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