30 Questions
What characteristic of services is described as 'difficult to define the boundary of intangible elements of service'?
Intangibility
Which aspect of service operations makes it challenging to achieve significant cost efficiencies?
Heterogeneity
What does 'Inseparability' in service characteristics imply?
Service production and consumption occur simultaneously
Which strategy is suggested to manage the impact of operations in service management?
Managing customers' expectations
What is a critical consideration for managing service operations due to the characteristic of 'Perishability'?
Matching capacity with demand
How does 'Heterogeneity' impact service operations?
Results in difficulty in standardizing services
What does the term 'customer experience' refer to in the context of the text?
The direct and personal interpretation of customer's interaction in the service process
Which of the following is NOT considered an outcome of a customer's experience as per the text?
Price competitiveness
How are 'co-production' and 'co-creation' defined in the context of customer service?
Instances where customers work together with the service provider to create value
Which of the following is NOT listed as a category of outcomes of a customer's experience in the text?
Services
What is one of the intentions that may result from a customer's judgments of a service, as per the text?
Intention to recommend the service to others
In the context of a customer's experience, what is meant by 'judgments'?
The conscious or unconscious assessment of the service and benefits gained
What is the foundational premise of Service-dominant logic according to the text?
Service is the fundamental basis of exchange
What do operant resources refer to?
Invisible and intangible skills and knowledge
Which concept emphasizes changing the way product functionality is delivered by packaging services along with products?
Servitisation
What distinguishes operant resources from operand resources in the text?
Operant resources are skills and knowledge, while operand resources are tangible assets.
What do economists distinguish between according to the text?
Operant and operand resources
How does Service-dominant logic view service in business activity?
As a process or activity, not singular 'service'
What does intangibility imply for service operations improvement?
Potential confusion on what should be improved
How does heterogeneity impact service operations improvement?
Different improvements for different customers
Inseparability suggests that:
Service quality is independent of the service provider's capabilities
What is a key implication of perishability for service improvements?
Little time to make improvements
What is one of the focuses of a service strategy?
Reflecting overall strategic business aims
What should an organization do after considering its service strategy as per the text?
Articulate its strategy
What is the purpose of capability mapping in service design?
To assess the implications of design changes
Customers in a service process may also be:
Payers
Which group primarily uses approaches based on customer purchasing behavior?
Sales people
What is a key task for operation managers according to the text?
Retaining valuable customers
Which group primarily uses approaches based on customer group characteristics?
Marketing people
What do 'customers' in a service process refer to according to the text?
'Customers' refer to all individuals or organizations who provide service
Study Notes
IHIP Characteristics of Services
- Intangibility: Services lack physical form, making it difficult to define their boundaries
- Heterogeneity: Every service is unique and can be perceived differently by each customer
- Inseparability: Services are produced and consumed simultaneously, making it difficult to separate production and consumption
- Perishability: Services cease to have value after a short period, making it essential to match capacity with demand
Managing Service Operations
- Manage customer expectations: Set clear expectations about what the service comprises to reduce misunderstandings
- Staff training: Train staff to cope with diverse customer requests and non-standard situations
- Transfer non-standard customers: Direct customers with unusual requests to a more appropriate service
- Technology: Leverage technology to separate production and consumption, reducing the impact of IHIP characteristics
- Customer guidance: Provide guidance to reduce the need for contact, such as FAQs on a website
- Accurate demand forecasting: Forecast demand to plan service capacity and minimize underutilized resources or lost revenue
Customer Perspective
- Customer experience: The customer's direct and personal interpretation of their participation in the service process
- Outcomes: Products, benefits, emotions, judgments, and intentions
- Products: The functional output of the service process
- Benefits: The benefits provided by the service
- Emotions: The emotions experienced by the customer during the service process
- Judgments: The customer's assessment of the service and its benefits
- Intentions: The customer's intentions based on their judgments, such as repurchase or recommend the service
Co-Production and Co-Creation
- Co-production and co-creation: Collaborative processes between customers and service operations to create value
- Experience economy: Recasting services as memorable experiences
- Servitisation: Packaging services with products to enhance their value
- Service-dominant logic (SDL): Viewing service as the basis for all business activity
Service-Dominant Logic (SDL)
- Foundational premises (FPs): Service is the fundamental basis of exchange, indirect exchange masks the fundamental basis of exchange, goods are a distribution mechanism for service provision, operant resources are the fundamental source of competitive advantage, and all economies are service-based
- FPs in practice: Firms trade services, goods have value through service provision, and operant resources are the source of competitive advantage
Implications for Service Operations Improvement
- Intangibility: Confusion about what to improve
- Heterogeneity: Different improvement needs for each customer
- Inseparability: Independence of service quality from individual service provider skills
- Perishability: Limited time for improvement
Service Strategy
- Service strategy: Shaping the direction and development of an organisation's service-providing resources and processes
- Four key aspects of service strategy: Reflecting overall strategic aims, satisfying market requirements, considering practicalities of service delivery, and developing organisational capabilities
Who are Customers?
- Customers: Recipients and often providers (co-producers) in a service process
- Types of customers: External, internal, intermediaries, end users, stakeholders, payers, beneficiaries, participants, valuable, and non-valuable
- Classifying customers: Based on purchasing behavior, characteristics, or position in the supply network
- Benefits of retaining good customers: A key task for operation managers, as retaining valuable customers is crucial for business success
Explore the meaning and implications of IHIP in managing service operations, focusing on Intangibility, Heterogeneity, Inseparability, and Perishability. Understand the challenges related to defining boundaries, standardizing services, predicting customer demands, and achieving cost efficiencies.
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