Marketing of Services

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Chapter
23-1 23-1 Dr S.L Gupta

Marketing of Services

Marketing of Services

Defining Services
A service is an activity or series of activities of more or less intangible nature that normally, not necessarily, takes place in interactions between the customer and service employees and/or physical resources or goods and/or system of the service provider, which are provided as solutions to customer problems.

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Marketing of Services

Characteristics of Services
Typical characteristics of services include 1. 2. 3. 4. 5. 6. Intangibility Inseparability of production and consumption Heterogeneity Perishability Client-based relationship Customer contact.

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Marketing of Services

Intangibility

Service Characteristics Inseparability

Difficult to evaluate, Marketer sells a promise, Difficult to advertise, Difficult to justify prices, Goods augmented with intangible services. Activities of service production and consumption are simultaneous, Consumers must participate in production. Consumer does not take physical possession of service, Role of service provider critical. Considerable variation in man-based service quality, Quality control difficult, Difficult to standardise service delivery. Services cannot be stored. Very difficult to balance supply and demand, Unused capacity lost for ever, Considerable variation in demand. Success depends on satisfied customers in the long-run, Customer relationship maintenance is critical. Retaining a group of satisfied customers essential. Service providers commitment critical to delivery, High-level of employee training and motivation essential to success, Service marketers try to change high-contact services into low-contact services without affecting customer satisfaction.

Heterogeneity

Perishability

Client-Based Relationship Customer Contact

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Marketing of Services

Classification of Services
Despite considerable diversity, services can also be classified on the basis of different categories:      Type of market. Degree of labour intensiveness. Degree of customer contact. Skill of service provider. Goal of service provider.

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Marketing of Services

The Service Continuum

Education

Ad Agency

Health Care

Air Restaurant Retail Travel Store

Autos

House

Sugar

Tangible (Good-Dominant)

Intangible (Service-Dominant)

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Marketing of Services

Developing Marketing Strategies for Services

Marketing mix for services is an extended one and includes 7Ps. Three more Ps for service products marketing and include people, physical evidence, and process.

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Marketing of Services

People of a service organisation involved in production and delivery of

services are a vital element of the marketing mix.

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Marketing of Services

Physical evidence reduces the risk perception by customers by

offering tangible evidence of the promised service delivery.

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Marketing of Services

Process is of critical importance to consumers in high-contact services.

Service marketers can choose among different processes to deliver their services to consumers.

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Marketing of Services

Services Involve Three Types of Marketing

Company

Internal Marketing Childcare Services Financial Services

External Marketing

Air Travel Services Employees Interactive Marketing Consumers

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Marketing of Services

Service Quality and Differentiation

Service quality as the customers perception of how well a service meets or exceeds their expectations. Customer Satisfaction = Perceived Delivered Service Expected Service Service Quality Evaluation

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Marketing of Services

Model of ServiceQuality

Word-of-Mouth Communications

Personal Needs

Past Experience

Expected Service CONSUMER GAP 5 Perceived Service

MARKETER

GAP 1

Service Delivery GAP External (including pre and Communications 4 post-delivery contacts to Consumers GAP 3 Translation of Perceptions into (Source: Slightly modified from Service-Quality A. Prasuraman, Valarie A. Specifications Zeithaml, and Leonard GAP L. Berry, A Conceptual Model 2 of Service Quality and Its Management's Implications for Future Perceptions Research, Journal of of Consumer Marketing, Fall 1985). Expectations

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Marketing of Services

Monitoring Service Performance

Service companies can use several methods to monitor their performance, such as ghost shopping, putting in place an efficient system of receiving consumer complaints and suggestions, and conducting surveys etc.

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