responsibilities. Many hospitals have developed patient handbooks very similar in appearance to employee handbooks to describe what the patient should do in preparation for arrival at the hospital will happen when he or she arrives and policies regarding visiting hours and billing procedures. While formal training and written information are usually provided in advance of service experience, other strategies can be employed for continuing the customer socialization The customer required two kinds of orientation (Where am I? And how do I get from here to there) and function orientation how does this organization work and what am I supposed to do?) Orientation Aids can also take the form of rules that define customer behaviour for safety (airlines, health, clubs) for appropriate dress (restaurants, entertainments venues), and noise levels (hotels, classrooms, theatres). Reward Customers for their Contribution : Customers are many likely to perform their roles effectively or to participate actively, if they are rewarded for doing so. Rewards are likely in the form of increased control over the delivery process, timesavings, monetary savings, and psychological or physical benefits. For instance, ATM customers who perform banking services for themselves are also rewarded. Through s for themselves are also rewarded. Through s for themselves are also rewarded. Through greater access to their bank, both in terms of locations and times. In health care context, patient who perform their roles effectively are likely to be rewarded wit better health or quicker recovery. Customer may not realize the benefits or reward of effective participation unless the organizations make the benefits apparent to them. The organization also should recognize that not all customers are motivated by the some types o rewards. Some may value the increased access & timesavings then can gain by performing their service roles effectively. Others may value the monetary savings. Still others may be looking for greater personal control over the service outcome. (III) Manage the Customer Mix: Because customers frequently interact with each other in the process of service delivery and consumption, another important strategic objective is the effective management of the mix of customers who simultaneously experience the service. If a restaurant chooses to serve two segments during the dinner hour that are incompatible with each other for e.g. single college students who want to party and families with small children who want quite it may find that the two groups do not merge well. Of course it is possible to manage these segments so that they do not interact with each other by seating them in different sections or by attracting the two segments at different times a day.

The process of managing multiple and sometimes conflicting segments is known as compatibility Segment broadly defined as “a process of first attracting homogeneous consumers to the service Environment and customer to customer encounters in such a way as to enhance satisfying encounters and minimize dissatisfying encounters. To manage multiple segments organizations rely on a variety of strategies. Attracting maximally homogeneous group of customers through careful positioning and segmentation strategies is one approach. This is the strategy used Ritz Carlton Hotel Company. Other strategies for enhancing customer compatibility include customer “codes of conduct” such as the regulation of smoking behaviour and dress codes. Clearly such code of conduct may vary from one service establishment to another. Finally training employees to observe customer-to-customer interactions and to be sensitive to potential conflicts is another strategy for increasing compatibility among segments.

Define Customer Jobs

Effective Customer Participation

Recruit, Educate and Reward Customers

Manage the customer mix (customers taking the service simultaneously)

6.6.7 IMPORTANCE OF PEOPLE INTERACTIVE & TECHNICAL Banking products cannot be separated from the person who markets them. The product and the seller together constitute a banking product. In designing this product. The same degree of care and attention needs to be paid to both the product and the seller. The most impressive and well conceived product could fall if it not implemented successfully through people .the corporate mission must be communicated repeatedly and effectively by the top management to all employees. Services are performed by people. A service is performed that is, service is delivery is done, by a person belonging to the service organization. There is an interaction between that person and the customer. The nature of this interaction deicide hoe satisfactory the

service is, in the mind of the customer. Even if all the other elements constituting the service product function consistently, and with high perfection, there is dissatisfaction when the people elements fail. Technology, equipment, system etc. cannot strengthen these weak points. They may help to eliminates some of the weak points but other weak point will remain. Several hotels have introduced special categories of service, like crone plaza, of the holiday inn, for what they call premium segments. This includes provision of sleepers, house coats, weighing machines etc. during stay as well as free use of heath club and business centre services. The higher level of service will be experience by the user who pays more, only when the people in the hotel recognized them as belonging to that higher class. Deserving special consideration. Assume for a movement that one of the attendance in the health club is unaware of the full details of the offer of the hotels and keep the customer waiting till he get confirmation of his entitlement from the manager or holds him back till his status as a guest is verified. There will be problems. Technology, equipment, systems etc. cannot substitute for the intimate recognisation that a personal contact may provide. A fully computerized report from a diagnostic centre on one’s health condition does not satisfy fully. When a doctor reads it out and explains, there is better satisfaction.

7 PHYSICAL EVIDENCE MIX

6.7.1 THE EVIDENCE OF SERVICE As services are intangible, the customers are searching for evidence of service in every interaction they have with an organization. The figure depicts the three major categories of evidence as experienced by the customer: people, process, and physical evidence. These categories together represent the service and provide the evidence that tangibilizes the offering. The new mix elements essentially are evidence of service in each moment of truth.

Contact employees Customer him/herself Other customers

PEOPLE

PROCESS Operational flow of activities Steps in process Flexibility versus standard Technology versus human

PHYSICAL EVIDENCE Tangible communication Services cape Guarantees Technology Website

All of these evidence elements, or a subset of them are present in every service encounter a customer has with a service firm and are critically important in managing service encounter quality and creating customer satisfaction. When a guest enters the hotel for a stay the first encounter of the guest is the door attendant and frequently with receptionists at the reception. The quality of that encounter will be judged by how the registration process works (How long is to wait? Is the registration system computerized and accurate?) The actions and attitudes of the people (Is the receptionist courteous, helpful, knowledgeable? Does she handle the enquiries fairly and efficiently?) and the physical evidence of the service (is the awaiting area clean and comfortable). The three types of evidence may be differentially important depending on the type of service encounter (remote, phone, face – to – face). All these types will operate in face – to- face service encounters as in the one just described. 6.7.2 PHYSICAL EVIDENCE

It is the environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of service. It includes all tangible representations of the service-such as brouchers, letter head, equipment etc. in some cases the physical facilities where service is offered is important e.g., in a hotel the parking lot, surroundings are important. In other services such as telecommunication the physical facilities may be irrelevant. In this case other tangibles like billing statements become important. Physical evidence includes (A) Physical facilities (essentials and peripherals) (B) Physical setting (appearance of premises) (C) Social setting (appearance of staff) The decision on the physical evidence will differ in terms of customer-employee interaction. At one end is self-service of customer without any interaction with employee (ATM) where physical facilities must be to attract customer and user friendly. At other end employee performs without any interaction (mail order business) here physical evidence is designed to promote operational efficiency. Between the two extremes is a situation where both customer and employee interact. In this case physical evidence must be planned to facilitate the activities of both. (E.g., Banks, Airlines). Certain service environments are simple requiring very little space or equipment (ATM, Vending machine). They are called lean environment. Others like hospitals, hotels are elaborate environment where proper planning is needed. (a) Physical facilities: The potential customers form impression about the service organization on the basis of physical evidence like building, furniture etc., Essential Evidence: They are dominant features like building area, parking space, signboards etc. Peripheral Evidence: They are less dominant like admission card, medical reports, etc. (b) Consist of service environment  Ambient factors (light, colour, temperature)  Space (spatial layout and functionality- i.e., ability of equipment and furniture to accomplish interactions)  Decor and artefacts

(c) Social setting: Employee uniform, appearance etc. of service scape can influence customer expectation, satisfaction and other behavior. In shopping mall soft music is played/crossroads had hired separate parking space. Bitner identifies Physical Facilities and Environment as SERVICE SCAPES However too much decor may make customers feel that they are paying for the expensive décor. Employees however feel that an investment in environments is an indication of management’s concern for their job satisfaction. Hence the challenge is to strike a balance. 6.7.3 ROLE OF PHYSICAL EVIDENCE:  Facilitator: It enhances performance level of persons in the environment.  Socializer: It helps to convey expected roles, behavior, and relationships in the interaction process (a “No Smoking” or “Silence” sign board)  Differentiator: It can differentiate the service firm from its competitor.  Impressions: It helps in shaping first impression of the service encounter.  Image and identity: It portrays the corporate image and builds corporate identity.

CHAPTER VII MANAGING SERVICE QUALITY 7.1 INTRODUCTION To compete successfully a firm must define how the customers perceive the service quality and in what way the service quality is influenced. The quality can be of seen from two angles (1) Technical quality (What is delivered) (2) Functional quality (How it is delivered). When a customer comes to the service provider he comes with some expected quality. When he takes the service he experiences a service quality – this is his perceived quality.

Expected Service

Traditional marketing activities like Advertising, Word of mouth, or PR

Perceived Service Quality

Perceived Service

IMAGE

Technical Quality (WHAT)

Functional Quality (HOW)

7.2 PERCEIVED SERVICE QUALITY Customer service is about perception. Perceptions are judgment of the consumers about the actual service performance or delivery by a company. Since service are intangible, customers search for the evidence of quality in every interaction they have with a service firm. The evidence of service that are experience by the customer are people, process and physical evidence. People – contact employees, other customers or the customer himself. Dimensions – reliability, assurance, empathy and responsiveness. Process – operational flow of activities. Dimensions – reliability and promptness of service. Physical evidence – tangible aspect of service. Apart from these the corporate image of the service provider as well as the service can also influence the perceived quality. While comparing the expected and perceived service quality the following may be the outcome. 1). Perceive quality > expected quality. Result = delighted customer. 2). Perceive quality = expected quality.

Result = satisfied customer. 3). Perceive quality < expected quality. Dissatisfied customer. A very important factor in important service quality is to always keep promises and not guarantee which the firm cannot deliver. Influencing Expectations

Word of Mouth

Dimensions of Service Quality Reliability Responsivenes s Assurance Empathy Tangibles

Personal Needs

Past Experience

Expected Service

External Communications

Perceived Quality ES < PS (Quality surprise)

Perceived Service

ES = PS (Satisfactory quality) ES > PS (Unaccepted quality)

7.3 ZONE OF TOLERANCE The services provided are varying between organizations, between employees and even with in employees at different times. The extent to which the customers recognize and are willing to accept this variation is called as zone of tolerance. If the service levels fall below this level, customers will be frustrated.   

Different customers possess different zones of tolerance Zones of tolerance vary for different dimensions fo service Zones of tolerance vary for first time and recovery service

7.4 QUALITY GAPS To manage the perceived quality of a service one has to match the expected service and perceived service to each other so that consumer satisfaction is achieved. To keep the gap between expected service minimal, two things are critical: •

The promises about how the service will perform given by traditional marketing activities and communicated by word-of-mouth, must not be unrealistic when compared to service received by the customer.

•

Managers have to understand how the technical and functional quality of a service is influenced and how the customers perceive these quality dimensions.

In order to develop greater understanding of the nature of service quality and how it is achieved in an organization, ‘A Gap Model Of Service Quality’ was developed. The model clearly indicated that the consumer’s quality perceptions are influenced by a series of five distinct gaps occurring in the organizations, which are as follows: Gap1 (Marketing Information Gap) : Difference between consumer expectations and management perceptions of consumer expectations arising due to inadequate or inaccurate management understanding of customers’ service expectations Gap2 (Standard gaps) : Difference between management perceptions of consumer expectations and service quality specifications arising due to Management’s failure to develop performance specifications reflecting customer’s expectations. Gap3 (Service Performance Gap) : Difference between service quality specifications and the service actually delivered. Gap4 (Communication Gap) : Difference between service delivery and what is communicated about the service to consumers resulting in discrepancy between communications to customers describing the service and the service actually delivered. Gap5: Difference between the perceived service and expected service. This gap depends on the size and direction of the first four gaps associated with the delivery of service quality. These Gaps develop due to the following reasons GAP 1 :  Lack of adequate market research  Lack of upward communication between front line staff and Management  Lack of interaction with the customers  Lack of segmentation to identify specific needs of the customers

GAP 2 :  Lack of commitment from Management (they may perceive that customer expectations are un reasonable)  Lack of Goal setting  Lack of resources GAP 3 :  Ineffective recruitment  Role ambiguity  Lack of training/incentives to perform to the staff  Lack of training to customer on use of service and their roles  Lack of pre-testing when new procedures are introduced  Lack of understanding of customer habits – how they prefer to consume a service (a customer may prefer a slow delivery of food in an exclusive restaurant compared to an Udipi restaurant) GAP 4 :  Exaggerated promises  Ineffective communication  Lack of Horizontal communications with in the organization GAP 5  Too much of Gaps (1 to 4) To close the gaps the following things should be implemented: 1. Develop customer trust through long-term strategy rather than a snip-shot superficial programme. 2. Understand customers’ habits on how they prefer to consume a service. eg., a customer would prefer extended hours for a meal in a exclusive restaurant. 3. Pre-test new procedures and equipments before introducing them. The failure of a productivity improvement programme is more damaging than otherwise, e.g., when Indian Airlines introduced computerized reservation system to improve its service, it found that at most places the system remained down most of the time. It created more confusion, both among customers and employees, and proved to be countered productive. 4. Understand the determinants of consumer behaviour in terms of their choice; by force or by any other external forces, e.g., shopping behaviour is not even throughout the month. It changes between the first weeks to the fourth week of the month; it changes between weekdays and weekends.

5. Teach consumers how to use service innovations—most people don’t know how to go about treatment in government hospitals—there is a need to make people aware of how to go about from registration to appointment to check— up and treatment, in the same way as traffic routes at India Gate or Connaught Place are notified through press and television before introducing them. 6. Promote the benefits and stimulate trial. The success in innovation lies in encouraging trial by making the benefit obvious. 7. Monitor and evaluate performance. One can learn from experience—good or bad. As one goes along introducing changes, corrective measures should also be taken simultaneously. These measures should be restricted to redesign of facilities and procedures or extending to educating, communicating and promoting the efforts.

Word of Mouth

Personal Needs

Past Experience

Expected Service CONSUMER

GAP 5 Perceived Service

GAP 1

Service Delivery (Including Pre & Post Contacts)

GAP 3 MARKETER

Transition of Perceptions into Service Quality Specifications

GAP 2 Management perception of Consumer Expectations

GAP 4 External Communications to Consumers

7.5 THE 5 DIMENSIONS OF SERVICE QUALITY ARE AS FOLLOWS On Which Customers Judge The Service Quality •

Reliability: means the ability to perform the promised service dependably and accurately. In other words reliability means that the company delivers on its promises – promises about delivery, service provisions, problem resolution, and pricing. For example, FedEx, this company effectively communicates and delivers on the reliability dimension.

•

Responsiveness: is the willingness to help customers and provide prompt service. This dimension emphasizes on attentiveness and promptness in dealing with customer’s request, questions, complaints and problems. Responsiveness also captures the notion of flexibility and ability to customize the service to the customers needs.

•

Assurance: is defined as employee’s knowledge and courtesy and the ability of the firm and its employees to inspire trust and confidence. This dimension is likely to be particularly important for service for services that the customer perceives as involving high risk and / or about which they feel uncertain about their ability to evaluate outcomes. For examples, banking, insurance, brokerage, etc.

•

Empathy: is defined as carrying individualized attention the firm provides its customers. The essence of empathy is conveying through personalized or customized service, the customers are unique and special. Customers want to feel understood by and important to that provide service to them. For example, personnel at small firm know customers by name and build relationships that reflect their personal knowledge of customer’s requirements and preferences. When such a small firm competes with large firms, the ability to be empathetic may give the small firm a clear advantage.

•

Tangible: tangibles are defined as the appearance of physical facilities, equipment’s, personnel and communication materials. All of these provide physical representations or images of the service that customers particularly new customers, will use to evaluate quality.

Although tangibles are used by Service Company’s to enhance their image, provide continuity, and signal quality to consumers, most company combine tangibles with another dimension to create a service quality strategy for the firm. Examples of how customers judge the 5 dimensions of service quality: •

Car repair (consumers):

1. Reliability: problem fixed the 1st time and ready when promised. 2. Responsiveness: accessible, no waiting, respond to request. 3. Assurance: knowledgeable mechanics. 4. Empathy: acknowledges customers by name, remembers previous problem and preferences. 5. Tangibles: repair facility, waiting areas, uniform, and equipment’s

•

Airlines (consumers):

1. Reliability: flights to promise destination, depart and arrives on time. 2. Responsiveness: prompt and speedy system of ticketing, in flight baggage handling. 3. Assurance: trusted name, good safety records & competent employees. 4. Empathy: understanding of special individual needs, anticipates consumer needs. 5. Tangibles: aircraft, ticketing counters, uniforms, and baggage areas. •

Medical care (consumer):

1. Reliability: appointments are kept on schedule diagnoses prove accurate. 2. Responsiveness: accessible, no waiting, willingness to listen. 3. Assurance: knowledge, skills, credentials, and reputation. 4. Empathy: acknowledges patients as a person, remembers previous problems, good listening, and patients. 5. Tangibles: waiting room, exam rooms, and equipment, written materials. •

Architecture (business):

1. Reliability: delivers plans when promised and within budget. 2. Responsiveness: returns, phone calls, adapt to change. 3. Assurance: credential, reputation, and name of the community, knowledge and skills. 4. Empathy: understanding clients industry acknowledges and adapts to specific clients needs, gets to know the client. 5. Tangibles: office areas, report, plan themselves, billing statement, dress of the employees. •

Information processing (internal):

1. Reliability: provides needed information whenever requested. 2. Responsiveness: prompt response to request not “bureaucratic’ deals with problems promptly.

3. Assurance: knowledgeable staff, well trained, credentials. 4. Empathy: knows internal customers as individuals and departmental needs. 5. Tangibles: internal reports, office areas, and dress of employees. •

Internal brokerage (consumer and business):

1. Reliability: provides correct information and executes customer’s requests accurately. 2. Responsiveness: quick website with easy access and no down time. 3. Assurance: credible information sources on the site, brand recognition credential apparent on site. 4. Empathy: ability to respond with human interaction as needed. 5. Tangibles: appearance of the website and collateral. 7.6 BENEFITS OF MAINTAINING SERVICE QUALITY: 1)

Improve their image in the eyes of customers. When an organization provides quality service it will build good brand image. Even the word of mouth will help increasing the sales.

2)

Improve profitability. When there is word of mouth, it leads to increase in sales and also increase in profits of an organization.

3)

Improve staff morale. Employees are having high morale while working with an organization that is comply with all its duties and social responsibility towards society and providing satisfaction to its customers.

4)

Increase productivity. When an organization is esteem with good brand image and higher staff morale the productivity would automatically increase.

5)

Reduce costs. With higher profitability company can spend more on research and development that would add more value to product/services with reduced costs.

6)

Encourage employee participation. If there is proper working condition in an organization, it would increase employee participation as well as profits and image of company.

7)

Brings about continuous improvement. Employee participation, increased productivity, reduced cost will bring continuous improvement.

8)

Minimize price sensitive. In long run customer will understand that quality comes with higher price, and will be attracted towards the service of an organization.

9)

Increase customer satisfaction. Expected service quality, excellent after sales service will lead to higher customer satisfaction.

10) Differentiate themselves from the competitors. Competitive Service quality would definitely differentiate themselves from those of competitors.

7.7 BENCHMARKING OF SERVICES Benchmarking means measuring the performance of a business against that of the competitors in order to establish ‘best practice’. Benchmarking is a part of process of continuous improvement. Benchmarking can be applied at three levels: 1. Internal Benchmarking. 2. Competitive Benchmarking. 3. Functional or Generic Benchmarking. Internal Benchmarking: Internal Benchmarking is normally carried by large organization by way of comparison between operation units. For e.g.. Super market chain might benchmark operations across stores, financial across branches, different colleges under the same authority. But important thing is how performance is measured &this is clear link to the strategy of organization.

Competitive Benchmarking: At a second level competitive Benchmarking can be used. This is probably the most frequently use where comparisons are made with directly competitive organization. Customer participation is necessary because of which it will be easy to achieve in some service environments. For e.g: As a hotel owner, it is possible to ‘sample’ the service to competitor simply by ‘posing’ the guest. Often however, this is done in informal manner. A comparative impression gained of the service without examining the different facets in a structured way & attempting to measure them. Functional or Generic Benchmarking: The third approach is Functional or Generic Benchmarking, which compares specific functions such as distribution and after sale service. The advantage here is that information is sometime easier to obtain than when comparison are being made with competitors. Care has to be taken in selecting the dimension & sales to be used for performance measuring and ensuring that due account is taken of all relevant factors.

THE PROCESS OF BENCHMARKING.

Determine the Parameters to be measured

Identify BEST competition

Determine data collection method

Compare Competitors performance with organization’s performance

Establish action plans to close Gaps

Identify the factors that contribute to the performance Gaps

Set Targets to measure progress

Implement Action Plans

Monitor Performance against Targets

REPEAT

INDUSTRIES INDIAN INSURANCE SECTOR What is Insurance? Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party happening of a certain event. Insurance is a protection against a financial loss arising on the happening of an unexpected event. Insurance Companies collect premium to provide for this protection. A loss is paid out of this premium collected from the insuring public. The insurance Company act as a trustee to the amount collected through premium. Insurance is generally classified in three main categories, (i) Life Insurance, (ii) Health insurance and (iii) General Insurance To get insurance an individual or an organisation can approach to an insurance Company directly, through Insurance Agent of the concerned company or through Intermediaries. Benefits of Insurance 1. 2. 3. 4. 5. 6. 7.

Safeguards oneself and one's family for future requirements Peace of mind-in case of financial loss. Encourage saving. Tax rebate. Protection from the claim made by creditors. Security against a personal loan, housing loan or other types of loan. Provide a protection cover to industries, agriculture, women and child.

Reasons for buying insurance Insurance Buys Time and Money People like to refer to insurance as time insurance, the reason being that insurance proceeds are paid to the insured's beneficiaries in case of death or on the maturity of the policy. The money proffered by insurance helps buy time to adjust to the change of circumstances. Insurance provides large amounts of cash that will keep the lifestyle for the survivors the way it was before the insured's death.

Insurance Offers Peace of Mind For the person who buys an insurance policy, it offers absolute and complete peace of mind. He or she knows that the decision made by him will provide sound benefits in the future, whether or not the individual may live to see it. The life insurance policy will subsequently prove this in the future if and when funds are needed. This is the guarantee of the insurance contract. Financial Security The insurance policy offers contractual guarantees to people looking for peace of mind when they buy life insurance. Life insurance offers complete financial security. The purchase of life insurance demonstrates concern for a family's future financial well being. Regard for Family The purchase of life insurance clearly displays care and concern for the people the policy owner loves. Insurance is Safer No financial institution can do what life insurance does. No industry can back its products with reserves and surplus as sound as those of the insurance industry. The proof of strength and safety that insurance companies have ensured even under the most adverse of conditions is a matter of pride for the entire insurance industry. For generation after generation, life insurance has been acclaimed as the very benchmark of security against which the other industries are measured.

8 P’s of Service 8 P’s of Service 1. Product Elements Here, we identify the core product and the supplementary products offered by Rahul Transport that results in Perfect Service Performance, thus creating value for customers. We have identified the following: Core Supplementary Services

Road Transportation Warehousing, Packaging, Loading & Unloading, Payment Handling, Reverse Logistics, and Consultancy

The name Rahul Transport itself mentions the core service of the company i.e., Transporting Goods from one place to another. Ever since Liberalisation in 1991, the company felt the need to tune its services to make it more customer friendly and provide more value added solutions to its clientele. As a result, the company evolved from a transportation company to a complete end-to-end logistics company and added newer services, which would satisfy consumer needs. Warehousing includes • Warehouse and Inventory Management • Order collection and Invoicing • Return Goods Handling Packaging includes: • Survey and Estimation of effects to estimate packing and vehicle requirements • Packing as per client’s specifications • Unpacking as per client’s specifications Consultancy includes: • Inward movement of raw materials • Outward movement of finished goods • Movement of consumables and spares • Information Management • Load Consolidation and Optimization

As per the Industry, with regards to loading and unloading, there are set norms. At the place of collection of goods, the party places the goods in such a place from which they can be loaded on the vehicle. This is the responsibility of the party. But, whether the party loads the goods on the truck or no solely depends on the terms and conditions of the contract. As part of their supplementary services, they also provide loading and unloading facilities to the client. In Hindi this is referred to as Hamali. Their competency is enhanced because of the fact of their self-owned vehicles, which are at their beck and call and enhance speedy delivery of cargo.

8 P’s of Service 8 P’s of Service 2. Place and Time

Place and Time refers to how the service is going to be delivered, what time, the methods and the channels used to deliver the service. Place of Service Delivery – Rahul Transport has got 40 service outlets throughout the 4 states of its operation. This allows any of its clients to drop into any of the service outlet to request for a vehicle. For client convenience, these outlets are located at prominent industrial and market locations. This helps the company to obtain orders faster and execute them. The channel they use to deliver the cargo depends on various factors. These are: • Type of goods • Final Destination Type of Goods - If the cargo contains goods which can be overloaded onto the truck, the company does not use it’s own vehicles. In such instances they outsource the trucks because overloading affects the performance of their own trucks. As a thumb rule they cannot refuse the client to overload a particular truck because with certain products it’s not economically viable. For e.g.: Rice Gunny bags. Final Destination – If the cargo has to be delivered to a place, which is outside its network, then the company out sources trucks. They cannot deny such an order in the first place, because they do not want to dissatisfy their clients. They cannot operate their own trucks outside their own network, because they do not possess the required permits for other states. Thus the channel they use to deliver the service depends on the above 2 factors. Time of Service Delivery – For clients, it is sometimes important to get cargo across from one destination to another quickly. In such cases if their truck is not available, they

immediately call for a market truck and ensure speedy delivery of the cargo. The company makes sure that they deliver the cargo to the required destination within the promised time period. The company’s ‘on time delivery ratio’ is approximately 90%. The balance 10% failure occurs because of external factors that are outside their control. External factors such as strikes, calamities, accidents, political instability etc. The recent transport strike tremendously affected the company. The recent ‘Kumbh Mela’ at Nasik has also affected the service delivery of the company, thus increasing the time taken to deliver the product efficiently.

8 P’s of Service 8 P’s of Service 3. Process Customer approaches the company – The customer approaches the company for the service that he requires. This is a type of service wherein customers either enter into yearly contracts or just do a retail transaction. A retail transaction would be wherein a customer would use the transportation service only once based on the rates prevailing on that day in the market. Contract customers – The customers prefer to enter into a contract with the company, as in a contract the rates of transportation are fixed based on yearly averages. So even the customers get benefit of not discussing or bargaining of rates at every transaction. Also the customers get advantage of a lower rates in times of peak season when the rates shoot up as the rates are fixed on supply and demand basis in the market. If the customer enters into a contract then the different formalities of the contract viz. contract clauses, promised volume of business, fixing of rates based on yearly averages, decision on area of operation; are decided. Transaction process – Both the retail and the contract customers react with the “Traffic Guy” who is the front line guy at any office of Rahul Transport. The Traffic Guy is the person who handles the rates of transportation based on his interaction with his sources in the market. He interacts with the transport market and keeps himself updated about the prevailing market rates. When the retail customers call him he gives them the prevailing rates. He also looks after the availability of the trucks. As per the requirements of the customer he checks if trucks are available and promises the customer the truck. Using of self owned trucks or outsourcing – If the customer requires a destination which is outside the company’s area of operation then the company outsources the trucks. This means that the company uses trucks from its attached fleet of 125 trucks. This is because as explained above the company does not have the required permits for areas other than its area of operation. Also based on the type of cargo company decides the mode. If the cargo contains goods which can be overloaded onto the truck, the company does not use it’s own vehicles. In such instances they outsource the trucks

because overloading affects the performance of their own trucks. Also overloading is not based on the company’s decision, it is rather a customer’s choice. As a thumb rule they cannot refuse the client to overload a particular truck because with certain products it’s not economically viable. For e.g.: Rice Gunny bags Sending of the Transport for loading – After deciding on all the above issues the truck is sent to the company of the customer or loading of goods. The loading charges are borne by the transport company or by the customer based on contract. After the loading is over the ‘lorry receipt’ is made which is a document, which contains all details about the goods. This lorry receipt is sent along with the truck and is then stamped by the receiver of the goods. This lorry receipt then becomes the ‘Proof of Delivery’. If such a transaction is on Pay on order basis Rahul Transport driver also collects the payment on the deliver of the goods. Thus this is the entire process of the delivery of the service. This service is not very customer oriented and there is not much interaction between the customer and the company on one to one basis. The interaction only happens at the rate fixing stages and contract stages. The variation in the service can happen in stages of ongoing transportation wherein the company might provide warehousing facilities. Also the company may provide facilities like packaging and unloading.

Service Blue - Printing Service Blue – Printing

Customer

Contract

Service Blue Print Diagram ‘Traffic guy’ Retail

Returning of LR to Customer Payment collection in case of Pay on Delivery

AT FR

Decision on outsourcing of using self – owned transport based on customers requirements

Delivery of goods Stamping of Lorry Receipt

Transportation of goods

AT

Creation of Lorry Receipt (LR)

Sending of transportation

Loading of goods

AT – Availability of Transport FR – Fixing of Rates (only in case of Retail customers.)

8 P’s of Service 8 P’s of Service 4. Productivity and Quality Sometimes it happens that cargo has to be sent across to an unviable destination for which there is no return cargo. In such instances, the company uses the services of brokers. Brokers play a very important role in the unorganized road transport industry in India. These brokers are local area brokers and they have information on each and every truck that will pass their area. These brokers provide Rahul Transport information on which trucks pass through that area. Thus, Rahul Transport books space on that truck with the broker. This saves the company a lot of time and effort in trying to reach unviable destinations, which in turn affects the productivity of the company. The company also takes good care of its trucks and ensures time-to-time maintenance and checks. This usually happens when the truck is idle. Sometime it so happens that when a truck has finished delivering its goods and the next task begins the next day, then the truck driver uses this idle time to carry out maintenance activities like checking for oil and the various other important liquids, etc. The company also ensures productivity by following optimal route planning. In some cases, when the cargo is small and the destination is common, then the company does not send a whole truck, but sends a smaller vehicle and also manages to get cargo from other sources to deliver to the same destination. As a result, the truck does not go half full, but rather goes fully loaded. This helps it optimize its truck capacity. The various supplementary services that the company provides has added to the quality of service delivery of Rahul Transport.

8 P’s of Service 8 P’s of Service 5. People Customers usually assess the quality of the service by assessing the people who provide the services. Thus, front office people play a vital role in winning a customer. Thus, the way they interact and their communication is very important. This all is true for service sectors in which they come in contact with many individual customers on a daily basis. In the case of Rahul Transport, they hardly have any walk in customers. Most of their business is done on the telephone, where the client asks them to send a truck to their warehouse or a particular destination. Hence, they do not come in direct contact with any customer. But however, potential clients are handled by the sales team and the various managers. Thus, they do not feel the need for a highly impressive front office staff.

In a company like this, the role of the back-office becomes very important because the efficiency of the service depends on these people. With a total of 250 managerial and operations staff, more than 85% of the workforce constitutes the back-office staff. To ensure maximum productivity, the company hires experienced personnel, who know their task and do not have to undergo training. Thus, saving on training costs. Important constituents of the workforce are the drivers who can be called as the executioners, as they are the people on the field delivering the service. Keeping them happy becomes a very important task. As a result, they are given sufficient monetary benefits, such as allowances, etc. to keep them satisfied. The company does not overburden the drivers with harsh delivery schedules, as they believe this can cause stress and can result in accidents. The company also refrains their drivers from alcohol consumption.

When it comes to the labour force such as the drivers, porters, etc., they are hired from the ‘Mathadi Labour Board’. This is a union, which supplies labourers to the road transport industry. Even though these labourers are members of the board, they work for the company. The Union is just to protect the interests of the workers.

8 P’s of Service 8 P’s of Service 6. Promotion and Education Promotion & Education over here refers to informing, advising or encouraging people to use a particular service provided through websites, brochures, TV advertisements, magazines and word of mouth publicity. In the case of the Indian Road Logistics Industry, which is highly unorganized, there is no formal communication channel through which they promote themselves. Rahul Transport too, does not use any formal channel to promote itself. It solely depends on Word of Mouth publicity. The company has a few brochures and pamphlets which provides a potential client with information on the company and the various services that the company provide. The brochures are very attractive and they portray the impressive performance of the company. The company also carries its name on all its truck in bright yellow. This is an identifier and also carries out promotion to a certain extent.

8 P’s of Service 8 P’s of Service 7. Physical Evidence

This refers to any physical evidence that portrays the service quality of the company. As stated earlier, Rahul Transport is not a logistics company which comes into contact with individuals, as a result the need for any physical evidence is not really felt. The only physical evidence they have is their brochures and pamphlets.

8 P’s of Service 8 P’s of Service 8. Price and Other User Costs

This refers to how the service provider minimizes the burden of cost on a consumer. In the land transport industry, there are two methods of purchasing the service. They are: •

Simple Purchase Simple Purchase is a normal purchase whereby a client can go to any fleet operator and ask for the service. Over here the client has to bear the fluctuating market rates that prevail. And the price of the service also depends on the distance and the destination.

•

Contract Purchase This is a method of purchase whereby the client enters into a contractual agreement with a logistics company. This contract helps the client to get a fixed rate and he does not have to bear the costs of market fluctuations. Moreover, the client can also avail of certain supplementary services when they have a contract with a logistics company.

With regards to Rahul Transport, more than 90% of its business comes from Contract Purchase rather than Simple Purchase. They have very few walk-in customers who purchase their service.

Pricing of the contract depends on lots of considerations. Some of the considerations are: • What is the consignment of goods? • The value of the consignment. • Destinations to which this consignment needs to be delivered. • Frequency of delivery • Expected Volumes • Time taken to load or unload the consignment • Place of Loading or Unloading Taking all these factors into consideration, a contract is entered into with the client. These contracts maybe annual, half-yearly or quarterly. In the contract a fixed rate is decided for the delivery of the consignment. The client also gets benefits of supplementary services such as loading-unloading facility, warehousing facility etc. When Rahul Transport uses its own fleet of trucks, the various costs that are involved are broken down into two components – the fixed component and the operating component. Fixed cost component includes – Truck Capital cost + Finance Cost + Permit Cost + Insurance Cost + Maintenance & Repairs Cost The operating cost component includes – Diesel cost + Labour Cost + Labour Allowance + Octroi Cost + Toll Cost + Loading & Unloading Cost (Hamali). Both these components put together contribute to the cost of the product. From the total cost, diesel cost contributes to around 55% of the cost. As stated earlier, the company sometimes out sources the trucks to market players and fleet operators. The price at which they provide the service fluctuates on a daily basis. This price is dependent on the market supply and market demand. Most of the time the cost of operating a market vehicle is lesser than the company’s cost of operation. Thus, on some routes the company only operates market trucks. Sometimes due to environmental factors the costs of these trucks go up marginally. Like for e.g., due to the recent Kumbh Mela at Nasik, the price of market trucks went up by around 50% because their availability reduced. In such cases, the company has to offer the client the service at the pre-decided rate and has to bear the loss. These are the various costs involved in delivering the service. With this we cover the 8 P’s of Service of a service organization. – Rahul Transport Pvt. Ltd. To understand the service of Logistics better, we have also studied the service of an MNC – Maersk Sealand.

RAILWAYS BLUEPRINT

A potential customer comes for enquiry regarding the number of trains between two particular places, their timetable, the availability of tickets, fares, etc. The person at the counter refers to the centralised database and reservation system and accordingly gives information. If the information is favourable( tickets available or in waiting list), and if the potential customer has decided to make the reservation, the database system accordingly sends information to the reservation counter. The person at the reservation counter issues ticket to the customer. Then the customer arrrives at the railway station on the date o the reservation made. He hires a coolie who takes the luggage to the train in which the customer is supposed to board, and deposits the luggage in the boogie where his seat is reserved. The customer to make sure that there is no mistake in the reservation/ or to see the status of his reservation checks the PNR status. The list stating the PNR status, is put up at the railway station on a notice board by the railway employees.Once everything is in order, the customer/passenger boards the train. The journey starts with the motorman starting the engine as per the instruction of rail traffic operators. The journey is then monitored and guided by the rail traffic operators through signals and instructions at stations and driven by motormen. Meanwhile during the journey, the ticket checker arrives with a list of pasengers and information on their journey. He checks the infomation given to him with the tickets of the passengers. Subsequently, the attendant in the bogie, provides food and bedding facilities to the passengers. This facility is provided by the stores and maintained by other railway employees. Many other railway employees provide pasengers with food and beverage facilties at different stations. The customer/passenger finally reaches the destination and gets down from the train with his luggage. He hires a coolie who takes the luggage wherever the passenger instructs him to on the railway premises.

Diagram

Banking industry INDIAN BANKING SECTOR BACKGROUND Sound and healthy banking institutions are the backbone of any economically strong country. It is the foundation on which the long-term sustainable economic progress can be built. The Southeast Asian crisis is the latest proof of this basic principle. In India the nationalized banks provide a major chunk of the banking services with SBI and its subsidiaries forming the heart of the banking system. The banking sector can be broadly divided into three categories: • • •

Public Sector banks Private banks Foreign banks

 PUBLIC SECTOR BANKS

Public sector banks have the government as a majority shareholder. This segment comprises of SBI and its subsidiaries, other nationalized banks and Regional Rural Banks (RRB). The public sector banks comprise more than 70% of the total branches. The listed public sector banks are State Bank of India, State Bank of Bikaner and Jaipur, State Bank of Travancore, Bank of Baroda, Bank of India, Oriental Bank of Commerce, Dena bank and Corporation bank. State Bank of India also made a GDR issue making it the first and only Indian bank to do so.  PRIVATE SECTOR BANKS (OLD) These banks existed prior to the promulgation of Banking nationalization Act but were not nationalized due to their smaller size. They mostly focus on niche regional markets, and thus are smaller in size. These banks are mostly located in south of India and the driving focus of their business is service standards and technology up gradation. In the next round of industry restructuring, these banks will see heightened activity. In fact, there have been takeover attempts for some of these banks, but none has been very successful.  PRIVATE SECTOR MANKS (NEW) Some of the new entrants in the banking sector are making quite a few waves and bringing about a paradigm shift. Times Bank, IndusInd Bank, Bank of Punjab, HDFC Bank, ICICI Bank and Global Trust Bank are some of the names in this category. The level of service offered and the efficiency of the operations is considered much better than the nationalized banks.  FOREIGN BANKS Many foreign banks have set up their branches in India and look set to revolutionize the way business is done. Standard Chartered is the oldest foreign bank doing business in this country. Some of other foreign banks with significant presence are HSBC, American Express bank, Citibank, ABN Amro Bank and ANZ Grindlays Bank. FUNCTIONS OF A BANK Functioning of a Bank is among the more complicated of corporate operations. Since Banking involves dealing directly with money, governments in most countries regulate this sector rather stringently. In India, the regulation traditionally has been very strict and in the opinion of certain quarters, responsible for the present condition of banks, where NPAs are of a very high order. The process of financial reforms, which started in 1991 has cleared the cobwebs somewhat but a lot remains to be done. The multiplicity of policy and regulations that a Bank has to work with makes its operations even more complicated, sometimes bordering on illogical. This section, which is also intended for banking professional, attempts to give an overview of the functions in as simple manner as possible.

Banking Regulation Act of India, 1949 defines Banking as "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheques, draft, order or otherwise." Deriving from this definition and viewed solely from the point of view of the customers, Banks essentially perform the following functions:  Accepting deposits is one of the two major activities of the Banks. Banks are also called custodians of public money. Basically, the money is accepted as deposit for safekeeping. But since the Banks use this money to earn interest from people who need money, Banks share a part of this interest with the depositors. However, accepting deposits and keeping track of the money involves a lot of bookkeeping and other operations. Let us see what the Banks must maintain to provide this service 1. An effective branch network to reach the targeted customer base 2. A system of Intra branch accounting with separate account(s) for each customer 3. A system of reconciliation at the end of the day 4. Availability of adequate funds at each branch 5. Trained staff for effective customer service 6. Infrastructural inputs like spacing, stationary, comfortable environment etc.  Lending money to the public Lending money is one of the two major activities of any Bank. In a way, the Bank acts as an intermediary between the people who have the money to lend and those who have the need for money to carry out business transactions. This activity places its own requirements on the resources of the Bank. For effective functioning of this, a bank must possess: • • • • •

Sufficient deposits. Skills to appraise the potential borrowers and the activity. Legal skills for documentation. Legal skills for recovery of its dues through the courts. Skills to follow up and monitor the end-use of money lent

by it. • •

An effective credit delivery system. Review of credit portfolio.

 Transfer of money Apart from accepting deposits and lending money, Banks also carry out, on behalf of their customers the act of transfer of money - both domestic and foreign. - from one place

to another. This activity is known as "remittance business". Banks issue Demand Drafts, Banker's Cheques, Money Orders etc. for transferring the money. Banks also have the facility of quick transfer of money also know as Telegraphic Transfer or Tele Cash Orders. To deliver this service, a Bank must have: An effective branch network or correspondent relationships. • A system of Inter branch reconciliation • A system of reconciliation with the correspondents • Availability of funds at all the centers •

 Trustee Business Banks also act as trustees for various purposes. For example, whenever a company wishes to issue secured debentures, it has to appoint a financial intermediary as trustee who takes charge of the security for the debenture and looks after the interests of the debenture holders. Such entity necessarily have to have expertise in financial matters and also be of sufficient standing in the market/society to generate confidence in the minds of potential subscribers to the debenture. While Banks are the natural choice for the customers, Banks must possess the following to be effective and retain that: • • •



A track record of sufficient length. Facilities for safekeeping. Legal skills to take necessary steps for the trusteeship.

Safe-keeping

Bankers are in the business of providing security to the money and valuables of the general public. While security of money is taken care of through offering various types of deposit schemes, security of valuables is provided through making secured space available to general public for keeping these valuables. These spaces are available in the shape of LOCKERS. The latter are small compartments with dual locking facility built into strong cupboards. These are stored in the Bank's Strong Room and are fully secure. Lockers can neither be opened by the hirer or the Bank individually. Both must come together and use their respective keys to open the locker. To make this facility available to its customers, the Bank must provide: • • • •

Physical structures to house the lockers Locker cabinets Security arrangements Record of access to lockers

 Government Business

Earlier Government business used to be exclusively carried out by Government Treasuries where all type of transactions took place. However, now Banks act on behalf of the Government to accept its tax and non-tax receipts. Most of the Government disbursements like pension payments and tax refunds also take place through banks. While the Banks carry out this business for a fee to be paid by the Government, providing this service requires a lot of effort and organization. The Banks must provide: Interface with the public Liaison with local government departments and government treasury • Arrangement for reconciliation with the Government Accounts Department • Necessary infrastructure, stationery etc. to cater to the numbers • •

PRODUCT Savings Account ATM Network 7-Day Banking Telebanking iConnect-Internet Banking PEOPLE Many service require personal interactions between customers and the firm's employees and these interactions strongly influence the customer's perception of service quality. For this reason, human resources management policies and practices are considered to be of particular strategic importance for in delivering high-quality services. Establishing a customer-oriented culture throughout the firm and empowering employees to provide quality service cannot be established merely by putting up inspiring posters. Management leadership, job redesign and systems to reward and recognize outstanding achievement are among the issues that a successful service manager must address. ICICI ICICI bank views people as a key source of competitive advantage. Consequently the development and management of human capital is an essential element of its strategy and key management activity. While ICICI bank is the India’s second largest bank; it had just over 7,700 employees at March 2002, demonstrating its unique technology driven, productivity focused business model. ICICI bank continues to be a preferred employer at leading business schools and higher education institutions across the country. A sixsigma initiative has been undertaken for the lateral recruitment process to improve capabilities in its areas. ICICI bank has built strong capabilities in training and development to build competencies. Training on product and operations is imparted

through web – based training modules. Frontline staff members are being trained on the regular basis by IT users support group on the various enhancements as well as new packages designed for offering customized solutions to customers.



UTI

UTI’s most valuable assets are its human resources and therefore emphasizes on training and development and therefore it is accorded high priority at UTI. Competitive advantage can be gained by continuously upgrading the knowledge and skills of the staff members. UTI had 9,300 employees as of March 31, 2002. Thirteen employees employed throughout the year were in receipt of remuneration of Rs.12 lacs or more per annum. In order to ensure that a well-motivated workforce contributes towards the growth of the institution, our Bank has made inroads towards establishment of Quality Circle concept among its employees. The emerging challenges of a liberalised economy entail on us a responsibility for developing motivated and knowledgeable workforce to meet the requirements. Special programmes on functional training and leadership development to build knowledge as well as management ability are conducted at a dedicated training facility. UTI bank seeks to build in all its employees a total commitment towards exceptional standards of performance and productivity.

PLACE The selection of a suitable place for the establishment of a branch is significant with the view point of making the place accessible and in addition, the safety and security provisions are also found important. Banking organizations are not free to open a

branch since the RBI regulates the subject of Branch Expansion but so far as the management of branch is concerned, the branch managers have option to select a place ICICI In 1991 The Bank has established a well-diversified branch network with 24 branches in 15 centres covering 12 states. The bank set up a fully computerized environment with the State-of-the-art technology at all offices continuously upgrading its strong systems and procedures with special emphasis on risk management. In 1997 the bank opened 11 branches and 2 extension counters thereby increasing the total network of branches to 33 and extension counters to 4. As on March 31, 2000, bank had a network of 81 branches, 16 extension counters and 175 ATMs. The capital adequacy ratio was at 19.64 percent of risk-weighted assets, a significant excess of 9 percent over RBI’s benchmark. ICICI has developed a successful third party distribution model with a growing market share in distribution of mutual funds, Reserve bank of India relief bonds and insurance products. This allows us to meet all customer needs through products that are complementary to those that we offer directly, while leveraging our distribution capability to earn fee income from third parties. ICICI bank has pioneered a multi-channel distribution strategy in India, giving our customer 24*7 access to banking services. The enhanced convenience that this offers the customer has supported our customer acquisition efforts and migration of customer transactions from branches to lower cost technology enabled channels. During the year, ICICI Bank continued to expand its non branch channels aggressively and successfully migrated customer transaction volumes to these channels. Only 35% of customer induced transactions now take place at branches. ICICI Bank set up over 500 new ATMs during fiscal 2002, taking the ATMs network to over 1000 ATMs. Master, Cirrus and Maestro cards can now be used on all our ATMs. Other new initiatives on ATMs include multilingual screens, bill payments and prepaid mobile card recharge facility. 

UTI

In order to enhance customer service, UTI has widened its distribution network by opening several new offices across the country. As on March 31 st 2002, UTI had a network of 120 offices in India. The bank has pioneered in taking initiatives and providing one-stop financial solutions to customers with speed and quality. In a way to reach customers, it has used multiple delivery channels including conventional branch outlets, ATMs, telephone call-centers and also through Internet. The Bank was incorporated on 3rd December and Certificate of business on 14th December. The Bank transacts banking business of all description. In 1998 the Bank has 28 branches in urban and semi urban areas as on 31st July. All the branches are fully computerized and networked through VSAT. ATM services are available in 27 branches. In 1999 UTI Bank Ltd inaugurated an off site ATM at Ashok Nagar, taking the total number of its off site ATMs to 13.m. Today UTI is one of the top five banks that deploy half the ATM’s total pool. Its network of 546 ATMs is the largest in the country accounting for nearly 18% of all ATMs in the country.

With geographical and infra structural expansion, the distribution network strategy for the ICICI and UTI will continues to focus effectively on reaching out to the customer and providing customized services. PRICE ICICI Interest is paid on the minimum credit balance maintained between the 10th day and last day of each calendar month in Savings accounts at the rate in force in accordance with RBI directives. Interest so calculated is rounded off to the nearest rupee, ignoring fractions of a rupee. Interest is paid every half year in September and March. No interest is currently payable on the balance maintained in a current account in acceptance with RBI directives. SAVINGS ACCOUNT

-

8.50%

INTEREST RATES

-

8.00%

PROCESS



ICICI

The use of technology helps ICICI to provide value-added products and services to our clients in tune with the customer’s requirements. As one of the new generation banks, we are very well placed to exploit the opportunities being provided by e-commerce. The increase in the net banking customer base was significant in the last quarter of around 75,000 to 80,000. From our point of view, branch banking has the highest transaction costs, while net banking costs just one-tenth of that. Thus a major shift from branch banking to net banking will help us to reduce transaction costs. From the customer’s viewpoint, they can use banking services at any time according to their convenience. Following documents are required: 

Income Proof

(A) Salaried Individuals • • •

Latest salary slip of 3 months. Form No.16 for the last 2 years. NOC from Employer and/or Employer Society

(B) Businessmen/ Self Employed/ Professionals

•

Copies of last 3 years IT returns with computation of income, Balance sheet, Profit & Loss Account certified by your Charted Accountant.



Personal Documents

• • • •

Age proof (passport/ driving license/ election card Address proof (Ration card/ passport/ maintenance receipt) Four photographs of Applicant/s and two photographs of each guarantor. Bank statement for last 6 months.



Property Documents

Copies of • • • • •

Registered agreement for sale/ lease deed, if any Registration receipt Share Certificate of society (if formed) NOC from Builder/ Society/ MHADA/ CIDCO in bank’s format. Payment receipts Title Clearance/ Search report Valuation report from Bank’s approved valuer (in case of Resale flat only)

PROMOTION ICICI In the credit cards business we expanded our distribution to 36 locations. The total number of credit cards in force increased by 450000 to about 650000 at the end of fiscal 2002. during the year we launched two co-branded cards, with Hindustan Petroleum Corporation limited (HPCL) and BPL Mobile. We also entered the merchant acquiring business during the year.ICICI Bank is the largest incremental issuer of credit cards (including both debit and credit cards) in India. ICICI banks “Ncash” debit cards is a deposit access product that allows cash withdrawals through ATMs and also enables purchases at merchant establishments with point-of-sale terminals The card is valid internationally and earns loyalty points on usage. We also introduced a domestic debit card variant primarily for our payroll customers. As at March,31,2002,ICICI Bank had issued about 600000 debit cards. During fiscal 2002,ICICI Bank also implemented two smart cards projects, at a corporate worksite and an educational institution. 

Single Messaging Service (SMS)

SMS functions through simple text messages sent from your cellular phone. These messages are recognised and validated by ICICI Bank to provide you with the required information. For example, when you enter 'IBAL', your cellular phone screen will display the current balance in your primary account

With SMS, you can perform a wide range of query-based transactions from your cellular phone, without even making a call. You can use this facility all across the country, if your service provider happens to be: • • • •

Orange (Mumbai) Airtel (Delhi) BPL Cellular (Tamil Nadu - other than Chennai) BPL Cellular (Maharashtra - other than Mumbai, Goa, Kerala)



Wireless Application Protocol (WAP)

ICICI was the first organisation in India to offer WAP-based services in May 2000. Mobile Commerce, using WAP technology, allows secure on-line access of the Web using mobile devices. With WAP you can directly access the ICICI WAP server, check your account details and use other value-added services.



Call Centre

ICICI bank has also focused on the call center as the key channel for its promotion. ICICI banks call center can now be accessed by customers from 100 cities, and is India’s largest domestic call center. The call center is a single point of contact for customers across all products. It provides various self – service options and also personalized communication with customer service officers for a full range of transactions and account and product related queries. INTERNET BANKING TODAY IS BEING USED AS A MAJOR TOOL OF PROMOTION  UTI UTI Bank will has signed a co-brand agreement with the market, leader, Citibank NA for entering into the highly promising credit card business. UTI Bank and Citibank have launched an international co-branded credit card. Also, UTI Bank and Citibank have come together to launch an international co-branded credit card under the MasterCard umbrella. Again UTI Bank has launch of `iConnect', its Internet banking Product. It has also signed a memorandum of understanding with equitymaster.com for e-broking activities of the site. The other tools of promotion that UTI resorts to are:     

Pamphlets Word – of – mouth Advertising (Print media and Televisions) Telemarketing Hoardings

BLUE PRINT OF THE SELLING PROCESS OM KOTAK LIFE INSURANCE ` Customer calls up the sales representative

Sales

Representative fixes an appointment with the customer

Customer arrives at Om Kotak branch

representative

Customer is greeted By the representative

Presentation is followed by Question-Answer session

Customer calls the representative to his office

Customer called for medical check-up

Customer is led to the Conference Room

Representative offers the customer some thinking time

Detailed information on product demanded by the customer

Policy documents handed after a clean chit by the doctor

Representative identifies the customer’s needs With Need Analyser

Closing of the first meeting

Representative presentation customer

makes a to the

Sales representative does follow-up (2-3 times)

Customer closes that meeting

Preparation of the paper work by the representative

with a decision to buy

Welcome letter given to the customer and the details of the policy explained again

Payment of first instalment of premium by the

THE 8 P OF FAME ADLABS PRODUCT Service Product / Service Package: The Core Competency here is SCREENING OF MOVIES. The supplementary products / services are enormous like the Video Games Parlour & the Food Court. Good options for food like the Cafeteria where you get food made in hygienic conditions. The ambience is pleasant with centrally air conditioning, well-illuminated layout. FAME ADLABS is well known for its DOBLY DIGITAL SOUND. PRICING FAME uses differential or flexible pricing for its Multiplex theatres. Rates: In the multiplex averages between Rs. 90 & Rs.120 depending upon the box office performance of the movies screened. The prices are popularly estimated to be extremely fair prices for the complete entertainment experience. Reasonable pricing is possible thanks to the government policies regarding the partial wavier on the extremely high entertainment tax that multiplex enjoy. PLACE It is located at Andheri, Mumbai. From the point of view of public transport it’s closest to Andheri station. From this station one has an option of hiring a rickshaw, taxi or local BEST buses. However, all said and done, there is no denying that FAME is off the beaten track for most Mumbaikars. Since it is located in the suburbs of city it is not easily accessible and hence loses out here. PROMOTION Initially hyped, FAME attracted a lot of press attention and subsequently the public flocked to Andheri to witness the spectacle. However after the initial hype died down FAME did not take a more aggressive role in promotion but instead took a back seat.FAME beat IMAX by offering its clientele innovative methods of buying tickets via the MOBILE PHONES (SMS) that completely excluded the requirement of the customer to visit the theatre before the actual movie experience. The most effective way of promotion is the daily advertisements in the paper, which promote the movie, which is currently being screened in the theater, and informs the public.

PEOPLE Courteous and well-dressed people characterize the Multiplex. The employees are highly motivated and trained and exude an aura of energy and vibrancy as they perform their duty with a smile on their lips and a spring in their step. Whilst actually experiencing the movie, the sin-goers around us are just as important as the employees that escort us to the theater. Therefore FAME, which attracts the upper strata of the society, SEC A++, is a very conducive atmosphere and a pleasant environment to enjoy a movie with the entire family. PHYSICAL EVIDENCE

Ambient factors

•

Air conditioning

•

Excellent ventilation

Design factors •

Uniform appearance

•

Extensive parking lot

•

Spacious interiors

Social factors • Well dressed employees •

Courteous

•

Genial

•

Elite and up market crowd

•

Family atmosphere PROCESS

The process is a sequence of actions to deliver the service to the customer. In this case the following is the process followed by FAME

The customer arrives to FAME by car and first goes to the ‘pay n park’ to park the car. The customer then moves on to the ticket window to purchase the ticket for the movie he is interested to watch. Then the customer enters the building. Here the usher at the door checks for the tickets. Then the customer will move on to the screening area and watch the movie. In the interval the customer will mostly come out to eat or drink something from the cafeteria. The customer goes back to the screening area to continue the movie. PRODUCTIVITY & QUALITY Undoubtedly, the FAME caters to the crème de la crème of the crowd in the Mumbaikars that patronize the theater. Therefore, these people are treated to the best of quality and productivity by the employees. The customer is the King here. The service for the multiplex goes as far as actually delivering the tickets to the client’s home so as to limit the customer’s trouble in actually booking the tickets in advance. The theater, keeping in mind , its limited accessibility is very considerate towards the people that determine its success. RATER

RELIABILITY

RESPONSIVENESS

ASSURANCE

RATER

EMPATHY

TANGIBLES

RELIABILITY: -People can rely on FAME to screen the best of the movies. The latest and the most awaited movies are released here. Also the customers can rely on the fact that it will be a great family experience, they will get value for money, the crowd will be decent etc. One can rely on FAME for utmost customer delight ASSURANCE: - FAME has been successful in providing assurance to the customers with regard to quality. This is in terms of screening of the movie, sound system, good quality food, cleanliness, ambience, crowd etc. Even if the customer pays a higher price as compared to other theaters for the ticket, they are assured that they will not be disappointed. One can be sure that one will get what one expects here. TANGIBLES: - The layout is very well planned with sophisticated space planning i.e. it does not look uncomfortable. It is well ventilated, which is very important taking into consideration the fact that people will be present in large numbers as there are five movies being screened at one time. All the critical areas are well illuminated which emphasizes their importance. The seats of the theater are extremely comfortable with ample of leg space. EMPATHY: - The personnel at work at FAME are well dressed and presentable. They are courteous and approachable. They are well spread i.e. there is always someone available to help no matter where you are within the theater. They have also made facilities like escalators and lifts made available, which have proven to be of great help for the elderly and handicapped customers. RESPONSIVENESS:- The personnel at FAME are very helpful. The employees are highly motivated and are willing to help the customers at any given point of time. Any problems or questions of the customers are immediately attended to. They come out to help you and guide you through the place. HOTEL Characteristics The industry's ups and downs reflect, in part, the limiting characteristics inherent in hotel keeping. Perishability: If the full capacity of the services is not utilized, the service becomes perishable. If a hotel having an accommodation facility of 100 rooms is able to lease out only 70 rooms on a particular day, then the remaining 30 rooms or 30% capacity gets perished and can never be reused. The product is perishable -- a room not sold tonight is lost forever. The location and product inventory (rooms) are fixed -- they cannot be moved as demand patterns change. Entry into the business takes large amounts of capital -- creating huge fixed costs that necessitate high occupancies to achieve a break-even level of volume. Activity is seasonal -- with all the adjunct problems of operating an ebb-and-flow business.

Variability: The fact that service quality is difficult to control compounds the marketer's task. Intangibility alone would not be such a problem in customers could be sure that the services they were to receive would be just like the successful experiences their neighbors were so pleased with. But in fact, customers know that services can vary greatly. Services are performances, often involving the cooperation and skill of several individuals, and are therefore unlikely to be same every time. This potential variability of service quality raises the risk faced by the consumer. The service provider must find ways to reduce the perceived risk due to variability. One method is to design services to be as uniform as possible - by training personnel to follow closely defined procedures, or by automating as many aspects of the services as possible. The appeal of some service personnel particularly, the hotel industry- lies in their spontaneity and flexibility to address individual customer needs. The danger with too much standardization is that these attributes may be designed right out of the services, therefore reducing much of their appeal. A second way to deal with perceived risk from variability is to provide satisfaction guarantees or other assurances that the customer will not be stuck with a bad result. Inseparability: This characteristic is interpreted differently by different service marketing marketers, but all interpretations point out that special operation problems exist for the firm's managers. One interpretation of this term is the inseparability of customers from the service delivery process. In particular, many services require the participation of the customer in the production process. Unlike goods, which are often produced in a location far removed from the customer and totally under the control of the manufacturing firm, service production often requires the presence and active participation of the customer - and of other customers. Depending upon the skill, attitude, cooperation and so on that customers bring to the service encounter, the results can be good or bad, but in any event are hard to standardize. In hotel industry, the customer has to go to the service provider in order to avail the service. He cannot use the services just by sitting at his residence. Thus hotel industry is an inseparable service. Intangibility: Intangible services are difficult to sell because they cannot be produced and displayed ahead of time. They are therefore harder to communicate to prospective customers. Marketers of services can reduce these risks by stressing tangible cues that will convey reassurance and quality to the prospective customers. These tangible cues range from the firm's physical facilities to the appearance and demeanor of its staff to the letterhead on its stationery to its logo.

In case of hotel industry, the core benefit is getting good food, good boarding and lodging facilities. The tangible services are those, which one can touch and taste. Thus hotel industry is tangible.

Earnings Sensitivity Factors Profitability in the hotel Industry is dependent on many factors; a few salient ones are listed below: Tourism: This is the primary factor for the hotel industry. India has great potential of becoming a major stop for tourists. However, lack of infrastructure has kept the foreign tourist at bay. The government has been actively participating in propagating India as an oasis for global travellers. India has always conjured up a fascinating image in the mind of foreign tourists. India has an advantage of having diverse cultures, languages and religions, which makes it an exciting tourist destination for people all over the world. Business factor: Liberalization has brought home a new class of MNCs, which has increased the number of corporate travellers visiting India. Other than metros, developing cities have also come into the limelight and hence there has been an increase in demand for hotels in various places. This trend has enthused many hoteliers to set up corporate hotels. This class of business travellers has reduced their dependence on seasonal tourism. The industry is again headed for a hit, with the attacks on the world's largest financial centre in the US. Room occupancy: The ARR and occupancy are the other critical factors that determine profitability. These, in turn, depend on the location, star rating, amenities and quality of service. The occupancy of Indian hotels and the ARR has been on the decline for the past three to four years due to the turbulent socio-political environment in the nation and

also because of the East Asian economic crisis. However, the hotel industry reported impressive earnings and revenue growth for the year ended March 2001. Seasonality: India being a tropical nation witnesses an inflow of leisure tourists, mainly during the winter months of October to March. Hence the hotel industry has a better second half. In the first half of the year, local tourists prefer April to May and October in the second half due to summer and Diwali vacations respectively. Other months being off-season periods, many hotels offer heavy discounts on room tariff to ensure repeat customers such as corporates, airline crewmembers and tour groups. Political scenario: In the past few years, the hotel industry has been going through a lean phase. Room occupancy has been on a decline, mainly due to a steep fall in both business and tourist arrivals. Though the exorbitant rates of five-star hotels as compared to the quality of services provided is one of the factors for the decline, the fluid political environment has also had a negative impact and foiled the dreams of the Indian hotel industry. Tax structure: This industry is one of the heavily taxed sectors of India. State governments have levied various taxes like expenditure tax, luxury tax and sales tax. This is apart from the income tax levied by the central government. These taxes are as high as 30 per cent in cities like Chennai, while other Asian countries have a tax structure of 4 to 5 per cent. As a result, Indian hotels are more expensive than their Asian counterparts. Industry bottlenecks: Progress of the industry is held hostage to various bottlenecks existing within the industry like high variable costs. The hotel industry is reeling under high variable expenses. A high wage bill, maintenance costs and overhead expenses mark the industry. Domestic hotel chains have a high man-room ratio as compared to their overseas counterpart. Differential pricing: Hotels in India typically offer discounts on published room tariffs to many clients. As a result, though the occupancy rate of these hotels increases, the ARR does not increase proportionally. However, the magnitude of discounts varies depending on the nature of the client location and size of the hotel. Furthermore, in the dual tariff rate system, there is a domestic currency rate for local travellers and a dollar rate applying to foreign travellers. Hence there is need of a common yardstick for tariff rates CORE PRODUCT At the very center is the core product which satisfies the basic need of the consumer. The core product in the hotel industry is ACCOMODATION. The role of Hotel International is to provide basic accommodation facilities. Like a bed for the night and a room with a bathroom.

FORMAL PRODUCT When consumer’s expectations grows synchronized with increased competition, the marketer offers some tangibility to the existing core product, that is, some more features. Consumers prefer to pay more for these additions and the marketers have more to offer than the competition. Hotel International has to provide some additional features like: Hygiene: It comes next to the basic function of accommodation. Hygiene plays a very important role in the status of a hotel. An unhygienic hotel will never be able to attract lot of people, especially if it has to attract a lot of people from foreign countries where the hygiene conditions are top notch. Room Service: When people go to hotels, they would expect good and prompt room service. This means, when they order food or ask for any service, a hotel that provides it promptly will have a great edge over the other hotels. Price: The price of the rooms should be such that both the rich and the middle class people can afford them. Not everyone can afford a very expensive room and also not everyone will like to stay in a room that does not have some luxurious facilities. Etiquettes: The people who come in contact with the customers, that is, the reception people, room service people, and waiters, all have to be trained well to behave in a manner that pleases the customer. They should be civilized, cultured and polite. Laundry services Food and Wine:The food should be of good quality and should be prepared in hygienic conditions. CORE PRODUCT AND AUGMENTED SERVICES FOR A LUXURY HOTEL

Hierarchy: Chief Operating Officer (COO) | | General Manager | | Departmental Heads | |

Sub-Ordinates / Deputy Managers | | Operational Staff / Administrative Staff | | Front Office Staff

The hierarchy for the restaurant: F&B Manager | | Assistant Manager | | Restaurant Manager | | Captain | | Steward

Departments: The various departments it has are: 1. Security 2. Human resource management 3. Food and beverages. 4. Front Office 5. Kitchen 6. Sales 7. Purchase 8. Training

9. Maintenance & Engineering 10. Quality 11. Public relations 12. Finance 13. Marketing Basis of charging room rate 24 hour basis On this basis, a rate is charged for a room taking the time of arrival into account. E.g. if the person arrives at 0900 hours on the 6 th September a new day will start. the guest will be charged for one day only for the next 24 hours i.e. till 0900 hours on 7 th September. This can be very confusing for the receptionist, as she has to keep a track of arrival times of all the guests. This basis can be adopted in transit hotels as the guests cannot be expected to arrive and depart at a fixed time and also the stay is short in transit hotels.

Room night hotels In this case, a person is charged for the no. of nights he spends in the hotel. However if he checks in during the day and checks out during the night, he will be charged only for one night only. The person checking out should do so before dinner time or before the night out or he will be charged for extra time. None of the hotels preferthis system of charging in present times.

Check in and check out basis Most hotels prefer to have a fixed check in and check out time. Normally, accepted check out time is 12 noon. This will be influenced by transport factor. So in some cases check in and check out time may differ. There are several advantages in having a fixed check in and check out time for guests as well as for the hotel. The guest knows that he has to check out by certain time or he may be charged extra. The receptionist knows how many rooms are occupied and how many are available for sale. The housekeeping department will be aware of the number of rooms they will have to service as check out room. So better co-ordination is possible between the various departments to prepare for incoming guests. The hotel can also earn more revenue from rooms by selling the room more than once to different guests Types of Accommodation in India On The Basis Of Standards: Like most of the countries in world, India also has hotels divided in different categories depending on their location, facilities, infrastructure, and amenities provided. All the star hotels in India are government approved with continuous control on the quality of services offered. Five star hotel The most luxurious and conveniently located hotels in India are grouped under Five Star Deluxe Hotel Category. Five Star Deluxe hotels in India are globally competitive in the quality of service provided, facilities offered, and accommodation options. These hotels are located primarily in metropolitan cities like New Delhi and Mumbai and major tourist destinations like Jaipur Agra, and Goa. These are top of the line hotels located mostly in the big cities. These hotels provide all the modern facilities for accommodation and recreation matching international standards in hospitality. Many of these hotels are situated in the Central

Business Districts of the metropolitan cities or near the centers of transportation providing exceptional value for the business travelers. Four Star A rung below five star hotels, these hotels provide all the modern amenities to the travelers with a limited budget. Quality of the services is almost as high as the five stars and above categories. These kind of hotels are there for the travelers with a limited budget or for the places which might not getting the tourist traffic associated with larger cities. Three Star Hotels These are mainly economy class hotels located in the bigger and smaller cities and catering to the needs of budget travelers. Lesser in amenities and facilities, these hotels are value for money and gives good accommodation and related services on the reduced price. Services would be the stripped down version of higher categories of hotels but sufficient to fulfill your basic needs.

Two Star Hotels These hotels are most available in the small cities and in particular areas of larger cities. Catering to the backpacker tourist traffic, these hotels provide all the basic facilities needed for general accommodation and offers lowest prices. One Star Hotels The hotels with most basic facilities, small number of rooms, and location in the far flung areas are grouped under One Star Hotel category. These hotels are best when you are looking for cheapest available accommodation option (apart from camps and hostels). In a nutshell these are the various requirements according to which a hotel is graded How Does One Five-Star Hotel Differ From Another? Except for the location and some subtle variations in themes, most hotels under this category are the same. All are expected to provide luxurious and most modern facilities. In that case, what is their unique selling proposition (USP)? In this service-oriented industry, quality of service provided can hardly serve as a USP. Location could, but not for everybody. A hotel could be close to the airport for instance. Like The Leela in India. Or it could be located in a commercial area like The Oberoi or The Taj, both in Mumbai. Generally speaking, there is very little difference between one five-star hotel and another. International consultant Stephen Rushmore who has visited around 6,000 hotels in his career vouches for it.

Overseas, five-star hoteliers try to differentiate their services by adopting various concepts like heritage, Disney world or environment friendly hotels to name a few. But, in India very few five-star hotels boast of any such difference. One such hotel that does is The Orchid. Set up barely a couple of years ago it has created a name for itself by being a pioneer in the field of environment friendliness. The hotel that is situated in the vicinity of the Mumbai domestic airport is promoting itself as an ecotel, or an eco-friendly hotel. This concept has helped it achieve the ECOTEL certification for demonstrating a high level of environmental sensitivity in areas of solid waste management, energy efficiency, water conservation, community involvement and employee education On The Basis Of Nature: Heritage Hotels Heritage hotels in India are best if you are looking for sheer elegance, luxury, and royal treatment. They are not just another accommodation options but tourist attractions in themselves. Exquisitely designed and decorated, meticulously preserved, high standards of service, and ethnic cultural motifs helps the tourists get the complete experience of an India that otherwise exists only in the history books. e.g. The Lake Palace Hotel, Udaipur Beach Resorts Hotels Peninsular India bounded by Arabian Sea, Bay of Bengal, Indian Ocean and the two emerald archipelagos of Lakshwadeep and Andaman and Nicobar have a long coastline of around 7500 km, offering an amazing array of beaches, some popular, some not so well known. Wildlife Resort Hotels A wildlife tour is incomplete if you don’t actually live in a forest for a few days. Imagine living in a rest house or a tent the midst of the dense wilderness, and waking up to the twittering of birds, or maybe the roar of a lion! Day trips alone are certainly not enough to show you the true majesty of the wild, so why not try this too? Government Approved Hotels These are the hotels, which might not have applied for star categorization or small enough to find them in the list. Many of the wildlife resorts, lodges, and hostels are government approved providing a minimum level of accommodation facilities at far off places. Guest houses

These provide the minimum facility of food &beverages along with accommodation. The standard of accommodation is not as good as a hotel. The menu offered is not as elaborate as a hotel or similar establishments. Services are not very professional or specialized. Expenses are very much less in comparison to the above mentioned other establishments. Generally people who can’t afford the expenses or the luxuries of higherclass establishments make use of these facilities. Dormitories Dormitories mean a building containing one or more accommodation units and may contain shared kitchen facilities, for use by students enrolled at a post secondary institution. Dormitories are set up to offer a good environment for studying, and to experience independent citizen life. The dormitory rooms are furnished with beds, study tables, chairs, washstands, and telephones. Further, dormitories are equipped with lounges, laundry rooms, and kitchenettes. Students, therefore, can start studying only if they bring their personal belongings. A shared building (Life Center) in each area of the dormitories include a restaurant, public bath, shops, barber shop, and beauty salon.

Holiday Villages Holiday villages are usually large, self-contained resorts and ideal for people who want a lively holiday with children's clubs, organized activities and evening entertainments laid on.Many holiday villages offer children's clubs, run by qualified English speaking staff, for babies through to late teens. These are invaluable for families, as they not only give children a chance to meet new friends and have fun, but also give adults some time off too.However, though standards are improving markedly, somehow this is never a really smart option. Accommodation, unless rated at least four or five stars, can be cramped for example.

AUGMENTED PRODUCTS With further higher expectations of the customer- again synchronized with intense competition- marketers offer more and more intangible features. All the extra things provided are service oriented. In the case of Hotels the augmented products include: Facilities In Room : Ø CTV Satellite channels Ø International direct dial Ø Refrigerator (deluxe rooms and suites) Ø Bathtub (executive rooms and above) Ø Running hot and cold water.

Services Provided : Ø Ayurvedic Massage Center and steam bath Ø Beauty Parlor Ø Florist Ø 24 HRS Room Service Ø 24 HRS Coffee Shop Ø Airport Transfer Ø Ample Car Park Ø Safe Deposit Lockers Ø Travel Assistance Ø Currency Exchange Ø Same Day Laundry Ø Direct Dialing Ø Cable TV Ø Health Club Ø Banquet Halls Ø Back Water Cruises and Package Tours Ø 24 hrs Check Out Restaurant/Bar: 1. Variety Restaurant (Indian, Tandoor, Kerala, Continental and Chinese dishes.) 2. 24 hour Specialty Coffee Shop. 3. Family Bar (daily happy hours.) Promotional Activities: Ø Regularly conducting Food festivals. Ø Official host for Motor shows, Fun Carnivals, Fashion shows and other Fairs.

The 8 P’s with reference to The Taj Mahal Hotel Product Element This gracious turn-of-the century hotel is located 32 km from the airport and minutes away from Mumbai's commercial, shopping and banking districts. The Taj Mahal Hotel has an old-world Heritage Wing and a contemporary Tower Wing. The hotel's premium suites have been used by royalty and Heads of State. Taj believes that the their core product is space. This space is supplemented with the services they provide like the restaurants, health club, banquets, discotheque, bar, business centers etc. Their other supplementary products also include travel

arrangements, ticketing, airport pick-ups, sightseeing etc. The hotels various other departments like the house keeping, front office, food and beverage, room service and maintenance, all provide the supplementary services to the customer. A few of the Facilities and Services offered are as follows:Types of Accommodation 582 centrally air-conditioned rooms including 49 suites. Tower Wing Rooms: With easy access to the Business Centre, these contemporary rooms offer guest amenities like Internet connectivity, 2-line speaker phones with international direct dial facility and voice mail. Mini bar, personal safe, channel music and television with satellite programmes. A complimentary in-room fax can be provided on request. Guests have a choice of rooms that overlook the city or face the Gateway of India and the Arabian Sea. Heritage Wing Rooms: These rooms are renowned for their architecture and exude an aura of old-world elegance. Each corridor in this Wing resembles an art gallery, and the design, décor and furnishing ensure that no two rooms are alike. Guests have a choice of rooms that overlook the city or pool or face the Gateway of India and the Arabian Sea. Taj Club: Located on the top floors of the Heritage Wing, Taj Club is designed for the discerning business traveler. Guest amenities and services include complimentary airport limousine transfers, private check-in at the Club desk, in-room fax, personal safe, a complimentary bottle of wine, valet service and complimentary deluxe Continental breakfast. Taj Club guests can also enjoy complimentary tea/coffee throughout the day and cocktails during the Cocktail Hour at the Club Lounge. Taj Club also offers guests exclusive Meeting Rooms and a Business Service Unit on the Club Floor. Suites: Choose from elegantly appointed Junior Suites, Executive Suites, tastefully decorated Large Suites, newly renovated Luxury Suites or spacious, plush Grand Luxe Suites. The finest suites at The Taj Mahal are the luxuriously appointed Presidential Suites. Each of these suites is decorated with original paintings and antiques that transport guests into a world of regal luxury and grandeur. Grand Luxe and Presidential Suite guests can also avail of a personal Valet Service.

Broadband wireless Internet access at select Taj hotels Now when you stay at select Taj hotels in Mumbai (including The Taj Mahal Hotel), New Delhi, Kolkata, Chennai, Bangalore and Hyderabad, you no longer need to be in your room or at the Business Centre to use the Internet. Multiple 'hot spots' located across the hotels lets you get onto the Internet from almost any place in the hotel - quickly and without plugging in! What's more, there is a Cyber Butler on call, should you need any assistance with getting connected.

Facilities and Services Swimming pool, fitness centre and spa, beauty parlour, barber shop, travel desk, car rental, pastry shop, book shop, shopping arcade, currency exchange, doctor-on-call and babysitting. Complimentary use of steam, Jacuzzi and gymnasium at the fitness centre for all guests. Arrangements for golf, badminton, squash, billiards, tennis and table tennis on request. 24-hour room service and laundry service Place and Time As far as place is concerned, all the Taj services and facilities are provided at one point. To ensure timely delivery of their services, they have set processes in place and incase of failure or delay of service, they have built in contingencies and trained their staff to communicate the delay to the customer in the right manner. One of the incidents that Mr. Vivek Sah, the Training Manager at Taj provided us with to explain this concept further is of the implementation of the contingency plan during the breakdown of the elevator. In case of breakdown of the elevator, the Room Service makes use of the elevator in the other wing to ensure timely delivery to the customer. They also have complaint management systems where they encourage customer feedback. Each of their feedback form is numbered and hence if any feedback form is missing, the staff is held liable for it. This is to ensure that the management views every feedback form. To ensure standadization in their services, they have Standard Operating Procedures (SOP), e.g the food that is served in the restaurant will be of the same quality and taste at any given day and time. Process In order to ensure that the core product and the supplementary product is developed and delivered in the right manner and at the right time, the hotel has formed certain set processes. When the room is being prepared for customer check-in , the house-keeping department make sure that all the room amenities are provided as per the check list. For e.g. certain room amenities like 3 embroidered laundry bags, 2 closed slippers with logo, 2 shoe bags, etc. are provided by The Taj Mahal Hotel. Infact the processes are so specifically laid down that hotel staff are even advised on what to say and what words to use while talking to a customer. The following example will illustrate this better. When a customer asks for something to be done instead of saying “no problem, the staff is taught to say ‘ most certainly’. The Taj Blueprint When the service provider comes in contact with the customer, he needs to surpass the customer’s expectations, for which a blue print is made and followed by the service provider, in this case the Taj Mahal Hotel.

Dinner Service Sequence Procedure Entrance Host(ess) / Manager

1 Greet Guests Smile using appropriate salutation,correct posture,eyecontact and guest name where 2 possible. Smoking/Non-smoking preference to 3 be confirmed. 4 Assist guests to their seats. 5 Unfold the napkins, ladies first Suggest the Dinner buffet, and describe the buffet highlights 6 specials etc.

Entrance

Host(ess) / Manager

Entrance Restaurant Restaurant

Host(ess) / Manager Host(ess) / Manager Captain

Table

Captain / Manager

Present the food menu along with the beverage list/ wine menu, if A La Carte is desired by the guest. Suggest daily specials and advice non availability`s, prior to food 7 orders. Table Suggest bottled water and offer wine 8 by glass. Table For wine service, appropriate 9 glassware to be present on the table. 10 For all orders, serve ladies first Clear plates accordingly before guests return after second helping 11 from buffet. For A La Carte orders, plates to be cleared only after all complete their 12 meal. 13 Replenish the cuttlery accordingly. Napkins to be folded neatly in half and placed on the left arm-chair, when guests leave for second 14 helping.

Captain / Manager Captain

Table Table

Captain / Server Captain / Server

Table

Captain / Server

Table

Captain / Server

Table

Captain / Server

Table

Captain / Server

For A La Carte orders, offer dessert 15 menu and describle items. Table Offer tea / coffee after entrée and 16 side plates are cleared. Table

Captain / Server Captain / Server

Always maintain table top clean, 17 before resetting the table Place bill folder with cheque on table for signature, as per guest 18 convinience Thank all guests using their names 19 respectively. 20 Bid farewell. Upon guest departure, clear table 21 immediately.

Table

Captain / Server

Table

Restaurant

Captain / Server Captain / Server / Host(ess) / Manager Captain / Server / Host(ess) / Manager

Table

Captain / Server

Table

Productivity The Taj as a hotel does not compare itself to only Indian hotels, but even with the hotels internationally as it claims to have “World Class Quality”. In order to ensure that its inputs are transformed into desired outputs, they provide extensive training to their employees irrespective of the field they come from. The Taj Mahal hotel has various quality tools to enhance quality. This involves every department, as they have to make sure that the raw material as well as the finished product is of top quality. At The Taj, it is the responsibility of the purchase department to make sure that the raw materials are purchased at the Right Time, Right Place, Right Cost and from the Right Source, in order to avoid any hindrances in their productivity and quality. Taj has developed enormous credibility in terms of trustworthiness being the oldest brand of hotels, with the reputation of being World class and honest service provider. Security, Communication and understanding the customer psychology are special assets the Taj management has mastered with time. People People here mean the customers, employees, management and the society. It is the final customer who is to be satisfied and this can be done only with the help of the employees, who are directed and guided by the management. In the end the final motive of Taj is to provide consistently and relentlessly an Indian experience of warmth and hospitality by anticipating and exceeding guest expectations. They also provide various customer services such as ‘The Taj Inner Circle Group’, ‘Taj Advantage’ and ‘Taj Epicure’. In order to ensure the productivity of their employees they provide them with various facilities such as medical help, consultation, traveling facilities, perks and bonuses. The employers here each have their own lockers in which they keep their uniforms and other belongings, they also have bunkers with small beds so that the employees working in shifts can catch some sleep if need be.

In spite of the fact that human resources management is such an integral part of the service industry of which hotels form a major part, its role has begun to be acknowledged only recently. The Taj Group of Hotels is probably one of the first Indian hotel chains to have recognised and respected the significance of HR in the hospitality industry. Says K S Srinivasan, GM-corporate human resources, The Taj Mahal Hotel, Mumbai, “Functions like sales, marketing and HR are not hotel-specific, unlike those of chefs, housekeepers, bartenders, stewards and the like. They are, in fact, common to all businesses.” He asserts that HR, as a function, is like a partner in the business in any organisation and not a stand-alone function. It is the key to effective utilisation of the manpower that the hotel industry is so dependent on. And the Indian hotel industry is among the most labour intensive since the number of people serving guests is the maximum here. It is precisely for this reason that the significance of HR requires to be appreciated. It is not merely monetary rewards that employees seek today; the intriguing aspect is the learning experience that the job promises. “It is precisely with this very thought in mind that the Taj Group of Hotels, a Tata enterprise and one of the oldest hotel chains in the country, decided on a training programme for the operations trainees,” explains Srinivasan. Interactive sessions between the Taj management and the director of the Tata Institute of Social Sciences (TISS), a Tata educational and research institution, led to an interesting and comprehensive tailor-made course curriculum being chalked out. Thus was born the ‘Taj TISS HR Associate Programme’, a one-year course comprising four modules that are designed to give equal importance to and impart balanced knowledge of both the theoretical and the practical aspects of all HR-related functions of the hotel industry. After finalising the course details, the Taj made announcements about the course, offering interested trainees with two to three years of work experience an opportunity to apply. The response was encouraging and five trainees were shortlisted for the first batch of the training programme. Each of the four modules have four sections. The first stage consists of theoretical lessons, providing a sound background to the practical application of the knowledge required of them in the second stage. In the third stage, the students return to the Institute and their performance is evaluated by professors of TISS. In the fourth and final stage, grades are awarded. While practical training sessions for the first three modules have been organised at the Taj hotels across the country, the fourth modules practical sessions had students of the first batch working in Tata companies such as TISCO and Tata Consultancy Services (TCS). “This gave them a wider scope and more exposure, besides making them realise that HR skills in a service-specific industry like the hotels are much more challenging than their application in the manufacturing or any other industry,” observed Srinivasan. He said he himself had started off in the manufacturing industry and only later did he move over to the service industry. “I have been in the industry for over a decade now and am well-set here,” he added.

The key to retaining staff and ensuring the success of any business organisation lies with the HR department and its effective functioning. Any organisation, including hotels, incur heavy expenditure on their employees, especially between the time of recruitment and the employees’ acquisition of the skills imparted during their training. It can be inferred, therefore, that a high employee turnover rate lowers the efficiency of the staff as a whole owing to their constant on-the-job training and skill enhancement. “An organisation must be able to create for itself a unique place and image in the minds of the employees, both present and prospective. This enables the employees to aspire to be a part of the organisation, giving it their very best,” says Srinivasan. “Though the training programme has and will continue to cost us money, we believe that it is truly worthy investment,” he added. “The Taj group,” says Srinivasan, “is an expanding organisation and we are a peopleoriented company. What we need are people who can match our organisational standards. We are also looking to create and ensure a constant supply of good quality HR professionals, which is why we decided to impart training of an extremely specialised nature to our management trainees. I have observed them at the end of the programme and must say that they appear all charged up and raring to go,” he remarked. The Taj-TISS joint programme is expected to create a demonstration effect in the industry with more hotel groups placing additional emphasis on the HR training programmes. To be a successful HR professional, what is required most is the aspirants’ ability to challenge themselves as well as their colleagues. Only then can they get the very best from themselves and their team. “Challenges in the HR field are immense and since it is so people-centric, it is only obvious that professionals should have strong peoplemanagement skills,” explains Srinivasan. Besides this, a right attitude towards the job and life in general is extremely essential. “As a manager myself, what I would look for in an applicant would be the ability to fit into my organisation perfectly and be emotionally balanced, competent and above all, be a cultural fit, fulfiling the basic values that the Taj is known for,” concludes Srinivasan. Promotion and Education They carry out their promotions by the means of calendars, monthly letter to their ‘Inner Circle Customers’, informing them about their upcoming events and offers. Taj has television advertisements on popular channels like CNBC, and print ads in magazines and newspapers. Taj takes part in exhibitions like wherein they promote their holiday packages. They also have special offers during the “off-season” etc. Also The Taj is the only hotel chain to personify itself and in promotion campaigns and advertisements the Taj is often referred to as “She” The print ads for the Taj are :Physical Evidence

The Taj Mahal Hotel was built in 1903. The architect was Sitaram Vaidya. It had a very ethnic look to it, which kept up their image of providing an Indian experience of warmth and hospitality. They realized that modernization is the name of the game and had The Taj redesigned by Mr. Chambers, Mr. Wilkes and Mr. Bernard from Singapore. Some of the recent renovations that have been carried out at the Taj are The exterior has been given a new and modern look while still retaining the old world charm of the building. The entrance has splendidly carved bronze and glass doors Soaring onyx columns stretch to a luminous alabaster ceiling; while underfoot, rich hand-woven carpets set off a magnificent floor painstakingly inlaid with semi-precious stones. The eclectic mix of western contemporary style and traditional Indian motifs creates a veritable feast for the The city's most exclusive restaurant, The Zodaic Grill provides a graceful setting for an intimate dining experience. Under a magnificent trompe l'oeil dome, they serve the finest gourmet cuisine complemented by an extensive wine list, as a classically trained pianist entertains patrons. Price and Other User Costs Taj realizes that their prices are high and not affordable by all, but this is due to various overheads that it incurs and the superior quality that it offers. For e.g. a roadside sandwich seller sells his sandwich for Rs.10 as he has no overheads and has no quality standards to maintain, like the quality of the bread and the vegetables. But at The Taj, they serve the best quality and also incur overhead expenses. Also the target audience that the Taj caters to are the one’s who come to the Taj for it’s ambience and world class standards, therefore they say that their prices are justified as they help The Taj retain the exclusivity that it stands for.

HOSPITAL – THE TYPOLOGY There are different types of hospitals serving the multi-faceted needs of the society. There is distinction in their structure, function and performance. This variation is due to their distinct nature and form

OBJECTIVES The first criterion for the classification is objective. Here the main objective of establishing a hospital is taken into consideration. Some hospitals are set up with the

motto of imparting medical education, training and research facilities whereas in some other hospitals, the prime attention is on health care. CLASSIFICATION ON THE BASIS OF OBJECTIVES

Hospital

Teaching cum Research

General Hospital

Special Hospital

Teaching-cum-Research Hospitals These hospitals are teaching based. They are found engaged in advancing knowledge, promoting the research activities and training the medicos. As for example, All-India Medical Institute, New Delhi, Post-Graduate Medical Education and Research Institute, Chandigarh, etc…

General Hospitals The general hospitals also offer teaching and research facilities but these objectives are secondary. The main objective in the general hospitals is to provide medical care. As for example, different medical colleges and district and sub divisional hospitals.

Special Hospitals The main objective of special hospital is to provide specialized medical services. These hospitals concentrate on a particular organ of the body or a particular disease. CLASSIFICATION ON THE BASIS OF OWNERSHIP (Hospital on the basis of Ownership)

Hospital

Government Hospital

Semi-Government Hospital

Voluntary Agencies

Private Charitable Hospital

The government hospitals are owned, managed and controlled by the government whereas the semi-government hospitals are found acting as an autonomous body. The

voluntary agencies’ hospitals are owned by the voluntary organizations whereas the private parties own the private charitable hospitals. CLASSIFICATION ON THE BASIS OF MEDICINE (Hospital on the basis of Medicine) 1. Allopathic 2. Ayurvedic 3. Homeopathic 4. Unani 5. Others Classification on the basis of size (Hospital on the basis of Size) Hospital

Teaching Hospital

District Hospital

Tehsil/Taluka/ Subdivisional Hospital

Primary Health Centres

On this basis, there are variations in the size of the hospitals. As such, the teaching hospitals generally have 500 beds, which can be increased according to the number of students. The district hospitals generally have 200 beds, which can be raised to 300 depending on population. The teshil / taluk / sub-divisional hospitals generally have 50 beds that can be raised to 100 depending on population. The primary health centers generally have 6 beds that can be raised to 10 beds.

PRODUCT Regarding product Kotler says a product is anything that can be offered to a market for attention, acquisition, use or consumption; it includes physical objects, services, personalities, places, organization and ideas. In the case of hospitals, different types of hospitals offer different services to their users. Some of the hospitals give an overriding priority to the medical education, training and research whereas some others concentrate their prime attention on medical treatment. The main product in a hospital maybe any of the following: • •

Medical Services Medical Training

• •

Medical Education Medical Research

Medical services can further be classified as follows: ♦ ♦ ♦ ♦ ♦ ♦

Line Services Emergency Out-Patient In-Patient Intensive Care Operation

The aforesaid classification of product is based on different categories of hospitals. The medical colleges and some of the medical institutes impart medical education, training and research facilities. It is natural that concentration on product varies depending on the nature of the hospital. However, it is right to believe that the ultimate aim of almost all providers is to make available the best possible medical services and to prepare and train the best medicos. Therefore it is essential that providers are aware of the nature, behavior, requirements and status of the users. This helps them in planning and development of the services in the background of users’ changing needs and requirements. The product should be developed keeping in mind the users’ psychology.

THE FORMULATION OF PRODUCT MIX The main products of hospitals are medical services. The services rendered by hospitals or public health centres occupy a place of significance, specially while designing the product mix. In addition to medical care, some hospitals also impart education, training and research facilities and some hospitals also educate and train paramedical officers, nurses and other technical staff. It is thus clear that the nature of the hospital governs the designing of product mix. The changes in environmental conditions, global efforts for acquiring sophisticated equipment and appliances also govern formulation of product mix. This makes it clear that in hospital services the designing of product mix is influenced by various factors.

MEDICAL CARE To give care to the sick, to render time-honoured services to the injured and restore the health of diseased persons are some of the important functions of a hospital. A number of hospitals are found engaged in rendering Medicare facilities and so their product mix would normally be confined to the offering of medical aids. It is right to say that the successful formulation of product mix depends upon the fullness of life of a patient after leaving the hospital. Thus while framing the product mix, all the services like line, staff and auxiliary divert a close attention.

ORGANIZING THE LINE SERVICES In the emergency services, the casualty services need priority attention. The casualty department of a hospital makes available round the clock services. This department is specially meant for patients having illnesses of grave nature requiring immediate treatment. It is also meant for injured persons. The success of this department depends on the intelligence and diligence of doctors, paramedical officers, nurses and so on. Here an emergency ward is needed to provide immediate treatment to needy persons. In the modern world of medical sciences this department has become an indispensable part of a hospital as the growing rate of urbanization and lack of traffic sense often result in major accidents. This department is expected to shoulder the special responsibility of removing emotional strain, suspense and anxiety of attendants in addition to the best treatment made available to patients. In order that emergencies are attended quickly and effectively it is necessary to have an efficient set up, well knit with other departments of the hospitals with well laid out procedure and work distribution. The casualty department needs to apply more precautions especially in cases of poisoning and accidents. The doctors have to honour legal formalities. But here legal procedures should not stand as a barrier.

Casualty Dept Reception & Enquiry Registration Examination Observation Admission

Dressing Discharge

Normal Health

Out patient Services

Death

In the out patient department all patients are examined irrespective of the degree of illness, whether minor or serious, acute or chronic. The OPD renders diagnostic, curative, preventive and rehabilitative services on an ambulatory basis. While constructing the OPD it is important that there is a gap between the indoor area and the OPD. At the same time it is also essential that it is well connected with the X-ray, laboratories and other supportive services.

OPD

Registration

Examination

Prescription

Investigation

X-Ray

Laboratory

Tests Report

Dressing & Treatment

Admission to in-patient ward & treatment

Discharge

In the formulation of product mix for hospitals, it is impact generating that OPD is given due weightage. This is considered essential to minimise the pressure on indoor services. The doctors, para-medical officers and nurses should be well trained so that users never feel dissatisfied. The examination or investigation of diseases is the most significant aspect of services rendered by the OPD. Writing prescriptions, dressing and treatment and further admission of patients to in-patient ward need time honoured arrangements.It is the most sensitive point where hospitals may be successful in projecting their fair image.

IN-PATIENT SERVICES After the examination of patients in OPD, they are advised admission to inpatient wards, if necessary. The patients are required to make decisions regarding their admission to a particular ward, whether private or general. Each ward requires a doctor’s duty room, dressing room, nursing staff station, and other facilities required for patient care like x-ray, operation theatre, pharmacy and pathology departments etc. The management should ensure that both general and paying wards are made available medical facilities without any discrimination.

INTENSIVE CARE UNIT While managing the line of services the management has to give due attention to the ICU which is considered to be the heart of the hospital. ICUs are meant for those patients demanding acute, multidisciplinary and special treatment. This unit is meant for patients of shock, coma, heart attack, lung, kidney and brain diseases etc. The staffing pattern of the ICU needs to be planned in a scientific way so that related patients get proper medical aid without a break or gap. The establishment of ICUs imposes extra financial burden but these units are so significant that an ideal hospital cannot ignore them.

OPERATION THEATRES Operation theatres play a significant role in the product mix of a hospital. While organising operation theatres management should make available technologically advanced and sophisticated equipment and appliances. The stand-by power arrangement, proper ventilation etc. also affect the performance of OT. Also OTs should be manned by efficient doctors, paramedical staff and nurses. Each OT should have a pre-anesthesia room and a sterilisation room. In addition there should be a scrub room for nurses and doctors. The OT also needs a close integration with the blood bank.

SUPPORTIVE SERVICES To enrich the hospital services certain supportive services are found to be important e.g. sterilisation, supply and maintenance of instruments, materials and garments etc. The catering department comprises the kitchen, bulk food stores and dining rooms and supplies meals in the hospital. Heated trolleys have to be used to transport meals to patients. Pharmaceutical services also occupy a significant place as they influence the treatment programme of a hospital. An official laundry is essential to provide bacteria free garments and clothes. The patients need to be provided with disinfected and clean linen. The laboratories need to be properly manned and proper

diagnosis needs to be given by them to enable right medical prescription. The establishment of laboratories should be between the OPD and indoors so that both areas are covered without delay or disruption. Clinical pathology, blood bank and pathological anatomy are important areas to streamline functional management of hospital laboratories. The radiology department should have hi-tech facilities keeping in mind patient load of the hospital. Currently ultrasound scanning and CAT scanning have been found significant in improving services of the radiology department. The nursing services are also important among supporting services. Nursing services are managed by a matron who is assisted by a sister-in –charge. The norms accepted by the Indian Nursing Council should be followed. An ideal nurse-patient ratio is 1:5 which is hardly found in Indian hospitals.

AUXILIARY SERVICES Auxiliary services consist of registration and indoor case records, stores management, transportation management, mortuary arrangement, dietary services, engineering and maintenance service etc. It is important that these services are maintained properly which would govern the successful operation of a particular department. The security arrangements, supplies, transport facilities etc cannot be ignored. For a hospital registration is a must as it helps in collecting statistics for a hospital e.g. admission , discharge and average stay of patients in the hospital. The central store issues bulk items. There are different types of stores like pharmacy stores, chemical stores, linen stores, glassware stores, surgical stores etc. For carriage of supplies and patients trolleys, wheelchairs and stretchers are used. The hospital also needs a cold storage or mortuary for preservation of dead bodies till they are claimed by relatives or for post-mortem. The dietics department plays a vital role as it provides the hospital menu to meet the needs of patients. The services of well qualified and trained dieticians help in providing nutritious diets. The engineering and maintenance services are concerned with hospital building, furniture and other equipment. A security force is essential to provide protection to the hospital property. Personnel related with defence or police should be given preference while appointing the security force. Thus the line services, supportive services and auxillary services are mainly concerned with medicare facilities available in a hospital. The designing of product mix is meant to make suitable arrangements for improving the level of services in all concerned areas and in this context the medical education, training and research services play a significant part.

MEDICAL EDUCATION: TRAINING AND RESEARCH The teaching hospitals are mainly engaged in offering medical education facilities. Research and training facilities are also made available in these hospitals where patients are used as inputs for teaching and research both by the teachers and by those who are taught. Medical institutes and medical colleges both offer education, training and research activities with one difference being that the institutes are specialised in a particular field and colleges are generalised.

PRICING The second component of the marketing mix is the pricing strategy. The pricing decisions keeping in view the Indian condition help hospitals in subserving the interests of general masses. To be more specific in the developing countries like ours where the level of income of the general masses is found low, it is significant that pricing decisions are liberal to the economically weaker sections of the society. The pricing management of a social institution becomes complicated as the policy makers are expected to assign due weightage to social considerations. The people living in a welfare state have high hopes and aspirations from the government. They like cost-free services, albeit they belong to the affluent sections of the society. Naturally it jeopardizes the task of top management. It is rather impossible that the government more so in an over populated country makes available world-class services to all without charging any fee. Moreover, it is also not rational that we expect free services, though bear the capacity to pay. The application of marketing principles in the hospitals aims at pricing the services in tune with the paying capacity of our population. If we earn nothing, we are expected to pay nothing. If we earn something, we are expected to pay something. If we earn more, we are expected to pay more. The quality of services should not be allowed to deteriorate, albeit our development plans impose on the users some additional financial burden. It is paradoxical that the developing countries have been encouraging degeneration in quality simply to avoid a basic change in our policy decisions. The marketing principles advocate that the benefits of the latest developments should be made available to all. The services should be free or subsidized or cost based or cost plus subsidy compensating depending upon the paying capacity of our users. None of the socialistic doctrines never allow degeneration in quality. The strategies help us in projecting our image. Not only this, if the strategies are welfare oriented, the task of satisfying the users is also simplified. But the satisfaction depends upon sophistication. And sophistication can’t be possible unless we change our pricing strategies. In the Indian setting, a good number of hospitals are managed and maintained by the government. Some of the hospitals are managed by the charitable trusts whereas some other hospitals are managed privately. The government hospitals generally adopt cost-free pricing strategies whereas the trusts and private hospitals adopt subsidized or cost based pricing strategies. In a few cases, some of the private hospitals also adopt cost plus subsidy based pricing strategies. The main thing in the pricing strategy is to link it with the paying capacity of the users so that all the classes get medical aids without any discrimination. Free Services: All categories of hospitals should adopt cost-free services to the weaker sections of the society having no source of income for paying even the nominal charges. In this context, the trust hospitals and the private hospitals should be given special grants to avoid an imbalance in their financial management. To some extent, the private hospitals should also be allowed to continue with the cost plus subsidy strategy for the affluent sections of the society which would help them in compensating the losses on account of free services made available to the weaker section.

Subsidised services: The users belonging to the low-income group should be made available subsidized services. It is meant that the public or the private hospitals make nominal charges for the services made available to them. It is more or less clear that subsidized services are a bit lower than the cost involved on treatment. Both the central and state governments would give the subsidies. Another alternative is to allow hospitals to adjust the losses by charging more from the affluent sections. Cost-based Services: this is based on the principle of no-profit, no-loss. Or say, the cost based strategy in which prices or fees are equal to the costs involved on treatment. Cost plus Subsidy: this strategy allows charging more than the costs involved on services but only from the affluent sections and transferring the surpluses to the account of subsidy for compensating the losses on account of providing free or subsidized services to the weaker sections and low income group users. No doubt the hospital is a service generating social institution where this practice may invite multi cornered comments but we find no alternatives, as degeneration in medical services can’t be allowed to move upward. If we welcome it, the avenues would be paved for expansion and modernization of hospitals.

Subsidised Cost-Based Subsidy Cost Plus Subsidy Public Hospitals

Private Hospitals

Segment

No – Income

Low – Income

Middle - Income

High - Income

No doubt the standard of services would be uniform but the fee charged for the services would vary. This would help hospital organizations in charging more from high and middle income groups, charging equal to cost from the low income group and making available free services to the no-income group. The dependence on the exchequer would be minimized but the doors would not be closed for initiating qualitative or

quantitative improvements. Another important advantage of this segmentation is concerned with implementation of modernization and expansion plan for the hospitals. The hospitals in general fail in making available to the users the modern facilities due to inadequate funds. This obstacle would be removed when marketing strategies are based on this principle. Further this would also simplify the task of doctors, nurses and other staff specially relating to the study of their behavior. For satisfying the users, it is only not essential that they are made available the best possible medical aids. In addition to the medical aids, the behavioral aspect is also found impact generating, especially when we consider marketing a customer satisfaction-engineering tool. It is natural that the expectations of all groups can’t be uniform. On one hand, it is judicious that no discrimination is found in respect of making available the medical aids but on the other hand, we can’t adopt uniform policy while making available to the users and their attendants other facilities like standard of room, indoor facilities and other non medical amenities. This is justified on the ground that all groups are not paying equal fees for availing their services. Moreover when no income group has been availing the services without paying any fee, their expectations would not be more than the proper medical aids. The main purpose of segmenting the market in the hospital services is to study the uniqueness. PLACE Place refers to the contact point between the service provider and the customer. Two main issues considered regarding the decision of the place are accessibility and availability of the service to the customer. PROMOTION Recently, the administration and management of hospitals has gained prominence allover the world. Albeit the developing countries have shown their interests in managing the service generating organizations in general and the hospitals in particular. The management of a social service organization like a hospital is a difficult task. It is, ofcourse, thorny especially in the developing over-populated countries like ours where degree of illiteracy has complicated the task of generating health consciousness. The multi-prolonged health hazards are found instrumental I contracting the resistance capacity of general masses but unfortunately they are not in a position to get the required medical aids. The exchequer finds it difficult to offer free or subsidized services to the masses. On the other hand, the technological sophistication has raised the cost of services as the inputs used in making available the medical services are found costly due to rising inflationary pressure. All these things necessitate application of marketing principles in hospital management. The main purpose of applying the marketing principles is to satisfy the users and to raise the service generating capacity of hospitals. It is found that marketing principles have been successful in making an assault on multi-faceted problems and this most neglected service generating social institution has failed in making available to its

users world-class services. The marketing experts advocate that application of marketing principles in the hospital services would raise the efficacy of hospitals visà-vis would act as a customer-satisfaction-engineering-tool.

PEOPLE It is necessary that the staff in the hospital is trained to provide quality patient care with the help of state – of - the - art technology. The objective of providing quality service to patients can be achieved by: 1. Motivating employees to be efficient, dedicated and loyal to the organization. 2. Providing regular on – the – job training of employees to ensure continuous improvement in health care 3. Utilising services of professionally competent medical consultants. 4. Use of the latest technology.

Motivation is not necessarily by giving high salaries. There are many other ways to motivate employees – concessions should be given to the employee’s near ones and there should be active participation of the employees in the activities of the hospital. PROCESS Process is a set of activities that take an input, convert it and add value to the input and finally, create an output. Processes are designed by blueprints, which sets a standard for action to take place and to implement the service. A process is divided into the following phases in a hospital: 1. The joining phase – which includes  The arrival of the patient  Registration – where a patient has to make an initial deposit at the inpatient billing counter after which a file is opened in the patient’s name to know the patient’s medical history 2. Intensive consumption phase – which includes  Diagnosis – where the consultant diagnoses the illness by making the patient undergo various tests  Treatment – where the illness is treated with proper medication or surgery  Information about further actions – the consultant will instruct the patient regarding the diet to be followed, the medication to be taken etc. 3. Detachment phase – which includes  Discharge of the patient  Payment – after the patient is discharged, the bill will bee paid at the billing counter. 4. Feedback – at this stage, the patient is requested to fill an evaluation form, which helps the hospital authorities to know the level of satisfaction derived by the

patient. Patient’s suggestions are always considered for improving the hospital services. PHYSICAL EVIDENCE Physical evidence makes a huge impact on the customer. Physical evidence provides customers means of evaluating the service. Corporate image plays an important role in terms of physical evidence. This can be developed with corporate relation programs. Modern hospitals need to create a good ambience. This ambience plays an important role because when a patient walks into a hospital, he immediately forms an opinion about the hospital. The staff should follow a dress code to show professionalism and maintain discipline. The staff also needs to be trained to be understanding, warm and comforting because the clientele that goes to the hospital is usually disturbed or unhappy. It is necessary for a hospital to be well organized and segregated into different departments. All the doctors should be provided with a well – equipped cabin. If possible, the hospital should be centrally air – conditioned. However, good lighting and ventilation is a must. Special care should be taken to maintain hygiene; cleanliness and the whole hospital must be well – lit. This is generally taken care of by the housekeeping department. A hospital has to keep in mind both the aspects of physical evidence that is essential and peripheral evidence. Physical evidence plays an important role in a hospital where the patients are already depressed or traumatized and a good atmosphere could make all the difference. PRODUCTIVITY AND QUALITY Productivity in services is how we transform the inputs into outputs, which are valued by the customer. Quality is the degree to which the service satisfies a customer by meeting their wants and expectations.

INTRODUCTION TO BREACH CANDY HOSPITAL

Breach Candy Hospital, a multispeciality hospital, is situated on the coastline of South Mumbai and has an atmosphere of quietude and unpolluted air. It is a Private Charitable Trust hospital. The hospital is renowned for its excellent medical expertise, nursing care and quality of diagnostic reports. The hospital has earned national recognition as a leader in interventional cardiology. Many techniques in routine use including Coronary Angioplasty, Magnetic Resonance Imaging and Hysteroscopy were first performed here. One of the first ICU's in the country was established here. The hospital is continuously in tune with the latest technology that promotes the health care and well being of the patient.

ORGANIZATION STRUCTURE: Chairman / Board of Directors

CEO

Director Medicine

Director Engineering

Director Nursing

Finance Controller

Director Administration

Director Personnel

THE 8 PS OF SERVICES MARKETING FOR THE HOSPITAL SECTOR PRODUCT In the hospital sector, product covers issues such as service package, co-services and peripherals, managing the service offering ands developing the service offering. Breach Candy offers the following services: LABORATORY SERVICES Pathology caters to all sub-specialties of pathology, providing a comprehensive range of tests necessary to diagnose various medical problems. The department has an envious position of being the center for Quality Check referrals from outside. The department is equipped with the latest technology, fully automated machines, which are manned by well-qualified & experienced staff, both Medical & Paramedical. Blood Bank of the Hospital, approved by the FDA is recognized as one of the best in the city. Facilities are available for autologous transfusion & blood component therapy. Surgical Pathology, Cytology & Immunohistochemistry Section uses a wide spectrum of tests for analyzing specimens removed from patients, either at surgery or biopsy. The department offers High Quality accurate reporting on routine & frozen sections and consultation material obtained from clinicians in various specialties. Over the years, it has earned an outstanding reputation for Cancer diagnosis and functions as a referral laboratory of the Indian Cancer Society. FUNCTION TESTING SERVICES Pulmonary Function and Stress Test department is equipped with the latest state of the art technology and manned by well-trained & experienced staff. Procedures here are continuously upgraded to reflect the latest test standards. It is one of our busiest outpatient departments. Cardiac Catheterisation and Interventional Cardiology laboratory has a highly qualified & experienced team of professionals, besides availability of latest technology. India's first Coronary Angioplasty and city's first Rotablator procedure was performed in our hospital. Balloon Angioplasty for mitral valve disease, correction of certain congenital heart defects, Pacemaker implantation are commonly performed procedures. The success & safety rates of interventional procedures match those in the best units in the world. The EEG & Evoked Potentials Unit- the department is reputed for its quality of Neuropsychological reports DIAGNOSTIC IMAGING SERVICES

Spiral CT Scan: The hospital is equipped with the fastest and the most advanced 'subsecond spiral' CT scanner with unrivalled features that can scan the whole or parts of the body. 3-D pictures of the sections can be reconstructed as colour images. Conventional Radiology : Used to detect variety of disorders, particularly problems related to chest, abdomen, bones, gastrointestinal tract and kidney functions. Mammography: Offers a screening test for early detection of Breast Cancer. Magnetic Resonance Imaging. We have a 1.5 Tesla unit, Philips Gyroscan-the most advanced MRI scanner capable of carrying out diagnostic and therapeutic procedures. Ultrasonography: An important imaging modality for Obstetric evaluations. Also an excellent means of evaluating the liver, gall bladder, and kidney, thyroid, prostrate and the orbit of the eye. Colour Doppler Sonography: Enables easy visualizing of arterial and venous systems of the body. Operation theatres: There are 8 Operation Theatres housed in three Theatre complexes catering to the surgical needs of all the patients. The OT's are dedicated to Cardiovascular Thoracic surgery, Plastic & Reconstructive surgery, Cosmetic surgery, Orthopaedic, Ophthalmology, Gynaecology, Nephrology, Neurosurgery, General surgery and others. Theatres 1,2,3 have been totally renovated and are the best in the country. INTENSIVE CARE SERVICES Medical Intensive care unit is regarded among the best ICU in the country, serving allpurpose critical care. The ICU pioneered intensive respiratory care in the country and set standards matching those in leading hospitals in Western countries. Surgical Intensive Care Unit looks after critically ill patients following major surgery including open-heart operations. It has an excellent record of recoveries. Neonatal Intensive Care Unit, staffed by a team of Peadiatric intensives and nurses give full range of services to critically ill newborn babies. High Dependency Unit serves as an intermediate care unit for patients recovering in the ICU but not well enough to be shifted to the ward. Daycare Surgery: Endoscopic & Laparoscopic Surgical procedures are conducted to reduce wherever possible, the length of stay & obviate the risk of open surgery. Artificial Kidney Dialysis Unit- Patients who’s Kidneys fail, either temporarily or permanently, are taken care in this unit with dialysis and kidney transplantation.

Maternity Services of the hospital are well renowned all over the country and abroad. The department of Obstetrics and Gyanecology offers comprehensive services, ranging from routine examination and family planning to highly specialised procedures. Common problems treated include abnormal bleeding, uterine fibroids, pelvic infections, endometriosis and loss of bladder control. The technique of hysteroscopy in India was first performed in our hospital. Peadiatric facilities cater to all health care needs of children, from birth to adolescence. The hospital conducts a 'well-baby clinic' that offers immunisation, monitors growth and development of children, and counsels mothers on nutrition and other child related issues. Outpatient and Casualty services are available for immediate care and treatment. Physiotherapy department offers its rehabilitative services the clock. A popular feature about this department is Antennal classes to prepare for labour and delivery and postnatal exercise classes for new mothers. Speciality Clinics include Sports Medicine, Dietetics & Weight Reduction, Rheumatology & Neurosurgery Health Check-up Schemes ranging from pre-employment check-up to complete medical evaluation along with consultation are offered on all weekdays, except public holidays and Sundays. Ambulance services: The ambulance services are outsourced.

PRICING: Price is one of the most prominent elements in the, marketing mix. Prices charged by the hospitals usually depend on treatment prescribed by the consultant and the facilities offered to the patient. On admission, an initial deposit is collected at the in-patient billing counter. The amount depends on the category of room and the treatment / surgical procedure planned. Various categories of rooms ranging from a shared room to the deluxe suite are available. Room Charges and Deposits at Breach Candy Hospital: GENERAL: Room Category Deluxe New wing Single Rooms (West) Single Rooms (East) Single Rooms (Shared Bath) Double Shared Room Non – A/C Single Room

Tariff (Rs.) 4,500 4,200 3,000 2,500 1,500

Deposit (Rs.) 40,000 40,000 30,000 25,000 20,000

1,300 1,200

20,000 20,000

(Shared Bath) MATERNITY: Room Category Deluxe Maternity Single Room (With Attendant Couch) Single Room Single Rooms (Shared Bath) Double Shared Room (Shared Bath) Shared Room (Shared Bath) Labour Room

Tariff (Rs.) 4,500 3,500

Deposit (Rs.) 20,000 20,000

3,200 2,400

20,000 20,000

2,200

20,000

1,300

20,000

1,800

INTENSIVE CARE UNITS: Room Category Surgical Medical Neonatal 1 Neonatal 2 High Dependency Unit Day Care

Tariff (Rs.) 5,000 5,000 3,500 2,200 3,200 900

Deposit (Rs.) 40,000 40,000 35,000 30,000 30,000 20,000

The in-house doctors are paid salaries by the hospital as per the hospital norms whereas the visiting doctors decide the fees in consultation with the patients and only 10% of this fee is retained by the hospital. All the billing transactions are done through the hospital.

PROMOTION: Hospitals do not normally undertake aggressive promotion; they rely a lot on favourable word of mouth. They conduct camps in rural areas to give medical check ups at reasonable prices, they sponsor visits to old age homes etc. they continuously introduce different health services and they generally advertise in health and fitness magazines. Breach candy hospital does not have formal promotion schemes because it is already an established brand. However Breach candy has the Godrej charitable wing, which was set up in June 1979 to offer free medical aid to underprivileged patients. As of now there are 24 beds in this wing. The hospital also conducts free pediatric camps and eye camps. They also offer free check ups and free treatment to outpatients from time to time. Breach Candy’s clientele consists of a lot of celebrities, who, when admitted, are spoken about in the newspapers which gains a lot of indirect promotion for the hospital.

Some of the celebrities who have been treated by this hospital are the Prime Minister Mr. Vajpayee, Mr. Dhirubhai Ambani, Shammi Kapoor, Shahrukh Khan, etc. The hospital has tie-ups with 150 corporate companies and consulates, which brings them a lot of business and also, helps in promoting the high – class quality of service they provide. Corporate Tie-ups - entitles executives to consultation and admission without payment formalities. The bills are settled directly by the company, simplifying the admission and discharge procedures for selected employees. Regular correspondence is maintained with their corporate clients, they are sent brochures and flyers regularly.

PLACE: Place refers to the contact point between the service provider and the customer. Two main issues considered regarding the decision of the place are accessibility and availability of the service to the customer. Breach candy is located at a convenient spot especially for its clientele. Breach Candy Hospital, a multispeciality hospital, is situated on the coastline of South Mumbai and has an atmosphere of quietude and unpolluted air.

PEOPLE: Service personnel play an important role in an organization, which provides services. In a hospital the behaviour and attitude of the personnel providing services is very important as far as the customers overall perception of the service is concerned. It is necessary that the staff in a hospital is trained to provide quality patient care using state of the art technology. At breach candy hospital many specialists attached to the hospital are nationally and internationally recognized for their contributions to the field of medicine and surgery. A few well known doctors attached to this hospital are Dr. Bhattacharya (Cardiologist), Dr. Sunawala ( Gynaecologist), Dr. Udwadia (Surgeon) etc. Personalized care by nurses is one of the greatest strengths of the hospital. Breach candy is renowned for its excellent nursing care spanning the length of the patients stay from admissions to discharge. Each patient is the focus of individual attention. Nurses form an integral part of a patient’s health care team. This hospital maintains a ratio of 1:4 nurses for its patients, which is higher than the standard ratio of 1:5. In the I.C.U. the ratio is 1:1. Although this hospital is not a teaching cum research type hospital it provides courses in Critical Care Medicine to its junior doctors.

PROCESS: In a hospital the process is divided into the following phases:  The joining phase,  The intensive consumption phase, and  The detachment phase and feedback. Now we will be considering the process blueprint of an Emergency / Police Case Patient brought in emergency to the hospital

Police Case

Inform the local police

Police arrives

Inquiry by the police at the hospital

Statement of the patient

Non - Police Case

Patient rushed to the Emergency

Attended by the doctors

Patient stabilizes

Relatives/patients have to do the paper work, pay the deposits and complete all the formalities of the hospital.

PHYSICAL EVIDENCE: Physical Evidence is the environment in which the service is delivered with physical or tangible commodities and where the service provider and the customer interact. The Breach Candy Hospital is situated at sea-side and its verandah facing the sea is very helpful in the recovery of patients. Good hygiene standards are maintained. Also, exotic food menu is available to the patients including continental food. When the Prime Minister Mr. Vajpayee was admitted in the hospital, his PMO was operating his office work from the hospital and an entire floor was booked for the PM’s officials who were residing there for that duration. Patients interact daily with nurses and ward boys who have to be extremely polite and understanding. At Breach Candy, any customer complaint is recorded in a daily Complaint Record Book and action is taken immediately to rectify the problem.

PRODUCTIVITY AND QUALITY: Productivity in services is how we transform the inputs into outputs, which are valued by the customer. Quality is the degree to which the service satisfies a customer by meeting their wants and expectations. Medical Research Centre : The Research Centre is recognized by the Indian Council of Medical Research and the Department of Science and Technology, Government of India. Its activities include regular weekly clinical meetings in which interesting cases and advances in medicine are presented. The Library attached to the Research Centre offers a strong collection of books and journals, carefully selected to meet the needs of the hospital staff. It also provides access to MEDLINE, the world’s largest medical database. The research centre continuously strives to improve the medical care given to patients by devising better ways of preventing, diagnosing and treating diseases. Studies are carried out using powerful new technologies based on molecular biology. Special areas of interest include Breast Cancer and infections. Breast Cancer: Currently the Surgical Pathology staff is conducting studies to identify early pre-cancerous changes in the breast using tumor markers. The aim is to devise tests for screening and early detection that will help to reduce deaths from breast cancer. By studying patients from various ethnic and religious groups, they also hope to discover whether genetic factors are responsible for the differing prevalence of breast cancer among various communities in India. Infections: The Microbiology department is carrying out research to probe the pattern of hospital infections and their response to antibiotics, concentrating on the drug resistance level of a common hospital pathogen, Staphyloccus aureus. The goal is to identify the

most effective antibiotics for controlling hospital acquired infections. Among communityacquired infections, tuberculosis is by far the most lethal. To expedite the diagnosis of TB, the Molecular Medicine Laboratory has developed an advanced technique known as polymerase chain reaction (PCR) which gives accurate answers within two days. As the only centre in Mumbai offering PCR diagnosis of TB, the hospital receives TB samples from various institutions. There are 150 beds along with 24 for the underprivileged. Their staff sums up to 900 with the ratio of nurses to patients cming to 1:4, which is higher than the standard of 1:5. There is a Central Report Center, which gives all the medical reports regarding a treatment of any patient at altogether instead of the patient having to visit several locations for various reports. Since their ambulance service is outsourced from three to four different areas in the city, it increases productivity as it is more accessible and convenient for the patients. There is constant improvement in nursing as well as personalized care.

INNOVATION: Hospitals will soon go hi-tech, not so much in terms of sophisticated medical equipment, but in that a patient’s kith and kin can virtually visit him/her from any part of the world and the patient too can communicate with them and relieve their undue anxiety. Bangalore has emerged as a pioneer in the design of an interactive website used in making virtual visits to hospitals, thus introducing a human element hitherto, unthought of. This breakthrough in the usage of information technology for patients was achieved by the Bangalore based ‘Think Ahead Incorporated’, in designing he website for a hospital. The primary advantage of this technology is the mitigation of undue anxiety of relatives particularly, sons and daughters, children of patients who are settled abroad – who cannot be at the bedside of the patient undergoing treatment for a heart ailment or a major surgery. The ‘Virtual Family Visit’ allows relatives to see real time images of patients through audio – visual files which can be downloaded on their computer by entering the hospital website through the Internet. These files of the patient are shot by the hospital using a webcam to show the convalescing patient and his message for his family members. The files are then uploaded in the hospital website. The family members can also communicate with the patient by way of sending online get well card to patients. Besides, they can also get reports of the patient’ condition from the doctor in-charge, if the relatives so desire. Wockhardt Hospital, where the virtual family visit is in use, the relatives are physically able to see their near and dear ones recuperating from the treatment which avoid emotional trauma. This facility in hospitals is particularly useful when a relative is unable to rush to the hospital to be physically present due to various reasons. Besides,

the patient himself is to be on the road to faster recovery when he communicates with his loved ones. The use of web technology for virtual hospital visit is said to be the first of its kind in the world. The claim may be true considering that family bonds in the country are very strong and even extends to close relatives. It may also be one of the reasons why such a facility had not been thought of in other parts of the world. Besides, scaled – down joint families are still prevalent where this technology would come in handy. The success of this facility is revealed by the fact that there were as many as 8,000 hits within two months after its introduction some time in May, 2000. ANSWERING A CASE STUDY…….

1. READ, RE-READ AND UNDERLINE KEYWORDS/ PHRASES 2. EXAMINE THE ENVIRONMENT, INDUSTRY. DOES THE COMPANY (ABC, XYZ, ETC) REMIND YOU OF ANY COMPANY YOU HAVE READ ABOUT? 3. LOOK FOR DATA ON AGE SEGMENTS, INCOME GROUPS, EDUCATION, LIFESTYLE DIMENSIONS 4. IF THERE ARE GAPS IN THE INFORMATION PROVIDED MAKE SUITABLE ASSUMPTIONS WITH BRIEF JUSTIFICATION 5. APPLICATION OF CONCEPTS – STATE THE CONCEPTS USED DO NOT EXPLAIN THEM. 6. TYPICALLY A BMS CASE STUDY HAS 3 QUESTIONS – THEY DO NOT EXPECT A TOTAL SOLUTION. FOCUS ON THE QUESTIONS POSED. 7. TRY AND LINK THE THREE QUESTIONS SO THAT THE ANSWER FLOWS LOGICALLY

ALLOCATE YOUR TIME IN PROPORTION TO THE MARKS ALLOTTED SHL 1. WAS THE CEO RIGHT IN FIRING THE SALES FORCE T&D CELL INCHARGE? WHY? (5 marks) • Why did they fail? o What is the selling environment? o What is the selling methodology?

•

o What was the selling experience they had? o Which markets had they worked in? o Did they have any prior experience of working in these markets? What are the pre-requisites for a salesman to be successful in rural markets?

2. WHY DID THE SAME STRATEGY NOT WORK IN RURAL AREAS? (10 marks) • SHL had made some assumptions o No test marketing in semi-urban markets o Demand pattern, consumer profile and behaviour was assumed to be similar o No specialized training for selling techniques, required attitude for rural markets

•

Profile the rural consumer (Key decision maker) for durables o Occupation o Income o Age

Identify the hurdles the company would face 3. PROPOSE A MARKETING STRATEGY FOR RURAL MARKETS (5 marks) •

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

•

•

•

IDENTIFY THE TARGET SEGMENT CLEARLY IF YOU THINK NECESSARY YOU CAN MENTION GEOGRAPHIC ZONES WHERE MARKETING ACTIVITY SHOULD BE FOCUSED (e.g. south more open to technology products, mindsets not so rigid) Before stating your proposed strategy identify factors that will influence consumer purchase behaviour : • Infrastructure – e.g. voltage fluctuations, piped water • Cultural practices prevailing – e.g. common washing areas, decision making by male head • Preferences for larger size products, colours • Influencers : mahajan, panchhead, youth

Product o Categorically mention that the urban offering can not be extended o Product variants o Features o Operating instructions o Positioning, Branding (pneumonic, name) Price o Value o Cost-benefit Promotion o Region specific message (language barriers)

o o o o o o o •

Product information Create product experience – demos, free washes Awareness & interest ? Conviction, purchase? : POC Which unconventional media? Databasing : postmasters, mandal chiefs Service support

Distribution o Retail push : POS o Haats, melas?

TOURISM - SWOT ANALYSIS STRENGTHS a. India's geographical location. A culmination of deserts, forests, mountains, and beaches. b. Diversity of culture i.e. a blend of various civilizations and their traditions. c. A wealth of archeological sites and historical monuments. WEAKNESSES a. Lack of adequate infrastructure. b. A xenophobic attitude among certain sections of people. c. No proper marketing of India's tourism abroad. Foreigners still think of India as a land of snake charmers. OPPORTUNITIES a. More proactive role from the government of India in terms of framing policies. b. Allowing entry of more multinational companies into the country giving us a global perspective. c. Growth of domestic tourism. THREATS a. Economic conditions and political turmoil in other countries affects tourism. b. Aggressive strategies adopted by other countries like Australia, Singapore in promoting tourism. The important task is to get tourism accepted as an instrument of development and national integration. For this it is necessary to create awareness of India's charms as a tourist paradise and simultaneously addressing the important issue of toning up infrastructure and then getting down to marketing the product in a pragmatic and result oriented manner. All segments of the tourism trade should get together and hammer out a strategy taking into account the ground realities and demands of the future.

TRENDS IN THE TOURISM INDUSTRY IN INDIA New trends, are being developed by the government to expand the activities under the tourism industry like: ECOTOURISM: Eco tourism is defined as responsible travel to natural areas and sustains the well being of local people. It is further an amalgamation of interests arising out of environmental, economic and social concerns. Tourism has become one of the largest global activities and a way of paying for nature conservation and increasing the value of land. The flow of dollars can flow back into conservation and make it pay for itself. The WTO in its projections for the year 2000 estimates that around 1000 million people will be involved in global tourism. The number is likely to increase. India's share in the traffic will be around 2 to 2.5 million tourists or even more.Ways in which eco-tourism and nature-based tourism are being promoted include: · Eco-tourism projects in Kerala-Coconut Grove and Spice Village Resorts. · The Bangaram Island Resorts · Bekal Resorts, Kerala · Jungle Lodges and Resorts, Karnataka · The sustainable development project of Andaman. HERITAGE TOURISM: This is a new kind of tourism that has come up in recent times. The concept of Heritage tourism came up to aid & facilitate the curious guests attempt to get to know India's great traditions. It was realized that the historic homes could be maintained only with their appropriate reuse. The large Palaces of Maharajas set the trend by becoming five star hotels. The main charm is the individual attention & personalized services. The homes are modernized to meet the needs of today's International traveler, with adjoining bathrooms, running hot & cold water, modern plumbing, even perhaps a swimming pool. This kind of tourism was developed mostly for the international tourist who wanted to get the feel of traditional India. ADVENTURE TOURISM AND HOLIDAY TOURISM: India's vast geographical diversity provides a vast potential for adventure tourism. All tastes are catered to and there is something for everyone. From the gentlest to the fast placed, for the beginners to the experts. Besides this the prices here are lower as compared to international standards. Travel agents and tour operators very often specialize in certain fields, offering package deals for groups as well as individuals. Mountaineering, trekking and rock climbing, ballooning and hang gliding, camel treks and desert safaris, white water rafting and river exploration are some of the exciting possibilities. Apart from this there are sports like skiing, scuba diving and underwater coral viewing, angling, wild life and bird watching, golf, tennis, badminton, polo, swimming and motor rallies amongst other sports.

For the tourist in search of sun, sea and surf, there are beach resorts on the western and eastern coasts. MOUNTAINEERING: Scaling the Himalayan Peaks - the greatest adventure of all. The mighty mountains stretching across the northern borders of India have hundreds of peaks, many yet unscaled and inviting the intrepid mountaineer. The states of Jammu and Kashmir, Himachal Pradesh, Uttar Pradesh and Sikkim offer bases for mountaineering expeditions.There are agents who can make all the arrangements for groups or individuals including food, transport, porters, camping equipment, etc. The best season for mountaineering is from May to October and six months notice is required to book a peak. TREKKING: The spectacular Himalayas are the abode of snow and evoke unmatched feelings of reverence and excitement and offer wonderful bevy of trekking routes. Peninsular India offers natural beauty of another kind for trekking. The Western Ghats, the Aravalli Hills, the Satpura range and the Nilgiri mountains have a rich heritage of flora and fauna, each with a special lure of its own. Treks can be taken along the remote areas or the route pilgrims have trekked year after year to remote shrines in the mountains. The season for trekking is April to June and September to November with regional variations. No system of permits exists in India but trekkers should not enter any restricted areas. ROCK CLIMBING: Especially popular in the foothills of the Himalayas wherever there are rocks and hills, stiff climbs and sheer mountainsides - rock climbing is a popular sport.

BALLOONING: In its infancy this sport is available only in Delhi. The Balloon Club of India at Delhi's Safdarjung Airport is the takeoff point and has its headquarters within the complex. HANG GLIDING: Recently introduced in India Hang Gliding is available at Pune, Devlali, Mumbai, New Delhi, Chandigarh, Shimla and Banglore. Kangra and Kasauli are developed as major hang-gliding centers. CAMEL TREKS AND DESERT SAFARIS: The great Indian Thar Desert provides the scene for exploring the old desert routes on camel back or for the less intrepid in camel carts. Jeep tours can be taken over remote desert tracks that are rarely taken by tourists. Jodhpur, Jaisalmer and Bikaner are the starting points for such tours with stops at villages en route.

WHITE WATER RAFTING AND RIVER RUNNING: The mighty Indian rivers tumble and crash through the mountains to form white water rapids and terraced cascades. This is a paradise for the white water sportsmen. Ladakh and Zanskar valley in Kashmir, Lahul valley, the Garhwal Hills and Sikkim are some popular areas. The Indus, Zanskar, Ganges, Ravi, Beas, Chenab and Teesta are rivers with both rough and calm waters for both beginners and experts. These rivers are excellent for canoeing and kayaking. WINTER SPORTS: Gulmarg in Kashmir is India's most popular and developed ski resort with most modern equipment. There is an institute of skiing and mountaineering, which offers training courses. The Gulmarg - Khilanmarg route is a great experience for ski mountaineering enthusiasts. Kufri also offers skiing. Along the Rohtang pass, skiing is possible in summer also. Shimla offers ice-skating, figure skating and speed skating. MOTOR RALLIES: Through out the year many rallies are held whose dates can be obtained from the nearest tourist office. The Himalayan car rally attracts international participation and goes through the mountains of Himachal Pradesh and Uttar Pradesh. BEACH RESORTS: The extensive coastline of India has excellent virgin beaches unspoilt as yet by man. The best-developed beach resorts are at Goa, Kovalam and Mahabalipuram. Excellent water sport facilities are available at these three centers. There are other resorts in smaller cities along the coast of India. SCUBA DIVING: The best spot for scuba diving and snorkeling is at the Andaman Islands, which has a vast plethora of coral and marine life that is equally interesting to the tourist and naturalist. This clear water permits exciting under water photography for enthusiasts. WILDLIFE TOURISM: The Indian subcontinent provides vast variations in geography and climate, which results in diversity in habitats and wildlife. The Himalayas offer a wide spectrum of landscapes and wildlife. Tropical forests in its eastern extremity contrast with pine and coniferous woodlands of western Himalayas. Natural cover varies with altitudes and these evergreen forests are bounded with high alpine meadows nearer the snowline and temperate forests of short stout trees in the lower elevations. In the foothills are the deciduous trees, with shrubs, bamboos, fern and grass. The northern plains, the course of holy rivers, the great Thar Desert and the Sundarbans, the marshy swamplands, the volcanic rock of the deccan plateau all provide fascinating habitats that sustain over 350 species of mammals, 2100 kinds of birds - local and migratory, nearly 350 species of reptile and countless insects. India currently has around 80 national parks and 441 sanctuaries dotted around the country. While some are inaccessible others have excellent facilities for the visitors. The thrill of spotting herds of wild elephants, deer, a rhino or even a tiger in its natural environment is very difficult to match.

BUDDHIST CIRCUIT AND PILGRIMAGE TOURISM: Pilgrimage tourism is a major segment that contributes to the growth of employment and local economic development. The National Action Plan announced in the parliament in 1991 recognized pilgrimage tourism for the first time in the country. Temples and tourism go hand in hand and with the increase in the number of temples the tourism industry also grew. Today more than 50% of the 9.2 million domestic tourists travel to visit various places of worship starting from the Ganges to Rameshwaram and Vaishnodevi to Valankini. In 1998 more than 95 lakh people assembled at the Kumbh Mela, the largest and the last of its kind in the 20th century. Another standing example is Tirupati in the south. It is also an example of the best temple management in the country. It has devised methods by which every devotee pays for the service they get. The government recently identified 17 places of pilgrimage for developing The country has embarked on the right path. Upgrading existing infrastructural facilities and adding new ones should definitely help tourism industry to tap the enormous existing potential. 8 P’S OF SERVICES MARKETING: RAJ TRAVELS

PRODUCT ELEMENTS BENEFIT 1. CORE BENEFIT 2 BASIC PRODUCT 3 EXPECTED PRODUCT

WITH RESPECT TO THE TRAVEL AND TOURISM INDUSTRY The fundamental benefit or service that Traveling the customer is buying Ticketing, hotel reservation Basic, functional attributes MEANING

Set of attributes/conditions the buyer normally expects

4 AUGMENTED PRODUCT

That meets the customers desires beyond expectations

5 POTENTIAL PRODUCT

The possible evolution to distinguish the offer

Customer friendliness, good food Prompt services, comfortable and convenient trip, spectacular sights, music Totally customized tour packages, A grade service at every stage

The services a product offers consist of three levels. The first level is that of the basic service package which includes core service, facilitating services and supporting services. In the case of the travel and tourism industry, the core services would include traveling, ticketing, hotel reservations, food services etc.

The second level is that of an augmented service offering where accessibility, interaction and customer participation is given equal importance in delivering the service product.

Accessibility of Service -N umber and skills of personnel -Working hours and time used in performing various tasks -Location of service outlet -Exterior and interior of service outlet -Infrastructure, hardware, documentation -The number and knowledge of consumers simultaneously involved in the process Interaction with service organization -Interactive communication between employees and customers Interactions with the physical and technical resources of the organization needed in the service production process -Interaction with other customers involved in the process. Customer Participation How well is the customer aware about the process of service delivery and his or her role -How well is the customer prepared to share information -How well is the customer willing to share information or use the service equipment The third level is that of the market communication of the service offering as in its absence the augmentation service package does not have any relevance to the customer. THERE ARE VARIOUS PRODUCTS AND SERVICES OFFERED BY RAJ TRAVELS . THEIR CORE PRODUCT, ARE TOURS WHICH ARE MADE AFTER A LOT OF RESEARCH AND TESTING.THEY HAVE VARIOUS INTERNATIONAL AND DOMESTIC TOURS . SOME OF THE MOST POPULAR ARE EUROPE, FAR EAST, USA, SOUTH AFRICA , MAURITIUS ,AUSTRALIA AND NEWZEALAND. THESE PRODUCTS ARE WELL DESIGNED AS THESE ARE ALL INCLUSIVE PACKAGES AND THERE ARE NO OPTIONALS . SINCE THE BEGINNING RAJ TRAVELS BELIEVED IN SELLING THE RIGHT PRODUCT AND NEVER BELIEVED IN SELLING PRICE . THE DESTINATIONS ARE WELL CHOSEN KEEPING IN MIND THE GENERAL TASTES OF INDIAN FAMILIES AND THEY OFFER THE BEST OF SIGHTSEEINGS AT AN ALL INCLUSIVE PRICE .TICKETING ,PASSPORTS ,VISAS , FOREIGN EXCHANGE , INSURANCE ARE A BUNDLE OF OTHER SUPPLEMENTARY SERVICE ELEMENTS SURRUNDING IT . CUSTOMERS ARE BENEFITED BY THIS AS THEY GET AN ALL INCLUSIVE PRODUCT FOR WHICH THEY HAVE TO PAY FOR ONLY ONCE AND THERE IS NOTHING MORE THAT THEY HAVE TO PAY WHEN TRAVELLING .

PLACE Because of intangibility (from production to sales) of services, they cannot be stored, transported and inventoried. Hence traditional distribution channels available for product marketing like wholesalers and other intermediaries cannot be used. Even the retailing cannot be an independent activity. Similarly, because of the inseparability, i.e., in case of services production cannot be separated from selling, services must be created and sold at the same time. These two characteristics make the channel very short and direct. Most services are distributed through direct sales. At best one agent or middleman can be added to it, like in the case of insurance, travel agency, courier service, etc. So we see that there is a little controversy regarding the distribution of services. There is one school, which says that since the service cannot be separated from the producer of the service, direct selling sales channel are the only method of distribution available for services. The advantage of direct selling is that the service can be offered to the customer at a lower cost. The other school partially disagrees with this theory and suggests that it is possible to have intermediaries but the channel of distribution would be rather short and simple as compared to tangible goods. THERE ARE VARIOUS DISTRIBUTION BRANCHES THROUGH WHICH RAJ TRAVELS DISTRIBUTES ITS PRODUCTS .RAJ TRAVELS HAS VARIOUS BRANCHES ALL OVER INDIA AS WELL AS ONE IN LONDON IN WHICH ALL THE ABOVE MENTIONED SERVICES ARE PROVIDED UNDER ONE ROOF . THERE ARE ALSO SALES REPRESENTATIVES THAT ATTEND SALES CALLS AND HENCE PROVIDE SERVICES AT THEIR DOOR STEPS . RAJTRAVELS ALSO HAS AN EXHAUSTIVE WEB SITE www.rajtravels.com WHICH HELPS IN ONLINE BOOKING AND ALSO PROVIDING THE NECESSARY INFORMATION . THERE ARE VARIOUS OTHER WEBSITES LINKED TO THIS ONE AND ALSO GIVES INFORMATION ABOUT THE WEATHER IN DIFFERENT COUNTRIES TIME DIFFERENCES, CURRENCY CHANGE ETC PROCESS The importance of process management is that it assures service availability and consistent quality. Without sound process management, balancing service demand with service supply is extremely difficult. Service cannot be inventoried; therefore, it becomes essential to find out ways and means to handle peak load to optimize different customer needs with varied expertise levels within the service organization. In marketing management, operations management has been recognized as an integral function. In manufacturing sector, for example, logistics in distribution are vital to satisfy customer needs. Similarly, in services sector, where there is no tangible product,

the operations management is vital to deliver satisfaction because here the operations management would decide how the process of service delivery would function, or in other words, the interactive experience that would deliver the service benefits to the consumers. Shostack gave a much-simplified version and described the 'process' in three stages. First, a process can be broken down in logical steps to facilitate analysis and control. Second, there are more than one available options of processes in which output may differ. Finally, each system includes the concept of deviation or tolerance standards in recognition that the processes are 'real time' phenomena that do not conform perfectly to any model or description, but function within a norm. One can observe how changes in complexity and divergence influence their market position. For managers in service industries, taking a structural approach can help increase their control over some of the critical elements of the service system management. Therefore, for marketers in service industries, process design may be a tool that can substantially increase their impact and role in marketing their services. ALL THESE SERVICES ARE INTER LINKED AND HENCE FOLLOW A PROCESS . FIRSTLY AS AN INTERNATIONAL DESTINATION IS CHOSEN THE BOOKING IS DONE WITH COMPLETE DETAILS ON THE BOOKING FORM REGARDING MEALS , ROOMS ETC AND THEN THE SAME IS PASSED TO THE TICKETING COUNTER TO BLOCK THE SEATS AFTERWHICH THIS THE PASSPORT AND VISAS ARE CHECKED OR PROCESSED AND THEN GIVEN TO THE OPERATIONS DEPARTMENT TO SEND THE DETAILS TO THE FOREIGN AGENTS TO PROCESS FURTHER BOOKINGS REGARDING BOOKING OF ROOMS AND SIGHTSEEINGS.

PRODUCTIVITIY /QUALITY Productivity in services refers to how you transform the inputs into outputs, which are valued by the customer. Quality refers to the degree to which the service satisfies the customer by meeting their wants and expectations. Productivity and quality need to be omnipresent for the industry to complete its service obligations aptly. Only if your firm is productive and the quality meets the requirements of the customers can your performance be graded as excellent. Here are five key things to consider when developing the performance strategy for your business.     

Have you found a way to fit marketing into your schedule? Do you keep track of both your long and short-term projects (including marketing projects), and review that list daily? Do you have a way of combating procrastination and delay? Do you maintain the highest standards of integrity and excellence? Are you continually working to improve your skills in all areas of your business?

RAJ TRAVELS SLOGAN ITSELF IS “INDIAS FINEST QUALITY TOUR OPERATORS “ WHICH MEANS THAT QUALITY HAS ALWAYS BEEN AN IMPORTANT ASPECT . RAJ TRAVELS OFFERS QUALITY TOURS AS IT OFFERS THE BEST OF HOTELS , SIGHTSEEING , MEALS ETC . FOR EXAMPLE RAJ TRAVELS TAKES ITS EUROPEAN PASSENGERS TO EIFFEL TOWER ON THE TOP LEVEL OR THE THIRD LEVEL AND NOT LIKE THE OTHER TOUR OPERATORS WHO TAKE THEM ON THE 1ST OR 2ND LEVEL .

PEOPLE In a service organization, employees are essentially the contact personnel with the customer. Therefore an employee plays an important role in the marketing operations of a service organization. According to him, "the internal marketing concept states that the internal market of employees is best motivated for service-mindedness and customer-oriented performance by an active marketing like approach where a variety of activities are used internally in an active, marketing like and coordinated way." The starting point in internal marketing is that the employees are the first internal market for the organization. To realize its potential in services marketing, a firm must realize its potential in internal marketing - the attraction, development, motivation and retention of qualified employeecustomer through need-meeting job-products. Internal marketing paves the way for external marketing of services.

The companies that practise internal marketing most effectively will (1) compete aggressively for talent market share, (2) offer a vision that brings purpose and meaning to the workplace, (3) equip people with the skills and knowledge to perform their service roles excellently, (4) bring people together to benefit from the fruits of team play, (5) leverage the freedom factor, (6) nurture achievement through measurement and rewards, and (7) base job-product design decisions on research. RAJ TEAM MEMBERS ARE THE HIGHLY QUALIFIED AND EXPERIENCED PEOPLE. THERE IS STRONG INTERACTION BETWEEN THE CUSTOMERS AND THE RAJ TEAM MEMBERS AS ALSO THE TEAMMEMBERS ARE CLOSELY CONNECTED TO THE CHAIRMAN OF THE COMPANY . THIS RELATION IS BENEFICIAL TO THE CUSTOMERS AS THEY GET PERSONAL ATTENTION AND ALSO GET QUOTATIONS IN TIME AS THERE ARE ALSO CORPORATE CLIENTS AND VARIOUS INCENTIVE TOURS WHICH RAJ TRAVELS CATER TO .

PROMOTION AND EDUCATION It is now established that there are clear differences in information usage between goods and services. First, the difference is that consumers of services are less likely to purchase without information than those of goods. Second, the consumer of services will prefer personal sources over impersonal sources of information. And third, the basic characteristics of services have implications for communication strategy. George and Berry keeping in view the intangibility of services, proposed that in the case of services a customer is buying the performance of the service personnel and therefore the advertising in service industries should not only restrict itself to encouraging consumption, but also it should encourage employees to perform well. They proposed the following six basic guidelines to help design effective advertising programmes. • • • • •

The advertising should have positive effects on contact personnel. . It should capitalize on the word of mouth. It should provide tangible clues to the customers. It should make the service offering easily understood. It should contribute to the continuity. It should promise only what is possible.

Here are five key things to consider when developing the promotional strategy for your business: •

Are you networking enough? For many service businesses, networking is the key promotional technique. Join organizations; get to know people; get involved; keep in touch with people; do what you can to help them; be visible in your community.

•

Do you have a good, solid marketing letter that highlights your benefits and moves people to take action? This one inexpensive marketing tool is one of the most powerful when written properly.

•

Do you do personal PR such as speaking and writing? Again, these don't take much money but pay big dividends. Speak at Rotary, your Chamber of Commerce, at business associations and alumni groups. Write for your local paper; the trade journal of your industry, or even for someone else's newsletter. You can use the reprints later for credibility.

•

Are you mailing to people on your list? This is an absolute must. Don't let people forget who you are and how you can help them. From two to six times a year send clients and prospects a newsletter or other type of keep-in-touch mailing.

•

Do you have a Web Site? You should. It doesn't take a lot of money to create a web page and even less to post it. This is a powerful media that can serve as a combination direct mail piece, brochure and newsletter. Given the price of entry, it's crazy not to have one.

RAJ TRAVELS FEATURES IT ADVERISEMENTS IN ALL LEADING NEWS PAPERS OF THE NATION AND ALSO ON HOARDINGS .THEY TAKE PART IN A NUMBER OF TRADE FAIRS . THEY HAVE A NUMBER OF ADVATORIALS WHICH EDUCATE THE PEOPLE ABOUT THE DESTINATIONS THEY WOULD LIKE TO VISIT .

PHYSICAL EVIDENCE Glynn Shostack once observed, "A physical object is self defining; a service is not" and therefore the marketing task in service industries is "defining for the service what the service cannot define for itself." Though a customer cannot see a service, but definitely he can see various tangible clues of the service offer like facilities, communication material, objects, employees, other customers, price, etc. On the basis of his perceptions on the tangible clues, the customer makes the purchase decision. These clues might be both intended and unintended ones and, therefore, managing evidence is integral to the service marketing mix. Shostack even observed that the management of evidence comes first for service marketers. The argument here is that the physical environment, facilities and atmosphere; give enough physical evidence to help shape customer perceptions. Many service marketers have neglected this aspect while the others gave due emphasis to issues like exterior of buildings, office furniture, layout, colour 0.£ interiors, and even carry-bags, tickets, cash memos, labels, etc. The advocators of public relations have even coined a specific term called 'corporate identity' and suggested that such tools can create a visual identity that the public as customers can recognize. The corporate identity media can successfully contribute towards the marketing objectives provided they are attractive, distinctive and memorable. RAJ TRAVELS IS WELL EQUIPED BY COMPUTER RESERVATION SYSTEMS LIKE THE AMADEUS , GALILEO AND THE ABACUS WHICH HELPS THEM MAKE RESERVATIONS .

PRICE AND OTHER USER COSTS Pricing is yet another variable of the marketing mix. A particular product or service is acceptable to the customer at a particular price and if the price is increased, it is likely that the same product or service might become less acceptable to the customer. The other issue, which is related to pricing, is that of perceptions about quality. Generally, to most customers, high price means high quality. However, some customers don't need the highest quality at the maximum price. Detergents are one such example where average quality detergents at moderate prices are market leaders. Service pricing follows the principles and practices of pricing of goods and, therefore, they are either cost based or market based. Within these categories prices may be profit oriented, government controlled, competitive or customer oriented. However, the characteristics of services do influence the pricing and, therefore, different methods of pricing are to be followed.

There are some basic guidelines for pricing of services. These guidelines may help in developing an appreciation of the framework for service pricing. 1. For services, the pricing strategy should be such that demand fluctuations are successfully handled. Since services are perishable, they cannot be inventoried. In such a situation pricing strategy should be such that it should encourage the customers to delay their use of services till the period of low demand. 2. Service prices should be based on costs so as to take into account the cost of tangible clues of intangible services. To the first time users of services the "services offerpackage" is less understood if it is primarily dominated by intangibles. Therefore, the tangible and material content of the service product should be integrated in the 'serviceoffer package', which has definite cost implications. 3. The service pricing should be such a to provide value addition and quality indication to the customers. In situations of "homogeneous" services, the pricing strategy may be market oriented or customer oriented. But in heterogeneous services, the price may be used as a quality indicator. 4. The pricing strategy should be such as to cope-up with the degree of competition operating within a certain geographic and time zone. Services are inseparable from the person who provides them and the service providers have both geographic and time limits or markets, which can be served by them. RAJ TRAVELS HAS TOURS WHICH ARE THE MOST EXPENSIVE IN THE MARKET BUT THEY ARE YET INDIAS LEADING TOUR OPERATORS AND ACCORDING TO BBC SURVEY THE NO 1 TOUR OPERATORS IN LEISURE TRAVEL.. THIS IS BECAUSE OF THE FACT THAT RAJ TRAVELS DOES NOT BELIEVE IN SELLING A PRICE BUT THE PRODUCT . ALTHOUGH THE INDIVIDUAL AIR FARES ARE THE CHEAPEST AS RAJ TRAVELS HAS GOOD CONTACTS WITH THE AIRLINES AND ALSO BULK RESERVATIONS ARE MADE BY THEM. HENCE CUSTOMERS MAKE MOST OUT OF THEIR MONEY .