Service Management

Service Management

Content

Introduction………………………………………………………….1 1.0) 1. 0)

2.0) 2. 0)

3.0) 3. 0)

Thee servi Th service ce conc concept ept…… ………… ………… ………… ………… ………… ………… ………. …... .... ..2 2 1.1) 1. 1)

Thee nature Th nature of serv servic icee operat operatio ion… n……… ………… ………. …... ..... ..... .... ...2 .2

1.2) 1. 2)

Mode Mo dell of of ser servi vice ce op oper erat atio ion… n……… ………… ………… ………… ………. ….2 2

Appl Ap plic icat atio ion n of the serv servic icee concep concept… t……… ………… ………… ………… ………. …..3 .3 2.1) 2. 1)

Sect Se ctor or defi defini niti tion on and back backgr grou ound nd info inform rmat atio ion… n……… ……3 3

2.2) 2. 2)

Focu Fo cuss for for in inve vest stig igat atio ion… n……… ………… ………… ………… ………… ………3 …3

2.3) 2. 3)

Appli App lica cati tion on of of ser servi vice ce con concep cept… t……… ………… ………… ………… ……4 4

2.3.1) 2.3. 1)

Servic Ser vice-d e-deli eliver very y proces process…… s…………… …………… …………… …………4 …4

2.3.2) 2.3. 2)

Qualit Qua lity y and custome customerr satisfa satisfacti ction… on………… ……………… ………..4 ..4

2.3.3) 2.3. 3)

Supply Sup ply cha chain… in………… ……………… ……………… ……………… …………… ……..5 ..5

2.3.4) 2.3. 4)

Revenue Reve nue man manage agemen mentt and and perfo performa rmance… nce………… …………5 …5

Reco Re comm mmen endat datio ions ns and and Concl Conclus usio ion… n……… ………… ………… ………… ………. ….6 6

References…………………………………………………………7-8

Gaurav Bhatia BAHM India

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Service Management Introduction:

Service industry is one of the complex industries in today’s world. It requires better planning, affective strategies, and resources to attract people. One should understand the core concept and nature of the business and their target market immensely. There are many internal and external factors, which one should consider, or else it may harm the business. Employees’ performance considers as an internal factor, if the employees are not performing well then it may reflect negative impact on the business. The concept of service industry needs to be upda up date te as th thee ch chan ange ge re requ quir ired ed in inno nova vati tion onss in th thee se serv rvic icee co conc ncep eptt an and d introduction of new schemes can attract a pool of people towards the company. Service industry needs change and employees have to be ready to meet the changing situation or in other words, the employees have to be ready to meet the demand of customers in every changing situation. This is the nature of the industry, where no one knows when and how the demand will arises, the only way is to assume the future demand or forecast the demand may arise in future, well in advance. Service does not have any physical appearance and cannot be stored to meet the peak season. Therefore, it has to be given at the time of demand arises. This report is based on the T.G.I. Friday’s, Friday’s, a chain restaurant, restaurant, better known as quick service restaurant. This report tells about the service concept of Friday’s, how they are maintaining the quality of food and beverages in order to satisfy the customer. How the rand Friday’s is emphasized on service quality and customer satisfaction through their delivery process, is the main focus of the research. Friday’s is the perfect example of performance of employees’ leads to better revenue, how the customer behavior reflects the business. Friday’s ability in customer satisfaction and maintaining cost of product in order to achieve customer satisfaction is discussed further in the report.


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Service Management 1.0) The Service Concept:

The service industry is entirely different concept; it needs to meet demand as it arises. It is not like the manufacturing industry, where one can manufacture goods well in advance to meet the peak season. (Chase, 2006). Service Service concept consists of both internal and external factors, which may effect to service quality of any organization. Employee’s performance (internal) required in customer satisf sat isfact action ion and in ser servic vicee qual quality ity.. Sat Satisf isfied ied and loy loyal al cus custom tomers ers giv givee mor moree revenue to the company. (Kaplan Robert S. and Norton David P., 1996). Service concept includes benefits and additional services related to the core product that the customer is seeking. (William Christie and Buswell John, 2003). T.G.I. Friday’s is a quick service restaurant, serves bar food and beverages. Friday’s bel belie ieve vess in bu buil ildi ding ng co core re re rela lati tion on wi with th cu cust stom omer er by en enga gagi ging ng th them em in conversations. Friday’s follows this strategy to build customer contact into their service concept. The brand emphasized on customer satisfaction by providing best service and quality food. (Anon,2007). 1.1) Nature of Service Operation:

The nature of service can define as following ways: • Service is a perishable commodity; it arises only at the time of demand of customer and because of its perishable nature, the service cannot be stored, it requires at a particular time to cope up with the demand. • Services are intangible; service does not have any physical presence. Products are things whereas, services are ideas and concepts of someone to survive in the market and gain the customer satisfaction. • It is a fact that, services originated and consumed very quickly. The service needs to create immediately, as the demand arises. Any company cannot make inventory for services, the only way is to assume the demand of the product in the future.

1.2) Model of Service Operation:

Model of service operation should organize in such a way, so that the company will reach out more customers and should be able to satisfy them. The quality of service and employees attitude can convert a person into a loyal customer for any restaurant business. (Laws Eric, 2004). It includes following strategies like, T.G.I. Friday’s, mainly target youth customers and people who are willing to pay but have less time. Friday’s segment the market in that way, they knows the value of customer satisfaction, at the same time, the brand emphasized on the quality of service and delivery process to the customer. The brand Friday’s recognized all over the world for its quick service. Delayed in service can affect the customer behavior. There is very strong connection between the customer attitude and restaurant delivery abilities. (Jones Peter and Dent Michael, 199 4). Gaurav Bhatia BAHM India

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Service Management

2.0) Application of the Service Concept:

The service concept should reflect the demand of the customer and requirements of th thee ta targ rget et ma mark rket et;; del deliv iver ery y pr proce ocess ss and dé déco corr of th thee re rest stau aura rant nt sh shou ould ld compliment the service concept. (Walker John R, 2007). Standardized service concept helps T.G.I. Friday’s to satisfy every individuals and at the same time helps to meet the demand of the customers. The employees of Friday’s try their best by providing best quality meal and services in order to retain the guest.

2.1) Sector Definition and Background Information:

T.G.I. Friday’s is a chain restaurant. T.G.I. Friday’s the name stands for “thanks goodness it’s Friday.” This offers great food and beverage in a fun atmosphere. The concept of casual dining mainly emphasized on bar food, a broad range of alcoholic and non-alcoholic beverages. The service offered here is generally pre plated. (Anon,2008). T.G.I. Friday’s is the unit of Carlson Companies, the first Friday’s restaurant was formed in 1965 and today there are over 826 Fridays in over 50 cities all around the world, serving 25,000 guest everyday approximately. (Anon, 2008). Friday’s is a well-known brand in the world; generally distribute the franchises to the local entrepreneurs. Franchising has been the new concept becoming popular now days, it allows the parent company to sell ideas and concept to aspiring people, who likes to serve, and franchising is the simplest way to reach out mo more re pe peopl oplee an and d he help lpss in es esta tabl blis ishi hing ng th thee br brand and na name me in th thee ma mark rket et.. (Fitzsimmons, 2006).

2.2) Focus for Investigation:

T.G.I. Friday’s is the world-renowned restaurant chain. There are over 826 restaurants around the world. The concept of Friday’s restaurant seems very attrac att ractiv tive, e, exc excell ellent ent déc décor, or, per perfec fectt foo food d a com compli plimen mentt wit with h wid widee ran range ge of alcoholic and non-alcoholic beverages, all above that the services deliver by employees are appreciative. Brand Friday shows rapid growth and potential in the competitive market, the strategies of gaining customer rather than gaining profi profit, t, wor works ks for the cha chain in res restau tauran rant. t. Fri Friday day’s ’s try trying ing har hard d to sat satisf isfy y ever every y indivi ind ividua duall cus custom tomer er by pro provid viding ing exce excelle llent nt mea meall exp experi erienc ence. e. The sta staff ff of Friday’s knows the value of customer satisfaction, want every single customer become loyal towards the brand and will have the best meal experience in any of the T.G.I. Friday’s restaurant. The way Friday is maintaining cost of products and sales is remarkable, simple and straight operational process is being working well so far. Brand Friday’s believes in providing best quality food for retaining the customers. Gaurav Bhatia BAHM India

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Service Management

2.3) Application of Service Concept:

Service concept of T.G.I. Friday’s turns out to be an effective concept that attracts people towards the brand. The quality of food being served, servicedelive del ivery ry pro proces cess, s, conc concept ept of gai gainin ning g cus custom tomer er rat rather her tha than n gai gainin ning g pro profit fit,, performance of employees etc. all these leads to customer satisfaction. T.G.I. Friday’s follows a standard operating process, which consists of quality service to customer to make the meal experience remarkable. 2.3.1) Service-Delivery Process:

The service Offered in T.G.I. Friday’s can be described as, Mass Customization, New concept through, which a company standardized their products and services to fulfill the needs of customers. (Pine B. Joseph, 1993). The service offered in Friday’s is pre-plated; the delivery here needs to be quick to meet demand of the customers. T.G.I Friday’s have more than one hundred food items in the menu, so Friday’s believes in mass production in order to satisfy the indivi ind ividua duall nee need. d. (An (Anon, on,2007 2007). ). The emp employ loyees ees of Fri Friday day’s ’s giv gives es adv advise ise and guide the customer to have best meal experience. The successful service requires the involvement of employees, shown by counseling with customers about the meal experience. (Lashley Conrad, 2000). The Friday’s restaurants famous for its quick service, Friday’s ensure that the meal will be out in less than fifteen minutes, this shows, the brand Friday’s is quick in terms of service and delivery process of food and beverages.

2.3.2) Quality and Customer Satisfaction:

Quality and Customer satisfaction is closely related to customers retention and market share. Service quality can influence the customers perception, it have been playing a cruci crucial al role for survival survival and succe success ss in today’ today’ss world. (Fen Yap Sheau and Lian Kew Mei, Sunway academic journal). Today, T.G.I. Friday’s are working on gaining customers rather than gaining the profit. This becomes possible by giving value for money Food and Beverage. The Friday believes in changin chan ging g and im impro provin ving g the mea meall qual quality ity to ens ensure ure cus custom tomer er sat satisf isfact action ion.. Friday’s Frid ay’s are targe targeting ting customers customers who want good quali quality ty food, but have limi limited ted amount of time. Friday’s have introduce some quality schemes, which include lunch in fifteen minutes, dinner in fifteen minutes etc, Friday ensure that the meal will be served in ten minutes or else or it will be free. T.G.I. Friday’s is doing best to ensure every guest will w ill be satisfied. (Anon,2007).


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Service Management 2.3.3) Supply Chain:

Increase in competition in today’s market force the business enterprises to focus on the supply chain. The complex supply chain can increase the cost of product, where as the simple and typical supply chain can decrease the cost of the product and at the same time helps in increase the profit. (Simchi-Levi Edith and Kaminsky Philip, 2004). The supply chain process consist of different levels, it starts from the process of purchasing of raw material and ends with service to the customer. The process of supply chain, which T.G.I. Friday’s follows, is simple and typical. Direct purchasing of raw material, required to meet the daily demand of the customer, partial cooking of food and freeze it before final preparation, so the final preparation takes less time, Friday’s assure the service will be given in ten minutes to guest, all this comes out as an effective supply chain for the restaurants.(Anon, 2007). An effective and good supply chain process ensures the promises of customer delivery and demand of customer, should taken as a priority of the business. (Martin William Martin, 2007). The supply chain process turns out to be an effective tool, that makes T.G.I. Friday’s a profitable restaurant business and helps in maintaining the cost of the product.

2.3.4) Revenue Management and Performance:

T.G.I. Friday’s is high-end restaurants, mainly target to youth and people with high hi gh spe pend ndiing po powe werr. Pe Peop oplle, wh who o ar aree wi willlin ing g to pa pay y for foo ood d wi witth entertainment, are the target customers of Fridays. Revenue management consist of several points; customer willingness to pay, the value of the product in the market and at what point of time the product can obtain maximum margin out from fro m the con consum sumer. er. (Cr (Cross oss Rob Robert ert and Bla Blacks ckswan wan Or Orien ient, t, 1997 1997). ). Reg Regula ular r introduction of new items or improving quality of existing items in the menu makes Friday stand apart from the other restaurants. Friday’s keep on launching schemes like, happy hours (50% off in afternoon time), discount on holidays, discount on appetizers, etc. apart from schemes, Fridays arrange theme parties on weekends, fashion with Fridays, Halloween party on Saturday and much more. Such programs help Fridays to attract more and more customers, which may lead to increase in revenue. (Anon, 2007). On the other hand, staff of Friday’s knows how to convert normal guest into regular one, the staff is clear about the organizational target. Staff utilizes the resources in the best way to deliver the best service to target customers, this all effort together enhance the performance of brand Friday’s and generate more revenue.


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Service Management

3.0) Recommendations and Conclusion:

The service industry is entirely depending on the demand of the consumer and quality provided by the firm, but no one knows when the demand of a particular thing arises. Therefore, the service concept has to be quick in order to meet the demand immediately. Delayed in service can affect the behavior of the customer and on the other hand quick and quality service can convert them into loyal customer towards the brand. Now a day, restaurants those are able to maintain the quality and at the same time able to satisfy, the needs of customers can resist and establish establish as a brand in the marke market. t. The concept of service operation operation should clea cl earr to th thee em empl ploy oyee eess an and d th they ey sh shou ould ld kn know ow th thee im impo port rtan ance ce of gu gues estt satisfaction. Regular change in menu and improving the quality of food and service, meeting with the demand immediately makes T.G.I. Friday’s a successful brand. In every aspe as pect ct,, Fr Frid iday ay’s ’s is ab able le to sa sati tisf sfy y th thee cu cust stom omer er by pr provi ovidi ding ng be best st me meal al experience. More over, innovations in restaurant operations and introduction of new concepts are the key to become successful brand for Friday’s. The brand is very clear about their target market and following strategies in order to capture maxi ma ximu mum m ma mark rket et sh shar are. e. T. T.G. G.I. I. Fr Frid iday ay’s ’s ar aree do doin ing g be best st to en ensu sure re eve every ry individual guest will be satisfied.


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Service Management References:

Anon.(2008) Available from http://www.tgifindia.com/ [Accessed 29/11/09] Anon, (February 2009). Available from http://fridays.mediaroom.com/index.php?s=64 [Accessed 30/11/09] Anon (2007). Team 3 T.G.I. Friday’s. Available from http://team3tgifridays.blogspot.com/ [Accessed 1/12/09] Chase. (2006). the perfect service package packag e attracts the guest. Available from http://books.google.co.in/books? id=kNRkTmMCXDsC&dq=the+service+concept+of+restaurants&source=gbs_navlinks _s [Accessed 29/11/09] Cross, Robert. and Blackswan, Orient. (1997). Revenue Management. Available from http://books.google.co.in/books? id=wDXYH_OG_6sC&pg=PA78&dq=revenue+management+in+restaurants#v=onepa ge&q=revenue%20management%20in%20restaurants&f=false [Accessed 30/11/09] Fen, Yap She Fen, Sheau. au. and Mei MeiLia Lian, n, Kew Kew.. Ser Servic vicee qua qualit lity y and cus custom tomer er sat satisf isfact action ion:: antecedents of customer’s Re-patronage intentions. Sunway academic journal 4. pg,6061. Available from http://www.sunway.edu.my/others/vol4/service_quality.pdf [Accessed 29/11/09] Fitzsimmons. (2006). Service management 5E W/cd. Available from http://books.google.co.in/books? id=zAE3FZ2e3zAC&dq=nature+of+service+operation&source=gbs_navlinks_s [Accessed 30/11/09] Jones, Peter. and Dent, Michael. (1994). Improving service: Managing response time in hospitality operations. Journal of operation and production management. 14(5). Pg,5258. Available From http://www.emeraldinsight.com/Insight/viewContentItem.do? contentId=848787&contentType=Article [Accessed 1/12/09] Kamins Kami nsky ky,, Ph Phil ilip ip an and d Si Simc mchi hi-L -Levi evi,, Ed Edit ith. h. (2 (200 004) 4).. Ma Mana nagi ging ng su suppl pply y cha chain in:: th thee definitive guide for the business professional. Available from http://books.google.co.in/books? id=dUKGHB_YjFQC&dq=supply+chain&source=gbs_navlinks_s [Accessed 29/11/09]


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Service Management

Kaplan, Robert S. and Norton, David P. (1996). The balance scorecard: translating strategy into action. Available from http://books.google.co.in/books? id=mRHC5kHXczEC&dq=the+service+concept&source=gbs_navlinks_s [Accessed 30/11/09] Lashley, Conrad. (2000). Empowerment through involvement: a case study of T.G.I. Friday’s restaurants. 29(6). Pg 791-815. Available from http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=EB4F935DCC 4700AB25E5B17B5A420845? contentType=Article&hdAction=lnkhtml&contentId=879268[Accessed 1/12/09] Law, Eric. (2004). Improving tourism and hospitality services. Available from http://books.google.co.in/books? id=bBlEICDneOYC&pg=PA63&dq=service+design+in+hospitality#v=onepage&q=ser vice%20design%20in%20hospitality&f=false [Accessed 1/12/09] Martin, James Will Martin, William. iam. (2007). Lean six sigma for suppl supply y chain management: management: the 10step solution process. Available From http://books.google.co.in/books? id=LETzjD2FZsYC&dq=supply+chain+process&source=gbs_navlinks_s [Accessed 30/11/09] Pine, B. Joseph. (1993). Mass customization: the new frontier in business competition. Available from http://books.google.co.in/books?id=Seli55GtsEC&dq=mass+customization+definition&source=gbs_navlinks_s [Accessed 29/11/09] Walker, John R. (2007). The restaurant: from concept to operation. Available from http://books.google.co.in/books? id=Vng3e6zBCwcC&pg=PT110&dq=application+of+the+service+concept+in+restaura nts&lr=#v=onepage&q=application%20of%20the%20service%20concept%20in %20restaurants&f=false [Accessed 1/12/09] William, Christine. and Buswell, John. (2003). Service quality in leisure and tourism. Available from http://books.google.co.in/books? id=0zyt7SBkhCMC&pg=PA104&lpg=PA104&dq=the+service+concept+of+tgi+friday s&source=bl&ots=KFySQmD_Dx&sig=F56vwXe7fjNN17oOl6bdcrK1Adg&hl=en&ei =bAYVS6bYApCgkQW3kaCJBw&sa=X&oi=book_result&ct=result&resnum=4&ved =0CBgQ6AEwAw#v=onepage&q=the%20service%20concept%20of%20tgi %20fridays&f=false [Accessed 30/11/09]


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Service Management


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