Services Marketing

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

2
Types of services-

1.Professional service firms may serve both- business

market , the private individuals.

Characteristics-
Advisory and problem solving, provided by a qualified
professionals known for their specialty, include an
assignment requested by the client, provided by a
professional who is independent and not connected
with other suppliers, supervised by professional
associations, to lay down requirements of competence,
to control the practice of profession and to enforce a
code of ethics.
Examples:- financial advice, advertising, business and
management consultancy, architectural and interior design
legal and medical services, estate agents

2. Business to business market or consumer oriented firms (non-

professional)

Example:- office catering services, cleaning services,

Holiday tour companies, fast food outlets, entertainment

industries
 Intangibility
 Heterogeneity
 Inseparability
 Perishability
 Ownership

5
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

3.Reduce perceived risk-

e.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
Perishability:-
The service marketer can try to overcome the problems of
perish ability by trying to match supply and demand by
1.Varying supply in accordance with demand (service
supply management)
2.Keeping supply fairly constant but trying to smooth out
demand to avoid excess capacity (service demand
management)
Classification of services
 Direct recipient of service

PEOPLE THINGS
Nature of service
Services directed at people’s Services directed at goods and
Act
bodies other physical possessions

TANGIBLE 1.Healthcare 1.Laundry and dry-cleaning

ACTIONS 2.Passenger transportation 2.Repairs and maintenance
3.Beauty saloons 3.Landscaping
4.Restaurants
5.Gym

Services directed at people’s Services directed at intangible

INTANGIBLE mind assets
ACTIONS
1.Education 1.Banking
2.Information services 2.Legal services
3.Theaters 3.Accounting
4.Museums 4.Insurance
2.Type of relationship that the service
organisation has with its customers-

By 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 No formal relationship

Nature of service relationship
delivery

Continuous delivery Insurance Radio stations

of service College enrollment Police protection
Banking Lighthouse
Trade associations Public Highway

Discrete transaction

Long distance phone calls Car rental

Tickets or passes Movie theater
Public transportation
Restaurants
3.Scope for customisation & Judgement in Service
Delivery--
 Extent to which service characteristics are customised
High Low
Extent to which
amount of judgment Professional services Education (large classes)
exercised by Surgery College food service
customer contact Taxi services Preventive health programs
staff Beautician
Plumber

High

Telephone service Public Transportation

Low Hotel service Movie theater
Routine appliance repair
Fast food Restaurant
4.Nature of Demand and supply for
the service
 Extent of demand

Wide Narrow
Extent to which
supply is Electricity Insurance
Constrained Telephone Legal services
Natural gas Banking
Peak demand can Police &fire emergencies Laundry and dry cleaning
usually be met
without a major
delay

Accounting &tax preparation Services similar to those above

Peak demand Hotels but with insufficient capacity
regularly exceeds Restaurants for their base level of business
capacity Theaters
5.Method of service delivery

Questions-
1.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
Nature of
interaction Single site Multiple site
between
customer & Bus service
service Theater Fast- food chain
organisation Barbershop

Customer
goes to service
organisation

Lawn care service Mail delivery

Pest control service Emergency repairs
Service Taxi
organisation
comes to
customer
Component tasks in service Marketing

Product-

 Understanding the nature of service

 Understanding the customer and his expectation
of the service
 Giving a shape to the service (developing the
service product)
Organizing delivery system (Place):-

1.Location decision

2.Using channels/intermediaries
Pricing strategy:-

People:-

Selection of personal

Motivation

Training

Team development
Physical evidence:-

Process:-
Promotion (achieving differentiation):-

1.Differentiate the offer

a. on the basis of speed

2.Differentiate the actual performance of

the service on the basis of:-
a. People providing the service
b. Physical evidence involved
c. Process involved in the service

3.Differentiating the image

Managing Service quality
 Gap between management perceptions and consumer
expectations
 Gap between management perceptions and service
quality specifications
 Gap between service quality specifications and service
delivery
 Gap between service delivery and promises made to the
customers through communication
 Gap between expected service and perceived service
Determinants of service quality-(SERVQUAL Model)

 Reliability – delivering on promises

 Responsiveness – willing to help
 Assurance – inspiring trust and confidence
 Empathy – individualising customers
 Tangibles- physical representation