Month: January 2004

Special Sports

Special Sports

School Sports Day is always fun. It’s nice to see children participating in the various sporting competitions, some winning and thrilled about it, others losing and feeling dejected and some others nonchalant about whether they’ve won or lost. And when the children competing are special, the sporting event takes on a completely different meaning as was demonstrated last week at the second Jidd School annual sports day.

On Saturday 17 January, 2004, about 50 students of Jidd School participated in the various sporting contests organised in the Dadoji Kondeo Stadium. The day began with the customary March past and salutation offered to the Chief Guest, Vijay Padwal, who is the Chairman of the Sports and Cultural Committee of the TMC. Padwal formally threw open the event, distributed sweets to the children while wishing them good luck.

There were as many as 15 different types of competitions, some normal and others that were specifically designed for the special children. For instance, children suffering with restricted mobility could participate in the straw game – entangling as many drinking straws in their hair as possible with the given time. Then there was block building – making tall structures using brick-like blocks, throwing balls in the basket and beading of laces. All these games, besides being exciting, also taught children important things such as hand coordination and various other movements.

"As teachers, we learnt a lot too, by observing these children compete, even when many of them were unable to do so. We laughed a lot. Yet, more than once, I found my eyes moist with tears of joy," said Shyama Bhonsle, Principal of Jidd School, who wanted to provide as normal an experience to her students as possible.

Vaishali Shirke, a special educator at the Jidd School, related an incident about how a nine-year old girl called Mosin Mulani, who is not only mentally retarded but also suffers from cerebral palsy, overcame her nervousness. She said, "As teachers along with her mother cheered her, the girl began to gain confidence and managed to put nine blocks one upon the other in less than a minute. Then they fell and she rebuilt the structure. They blocks kept falling and she kept re-building. The expression on her face was that of delightful happiness. And that in turn brought us joy."

Normal sporting competitions such as sack race, potato race, spoon and lemon, shot put and the three-legged race were also organised. Then there was running race for mothers and one for fathers. Another race was for wheel chaired children who were pushed by their parents. Parents truly enjoyed this one. A girl called Manali was angry with her father who, some reason got stuck and therefore she missed the first spot and stood second in the wheel chair race. Then there was an MR Child who participated and won so many contests that he did not remember how many he had won – when asked, he said he’ll ask his mother. 11-year-old Shoaib Khan 11, with Down’s syndrome, always plays well at school but in the presence of his father, he did even participate in any of the competitions.

Archana Shete, another special educator at Jidd, recounted two interesting incidents. One, when in the sack race, two winning pairs – but first one did not touch the ribbon, so the second pair was declared winner. Then there was Milind Surve who did not know when to stop in a sprint, so he kept running even after crossing the finish line – right up to the end of the stadium!

The atmosphere of the day was relaxed. There were contests for staff and a tug of war between parents and teachers too – the teachers won, because they got the support, and strength of the children. The day was filled with lots of exciting and funny incidents and laughter could be heard all around. Teachers, parents and children were all happy. And why not – after all, winning or losing was hardly a consideration. That the special children participated and tried was in itself cause for celebration.

This way to success…

This way to success…

When the Post SSC Students Association at Thane, better known as the Almeida Library, celebrated its Golden Jubilee two years ago, hundreds of erstwhile members, including this writer, recalled with fondness the time they spent there studying, revising and even cramming for exams. The library, which remains open 24/7 and provides a superb ambience that facilitates studies, was founded in 1952 by University students of the Thane. For those who are unaware, the library popular name is derived from Dr. Almeida’s Building at Cherai, which is where it was situated before shifting to the current site in 1965.

The library has come a long way since 1952 and so has the city. In those days, Thane did not even have a college of its own. The students of Thane had to depend on distant colleges and had no library facilities in and around the city. In 52 years, the library has benefited more than 25,000 student-members, many of who have gone on to become successful professionals.

Managed entirely by students, the library goes beyond being a study room with a book collection. It assists students by frequently arranges guest lectures and seminars, visit to industries, counselling for job interviews and so on. It also actively participates in serving the society by organising such things as blood donation camps and sapling plantation drives.

Since last year, the library has initiated an annual programme called "Disha," a series of guest lectures that aim to guide students in making the right decisions in their journey towards success. There are five main topics of discussion, which would be led by prominent individuals: Positive Thinking by Jayprakash Kabra; Time Management by Leela Joshi; Human Beliefs and Values by Rajabhau Gawande; Improvisation by Mina Gurjar; India’s Defence and Youth by Major Shashikant Pitre.

The day-long programme, which begins at 9:30 am through 6:00 pm, is being held on January 18, 2004 at the New English School at Ram Maruti Road. The entry fee is a mere Rs. 30, which includes lunch and tea. Readers interested in attending the programme may contact Rohan Pradhan on 25437209 or Sheetal Rane 25366121.

Buy the best you can

Buy the best you can

When deciding to buy a PC, it is easy to get fooled by the tempting offers that computer sellers make. Therefore, before you make an investment in your new PC, it’s a good idea to scan the market and find the best options within your budget instead of simply getting carried away by a free Printer, scanner or a Web Camera.

Most home PCs are used for general tasks like word processing, spreadsheet, home finance, some basic windows games, e-mails, browsing the Internet and listening to music. So look for a mid-range PC with high performance.

The two key factors that determine the performance of your PC are the processor and the memory. The processor governs the speed at which your PC processes information, which is measured in Gigahertz (GHz). The memory, also known as RAM (Random Access Memory) is where your computer stores the information while it works. Like the processor, RAM also determines the speed of your computer, albeit in a different way. RAM is measured in megabytes (MB).

The hard disk is another key determinant of your PC’s performance. Hard disk space is measured in Gigabytes (GB). A 40 GB Hard Disk is more than sufficient for most people.

Since you’ll be staring at the monitor for hours, it’s important to make sure that you get one that’s comfortable on your eyes. Monitors come in sizes ranging from 14" to 21". We suggest you go in for a 17" monitor as the difference in price from a 15" one is only marginal.

When you buy a branded PC, you will receive integrated peripherals like keyboard, mouse, floppy disk drive and CD-ROM drive as part of the standard equipment. A 56K external fax modem is a must if you wish to connect to the Internet the old fashioned way – using a telephone line. You can also use it for sending faxes.

Once you zero in on the options, follow this general rule: and you won’t regret: buy the most powerful computer your budget allows. If you’re short on cash, put off buying those fancy gadgets or that printer if you will, but do not cut corners on the main system unit – processor, memory, hard disk and monitor. You can always add other contraptions later, when you have spare money. Remember, you will use your PC for at least 2 or 3 years, maybe more and you definitely don’t want to find yourself running out of disk space or memory in the first few weeks of your using it.

Some brands bundle gadgets like the web camera, hi-fi speakers, CD Writer or DVD-ROM drive to make the offer attractive. Although a CD writer can come in handy for copying large files and taking back ups of important files, the rest of devices should be considered only if there cash left over after you take care of the main components.

Some people buy a PC because it looks attractive. Remember, a PC’s performance has very little to do with its looks. Therefore, do not invest in a machine simply because it looks good.

Finally, carefully read through the terms and conditions of the warranty and after sales service policy of the seller. How much free support do you get when you buy this PC? Is the warranty onsite, or will you have to take your PC to the service centre? Make sure the terms and conditions suit you.

Keep in mind

  • When taking the delivery of your computer, insist on driver CDs for all the hardware – particularly the mainboard, display card and sound card (also known as motherboard)
  • Prevent electrical voltage fluctuations – use a voltage stabiliser or at least a spike guard for supplying power to your PC
Breeding scientific awareness

Breeding scientific awareness

If Thane city wears a cap, it is undoubtedly is full of feathers, and a good assortment of them. Time after time the city and its inhabitants have achieved distinctions and made a name in the various spheres of life – culture, education, social service, sports and spirituality to name a few. A new feather got appended to our city’s cap on Monday when city-based NGO Jidnyasa was nominated as the State Organising Agency (SOA) by National Council for Science and Technology Communication (NCSTC).

As an SOA, Jidnyasa will play an important role creating and promoting scientific awareness in Maharashtra – this will be part of the year long programme announced by the President of India, Dr. APJ Abul Kalam on January 05, 2004 in Chandigarh during the Indian Science Congress. The mission of the programme is "Scientific awareness for sustainable development" and its main objectives are to create a scientific outlook in society and to develop a scientific temper and the spirit of enquiry among children, youth, and women a well as and policy- and opinion-makers.

For those who are unaware, the Ministry of Science and Technology, Government of India has declared the year 2004 as the "Year of Scientific Awareness."

Jidnyasa has always been on the forefront in promoting science education and awareness, among other things. Now, with this new role as SOA, Jidnyasa is working to form a State Organizing Committee which will plan, implement and monitor the year-long programme. The members of the committee will be distinguished scientists, academicians and other eminent personalities in the field science and technology.

Jidnyasa’s first initiative in creating scientific awareness is ready to launch. On January 15, 2004 Jidnyasa is unveiling the Thane chapter of "Exploratory," an initiative to promote learning of science in a real world setting. Every Saturday afternoon and Sunday morning, children will be able to learn science in the right way – they will invent and discover, innovate and invent, design and fabricate. The Thane Municipal Corporation has provided Jidnyasa with a classroom for this purpose.

The first official lecture of Exploratory will be given by Dr VG Gambhir, Chief Research Officer at The Homi Bhabha Centre for Science Education, which is run by the TATA Institute of Fundamental Research. Jidnyasa is also looking for scientists and academicians from Thane area who can volunteer to guide students on weekends at the Exploratory.

Students, scientists and academicians interested in Exploratory can contact Jidnyasa at 25403857. For the rest, keep reading this column as we will keep you updated with the progress, initiatives and achievements of the year-long programme of scientific awareness.

Dialling Despair

Dialling Despair

Mobile phones have made travelling by train noisier than ever before. Cell phones do not stop ringing and commuters do not stop talking. Those of you who travel regularly by suburban trains have surely encountered co-passengers talking loudly into their phone about big business deals. And it’s not just the people talking loudly that causes annoyance, it’s also the weird ring tones based on the latest Bollywood hits. What’s more, each time there’s ring or a beep, which happens invariably almost every 10 seconds, everybody around who carries a cell phone checks to see if it was their cell phone that is buzzing.
 
Cell phone woes do not end here. If you happen to carry a cell phone and commute by train, be discrete about it or someday soon, you may have to lend your phone to a fellow traveller to make a call or two.

The other day a lady colleague, a Thane resident, was travelling back from work in a Thane-bound local. The train came to a halt before Kanjurmarg Station – the usual two-minute halt for signal, people thought.   But when the train refused to move even after 20 minutes, discomfort among people grew. Seeing trains moving freely on other tracks, some began to speculate that the train had probably developed a technical snag and would therefore probably not move for a long time. It was nearing 10 pm and our colleague, who was in the ladies compartment, was approached by an anxious looking young college student. She looked very reluctant at first, but finally managed to request our friend for allowing her to make a call using her cell phone. Our friend obliged and the girl called her folks to inform them about her being stranded in the train. She also asked her father to pick her up from the station as it would probably become late by the time she’ll reach Thane. No sooner did she finish talking than the train started. After a couple of minutes, the girl again approached our friend, wanting to make another call – this time, to tell her folks that the train has started and they need to bother to pick her up. Our friend accommodated her second request too.

When it rains, it pours. As if kindness is written all over her face, the next day our colleague once again received a request to allow a call to be made from her cell phone – this time from an elderly lady. Compassionate that she is, our friend helped yet again. The lady spoke for less than 30 seconds in which she informed the person at the other end (speaking in Gujarati) that she’ll be reaching her destination in half an hour. After the call, the lady bowled our friend over by asking her how much she should pay for the call. She even offered the standard three-rupees-per-call to our bewildered friend who, politely declined, trying her best not look embarrassed.

Modern technology has its uses – it’s made a huge difference to our lives. But then roses always come with thorns.

In the beginning was the word…

In the beginning was the word…

Word of Mouth communications is as old as humankind. In the Garden of Eden, after Eve tasted the forbidden fruit, she strongly recommended Adam to take a bite. Eve’s insinuations stirred up in Adam heart an irresistible temptation which led him to try the fruit himself. And thus was set in motion the first ever word-of-mouth phenomenon.

Though marketing communications has certainly evolved since the days of Adam and Eve, the power of the word remains unchallenged. Every business in the modern era, either knowingly or unknowingly, generates word-of-mouth that is either positive or negative. While positive word-of-mouth increases sales and helps raise brand equity, negative buzz is usually harmful to business.

Even as positive word-of-mouth can substantially reduce your marketing and advertising costs, negative word-of-mouth is accompanied by the danger of annihilating your brand. Therefore it follows that every marketer in his right mind will aim to minimise negative buzz about his brand while maximising positive buzz around it.

The power of Word-of-Mouth

George Silverman, President, Market Navigation, Inc. says, "In study after study, with almost every category of buyer, word of mouth has been shown to be what is known as the proximal cause of purchase – the most recent thing that happened just before purchase."   [1]

Ask yourself what you do when you’re looking for a doctor, lawyer, plumber, architect or a financial consultant? Seek a reference from a trusted friend? You bet.

There is a small automobile service centre in this writer’s neighbourhood. It specialises in service and repair of Maruti cars and has thriving business. The owner is a thorough professional and believes in providing true to service to his customers. He never fixes anything that doesn’t require to be fixed, and goes that extra mile to ensure that the car delivered to the customer is as perfect as it can be.   His work is brilliant – the car always runs smoother and better after a visit to his garage. He never charges you for minor repairs. He’s installed computers at his office to record the repair history of all his customers. His bills are never inflated and his charges are quite reasonable – certainly much lower than what an authorised centre would charge. Almost all the Maruti cars in the area (numbering in hundreds) turn up at his garage for servicing. This, in spite of the fact, that there is a Maruti Authorised Service station right next to his small little garage. His business is brisk because he believes in consistent quality service. His customers (including this writer) swear by his service and bring their friends, colleagues and associates to him. His is a local business and he does absolutely no advertising.

The Bukhara of ITC Maurya in Delhi, which is now ranked seventh among the top 50 restaurant brands in the world, has never been advertised.

According to Gautam Anand, general manager, ITC Maurya Sheraton, Delhi, "Bukhara is like a temple of the Indian experience where it’s stayed relevant for 25 years and nothing has changed – not its menu, not its ambience or even its seating style. It offers a very predictable experience and people know what to expect consistently. It has just been the buzz that has made it so." The brand has grown and has lent itself neatly to ‘Kitchens of India’, the ready-to-eat, canned premium range from ITC Foods and not just that; the restaurant itself has spread to other cities such as Chennai and Mumbai, albeit as Peshawari. [2]

On the negative side we have the Palio car from FIAT. Its sales picked up very well only to slacken down later because of the buzz that it is a petrol guzzler. In spite of Sachin Tendulkar’s endorsement, the brand could not hold on to the market share, as negative word-of-mouth about its poor fuel efficiency caught on.

The above examples of positive word-of-mouth are by no means exceptional. In a study of 7,000 consumers in seven European countries, 60 percent said that they were influenced to use a new brand by family and friends. [3] See Box: What do people "buzz" about?

What do people "buzz" about?

  • Exciting products (like movies or destinations that offer exciting experiences)
  • Innovative products (like web browsers)
  • Personal experience products (hotels, airlines, vacation)
  • Complex products (in order to reduce risk people talk about products they do not understand like software, medical devices)
  • Expensive products (a very expensive vacation package will make potential buyers ask about what it offers and how good it is since it requires a big investment by the buyer)
  • Observable products (people engage in discussions about what they see in other people, e.g. clothing, expensive cars)
  • Personal activities (like attending a cultural or sporting event, people usually talk about this kind of experiences while socializing with friends and relatives)

Products like books, films and entertainment depend heavily on buzz. It is common knowledge that word-of-mouth is the single largest determinant in the success or failure of a film. In fact, a 2001 McKinsey report found that buzz plays a major role in entertainment. The report states that motion pictures and broadcasting are two of the categories largely driven by word-of-mouth. The report also says that 54 percent of sales across industries are affected by word-of-mouth. [4]

Because this is the age of the Internet, e-mail, websites, chat rooms, and video teleconferencing, word-of-mouth is even more important to businesses today than ever before. Information travels faster than ever before.

Word-of-mouth marketing contributed significantly to the success of many large companies and brands such globally recognised brands a KFC, Harley Davidson, Body Shop, Hotmail and Apple.

Apple did not advertise until very late in the game, and relied almost entirely upon word-of-mouth in the form of dealer recommendations and friends telling friends. [5]  

Coca Cola re-entered the Indian market in 1993 after 16 long years of absence, yet its brand awareness among the youth was substantially high. They had heard about Coca Cola from their parents and other elders who knew about the brand.

Studies have shown that a satisfied customer will tell an average of three people about a product or service she likes. Yet, more importantly, a customer will tell eleven people about a product or service with which she had a negative experience.[6]

The average urban consumer is exposed to 200-800 commercial communications per day, but only acts on one every week or two, and then mostly to get more information, not to buy.[7] When people ask someone about a product, they are likely to ask, "Did you face any problem using X?"

Another reason that word-of-mouth is so often negative is because the positive experiences are expected and soon forgotten, but the negative experiences cause people to be angry and frustrated, generating negative word-of-mouth. Studies have also shown that unexpected extraordinary service also causes strong positive word of mouth. In fact, some of the strongest and most frequent word of mouth results when a customer who has been let down is turned around by an extraordinary response to their expression of dissatisfaction.

Advertising versus Word-of-Mouth

Research shows that word-of-mouth can be seven times more effective that print media, twice as effective as broadcast media and four times more effective than sales personnel. Why? Because the source of word-of-mouth communications is normally independent of the company – the person is offering his or her own candid opinion and therefore, the information appears credible. On the other hand, advertising is the renting of a medium to send out a carefully crafted message to a specific audience.

"People are deluged with promotional information, and they are beginning to distrust it [advertising]. People are more likely to make decisions based on what they hear directly from other people, including friends, experts, or even salespeople. These days more decisions are made at the sales counter than in the living room armchair," wrote Regis McKenna, considered the marketing guru of Silicon Valley. [8]

Management consultants Cap Gemini Ernst & Young found only 17 per cent of the 700 U.S. consumers it surveyed in the past six months said TV ads influenced their car-buying decisions. Ads on Internet search engines influenced 26% of consumers. Nearly half, or 48%, of the consumers said a direct-mail offer from a car dealer would influence their vehicle purchases, but the most influential measure was word-of-mouth, cited by 71 per cent of consumers. [9]

The findings are significant because, as a group, automotive marketers are the largest purchasers of advertising and skew heavily toward TV advertising.

In a report in Advertising Age, Mike Wujciak, a vice president who oversees Cap Gemini’s auto practice said, "We think manufacturers and their dealers are wasting money on broad-based TV advertising instead of a direct-marketing approach," said While he’s not suggesting carmakers entirely ditch their TV ad budgets, he said "maybe they should re-evaluate the media mix, because TV is such a big part of their budgets." [10]

Yet, a good advertising campaign has the power to trigger off a strong word-of- mouth phenomenon. Like, what the legendary Bill Bernbach, considered father of modern advertising by many, said, "A great ad campaign will make a bad product fail faster. It will get more people to know it’s bad."

Harnessing the Power of Word-of-Mouth

Ensuring a good product and high quality service are best things you can do to avoid negative, and generating positive, word-of-mouth communications. Yet most marketers feel that WOM is like weather – you can do nothing about it.
 
The best way to get people talking about your company or its products is to create some excitement. Wendy’s did it years ago with a funny demonstration of the competitive advantage their burgers hold over McDonald’s. By asking "Where’s the Beef?" they were able to build name recognition and show customers why their burger is better. The humorous and offbeat approach helped turn a successful consumer campaign into a positive word-of-mouth campaign.

As recently as September 2003, Sony Entertainment Television launched a massive buzz campaign to launch and promote its new comedy series Jassi Jaisi Koi Nahi. Besides TV, print and outdoor, the channel also fired up other offline initiatives such as flash mobs, PR, email marketing, radio, SMS, leaflet messages and phone-in messages, all of which saw a steady build-up from pre-launch to post-launch.

Another way to create excitement is to give something away. Car Company Chrysler went directly to business leaders to introduce its LH series, offering new cars for a weekend to 6,000 top executives. The subsequent exposure in newspapers and the electronic media brought immediate public relations benefits. According to statistics in follow-up surveys, 90 percent said their opinion of Chrysler had changed; 98 percent said they would recommend the car to a friend; and at least 32,000 people know about the car as a result of the 6,000 weekend test drives.[11]

But marketers must remember that ultimately artificially created buzz can do only so much. If ultimately the consumer does not like the product, it will fail anyway – and maybe faster due to the buzz.

Dealing with negative word-of-mouth

Often, companies and brands become victims of negative buzz. Unfortunately, people are more likely to talk about your business when they are unhappy than when they are happy or satisfied. Recent research reports that 92.6 per cent of rumours about companies or brands heard in the past year by consumers were negative in nature.[12] Whether the negative buzz is a rumour or reality, marketers must deal with the situation carefully. You must control damage as early as possible, definitely before it blows out of proportion and harms the image of your company or brand.

The best way to counter negativity is to create positive word-of-mouth. Try to find the source of the problem and specifically answer the charges.

Sometimes keeping quite and doing nothing about it is the best option because consumers may actually hear about the rumour only when marketers attempt to correct it. Many years ago in Ohio, the McDonald’s Corporation was the victim of a nasty rumour. The focus of the rumour was that McDonald’s hamburgers contained worm meat in them. McDonalds tried to counter the rumour by posting a letter from the Secretary of Agriculture which claimed that hamburger produced by the effected establishments is "wholesome, properly identified and in compliance with standards prescribed by Food Safety and Quality Service regulations." In spite of these attempts to quell the rumour, it remained strong. Later, a study found that 35 per cent of consumers learnt about McDonald’s worm only when they saw the company’s anti-rumour campaign.[13]

Another option is to deal with negative word of mouth is address it discreetly. When people in the US perceived oil companies as greedy, companies launched campaigns highlighting the socially desirable things that they had achieved. [15]

Another idea employed of marketers to deal with negative word-of-mouth is to release creative advertising to get consumers to think about something else. For example, during the time period of the worm rumour, McDonalds could have advertised their cleanliness and the quality of their food. Here, without mentioning worms, the rumour is indirectly addressed by getting consumers to realise that a clean McDonalds is a wormless McDonalds. [14]
 
For business-to-business and service industries, negative feelers are often a result of discontented customers. Compile your customer complaints, and check for a pattern. If a particular product or service emerges as the problem, rectify the problem immediately.

Final Words

The Holy Bible say: In the beginning was the Word, and the Word was with God and the Word was God (John:1:1-3). Well, from the above discussion we can safely conclude that as far as marketing communications go, the Word is still God.

WOM has the power to both accelerate and slow up product acceptance. Most marketing professionals, even those who understand the power of electronic broadcast, believe that WOM is the most compelling way to bring in new customers. It is credible, spreads fast, is low-cost and triggers purchase better than all other form of communication. Time and again, WOM has proven to be more effective in stimulating sales than any other medium, mass or niche.

When used effectively in combination with other tools like mass media advertising, direct marketing and public relations, WOM can lead to substantial savings in your marketing expenditure. Take my word for it!

Notes:
[1, 5] How to Harness the Awesome Power of Word of Mouth by George Silverman, Direct Marketing Magazine, November 1997, pp 32-37
 [2] Flash mobs! That’s buzz marketing by Shamni Pande, The Economic Times Wednesday, December 24, 2003
[3] "Marketing Management" by Philip Kotler, 11 E, 2003
[4] "The Buzz on Buzz" by Renee Dye, Harvard Business Review, November-December 2000.
[6] "The Secrets of Word-of-Mouth Marketing How to Trigger Exponential Sales through Runaway Word of Mouth" by George Silverman, Amacom 2001
[7] "Heard it from a Friend, The Secrets of Word-of-Mouth Marketi
ng" by George Silverman, Quirk’s Marketing Research Review, Feb. 2002,
[8] Regis McKenna, The Regis Touch (Addison-Wesley, 1985)
[9, 10] Advertising Age, October 13, 2003
[11]
http://www.smartbiz.com
[12, 13, 14] Rumor Has It That Word-of-Mouth Can Be Dangerous by Michael A. Kamins, www.marketingprofs.com
[15] Conceptual Issues in Consumer Behaviour: The Indian Context, 1/e by S Ramesh Kumar, Pearson Education 2003

Services are performances, not manufactured products

Services are performances, not manufactured products

Dr A ParasuramanManoj Khatri: What are the special challenges of marketing and managing services in today’s technology-driven environment?
Dr. Parasuraman:
The proliferation of technology-based systems offers tremendous opportunities for companies to communicate with and serve their customers.   At the same time, technology-based systems are not a panacea.   There is a real danger of companies going overboard in this regard.   For instance, all too often companies are overeager to migrate all customers to self-service systems because of the potential for reducing costs.   A case in point is banks – several of the larger U.S. banks started forcing customers to complete their banking transactions via ATMs, telephone-banking systems, or online banking; customers preferring to interact with human tellers had to pay a fee!   While this strategy appealed to techno-savvy customers who preferred to deal with technology rather than with tellers, it enraged others who did not take too kindly to being charged for personal service.   Capitalizing on growing customer frustration, smaller banks started emphasizing personal service and boosting their market shares.   Reacting to this backlash the larger banks are now increasing – at no small expense – the number of bank branches and branch-based personal services.  Companies would do well to recognize that not all people – both customers and employees – might be equally enthusiastic about technology-based systems.   Findings from some of my recent research strongly suggest that there are distinct segments of people with differing levels of "technology readiness" [TR], which refers to an overall mental inclination to embrace and use technology-based systems.   TR is not synonymous with technical competence – there are a lot of technically competent people who may still resist technology due to psychological or personal reasons.   An important challenge and priority for companies is to understand the TR profiles of their constituencies and to take a measured approach to migrating from traditional to technology-based service systems.

Mk: How can service quality be defined and improved when the product is intangible and non-standardised? How can the organisation ensure the delivery of consistent quality service when both the organisation’s employees and the customers themselves can affect the service outcome?
Dr Parasuraman:
Services are indeed performances rather than manufactured products.   As such, in contrast to product quality – which is typically verified in the factory by examining whether the final product conforms to design specifications – the only meaningful way to judge service quality is to examine the extent to which the delivered performance meets the customers’ expectations.   In other words, the performance that customers believe an excellent service organization can and should deliver is the true standard for assessing service quality.   Therefore, gaining a good understanding of customers’ service expectations, as well as variations in those expectations across different customer segments, is essential for improving service quality.   Consistently delivering superior service quality is much more a matter of meeting and exceeding customers’ expectations rather than simply conforming to company-defined specifications.   One of the biggest shortcomings of service companies is a failure to understand accurately what’s important to customers.   Service companies are often quick to institute so-called service improvements based on assumptions about what’s important to customers.   To illustrate, a well-known four-star hotel in Spain in which I was a guest some time back offered a choice of ten different pillows to customers!   This unusual service might have really "wowed" me except that this same hotel failed to meet some of my basic service expectations (e.g., it neglected to give me a wake-up at the time I had requested one).   So, instead of pleasing me, the choice of a wide variety of pillows – a nonexistent expectation in my case and, I suspect, in the case of most hotel guests – actually magnified my frustration with the hotel’s failure to meet my basic expectations!   Another imperative for improving service quality is to "manage" customers’ expectations by making realistic rather than exaggerated promises, and by proactively educating customers about the their roles and responsibilities in obtaining service.

MK: How can new services be designed and tested effectively when the service is essentially an intangible process?
Dr Parasuraman:
Although services are intangible, principles and approaches that are analogous to those pertaining to new-product development can be used to design and test new services.   For instance, a technique called "service blueprinting" can be used to diagram an existing service process – by essentially mapping the various service steps and their inter-relationships – and to identify opportunities for streamlining and/or creating new versions of the current service process.   In addition, service companies can develop and systematically evaluate prototypes of new ways of delivering their services.   For instance, Bank of America has an "Innovation & Development" team that is charged with developing and testing different bank-branch formats consisting of various combinations of technology- and human-based processes.   New bank-branch prototypes are first evaluated, and if necessary refined, by bank employees; they are then subjected to "live" tests with actual customers in several locations in the Atlanta, Georgia. The new formats are rigorously evaluated in terms of customer reactions as well as financial metrics, and the most promising ones are identified for a market-wide roll out.   Citibank, which pioneered the introduction of automated teller machines, is another example of a service company that uses systematic and rigorous consumer research to evaluate new service-delivery systems.

MK: Pricing a service product is tricky because it is difficult to determine the actual costs of production. In such a scenario, what factors should be considered while determining a pricing strategy of a service product?
Dr Parasuraman: Pricing issues are indeed more complicated in the case of services because the "raw materials" – employees’ time and effort – are more difficult to track down on a transaction-by-transaction basis.   However, this does not necessarily mean that such tracking is impossible.   For instance, call centres can – and many do – keep track of the average time for, and hence cost of, handling different types of inquiries.   Through the systematic use of activity-based cost-accounting principles one can get at least a rough estimate of whether the price per transaction or customer covers the cost of delivering the service.   A more critical issue in the context of pricing services is whether or not a service company has an overall pricing strategy.   Because customers cannot examine a service prior to purchasing and experiencing it, the service’s price – along with its brand name – is a strong, and at times only, clue to first-time customers about what the service will be like.   The potential role of price as a quality signal is an important, but frequently overlooked, strategic consideration in setting prices.   Another obvious factor to consider is competitors’ prices for similar services. However, relying solely on and blindly matching competitors’ prices can be detrimental because it increases consumers’ price sensitivity, making it increasingly difficult to compete on anything other than price and to recover the cost of providing the service. Unless a company has a substantial cost-advantage over its competitors, competing solely o
n a low-price basis can suicidal. A more balanced pricing strategy that carefully considers cost of service provision, along with the implicit signals the company wishes to convey to its intended consumer targets, will be a much more appropriate and sustainable.
 
MK: Because most services are delivered in real time, service employees are a critical part of the product itself. How should a firm select, train and motivate the right employees so that the service level delivered is the same as the service level conceived by the management?
Dr Parasuraman:
Since a service is a performance, delivering excellent service can be considered as being similar to producing a play that captivates the audience. As such, consistent delivery of superior service requires that the actors (employees) are carefully cast (recruitment and selection), well choreographed (training), fully cognizant of how their roles interrelate (teamwork), and provided with the necessary behind-the-scenes support (incentives/rewards).   Thus, just as producing a successful play calls for considerable effort and hard work up front by the production company, consistently delivering quality service calls for true commitment on the part of the management.   Moreover, the service level and attributes specified by management must be aligned with customers’ expectations. Understanding what is truly important to customers in terms of employee-delivered service, translating that understanding into concrete service specifications, and then sparing no expense in ensuring that employees are able to meet those specifications are the hallmarks of true commitment to customer service.   A company that epitomizes such unwavering commitment is Southwest Airlines, the most consistently profitable air carrier in the U.S.   They have a distinct customer-oriented, fun-loving service culture, which they preserve with a passion because it is a key ingredient of their competitive advantage.   To continue to nurture this culture the company use a rigorous, multi-stage employee-selection process that includes such novel steps as including loyal customers as interviewers in order to ensure that those who are hired will fit into and foster the firm’s corporate culture.

MK: How does the firm communicate quality and value to customers when the offering is intangible and cannot be readily tried or displayed?
Dr Parasuraman:
In the case of services, "the proof of the pudding is really in the eating."   All marketing communications, regardless of how creative and clever they are, can at best only make promises to consumers about how good the service will be.   Making good on those promises heavily hinges on excellent execution, which, in turn, depends on the quality of the customer-facing employees, regardless of whether they are in marketing or some other functional area.   The best opportunity to truly "market" a service by demonstrating its quality and value is during its actual delivery rather than prior to purchase.   Moreover, excelling in service delivery is critical for another important reason – namely, current customers who are highly pleased with the service may be the best "marketers" of the service by virtue of their potential for generating positive word-of-mouth communication, which is a powerful promotional tool for recruiting new customers, perhaps even more powerful than company-generated promotional communications.
 
MK: In the Indian context, where price plays a major role in purchase decision, do you think companies can effectively compete on service? Why?
Dr Parasuraman:
I do believe that Indian companies can effectively compete on service; and they should strive to do so.   Competing on service doesn’t necessarily have to be expensive. Some aspects of providing good service (e.g., treating customers with respect) cost little, if anything.   Moreover, some forms of poor service (e.g., being rude to customers) may actually increase costs (e.g., the time and effort needed to handle complaints from irate customers). Ensuring superior service quality has much more to do with consistently meeting customers’ service expectations than with delivering the most expensive or luxurious service levels.   A case in point is Southwest Airlines, a company I have already mentioned.   They are a low-priced, "no frills" airline (e.g., they don’t offer pre-reserved seats and have limited, if any, food and beverage service on their flights); but they consistently deliver the level of service promised to and expected by their target segments (e.g., friendly treatment by employees and a "fun" experience during the flights).   Southwest Airlines have also done a good job of educating their target segments about what they can and cannot expect.   Such proactive and honest communications help "manage" customers’ expectations by keeping them at a reasonable level; this, in turn, paves the way for meeting and exceeding those expectations.   In short, low prices and good service are not incompatible; companies competing on low prices just have to do a good job of managing their customers’ service expectations and then capitalizing on every opportunity to exceed those expectations.