Fluent Essays

Hewlett-Packard (H-P) has enormous installed base of printers in customer organizations, large and small, all over the world.  How could H-P capitalize on this installed base and develop some innovative, hybrid offerings? 0 Chapter 9 Managing Services for Business Markets © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 12e The value of systematically monitoring and managing the customer experience The central role that business services assume in customer solutions The roles that service quality, customer satisfaction, and loyalty assume in service market success How offerings that combine products and services can be created to deliver innovative value propositions for customers Chapter Outline 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Customer Experience Life Cycle © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Customer experience Represents the internal and subjective response a business customer has to any direct or indirect contact with a company Touchpoints Instances in which the customer has direct contact with either the product or service itself or with representatives of it by a third party Offers a valuable tool for diagnosing key touchpoints Between company and customer from the moment contact is made with a potential customer through the maintenance of an ongoing relationship Provides a foundation for defining what is most important in customers’ experience Customer Experience Map © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Aims to identify: Value that customers place on different levels of performance for each element of the experience Customers’ minimal expectations for each element Customers’ perception of the firm’s performance versus that of key competitors Customer Experience Map (continued) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Processes that capture customers’ subjective thoughts about a particular company Requires surveys and targeted studies at points of customer interaction that recognize gaps between customer expectations and their actual experience Customer Experience Management © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Begins with an analysis of a customer problem and ends by identifying the products and services required to solve the problem Focus of the exchange process is interaction based Value is co-created by the firm in concert with the customer Solution-Centered Perspective 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. From a Product to a Solutions Perspective Product Perspective Solutions Perspective Value proposition Win by creating innovative products and enriching features of existing products Win by creating and delivering superior customer solutions Value creation Value is created by the firm Value is co-created by the customer and the firm Designing offerings Start with the product or service, and then target customer segments Start with the customer problem, and then assemble required products and services to solve the problem Company-customer relationship Transaction-based Interaction-based and centered on the co-creation of solutions Focus on quality Quality of internal processes and company offerings Quality of customer-firm interactions © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. In developing solutions, business marketing firms must: Define their unique capabilities Determine how to use them to help customers to: Reduce costs Increase responsiveness Improve quality Products provide the platform for the delivery of services Determine Unique Capabilities 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 9.2 - Relational Processes Comprising a Customer Solution © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 10 Different functional groups and business units have to be in agreement to deliver effective situations Cross-unit coordination of a customer solution is promoted when employee incentives complement one another Solution effectiveness can be facilitated by: Documenting the history of effective and ineffective customer solution engagements Laying out a process to guide employees Developing Mechanisms for Coordinating Activities © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Extent to which employees of the business marketing firm are required to document key milestones in the creation and deployment of a solution Provides a tool for: Managing complexity involved in creating solutions Synchronizing work and sharing information across units Document Emphasis © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Refers to the extent to which a supplier firm: Clarifies the roles and responsibilities of organizational units Provides guidelines for sharing customer and product information in developing a solution Process Articulation © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Customer’s Role © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Customer adaptiveness Degree to which a customer is willing to adjust its routines and processes to accommodate a supplier’s products Political counselling Extent to which a customer provides a supplier with information regarding the political landscape in the customer organization Operational counselling Information provided to suppliers concerning relevant technical systems, business processes, and company policies in the customer organization New opportunities for increasing the amount of business that a company receives from its customer base Services offer more than what core products can offer Solutions offer more avenues for differentiation than products as they include a variety of services By co-creating solutions, business marketers enhance loyalty resulting in the customer creating barriers for competition Benefits of Solution Marketing © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Intangible Consumed at the time of production Cannot be stored Highly variable Services versus Products Tangible Time lag exists between the production and consumption Can be stored Highly standardized Products Services © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 9.3 - Business Product–Service Classification Based on Tangibility © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Characteristics Examples Marketing Implications Simultaneous production and consumption Telephone conference call; management seminar; equipment repair Direct-seller interaction requires that service be done “right”; requires high-level training for personnel; requires effective screening and recruitment Nonstandardized output Management advice varies with the individual consultant; merchandise damages vary from shipment to shipment Emphasizes strict quality control standards; develop systems that minimize deviation and human error; prepackage the service; look for ways to automate Unique Service Characteristics © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Characteristics Examples Marketing Implications Perishability: inability to store or stockpile Unfilled airline seats; an idle computer technician; unrented warehouse space Plan capacity around peak demand; use pricing and promotion to even out demand peaks and valleys; use overlapping shifts for personnel Lack of ownership Use of railroad car; use of consultant’s know-how; use of mailing list Focus promotion on the advantages of nonownership: reduced labor, overhead, and capital; emphasize flexibility Unique Service Characteristics (continued) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Responsiveness Description Examples Reliability Delivering on promises Promised delivery date met Responsiveness Being willing to help Prompt reply to customers’ requests Assurance Inspiring trust and confidence Professional and knowledgeable staff Empathy Treating customers as individuals Adapts to special needs of customer Tangibles Representing the service physically Distinctive materials: brochures, documents Dimensions of Service Quality © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Basic elements of the product or service that customers expect all competitors to provide Basic support services that make the product or service more effective or easier to use Recovery process for quickly fixing product or service problems Extraordinary services that excel in solving customers’ unique problems or in meeting the needs that they make the product seem customized Customer-Linking Processes That Affect Customer Satisfaction © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Encompasses the procedures, policies, and processes a firm uses to resolve customer service problems promptly and effectively Customer’s level of perceived service quality rises when service providers satisfactorily resolve service failures Business marketers should develop highly responsive processes for dealing with service failures Service Recovery 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Customer defections - Customers who do not come back Profits rise considerably when company’s relationship with a customer lengthens Benefits of retaining customers Service companies can charge more Cost of doing business is reduced Long-standing customer provides free advertising Zero Defections 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Service providers should: Track customer defections carefully Recognize that continuous improvement in service quality is an investment in a customer Zero Defections (continued) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Product dimension of service that includes decisions about: Essential concept of the service Range of service provided Quality and level of service Must consider some factors unique to services Personnel who perform the service, physical product that accompanies the service, and process of providing the service Service Packages 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 9.4 - Conceptualizing the Service Product © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Combination of one or more goods and one or more services that together offer more customer benefits than if the good and service were available separately Employed to advance revenue and profit growth 27 Hybrid Offering © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 27 Figure 9.5 - Manufacturer-Specific Resources and Capabilities for Successful Hybrid Offerings © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Hybrid Service Offerings Classification 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Product life cycle services (PLS) Facilitate the customer’s access to a manufacturer’s product Ensure its desired functioning during all stages of its useful life from delivery, installation, and maintenance to recycling or disposal Asset efficiency services (AES) Designed to provide customers with productivity gains on their asset investments Hybrid Service Offerings Classification (continued) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Process support services (PSS) Provided by a manufacturer that assist customers in increasing the efficiency of their own business processes Process delegation services (PDS) Manufacturer performs specific processes on behalf of the customer