Page 111 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes 6.2.2 The Service Triangle Management Model

There is a revolution taking place in the service industry, necessitating a radical change in every
service professional’s perspective.
Two models typify the change in the service perspective today:
The Industrial Management Model: This is prevalent today and is a hangover from the

industrial era.
The Market-focused Management Model: This is the model which can be used by service

firms as a replacement to meet the new environment changes for survival.
The Industrial Management Model is an approach to organizing a firm that focuses on revenues
and operating costs and ignores the role personnel play in generating customer satisfaction and
sustainable profits.
The model is a hangover of manufacturing methods but, sadly, is even now employed by many
organisations. Firms that follow this model fully believe that the factors that bring in the
revenue are advertising, sales promotion, accessibility, distribution and locational advantages.
They are of the opinion that the cost drivers are personnel, operations and that these should be
controlled. Even service sectors that seek price-competitive advantages follow this model.

Example: Jewellers of Mumbai employing Bengali goldsmiths. Even basic hygiene factors
aren’t met and the goldsmiths live and work in abysmal conditions. Another example would be
the myriad call centres that are sprouting all over India today. To get clients and projects, they
are pursuing cost-cutting measures as the means to control expenses.

Organisations following the industrial model believe that employees are indifferent, not very
skilled, do not have the right attitude and motivation and therefore cannot be empowered for
complex tasks. They would prefer to depend on automation and technology. There is therefore
greater dependence on senior personnel and less on front-line personnel.
The Market-focused Management Model focuses on the components of the firm that facilitate
the firm’s service delivery system. It proposes that the firm should be supportive of those
personnel who serve the customers and interact with them. In other words, there is more
emphasis by the organisation on those employees who are in the front line. The support is in the
form of equipment, office space (hygiene factors), moral support, motivation initiatives, career
growth and money.
If a service-oriented firm decides to follow this model, then for them customer interaction or
service delivery becomes the most important part of their strategy and the front-line personnel
their most important tool. This model is based on the Service Triangle framework.
The Service Triangle framework depicts the relationships among three groups of the service
organisation:
The service strategy,

Systems embedded in the organisation and

The people of the organisation.

The customer is at the centre, interacting with each of the groups.

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