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-