Service - what is?
In this lesson, service is scoped to service in business environment.
We have at one time or another experience service, receive service or provide service.
However, what is service?.
4 special characteristics that make it a service /What are the difference between goods and services? :
a) intangibility
services (intangible performance) / goods (tangible)
b) heterogeneity
service (output varies every time) / goods (homogenous, output always the same every time)
c) inseparability
service (cannot separate service provider and service)/ goods (can separate goods and customers)
d) perishability.
perish after service (ie no inventory)/goods (can be inventorised.)
===========
Good service is critical in contributing to a company's bottom line (profit).
How do we know if service is good?
How do we quantify it?
SERVICE STANDARD :
a) SOFT :
b) HARD :
soft (behavourial) :
how does the customer received the service. :
eg did the bus captain smile/welcome the passenger?
hard (operational) :
what/when the service is received.
eg in a call center, a call will be taken with 5 rings.
=================
How do we measure the service quality ?
Different dimensions can be used to measure service quality :
what are some of them :
a) tangibles/how reliable are the service/how responsive is the service/competence of service provider/courtesy of service provider/credibility of service provided/security of service provided.
======================
To decide what is the best strategy to provide good service,
service can be classified based on different dimension :
a) nature of the service (refer to 6P)
b) demand and supply (refer to 6P)
c) customisation/judgement (refer to 6P)
===============
SERVICE CHAIN PROFIT.
why go to so much effort to provide/measure good service?
Satisfied employees --> value add to service/provide good service -> customer happy --> become loyal customer --> lead to increase profit for the company.
Why want to make customer loyal ??
--> lower cost to retain existing customers than to find new customers.
Wednesday, November 26, 2008
L11- Costing
Key point : COSTING.
Outsourcing is just a support point to costing.
Outsourcing is one way to reduce cost (ie cost control.)
WHAT IS COST?.
resources (material, labour etc) that need to be sacrificed to achieve a business objective (eg to produce a doughnut)
Different type of costs.
- FIXED COST
when is a cost , fixed cost ?.
-
It is fixed cost when it is NOT dependent on the business or volume of activity (ie output, sales etc) .
However, it is usually time based (eg rental(per month), insurance (per year)
- VARIABLE COST
- the cost is DEPENDENT on the business or volume of activity (ie output, sales etc)
- MIXED COST.
when the cost have element of fixed and variable cost.
eg : electricity used in a hair salon : fixed (for lighting/air cond), variable (electricity used for hair dryers)
Components of costs.
TOTAL COST = FIXED COST + VARIABLE COST.
Why want to learn about fixe cost, variable cost?
SO that we can used it to understand the break even quantity?
BREAK EVEN QUANTITY.
What is break even quantity formula :
BE Quantity = Total Fixed Cost /Min selling price per unit (min selling price) - variable cost per unit
Why want to know Break even quanity?
in business, we need to know how much to produce, how many to sell before we can make a profit.
BEq = the quantity one need to sell/produce to break even ie when profit = ZERO
= when all fixed costs recovered.
= produced or sell less than BEq = loss, produced or sell more than BEq = profit.
WHY BEq is important ?
at this point, we do not have to pump in capital/cash/money.
WHAT is minimum selling price?
The selling price at which profit is zero, if you sell below min selling price, loss incurred, if sell above min selling price, there is profit.
=========================
Cost can be DIRECT or INDIRECT.
To produce one doughnut : made up of many costs - flour, oil, sugar, electricty, rental of the factory, capital cost of the mixer.
Direct cost component of a product : ie can be traced back directly to the source.
eg : flour, sugar, oil : direct cost.
Indirect cost : electricity, rental of the factory, capital cost of mixer.
========================
2 way to grow business :
a) expand the business - organic or inorganic (remmber)
b) control cost.
===========
How to reduce cost ?
One way - outsource.
To decide if should be outsource :
a) need to analyse it quantitively, based on cost and
b) qualitatively.
=======================
Whether to outsource or not - compare the cost directly related to outsourcing the service vs cost incurred in providing the service internally. (NOTE : don't use min selling price to decide whether to outsource) - see 6P (slide 23) example on whether to outsource or not (ie $2 per unit (outsource vs $2.40 per unit if provided internally)
What are the advantages/disadvantages of outsource?.
(see 6P)
Core function should not be outsourced.
Outsourcing is just a support point to costing.
Outsourcing is one way to reduce cost (ie cost control.)
WHAT IS COST?.
resources (material, labour etc) that need to be sacrificed to achieve a business objective (eg to produce a doughnut)
Different type of costs.
- FIXED COST
when is a cost , fixed cost ?.
-
It is fixed cost when it is NOT dependent on the business or volume of activity (ie output, sales etc) .
However, it is usually time based (eg rental(per month), insurance (per year)
- VARIABLE COST
- the cost is DEPENDENT on the business or volume of activity (ie output, sales etc)
- MIXED COST.
when the cost have element of fixed and variable cost.
eg : electricity used in a hair salon : fixed (for lighting/air cond), variable (electricity used for hair dryers)
Components of costs.
TOTAL COST = FIXED COST + VARIABLE COST.
Why want to learn about fixe cost, variable cost?
SO that we can used it to understand the break even quantity?
BREAK EVEN QUANTITY.
What is break even quantity formula :
BE Quantity = Total Fixed Cost /Min selling price per unit (min selling price) - variable cost per unit
Why want to know Break even quanity?
in business, we need to know how much to produce, how many to sell before we can make a profit.
BEq = the quantity one need to sell/produce to break even ie when profit = ZERO
= when all fixed costs recovered.
= produced or sell less than BEq = loss, produced or sell more than BEq = profit.
WHY BEq is important ?
at this point, we do not have to pump in capital/cash/money.
WHAT is minimum selling price?
The selling price at which profit is zero, if you sell below min selling price, loss incurred, if sell above min selling price, there is profit.
=========================
Cost can be DIRECT or INDIRECT.
To produce one doughnut : made up of many costs - flour, oil, sugar, electricty, rental of the factory, capital cost of the mixer.
Direct cost component of a product : ie can be traced back directly to the source.
eg : flour, sugar, oil : direct cost.
Indirect cost : electricity, rental of the factory, capital cost of mixer.
========================
2 way to grow business :
a) expand the business - organic or inorganic (remmber)
b) control cost.
===========
How to reduce cost ?
One way - outsource.
To decide if should be outsource :
a) need to analyse it quantitively, based on cost and
b) qualitatively.
=======================
Whether to outsource or not - compare the cost directly related to outsourcing the service vs cost incurred in providing the service internally. (NOTE : don't use min selling price to decide whether to outsource) - see 6P (slide 23) example on whether to outsource or not (ie $2 per unit (outsource vs $2.40 per unit if provided internally)
What are the advantages/disadvantages of outsource?.
(see 6P)
Core function should not be outsourced.
Tuesday, November 25, 2008
Down to earth- just do it
Click to read.
If you are interested to be an entreprenuer, read on...
Down to earth advise by Jack Sim - founder of WTO (World Toilet Organisation.)
I once met Jack Sim at a social entrpreneur conference and was surprised by how jovial and down to earth he is.
Reread his last point : "Enjoy the whole process. Lady Luck always favour happy, smiling people" The same applies to student , just enjoy the process .
Presentation - how to get fund
Click to read.
We present every where, every day,but may be not formally. Though this article was written for how to present to get funding, it is equally applicable to presentation during M3. Do you agree?.
Friday, November 21, 2008
Today online
RP has tied up with Today to provide an online version. see you mail.
You may want to download and skim this daily. Give you an idea of what's happening.
I like the tag line of Today - set you thinking.
You may want to download and skim this daily. Give you an idea of what's happening.
I like the tag line of Today - set you thinking.
Wednesday, November 19, 2008
Monday, November 17, 2008
L9 : Business growth
1 ) What is business growth??.
2) Why companies want to grow?
- do they have a choice
- what are the benefits ?
- economy of scale, increase barrier to entry etc .
3) Type of growth - organic (using internal or own resources) and inorganic (tap resources outside the companies)
4) Inorganic growth : type of : mergers, acquisition, take over, joint ventures.
5) Ansoff growth strategies :
- current market, current product : market penetration .
- current market, new product : product development
- new market, current product : market development
- new market new product : diversification.
6) When is each strategy suitable for the companies ?
eg : market penetration : when the market is still not saturated.
how : varies the marketing mix, promotion.
7) Diversification : growing and also to spread risk, though high risk during initial stage.
8) Diversification : related (to current business) /unrelated (to current business, eg Virgin)
9) Merger : horizontal : usually with rival/competitors in same industries,
vertical : in the same industry/supplier chain eg : retailer takes over distributors, or distributors merge/buy into manufacturers.
10) FRANCHISING : an agreement between one party (with the business concepts/systems/products/service-franchisor) that allow the other party (to use/learn/run/own the system/business concepts/product/servce)
11) What are the factors that make a business franchisable?
12) What are the benefits/limitation of franchising?
2) Why companies want to grow?
- do they have a choice
- what are the benefits ?
- economy of scale, increase barrier to entry etc .
3) Type of growth - organic (using internal or own resources) and inorganic (tap resources outside the companies)
4) Inorganic growth : type of : mergers, acquisition, take over, joint ventures.
5) Ansoff growth strategies :
- current market, current product : market penetration .
- current market, new product : product development
- new market, current product : market development
- new market new product : diversification.
6) When is each strategy suitable for the companies ?
eg : market penetration : when the market is still not saturated.
how : varies the marketing mix, promotion.
7) Diversification : growing and also to spread risk, though high risk during initial stage.
8) Diversification : related (to current business) /unrelated (to current business, eg Virgin)
9) Merger : horizontal : usually with rival/competitors in same industries,
vertical : in the same industry/supplier chain eg : retailer takes over distributors, or distributors merge/buy into manufacturers.
10) FRANCHISING : an agreement between one party (with the business concepts/systems/products/service-franchisor) that allow the other party (to use/learn/run/own the system/business concepts/product/servce)
11) What are the factors that make a business franchisable?
12) What are the benefits/limitation of franchising?
L8 : Market Segmentation.
WHY SEGMENT THE MARKET?
- to reach and respond cost effectively to group of potential buyers
- therefore to increase sales and profit.
WHAT IS SEGMENTATION :
- group potential buyers into groups
a) with common needs
b) will respond similarly to a marketing action.
A market segment consists of people who are relatively similar in their buying behaviour and needs.
===============
Generally market can also be broadly defined in term of
GENERIC MARKET :
consumer needs : broadly similar eg: leisure
needs satisfy by : wide range of products/service eg : concert, sport games, cruise.
PRODUCT TYPE MARKET :
consumer needs : relatively similiar : want to share holiday trip.
needs satisfy by : close subsitute of products/service : digital camera, camcorder, postcard.
MARKETING SEGMENTATION PROCESS ;
1) define a broad product market.
2) segment based on needs/similar buying behaviour
3) develop marketing mix to reach this segment.
Citeria to segment a broad product market :
a) the segment have homogenous (ie similar needs)
b) substantial - ie large enough market size/potential to be profitable (ie to develop a product for this segment.)
c) operational - the citeria used (dimension) must be useful to result in identifiable customers.
DIFFERENT DIMENSION (WAYS) TO SEGMENT MARKET.
- demographic
= age, gender, religion etc
- psychographic
= lifestyle, personality, motives etc.
= focus on the consumer
- behavioural
=usage, benefit sought etc
= focus on the product/service benefits.
- critical events.
- to reach and respond cost effectively to group of potential buyers
- therefore to increase sales and profit.
WHAT IS SEGMENTATION :
- group potential buyers into groups
a) with common needs
b) will respond similarly to a marketing action.
A market segment consists of people who are relatively similar in their buying behaviour and needs.
===============
Generally market can also be broadly defined in term of
GENERIC MARKET :
consumer needs : broadly similar eg: leisure
needs satisfy by : wide range of products/service eg : concert, sport games, cruise.
PRODUCT TYPE MARKET :
consumer needs : relatively similiar : want to share holiday trip.
needs satisfy by : close subsitute of products/service : digital camera, camcorder, postcard.
MARKETING SEGMENTATION PROCESS ;
1) define a broad product market.
2) segment based on needs/similar buying behaviour
3) develop marketing mix to reach this segment.
Citeria to segment a broad product market :
a) the segment have homogenous (ie similar needs)
b) substantial - ie large enough market size/potential to be profitable (ie to develop a product for this segment.)
c) operational - the citeria used (dimension) must be useful to result in identifiable customers.
DIFFERENT DIMENSION (WAYS) TO SEGMENT MARKET.
- demographic
= age, gender, religion etc
- psychographic
= lifestyle, personality, motives etc.
= focus on the consumer
- behavioural
=usage, benefit sought etc
= focus on the product/service benefits.
- critical events.
Wednesday, November 12, 2008
A blind girl's painful lesson- gratitude
There is a story about a blind girl who hated herself, detested everyone except her loving boyfriend, who was always there for her.
One day, she turned to him and said :" If only I could see the world, I will marry you"
It wasn't long before some one donated a pair of eyes to her.
When the bandages came off, she was finally able to see everything including her boyfriend.
He asked her : "Now that you can see the world, will you marry me?"
The girl looked at him and saw he was blind, just like her before.
........... the thought of looking at his closed eyelids for the rest of her life totally turned her off.
Her boyfriend left in tears.
Days later, he wrote her a note saying :
"Take care of your eyes, my dear, for before they were your eyes, they were mine. I love you"
Be thankful.
lightly edited from My Paper, BTW< 5/11/08
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