Service Marketing Theory

Service Marketing Theory

1. What are the services?

Definitions

We will understand by services "all those identifiable, intangible activities that are the main object of an operation that is conceived to provide the satisfaction of consumers' needs."

From the foregoing, it can be deduced that service organizations are those that do not have as their main goal the manufacture of tangible products that buyers will permanently own, therefore, the service is the object of marketing, that is, the company is selling the service as the central nucleus of its offer to the market.

Another similar definition is the one that states that: “a service is any act or function that one party can offer to another, which is essentially intangible and does not result in any property. Its production may or may not be linked to a physical product. "

However, a universally acceptable definition of services has so far not been achieved. From a marketing point of view, both goods and services offer benefits or satisfactions; both goods and services are products. The narrow view of a product tells us that it is a set of attributes, tangible and intangible, physical and chemical, brought together in a special way. The broad vision, the marketing vision, says that it is a set of attributes, tangible and intangible, that the buyer can accept to satisfy their needs and wants. Thus, in the broadest sense, every product has intangibles for it since everyone sells intangibles on the market, regardless of what is produced in the factory.

Features of the Services

Several characteristics have been suggested to help distinguish goods and services. It is the combination of these characteristics that creates the specific context in which a service organization must develop its marketing policies. The most frequently established characteristics of the services are:

Intangibility

Services are essentially intangible. It is often not possible to taste, feel, see, hear, or smell services before purchasing. Opinions and attitudes can be sought in advance; a repeat purchase can rest on previous experiences, the customer can be given something tangible to represent the service, but in the long run the purchase of a service is the acquisition of something intangible.

From the foregoing it follows that intangibility is the definitive characteristic that distinguishes products from services and that intangibility means both something palpable and something mental. These two aspects explain some of the characteristics that separate product marketing from service marketing.

Inseparability

Often times the services cannot be separated from the person of the seller. A consequence of this is that the creation or realization of the service can occur at the same time as its consumption, either partial or total. Goods are produced, then sold and consumed while services are sold and then produced and consumed generally simultaneously. This has great relevance from the practical and conceptual point of view, in fact, traditionally functions within the company have been clearly distinguished in a well separated way, with certain interrelationships between them, usually at the level of coordination or transfer of information that serves as input for one or the other; However, here we can appreciate more a merger than a coordination, the service production staff, in many cases,It is the one that sells and / or interacts more directly with the customer or user while he or she uses the service ("consumes"). Let us remember that in manufacturing, in general, the production staff and the production process itself do not involve direct interaction with the consumer.

Heterogeneity

It is often difficult to achieve standardization of production in services, because each "unit". Provision of a service may be different from other 'units'. Furthermore, it is not easy to ensure the same level of production from a quality point of view. Likewise, from the customer's point of view, it is also difficult to judge quality prior to purchase.

Perishability

Services are liable to perish and cannot be stored. On the other hand, for some services, fluctuating demand can aggravate the perishability characteristics of the service. Key decisions must be made about what maximum level of capacity should be available to meet demand before service sales suffer. Attention must also be paid to periods of low levels of use, reserve capacity or the option of short-term policies that balance fluctuations in demand. Take the case, for example, in the capacity of a hotel versus a manufacturing company, the latter has greater flexibility to cope with increases in the quantity demanded of goods and can, in general, increase production shifts to cope with it., but,What happens in the case of a hotel when the number of passengers increases beyond the number of rooms it has? What happens when there are many fewer who come to the hotel?

Property

Lack of ownership is a basic difference between a service industry and a product industry, because a customer can only have access to use a certain service. Payment is made for the use, access or rental of certain elements.

2. The marketing strategy in the service sector

While it is true that any marketing strategy is unique, in some way, because it is specific to a particular organization, it should not be overlooked that there are some differences between the strategies applied to services. Some unique aspects of the services that guide the formulation of the service marketing strategy are:

a) The predominantly intangible nature of a service can make it more difficult to select competitive offers among consumers.

b) When the producer of the service is inseparable from the service itself, it can locate the service and offer the consumer a more restricted option.

The perishable nature of the services prevents the storage of the product itself and can also add risk and uncertainty to the marketing of the service.

It should be remembered that the basic elements that make up a marketing strategy are those related to segmentation, positioning and the combination of marketing, marketing mix or commercial mix.

The segmentation and positioning stages of the marketing strategy are basically the same for both goods and services. Where the differences do occur is in the elements that make up the marketing mix.

However, it is useful to bear in mind that, in order to segment and define the target market of the service company, the market is made up of three main types or groups of users, each of which can be chosen as the market to which The company could preferentially direct its efforts, and then define within this group, those that satisfy certain demographic, psychographic, geographical characteristics or positions and / or the desired benefit. These three groups are: Natural persons, legal persons or organizations and households. According to this approach, a transport company, for example, could choose to meet the needs of households (removals), people (public transport, taxis, etc.) and / or organizations (cargo, personnel, etc.).Subsequently you can define more specifically what type of households, people and organizations, in order to more clearly conceptualize the supply of transportation services to be offered for the needs of the defined group and subgroup.

Positioning

Correctly positioning a service in the market consists of making it more desirable, compatible, acceptable and relevant for the target segment, differentiating it from that offered by the competition; that is, offering a service that is effectively perceived as "unique" by customers.

A service, being well positioned, makes the segment identify it perfectly with a series of wishes and needs in its own scale of values, making the degree of loyalty of the same greater and stronger compared to those offered by competitors.

In positioning, the following stages are usually distinguished:

a) Current Positioning (identification)

It consists of determining the place where the service is currently located according to the preferences or tastes of consumers, compared to the services of the competition.

In order to carry out this analysis, it is important to determine variables related to the service itself, variables attributable to the company and, finally, variables attributable to the environment, they are called attributes, and those that are relevant to the target segment must also be determined. Subsequently, the most direct competitors are selected and with this information as a basis, a study of the sample of interest must be carried out, in order to obtain a clear vision of how the service is perceived and how the service is positioned in the minds of customers and in relation to the competition.

b) Ideal Positioning

This stage can be approached from two points of view:

Ideal positioning of the consumer: consisting of determining what the consumer wants with respect to the kind of service offered.

Ideal positioning of the company: it consists of determining what the company wants to determine to reflect as an ideal service. This is where you know your comparative advantages over your competitors based on current positioning (if applicable).

c) Desired Positioning

It consists of determining the way to position the product or how to reach the ideal situation for the consumer and the company, which will represent the general guide for the preparation or design of the Marketing Mix (3rd Phase of the development of a Marketing strategy).

It is important to clearly establish, at this stage, the positioning concept or concepts that will serve as the basis for the marketing strategy in design, so that the latter does not constitute an isolated phase or not very coherent with the needs or desires of the clients. nor is it left to the free imagination of the participants in the design of the mix.

Marketing Mix

The best known marketing mix in the current literature refers to the combination of four variables or basic elements to be considered for decision-making regarding the planning of the marketing strategy in a company. These elements are: product, price, place and promotion (the four Ps that come from Product, Place, Price and Promotion.)

This mixture is the most used in the marketing of goods; however, there are three reasons why an accommodation for services is required.

to. The original marketing mix was prepared for manufacturing industries. The elements of the mix are not presented specifically for service organizations nor are they necessarily accommodated by these organizations, where the intangibility characteristic of the service of the service, the technology used and the type of primary customer may be critical.

b. It has been empirically demonstrated that the marketing mix may not have sufficient scope for the needs of the services sector due to their own characteristics (intangibility, perishable nature, etc.)

c. There is growing evidence that the dimensions of the marketing mix cannot be broad enough for service marketing, since it does not consider a series of essential elements for the generation and delivery of the service.

Based on the three reasons outlined above, the idea of ​​a revised or modified mix that is specially adapted for the marketing of services arises. This revised mix contains three additional elements, forming a final combination of seven elements, which are: product, price, place, promotion, personnel, physical evidence and processes (Personnel, Physical evidence and Process).

Decisions cannot be made about one component of the mix without taking into account the conclusions of the previous phases of the marketing strategy, as well as their impact on the other components. Inevitably there is a lot of overlap and interaction between the different components of a marketing mix.

Each element of the mix will then be reviewed in greater depth.

3. Product, price, place and promotion.

Product

Service as a product and an understanding of the dimensions of which it is composed is critical to the success of any service marketing organization. As with goods, customers demand benefits and satisfactions from service products. Services are bought and used for the benefits they offer, for the needs they satisfy, and not for their own sake.

The service seen as a product requires taking into account the range of services offered, their quality and the level at which it is delivered. You will also need to pay attention to aspects such as the use of brands, guarantees and after-sales services. The combination of the service products of these elements can vary considerably according to the type of services provided.

Service organizations need to make linkages between the service product as received by customers and what the organization offers. In doing so it is useful to draw a distinction between:

1) The concept of consumer benefit: this concept is a set of functional, effective and psychologist attributes. From the idea of ​​benefit to the consumer it is possible to define the concept of the service.

The clarification, elaboration and translation of the concept of consumer benefit raises several problems for those who sell services. First, the services offered must be based on the needs and benefits sought by consumers and users. But consumers and users may or may not be clear about what they require, express or not clearly express in the announcement of their requirements. Difficulties can arise due to not knowing what to expect, inexperience of what is required, or inability to determine its need. Second, the benefits sought can change over time due to good or bad experiences in the use of the service, through new expectations or changes in the consumption habits of the service. In third place,There are practical evaluation problems for service providers in deriving consumer-based measures of the importance of benefits sought in services, preferences among them, and changes in their importance.

The point of view of the consumer must be the central focus in shaping any service to be offered, since this consumer, in a sense, helps to make their own 'product' from a series of offered possibilities.

2) The concept of service: this concept is the definition of those offered by the service organization based on the benefits sought by customers; that is to say, what business are you in and what needs and wants are you trying to satisfy.

The definition of the service concept must be followed by the translation of said concept into a service offer and in the design of a service delivery system; In other words, the concept of service is the central nucleus of its offer and is generally made explicit in the concept of positioning.

3) The service offer: this point refers to giving a more specific and detailed form to the basic notion of the service concept. The form of the service offering stems from managerial decisions regarding what services will be provided, when they will be provided, how they will be offered, where and by whom. These decisions are intertwined, cannot be separated from decisions about the service delivery system, and are derived from the service concept.

4) The service delivery system: The final level of analysis necessary to define the service product is a factor of the service delivery system. As discussed above, the service sourcing and delivery process is an integral component of this product. Unlike a tangible good in which manufacturing and marketing are separate processes, in service marketing these two elements are inseparable.

Various elements are important in almost all service delivery systems, such as people and physical objects (or physical evidence), which will be discussed later.

Based on all of the above, it is evident that a service product constitutes a complex phenomenon. It consists of a series of elements, each of which must be taken into account by the service manager when managing his organization. Managing a service organization requires a clear understanding of these elements and the relationships and interactions between them. Successful management of a service organization can only be achieved through the sensible integration of the factors that comprise the service from the provider's point of view with the consumer's expectations and perceptions. This is a difficult task, compounded by the fact that few service organizations have only one service. Most of them offer a line of services.

Price

Price decisions are of paramount importance in marketing strategy for both consumer and service. In an exploratory study that we carried out in 1989 on some 40 medium-sized companies, manufacturers of consumer goods, it was detected that price, in the opinion of executives, was the most important marketing variable and the one with the highest frequency in decision-making. As with the other elements of the marketing mix, the price of a service must be related to the achievement of organizational and marketing goals.

The pricing principles and practices of services tend to be based on principles and practices used in the prices of goods. As with goods, it is difficult to make generalizations about prices. There is as much diversity in the service sector as in the goods sector.

The characteristics of the services mentioned above can influence pricing in service markets. The influence of these characteristics varies according to the type of service and the market situation being considered. However, they constitute an additional factor when examining the main traditional forces influencing prices: costs, competition and demand.

a) Perishable nature of the service; the fact that services cannot be stored and that fluctuations in demand cannot be met so easily through the use of inventories, has an impact on prices. Special pricing offers and price reductions can be used to deplete available capacity, and fringe pricing may be a more common thing. Consistent use of these pricing forms can lead buyers to deliberately delay purchasing certain services with the expectation that they will be produced. Sellers, for their part, can try to offset this effect by offering advantageous reductions on advance orders.

b) Customers may delay or postpone the performance or use of many services. They can even perform the services personally. These characteristics lead to stronger competition among service vendors and may even stimulate a greater degree of price stability in certain markets, in the short term.

c) Intangibility has numerous consequences for prices. First-time users may have great difficulty understanding what they are getting for their money, which directly influences the perceived risk to the service, the higher the material content, the more the prices will tend to be based on costs and the higher it will be. the trend towards more standard prices. The smaller the material content, the more customer-oriented and the less standard pricing.

Finally, it is possible to determine prices through negotiation between buyer and seller, since the service can be adjusted to the specific requirements of the client.

d) When prices are homogeneous they can be highly competitive. The more exclusive a service, the greater the seller's discretion in setting the price. In such circumstances, it is possible to use prices as a quality indicator; however, this idea is somewhat subjective.

e) The inseparability of the service of the person who offers it can set geographic or time limits to the markets that it is possible to serve. Similarly, service buyers can search for the service within certain geographic or time zones. The degree of competition operating within these limits influences the prices charged.

Services can be classified for pricing purposes according to whether they are subject to official regulation, subject to formal regulation or subject to market regulation.

Services subject to Official Regulation

In this classification, the price element of the marketing mix cannot be controlled by the seller and other elements other than price must be relied upon to achieve good results in the implemented policies. Communication services, educational services, health services and transportation services are examples in which the price is mainly regulated in an official way.

Services subject to Formal Self-Regulation

In this classification, services are subject to regulations due to institutional pressures of different kinds. formal self-regulation depends on an appropriate regulatory body that has pricing power and a price scale. That power only exists as long as the members value the benefits of the association. Some examples of this type of price fixation were the airfares subject to the IATA agreement, professional fees for services can be determined institutionally, etc.

Services subject to Market Regulation

In this classification, the prices charged for the service depend on what the market wants to tolerate, which is framed within a series of factors that include economic conditions, consumer susceptibility to prices, market competition, level of demand, urgency due to buyer need and many other factors. In general it can be said that price is largely determined by "market forces".

Marketing strategies involve the different elements of the marketing mix being formulated and executed with the objectives of those strategies very clear in mind. Pricing decisions are no exception to this principle. When setting price targets for services, several factors must be considered. The most important are:

Planned market position for the service: the market position means the site that the service is intended to occupy and does not occupy in the eyes of the customer and compared to competitors. It refers to the perceived positioning of the service in relation to others. Clearly price is an important element of the mix that influences this position. Tangible products can occupy a particular position due to their physical characteristics; services, on the contrary, are positioned on the basis of their intangible attributes. In general, the price would influence the market position.

Stage of the service life cycle: the price of the service is also related to its life cycle. Thus, when introducing a new service, an organization could choose to set low prices to penetrate markets and achieve rapid market participation. Alternatively, you could choose to charge high prices to earn a profit in the shortest time possible.

Elasticity of demand: The discretion that an organization has to determine its price targets is affected by the elasticity of demand in the market. The elasticity of demand in the market refers to the sensitivity of this to price changes. Clearly it is vital that a service organization determine how elastic or inelastic the demand for its services is in response to price changes. Elasticity may require limitations on certain pricing options.

Competitive situation: the strength of competition in the market influences the setting of prices. Thus, in situations where there is little differentiation between services and competition is intense, price discretion is limited; that is, a certain degree of price uniformity will be established. In other situations tradition and custom may influence the prices charged.

The strategic role of price: pricing policies have a strategic role in order to achieve organizational objectives. Thus, the pricing decision for a particular service must be tailored to strategic objectives. Any pricing strategy must be tailored to how the other elements of the marketing mix are handled to achieve strategic goals.

According to all the factors that must be considered for setting prices, and which were mentioned above, two methods can be established for setting prices for services: cost-based prices and market-oriented prices.

a) Cost-based pricing

(I) Profit oriented: Aiming for a minimum profit objective. Prices set by industry and professional associations belong to this category. If entry is severely restricted, prices will relate more to the customer's ability and willingness to pay and less to costs.

(II) Prices controlled by the government: They aim to protect the consumer by setting prices on a cost basis plus a modest margin.

b) Market-oriented prices

(I) Competitive: Accepting the current rate or maintaining or increasing market share through an aggressive pricing policy.

(II) Customer oriented: Prices established in relation to customer attitudes and behavior. Quality and costs can be varied to stay in harmony with prices.

It should be noted that in cost-based pricing the most important problem is that in service businesses it is difficult to establish what in a "unit" of service and even less to calculate its cost.

Once the price is determined, tactical pricing techniques can be used. In this sense, the particular tactic to be used will depend on the kind of implicit service, the target market and the general conditions that prevail in the market at that time. Some of these frequently used pricing tactics in service markets are:

Differential or flexible prices: This price consists of the practice of charging different prices according to the clients' willingness to pay.

The ability to use differential pricing tactics depends on a market being susceptible to segmentation on the basis of price, low possibility of resale or reassignment of one service to another, and minimal customer resentment towards the practice.

These prices seem to constitute one of the most common practices in the services sector, being called the "agreed price".

Some problems that can arise when using spreads are that customers may delay their purchases waiting for spreads to be used or they may expect discounts as a regular feature of a service offering. Due to these problems, some service organizations prefer to use uniform pricing practice, charging the same price to all customers regardless of time, location, or ability to pay.

Discrete pricing: Involves setting the price so that it is within the competence level of the decision-making unit and is sympathetic to a particular service or organization. For example, purchasing officers can order projects worth up to $ 10,000 without requiring approval.

Discount prices: Discount prices are presented in almost all markets and are intended to constitute a reward for services performed that allow production and consumption of the service, or as a promotional instrument.

Most service organizations can offer special reductions or payment of this nature. What is not well understood is that these payments erode the margins available to the producer of the service. However, they are strategically important.

Distraction pricing: This occurs when a low base price can be published for a service or parts of a service, in order to promote an image of a low price structure.

Guaranteed prices: These are presented when payment is made only if certain results are guaranteed.

Prices to maintain a high price: This practice is used when consumers associate the price of a service with its quality. In these circumstances some service organizations deliberately pursue a high-quality, high-price position.

Promotional Item Pricing: Involves charging a reduced price for the first order or contract in the hope of getting other business from a customer at better prices. The main disadvantage is that an initially low price can become a price cap. Customers can resist other price increases once that cap has been set.

Understanding pricing: This is a practice similar to distraction pricing in which a low base price is quoted but the "extras" have relatively higher charges.

Price alignment: This occurs when prices do not vary but the quality, quantity and level of the service reflect changes in costs. One problem with this method is that the differentiation of quality, quantity, and service level has to be relatively easy for customers to detect.

To conclude, it is necessary to recognize that no structure or framework is adequate for all decisions. Each price decision must take into account the existing circumstances, cost, demand, competition, the service and its characteristics and the situation in the market. Pricing for services, as for goods, remains largely a combination of good management, experience, trial and error, intuition, and good luck.

Promotion

Promotion of services can be done through four traditional ways, in such a way as to influence the sales of services as products. These forms are:

a) Advertising: defined as any paid form of non-personal presentation and promotion of services through a specific individual or organization.

b) Personal sale: defined as the personal presentation of services in a conversation with one or more future buyers for the purpose of making sales.

c) Public Relations (Publicity): defined as the non-personal stimulation of demand for a service obtaining commercially important news about it, in any medium or obtaining its favorable presentation in any medium that is not paid for by the sponsor of the service.

d) Sales promotion: marketing activities other than advertising, personal selling and public relations that stimulate customer purchases and the use and improvement of dealer effectiveness.

These types of promotion can be one of the most effective tools for influencing and communicating with customers. However, there is research evidence that in some kinds of service markets these forms may not be the most effective as they may not be used correctly.

The general purposes of promotion in service marketing are to create awareness and interest in the service and service organization, to differentiate the service offering from the competition, to communicate and represent the benefits of available services, and / or persuading customers to buy or use the service.

In general the purpose of any promotional effort is to sell the service through information, persuasion and recall.

The principles of promotion are the same for goods and services. However, some differences are mainly due to aspects such as: (I) the characteristics of the service industries (II) the characteristics of the services. In each of these categories there are factors responsible for these differences. These are:

(I) Differences due to the characteristics of the service industries:

Lack of marketing orientation: Some service industries are product oriented. They are not aware of the possibilities that the practice of marketing would offer in their industries. They see themselves as producers of services and not as organizations that serve the needs of customers. Managers are not trained, do not have the skills, and do not know the role that promotion could play in marketing.

Professional and Ethical Restrictions: There may be professional and ethical limitations on the use of certain marketing and promotional methods. Tradition and custom can prevent the use of certain forms of promotion. They can be considered inappropriate in the industry.

Small-scale of many service operations: Many service operations can be small-scale. They cannot be considered large enough to warrant spending on marketing or promotion in particular.

Nature of competition and market conditions: Many service organizations may not need to promote their services extensively due to their inability to cope with their current workloads. It is not envisioned that even in these situations the promotional effort may have a long-term role to play in maintaining a secure position in the market.

Limited view of available promotional methods: Service organizations may have a limited view of the myriad of promotional methods that exist. They can consider only mass advertising and personal selling and ignore the multitude of other methods that may be suitable, just as effective, and probably even less expensive.

Nature of the service: The nature of the service may by itself limit the use of certain promotional tools on a large scale. The class of service, the traditions in the particular service industry, the limitations of the promotion methods for a certain class of service, may restrict the use of promotions.

(II) Differences due to the characteristics of the services:

Consumer attitudes: Consumer attitudes is a key influence on purchasing decisions. With services, intangibility is an important quality in your marketing. Consumers are likely to rely more on subjective impressions of the service and the provider or vendor of the service when they are shopping. This dependence on subjective impressions may be of less importance in the purchase of tangible goods.

Purchasing needs and reasons: The needs and reasons for purchasing goods and services are largely the same. The same kinds of needs are satisfied by purchasing tangibles or intangibles. However, one need that is important, for both situations, is the desire for personal attention. Meeting this need for personal attention is one way that service vendors can differentiate their services from competitors.

Buying processes: The differences between goods and services are most notable in the buying process. Some service purchases are considered riskier in part because it can be more difficult for buyers to assess quality and value. Similarly, consumers are more likely to be influenced by others. This more predominant role of personal influence in the purchasing process has implications for service marketing. Especially to develop a professional relationship between service providers and their consumers and the need for promotional programs to create verbal communication.

The differences between goods and services can have some consequences for the promotional program of the organization, so it is necessary to comply with some principles in each element of the promotion in order to achieve a more effective impact. These principles are:

Advertising

to. Use clear messages without ambiguity.

b. Highlight the benefits of the services.

c. Just promise what can be given.

d. Advertising for employees.

and. Obtain and maintain customer collaboration in the service production process.

F. Create verbal communication.

g. Give tangible clues (symbols, themes, formats, etc.)

h. Give continuity to advertising.

i. Eliminate anxiety after purchase.

The advertising of services must fulfill five functions to achieve its efficiency:

• Create the world of the company in the mind of the consumer Build a suitable personality for the company Identify the company with the customer Influence company staff on how to treat customers Help open doors for representatives sales.

Personal sale

to. Build personal relationships with clients.

b. Adopt a professional orientation.

c. Indirect sale use.

d. Create and maintain a favorable image.

and. Sell ​​services not service.

F. Make shopping easy.

There is a seven-guideline model for personal selling of services. This was deduced from empirical data on the differences between the sale of goods and services. The seven guidelines of this model are:

• Instrument the meeting of the purchase of the service. Facilitate quality assessment. Make the service tangible. Highlight the organizational image. Use external references to the organization. Recognize the importance of all staff in contact with the public Recognize customer participation during the service design process to generate customer specifications by asking questions, indicating examples,

Sale promotion

The increase in sales promotion activity in many service markets in the last ten to fifteen years has been one of the major changes that has taken place in marketing. Particular forms of activity have received more attention than others; But first and foremost it is a field of marketing that awaits more detailed attention.

Finally, sales promotion is one element of the promotion mix in a service organization. The most effective promotional programs are those that fit the entire promotional strategy and are in turn considered as an element in the overall marketing strategy.

Square

All organizations, whether they produce tangibles or intangibles, have a stake in decisions about the plaza (also called channel, site, delivery, distribution, location, or coverage). That is, how they make offers available to users and make them accessible to them. The plaza is an element of the marketing mix that has received little attention in or regarding services because it has always been treated as something related to the movement of physical elements.

The usual generalization that is made about service distribution is that direct selling is the most frequent method and that the channels are short. Direct selling is certainly prevalent in some service markets, but many service channels contain one or more intermediaries. It would be wrong to say that direct selling is the only method of distribution in service markets. Middlemen are common. Some of these intermediaries take their own risks; others perform functions that change property and others perform functions that allow physical movement. In reality, there is no uniformity in the functions performed by intermediaries.But this lack of uniformity should not obviate the fundamental truth that organizations operating in the service market have two main channel options. These options are the same for producers of physical elements. These are:

a) Direct selling: Direct selling may be the chosen method of distribution for a service by choice or due to the inseparability of the service and the provider. When direct selling is selected by choice, the salesperson does so possibly to gain marketing advantages such as maintaining better control of the service, obtaining perceptible differentiation of the service, or to keep direct information from customers about their needs.

Naturally, direct sales can be made by the client going to the service provider or the supplier going to the client. Many personal and commercial services are characterized by the direct channel between the organization and the client. Direct channels about your needs.

b) Sale through intermediaries: The most frequently used channel in service organizations is the one that operates through intermediaries. Service channel structures vary considerably and some are very complex.

In service markets there are many forms of intermediaries. These are:

• Agents: Frequent in markets such as tourism, travel, hotels, transportation, insurance, credit and employment services and industries Concessionaires: Intermediaries trained to perform or offer a service and with authorization to sell it Institutional intermediaries: They are in markets where services have that are or are traditionally supplied by intermediaries such as the Stock Market or Advertising Wholesalers: Intermediaries in wholesale markets such as Commercial Banks or laundry services for the industry Retail: Examples of these are photographic studios and establishments that offer laundry services dry.

The possible forms of intermediation are numerous and in some service transactions several organizations may participate.

Related to the choice of distribution methods for services is the problem of location. Whatever form of distribution is used, the location of the intermediaries will be an important factor. Location in this context refers to the location of people and / or facilities to perform service operations. All service organizations must make location decisions just as tangible distribution companies do.

The location may vary in importance according to the nature of the service sold. Services can be classified by location in three ways:

a) The location may not matter: The location may not matter for the services performed where the client is. Therefore, the location of any service is of less importance than for services performed on a specific site. However, what is definitive about these services is their "accessibility" or "availability" to the customer when the service is required. In this sense, location refers not only to physical proximity, although this may be important in some organizations that are subsidiaries to be closer to customers. An important element in the design of these services is then the communication system that must allow rapid response to customer calls.Setting and enforcing standards in these service organizations requires decisions about the level of services to be offered.

b) Services can be concentrated: Many services are concentrated. Two factors act here as forces of centralization: supply conditions and tradition. The reasons that stimulate this concentration include the status associated with certain sites; low intensity of demand; client's willingness to move; the historical development of complementary services and the little importance of the orientation of the demand.

c) The services can be dispersed: The services that are dispersed are located according to the market potential. The nature of the demand and the characteristic of the service require dispersal in the market.

The ultimate importance of location in many service operations results in more systematic methods than before. Intuition continues to play its role as part of decision-making but is increasingly being complemented by more careful and methodical analysis in the field of services. Service marketers are increasingly aware of the importance of location and channel choice in the marketing mix.

4. Personnel, physical evidence and processes

Personal

Service staff is made up of those people who provide the services of an organization to customers.

The service personnel is important in all organizations, but it is especially important in those circumstances in which, in the absence of evidence of tangible products, the customer forms the impression of the company based on the behavior and attitudes of its personnel.

The service personnel includes operators, bank employees, chefs in restaurants, hotel receptionists, security guards, telephone operators, repair personnel, service and waiters among others. These people can play a 'production' or 'operational' role, but they can also have a customer contact role in service organizations, their behavior can be so important as to influence the perceived quality of a service such as behavior of a sales staff. That is why it is essential that these service personnel carry out their work effectively and efficiently because they constitute an important marketing element of the company; equally,that an organization's measures of effectiveness and efficiency include a strong element of customer orientation among its staff. The importance of these personnel in service companies, therefore, is relevant in the design of marketing strategies. However, many times, what is less understood is that marketing management must participate in the operational aspects of carrying out the work, due to the importance of the variables of types of service people for the quality of the services offered. The way a service is delivered can influence the nature of relationships that exist between a service organization's staff and its customers, ultimately influencing a company's image.These relationships should not be left to chance and are a marketing responsibility as well as an operational responsibility.

"The sale of a service and the provision of the service can rarely be separated." Only with automated and mechanized services do people participate little in service transactions.

Consequently, human beings can play a unique role in marketing and service production. This has important consequences for the marketing function, as it is clear that people are an important element of any service marketing strategy and are an element in any marketing mix.

What distinguishes service companies from industrial goods companies is that the consumer can come into contact with people whose primary function is to perform a service and not market a service.

Service personnel include those members of the organization who are in contact with the customer (contact staff) and those members who are not in contact with customers. Part of this staff will be visible to the customer during the purchase and consumption of a service. Others are not.

Regarding contact personnel, it can be said that they are the key resource of the organization. Companies vary considerably in the amount of contact that takes place between service personnel and customers. In some there is a great deal of contact between service employees and customers and in others there is little.

The customer's contact is the customer's physical presence in the service system and the creation of the service is the work process implicit in the provision of the service.

This contact can be high or low, and will depend on the percentage of the total time that the customer is in the system compared to the relative time that is spent to serve them. Different types of service systems have consequences for marketing management in various ways. In this way they influence the service presentation process. In this context, due to the fact that human fulfillment can influence so much in the performance of the service, in high contact companies the quality of the service can be inseparable from the service personnel.

Another useful idea about the importance of service personnel to the type and quality of service a customer receives is the distinction between types of service quality. The type of service that a customer receives can consist of two elements:

Technical Quality:

It refers to "what" the customer receives in their interactions with service companies.

It can be measurable like any product and forms an important element in any customer evaluation of the service.

Functional Quality:

Functional quality refers to "how" the technical elements of the service are transferred. Two important components of how the technical elements of a service are delivered are the process and the people involved in the operation of the system. Functional quality may be less amenable to objective measurement. Nonetheless, it forms an important element in any customer evaluation of a service.

Functional quality consists of several elements: employee attitudes; the relationships between them; the importance of employees who have contact with customers; appearance of service personnel; the general accessibility of services for clients; the general propensity of staff towards service.

There are several ways that a service company can maintain and improve the quality of staff and their performance. Some of the ways are: careful selection and training of personnel; internal marketing; use methods to obtain uniform behavior; ensure uniform appearance; reduce the importance of personal contact and careful control through vigilance of service personnel among others. In practice, there is often overlap between actions and uses in each category and other possibilities can be considered. Each of these measures will be reviewed below.

Selection and training of service personnel: It is obviously important that customer contact personnel should be carefully selected and trained. The principles of good personnel management and training apply to this group of employees as well as to any other group in the organization. The clear consequence of the importance of personal contact for many services is that recruitment, selection, training and development programs have to be tailored to the needs of the services being delivered. Service personnel must have a clear understanding of the job. Likewise, the qualities that are required for the people who do contact work with clients must be defined.A recent idea tells us that employees in the service sector should be divided according to the communication demands imposed on them by customers. The nature and type of communication can be an important determinant of the qualities sought in the employee. Finally, you need to pay attention to how your work will be controlled and organized. Service employees in their role of linking the organization with customers often have to be more flexible and adaptive than other employees. Rigid, closed, methodical systems can be difficult to implement, and more flexible kinds of organizational structures and operating methods may be appropriate.Special classes of service personnel may be required to overcome the ambiguities and uncertainties involved in many kinds of border covering and customer contact functions.

Internal Marketing: Meeting service quality and performance levels in accordance with the standards of service companies means that this has to do with "internal marketing" as well as external marketing.

There is nothing new about internal marketing. It is implicit in the original idea of ​​the marketing concept with its central focus on the key role of the customer and the central objective for a market-based business, the satisfaction of customer needs. What the concept of internal marketing does is return to the importance of marketing for the people who serve external customers. A definition of internal marketing would be: «Apply the philosophy and practices of marketing to the people who serve external customers so that (i) the best possible people can be employed and retained (ii) they do their jobs in the best possible way.

This interpretation means that employees are viewed as internal customers and jobs are internal products that should be aimed at better meeting customer needs. By offering employees better and more satisfying jobs, the company increases its ability to be a more effective service marketing company. “The successful service company has to sell the work to employees first before selling to its client services.

Regardless of the direction you take, the value of internal marketing cannot be denied. It is already practiced in a number of service companies, and it has been a well-established but not universal practice within the service industries. "Consumer marketing often stops at producing materials and software for marketers to use, some service industries have long ago intuitively handled human evidence for broader purposes."

Internal marketing is critically important as staff may refuse to sell a service that they do not find acceptable.

One of the problems that service personnel in operational functions face when dealing with clients is that they often have to choose between the interests of the service company and the interests of the client. Operations personnel are often asked to have a dual set of conflicting roles since "they are the direct production workforce or the architects or both, and they are also the sales staff." The employee / customer interface is thus a complex area because an employee in contact with a customer may be "divided between the objectives of the company and those of the customer."

To some extent a service company can reduce this role conflict for its employees through marketing practices and procedures. An enthusiastic service orientation on the part of a company has positive effects on both customers and employees.

Use practices to obtain uniform behavior: Another problem for the service company is to achieve uniformity of conduct among staff. Consumer behavior will affect the behavior of the human representatives of the company and the quality of the service provided may vary since it depends largely on the individual who offers it. Achieving uniformity in our human effort is an important goal of many service companies. It is essential that companies establish fixed procedures for some of the services to ensure that they are performed in a consistent manner. But there is a danger that these practices could become too mechanized.Organizations have to come to a balance between too much rigidity in their systems and too much flexibility. Procedures have to be flexible enough to tolerate ambiguity from the variety of clients.

The human resources of a service company can be used as an important means of competition in the service market. In this way ongoing training, especially in communications and sales, is generally a much larger task and involves many people in service industries. Certainly the selection, training and supervision of human service representatives is a fundamental part of the service marketing function.

Ensuring Uniform Appearance: If we think about the intangibility characteristic of numerous services, the appearance of the establishment and its staff are often the only tangible aspects of a service business. Consequently, "the consumer can be expected to choose a service provider whose business site and sales staff clearly suggest the quality of service desired to satisfy their needs." One way that organizations try to create an image and suggest quality of service is through the appearance of the service personnel.

The appearance of the service personnel can be controlled through the service management. One way to do this is by wearing "uniforms" and costume styles. The degree of formality can range from wearing a jacket to a uniform complete with accessories.

Another standardization of appearance can be met by recruiting service personnel with specific characteristics, be it height or age. Similarly, the service company may offer facilities to stimulate personal care such as hairdressing salons and beauty salons. Even when a service company does not require a formal uniform for protective or promotional purposes, it is possible to deliberately encourage an "acceptable" style of clothing. Equally, "unacceptable" clothing styles can be discouraged. These uniforms help create levels of "uniformity" and thus are an important input to the overall image of the service organization where uniformity is required. When this is not required, companies can encourage varied styles of clothing to cultivate an unconventional image of variety.

Reduce the importance of personal contacts: The proposition that personnel involved in marketing and operations should be given priority consideration when thinking about service marketing seems reasonable. However, alternative forms of production can be introduced into the service operation, as is the case with mechanization. This mechanization can be applied to other service situations to eliminate the unsuitable conditions that many people require.

By thinking of service as something done by machines or systems, you can expand the concept of marketing for services. However, this changes the way consumers interact with service products. Although many technological innovations can offer benefits to customers, service managers cannot take consumer acceptance for granted. Sensitivity to customer needs remains essential. Testing and demonstrations are vital to gaining the trust and cooperation of customers so that they learn how to use service innovations.

Traditionally, service operations require many people. But operations that require people may not be necessary to provide efficient service. The most important principle has to be meeting the needs of the customers. Customers may have certain ideas about the performance of the service and may identify certain service personnel as key to the service. However, there may be some services in which the service staff is a minor part of the offer. In these cases, a more innovative approach to production and marketing, using teams and not people to control the quality of production and distribution, could result in a higher level of service. But there are certain services where direct contact is still of great importance.Innovations always have to be limited through the level of consumer acceptance.

Careful control through supervision of service personnel: A service company has to constantly strive to create and maintain a clear and attractive image. Since both employees and customers influence and reflect the image of a service company, it is the responsibility of the service management to ensure that the perceived image is compatible with the image that is needed. As there are no characteristics of the service itself, which makes a sufficient distinction between one service and another, the key to image formation will be the attitudes and behavior of the service personnel.

Supervision of service personnel is one way to ensure that levels are set and met. It is an unbiased, critical and systematic review of the habits of service personnel. Basically the service audit aims to make an inventory of the organization's total service with the goal of supporting effective marketing practices and correcting faulty behavior.

Service companies can use a number of methods to monitor performance. Practices vary according to the type of organization and the number of people involved. Some of the practices are:

• Systems related to sales (sales increase, market share, profitability, repeat purchase).

• Complaint systems.

• Suggestion systems.

• Audit visits.

• Surveys on customer satisfaction.

Physical evidence

One of the factors that is becoming more important is the role of physical evidence. Physical evidence can help create the "environment" and "atmosphere" in which a service is purchased or performed and can help shape customers' perceptions of the service. Customers form impressions of a service business in part through physical evidence such as buildings, fixtures, layout, color, and goods associated with the service such as suitcases, labels, brochures, placards, etc.

Due to biases in product marketing, service marketers often fail to recognize the unique forms of physical evidence that they can normally control and fail to see that they should be part of the marketing responsibilities.

In service marketing a distinction must be made between two classes of physical evidence: peripheral evidence and essential evidence.

Peripheral evidence is actually owned as part of purchasing a service. However, it has little or no value independent of the service itself. Simply confirm the service, it is not a substitute for it. Peripheral evidence "increases" the value of essential evidence only when the customer values ​​these symbols of service. These representations of service have to be designed and prepared with the customer's needs in mind. Often an important set of complementary elements are used for the fundamental service that clients seek. Examples of peripheral evidence are bank checkbooks, a movie ticket, etc.

Essential evidence, unlike peripheral evidence, cannot be owned by the client. However, essential evidence may be so important in its influence on the purchase of the service that it can be considered an element in its own right. The general appearance of a company, the feeling it gives, etc. they are examples of essential evidence.

In the long run, peripheral evidence and physical evidence, in combination with other elements that make up the image, influence the customer's opinion of the service. When a consumer tries to judge a service, especially before using or buying it, that service is known by the tangible clues, the tangible evidence that surrounds it.

Physical evidence and essential evidence, along with personnel, promotional, advertising, and public relations programs are some of the main ways a service company can formally create and maintain its image. Images are difficult to define, measure and control due to the fact that the image is a subjective and personal structure. Yet people form images of service products and service companies based on a number of evidences. Therefore, the handling of this evidence is convenient to ensure that the transmitted image is in accordance with the desired image.

Service companies with competitive services can use physical evidence to differentiate their products in the marketplace and give their services a competitive advantage. Tangible and intangible elements can be used to increase the essential offering of the product. In reality, companies that market predominantly tangible products often use abstract and intangible elements as part of their communications strategy.

Service marketing companies also try to use tangible elements to increase the meaning of their intangible products.

So, handling physical evidence should be an important strategy for a service marketing organization due to the intangibility of a service. That is, they can either be touched, or defined, or captured mentally. These characteristics bring problems and challenges for service marketers, who must find ways to make the service more palpable and easier to mentally grasp.

Service marketers can overcome these difficulties by:

a.- Make the service more tangible:

That is, to develop a palpable representation of the service in such a way that it can be separated from the vendor, that intermediaries can be used in the distribution in order to expand the geographic area in which the service vendor can operate; and / or achieve product differentiation.

b.- Make the service easier to mentally grasp:

Achieving mental uptake of service can be accomplished in two ways:

(i) Associate the service with a tangible object that the customer can more easily perceive: Here the intangible nature of the service is translated into tangible objects that represent the service. These may be more important and meaningful to clients. With this approach it is obviously vital to use objects that the customer considers important and that are sought as part of the service. Using an object that the client does not value can be counterproductive.

(II) Focus on the buyer-consumer relationship: This method focuses on the relationship between the buyer and the consumer. The client is encouraged to identify with a person or group of people in the service company and not with the intangible services themselves.

The hypothesis underlying these methods is that the client can obtain some benefit from tangible elements presented in the intangible services offered. However, before a service company can translate intangibles into something more tangible, it must know precisely its target audience and the effect that is being sought through the use of these devices. In addition, you must have defined the unique points of sale that can be incorporated into the service and that meet the needs of the target market.

There are a variety of elements that companies can use to make a service more tangible, from the physical environment to accessories, equipment, general decoration, color, lighting, etc. All of this is part of the "environment" formed and shaped by the service business.

The design and creation of an "environment" should be a deliberate action for most service companies. The "environment" refers to the "context, physical and non-physical, in which a service is performed and in which the company and the customer interact. Therefore it includes anything that influences the performance and communication of the service.

When designing a utility facility, the "sense" of the total environment and its impact on workers and customers must be taken into account. The impact of the service environment on customer satisfaction with these services implies that they must work together in the future to design the environment.

Creating an ideal physical environment and the atmosphere within it is obviously a difficult task, because current knowledge about the impact of the environment and the particular elements within it are not perfect and also individuals are different and therefore try to respond to your environment in different ways as well. However, there are groups of people who can react to an environment in a similar way.

The image that a service company can form is influenced by a variety of factors. All elements of the marketing mix, the services themselves, the advertising and promotional campaigns, the price, and the public relations activities, contribute to customer perceptions, as well as the physical evidence.

Thus, there are a number of important attributes that would determine the choice of a particular company regarding the formation of the projected image. These factors are:

a.- Physical Attributes: Some aspects of the architecture and design of a service company have an influence on the formation of the image, and their presence or absence will also affect the perception of other attributes.

The external physical appearance of a service company can influence the image. The physical structure of a building, including its size, its shape, the type of materials used in construction, and its comparative attractiveness in relation to neighboring buildings are factors that shape customer perceptions. Related factors such as ease of parking and access, facade, door and window design, etc. they are also of importance. The external appearance can then convey impressions of solidity, permanence, conservatism or progress among others.

Internally the layout of the company, the arrangement of equipment, desks, accessories, lighting, air conditioning and heating systems, the quality of visual evidence such as pictures and photographs, etc. they are factors that combine to create impressions and image.

Physical evidence contributes to an organization's personality, a personality that can be a key differentiating characteristic in highly competitive and undifferentiated service markets.

b.- Atmosphere: The atmosphere of a service company also influences its image. The term "atmospheric factors" has been used to define space conscious design that influence buyers. Naturally the atmosphere also has an important influence on employees and others who come into contact with the organization. "Working conditions" in this sense influence the way service personnel can treat customers.

Many service companies are increasingly recognizing the importance of the atmosphere because it can affect customer perception; the company can be known by the atmosphere, it can be seen as warm or effusive, it can be welcomed, and so on. All for the atmosphere achieved.

Some influences on atmospheric factors are: sight, aroma, sound, and touch.

View: "Visual marketing," that is, the visual factors that affect the customer's perception of the organization, has to do with the creation of the image and the sale. It tries to ensure that whenever a customer is in the organization these two goals are achieved. Visual marketers try to ensure that when a client is in a dependency of the company, sales and image continue to be built. Lighting, layout, and color are obviously part of visual merchandising. So is the appearance and dress of employees. Visual cues are a powerful influence on customer preference for a service business.

Aroma: The smell can affect the image. In a variety of organizations, scent and fragrance can be used to sell their products, to attract customers to the point of sale to increase the possibility of sale, or even to develop a special atmosphere.

Sound: Sound is often the backdrop for creating atmosphere. A calm atmosphere can be created by eliminating extraneous noises and with the muffled tone of the sales staff. The opposite for a more dynamic atmosphere. In addition, the pace of store traffic is influenced by the type of music played, even affecting total sales.

Touch: The sensation of materials such as the texture of a covered chair, the depth and feel of the rugs, the touch of the papers, the wood of a table, the coldness of the stone floors, all this brings sensations and contributes to the atmosphere. In some organizations touch is stimulated through sample displays. The materials used and the skill of the displays are important factors for these companies.

The atmosphere can be an especially suitable competitive tool when there are a large number of competitors, or when the differences in products and / or prices are small, or if these products are aimed at groups of different social class or different lifestyle.

Process

It is generally said that marketing management and operations management need to work together if necessary to satisfy the customer. Thus, marketing is seen as having a role to play in the necessary forecasting and planning phases of operations management through marketing research; product specification and product design are also significant areas in which marketing management can also contribute; Likewise, the entire marketing logistics area combines the functions of marketing management and operations management, since both are interested in transportation, delivery, inventory levels, and customer service.

In service companies, cooperation between marketing and operations is vital. In these types of companies, marketing is very important to be left to managers and operations are very important to be left to the operations manager. This is because an important component of any service product, from the customer's point of view, is how the service delivery process works.

The clients of service companies obtain benefits and satisfactions from the services themselves and from the way in which those services are provided. The way these services operate is relevant. Service systems that operate efficiently and effectively can give marketing management considerable leverage and promotional advantage. It is clear that the uniform operation of a service offers competitive advantages, especially when the differentiation between products can be minimal. That is, there will be advantages if it works on time, if it does not demand too much from customers, or, they deliver what they promised. Ensuring that service systems function efficiently and effectively is traditionally the job of the operations manager.In service systems the consequences for operational performance of marketing are so important that the two functions have to cooperate. In services, marketers have to participate in the operational aspects of performance as much as operations managers; that is, with the "how" and with the "process of providing a service.

Staff can mitigate system breakdown, to some extent, by paying pleasant and considerate attention to customer problems. Nice physical facilities can ease the hassle of waiting longer than expected. But they cannot fully compensate for inefficiencies and system failures. How well the overall system works, its procedures and policies, the client's involvement in the process, the degree of standardization of the system; All of these are both marketing and operational concerns.

Operations management is not only about manufacturing, service companies are increasingly discovering that the ideas and practices of operations management are already an essential input for their cost control, system improvement, and customer service levels. client.

Operations is defined as “a means by which resource inputs are combined, reformed, transformed, and separated to create useful outputs (goods and services). Operations management refers to the planning, organization, and control of this resource conversion process. The useful concept is important; For the purposes of the process, it is to add utility or value above all the costs incurred to obtain inputs from the system and undertake the transformation process.

Service operating systems can be classified, this classification can be in various ways which are related to the type of process and the degree of contact.

Depending on the type of process, the three processes applicable to service companies are:

1. - Online operations: In an online operation there is an organized sequence of operations or activities. The service occurs in this sequence. The high degree of interrelationship between the different elements of a line operation means that overall performance is limited by performance at the weakest link in the system and delays can arise in the delivery of the full service. It also tends to be a relatively inflexible type of process, although the tasks of the process can be specialized and routinized giving a faster result. This process is most suitable in service companies with high volumes of continuous demand for relatively standard classes of services.

2. - Combined operations: A combined operation produces a variety of services that use different combinations and sequences of activities. The services can be adjusted to meet various customer needs and provide a requested service. While flexibility is a key advantage of this type of system, it can be more difficult to program, more difficult to substitute capital for labor in the system, and it can be more difficult to calculate system capacity.

3. - Intermittent operations: Intermittent operations refer to service projects that are repeated once or infrequently. The scale of these projects makes their administration a complex task. These projects offer an appropriate field for the easy transfer of many control and programming techniques. The scale and infrequency of such projects differentiate them from line and combined operations.

Some of the difficulties of managing operations in services consist of: setting objectives, utilization of capacity, the participation of people in the process, inter-functional conflict, quality control and in the application of the system concept. An explanation of each of these points is:

a.- Establish objectives in the service systems: In some service systems, conventional measures such as profits and return on investment cannot be used, alternative methods are used. Therefore, in the non-profit services and social services sector, it can be difficult and complex to set objectives, at the general level and at the operational unit level. Normally the objectives for this type of service will have to incorporate measures of the level and quality of the service that in some parts are provided, and these pose difficulties.

b.- Capacity utilization: The intangibility of the services means that there are limitations for the creation of inventories, although naturally people and their skills can be inventoried by accumulation of work, and the facilities can be inventoried to offer extra capacity in case necessary. Generally in services what is not used or is inactive is lost and cannot be used to fill any overload that may be in the future. A critical decision in managing a service is what level of capacity to provide. Too much makes the operation uneconomic; too little can cause difficulties in service delivery and customer discomfort due to inefficiency and loss of business.Most service organizations cannot have something like a "service existence."

c.- People's participation in the service process: As mentioned above, customers often judge the quality of a service and are satisfied with it through the quality of the relationship they enjoy with the service employees. Obviously the manners of the employees, the quality of their training and their knowledge of the services available are important influences on these satisfactions. But in the long run, employees operate systems. Employees can do whatever they can to help customers, but they can't fully compensate for bad, inefficient, and unfair systems.

In operations management there is a transaction between people and systems. Removing employee discretion from a service that operates on a system can make good economic sense and result in a more standardized service. It can also mean cheaper service, perhaps of a more consistent quality. However, that can only be achieved at the cost of employee satisfaction. Tasks that are routinized and systematized can be less intellectually demanding and enriching for employees and can reduce their motivation. This in turn can have a detrimental influence on the quality of the services that it ultimately offers.

In high-contact systems, customers also participate in the service provision process. The design of the service system must take into account their reactions and their motivation: «… consumers participate in the production process, therefore, they are also an input for it…»

d.- Organizational conflict in service systems: Certain kinds of services require the management of numerous small units, which may be geographically dispersed. Core operations can be limited to strategic operations on things such as choosing new sites for services, planning future capacity, establishing personnel and training policies, controlling finances and purchasing. But at the site or branch level managers have to operate the system. They have a key role with responsibilities for marketing, operations, and personnel, making the service site operation a more meaningful "general manager" role.There is a fair amount of influence and interdependence between functions that can lead to conflict problems when managers try to balance the needs of operations and marketing or operations and people. Four general sources of cross-functional conflict between marketing and operations have been identified when a service company is introducing some innovation. These are:

• Different motivations for change. Different functions may have different reasons for the change, which could be due to technical development, increased market share, etc.

• Income versus cost orientation. Operations managers tend to worry about efficiency and cost reduction, marketing managers about opportunities to increase sales and revenue.

• Different time horizons. Marketing can take a short-term orientation that focuses on current interests and operations; a long-term orientation to bring new technology and new operating procedures.

• Perceived adjustment of the new service with existing operations. A new service introduced by marketing may be incompatible and not fit with existing operating systems.

e.- Quality control. Another difficulty is quality control. Many quality control principles applicable to manufacturing can also be applied to services. Some of these include:

• Quality control includes everyone in a service operation on visible and non-visible tasks.

• Systems need to be used to identify quality failures, reward successes, and assist with improvements.

• Quality control can be improved by replacing people with machines, especially in routine tasks.

Quality control standards can be established for service delivery processes although their development and execution may be more difficult than in manufacturing. In part, many of the principles for improving productivity in service operations are applied to improve quality. Employing mechanization, time and motion studies, standardization, labor specialization, employment of assembly line principles, better training, more work scheduling, and attention to work organization are all principles that can be used. with both ends. Technology in particular has its uses, but also its limitations, since it is generally less flexible than people.

f.- The concept of service systems: The concept of systems is widely used in operations management to shape the fundamental nature of the conversion process in manufacturing (that is, there is a logical sequence with raw material inputs passing through of a conversion process in which technologies are applied, value is added and finished goods are produced). However, the application of this model is more difficult in some service systems because the distinctions between inputs, conversions and results are less clear. This is due to the transactional nature in which many services ignore certain steps or repeat them. In the same way, "unattended conversions" may occur, that is, the customer may perform the service himself.Part of the problem is that it may not be as easy to shut down the technical core in a service system as it is in a manufacturing system, because the tasks to be undertaken and the workflow can be more uncertain. Although some service systems may try to develop less open systems through careful customer selection, socialization, and routinization of the production process, there is a danger that customer satisfaction may decline as the service process shifts to a production system. more closed operation.Although some service systems may try to develop less open systems through careful customer selection, socialization, and routinization of the production process, there is a danger that customer satisfaction may decline as the service process shifts to a production system. more closed operation.Although some service systems may try to develop less open systems through careful customer selection, socialization, and routinization of the production process, there is a danger that customer satisfaction may decline as the service process shifts to a production system. more closed operation.

There are some standard services where this problem cannot occur. But of course with some personal and on-demand services there are dangers of quickly adopting operations management tools and techniques without considering their impact on the client.

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