Service Management

Business

Quiz 1 :

The Service Economy

Quiz 1 :

The Service Economy

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How are the distinctive characteristics of a service firm illustrated by Village Volvo ?
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The service process involves the direct interaction between the service provider and the customer and therefore the customer participation is for major priority. The distinctive characteristics of the same has to be fulfilled in order to have a successful customer feed back and hence the business.
In order to have a better performance in the service sector, the operators imbibe certain characteristics. These characteristics are distinctive and important as far as the service process are considered. Those distinctive characteristics are customer participation, Simultaneity, Perishability, Intangibility and heterogeneity.
Let us examine how each of the distinctive characteristics are illustrated in the Village Volvo service operations.
1. Customer participation: The participation of the customer is a mandatory criteria for the success of the service operations. The Village Volvo makes it sure that customers are consulted and the manager involves in a discussion about the time and the type of repair works are to be performed in the car. The customers can put forth their suggestions and there by the work would be done with the participation of the customers and also fulfilling the company policy. The CCVD method also enhances the customer participation as it holds the history of the work done on the vehicle and alerts the customers on the nearing service schedule there by making the customers actively take part in the service operations.
2. Simultaneity: This characteristic of the service operation where the product of the service has to be used by the customers simultaneously is well illustrated in the Village Volvo, where the mechanics take the customers for a test drive once the repair and servicing is done to make sure that the service is performed as per the requirement of the customer.
3. Perishability: The services when not used with in the stipulated period of time would perish and would be of no use. The service offered by the Village Volvo is also perishable, the nature of work that has to be performed on the vehicles is finalized after having a discussion with the customers. The time and date of the same would be intimated well in advance. If the customer fails to produce the car in the stipulated time the service cannot be rendered and the time slot allotted would perish as the next customer would be waiting for their turn. Like wise the service rendered would be effective for a particular period as mentioned by the mechanic after which the car should be subjected to service again for smooth performance. The Village Volvo follows the CCVD method that would remind the customers when they will have to get the service and repair done.
4. Intangibility: There is no measure for the extend of the satisfaction that the customers feel after the service is received. This intangible characteristics is a salient feature of the Village Volvo too as the satisfied customers are the asset to the firm but the level of the same cannot be measured.
5. Heterogeneity: This characteristics deal with the diversity of the customers and their requirements. The Village Volvo also encounters a wide range of customers with varying requirements in terms of service and repair. The manager of the firm get in to a discussion with the customers to know about the extend of the service and the budget with in which they would like to do it. The success of the firm lies in the effectiveness with which these heterogeneous customers are handled.

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Describe Village Volvo's service package.
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Service packages comes in various dimensions and environments. A service package refers to a cluster of products and services along with the relevant information useful for the customers in a particular environment.
There are innumerable service providers globally and the service providers market themselves with respect to the service packages they adhere to. Describing a service package refers to analyzing the services and products of the service provider with respect to the predetermined characteristics and any additional features possessed by the provider.
In the Village Volvo case study the following are observed as the service package attributes.
1. Supporting Facility: The supporting facility would enhance the image of the service provider and attract more customers. In this case the Village Volvo is equipped with a new Butler building, which would be a good ambience for the customers. An office and four work bays, waiting area for the customers and a spacious storage room.
2. Facilitating Goods: The customers bring in cars for repair or service and these are facilitating goods of the Village Volvo. The quality of the service is claimed to be good and the customer satisfaction is given more priority.
3. Information: The Village Volvo follows a systematic procedure in collecting and storing information about the cars that come for the service and the work they have done on the cars. This would help the employees to have a track on the history of the work done on the vehicles and the possible issues that may arise in future and inform the customers about this well in advance. They have named this system as CCVD or Custom care vehicle dossier.
4. Explicit Services: The manager of the Village Volvo pulls out time to involve in conversation with the customers about the quality of services and the suggestions. This would help in improving the customer relationship. Fixing the cars with a quality in service there by satisfying the customers, these can be counted as the explicit services of the firm.
5. Implicit Services: The implicit services includes being socially responsible by recycling the old and worn out parts of the car instead of dumbing it in the trash and the repair services they provide with out any hassle, which make the customers satisfied.
The other features of the service package includes:
• Regular services like oil change and tune up.
• Customer relationship.
• Estimation of cost and time duration before staring the work to check if the customers are comfortable with it.
• Help desk comprising of experienced mechanics.

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How are the distinctive characteristics of a service operation illustrated by Xpresso Lube?
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The business has to be customer oriented so as to achieve its goals. This is applicable to the products as well as the services. Every business undertaking has to have certain distinctive characteristics in order to create an impact in the market and stand out of the crowd.
The service operations directly involve the participation of the customers and the satisfaction of them would have a higher influence in the further business. Although the service operations are customer oriented, it also has to processes certain distinctive characteristics so as to be recognized in the market. These characteristics are customer participation, simultaneity, perishability, intangibility and heterogeneity. The service firm can be measured for its success by counting on how they fulfil these distinctive characteristics.
Xpresso Lube is considered to be successful in the business and let us examine how the distinctive characteristics are being fulfilled.
1. Customer participation : Participation of the customer is an inevitable event in the service operations. More the customer is involved in the operation higher would be the level of satisfaction and there by enhancing the image of the firm. In the Xpress Lube, unlike any other dealers the customers are given chance to view the bottom portion of the vehicle with the help of the lift. By doing so the customers would understand the real situation of their vehicle and can actively take part in the discussion regarding the repair rather than blindly believing the words of the mechanic.
2. Simultaneity : The situation where the service or the product has to be produced and consumed at the same time can be referred as simultaneity. In the case of the Xpress Lube, the main functionality being oil change is created and applied on the vehicles at the same time.
3. Perishability : The services rendered by the operator can be perished at any point of time. The time scheduled for a particular customer would be perished if it is nit utilized, the chairs and the tables in the waiting room would be full at some point making it unavailable for the further customers or it would be left empty if no customers shows up.
4. Intangibility : The level of satisfaction attained by the customers cannot be measured. The customers exhibit a higher comfort relaxing in the coffee bar while the work on their car is being carried out or go for a local shopping nearby. These pleasure and comfort are intangible yet mandatory.
5. Heterogeneity : There would be a wide range of customers visiting the Xpress Lube every day and their needs would be different. Some would prefer to drop the vehicle for service and spent time do shopping in the near by store or in the coffee bar. Yet some other customers would prefer the service person to provide transport of their vehicle to and from the service station so that they need not spend their time after work in the garage. The method of repair also varies depending on the customers where some would prefer higher end spare parts where as others cost effective ones. The success of the Xpress Lube is in managing and fulfilling the varying demands of the customers there by attaining higher reputation and enhancing the firm image.

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Describe Xpresso Lube's service package?
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Illustrate how the type of work that he or she does influences a person's lifestyle. For example, contrast a farmer, a factory worker, and a schoolteacher.
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Is it possible for an economy to be based entirely on services ?
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Given the example of Xpresso Lube, what other services could be combined to "add value" for the customer?
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How can Village Volvo differentiate itself from Volvo dealers ?
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What are some of the management problems associated with allowing service employees to exercise judgment in meeting customer needs ?
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What elements of Xpresso Lube's location contribute to its success?
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What is the value of self-service in an economy?
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Determine if the service sector is currently expanding or contracting based upon the Non-Manufacturing Index (NMI) found at the ISM Report on Business on the Institute of Supply Management website: http://www.ism.ws.pubs/ISMMag/index.cfm?navItemNumber=22310.
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Critique the "Distinctive Characteristics of Service Operations" by arguing that the characteristics of, customer participation, simultaneity, perishablity, intangibility, and heterogeneity, may apply to goods as well.
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How could Village Volvo manage its back office (i.e., repair operations) like a factory ?
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