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SERVICE LEAD ERSH IP

Service Profi t Chain


Links in Service Profi t Chain
1. Customer loyalty drives proftability and growth
Integrating M arketing,
Operations and HR
Marketing Function
Four Levels of Service
Perform ance
Service Losers
Four Hurdles for M oving up the
Perform ance Ladder

Cognitive Hurdles

People cannot agree on causes of current problems and the


need for change

Resource Hurdles

Firm is constrained by limited funds

Motivation Hurdles

Prevent rapid execution when employees are reluctant to


change

Political Hurdles

rgani!ed resistance forces in forms from powerful vested


interests see"ing to protect their positions
!LM !R" L#!$#RSHIP

#rip fre$uency% transaction si!e%


productivity and costs

&'LP co! of &'LC

Consumables and Private labels

Locali!ation and ancillary services

Shop(ability and retail(tainment

PP% CPFR% MC)PS

PS( sold out factor

nline feedbac" systems


C!S#L#"S

#our and #ravel operators are facing


a torrid time maintaining bottom(
lines with the hi"e in diesel and
petrol prices* +n this scenario% how
can a tour operator li"e Ra, #ravels
segment the mar"et and use a
positioning strategy to prop up its
sagging bottom(line-
C!S#L#"S

#he +./ /roup plans to conduct an


integrated campaign throughout
+ndia after it assumes ma,ority
control in 0ysya 1an" followed by a
change in the ban"2s name* 'iscuss
the di3erent branding options that
+./ can opt for its 4nancial services
C!S#L#"S

)vish"ar )dvertising is a small ad agency that had


established itself by providing advertising services
to companies in the healthcare industry* However%
things changed with the entry of advertising
agencies li"e &uro(RSC/% M))(1o!ell% FC1(5l"a
and #16) that began wor"ing with
Pharmaceutical companies li"e 7noll% #orrent% and
.ovartis on the strength of their international
alliances* 1igger agencies li"e 8M% Lowe and
McCann also set up separate divisions for
healthcare communications* 6hat "ind of pricing
ob,ective and pricing strategy should )vish"ar
adopt to tide over this situation-
C!S#L#"S

/)#+% the cargo services company% plans to


launch 2#he Millennium Parcel &xpress2 a
co(enterprise between /ati and +ndian
Railways% that consists of a cargo train%
having a capacity of 9:; tonnes% specially
designed to carry high(value express
cargo* 6hat do you thin" the promotional
ob,ective of /)#+ should be- 6hich of the
promotion mix elements would be best
suited to launch 2#he Millennium Parcel
&xpress2-
C!S#L#"S

#he world2s largest independent +# training


company% the 5S(based .ew Hori!ons% has
entered +ndia at a time when the domestic
computer education mar"et is struggling in
the wa"e of the global technology meltdown*
6hat factors should .ew Hori!ons consider
when ma"ing channel decisions- ther than
franchising% which delivery channel can the
company opt for if it wants to reach a large
number of customers at their convenience
and yet "eep down costs-
C!S#L#"S

#he recent 5nion budget saw an increase in


postal rates with rates for the ordinary
envelope being increased by 9; per cent to Rs
< for 9; gm* 6ith bul" courier rates starting
from around Rs* <% local companies have
started switching to courier services* +n this
"ind of situation% there could be increased
opportunities for individuals to start courier
4rms* 1ased on customer involvement% under
which category do courier and postal services
come- 6hat type of services can a courier
company o3er based on the type of end(user-
C!S#L#"S

Spea"ing about the continuing poor 4nancial


performance of an airline for the past seven
$uarters% a mar"eting research analyst said
=#he failure can be attributed to the airline>s
lac" of focus on one of the "ey characteristic
of a service industry ( =perishability?% which
led to a lower occupancy rate i*e*% the airline
reali!ed less sales volumes per @ight*? 6hat
are the "ey characteristics which ma"e
services mar"eting di3erent from product
mar"eting* 6hich among them will a3ect the
airline industry most-
C!S#L#"S

Fit 8 Fine% a leading chain of health


and 4tness centers brings out
advertisements which say =1ring this
advertisement and avail free <"g
weight loss program?* 6hat is the
motive behind such promotions-
C!S#L#"S

) new 1P company is deciding upon the service


$uality standards it wants to enforce* #he top
management had earlier 4xed $uality standards
based on industry benchmar"s* 1ut this initiative
did not yield the desired result* .ow the
management has appointed Mr* 7* P* Singh a
leading service industry expert% to loo" into the
matter* 7* P* Singh has suggested that the service
$uality standards need to be based on customer
service expectations rather than on industry
benchmar"s* 6hat do you mean by customer
service expectations and what are various types of
customer service expectations-
C!S#L#"S

17 Fast Foods A17B is the oldest restaurant


chain operating in Southern +ndia* However in
the recent past its sales have been dipping
and the customer traCc to its outlets
dwindling +t hired Mar"4rst% a mar"et research
agency to analy!e reasons for its poor
performance* #he study conducted by
Mar"4rst revealed that customer perceived it
as a =tired brand? which had lost its relevance
in the present day environment* 6hat are the
various ways through which 17 Fast Foods can
change the perceptions of the consumers-
C!S#L#"S

SS1 +nsurance is a new entrant in the


highly competitive life insurance
mar"et* +t is in a dilemma regarding
the customer segment it has to
target* 6hich form of segmentation
is appropriate for SS1 +nsurance-
C!S#L#"S

/odre, +ndustries is a diversi4ed group


having varied interests in personal care
products% consumer electronics business%
industrial products% and furniture business*
)s a product company it could meet demand
by increasing production* .ow% /odre, is
entering into the 1P mar"et* However%
managing demand and supply is not easy a
proposition in the services sector* 6hat are
the "ey capacity constraints that /odre, may
face in its 1P business-
C!S#L#"S

SouthSide Hotels is a ma,or player in the


hospitality industry with a chain of hotels and
resorts* Recently% it opened a new theme par"
in Hyderabad* 1eing the 4rst of its "ind in
Hyderabad% it attracted visitors in thousands*
n wee"ends and holidays% many visitors
could not enter the par"% as the tic"ets for the
day where sold out* #he management of the
par" was unable to cope with the increase in
demand because of 4nancial and operational
constraints* 6hat strategies should SouthSide
adopt to meet the demand-
C!S#L#"S

Pantaloon Retail +ndia Ltd% a leading retailer in


+ndia with brands Pantaloons% 1ig 1a!aar%
Food 1a!aar% and /old 1a!aar% has recently
entered into mall management services by
opening a chain of malls in various cities
under the brand DCentral>* +t leases its mall to
various consumer product manufacturers and
service providers* +n .ovember 9;;E% it
opened DHyderabad Central> with an
investment of Rs F; crore* 6hile deciding the
leasing rate for the stores in the mall% what
was the pricing ob,ective-
C!S#L#"S

)1.()mro 1an" has surprised the


ban"ing industry by announcing the
lowest interest rate of G*<H for its
housing loans% which is IH less than
what other ban"s are o3ering* 6hat
"ind of pricing strategy has )1.(
)mro 1an" adopted in this case-
'escribe the pricing strategy*
C!S#L#"S

+ndia#0 launched in the cluttered +ndian


television channel mar"et with well(
entrenched names li"e .'#0% Jee .ews%
)a,ta"% and Star.ews* Mr*Ra,at Sharma the
head of +ndia #0 wants to establish the
channel as a =mouthpiece of the common
man*? )s the channel is free(to(air% its only
source of revenue is advertising* #herefore%
while pricing the advertising space in the
channel what are various factors that the
channel management must "eep in mind-
C!S#L#"S

Charms Spa% a Spa chain having


branches all over +ndia is setting up
its new branch at Hyderabad* )s the
spa concept is new to many +ndian
customers% it is planning to run a
sales promotion campaign to attract
customers and create awareness
about its service o3erings* 6hat are
the various sales promotion schemes
that Charms Spa can adopt-
C!S#L#"S

S1+% that lost to new age private ban"s


during the IKK;s% has renewed its e3orts
to regain its lost pride in the past two
years* +t has introduced various measures%
such as expanding its )#M networ"%
opening personal ban"ing divisions%
venturing into credit cards and insurance
services% providing value added services
li"e online ban"ing% and reducing the
wor"force through 0RS* 6hat do you thin"
are the motives behind such moves-
C!S#L#"S

DCo3ee House> a co3ee bean exporter sensing


the high mar"et potential of co3ee bars% is
planning to launch a co3ee bar chain in +ndia
called =#imepass?* +t wants to position its
co3ee bar chain as an up mar"et leisure
hangout for customers* )s it lac"s "nowledge
and experience in the co3ee retailing
industry% the company is undecided about the
design aspects of the co3ee bars* 6hat
decisions relating to the elements of physical
evidence are to be ta"en by DCo3ee House>-
C!S#L#"S

Former partners of a leading


consultation 4rm have formed
=Stratosphere?% a strategy consulting
company* )s it is new to the mar"et
it is undecided about the pricing
strategy to be adopted for the
di3erent services rendered by it*
6hat "ind of pricing approach should
the company adopt-
C!S#L#"S

Mediciti Hospitals% a multi(specialty


hospital chain% has branches in all the four
metro cities* )s part of the exercise to
improve the customer service at the
hospital% it wants to analy!e the ade$uate
service expectations and the factors that
a3ect the ade$uate service expectations
of the customers* 6hat are the possible
factors that a3ect the ade$uate service
expectations in the context of healthcare
service-
C!S#L#"S

'eccan Chronicle% a leading &nglish


newspaper in )ndhra Pradesh is
planning to enter the highly
insulated Chennai mar"et* 6hat "ind
of segmentation should 'eccan
Chronicle adopt- 6hich segments
should the newspaper target-
C!S#L#"S

#ravelMart% a travel agency that


o3ers tic"eting services to corporate
customers is planning to launch new
value added services to improve its
revenues and ta"e on the
competition* 6hat new services can
#ravelMart o3er to ta"e on the
competition and improve its
revenues-
C!S#L#"S

P*S +ndustries opened a hypermar"et store ='iscount


Shoppe? with much fanfare* #o di3erentiate it from the
competition% it designed the store on the lines of up(
mar"et departmental stores with bright lighting and neatly
arranged store rac"s* +t even housed a premium range of
goods and accessories to attract up(mar"et customers*
#he prices were decided "eeping in mind pro4t margins
rather than the generating of sales volumes* #he company
promoted it as the best bargain shop and roped in
celebrities to promote the store* +t located the store in the
central business district of the city* #hough it attracted a
record number of customers during the initial days% the
footfalls dwindled over time and the company was forced
to close down the hypermar"et* 6hat do you thin" were
the reasons for the failure of ='iscount Shoppe?-
C!S#L#"S

SS couriers% an established player in the


corporate overnight courier delivery service%
witnessed continuous growth rate since its
inception* +t has many 4rsts to its name L having
its own @eet% use of +# and providing varied
services* However% in the past three years% SS>s
customer base and sales volumes moved south*
) survey conducted by the company>s
management revealed that customers were
dissatis4ed with the poor customer service and
fre$uent service failures* 6hat service recovery
steps can SS ta"e to regain its customers-
C!S#L#"S

Fed&x provides guaranteed overnight


delivery of parcels* 'omino>s
guarantees delivery of orders within
half(n(hour% or else the order is given
free* )irtel launched a money( bac"
guarantee to its post( paid
customers% where customers
experiencing a call drop during
conversation would not be charged
for that call* 6hat are the motives
behind setting such service
guarantees-
C!S#L#"S

M7S is a leading diagnostic service


provider to leading hospitals in +ndia*
+t collects test samples and gives
diagnostic reports of patients to
hospitals* M7S wants to enhance its
service delivery process* 6hat are
the various factors that will in@uence
the service delivery process-
C!S#L#"S

)fter FMC/s% food% and entertainment% pharma


retailing has gained attention with an increasing
number of corporates foraying into the segment*
#hough corporates are putting in ma,or
investments into this segment% it would be very
diCcult for them to become more attractive to
customers than the neighborhood chemist% unless
the overall value proposition for the retail outlets
includes a number of value(added services* +n
what ways can a pharma retailer enhance the
value proposition o3ered to customers and move
up the services value chain-
C!S#L#"S

6ith most ad agencies moving from the


@at I< percent commission to a fee( based
revenue arrangement% advertising
agencies such as Contract are see"ing
ways to improve pricing by o3ering value(
added services such as consulting% which
is a step further than the account planning
services of a traditional ad agency* 6hat
type of pricing strategies can Contract use
to re@ect the additional value delivered to
customers-

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