Service Management

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ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATIONS – OCTOBER 2013
B.COM (TRAVEL & TOURISM) – III SEMESTER
SERVICE MANAGEMENT
Duration: 3 Hrs Max. Marks: 100
SECTION – A
I) Answer ALL the following questions. (10 x 2 = 20)
1. Dr. Ram who recently started his multi-specialty hospital is facing trouble that he is
not able to manage demand to match the capacity. What strategies can be used by the
promotional team to match the capacity provided?
2. What do you mean by theme based entertainment? Give examples.
3. Give two examples of potential service product.
4. Explain and give an example of Credence attributes.
5. Ms. Sridevi cannot reproduce exactly the same lecture in another class. What
characteristic of service this depicts? Explain.
6. Draw a service blue print of service process at an RTO office.
7. What do you mean by service quality leadership?
8. What is the term used for difference between what a service provider’s
communication effort promise &what customer thinks was promised by these
communications. Give example.
9. Mention any four differences between goods and services.
10. David gave a negative review about the movie ‘Conjuring’ and Jonathan spoke very
positive about the movie ‘ lunch box’. What are both David and Jonathan referred to
the production houses of the respective movies?
SECTION – B
II) Answer any FOUR out of 6 questions. ( 4 x 5 = 20)
11. “Salaam Saheb” owner of non-veg. chain of restaurants is planning to locate his next
one in Bangalore. What decision regarding the location is to be considered while the
selection of site from where the delivery of service takes place?
12. Explain the various characteristics of service.
13. Explain the 80/20 customer pyramid and also its extended version.
14. Write a short note on Knowledge Process Outsourcing.
15. Swami wants to take an Internet connection and he is confused with the large
number of options available to him. What purchase process will he go through in
availing the service?
16. West wide shopping centre wants to build and strengthen their customer base. What
steps should the management take to build the customer loyalty?
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Section – C
III) Answer any THREE out of 5 questions. (3 x 15 = 45)
17. Recent growth of festivals and events as an industry around the world means that
the management can no longer be ad hoc. Events and festivals, such as the Asian
Games, have a large impact on their communities and, in some cases, the whole
country. Write the importance and role of the event management industry in the
economic development of our country
18. What are the seven P’s in a service sector? Also design the seven P’s for a tour
agency specialized in taking trips to South India.
19. Explain the various strategies which could be implemented to meet demand and
supply of the services.
20. Explain the seven types of gaps that can occur at various points during the design &
delivery of a source performance with the help of GAP model.
21. Union Finance Minister P. Chidambaram on 27 February presented the Economic
Survey 2012-13 in the Lok Sabha of the Parliament. The health services and telecom
sectors were projected to have rebounded in the year 2012-13. Overall the year
2013-14 is projected to be better for most of the service sectors, Give reasons for the
growth of service sector in India.
SECTION – D
IV) Compulsory Case study. (15 marks)
22. DEVELOPMENT AND IMPACT OF TOURISM INDUSTRY IN INDIA
Features of Tourism in India
Today tourism is the largest service industry in India, with a contribution of 6.23% to
the national GDP and providing 8.78% of the total employment. India witnesses more
than 5 million annual foreign tourist arrivals and 562 million domestic tourism visits.
The Ministry of Tourism is the nodal agency for the development and promotion of
tourism in India and maintains the “Incredible India” campaign.
The India travel and tourism industry ranked 5th in the long-term (10-year) growth
and is expected to be the second largest employer in the world by 2019.
Moreover, India has been ranked the “best country brand for value-for-money” in the
Country Brand Index (CBI) survey conducted by Future Brand, a leading global brand
consultancy. India also claimed the second place in CBI’s “best country brand for
history”, as well as appears among the top 5 in the best country brand for authenticity
and art & culture, and the fourth best new country for business. India made it to the list
of “rising stars” or the countries that are likely to become major tourist destinations in
the next five years, led by the United Arab Emirates, China, and Vietnam.
Tourist Attractions in India: India is a country known for its lavish treatment to all
visitors, no matter where they come from. Its visitor-friendly traditions, varied life
styles and cultural heritage and colourful fairs and festivals held abiding attractions for
the tourists. The other attractions include beautiful beaches, forests and wild life and
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landscapes for eco-tourism; snow, river and mountain peaks for adventure tourism;
technological parks and science museums for science tourism; centres of pilgrimage for
spiritual tourism; heritage, trains and hotels for heritage tourism. Yoga, ayurveda and
natural health resorts and hill stations also attract tourists.
The Indian handicrafts particularly, jewellery, carpets, leather goods, ivory and brass
work are the main shopping items of foreign tourists. It is estimated through survey
that nearly forty per cent of the tourist expenditure on shopping is spent on such items.
Despite the economic slowdown, medical tourism in India is the fastest growing
segment of tourism industry, according to the market research report “Booming
Medical Tourism in India”. The report adds that India offers a great potential in the
medical tourism industry. Factors such as low cost, scale and range of treatments
provided in the country add to its attractiveness as a medical tourism destination.
Initiatives to Boost Tourism: Some of the recent initiatives taken by the Government to
boost tourism include grant of export house status to the tourism sector and incentives
for promoting private investment in the form of Income Tax exemptions, interest
subsidy and reduced import duty. The hotel and tourism-related industry has been
declared a high priority industry for foreign investment which entails automatic
approval of direct investment up to 51 per cent of foreign equity and allowing 100 per
cent non-resident Indian investment and simplifying rules regarding the grant of
approval to travel agents, tour operators and tourist transport operators.
Constraints: The major constraint in the development of tourism in India is the nonavailability
of adequate infrastructure including adequate air seat capacity, accessibility
to tourist destinations, accommodation and trained manpower in sufficient number.
Poor visitor experience, particularly, due to inadequate infrastructural facilities, poor
hygienic conditions and incidents of touting and harassment of tourists in some places
are factors that contribute to poor visitor experience.
POSITIVE IMPACTS
1. Generating Income and Employment: Tourism in India has emerged as an
instrument of income and employment generation, poverty alleviation and sustainable
human development. It contributes 6.23% to the national GDP and 8.78% of the total
employment in India. Almost 20 million people are now working in the India’s tourism
industry.
2. Source of Foreign Exchange Earnings: Tourism is an important source of foreign
exchange earnings in India. This has favourable impact on the balance of payment of
the country.
3. Preservation of National Heritage and Environment: Tourism helps preserve several
places which are of historical importance by declaring them as heritage sites. For
instance, the Taj Mahal, the Qutab Minar, Ajanta and Ellora temples, etc, would have
been decayed and destroyed had it not been for the efforts taken by Tourism
Department to preserve them.
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4. Developing Infrastructure: Tourism tends to encourage the development of
multiple-use infrastructure that benefits the host community, including various means
of transports, health care facilities, and sports centers, in addition to the hotels and
high-end restaurants that cater to foreign visitors.
5. Promoting Peace and Stability: Honey and Gilpin (2009) suggests that the tourism
industry can also help promote peace and stability in developing country like India by
providing jobs, generating income, diversifying the economy, protecting the
environment, and promoting cross-cultural awareness. However, key challenges like
adoption of regulatory frameworks, mechanisms to reduce crime and corruption, etc,
must be addressed if peace-enhancing benefits from this industry are to be realized.
NEGATIVE IMPACTS
1. Undesirable Social and Cultural Change: Tourism sometimes led to the destruction
of the social fabric of a community. The more tourists coming into a place, the more the
perceived risk of that place losing its identity. A good example is Goa. From the late 60’s
to the early 80’s when the Hippy culture was at its height, Goa was a haven for such
hippies. Here they came in thousands and changed the whole culture of the state
leading to a rise in the use of drugs, prostitution and human trafficking. This had a
ripple effect on the country.
2. Increase Tension and Hostility: Tourism can increase tension, hostility, and
suspicion between the tourists and the local communities when there is no respect and
understanding for each other’s culture and way of life.
3. Creating a Sense of Antipathy: Tourism brought little benefit to the local
community. In most all-inclusive package tours more than 80% of travelers’ fees go to the
airlines, hotels and other international companies, not to local businessmen and
workers.
4. Adverse Effects on Environment and Ecology:
Increased transport and construction activities led to large scale deforestation and
destabilisation of natural landforms, while increased tourist flow led to increase in solid
waste dumping as well as depletion of water and fuel resources. Noise pollution from
vehicles and public address systems, water pollution, vehicular emissions, untreated
sewage, etc. also have direct effects on bio-diversity, ambient environment and general
profile of tourist spots.
Answer the following questions:
a) What is the role of tourism industry in the economic development of our
country?
b) What initiatives can be taken to boost the growth of tourism industry?
c) What constrains and negative impacts can tourism have on India?
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ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
(Affiliated to Bangalore University)
-_____________________________________________________________________
End Semester Examinations – OCTOBER 2013
Service Management B Com TT (3RD semester)
ANSWER SCHEME
Duration: 3 Hrs Max. Marks: 100
Section – A
Answer the following questions 10 x 2 = 20 Mks
1. Strategies for managing demand to match capacity
􀂾 Partitioning demand
Eg: Patients flow in higher on week days. Therefore, why not make appointments in the
latter part of the week to level demand.
􀂾 Vary the service offering
Eg: Accounting firms focus on tax preparations late in the year. During other times of
the year, they can focus on Audits and general consulting activities
􀂾 Advertising & Sales promotion:
Can also be used to remind customers about peak demand times & promotional
offers during off season are common.
2. Theme based entertainment:
Theme based entertainment can be defined as any sort of amusement or anything which
provides entertainment to people following a specific theme. The theme can be
anything depending upon the host. Themes can be retro, Halloween etc.
Examples: 1) Jungle lodges and resorts.
2) Wonder la
3) Disney land.
4) WWE.
5) Innovative film city.
3. Potential service: the service firm tries to find out better ways of delighting
customers. Eg: in university there are great placements, outline prog. , Can publish own
journal & newsletters & provide satellite education.
4. Credence attributes – Those characteristics that the customers find impossible to
evaluate even after purchasing it are known as credence attributes. E.g. A patient
cannot evaluate how well the dentist has done the complex dental procedures.
5. Variability: A service is always unique; it only exists once, and is never exactly
repeated even by the same service provider. Eg: teacher cannot reproduce the same
lecture.
6. SERVICE BLUEPRINT:A service blueprint is basically a flowchart of the service
process. It is a map in which all the elements or activities, their sequencing and
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interaction, can be visualized. In the simplest terms, a service system blueprint is a
picture of a service system.
7. Service quality leadership: A firm may position its service offerings in the high price
and high quality segment of the market to build a quality leader image for itself. High
price restaurants and personal care centers are examples of high pricing to portray
superior quality.
8. Interpretation Gap: Difference between what a service provider’s communication
effort promise &what customer thinks was promised by these communications.
9. Differences between physical goods and services.
Sl. No. Physical goods Services
1. Tangible Intangible
2. Homogeneous Heterogeneous
3. Production & distribution are
separated from consumption
Production , distribution & consumption
are simultaneous processes.
4. A thing An activity or process
5. Core value produced in factory Core value produced in buyer-seller
interactions
6. Customers do not participate in
the production process
Customers participate in the production
7. Can be kept in stock Cannot be kept in stock
8. Transfer of ownership No transfer of ownership
10. Extremely dissatisfied customers can turn into “terrorists”, providing an abundance
of negative word of mouth for the service provider. Customers who praise the firm in
public and refer others to the firm are described as “apostles”.
Section – B
Answer any 4 out of 6 following questions 4 x 5 = 20 Mks
11. The decision regarding the location is concerned with the selection of site from
where the delivery of service takes place. Location decisions have been based on
intuition, with a considerable range of success.
1. Nature of service:-
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2. Perishability of the service:-
3. Nature of Interaction:-
4. Nature of Customers demand:-
5. Competitive Position:-
6. Natural Geographical Location:-
7. Technological Advancements:-
8. Dependency on Other Services:-
9. Infrastructural facilities:-
10. Target Market Decisions:-
12. Characteristics of services:
• Intangibility:
• Inseparability:
• Variability:
• Perishability:
• In ability to own services:
• Customer participation:
13. 80/20 Customer pyramid
PLATINUM: These customers who constitute a very small percentage of a firm’s
customers base, are heavy users and contribute a very small share of the profits
generated. Typically this segment is less price sensitive but expects highest service
levels in return and is likely to be willing to invest in and try new services.
GOLD: The gold tier forms a larger percentage of customers when compared to
platinum, but individual customers contribute less profit than do platinum customers
do. Gold tier customers tend to be slightly more sensitive and less committed to the
firm.
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IRON: These customers provide a bulk of customer base. Because their numbers give
the firms the economies of scale, they are often important so that a firm can build and
maintain a certain capacity level and infrastructure which is often needed to serve
platinum and gold tier customers. However iron customers in themselves are often only
marginally profitable. Their level of business is not sufficiently substantial for special
treatment.
LEAD: Lead tier customers tend to generate less revenue’s for a firm but often still
require the same level of service as iron customers which turn them into a loss making
segment from a firms perspective.
14. Knowledge process outsourcing (KPO) is a form of outsourcing that is less
structured and more specialized than business process outsourcing (BPO). KPO deals
largely in services that are highly “knowledge-based”, such as: intellectual property
research for patent applications; equity research, business and market research, legal
and medical services; training, consultancy, and research and development in fields
such as pharmaceuticals and biotechnology; and animation and design.
In India:The Indian National Association of Software and Service Companies
(NASSCOM) estimated the total market size of the KPO sector in India in 2006 to be
$1.5 billions. The year before, 2005, it had been $1.3 billions, with Evalueserve
predicting that by 2010 it would be some $10 to $15 billions. The Indian government
was predicting that by 2010 India would have 15% of the global KPO market. However,
the global financial crisis, coupled with domestic economic problems such as the IPO of
Reliance Power in 2008, caused people to re-evaluate these predictions, incurring
worries that India’s IT, BPO, and KPO sectors — which by then, combined, were $8.4
billions in export revenues — would be greatly affected by these factors. Examples: 1)
Ugam solutions.
2) Copal partners.
3) Exl services.
4) Genpact.
5) Wns global services.
15. Purchase process for service
1st step Awareness of Need
2nd step Information search
• Define needs
• Explore Solutions
• Identify alternative service suppliers
3rd step Evaluation of Alternative Service Suppliers
• Review documentation(eg. Advertising, brochures, Web sites,
etc.)
• Consult with other people(eg. Friends, family, other customers)
• Visit possible service suppliers, speak to personnel)
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4th step Request Service from Chosen Supplier
(or initiate self service)
5th step Service Delivery
6th step Evaluation of Service Performance
7th step Future Intentions
1st to 3rd step – Prepurchase Stage
4th to 5th step – Service Encounter Stage
6th to 7th step – Postpurchase Stage
16.BUILDING CUSTOMER LOYALTY
Step 1: The Foundations of Customer Loyalty
Step 2: Creating Bonds with Customers
• Deepening the Relationship
• Reward–Based Bonds
• Social Bonds
• Customization Bonds
• Structural Bonds
Step 3: Managing and Curtailing Drivers of Customers Defections
• Common Churn Drivers
• Strategies to Reduce Churn
Section – C
Answer any 3 out of 5 following questions 3 x 15 = 45 Mks
17. Event management India has emerged as one of the most popular career choices for
Indian youth in the recent years. Advertising agencies Bhopal is believed to be one of
the fastest growing industries in India. Among these event management industries in
India is Aquarius Promotions Pvt. Ltd who has curved a niche in this career. Combining
the prowess of advertising and PR, this company has grown its portfolio to feature
clients from various work categories making it stand out as the most creative branding
that India has to offer. It has also been accredited making it stand out as a very strong
ad agency whose presence is huge in central India.
What makes an event management event firm stand out among the rest is its firm belief
in the value of brands and the ability to know the importance of this to the consumers’
lives. Taking this into consideration, Aquarius Promotions has braved it all as it has
consistently deployed effective print media advertising to achieve this objective. It has
also played an important role in embracing the new media making their clients be at
par with the contemporary tools of advertising.
18. Seven P’s of service sector
• Product
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• Price
• Place
• Promotion
• Process
• People
• Physical evidence.
19. MANAGING DEMAND AND SUPPLY IN SERVICES*
OPTION 1
Strategies for making capacity to match demand
􀂾 Customer Involvement
• Self Service
• Buffets and Salad bars at restaurants
• Fast food joints
􀂾 Cross training employees
To perform tasks in several operations creates flexible capacity to meet localized peaks
in demand.
􀂾 Using part time employees
A ready part time labour pool is available from college at Coffee Day, Pizza Hut
􀂾 tretch existing capacity
o Stretch time – Banks started working on Sundays
o Stretch labour – Overtime work from employees
o Stretch fascilities – Additional tables & chairs at restaurants
o Stretch equipments – Computers, phone lines
􀂾 Developing complementary services
Eg: Restaurants have complimentary services by adding a bar. Diverting waiting
customers into the lounge during busy waiting periods can be profitable to the
restaurants.
􀂾 Promoting off peak demand
Eg: Telephone company’s offer lower rates to encourage long distance dialing at night.
􀂾 Pricing Incentives
Eg: Movies (INOX) Mon to Thurs – Morning show – 79/-
Fri, Sat, Sun – Night show – 250/-
􀂾 Communicate to Customers
Eg: Signs in banks and post offices that let customers know their busiest hours and days
of the week, can serve as warnings.
􀂾 Modify Timing
Eg: Empire chain of Hotels open till midnight.
􀂾 Modify Location
Eg: Mobile libraries, Mobile Dialysis in ambulance
􀂾 Sharing Capacity
Eg: Parking facilities hired from neighbouring institutions on peak hours.
􀂾 Move facilities and Equipment
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Eg: Hotels – Two rooms with a locked door inbetween can be rented to two different
parties in high demand times.
􀂾 Schedule ‘[décor] time’ during periods of low demand
Eg: Paintings / Repair & Maintenance work done at college during holiday times.
OPTION 2
Strategies for managing demand to match capacity
􀂾 Partitioning demand
Eg: Patients flow in higher on week days. Therefore, why not make appointments in the
latter part of the week to level demand.
􀂾 Vary the service offering
Eg: Accounting firms focus on tax preparations late in the year. During other times of
the year, they can focus on Audits and general consulting activities
􀂾 Advertising & Sales promotion:
Can also be used to remind customers about peak demand times & promotional
offers during off season are common.
OPTION 3
Strategies when demand and capacity cannot be matched.
􀂾 Reservations
There are reservations for services particularly when supply is likely to be
constrained.
Eg: Railway booking tickets, 1 Re flight charges, MTR [lunch]
􀂾 Waiting lines
o Once a customer arrives, he or she may be willing to wait for service to
begin.
o Many queues operate on first come, first serve basis.
o Certain services on the basis of critical needs / urgency rather than order
of arrival
􀂾 Queuing situations
o Arrival patterns of customers
o Service times
o Number of servers
o Queue disciplines
􀂾 Triage / Sorting
Eg: To handle first class & Business class travelers more expeditiously than tourist class
travelers who have paid considerably lower fares.
Can serve segment demands of different kinds and route them to different service
process
􀂾 Delaying Service Delivery
Eg: It’s worth waiting one hour (or for a little while) to experience the service which is
worth it. (Like waiting for MTR lunch, waiting for the best doctor.)
20. GAP MODEL:
Parameters in Queuing situations
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This model identifies a total of seven types of gaps that can occur at various points
during the design & delivery of a source performance.
i) Knowledge Gap: It is the difference between what service providers believe
customers expect and customer actual needs & expectations.
ii) Standard Gap: It is the difference between management’s acception of customers
expectations & quality standard established for service delivery.
iii) Delivery Gap: It is the difference between specified delivery standards & the
service provider’s actual performance on these standards.
iv) Internal Communication Gap: It is the gap between what the company’s
advertising & sales personnel think are the product’s features performance &
service quality level and what the company is actually able to deliver.
v) Perception Gap: It is the difference between what is infact delivered & what
customers perceive they have received.
vi) Interpretation Gap: Difference between what a service provider’s
communication effort promise &what customer thinks was promised by these
communications.
vii) Service Gaps: It is the difference between what customers expect to receive and
their perceptions of the service delivered.
21.
• Technological Advances ,
• Globalisation ,
• Deregulation policies,
• Competition,
• Cost effectiveness ,
• Computer explosion ,
• More leisure time ,
• Increase in percentage of working woman.
Section – D
ONE Compulsory Case study (No choice) 1 x 15 = 15 Mks
22. As per the discretion of the concerned teacher.
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