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ser mkt

ser mkt

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Published by mumtaz_khan
Service Marketing
Service Marketing

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Published by: mumtaz_khan on Jul 23, 2010
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Service Marketing Strategy - Presentation Transcript
1.
 
Service Marketing Strategy and the Customer Experience Revenue Management & Pricing in Travel USA 2007 9-10 October,Caesars Palace, Las Vegas2.
 
Introduction
o
 
In this presentation I will focus on some key marketing components:
 
Product elements
 
Price and other user outlays
 
Promotion and education3.
 
Product, Pricing and Communication Decisions
o
 
W
hat price should we charge for our service?
o
 
H
ow should we communicate what our service has to offer?
o
 
W
hat should be the core and supplementary elements of our service product?4.
 
Core and Supplementary Elements
o
 
The core addresses the customer·s need for a basic benefit ² such as transportation to a desired location
o
 
Supplementary services facilitate and enhance use of the core service
o
 
In a mature industry with increased competition there is a risk of perceived commoditization5.
 
W
hat should be the elements of our service product?
o
 
W
hat are the characteristics of our core product?
o
 
W
hat supplementary service elements augment this core product?
o
 
W
hat product benefits create the most value for target customers?
o
 
H
ow can we differentiate our service product from the competition·s?
o
 
H
ow should we go about designing new services?6.
 
Augmented Product
o
 
The core product (a good or a service) plus all supplementary elements that add value for customers
o
 
Molecular model describes augmented products7.
 
Molecular Model Distribution Price Marketing Positioning Transport Aircraft In-flight Service Food and Drink Pre- and Post-flightservice Service Frequency Intangible Elements Tangible Elements G. Lynn Shostack, ´Breaking Free from Product Marketingµ8.
 
The Flower of Service Pierre Eiglier and Eric Langeard, ´Services as Systems: Marketing Implicationsµ Information ConsultationOrder Taking
H
ospitality Safekeeping Exceptions Billing Payment Core9.
 
Identifying and Classifying Supplementary Services
o
 
Facilitating supplementary services that aid in the use of the core product or are required for service delivery
 
Information
 
Order taking
 
Billing
 
Payment
o
 
Enhancing supplementary services that may add extra value for customers
 
Consultation
 
H
ospitality
 
Safekeeping
 
Exceptions10.
 
The Customer Experience in Five Stages11.
 
Stage One ² Discover 12.
 
Brand Level Objectives Source: AirCanada.com13.
 
Stage Two ² Evaluate Source: www.aircanada.com14.
 
Value Positioning15.
 
Multiple Value Propositions Multiple value propositions facilitate revenue optimization within and across brands16.
 
 
 
 
 
 
 
 
 
 
Customer Choice Source: www.aircanada.com17.
 
Flight Change Functionality18.
 
Opt-in or Opt-out Source: www.aircanada.com19.
 
Up-Sell Proposition20.
 
Pay to use Airport Check-in21.
 
22.
 
´ A-la-carteµ Access to Lounge23.
 
Non-Ticket Revenues
o
 
Ryanair·s non-ticket revenues were 18% of the total in 2006
o
 
Profit margins on ancillaries are much higher than on seats
o
 
Very low selling costs ² particularly if sold online
o
 
J
ustifies management unit
o
 
Measuring performance of ancillary product sales is still in its infancy24.
 
Ancillary or Non-Ticket Revenue25.
 
26.
 
Potential Revenues in IFE27.
 
New
W
ays to Charge Customers
 
28.
 
A Captive Audience for Advertising29.
 
The Value Exchange30.
 
W
hat Price Should we Charge?
o
 
W
hat costs do we have to recover?
o
 
W
hat prices are competitors charging?
o
 
H
ow sensitive are customers to variations in price?
o
 
W
hat out-of-pocket expenditures and non-financial outlays do customers incur beyond the price of our service?
o
 
Can we charge different prices at different times or to different customers?31.
 
Pricing Strategy
o
 
Cost-based pricing ² the practice of relating the price to be charged to the costs associated with producing, delivering,and marketing a product
o
 
Competition-based pricing ² the practice of setting prices relative to those charged by competitors
o
 
Value-based pricing ² the practice of setting prices with reference to what customers are willing to pay for the value theybelieve they will receiveLeonard L. Berry and Manjit S. Yadav, ´Capture and Communicate Value in Pricing of Servicesµ32.
 
Capturing and Communicating the Value of a Service
o
 
Uncertainty reduction ² If customers are unsure about how much value they will receive from a particular service, theymay remain with a known supplier or not purchase at all
o
 
Relationship enhancement ² In general, discounting to win new business is not the best way to attract customers whowill remain loyal over time, since those who are attracted by cut-rate pricing are easily enticed away by competing offers
o
 
Cost leadership ² This strategy is based on achieving the lowest costs in an industry33.
 
The Basis for Pricing
o
 
Price bundling ² the practice of charging a base price for a core service plus additional fees for optional supplementaryelements
o
 
Discounting ² a strategy of reducing the price of an item below the normal level34.
 
New Customer Options
o
 
Airline services are going a la carte
o
 
Tools to price a la carte on website
o
 
Seat location pricing
o
 
United·s ´Economy Plus Accessµ
o
 
Special check-in and security lines
o
 
Any reasonable proposition
o
 
Ultimately individual customer pricing35.
 
Types of Customized Pricing
o
 
Self selection
o
 
Controlled availability
o
 
Point of sale control
o
 
Buyer characteristics
o
 
Transaction characteristics36.
 
H
ow should we communicate what our service has to offer?
o
 
W
hat do customers need to know about our service, its benefits, and how best to use it?
o
 
W
hat communications methods and media will be most effective in reaching target audiences?
o
 
W
hat impressions can we convey through physical evidence?
o
 
H
ow well are our organization, its capabilities, and its brand names regarded?37.
 
Communicating with Customers
o
 
Communication efforts serve not only to attract new users but also to maintain contact with existing customers and buildrelationships with them
o
 
Nurturing customer relationships depends on a comprehensive and up-to-date customer database, and the ability tomake use of this in a personalized way38.
 
Communication Strategies for Services
o
 
Intangible nature of service performances
o
 
Customer involvement in production
o
 
Evaluating service offerings
o
 
Supply-and-demand management
o
 
Importance of contact personnel
o
 
Reduced role of intermediaries
o
 
Setting communication objectives39.
 
Stage Three ² Acquire40.
 
Credit Cards
o
 
$
3 billion spent worldwide each year on credit card merchant fees
o
 
Credit card fees are trending higher (3%)
o
 
Credit card companies are not negotiating41.
 
Lower-Cost Alternatives
o
 
H
aving already cut labour, commissions and GDS costs, credit card fees are the next savings opportunity

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