Project/Slides/Presentation Transcript

Topic: Flipkart – 7P`s of Services 

SLIDE 1 – Flipkart 7p in services

Flipkart.Com

ABOUT FLIPKART.COM

• Flipkart.com, India‟s largest e-commerce brand for physical goods, started with books in 2007, and entered the consumer electronics category with the launch of mobile phones, in September 2010.
• The co-founders of flipkart are SachinBansal and BinnyBansal.
• Since then it has grown rapidly, today the portfolio is spread across 14 categories – from books to music, mobiles, computers, cameras, home & kitchen appliances, TV & home theatre systems etc.

FACTSHEET

• Ranks in the top 20 websites in India.
• Book titles available– 11.5 million.
• Registered users – 3 million
• Current manpower – Approx. 4800
• Items shipped per day – 30000
• Own delivery network – 37 cities

SLIDE 4

7 Ps

• Product – Today, they present various categories of products such as: movies, music, games, mobiles, cameras, computers, healthcare and personal products, home appliances and electronics, stationery, perfumes, toys – and still counting!
• Price – The products are offered various prices catering to all the classes of buyers. Flipkart also offers discounts and special deals on books and other products.
• Place – This is where flipkart saves money as it does not need to incur cost on setting up stores as it is online based. – Flipkart operates these cities: Bangalore, Chennai, Delhi, Kolkata, Mumbai, Noida
• Physical Evidence – Website – Delivery
• People – Reviewers – Customers

PROMOTION

• Flipkart has been mostly markets by word of mouth advertising. Customer satisfaction has been their best marketing medium
• Flipkart also uses SEO and Google Ad-words as marketing tools to have a far reach on the online world.
• Flipkart recently launched a series of 3 ads with the tag line – “No Kidding No worries”. Kids were used to create the adverts to send out the message – if a kid can do it, you can also do it.
• The message is very clear to make people more comfortable with Flipkart, to generate a great customer relationship and loyalty on the basis of great product prices and excellent customer service. All in all to create a great customer experience.

SLIDE 8

Service Blueprint

SLIDE9

SUPPORT PROCES S CONTACT PERSON

SLIDE 10

RATER Model

SLIDE 16

Analyzing Rater Model

Particulars Expectation of Flipkart

Perception  of customers

Need to improve Reliability 7 5.5 1.5

Assurance 7 5 2

Tangibility 7 6.33 .67

Empathy 7 4.85 2.15

Responsiveness 7 4 3

SLIDE 17

Fishbone diagram: A cause-andeffect diagram to identify potential causes of problems

Delayed delivery

SLIDE 19

Gaps Model

SLIDE 20

Customer Expectations

Company Perceptions of Customer Expectations

Gap 1

1. Flipkart was among the few E-commerce sites and people expected it to be selling the E-books and PDF of books too.
2. Indian consumers expected the payment mode to be Debit/Credit cards and not Cash on Delivery.
3. Initially Flipkart did not have a 30Days Guarantee which customers expected in case of Electronics.
4. Lack of communication between Courier Delivery company (Employees) and Flipkart managers.

Knowledge Gap

Customer-Driven Service Designs and Standards

Management Perceptions of Customer Expectations

1. Flipkart has developed Flyte – Music Store , this service has been a very Vague and out of line Development from it.
2. The Service Standards were not upto the need of the Customers when it came to quality of Original Books and also Electronics like Laptops,etc.
3. Flipkart was inadequate in updating its Inventories and dealing its products returned with Defects by customers.
4. There was a lack of Tangiblity because of its Online presence in its Electronic products which Customers needed.

Standards Gap

Gap 2

Service Delivery

Customer-Driven Service Designs and Standards

1. Flipkart being a start up initially Human resource policies were deficient as most of employees left in a year or two of their recruitment
2. There was a problem of Customer not fulfilling their roles i.e. many customers made orders and upon Delivezzzry returned them or denied the purchase.
3. Flipkart had Problems with its service intermediaries which was the Courier Delivery Company because of logistical problems.
4. Flipkart had overreliance on price which was giving too much discounts to smooth demand which led to low margins. Delivery Gap

Gap 3

Service Delivery

1. Flipkart had absence of strong internal marketing program which led to High Employee Turnover and many Employee lacking complete knowledge of product .
2. Flipkart could not effectively manage the expectations of its Electronics segment Customers and could not keep up with kow prices and latest products in its Inventory.
3. There was little overpromising in its Books store segment which initially boasted as being the biggest online Book Store but it lacked many good Foreign Publishers Books with whom it did not have tie – ups.
4. Flipkart faced many Operational problems and there was a lack of Communication between Sales and Operations Departments because the Operations business was not streamlined.

External Communications to Customers

Communication Gap

Gap 4

Perceptions gap

Gap 5

Gap 6

• The Customers expected that Flipkart should give 30 days Refund Guarantee for all of its product while what could be perceived was that only 30 days replacement guarantee was being offered.
• The Customers expect that all the products are delivered in 3 to 4 days but the Employees perceive that the Customers would expect in 3 to 4 Business days which many a times is point of conflict for Flipkart Employees

SLIDE 26.

CUSTOMER RELATIONSHIP MANAGEMEMT

ONLINE CUSTOMERS

• Number of online users has increased 100 times in the past 12 years
• The number of e-commerce companies has also gone up tremendously.
• It is said that by 2014 at least 8 out of 10 Indians would have made an online purchase

.

WHY IS CUSTOMER RETENTION IMPORTANT TO FLIPKART

• Easy to Search
• Very few switching barriers
• High Competition
• Quick Comparison
• Even a slightly bad experience can lead to permanent customer loss
• Joe Girard said that one customer is a gateway to more than 200 other customers.

CRM IN E-COMMERCE IN INDIA

• The E-Commerce industry has not taken CRM too seriously.
• They have been playing the “ We have cheaper prices game”
• Flipkart had the responsibility to create awareness about ECommerce.
• Currently companies are spending on converting offline customers to online customers than retaining.

CORE SERVICE PROVISION

• 1st step in the Relationship building process.
• Flipkart has been successful in fulfilling the criteria in this department.
• The perceived quality is quite high because of their new ads
• The actual customer experience have fallen because: – Financial Distress – Technical Glitches – Critical feedback from users and experts • Eg: Forbes

SWITCHING BARRIERS

• Customer Inertia: – If a customer wants to leave you, he would. – Customers have accounts with multiple websites. – There is no loyalty whatsoever in the E-Commerce Industry.
• Switching Barriers: – Psychological cost and time cost are two switching barriers – Very few switching barriers. – Takes hardly 2 minutes to create a new account. – Customer is spoilt for choice.
• Hence, it can be a positive as well as negative factor for Flipkart.

SLIDE 32

Financial Bonds

• Volume and Frequency Rewards
• Stable Pricing
• Bundling and cross selling

Social     Bonds • Continuous Relationships

• Personal relationship
• Social Bonds among Customers

Customization Bonds • Customer Intimacy

• Mass Customization
• Innovation

Structural Bonds • Integrated Information System

• Joint Investments
• Shared Processes and Equipment

WHAT FLIPKART DOES?

• Notifies if a product of your choice is „now available‟.
• Customizes mails according to selected likes.
• Provides an online customer service.
• Special website for complaint registration.
• Lets you keep a check on past purchases and current orders.
• Sends mails on dispatching items.
• Feedback forms after every purchase.
• Simple and easy to use website.
• Prepaid wallet service.

FACTORS WORKING AGAINST FLIPKART

• Accused of „Overpricing and then giving a higher discount‟
• Strict Review Moderation system.
• Trust deficit.
• Financial constraints are stopping Flipkart from taking up CRM.

WHAT FLIPKART NEEDS TO DO?

• Segregate Customers according to: – Volume Sales – Amount of Sales – Frequency of Sales – Category in which sales have been made by a customer
• Send specific e-mails to customers.
• Start a point system.
• Give special calls to chosen customers and give them special communication officers

SLIDE 36.

Customer Service, Complaint Management and Service Recovery Strategy.

CUSTOMER SERVICE

• Flipkart has a 24/7 customer service.
• It has an online customer service.
• It has a Customer Care helpline.
• Considered to be the best in business.
• It gives the customers an option to review the product but not the service.
• It responds quickly to problems addressed to them on various social media platforms.

COMPLAINTS AND COMPLAINANTS

• Most of the complaints are not reported unless the price of the item is very high.
• The complainants are also in extremes: – Some might complain and not follow up (Passives) – Some take up the issue on a public platform • There are pages dedicated to Flipkart on the Consumer Protection Web Forum

HOW FLIPKART TACKLES COMPLAINTS?

• It is easy to find information about the various media that can be used to complain.
• It is very easy to lodge a complaint.
• They have made sure that the customer care staff : – Is not impolite – Understand the customer‟s problem
• They have been known to respond to open letters by the customers.
• Mr. Sachin Bansal openly replied to the article given in Forbes India.
• On the spot redressal is not possible as various aspects of the service delivery process have to be checked.
• The only drawback is that continuous improvement has not been achieved.

SERVICE RECOVERY

• The following strategies have been used by Flipkart:

– Welcome and Encourage complaints.

– Act Quickly.

– Treat customers fairly.

• It is difficult to actually understand if a customer is lost or not.
• There is no pressure from the company to buy the product.
• They post about their resolved complaints on their blogs.
• What they have not done is:

– Fail-safe the service

– Learn from lost customers

SLIDE 41

Matching Demand And Supply

RISING DEMAND

• Customer base increasing by 25% per month
• Daily Servicing orders increased from 24000 to 45000
• Current Fiscal Sales amount to Rs.2000 Crore
• Selling 20 products per minute
• Demand pattern – Demand exceed the optimum capacity level

SLIDE 43

Shifting Demand to Match Capacity

Low Demand

Introduced Cash On Delivery Online assistance to place orders Bought Letsbuy.com to increase range of electronics items TV Commercials

Products at discounted price

High Demand

Increased minimum COD from Rs.200 to Rs.300

ADJUSTING CAPACITY TO MATCH DEMAND

• When Demand too high – Employee base increased from 2500 to 5000 delivery men. – Introduced Flipkart Logistics. – Increasing Flipkart Logistics coverage from 13 to 25 cities.

GUARANTEES GIVEN BY FLIPKART

In stock : 3-4 business days

• Non prime areas 1-2 Weeks

Imported goods : 10 days or more

Pre launch goods : Shipped on release date

30 DAY Replacement Guarantee

Delivery Time Period

SLIDE 46

SUGGESTIONS FOR FLIPKART

• Up keeping the cost of 7 warehouses that it owns should be transferred to Flipkart Logistics.
• Cash on Delivery Option creating cash flow problems and so make it only online payment so Cash flow problems are solved.
• Flipkart should concentrate more on retaining the customers first rather than expanding into new segments.
• Maintain price differential from its new competitors like Junglee.com which is owned by Amazon.com .

The post Flipkart – 7P`s of Services appeared first on BBA|mantra.

FACTORS AFFECTING SERVICE QUALITY

• Access – Ease and approachability of service
• Aesthetics – The extent to which service package components are pleasing to the customer
• Attentiveness/helpfulness of staff/service provider
• Flexibility i.e. extent and degree of customization
• Cleanliness of the premises
• Comfort of the customer
• Commitment of management to solve customer problem
• Competence of the service provider
• Reliability of the service provider
• Security of information, good, health etc. of the customer

DIMENSIONS OF SERVICE QUALITY

• Tangibles – Appearance of physical facilities, equipment, personnel etc.
• Reliability – Ability to perform the promised service, dependably and accurately
• Responsiveness – Willingness to help customers, assuring the customer and providing prompt service
• Competence – Skill and expertise with the service is executed/ knowledge of staff
• Courtesy – Politeness, respect
• Creditability – Consistency in performance and ability of the service to inspire trust and confidence
• Communication – Ability of staff to communicate, listen and understand
• Security/Safety of service
• Understanding the customer

PROBLEMS OF SERVICE QUALITY CONTROL

• Inseparability of production and consumption 
• Communication gaps –
  • Failure to deliver promises
  • Failure to keep customer informed
  • Failure to listen on communicate in a way he can understand
• Viewing customer as statistics
• Short run/ profit motive of the business

PROCESS OF SERVICE QUALITY MANAGEMENT

Steps in managing service quality :

• Identify the primary factors that affects the service quality(customer experience and customer expectations)
• Manage Customer Expectations by understanding customer needs and expectations
• Re-organize tangible elements i.e. office space, staff, physical equipment etc. for better performance
• Educate the customer about the service through effective communication
• Develop quality standards and quality driven organization culture according to customer expectations
• Automate and maintain quality standards
• Take regular Feedback from customers and correct any deviations in performance standards  

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Expected services or Customer expectations are standards that customers bring into service experience i.e Basic expectations of the customers from the service. Perceived  Service or Customer Perceptions are perceptions of the consumer about the service after having the actual service experience.

The GAP analysis helps in closing the gap.

According to the GAP Model a consumer`s quality perceptions about a service is influenced by five distinct gaps occurring in the service delivery and the organization.

• Gap 1 – It is the difference between customer expectations and organization`s understanding of those expectations.

• Gap 2 – It is the difference between organization`s understanding of customer expectations and development of customer driven quality standards.

• Gap 3 – It is the difference between the developed standards and the actual service provided by the organization.

• Gap 4 – It is the difference between the service delivered to customers and the external communications made about the service.

• Gap 5 – It is the difference between the expected service and the perceived service.

Reasons for GAP 1 

• Inadequate market research
• Lack of upward communication in the Organization
• Insufficient focus on customer relationships
• Not knowing what customer expects
• Inadequate service recovery

Reasons for GAP 2 

• Poor service design
• Absence of customer driven standards
• Lack of management commitment to satisfy the customer
• Lack of intangible evidence

Reasons for GAP 3 

• Human resource problem
• Failure to match Market demand and Market supply
• Customers are unaware of their roles and responsibilities
• Service intermediaries problems

Reasons for GAP 4 

• Lack of integrated service marketing communications
• Ineffective management of customer expectations by managers
• Over promising by the organization
• Inadequate horizontal communication within the organization

GAP 5 > The extent of this gap depends upon the quantum of the first four gaps.

The post GAP Analysis – Reasons for 5 GAPS in Service appeared first on BBA|mantra.

1. Business services
2. Communication
3. Construction and engineering
4. Distribution
5. Education
6. Environment
7. Finance
8. Tourism
9. Health
10. Recreation
11. Transportation

TYPES OF SERVICES

1. There are 4 types of services on the basis of ownership and business objective

• Government for profit – Public sector – e.g. post office, police, water, electricity
• Government not for profit –g. charities, foundations, old age homes, societies related to women, literacy, welfare etc.
• Non-government for profit – Business sector – e.g. banks, hotels, airlines, travel agencies, insurance, legal, medical and consultancy.
• Professional services –g. security personnel, accountants, auditors, computer operators etc.

2. In relation to goods there can be 7 types of services – 

• Pure tangibles –g. renting goods where no service or intangibles are associated.
• Major tangible with minor intangibles – g. tangible good with accompanying services ( Refrigerator ,AC)
• Minor tangibles with major intangibles –g. major services accompanying a minor tangible good (Meals on Airlines)
• Pure services – Here the offer is only a service (telecom, health club)
• Rented goods – The service gives the right to possess and use a product
• Owned goods – It involves creation, repair or improvement of a product
• Non good services – Such a service has no product elements but is rather an experience

CLASSIFICATION OF SERVICES

Services can be segmented into clusters that share certain market relevant characteristics.

1. On the basis of degree of involvement of customer

• People processing– The customer has to be present at the place of delivery in order to experience or consume the service
• Possession processing – The customer presence is not required but his physical possession or property needs to be deposited for service
• Mental stimulus processing– Customer’s mental attention is required in order to experience the service
• Information processing– In this case dates, knowledge, information are gathered and analyzed for the use of clients

2. On the basis of service tangibility

• Pure tangibles – Cell phone on rent – no service or intangibles are associated.
• Major tangible with minor intangibles – Tangible good with accompanying services
• Minor tangibles with major intangibles – Major services accompanying a minor good
• Pure services – Here the offer is only a service

3. On the basis of skills of service providers

• Professional (high skill) services – Require a high level of qualification and training e.g., doctors, lawyers, pilots etc.
• Nonprofessional (low skill) services – Does not require special skills e.g. Babysitting

4. On the basis of the business orientation of service provider

• Government sector
• Business sector
• Internal/Professional services
• Non-profit organization

5. On the basis of market segment on end user–

• C2C or end consumer services– These services are purchased by individual customer for their own consumption e.g. medical, fitness, treatment
• B2B or business consumer services– These services are purchased by organizations e.g. company hiring another for market research

6. On the basis of degree of regulation

• Highly regulated – banking, insurance, hospitals
• Limited regulated – catering, fast food
• Non-regulated – computer, lawn care, painting

7. On the basis of degree of labor inventiveness

• Equipment based –
  • Automated – e.g., ATM vending machines
  • Operated by unskilled labor- e.g. taxi, dry cleaning
  • Operated by skilled operators- e.g. excavating, airline computing, time sharing
• People based –
  • Unskilled labor- e.g. lawn care, guards, cleaning service
  • Skilled labor- e.g. appliance repair
  • Professionals

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What is a Service?

Kotler and bloom (1984) defined service as:

“Any activity on benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything”

Therefore, a service can be:

• An act or performance offered by one party to another
• An economic activity that does not result in the ownership of anything
• A process that creates benefits by facilitating a desired change in – intangible assets, physical possessions or the customer themselves.

From a consumer`s point of view, services can be viewed as activities (activities which a customer cannot perform himself or he chooses not to) offered for sale which provide valuable benefits and satisfaction to a customer.

GATS identified 155 activities as service and classified them into 11 categories. They are:

1. Business service
2. Communication
3. Construction and engineering
4. Distribution
5. Education
6. Environment
7. Finance
8. Tourism
9. Health
10. Recreation
11. Transportation

CHARACTERISTICS OF SERVICES

• Services are activities rather than things
• Services are intangible- i.e. we can’t see, touch or feel a service.
• Thay are inseparable i.e. they are produced , distributed and consumed simultaneously
• They are heterogeneous i.e. all services vary in time taken for delivery and consumption and the quality and extent of service
• They are perishable i.e. it cannot be stored
• Customers do not obtain ownership of a service they avail once
• They are variable i.e. It refers to variations in service quality due to presence of human element
• In case of services there is greater involvement of customer in production process
• Services are difficult to visualize and understand, therefore they are also difficult to evaluate
• A service is essentially a process and not a product 

DIFFERENCE BETWEEN GOODS AND SERVICES

REASONS FOR GROWTH OF SERVICES IN INDIA

The Service industry accounts for 51% of India`s total gross domestic product .The reasons for such growth are as follows-

Changes in government policies –

• Liberal rules and regulation
• Privatization
• Rules and regulations to protect customers and employees
• Agreements on trade in service
• 100% FDI and Export promotion Measures

Socio-cultural changes-

• Rising customer expectations
• Changing role of women in the society
• Cultural changes

Business trends –

• Push to increase shareholder value
• Emphasis on productivity and cost
• Manufacturers add value through services
• Growth of franchising, outsourcing and strategic alliances

Advances in IT –

• Growth of internet
• Greater Bandwidth
• Compact mobile equipment
• Wireless networking
• Faster, powerful software
• Digitalization of text, audio, graphics, video

Globalization –

• More companies operating on translational basis
• Increased international travel
• International mergers and alliance
• Off shoring of customer services
• Foreign competitors invading domestic market

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