Services Management 9781642876321, 9789350243930

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SERVICES MANAGEMENT HIMALAYA

PUBLISHING

Dean of Studies, Surana P.G.Centre, Kengeri, .. ~.~ Bangalore, Former Director, SRN Adarsha College, Bangalore, Former Principal, P.A College, Tiptur, Founder President, Federation of Teachers' Councils of Commerce and Management in Karnataka

HOUSE

. pirector, K..K.io.I;.C.SrJn~~yte of Management, Bangalore. Former Dean & Chirman, Department of P.G. Studies in Commerce and Management, Bangalore University.

Dr. H. V. S. RAGHAVAN

D. S. GOPALA KRISHNA

Prof. & HOD, MBA, Surana P.G.Centre, Kengeri, Bangalore . 60

Faculty - MBA Surana P.G.Centre, Kengeri, Bangalore - 60

Hal Glfimalaya 'PublishingGJiouse MUMBAI· NEW DELHI· NAGPUR • BANGALORE • HYDERABAD • CHENNAI • PUNE • LUCKNOW· AHMEDABAD· ERNAKULAM

r,

ISBN

: 978-93-5024-393-0

Contents Chapter 1.

SERVICES MANAGEMENT -

1 - 48

AN OVERVIEW

Services Management - The Concept - Growth of Service Sector-Role of Services in the Economy - Definition alld Meaning - Service COllcept - Characteristics.

Chapter 2.

49 - 68

SERVICES CLASSIFICATION Basis of classification - Ultimate user - Tangibility - Service Options - Specializations - Profit-orientation - External Service - CustomerEmployee Dimensions - Difference between goods and services Managing Demand-Supply.

Chapter 3.

MARKETING MIX OF SERVICES

69 - 93

Services Marketing and Goods Marketing - Nature of Services Marketing - Customer - Service Provider Matching - Services Marketing Concept - Service Marketing - Mix -Product - Price Promotion - Place - People - Physical Evidence.

Chapter 4.

CUSTOMER RELATIONSHIP MANAGEMENT IN SERVICES

94 - 124

Customer involvement ill service processes - Customer behaviour ill service selling - Targeting customers - Managing relationships and building loyalty.

Chapter 5.

PLANNING AND MANAGING SERVICE DELIVERY Identify the channels through which services are delivered Understand the benefits of methods of service delivery - Service deliveries through illtermediaries - To understand service quality dimension - To understand satisfaction of instances - Learn about the need for productivity aild quality - Understand issues related with capacity-constrained services - Learn about supply and demand - Strategies for managing waiting lines when capacity and demand can't be matched - Managing customers reservatiolls and Waiting Lists.

125 - 144

Chapter 6.

TOURISM MANAGEMENT

145 - 172

Tourism Management: Introduction - Concept and nature of tourism - Significance and impact of tourism - Market segmentation in tourism - Tourism marketing mix. Chapter 7.

TRAVEL SERVICES

173 - 198

Management of Travel Services: Travel Agencies and Travel Organisations - TOllr Operators Measuring and Services. Chapter 8.

HEALTH CARE SERVICES

199 - 237

Health Care Concept - Hospital Services - Hospital Development - Facilities - Personnel Administration - Service Extensions Phanna - Midwife - Medical Transcription Service Chapter 9.

HOTEL INDUSTRY Evolution - Hotel. the Concept - Facilities - Guest Cycle Classification(Grades) - Marketing-mix of Hospitality Industry.

238 - 278

Chapter - 1 Services Management - An Overview

J

Services Management The Concept . G "owth oj Service Sector - Role oj Services in the Economy - Definition and Meaning - Service Concept - Characteristics .

•

Understand the concept of services management.

•

Understand service sector and its contribution to economic.

•

To know the types of services runon commercial basis.

Today, in the developed countries majority of people earn their livelihood from service sector than from other sectors such as farm and manufacturing. In developing countries like India, focus is more on the development of service sector. It is experienced in India that only after New Economic Policy (NEP) initiative in 1991 . the service sector contributed greatly for the growth of the economy. The contribution to GDP of the country rose from 19% in 199 1 to 50% in 2005. Information Technology (IT) services is the major contributor amongst other services. Even for consumers. opportunities have increased to consume very m a ny services which were previously unattainable or to be produced and consumed within the household unit. Opening up of service sector in a big way after the introduction of NEP. the living standards of people has also changed a n d h as contributed for the economic growth of the country amidst various d isturbi n g factors. Overall growth rate of the economy in 2004 - 2005 is 8% a s against the

Services Management

2

estimate of 6%. This was largely due to the greater contribution of service sector and increased output in farm and manufacturing sectors. This indicates that service sector can significantly contribute for the growth of the economy. The growth of service sector in . lndia and elsewhere has presented many viSible paradoxes. Very many service providers and service organizations cannot provide services as stated by them. They may put in their efforts to improve their standards. Even then. the dissatisfaction seems to be growing in many service domains as the service providers cannot raise to the expectations of consumers. Financial. hospitality. BPO (Business Process Outsourcing) or in any services. the company may develop relationship programs to deliver quality services. But in the course of delivery. the firms may not adhere to .performance standards which they have promised to their customers due to uncontrollable factors which emerge at the time .of delivery of service. This apparent paradox may exist even when service providers deliver services as promised. Because. the customers may perceive the similar service in different ways. However. the service organizations should design and develop sound management ~r~cess to render quality services. Service. h~ving the characteristIc features of (i) Intangibility; (il) Inseparability: (iii) Perishability and (iv) Variability and is different from physical product. should have its own processes of delivery. Managing service organization is not an easy task. Most of the services today are commercialized. Therefore. they have to be professionally managed. As marketing occupie1? a prime place in service organizations. Services Marketing cannot be' separated from Services Management. Successful service companies make sure that their front-line people can competently deliver the promises which marketing people make to customers. This necessitates the development of a management proce.,.ss which can be applied to any type of service. The management of service~ iis fully explained in the subsequent paragraphs. It is essential. as a first step to understand the concept of "Service" and the evolution of service sector.

SERVICES MANAGEMENT - THE CONCEPT

.

Most of the books on service activities have focused on "Services Marketing". Many of the titles are also on "Services Marketing". In these books. management of services are not fully explained and heavy focus will be on management of Services Marketing. Even this title "Services Management" also gives a direction to focus on marketing of services. The issues involved in this book are (1) Meaning and Classification of Services; (ii) Marketing mix in

Services Management -

An Overview

3

service industry; (iii) Consumer behaviour towards services and marketing management of different types of services such as tourism. hotel. health care etc. Keeping these aspects in view~ it is essential here to analyze the concept of "Services Management". With the introduction of fast moving consumer goods (FMCGr in the markets of the world. necessity arose to a greater extent to have more and more repairmen in these goods to "provide after sales service. Even with introduction of manufacturing goods. service people were required to service the machineries after installation. But today the service activity has grown in leaps and bounds and has gone into commercialization with the identification of very many service functions. Each functional area has assumed the dimension of big business. (Ex: Hotel Services. Hospital Services. Tourism. Telecommunication Services. Financial Services. etc .. ) Each one is becoming an industry. In this scenario. it is essential to have a clear understanding as to how these individual functional areas are managed pr6fitably. Today service is no longer a free activity. Every service activity runs on a commercial basis and earning profit is the key factor. The recent service activity which has emerged in a big way in IT industry is BPO (Business Process OUtsourcing). To manage these services on sound lines. the service manager should know the principles and functions of "Services Management" . In the early stages of the development of service sector. the boss or the owner of service activity knew nothing or little aspects of services management. Professional service management techniques as known today was unheard of in the early stages. Indeed. business management itself. in the professional sense that we think of today. was still in its formative stages. Peter Drucker. the modern Management Guru. had yet to publish his first work on the subject. But over the years (From Taylorism to today's "Do it. Get it" approach) much water has flown and management functions have fully crystallized. However. seve:-al empirical studies are still going on. New dimensions and concepts have been added to every functional area of management. Service sector assuming a bigger dimension. has a sophisticated growth. The owners of service business have started realizing that service management is an exacting discipline and is as demanding as other forms of general business management. Leaders of service industry have understood that service managers should possess more of general management skills rather than technical skills required for a particular service activity. General management potential is only providing the definite foundation for success.

Services Management

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Today's customer is more demanding and he has to be retained by business houses. ' Because cost of acquiring a new