SERVICES MARKETING

University of Central Punjab, Lahore

BY
Prof. AMJAD HABIB MIRZA
Business and Management
Consultant
auj 199@hotmail.com
0315-4259982
• LECTURE ^ 1

IN
THE NAME OF ALLAH
THE MOST BENEFICIENT,
THE MOST MERCIFUL
 Services are:
Deeds, Process and Performance.

Services Marketing is usually confused. There

are a variety of definitions covering product
spectrum of activities. Included in services
ambit, some services are intangible as such,
whereas, some are tangible in nature.
Timelines of services is intangible and repair
and maintenance are to a large extent, tangible.
There are services provided with the sale of the
product like packing, delivery etc. MARKETING
RESEARCH
• Then there are service providing
companies like repairs and
maintenance of machines, electrical
system etc.
Let us, however, define it as:
• “All economic activities, whose output
is not a physical or construction is
generally consumed at the time it is
produced, and provides added value in
forms (Such as convenience,
usefulness, amusement, comfort or
healthiness) that are essentially
intangible concerns of its first
purchases”.
 MARKETING
• SOCIETICAL PROCESS, WHEREBY
THE NEEDS AND DEMANDS OF AN
INDIVIDUAL OR A GROUP ARE MET
WITH…AND IN THE PROCESS BRINGS
SATISFACTION AND CONTENTMENT
FROM WHAT IS BEING CONSUMED
• Categories of Services:
Four Categories:
…
• A. Services Industries: These are those firms, whose
core business is providing services. Transport
services, Medical services, Janitorial services, Event
management, Delivery services, Pathological
services.
• B. Service with Product: There are services, which are
made a package with the product and provided. For
example, Installation of A/C in the house coupled with
sale of A/C, generators, fixtures and even catering
• C. Customer Services: Periodical change of
product parts, oil, lubricant, health maintenance,
Vaccination, fumigation. Lower perception comes
from:
• Inexplicable services, Silence of services
• Too much complicated services
• Not deliver what customer wants
• Not commensurate with service design
• Not matching with promises
• Wrong or inappropriate Service Design etc
 •

D. Derived Services:
This category include
such services, which are customer option.
The customers can pay little to derive them,
compared to others.
e.g. Insurance, Banking,
wedding arrangement,
safety and security,
 TRENDS IN SERVICE SECTOR

It is a continuously rising trend in almost

all categories above. The ratio of
services to product, are increasing
manifold. For example, hotels,
restaurants, airlines, ticketing,
recreation, weddings, parties, festivals,
matches, events, religious get to-
gethers….etc
 Services are Predominant in:
• Automobile Industry
• I .T and Computers
• Electronic
• Food, Catering & Hotels
• Travel & Communication
• Advertising
• Transport
• Consulting
• Teaching
• Beverages
• Utilities
 Some of world economies are Services industry:
• Singapore
• Greece
• Australia
• Korea
• India
• UAE
• Italy
• Japan
• Taiwan
• China
• UK
• Others: France, Spain etc.GOODS MANUFACTURERS
 Service Marketing is Different:
CHARACTERISTICS:
1 Intangible: Services are usually not
visible, but they help marketing. Our
approach is to make services stay
clean away from the tangibility of the
product. They have direct impact on
product and overall marketing, sales
and distribution.
2 Heterogeneity: It is the performance,
produced by human, no two services
are the same. Our approach is to
provide homogeneity in services. Set
some standards, as per cost and input
 Production and Services:

• Product sell on services provided.

• Our approach is to sell services first, then the
product.

3 Perishability: Services cannot be stored, resold,

returned or saved. It must be delivered and once
delivered is final. Our approach is to deliver it
perfect & error free.
• The Aims of Services Marketing is made Easy:
• - If we stay Focused on Customer.
• - Customer satisfaction
• - Want & Need Identification
• - Predominant Want
• - Customer Re-emphasized
• - Services are identified.
• - Value Added
 END OF LECTURE 1
• SEE YOU…………..
 LECTURE- 2

The Customer Gap

 Conti….
• There is s difference between what you
expect and what you have in your perception.
Customer Gap is the difference between
expectations and perception.

• Customer Expectations are standards or

reference points that customers brings into
service experience. Whereas customers
perceptions are subjective assessments of
actual service experience, so we must review
them from that point of view.
Expected Service
I
I
I
V
Perceived Service
–Customer Expectations come
from what customers believe
should happen. e.g.
From a visit to a posh restaurant
and to a fast food restaurant, we
expect quick and prompt, with
good hot and fresh food services.
We want car park and safety &
prompt handling.
•

• Expectations come from image, advert,

reputation, references, sales promotion,
word of mouth, etc.

• Perception comes from real service

experience which the customer faces or
feels.
Now, how this gap does widen?
 Expectations are raised
Through 1- fake promises or 2 - rhetoric
3 - Inherent exaggeration in adverts
4 - High-profile Image
5 - Too much display
 Lower perception comes from:
• Inexplicable services
• Silence of services
• Not highlighting the importance of services
• Too much complicated services
• gap
• Not deliver what customer wants
• Not commensurate with service design
• Not matching with promises
• Wrong or inappropriate Service Design
 Customer Wants are not
known
This Creates Producers Gap
Because of
• Poor and Inadequate marketing study
or of customers
• Lack of upward communication. Means
we do not convey to service designers
• Insufficient relationship exists between
the provider and the customer
 TPoor Service Design:
• Poor work
• Absence of customer–driven standards
• Inappropriate physical standards and infra-
structure & iNVESTMENT
• Poor Matching:
• Over promising
• Inefficient management in customer handling
• Lack of integrated services
 LET US Refer to Islamic
Principles
• Show & explain your product well and fully
• Discuss salient points
• Tell Do’s & Don’ts
• Tell safety requirements
• Tell defects / shortcomings as well, if any
• Give customer an opportunity to try, Test,,
touch, feel, speak, hear, whatever is possible
and whatever is the product
 END OF LECT -02

• SEE U NEXT TIME

LECT 03 — Consumer Behavior
in Services:
– It is extremely important that we
understand consumer behavior. His
behavior can well be understood if we
know his problems.
 Consumer Problems:
• Non availability of things
• Prices
• Late deliveries
• Lower quality
• Poor services
• Low standards
• Poor handling
 Points the Most Serious
ones are:
– Time Deficiency
• Consumers do not have time in fast life.
• Time is wasted in:
• Selection
• Shelfing
• Labels
• Similar – sounds of names
• Check out
• Waiting
• It is called ‘drudgery’ and ‘boring’
 Solution

• Make separate check out counters

• Make telling machines simple
• Make accessible counters
• Give enough space
• Do not overload shelfs
• Out – sourcing
The idea behind this Service
is:
• Convenience
• Fastness & ……….
• Comfort
• Ease
• Easy info on Price, Quality, Brands
 Customers fail to make
comparisons
• Give customers
• Search Qualities
• Product info
• Experience …………true references
 Consumers Needs
• Need Recognition
• Information to ease Search
• Evaluation of Alternatives
• Purchase
Need Recognition
• Psychological Need
• Ego Need
• Real Need
• Social NeedIT IS AN UNPROVEN
STATEMENT OR A PROPOSITION
ABOUT A FACTOR THAT IS OF
INTEREST TO THE RESEARCHERS
• Retailing must be recognized as
science.
• Consumer Experience:
• Consumers learn from experience of trying
purchase.
• Customer Service
• Transaction
• Self – Help
• Services Marketing include giving Good
experience.
• Bad experience makes more customers
caste away.
• Post Experience Evaluation:
– Word –of--mouth communication
– Attribute of dissatisfaction
– Pre-set mind
– Loyalty
– New Products inflow
 USUALLY
WE APPLY 5 Ws
Who, when, where, what and why
 END OF LECTURE-3
• SEE YOU
 LECTURE-4

Understand the
Differences of Consumers …
• So far, we have talked about Consumer
Gap and Consumer Needs, the
Consumer Perception and Reality.
• Let us go into discussing the
• difference of consumers on certain
external factors.
 Culture and it Role
• Culture plays pivotal Role,
* Ethnic and * National Culture.
• Culture represents common values, norms and
behavior of a group.
• Culture varies from place to place, and from
generation to generation.
• Culture determines the kind and nature and style of
services, which we desire. Customers perceive
differently across the board. Culture influences, how
companies and their services package and employee
interact with customers.
 In Far East and Asia, culture
demands more interaction with
customers in purchases, while
in the west, least interaction is
desirable.
Cultural Manners and Customs
• Ways of Behavior
• Treatment to Women
• Habits
• Form of Communication
• Material Culture:
• Tangible Products and
Features.
• Aesthetics:
• About Beauty and Good taste.
• Educational & Social:
• Education Literacy, Awareness, Social
justice, Consumer rights etc are all
defined in services.
• Legal Framework:
 Organizational set up
• There are more centralized orgs in Pakistan.
Decisions are taken by one-man or one
family, with or without justification, on whims
and fancies of that person or persons.
Income Strata
• A lot depends on where people live and their
Incomes and source of their Incomes/ People
live in rural and villages, people live in cities.
People differ in their educational background
 END OF LECTURE –4
• SEE U NEXT … in LECTURE 5.
 LECTURE NO. 5

Customer Expectation or
Services
• Customer expectations are
• “belief about service delivery that serve
as standards or reference points
against which services are judged”.
• Customer Expectations are most
difficult to judge. We can ask the
following questions;
 Types of Expectations
• Ideal Expectations or desires
– Freshness, Correct weight, Taste, Color look
• Normative Expectations (should have)
– Salt / sugar white, chocolate brown, car
operates, fan revolves
• Experience Expectations - References
• Acceptable Expectations - Soap, Ghee
• Minimum Expectations – Must have
 Sources if Customer
Expectations
• Sources of Desired Service Expectations
• Personal need - social, health, economic
• Lasting needs – services
• Sources of Adequate (better)Service
Expectations
• Temporary service intensifiers(look others and
feel it need for u)
• Perceived service alternatives(try)
• Situational factors
 What to do if expectations are
Unrealistic
• Explain the Realistic picture of the
services
• Interact with customer & explain
• Reduce exaggeration—TAPPER OFF
MISGIVINGS
• Offer what you can deliver
• Satisfaction Vs expectations psyche
• Resultant =
• Customer delight
 CUSTOMERS PERCEPTION OF
SERVICES
• We all have different levels of understanding
depending on our educational background,
intelligence and vision.
• Perception of Reality is as WHATWE
UNDERSTAND, not what it is.
• Customer perception is what they
understand product and services. Hence, to
give maximum satisfaction to customers, we
must first correct Perception.
 Satisfaction vs. Service
Quality
• Satisfaction is very Interchangeable and
Controversial term.
• Hence, it is difficult to define Satisfaction.
It is derivative and differs from time to
time. It is situational. Whereas service
quality is definable in terms of
characteristics we use service quality as a
tool to derive customer satisfaction, but
its perception must be clear.
• Customer Satisfaction comes:
• Word of mouth
• Loyalty / promotion
What is Customer Satisfaction?
• It is Consumer Fulfillment Response.
• It is the judgment that a product and its
services provide a pleasurable level of
consumption- related fulfillment.
What Determines Satisfaction?
• Product features – overall
• Consumer Emotions – Perceptions
level of Pleasure
• Fairness and equity
• Other influenced family, friends and
experts
• Services are delivered by employees,
hence it adds to the problem.
• Service Design must Incorporate the
following:
– Simplification
– Completeness
– Objectivity with material things
– Correct Communication & interoperated
• Types of New Services:
– Major or Radical (fundamental/essentail) Innovation:
• When we bring in new aspects to the existing
services. Cellular phone services are the kind.
– Startup Business:
• When the market is already being catered and we
bring startup services. TV, cable, internet etc.
– Service Improvement:
– Newer Style of Services:
Types of Customer Defined
Services:
• Where services are pivotal customer
requirement.
• Two sections
• Hard Customers – defined standards
• Fedex is one example.
• “Do it Right the first time” standard.
• Reliability
• Strip to target
• On–the–line fixed
• Speed, correct, on – time
• Soft Customer – defined standards
• Demands basic services without fail.
• Delivery
• Safety
• Confidentiality
 End of lecture -5
• See you……
 LECTURE--06
• LECTURE O6

• EMPLOYEE’S ROLE IN SERVICE

DELIVERY:
• Culture formally defined as “the way we
manage things around us”
 Corporate Culture:
• “The pattern of shared values and
beliefs that give the members of an
organizational meaning, and provide them
with the rules of behavior in the
organization”
• Experts now believe that the success of
organizations depends upon incorporating
‘service culture’ or ‘customer – oriented”
culture.
 Let us look at ‘Service Culture’
• Customers come First
• Emphasize Service over everything
• Make Services as Routine-task
• Train Employees regularly and
periodically
• Put concerted Efforts on services
• Evaluate employee weight age to
culture
 Service Culture Leadership
• Service culture begins from leadership by
seniors in an organization. This will infuse
values into the fabric of an organization.
Culture infusion is not by command or rules
or direction; it is by examples.
• Let employee belief that it is a part of job.
Service culture does not come about
overnight. It takes time; service culture is
infused on day one. Many organizations even
have printouts/ manuals on service culture or
corporate culture.
upwards and downwards and
horizontically. Corporate
culture or service culture
does not have gender or
religions aspects. In fact,
service culture merges all
nationalities, castes,
Census every tenth year incolors
a countryor
is
creeds.the
It best
is almost one
example of of its
Survey
own types. It does respect all
religions but has its own way
• Service culture is a part of every
supervisor, and travels upwards and
downwards and horizontically. Corporate
culture or service culture does not have
gender or religions aspects. In fact,
service culture merges all nationalities,
castes, colors or creeds. It is almost one
of its own types. It does respect all
religions but has its own way of doing it.
 SERVICE Employee Satisfaction,
Customer Satisfaction:
• It brings serenity peace and tranquility. It satisfies
employees and that brings satisfied customers.
• Service Profit Chain:
• ┌ Employee retention ┐
• Internal service culture → satisfied employee →
External service
• └ Employee productivity ┘
• ┌ Revenue growth
• → Customer satisfaction → customer loyalty →
• └ Profitability
 End of lecture 6
• See you next..IN LECTURE 7
Delivering Service Quality thru
People
• Good service quality calls for good
people. The organization should be
strengthened with the ‘best’ people.
Who are best?
• Highly qualified people? Intelligent?
• Good looking? Smart? Strong
references?
• Actually, good people are those who, by
nature, have service built – in their
characteristics. For example, women are
supposed to have this characteristic
genetically. But only a few make good
nurses, flight stewardess, good front-desk
personnel, and good assistants.
 Hire the Right
People is the Asking
 Delivery Services:
• In person delivery of services and
through intermediaries is a big case in
the world.
• Even in direct channel, we have
employees through which deliverance
in done. Case of distance – learning,
• on – line learning and campus learning
is the most debated area throughout
the world.
 Direct Delivery of Services
• Services are intangibles
• Does no involvement of material thing
• Cannot be warehoused
• Involves people for delivery
• Hence, direct delivery means delivery
of services means Involving employees
• Direct control
Delivery through Intermediaries
• Through retailers _ by virtue of franchising
• Making model stores
• Through own agents/brokers
• Through employees
• Through outsourcing
• Difficulties through Intermediaries:
• Channel conflict over objectives, protectively &
performance
• Quality & consistency
• Tension between centre & intermediaries
• Ambiguity in understanding by intermediaries
 Strategies to Control:
– Control & set standards
– Enforced conditions
– Partnering strategies
– Training and communication
END OF LECTURE-7

WE GO TO LECTURE 08
 Price & Pricing:
• Before we talk on price and pricing with context to
services marketing, let us understand the concept of
price as it is in marketing.
• Price in easy terms means “Monetary expression or
value of the product.”
• Nothing in the world is ‘free’ or ‘valueless.’ We have
to value, in terms of medium of exchange, for
everything. Marketing involves and centers around
exchange, hence it has a price. Pricing is considered
so important in marketing that the experts call it as
half – marketing. For us the students of marketing,
we must clearly understand this concept in order to
fully comprehend the concept of marketing.
Improper handling of this aspect of price
and pricing can lead to problems of
unlimited proportion. On the contrary,
proper handling of price and pricing
can lead to success and growth in
business. Many cases exist in the
practical world, where prices lead to
failure and success
 Japanese economy grew on this
formula. In the mid 70s, Japan evolved
a new pricing formula vis–a–vis
product. In decades of 70s and 80s,
they captured the world markets and
today, Japanese products are the world
leaders, all over the globe.
 Role of Price/ Pricing in
Services Marketing:
• 1Two, customers and providers may
have different outlook towards the
services.
• Hence, the qualifiable aspect cannot be
applied to services marketing pricing.
 Three factors:
• Customer’s knowledge of services
and its pricing.
• The place and importance of non –
monetary cost input.
• Price signifies quality more in case of
services, than intangible product.
 CONT…….
These three aspects make services
marketing significantly different
from the rest of the marketing.
They need to be studied more in
detail before we proceed further. In
a way I may ass here that pricing of
services is by for more difficult
than pricing other products.
• In case of others products, the usual
bench mark of pricing is,
• Direct material +
• Direct labor +
• Direct overhead expense +
• Profit margin = Price
• Whatever method of profit – working is
applied, the pricing is easier.
• In case of services marketing, the direct
input of material and labor and overhead
expenses is difficult to assess. Then, there
are several non – monetary aspects, such as
time expertise, finance, delivery, and the
techniques of people, extra, which are
involved. It is most impossible to ascertain
the value input of these aspects to work on
mathematical formula of pricing
END OF LECTURE 8—WE GO
TO LECTURE 9
Customer knowledge of Services
Prices
Customer’s knowledge of services prices
is one of the crucial things. Services
are required without which the product
is not complete. E.g. A/c is bought but
until it is installed and all proper
preventive measures are not taken, it
would not give utility but how much will
it cost to install? Let us look at some of
the difficulties that a customer faces.
 Services Variability

• Services can vary in its offering. Take

the case of an A/c. some customer
need just an installation, another just
replacement, another need stabilizer
too, another needs maintenance too,
yet another monthly check up services.
All these services costs money.
• Permutations have to be worked out.
• Providers unable to estimate cost/price:
• It is difficult to ascertain the level and extent
of services, hence pricing. Medical services,
legal services, counseling services, image
profiting services etc are of the ……. How
long the litigation will go? How far the
doctor’s services required? No one can know
from symptoms. Hence difficult in pricing.
 Individual Needs Differ
• Services in case of fashion designers, hairstylists
(men & women), education etc are such fields, where
needs of customers largely varies and differs.
• Take the example of bridal dresses for ladies. Price
with or without the fabric varies from 30,000 to
almost one million (10, 00,000). Decorations of
wedding halls vary from simple 50,000 to 800,000 in
one wedding, I attended in PC Lahore, and the host
had all flowers imported specially from Austria. It
costed him over 1.3 million for three hours gathering
of guests.
 Understanding of Services
Prices
• Customers do not comprehend the
price of services, due to its
uniqueness. The crockery varies. In
one banquet, the customers demanded
‘Unison’ crockery and ‘Stanley smith’
cutlery. The services for some 50
guests costed him over 2000 per head
as compared to what it could have been
Rs 300 – Rs 400 per guest/ head.
 Non – Monetary Elements
• In services pricing, elements of non –
monetary costs are predominant. Time
cost, the particular day cost, the search
cost, the psychological costs are to be
considered. Services providers should
mace efforts to reduce non – monetary
costs to reduce the impact of prices.
Price as Indicator of Quality:
The reputation and image of the provider also has its
price. Take the case of hair cut in Lahore. One lady
in cantt charges Rs 10,000 or a 30 minute haircut
(Gents). She claims foreign diplomas for haircutting.
She is so heavily booked that one cannot find
space/time with her for weeks. She does only 8 – 10
hair cuts a day. The employees uniform, the décor of
the shop/place, the treatment, the handling makes it
more image, hence hence exorbitant price. People
pay just for the name. I had a student with a very rich
father. He used to come to class and broad cast
loudly that he went to “Ayeshas” to get his haircut.
To tell you frankly, I could hardly see the work of
scissors on his hair. On the contrary his hairs were
more unruly than before.
 Approaches to Pricing:
• The most commonly used and
applicable approach is to collect cost
of:
– Direct Material
– Direct labor
– Overhead Operating Expenses
• We total them up: Add margin of profit
and set price.
• We call it Cost – based pricing
approach. In services marketing, this is
usually applied, although access to
data of DM and DL and OEs are not
easily available. Depending on the
nature of services,, we normally keep
cushion for the unknown. We normally
refund if the unknown do not appear to
that percentage.
Competitive based Pricing
Approach
We keep a close touch with
competitive activities. We judge
then quality, make our best
assessment and price our
services.
 ADVANTAGES

• IT MAKES IT ALL EASY TO

DIFFERENTIATE
• IT MAKES IT SENSIBLE AND MORE
POLICY -ORIENTED
 Based on Demand and
Sensitivity:
where services are sensitive in nature.
For example, legal services, medical
services, even business consultancy
services, they are extremely critical in
nature and importance. Hence pricing
is done as per gravity of issue for
services. Other services too have
image name reputation, conditions,
situations and time of services.
 End of lecture—09
WE GO TO LECTURE 10
Financial & Economic Impacts of
Services:
Services are an integral part of product
marketing not with standing its
importance, customer satisfaction
cannot be attained until product is
coupled with good and quality services.
We need to improve services
continuously. Services give rise to the
following questions.
• What return (additional) can we expect on
service quality improvement?
• Services quality is an investment hence ROI
(return on investment) must be known to us?
• All expenditures on quality efforts must be
financially accountable and justified.
• We can go too far in services quality
improvement; hence we must control.
• We must validate expenditure on service
quality.
 Before we answer these questions, we must
understand one thing clearly and that is that
services must go in package. This means we
cannot neglect and aspect of services. For example
in a restaurant we provide prompt and services in
booking and delivering clients orders. The staff
must be courteous and well dressed. The cutlery
and the furniture of the restaurant must be good.
The layout of tables, the air conditioning, and the
seating arrangement must be equally good. The
décor of the restaurant, the color, the ambience,
the hygiene etc must be looked after closely.
* The car parking, the security of
vehicles, the proper facilities, the wallet
may be provided. The wheel chair for
old and disabled people, the fire –
fighting equipment and emergency
medical supplies must be handy and
called upon on requirement.
 • The sanctity of ‘purdah-nashin’
women, the families, the children, the
play area etc must be well maintained.
• In short, the entire package of services
must be uniformed and good quality.
The standard must be well – maintained
and fully addressed at all times.
• We sometimes have the tendency to
ignore certain aspects and
• erroneously neglect the same. For example, in P.I.A
aircrafts domestic and international flights there is
no area for prayers. In all Islamic airlines, it is
provided except PIA. Even on Hajj flights, it is
woefully neglected. The reason, of course, is to add
more seats for the passengers. But in view of
additional 8 – 10 seats revenue, a basic service
provision is ignored. This makes passengers awfully
sad and neglected. The services must come in a
package, as a whole. No aspect must be neglected at
any cost or reasons.
 End of lecture 10
• Lecture 11 starts
• Now let us see what services are and
how do we composed its composition
to turn it into profits for the
organization.
• In Services, we have already studied before what
bring its quality.
• Services
• People
• Their empowerment
• Their training & enrichment
• Conducive environment
• Package
• Commitment
• Each of the above factors brings customer
satisfaction.
• This leads to
• Customer Retention
• Customer loyalty/ longevity
• Assured volumes
• Revenue growth
• Reduced costs
Business Indicators of Result:
• Lower operating cost
• Higher and increasing volumes
• Higher and increasing revenues
• Assured & loyal customers
• Satisfied & motivated staff
• Price premium
• Word – of – publicity
 Negative and Worrying
Factors
• Fall in revenue more than recession or
depressed market/ economy
• Slippery customers
• Customers complaints
• Disgruntled employee
• Overall gloom
• Increase in expenses / costs
• Spread of bad – words.
 Service Improvement
• CORPORATE IMAGE
• Services are one factor which single-
handedly does the maximum benefit, and
reversely, the maximum damage to the
Corporate Image.
• This better corporate image creates better
names & better reputation.
• It brings competitive advantage through
better recall.
• This leads to:
 Selection of Staff
• The right people to handle enhanced image
for better quality of service.
• New Hiring is done, in-house education,
training takes place on more regular basis.
The employee is motivated through
increased salary and promotion. The
employee satisfaction is attained.
Management becomes easier and
convenient. Support services are built up.
Coordination becomes easier.
It works like a Chain Reaction
• Employee empowerment and
accountability becomes possible
employee use the words ‘US’ and
‘Ours’ to clients.
• The chain reaction and results in
customer satisfaction
 Support for Customers is Built-
Up.
• Japan has 81% of the world orders in
2001/2002. …………. Ship-building Timeliness
of delivery is made. Quality improves and so
the profitability.
• It may all sound very idealistic.This is what
happens always. In practical life, it has been
observed that the goodness in business has
come about. Very rarely do we find that such
goodness comes from certain policies and
systems.
• Xerox machine (photocopiers) became no.1 in the
world through prompt after sale service and
attention. Japan became world economic leaders
through timely delivery of orders. British ship-
building industry has been 400 years old. ………….
The minimum delay in delivering orders has been
100 days. The average delay in 2001 was 163 days.
Japan ship-building industry came up with removing
this delay. The average delay in Japan ship-building
industry in delivering orders has been recorded as 4
days as against 163 days average in British ship-
building. The result is industry has laid off 50,000
staff in 2004/2005.
 End of lecture 11
• Lecture 12
 Chain Process of Services
Marketing – Profitability
• The ultimate objective of every business is profit. In
fact, it is the sustained profit means continuous
profitability achievement over a period of time.
Situation and environment keeps changing,
technology changes, and market changes
demographically and geographically. But these
changes should have least affect on our business
layout and profitability. That is sustained profit.
• Let us learn the technique of using improved
services marketing as a tool to achieving business
profit and sustain it over a period of time.
• Let us start with basic:
 Better Image
• * The business must have a better image.
Means it should have cultural acceptance
and within the rule of law and ethics of
business. All societies have their own ethics
and we wont argue the righteousness of
ethics. Business must be ethical, as per then
ethics. For example, a sauna bath club is
quite ethical in western society, but it may
not have a good image in Pakistan, being an
Islamic state.
• The name of the business should be easy
and localized. Slang language should be
totally avoided in naming the business. The
business name should be easy and neat and
clean and sober. This gives a straightaway
edge over competition. The position
becomes firm and solid from the start. The
name should be easy to recall. The name
should reflect humanity, decency, sobriety
and culture. Competitiveness is straightaway
in born.
 Selection of Staff
• One next priority is establishing, a step
forward to profitability, is selection,
recruitment and induction of proper
manpower. In other words, enriching human
resource. Selection of staff is done through
professional bodies and through screening.
We must spend considerable time, efforts
and money in choosing the rightest person
for the job. Age, gender, educational
requirement, health, attitude and habits etc
must be compatible with the job requirement.
 • Over qualified hiring of people can be harmful
perhaps more, than under qualification. Training and
orientation of staff is important. Enhancement of
skills should be a continuous effort. This keeps
manpower fully abreast with changes that are
occurring. It also helps in inducting technology and
modern electronic gadgets. What good are the
computers, if the staff do not know how to use them.
I have seen people uneasy with computers and then
application in bank, and therefore not able to provide
services. ATM is also a failure in banks for lack of re-
loading and maintenance.
 Employee Satisfaction:
This brings employee satisfaction and
contentment. Satisfied employees is
perhaps much difficult to attain and
perhaps for more important to achieve,
before anything.
• Satisfied employee give satisfactory output
and much better services than the
disgruntled and agitated employees. The
human resource policies should be fair and
transparent. Injustice should not be done
under any circumstances. Supervision of
staff becomes easy and simple. The
organization has no ripples or turbulence.
Employee relation is good and judicious.
They become supportive and maximize their
performance.
 Employee Empowerment:
• Employee satisfaction brings employee
empowerment. It adds to the value output of
employees. Employees output, performance
and delivery of service multiples manifold.
The classical example is that of Japan.
Japanese employees perform much more
than the average employee in US or UK any
other country. The Japanese employee is
multi-directional and finishes the job very
well.
• Employee empowerment reduces
routine supervision and direction. It
leads to smooth operation of
organization. Customers directly get
affected by better performance.
 Customer Satisfaction:
• Employee satisfaction, better
performance and efficient output finally
leads to customer satisfaction is a very
broad term. However, three things
affect customers. These three things
either lead to customer happiness or
customer annoyance.
• 1. Timeliness of Delivery:
• All customers want timely delivery. A
client in a restaurant wants timely
service wants timely service. A
contractor of road or canal wants
timely delivery of machinery or cement.
Ladies want timely delivery of stitched
clothes. All want, big or small, timely
delivery of product.
• 2. Quality of goods:
• Customer pays for product so he wants
quality (A specific quality) in return. He
wants value for his payment. He wants to
accomplish his planned objective from the
product. If quality is not delivered, the
customer feels very unhappy. Quality also
means after sale service, back up
maintenance and in-time follow up and calls.
In case of technical products, the availability
of spare parts.
• 3. Shopping experience:
• Shopping experience is the interaction, which
customers have while procuring and using the
product. It includes counter services to delivery,
packing etc. if customers are well treated on the
counter, their experience is good, no matter the kind
or nature of the product. Therefore customer
satisfaction can be attained, apart from other things,
from decent, friendly and professional experience
during his interaction. Hence, services at this
juncture must be fully catered.
• Customer buying behavior:
• Once customer satisfaction is
attained, it is reflected in three ways.
• Repetitiveness of customers
• Retention and loyalty
• Referrals
• These three things can be visibly
seen and felt and even calculated in
statistics. Customers remain loyal no
matter what.
• Customer buying behavior:
• Once customer satisfaction is
attained, it is reflected in three ways.
• Repetitiveness of customers
• Retention and loyalty
• Referrals
• These three things can be visibly
seen and felt and even calculated in
statistics. Customers remain loyal no
matter what.
All these Factors Coupled with:
• Higher and consistent turnover
• Increased revenue in sales
• Better margins – lower cost of goods sold
• All these in return bring:
• INCREASED PROFITS
The story does not end here.
• Better profits:
• Bring increased share prices
• Better reputation
• Increased taxes
 End of lecture 12
• Lecture 13 starts
• We have studied Services Marketing as
a tool to bringing profit and sustained
profit to the firm.
• Services are a sure-short tool to
profitability.
• Services are a culture: It needs to be
adopted as an integral part of business.
• Services are and can be marketed just
any tangible product.
• The need deficiency of services is acute.
Hence, it must be fulfilled.
• Services entail human efforts and skills.
Human touch is prominent. Services are like
handicraft.
• Services have the Sustainability of Economic
Upheaval. Economic shocks are minimal in
services.
• Services depend upon, habits, style, values,
customs and traditions. Hence services can
be made part of life, the style of life and
woven into business circle.