EIGHT COMPONENTS OF INTEGRATED SERVICE MANAGEMENT TUTORIALS

INTEGRATED SERVICE MANAGEMENT COMPONENTS
What Are The Eight Components Of Integrated Service Management?


When discussing strategies to market manufactured goods, marketers usually address four basic strategic elements: product, price, place (or distribution), and promotion (or communication). Collectively, these four categories are often referred to as the "4Ps" of the marketing mix.

However, the distinctive nature of service performances, especially such aspects as customer involvement in production and the importance of the time factor, requires that other strategic elements be included. To capture the nature of this challenge, we will be using the "8Ps" of integrated service management, which describe eight decision variables facing managers of service organizations.

Our visual metaphor for the 8Ps is the racing "eight," a lightweight boat or shell powered by eight rowers, made famous by the Oxford and Cambridge boat race that has taken place annually on the River Thames near London for almost 150 years.

Today, similar races involving many different teams are a staple of rowing competitions around the world, as well as a featured sport in the Summer Olympics. Speed comes not only from the rowers' physical strength, but also from their harmony and cohesion as part of a team.

To achieve optimal effectiveness, each of the eight rowers must pull on his or her oar in unison with the others, following the direction of the coxswain, who is seated in the stern. A similar synergy and integration between each of the 8Ps is required for success in any competitive service business.

The cox—who steers the boat, setsthe pace, motivates the crew, and keeps a close eye on competing boats in the race—is a metaphor for management.

Product Elements
Managers must select the features of both the core product and the bundle of supplementary service elements surrounding it, with reference to the benefits desired by customers and how well competing products perform.

Place, Cyberspace, and Time 
Delivering product elements to customers involves decisions on both the place and time of delivery and may involve physical or electronic distribution channels (or both), depending on the nature of the service being provided. Messaging services and the Internet allow information-based services to be delivered in cyberspace for retrieval by telephone or computer wherever and whenever it suits the customer.

Firms may deliver service directly to their customers or through intermediary organizations like retail outlets owned by other companies, which receive a fee or percentage of the selling price to perform certain tasks associated with sales, service, and customer-contact. Customer expectations of speed and convenience are becoming important determinants in service delivery strategy.


Process
Creating and delivering product elements to customers requires the design and implementation of effective processes. A process describes the method and sequence in which service operating systems work.

Badly designed processes are likely to annoy customers because of slow, bureaucratic, and ineffective service delivery. Similarly, poor processes make it difficult for front-line staff to do their jobs well, result in low productivity, and increase the likelihood of service failures.

Productivity and Quality
These elements, often treated separately, should be seen as two sides of the same coin. No service firm can afford to address either element in isolation. Improved productivity is essential to keep costs under control but managers must beware of making inappropriate cuts in service levels that are resented by customers (and perhaps by employees, too).

Service quality, as defined by customers, is essential for product differentiation and for building customer loyalty. However, investing in quality improvement without understanding the trade-off between incremental costs and incremental revenues may place the profitability of the firm at risk.

People
Many services depend on direct, personal interaction between customers and a firm's employees (like getting a haircut or eating at a restaurant). The nature of these interactions strongly influences the customer's perceptions of service quality.

Customers often judge the quality of the service they receive largely on their assessment of the people providing the service. Successful service firms devote significant effort to recruiting, training, and motivating their personnel, especially—but not exclusively— those who are in direct contact with customers.

Promotion and Education 
No marketing program can succeed without an effective communication program. This component plays three vital roles: providing needed information and advice, persuading target customers of the merits of a specific product, and encouraging them to take action at specific times.

In service marketing, much communication is educational in nature, especially for new customers. Companies may need to teach these customers about the benefits of the service, where and when to obtain it, and how to participate effectively in service processes.

Communications can be delivered by individuals, such as salespeople and trainers, or through such media as TV, radio, newspapers, magazines, billboards, brochures, and Web sites.

Physical Evidence The appearance of buildings, landscaping, vehicles, interior
furnishing, equipment, staff members, signs, printed materials, and other visible cues all
provide tangible evidence of a firm's service style and quality. Service firms need to
manage physical evidence carefully because it can have a profound impact on
customers' impressions. In services with few tangible elements, such as insurance,
advertising is often employed to create meaningful symbols. For instance, an umbrella
may symbolize protection, and a fortress, security.

Price and Other User Outlays
This component addresses management of the
outlays incurred by customers in obtaining benefits from the service product.
Responsibilities are not limited to the traditional pricing tasks of establishing the selling
price to customers, which typically include setting trade margins and establishing credit
terms. Service managers also recognize and, where practical, seek to minimize other
costs and burdens that customers may bear in purchasing and using a service, including
additional financial expenditures, time, mental and physical effort, and negative sensory
experiences.

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