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CHAPTER 16
Services procurement
Objectives of this chapter
• To assess the differences between buying services as opposed to tangibles
• To outline a range of approaches to the procurement of services such as advertising,
marketing, PR and legal services
• To highlight the main features of relevant EU directives
• To indicate some features of relevant legislation
List of Cases, Research Boxes and Figures in this chapter
Mini Case Studies
• BA
• BT
Best Practice Boxes
• How to buy advertising and marketing services
• Incorporated Society of British Advertisers
Figures
• Figure 16.1 List of typical organisational requirements
• Figure 16.2 Managing perceptions and satisfaction during the process
• Figure 16.3 Managing satisfaction – maintenance
• Figure 16.4 Adequate performance satisfies the customer
• Figure 16.5 Using enhancers to delight the customer
• Figure 16.6 A dissatisfying outcome
• Figure 16.7 Enhancers compensate for failure
• Figure 16.8 Dissatisfaction shifts the zone of tolerance
• Figure 16.9 Delight shifts the zone of tolerance
• Figure 16.10 The service cycle
Instructor’s Manual
Teaching Notes
A major emphasis of this chapter is to demonstrate the contribution of procurement to a range of
services which traditionally have been sourced and managed by the users/technical experts
themselves (e.g. marketing/advertising) to the exclusion of procurement.
Accordingly much attention has been given to these areas, namely:
• Marketing
• Advertising
• Public relations
• Legal services
What they all have in common is as follows:
• Difficulty in specifying the process and the outcomes
• A traditional lack of procurement input in the sourcing and on-going contract
management
• Potential for realising the benefits of professional procurement involvement.
The BA mini case study helps illustrate these points.
Service Quality
Quality is the ability of a product or service to consistently meet or exceed customer
expectations. The dimensions of service quality are as follows:
• Access
• Communication
• Competence
• Courtesy
• Credibility
• Reliability
• Responsiveness
• Security
• Tangibles
• Understanding/Knowing the Customer
Instructor’s Manual
These dimensions of service quality are eventually going to be perceived by the user after their
initial expectations, which are based upon:
• Word of mouth, e.g. what others say about the supplier/provider
• Meeting of the users personal needs
• Past experiences of the supplier/provider
These initial expectations work towards giving an expected service level and then when the
service has been provided, the above dimensions of service are determined from what was
actually delivered and will be matched to the expectations.
This may result in a service quality gap between what was expected and what was actually
delivered; the result being the perceived service quality.
By reviewing all of the scenarios contained in the figures students can assess how perceptions
and satisfaction can be influenced.
