Services Marketing

WHAT IS SERVICE ?
service is any act or performance that one party can offer to another that is essentially intangible and does not result in any ownership

PHILIP KOTLER

Growth of Service Sector

Reasons for growth of services in India

Economic affluence Changing role of Women Cultural Changes I.T. revolution Development of markets Market orientation Health-care consciousness Economic liberalisation Migration Export Potential Service tax

Types of services

Financial services- Banking,Insurance,Leasing

Shipping &distribution-Ocean, Rail, Trucking, Airfreight, Wholesaling,Warehousing,Distribution. Professional &Technical-Technical licensing &sale, Engineering design service, Architectural design, Construction management & contracting,other management services, legal services, Accounting.)

Consumer services Retailing,Healthcare,Travel, recreation, entertainment, education, Other Government services, Other professional services (restaurants, home repair, laundry) Other intermediate services- Computer, data Processing, Communication services (Including Software),franchising,advertising,other (realestate,business travel,security,postal services, contract maintenance

CHARACTERISTIC OF SERVICE

Intangibility Heterogeneity Inseparability Perishability Ownership

Intangibility:Marketers can develop two strategies to communicate the benefits 1.Makes services more tangible 2.Focus on the service provider Airline- competent pilots and flight attendants Life insurance-agents hospitals-doctors, medical care

Heterogeneity:Service marketer can follow two strategies 1.Increase control over the service
2.Switch from people to machines

1.Reduce perceived riske.g.:- by offering money back guarantee, positive word of mouth

Inseparability:The simultaneous production and consumption of services means 1.Simplicity of distribution 2. Importance of many locations 3. Image of the service provider

Perish ability:The service marketer can try to overcome the problems of perish ability by trying to match supply and demand by Varying supply in accordance with demand (service supply management)self service, appoint more employees etc. Keeping supply fairly constant but trying to smooth out demand to avoid excess capacity (service demand management)Off season package,fluactuating telephone rates

Product service Continuum

Differences between
Sr.
1 2. 3. 4. 5. 6. 7.

Physical Goods
Tangible Homogenous Production & Distribution Consumption A thing Core Value Product In Factory Customer does not participate in production Can be STOCKED

Services
Intangible Heterogeneous Production, Distribution & Consumption are simultaneous. An activity or process Core Value Product In Interactions. Customer actively participates in production Cannot be STOCKED

8.

Transfer of OWNERSHIP

No Transfer of OWNERSHIP

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Classification of services

END USER

Individual consumer as end- userBusiness to business end user-

E.g.- hairdressing, personal finance, package holiday tour

One business or a firm from one industry will seek services from another company E.g.- When Tata steel asks J.Walter Thomson Associates, the advertising agency , to design its advertising campaign.

Industrial end-user-

End user is plant and factories & require equally technical services. E.g.-Godrej housing , the real estate developer, would require services from,PECOPP, the pest control company

2.Nature of the service act

Direct recipient of service

TANGIBLE ACTIONS

1. Healthcare 2. Passenger transportation 3. Beauty saloons 4. Restaurants 5. Gym

1. Laundry and dry-cleaning 2. Repairs and maintenance 3. Landscaping

INTANGIBLE ACTIONS

Services directed at intangible assets

1. 2. 3. 4.

Education Information services Theaters Museums

1. 2. 3. 4.

Banking Legal services Accounting Insurance

3.Type of relationship that the service organisation has with its customersBy Knowing personal details about the customers, it becomes easy to contact them & tailor special offers for them.

Type of relationship between organisation and customers Membership relationship No formal relationship

Nature of service delivery

Continuous delivery of service

Insurance College enrollment Banking Trade associations

Radio stations Police protection Lighthouse Public Highway

Discrete transaction

Long distance phone calls Tickets or passes

Car rental Movie theater Public transportation Restaurants

4.Scope for customisation & Judgment in Service Delivery--

Customization of service characteristics High Professional services Surgery Taxi services Beautician Plumber Low Education (large classes) College food service Preventive health programs

Judgment by customer contact staff

High

Low

Telephone service Hotel service

Public Transportation Movie theater Routine appliance repair Fast food Restaurant

5.Nature of Demand and supply for the service

Demand fluctuation
Wide Peak demand often Electricity Telephone Natural gas Police &fire emergencies Insurance Legal services Banking Laundry and dry cleaning Narrow

met without a major delay

regularly exceeds capacity

Accounting &tax preparation Hotels Restaurants Theaters

Services similar to those above but with insufficient capacity for their base level of business

6.Method of service delivery

Questions1.Should the service be delivered at a single site or through multiple outlets 2.What is the most convenient type of transaction for customers 3. If the type of interaction is changed,would the service

Availability of service outlets

Service organisation comes to customer

7.Orientation toward Profit

Marketing challenges of services

Most service products cannot be inventoried Intangible elements usually dominate value creation Services are often difficult to visualize and understand Customer may be involved in co-production People may be part of service experience Operational input sand outputs tend to vary more widely

The

time factor often assumes great importance. Distribution may take place through nonphysical channels.

The Services Marketing Triangle

Internal Marketing
Enabling the promise

External Marketing
Making the promise

Employees/ Providers

Customers
Interactive Marketing
Delivering the promise

Three different types of marketing takes place during the service transaction amongst three entities-

External marketing The company does the external marketing on the customer. It promises benefits, explain features, assures satisfaction by way of advertisement, public relation exercises and other forms of communication. It uses mass media to convey its promises. It makes promises to the Customers.

Internal marketingThe company does internal marketing to its providers. The company has to provide working spaces like offices, equipments (telephone, computers) . It has to recruit ,select& train appropriate employees ,channel partners, franchisees. It enables service provider to complete promise. The company enables its promises.

Interactive marketingThe providers do the interactive marketing with the customer. The provider or employee is the one Who interacts with the customers.

Both the customer as well as provider gets instant feedback about each other during transaction. This reflects the perception of the quality of the Service. The provider keeps the promises" made by the company.

CUSTOMER PERCEPTION

Perception is the process of making a meaningful picture by selectivity organising a set of stimuli. In the marketing of services, perception can be defined as a customer's judgment about the service experience and aspects of value of service delivery , service quality and customer satisfaction

Factors that influence customer perception

3.Image
4.Price

SERVICE ENCOUNTER
It can be defined asAny episode in which the customer comes in contact with any aspect with the organisation and gets an impression of the quality of its service. The service encounter is popularly known as- Moment of Truth

Examples areSeeing an advertisement of the firm. Having a telephonic enquiry sessions with the service firm. The impression while waiting in a queue. Being greeted in the entrance. The decor and ambience. The quality of interaction. The experience of the service. Listening to the buzz word about the service firm.

Types of service encounters Remote encountersDo not involve any direct human contact. Examples- ATM machines, telephone answering machine, voice mail service automated mail order. Phone encounters-Use of telecommunication. Telephonic services like customer inquiry, registration of complaints, taking orders. reserving tickets. Face to face encountersRestaurants ,banks and grocery stores.

Elements of service encounter Customer

The service Provider

Case studyScandinavian Airline System (SAS) Jan Carlson- CEO He termed encounters as MOT.

EXPANDED MARKETING MIX FOR SERVICES