Services Management

1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – OCTOBER 2014

B.Com T.T. – III SEMESTER

 SERVICES MANAGEMENT

Duration: 3 Hours                                                                                         Max. Marks: 100

SECTION – A

1. Answer ALL the questions. Each carries 2 marks.                                       (10 x 2 =20)

 

 

1. Ram gave a negative review about the movie ‘Singam-Returns’ and Rahim spoke very positive about the movie ‘ lunch box’. What are both Ram and Rahim referred to the production houses of the respective movies?
2. What do you mean by price bundling?
3. Mention two difference between BPO and KPO.
4. Elsa cannot reproduce exactly the same surgery on a different patient with similar problem. What characteristic of service this depicts? Explain.
5. What do you mean by market Micro Segmentation?
6. List two intangible elements of watching “Finding Fanny” in Inox movie theatre at a popular mall.
7. Mention two differences between physical goods and services.
8. Mention benefits of service blueprints.
9. What is meant by structural bonds?
10. Mr. Sundar Ram is very happy as his restaurant is overflowing with customers. But he sometimes is not able to satisfy all the customers at peak hours. What strategies can be used by him to match the demand of customers?

SECTION – B

 

1. Answer any FOUR Each carries 5 marks.                                     (4×5=20)
2. Narayan wants to take a break from his work and want to go for an outstation trip. Tour agencies are offering different packages and he is confused with the large number of options available to him. What purchase process will he go through in availing the service?

 

12. When you enter a Hotel, does the service scape affect your perception of the service? Which are the important elements of physical settings?

 

13. Indrani was disturbed when the skin specialist recommended a steroid to her 6 month old baby for the skin treatment which she continued for a year and brought an end to it when she knew about the ill effects of long term use of the medicine which the specialist did not inform her. Is it difficult to evaluate services? What are the attributes that affects the evaluation of services.
14. Write a short note on the emerging event management industry.
15. “Customer’s Stop” shopping centre wants to build and strengthen their customer base. What steps should the management take to build the customer loyalty?

 

16. What are the steps involved in conceptualization of service concept?

 

 

SECTION – C

 

III)      Answer any THREE questions.      Each carries 15 marks.                         (3×15=45)

17. After the Second World War there has been a steady decline in the traditional manufacturing goods, their place has been taken by service based enterprise. This shift has been so significant that some refer it as the “Second Industrial Revolution”. What are the reasons for the growth in service sector?
18. What do you mean by GAP? Explain the seven service delivery gap with suitable examples.

 

19. Mr.Oberoi makes sure that his shirts and his perfumes are of Armani brand. Some times he is so happy with the color or the texture of the shirt that he pays premium amount to the retailer. What kind of customer is Mr. Oberoi to the retailer? Briefly explain the 80/20 customer pyramid and its extended version.
20. Explain the various strategies which could be implemented to meet demand and supply of the services.

 

21. Kamat Brothers & Co. plan to start a theme based Amusement park and Resort on kanakpura road with 200 acres of land. Draft the seven P’s of service mix in detail for the success of the Amusement park and to effectively handle competition.

 

SECTION – D

1. IV) Case study- Compulsory questions.          (15 marks)
2. Agri Tourism Development Corporation

Founded by Mr. Pandurang Tarawe, who himself hails from a farming family, ATDC’s goals are to develop and promote agricultural tourism (agri-tourism) as a potential vehicle for diversifying and stabilizing rural economies by creating jobs, increasing community income, providing a broader market base for local business, and attracting tourists to the area, thereby supporting the growth of small tourism industries.

The main goals of the programme are to benefit farmers, local communities, and tourism enterprises through the development of new consumer markets, increasing awareness of local agricultural products, enhancing understanding of the importance of maintaining agricultural lands, providing farm family members with opportunities for on-site employment so they do not have to migrate to urban areas, and strengthening the long-term sustainability of small farms.

There is also concern that migration to urban areas, particularly among the young, will have a long-term negative impact on the agricultural sector and rural areas, so finding ways to encourage young Indians to remain or return to their villages and earn a viable living is also a focus of the ATDC’s efforts.

ATDC offers free agri-tourism training programmes which equip farmers with the technical knowledge they need to diversify their products and establish small-holding tourism ventures. In addition, ATDC prepares feasibility reports of the villages and trains guides as well as the entire community for the development of agri-tourism business. It currently has 52 agri-tourism locations in Maharashtra, and has provided training to over 500 farmers in diversifying their activities into tourism. As a result, since the inception of the programme, farmers across the state have experienced a 25% growth in their income. A major goal of the programme is to encourage farm family members to remain in, or return to, their home communities and to have viable employment and business opportunities through the agricultural sector. To that end, ATDC advocates a policy of employing local youth in its agri-tourism centres, and it has helped to undertake activities that will attract rural youth to remain in their villages, including being appointed as technical faculty for the Shri Rajashri Sahu Self Employment Scheme, which trains unemployed youth from various castes to become entrepreneurs.

More than 50 have been offered a job at the end of their training and 5 have started their own agri-tourism centres. In addition, ATDC specifically contracts women for food preparation services in the agri-tourism centres, through organised Women Self Help Groups, again helping to support small enterprise development for rural families.

To support the cultural heritage of Maharashtra’s rural villages, ATDC conducts training programmes for local artisans, to keep traditional arts and crafts alive. To support this, handicrafts are then sold in souvenir shops for visiting tourists, plant nurseries and a medical plant garden have been built to educate visitors about traditional uses of plants, and cuttings sold to Indian visitors from urban areas, and a demonstration showcasing the transition of irrigation methods from traditional to modern, as well as changes in farming and transport, has been created. Tourists are additionally offered a range of activities, such as wine tasting tours and tractor or bullock cart rides.

 

 

With this innovative approach to working with rural farmers through the development of agri-tourism, Agri Tourism Development Corporation has contributed to poverty alleviation and has developed a concept that is leading the way towards sustainable livelihoods for many farmers and their families in the state of Maharashtra.

Questions:

1. What are the main goals of Agri Tourism Development Corporation?

 

1. What benefits will ATDC bring to the agricultural sector and Indian tourism Industry.

 

 

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Answer scheme

B.Com T.T. – III SEMESTER

SUB: Service Management

Duration: 3 Hours                                                                                         Max. Marks: 100

SECTION – A

• Answer ALL the questions. Each carries 2 marks.                                       (2 x 10 =20)

 

1. Ram-terrorist and Rahim-apostle to the production houses.
2. Pricing Bundling

In this strategy, the service provider prices all his service offering as a package at a single price.

Eg. Health clubs may offer a range of facilities at a single price for the benefits of its customers

 

3. BPO is typically categorized into back office outsourcing – which includes internal business functions such as human resources or finance and accounting, and front office outsourcing – which includes customer-related services such as contact centre services.

BPO that is contracted outside a company’s country is called offshore outsourcing. BPO that is contracted to a company’s neighboring (or nearby) country is called nearshore outsourcing.

Often the business processes are information technology-based, and are referred to as ITES-BPO, where ITES stands for Information Technology Enabled Service.

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.

 

4. . Variability:

• A service is always unique, it only exists once, and is never exactly repeated even by the same service provider. Eg: teacher can not reproduce the same lecture.

 

5. Market micro segmentation

• Each person has distinct (unique) characteristics and needs and prospective buyer is potentially a separate target segment
• The creation of customer data base and sophisticated software makes it problem for firms to adapt to micro segmentation strategies targeted at small groups of customers that have ceratin relevant characterists at a specific point in time

 

6. Entertainment, joy, delightful
7. 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

 

8. USES OF SERVICE BLUEPRINTS

Service system blueprints simplify service complexities by displaying the operation of existing systems. When the current operation is explicit, managers are enabled to make rational choices about how they will operate in the future. Service system blue prints are task oriented that is they focus on observable actions or events (tasks).

 

9. Structural Bonds – Structural bonds are seen mostly in b2b settings and aim to stimulate loyalty through structural relationships between the provider and the customer. Examples are joint investments in projects and sharing of information, processes, and equipment. Structural bonds can be created in a b2c environment too. For instance, some airlines have introduced SMS and e-mail alerts for flight arrival and departure times so that travelers do not have to waste time waiting at the airport in the case of delays.
10. Strategies for making capacity to match demand
11. Customer Involvement

• Self Service
• Buffets and Salad bars at restaurants
• Fast food joints

2. Cross training employees

To perform tasks in several operations creates flexible capacity to meet localized peaks in demand.

3. Using part time employees

A ready part time labour pool is available from college at Coffee Day, Pizza Hut

4. stretch existing capacity

• Stretch time – Banks started working on Sundays
• Stretch labour – Overtime work from employees
• Stretch fascilities – Additional tables & chairs at restaurants
• Stretch equipments – Computers, phone lines

 

 

 

SECTION – B

• 6 Analytical questions, 5 Marks each
• Answer any 4 out of 6                                                                  4 x 5 = 20 Mks

1. Answer any FOUR Each carries 5 marks.                                  (4×5=20)

 

11.

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)
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

 

12. The important elements of physical setting are as follows:

• Ambience
• Space
• Decor and Artifacts

 

 

13. Difficulty In Evaluating Services

There are mainly two types of attributes that affects the evaluation of services. They are

• Product Attributes

The main product attributes that affects evaluation are

• Search attributes – Physical goods tend to emphasize those attributes that allow customers to evaluate a product before purchasing it. Examples are Style, colour, taste, sound etc. In case of services these attributes does not exist. Therefore it becomes difficult to evaluate.
• Experience attributes – When there are no attributes which helps to evaluate the service before purchasing, then the Experience attributes can be used. It’s actually asking those people who has availed the services earlier regarding their experiences. But customers always cannot rely on the experiences of others, because each customer interpret or respond to one service differently. E.g. holidays, live entertainment etc.
• 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.

 

2) Strategic Attributes

 

• Intangibility of service performances – Marketers whose product are high in experience characteristics often  try to provide more search attributes for their customers

E.g. offer a free trial, advertising other credentials.

• Variability and quality control problems – quality control for services that fall in the experience and credence ranges is complicated by customer involvement in production.

Evaluation of such services may be affected by customer interaction with the physical settings of the business, employees and even other customers.

Service providers must be able to interact with the customers effectively to produce a satisfactory product. Problems can occur when this interaction doesn’t produce an outcome that meets customers’ expectations even though the service providers may not be at a fault

 

 

14. 14. Event Management is a multi-million dollar industry, growing rapidly, with mega shows and events hosted regularly. Surprisingly, there is no formalized research conducted to assess the growth of this industry. The industry includes fields such as the MICE (Meetings, Incentives, Conventions and Exhibitions), conferences and seminars as well as live music and sporting events.

The event manager may become involved at the early initiation stages of the event. If the event manager has budget responsibilities at this early stage they may be termed an event or production executive. The early stages include:

• Site surveying
• Client Service
• Brief clarification
• Budget drafting
• Cash flow management
• Supply chain identification
• Procurement
• Scheduling
• Site design
• Technical design
• Health & Safety

An event manager who becomes involved closer to the event will often have a more limited brief. The key disciplines closer to the event are:

• Health & Safety including crowd management,
• Logistics
• Rigging
• Sound
• Light
• Video
• Detailed scheduling
• Security

15. BUILDING CUSTOMER LOYALTY

Step 1: The Foundations of Customer Loyalty

Step 2: Creating Bonds with Customers

Step 3: Managing and Curtailing Drivers of Customers Defections

 

 

16.

Step 1: customer benefit concept	Concerned with what benefits customer seeks.
Step 2: service concept	Concerned with what general benefits the service organization will offer.
Step 3: service offer	Concerned with more detailed shaping of the service concept –tangible and intangible components and the forms of service.
Step 4: service delivery system	Concerned with creation and delivery of the service offer with the help of people, process and facilities.

 

 

 

 

 

 

SECTION – C

• 5 Essay Type- Full length questions, 15 Mks each.
• Answer any 3 out of 5                                                                 3 x 15 = 45 Mks

 

III)      Answer any THREE questions.      Each carries 15 marks.                     (3×15=45)

 

Cause	Effect	Illustrations
Technologicial Advances	Higher complexity of products requiring skilled specialists	Design services; eg. Engineering consultancy, maintenance services; eg, annual maintenance contacts for computer, auto servicing;  Computerized alignment and ignition setting services, cellular phones
Globalisation	More business internationalization	Multinational courier companies, international forwarding and shipping services
Deregulation policies	Privatization of regulated sectors	Telecom services, internet services, birth of private airlines; eg., Sahara, Jet Airways.
Competition and need for higher productivity	Specialization / expert knowledge	Market research, business process engineering consultancy, TQM programme implementation, software programming
Cost effectiveness drives	Optimum man power use and sub-contracting less critical functions	Security services(Group 4 securities) Janitorial services (Hospital/office cleaning) Electronic Data Processing Services (pay roll processing)  Subcontracting during project Execution(Manpower deployment By contracting agencies at the Project sites).
Computer explosions	Speed of work performance and availability of sound motion and picture at an affordable cost	Multimedia Advertising services Data processing, Internet and many others.
Overall increase in affluence	Increased spending power and wish for comforts resulting in demand for those services which the consumer himself does not want to perform anymore	Carpet cleaning services, Laundry services, lawn care services, ticketing travel agents.
Increasing percentage of working women	Work performed by women earlier when at home now done by somebody else	Crèches  Baby sitting
More leisure time	Shift towards pleasure/ entertainment	Travel resorts Entertainment (Disco) Education (adult Education) Nature agencies/tour Operations.
Greater life expectancy	Desire to live long has resulted in special care facilities	Nursing homes, Private hospitals like Apollo Health Clubs
Increased complexity of life	Need for services of specialists because of complex issues required to be handled	Labor law consultants, marriage counseling, Recruitment services
Scarcity of resources and concern about our ecology	Need for services which can supplement and meet the resource crunch	Leasing finance for buying  cars/household good car Rental services time Sharing at internet when You cannot afford interest
Demographic changes	Dual career families where parents have less time to prepare meals and do house keeping	Home delivery food services Domestic help/Maid services senior Citizen homes.
Urbanization	Fast mechanical and self-centered life, deterioration of law & order	Security services private  detective services

 

18. GAP MODEL:

This model identifies a total of seven types of gaps that can occur at various points during the design & delivery of a source performance.

1. Knowledge Gap: It is the difference between what service providers believe customers expect and customer actual needs & expectations.
2. Standard Gap: It is the difference between management’s acception of customers expectations & quality standard established for service delivery.

• Delivery Gap: It is the difference between specified delivery standards & the service provider’s actual performance on these standards.

1. 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.
2. Perception Gap: It is the difference between what is infact delivered & what customers perceive they have received.
3. Interpretation Gap: Difference between what a service provider’s communication effort promise &what customer thinks was promised by these communications.

• Service Gaps: It is the difference between what customers expect to receive and their perceptions of the service delivered.

 

 

 

 

 

 

 

19. CUSTOMER PYRAMID.

 

 

 

20. MANAGING DEMAND AND SUPPLY IN SERVICES*

OPTION 1

Strategies for making capacity to match demand

2. Customer Involvement

• Self Service
• Buffets and Salad bars at restaurants
• Fast food joints

2. Cross training employees

To perform tasks in several operations creates flexible capacity to meet localized peaks in demand.

5. Using part time employees

A ready part time labour pool is available from college at Coffee Day, Pizza Hut

6. stretch existing capacity

• Stretch time – Banks started working on Sundays
• Stretch labour – Overtime work from employees
• Stretch fascilities – Additional tables & chairs at restaurants
• Stretch equipments – Computers, phone lines

7. 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.

8. Promoting off peak demand

Eg: Telephone company’s offer lower rates to encourage long distance dialing at night.

9. Pricing Incentives

Eg: Movies (INOX) Mon to Thurs – Morning show – 79/-

Fri, Sat, Sun – Night show – 250/-

10. 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.

11. Modify Timing

Eg: Empire chain of Hotels open till midnight.

12. Modify Location

Eg: Mobile libraries, Mobile Dialysis in ambulance

13. Sharing Capacity

Eg: Parking facilities hired from neighbouring institutions on peak hours.

14. Move facilities and Equipment

Eg: Hotels – Two rooms with a locked door inbetween can be rented to two different parties in high demand times.

15. 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

1. 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.

2. 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

3. 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.

1. Reservations

There are reservations for services particularly when supply is likely to be constrained.

Eg: Railway booking tickets, 1 Re flight charges, MTR [lunch]

2. Waiting lines

Once a customer arrives, he or she may be willing to wait for service to begin.

Many queues operate on first come, first serve basis.

Certain services on the basis of critical needs / urgency rather than order of arrival

3. Queuing situations

• Arrival patterns of customers
• Service times
• Number of servers
• 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

4. 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.)

21. Seven P’s of service marketing

• Product
• Price
• Place
• Promotion
• People
• Process
• Physical evidence.

SECTION – D

ONE Compulsory Case study (No choice)                   1 x 15 = 15 Mks

1. IV) Case study- Compulsory questions. (15 marks)
2. Answer in the case study itself is available and marks can be given as per teacher’s discretion.