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MK0006

MK0006

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Published by Tushar Patil

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Published by: Tushar Patil on Nov 29, 2010
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11/05/2012

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MK0006 – Services Marketing and CustomerRelationship ManagementAssignment Set- 1
1a. Point out the distinctive characteristics of services withexamples. Answer:
Stanton points out that the special nature of servicesstems form several distinctive characteristics and he singles outfour for particular comment. They1. Intangibility2. Inseparability3. Heterogeneity (Kotler terms this as variability), and4. Perishability and fluctuating demand. These four have been identified by Kotler also as the majorcharacteristics greatly affecting the design of marketingprogrammers for services.
1. Intangibility
Services are essentially intangible. Because services areperformances or actions rather than objects, they cannot be seen,felt, tasted, or touched in the same manner that we can sensetangible goods. For example, health-care services are actions e.g.surgery, diagnosis, examination, treatment performed on thepatient, although the patient may be able to see and touch certaintangible components of the service e.g. equipment, hospital room.In fact, many services such as health care are difficult for theconsumer to grasp even mentally. Even after a diagnosis or surgeryhas been completed, the patient may not fully comprehend theservice performed.
Marketing Implications
Intangibility presents several marketing challenges. Services cannotbe inventories, and therefore fluctuations in demand are oftendifficult to manage. For example, there is tremendous demand forresort accommodations in Simla/Ooty in May, but little demand inDecember. Yet resort owners have the same number of rooms tosell year-round. Services cannot be patented legally, and newMK0006 – Services Marketing and Customer RelationshipManagement - 1 -
 
service concepts can therefore be communicated to competitors.Services cannot be readily displayed or easily communicated tocustomers, so quality may be difficult for consumers to assess.Decisions about what to include in advertising and otherpromotional materials are challenging, as is pricing. The actual costof a “unit of service” is hard to determine and the price/ qualityrelationship is complex.
2. Inseparability
Services are created and consumed simultaneously and generallythey cannot be separated from the provider of the service. Theservice provider customer interaction is a speciality of servicemarketing.Unlike the tangible goods, service cannot be distributed usingconventional channels. Inseparability makes direct sales as the onlypossible channel of distribution and thus delimits the markets forthe seller’s services. This characteristic also limits the scale of operation of the service provider. For example, a doctor can givetreatment to limited number of patients only in a day. This characteristic also emphasizes the importance of the qualityprovided to clients in services. This poses another managementchallenge to the service marketer. For example, an airline companymay provide excellent fight service, but a discourteous onboardstaff may keep the customer permanently off that company. There are exemptions also to the inseparability characteristic. Atelevision coverage, travel agency or stock broker may representand help marketing the service provided by another service firm.
Marketing Implications
Because services often are produced and consumed at the sametime, mass production is difficult if not impossible. The quality of service and customer satisfaction will be highly dependent on whathappens in “real time”, including actions of employees and theinteractions between employees and customers.
3. Heterogeneity
 This characteristic is referred to as variability by Kotler. We havealready seen that services cannot be standardized. They are highlyvariable depending upon the provider, the time and place wherethey are provided. A service provided on a particular occasion issomewhat different from the same service provided on otheroccasions. Also the standard of quality perceived by differentconsumers may differ accordingly. For example, the treatmentsMK0006 – Services Marketing and Customer RelationshipManagement - 2 -
 
given in a hospital to different persons on different occasions cannotsimilar. Consumers of services are aware of this variability and bytheir interaction with other consumers they also get influenced orinfluence others in the selection of service provider.
Marketing Implications
 The services are heterogeneous across time, organizations, andpeople ensuring consistent service is fully controlled by the servicesupplier; such as the ability of the consumer to articulate his or herneeds, the ability and willingness of personnel to satisfy thoseneeds, the presence (or absence) of other customers, and the levelof demand for the services.
4. Perishability and Fluctuating Demand
Perishability refers to the fact that a seat in an airplane or in arestaurant, an hour of a lawyer’s time, or telephone line capacitynot used cannot be reclaimed and used or resold at a later time. This is in contrast to goods that can be in inventory or resoldanother day, or even returned if the consumer is unhappy.Marketing ImplicationsA primary issue that marketers face in relation to serviceperishability is the inability to inventory. Demand forecasting andcreative planning for capacity utilization is therefore important inchallenging the decision areas. The fact that services cannottypically be returned or resold also implies a need for strongrecovery strategies when things do go wrong. For example, while abad haircut cannot be returned, the hairdresser can and shouldhave strategies for recovering the customer’s goodwill if and whensuch a problem occurs.
1b. Discuss briefly the significance of process and physicalevidence in services marketing.Answer: Process
 The process by which the service is created and delivered to thecustomer is critical to the service operations as customer oftenperceive the service delivery system as part of the service itself.Process means all work activities. Process involve the procedures,tasks schedules, mechanisms, activities and routines by which aproduct or service is delivered to the customer. It involves policydecisions about customer involvement and employee discretion.MK0006 – Services Marketing and Customer RelationshipManagement - 3 -

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