Service Management

Business

Quiz 4 :
New Service Development

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Quiz 4 :
New Service Development

The service and the production business are customer focused and works to meet the demands of the customer. Yet the process of the service and the production cannot have a similar approach as the service business has to deal with the customers directly where as in the manufacturing the customers are dealt with the product alone and not the process. There has been a continuous change in the approach of the retailers towards the customers and the process they carry out. In the production line approach, there are so many advantages as saving time, making the process simpler, requires lower skilled labors and making the process more cost effective. In the service business more that the cost effectiveness, it is the satisfaction of the customers that decides the reputation of the firm. Hence the factors that are considered to be a vital attribute for the success of the business can also become the limitation to the service aspect. The production line approach has its merits to make the process more effective and cost efficient. But the same attributes can also act as a limit in achieving the vision of the service business. 1. Standardization of services : By making the services rendered as a standard procedure as in the production line, the quality and uniqueness in the service can be obtained. But there would be no room for customization of services and customer participation in the service. This would make the service less customer friendly and satisfaction level of the customers would be low. 2. Division of labor : This approach, the task is divided in to small operations and lesser skilled people are employed for each. This would make the process cost effective and faster. But in case of services, the labors will not be able to perform better if the system does not work properly or if the customer asks for any additional services. As low skilled labors would be preferred and the job assigned would be a routine one, there would be no gain in knowledge and the lesser skilled employee would remain so as far as he continues in the job. 3. Substitution of Technology for People : In the production line approach there is a huge demand for substituting the people with the new technology so as to attain accuracy and higher quality. This may not be a success in the service business as the customers would like to interact with the employees and get their work done customized and more transparent. The production line approach may perform well to some extend in the service business but not to the higher level as the satisfaction of the customer is the bench mark for the future business. And the customers look for more involvement and get the work done as per their requirement. No freedom of executing the individual ideas would be there in the production line approach and the innovation of new products and services would not happen.

Service business is highly customer oriented and the goal of the dealer would be to attract more customers by increasing the number of attributes. The ambience and the infrastructure will be modified to suit the requirement of the customer. But it has to be understood that the quality if the service should be of prime importance than the additional attributes. The production as well as the service operations has its own core technical side that has to be performed with accuracy so as the business to sustain. It is found that in the service business, as the satisfaction of the customers is given the top priority, measures are made to make the service operations more customer friendly. The ambience of the store and the other additional attributes are modified and made pleasing so as to make the customers more comfortable and satisfied. In these cases the core technical activity too will have to be taken care of. An example of such a case can be discussed as follows. Considering an automobile service unit that is quiet spacious and in the main area where a lot of customers would notice. The ambience of the store is too good provided with a snacks and coffee bar, a waiting launch, neat wash rooms and latest magazines to read. Seems to satisfy the customers with the great ambience. But the store does not get enough customers to keep the business running. When analyzed, it is found that the core technical activity of repair and servicing is not given attention. The management took too much effort for improving the appearance of the store that they isolated the important technical core. •The latest advancement in the servicing. •The latest lubricants that gave good motor life. •Empowering the employees all were isolated. This resulted in lower performance of the dealer and the customers were not satisfied with the less skilled employees.

Customer participation is considered as the key to the success of any service firm. As the customers satisfaction cannot be measured, the participation of the customer is taken as the criteria to judge the effectiveness of the service. As there are merits in actively involving the customers in the service process, there are demerits as well. The concept of customer participation in the service business is gaining importance day by day. The customers also prefer dealers who allow them to highlight their opinion and make the work done. The service providers also encourage it as they are concerned about the customer count and customers also gets delighted to get the work done customized. It is found that the customers refer their friends and co workers to the service providers where the customer participation is higher. This in turn would enhance the business of the service provider. Although customer participation can be the key factor to the success of any service firm, it cannot be entertained beyond a certain limit. The drawbacks of the increased customer participation in any of the service business can be as listed below. •The customization of the service as per the customer requirement consumes lot of time and inventory there by increasing the cost to the firm. The customers would not be ready to pay more resulting in conflict. •Too much time take for a customer many annoy the customer who is waiting and eventually leave the store. •The customer may not be aware of the technical side of the service and too much of participation of the customer would not yield the desired result. •Number of employees would not be sufficient if each customer demands to be with the service employees. •The operation sequence of the service firm would be affected. •The customers would be heterogenous and the rate cannot be fixed if the services are rendered as per the demands of the customer. •The service policy of the firm would be violated if the customers are allowed to involve in the process beyond certain limit. •In certain service operations the safety of the customers would be at stake if allowed to involve in the process.