CHAPTER 4

PEOPLE AND DISTRIBUTION

Learning Objectives Part 1 (People):
Be able to

1. Explain the role of service personnel in service industry

(maritime)
2. Identify the job characteristic in service industry
(maritime)
3. Identify the critical importance of service employee in
service industry (maritime)
4. Explain the elements of service marketing triangle
Topic to discuss
 What is the Role of Service Personnel in Maritime industry? Give example
 Task Identity –What are their tasks in maritime industry? Give example
 Employees’ Roles in Service Delivery
 What are the Critical Importance of Service Employees in maritime industry?
Give examples
 What are the elements The Services Marketing Triangle
 How does an organization provide high level of service excellence continuously
in service industry? Aligning the Triangle
 Services Marketing Triangle Applications Exercise
What is the Role of Service Personnel in Maritime
industry? Give example
 Service can be divided into two categories:
 Support personnel
 Customer contact personnel
 Support personnel are seldom seen by the customer. E.g. the chef
who prepares the food or the janitor who cleans the facility.
 Customer contact employees are the interface between the service
organization and its customers.
 These employees are the ones customers see and the ones with
whom they interact.
 The quality of the functional component of service quality is
primarily determined by customer contact employees
Job characteristic
 Job characteristic of service industry is in the form of customer contact employees who serve for services.
 It is also called employees serve in a boundary-spanning role for services.
 A boundary-spanning role links an organization/company or business with its environment.
 Through interaction between:
1. members of the organization/company (employees and employers) and
2. members of environment (customer/client).
Example
 The UK P&I Club (insurance company) is one of the oldest P&I clubs in the world.
 It provides Protection and Indemnity insurance in respect of third party liabilities and expenses arising from
owning ships or operating ships as principals.
 One of the largest mutual marine protection and indemnity organizations it insures around 175 million tonnes of
owned and chartered ships from more than fifty countries across the globe.
 The customer impression on UK P&I Club will largely be determined by how UK P&I Club performes in their
services.
 Skill variety
 Task identity
 Task significance
 Autonomy
 feedback
FIVE IMPORTANT MOTIVATIONAL JOB CHARACTERISTICS
 In designing service jobs /posts form should aware of FIVE important
motivational job characteristics :
 i. Skill variety
 The degree or range of abilities required by an employee to do a job.
 ii. Task identity
 The degree job requires and identifiable unit of work with visible outcomes
 iii. Task significance
 The degree of impact an employee perceived his or her job has on the lives of
others inside or outside the organization.
 iv. Autonomy
 The degree of freedom and discretion an employee has in his or her work
design
 v. feedback
 The degree of direct, clear information an employee receives from superior
concerning the effectiveness of his or her performance
1. SKILL VARIETY
Employees will have jobs requiring varied skills and abilities appear to be more
motivated than employees whose jobs require monotonous.

 Due to most customer prefers to contact position required a wide range of

abilities.
 Employee must have additional skills that is variety of skills and abilities to
perform the actual service.
 Customer contact employees must have the abilities to interact with people i.e.
customers.
 E.g. Verbal communication skills which include both effective listening and
speaking skills are required.
 E.g. Cargo supervisor not only skillful in cargo operation but he must have good
communication skill in directing the cargo operation.
 Customer contact personnel should be able to deal with various types of
personalities.
2. TASK IDENTITY

 Most personnel in service industry have visible outcomes and distinct units of
work.
 They are personnel who serves as the interface with the customers. E.g.
Forwarders taking the request of exporting the consignment overseas. They are
the one who arrange for the export – import cargo with the requested port.
 Forwarders taking the request from the customers (manufacturers) and arrange
for the schedule of loading the cargo to the through the port operation. But
they will have no further contact with the manufacturers unless the customers
call back with complaints.
 This lack of task identity can make this type of job less fulfilling/ interested for
some employee.
 Therefore, some services company divide their job functions and having new
job designed where each task have their own task identity.
 Such as job low task identity – receptionist and job high task identity e.g
operation manager in a port.
Task Identity – What are their tasks in
maritime industry? Give example
 Most customer contact positions have visible outcomes and
distinct (different) units of work.
 E.g. hair styling, the employee is performing the work. The
outcome is clearly visible and the unit of work is distinct.
 The most difficult customer contact position in terms of having
task identity is the telephone receptionist who takes and schedule
orders.
 This situation occurs when customer call a plumbing service. The
receptionist will take the order and schedule the work but will
have no further contact with customer unless the customer calls
back with complaints.
 This lack of task identity can make this type of job less fulfilling for
the employee.
 Employees’ Roles in Service
Delivery
 Service Culture
 The Critical Importance of Service Employees
 Boundary-Spanning Roles
 Strategies for Delivering Service Quality Through People
 Customer-Oriented Service Delivery

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Service Culture
“A culture where an appreciation for good service exists, and
where giving good service to internal as well as ultimate,
external customers, is considered a natural way of life and
one of the most important norms by everyone in the
organization.”
- Christian Grönroos (1990)
What are the The Critical Importance of
Service Employees in maritime
industry? Give examples
 They are the service.

 They are the organization in the customer’s eyes.

 They are the brand.

 They are marketers.

 Their importance is evident in:

 the services marketing mix (people)
 the service-profit chain
 the services triangle
The “Power of One”
 Every encounter counts

 Employees are the service

 Every employee can make a difference

 Through their actions, all employees shape the brand

What are the elements The Services
Marketing Triangle
How does an organization provide high level of service excellence
continuously in service industry? Aligning the Triangle
 Organizations that seek to provide consistently high levels of
service excellence will continuously work to align the three
sides of the triangle.

 Aligning the sides of the triangle is an ongoing process.

Services Marketing Triangle
Applications Exercise
 Focus on one maritime service organization (example in shipping industry, port industry, haulage
industry, freight forwarding, etc) Who occupies each of the three points of the triangle?

 How is each type of marketing being carried out currently in that organization ?

 Are the three sides of the triangle well aligned?

 Are there specific challenges or barriers in any of the three areas of triangle?
Making Promises
 Understanding customer needs
 Managing expectations
 Traditional marketing communications
 Sales and promotion
 Advertising
 Internet and web site communication
Keeping Promises
 Service delivery
 Reliability, responsiveness, empathy, assurance, tangibles,
recovery, flexibility
 Face-to-face, telephone & online interactions
 The Customer Experience
 Customer interactions with sub-contractors or business
partners
 The “moment of truth”
Enabling Promises
 Hiring the right people
 Training and developing people to deliver service
 Employee empowerment
 Support systems
 Appropriate technology and equipment
 Rewards and incentives
 Ways to Use the
Services Marketing Triangle
 Overall Strategic Assessment
 How is the service
organization doing on all three
sides of the triangle?
 Where are the weaknesses?
 What are the strengths?
 Specific Service
Implementation
 What is being promoted and by
whom?
 How will it be delivered and by
whom?
 Are the supporting systems in
place to deliver the promised
service?
The Service Profit Chain
Service Employees
 Who are they?
 “boundary spanners”
 What are these jobs like?
 emotional labor
 many sources of potential conflict
 person/role
 organization/client
 interclient
 quality/productivity tradeoffs
Boundary Spanners Interact with Both
Internal and External Constituents
Boundary-Spanning Workers Juggle Many
Issues
 Person versus role

 Organization versus client

 Client versus client

Human Resource Strategies for Delivering
Service Quality through People
 Empowerment
 Benefits:
 quicker responses to customer needs
during service delivery
 quicker responses to dissatisfied
customers during service recovery
 employees feel better about their
jobs and themselves
 employees tend to interact with
warmth/enthusiasm
 empowered employees are a great
source of ideas
 great word-of-mouth advertising
from customers
 Drawbacks:
 potentially greater dollar investment
in selection and training
 higher labor costs
 potentially slower or inconsistent
service delivery
 may violate customers’ perceptions
of fair play
 employees may “give away the store”
or make bad decisions
Seattle’s CLICK!
 Traditional Organizational Chart

Manager

Supervisor Supervisor

Front-line Front-line Front-line Front-line Front-line Front-line Front-line Front-line

Employee Employee Employee Employee Employee Employee Employee Employee

Customers
Customer-Focused Organizational Chart
Inverted Services Marketing Triangle
How Employee Satisfaction Drives Productivity
and Customer Satisfaction at Wegmans

The grocery chain paid over $54 million for

college scholarships for 17,500+ employees
over the past 20 years.
Wegmans did not hesitate to send cheese
manager Terri Zodarecky on a ten-day
sojourn to cheesemakers in Europe.
The firm gives employees flexibility to
deliver great customer satisfaction.

How can this be justified?

How does this affect performance?
 Wegmans’ labor costs are 15-17% of sales,
compared with 12% for industry.
 But annual turnover is just 6% (19% for similar
grocery chains).
 20% of employees have 10+ years of service.
 This in an industry where turnover costs can
exceed annual profits by more than 40%.
 Wegmans’ operating margins are 7.5%, double
what the big grocers earn.
 Sales per square foot are 50% higher than
industry average.
Part 2: Marketing Environment
Learning Objective
 Student should be able to:
 Examine the marketing environment local and international
 Identify the particular needs and responding to the needs on
an acceptable basis to the client/customer in maritime
industry
 Conduct marketing research
 Conduct marketing plans
The Marketing Environment
 Marketing represents the process of examining a market,
identifying a particular need and responding to that need on
an acceptable basis of the client.
 Marketing impacts on positive cash flow, investment plans,
profitability levels, information technology, labour resources,
production in the form of the for example shipping services
operated and the overall image and position of the shipping
company in the global or international marketplace.
The Marketing Environment involves the
following areas:
a) Economic
b) Government and Political
c) Competition
d) Cultural and Demographic Issues
e) Technology and Science
f) Legal and Ethical Constraints
g) Ecology and Resource Limitations
h) The Firm In The International Environment
i) The Shipping Company’s Culture
Marketing Research
 Marketing research is the systematic gathering, recording and
analyzing of data about problems relating to the marketing of
goods and services.
 It is an essential ingredient in a successful marketing strategy
and ideally all decisions taken relative to the management of a
shipping business should be market research-led.
 Market research is of two main categories: primary and
secondary,
 Primary data involves the collection and analysis of raw data
obtained from the marketplace for example, a research
program, and it usually involves field research such as
questionnaires, face to face interview and so on.
 Secondary research is the process of obtaining data already
available in the marketplace such as government statistics and
information from international agencies, trade association
and the media.
Marketing Plans
 It is a complex operation with an international scope and
must answer three questions
1. Where is the company now?
2. Where does it want to go?
3. How might it get there?
 In short, the company must have a mission statement – an
outline of the company’s marketing objectives and the route
to those objectives.
 This involves the selection of the target markets, the choice
of market positioning strategies and the selection of the
appropriate marketing mix.
THE END