PRODUCT AND CUSTOMER SERVICE
STRATEGIES
Spring, 1999
OUTLINE
Quality– Concepts– Customer Service– Service Quality– Time Based Service
What is the relationship between
cost and quality??
QUALITY/COST RELATIONSHIP
An emphasis on quality reduces costs because it:– increases uniformity of
products– reduces rework and mistakes– reduces waste of manpower,
machine, and materials usage
QUALITY
In turn, these improvements lead to–productivity gains–better competitive position– job satisfaction
VALUE
What is value? “A perception that a product
meets customer needs at a fair price.”
It is the right combination of quality, service, delivery, and price.
QUALITY
Quality perspectives should be based on customer preferences, not internal evaluations
GENERIC APPROACHES TO QUALITY
“Catching up” “Leapfrogging”
ELEMENTS OF QUALITY
PERFORMANCE: the primary, operating characteristics of a good– How well does the washing machine
wash clothes? FEATURES: the “bells and
whistles” of the good; secondary characteristics– Does an airline offer a movie and
dinner?
ELEMENTS OF QUALITY
RELIABILITY: the probability of failure within a specific time; consistency of performance– What percentage of time will the car
start in winter? CONFORMANCE: degree to which a
product’s characteristics match preestablished standards– What is the incidence of service calls?
ELEMENTS OF QUALITY
DURABILITY: the measure of product life– How long will the lawn mower last?
SERVICEABILITY: the elapsed time before service is restored; the timeliness of service appointments– Is the product easy to service?– Can service be provided quickly?
ELEMENTS OF QUALITY
AESTHETICS: How the product looks, feels, sounds, tastes, smells– Does the furniture look and feel like
“quality” furniture? PERCEIVED QUALITY: Image,
brand name, reputation– What is the reputation of the brand?
DIMENSIONS OF SERVICE QUALITY
Tangibles– Appearance of physical facilities,
equipment and personnel Responsiveness
– Willingness to help customers and provide prompt service
Assurance– Knowledge and courtesy of staff;
ability to convey trust and confidence
DIMENSIONS OF SERVICE QUALITY
Reliability– Ability to perform the promised
service dependably and accurately Empathy
– Caring, individualized attention to the firm’s customers
IMPLICATIONS OF A SERVICE STRATEGY
The firm must strive to provide superior quality
The firm must set realistic expectations
TEN COMMANDMENTS OF SERVICE AND
QUALITY Thou shalt be remembered for your services. Thou shalt not only be interested in the customer's money. Thou shalt make service an action. Thou shalt know that if thou forget about service, thou shalt be forgotten. Thou shall not present false images. ("If you can't deliver, don't promise.")
6.Thou shall not forget that buyers seek value.
7.Thou shalt not forget that the buyer has the right to demand service.
8.Thou shalt remember that a satisfied customer is the best business strategy of them all.
9.Thou shalt not forget that success is never final.
10.Thou shalt let people know they matter.
TEN COMMANDMENTS OF SERVICE AND
QUALTY Thou shall not forget that buyers seek
value. Thou shalt not forget that the buyer
has the right to demand service. Thou shalt remember that a satisfied
customer is the best business strategy of them all.
Thou shalt not forget that success is never final.
Thou shalt let people know they matter.
THE “GAPS” MODEL
Three factors impact a customer’s expectations– word of mouth communications– personal needs– past experiences
Five “gaps” can lead to dissatisfaction with service delivery
THE GAPS MODEL
Customer’s Expectations / Marketer’s Expectations
Management Perceptions and Service Quality Specifications
Service Quality Specifications and Service Delivery
Service Delivery and External Communications
Perceived Service and Expected Service
TIME BASED STRATEGIES
A time based strategy attempts to beat the competition by providing a product to the customer as quickly as possible
TIME BASED STRATEGIES
Start from scratch Wipe out approvals Emphasize teamwork Worship the schedule Develop time effective
distribution Put speed in the culture
FROM THE TEXT...
Pages 378 to 386