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Q.1 Mention the different types of services with few examples and briefly give a note on service sector.
Ans.: Different types of services: The underlying objective in any service classification scheme is to get a deeper understanding of the service product. Despite the diversity in the range of service products, it is possible to classify and explore them on the basis of certain factors. There have been more than sixteen studies regarding the classification schemes. Naturally, some are worthwhile in developing marketing strategies, with others suffer shortcomings. Christopher Lovelock identifies certain issues as important in the classification of services. He points out that: a) Service industries continue to be dominated by operations, with the service managers insisting that their tasks and challenges in their industry are unique and have nothing in common with those from other service industries. b) A managerial mind set evident in many service argues that the marketing of a service industry has nothing in common with the marketing of another service industry. For example, the marketing of an airline service has nothing in common with marketing of a banking service or a financial service. c) Classification schemes should offer strategic marketing insights so as to have managerial value. Any other simple classification would be insufficient. Payne identifies a wide range of factors, which are used in various classification schemes. They are: a) Type of services, b) Type of seller, c) Type of purchaser, d) Demand characteristics, e) Rented versus owned services, f) Degree of intangibility, g) Buying motives, h) Equipment based versus people based, i) Amount of customer contact, j) Service delivery requirements, k) Degree of customization and l) Degree of labour intensity. A simple form of classification is to list out the service industries, like transpiration, banking, health care, education etc. Obviously, such listing is not helpful to identify the features relevant to the marketing of services. Recent researchers have sought to classify the service in a more meaningful manner that gives insight into the strategic dimensions of service marketing. Various classification schemes, clubbing various groups of services that share marketing commonalties, rely on good marketers to gain strategic marketing insights. The underlying aim for such classification scheme is to gain a deeper understanding of the service product. Service products are education, legal services, management constancy, accounting travels etc., In spite of such diversities, the services can be

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classified and on the basis of some criteria they can be explored to provide a deeper insight into the nature of services. Service Sector: The American Marketing Association defines services as activities, benefits or satisfactions, which are offered for sale and are provided with the sale of goods. This definition is considered to be too broad as products also offer benefits and satisfaction to customers. So, there were attempts to differentiate physical products from services by defining characteristics, which are present in service but are not found in case of products. Kotler defines a service as any act or performance that one party can offer to another that is essentially intangible and not results in the ownership of anything. Its productions may or may not be same to a physical product. Adrian Payne defines it as an activity which has some intangibility associated with it, which involves some interaction with property with it, which involves some interaction with customers or with property in their possession, and does not result in a transfer of ownership. A change in condition may occur and production of the service may or may not be closely associated with a physical product. A more mundane definition in the Indian context is provided by section 2 (r) of the Monopolies and Restrictive Trade Practices Act, 1969. Under the said statute a service means service which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, chit fund, real estate, transport, processing, supply of electrical or other energy, board or loading or both, entertainment, amusement or the purveying of news or other information. Stanton defines services and identifies factors, which distinguish products from services, which are accepted by most of the commentators. According to Stanton Services are those separately identifiable, essentially intangible activities that provide want-satisfaction, and that are not necessarily tied to the sale of a product or another service. To produce a service may or may not require the use of tangible. However, when such use is required, there is no transfer of the title (Permanent ownership) to these tangible which distinguish goods. Stanton emphasizes four characteristics, which distinguish service from products. They are, intangibility, inseparability, heterogeneity and penetrability and fluctuating demand. Kotler also emphasizes on intangibility, variability and perishability. A service is an activity which has some element of intangibility associated with it, which involves some interaction with customers or with property in their possession, and does not result in a transfer of ownership. A change in condition may occur and production of the service may or may not be closely associated with a physical product.

Q.2 What do you understand by customer defined service standards? Explain its relevant in services marketing.
Ans.: Customer defined service standards: A customer service standard is the interaction between a business and its customers. Customer service standards are excellence, response time, accessibility, delivery time and commitment. All business leads

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back to the customer in one form or another, so it is imperative that companies continuously strive to improve the level of service they deliver. Customer service standards must be constantly monitored and incorporated into the strategic planning of the company. Excellence in Customer Service Handle customers with care and reap the rewards long after the service has been given. Business image by Clark Duffy from Fotolia.com You must meet and exceed expectations and guarantee a quality product. Timely

How a product is delivered is what the customer will remember. Two business -men holding clock image by Ricardo Verde Costa from Fotolia.com Deliver your product or service efficiently. Categorize response time. For instance, if the request is for general information, respond to the customer no later than 24 hours after receipt of his request. Accessible

Be accountable, providing a contact for inquiries. telephone image by MATTHIEU FABISIAK from Fotolia.com Periodically contact the customer to assess any need or special request. Provide feedback and ideas and hear what the customer wants. Use this a tool for improving customer service. Committed

Communicate to your customers your committment and loyalty and they will do the same in most cases. Handshake image by Du...an Zidar from Fotolia.com Be professional, courteous and responsible to the customer

Factors necessary for appropriate service standards. -Standardization of service behaviors and actions. Expert services cannot be standardized viz; Accounting, consulting, engineering, dentistry, etc. Recurring tasks can be standardized viz; checking in patients, weighing, billing, collecting payment, etc. Hard customer defined standards. Things that can be counted, timed, or observed through audits (time, numbers of events) Soft customer defined standards.

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Opinion-based measures that cannot talking to customers (perceptions, beliefs) be observed and must be

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Q.3. Explain the concept of service design and service delivery in services marketing.
Ans.: Service Design: Service Design is the activity of planning and organizing people, infrastructure, communication and material components of a service, in order to improve its quality, the interaction between service provider and customers and the customer's experience. For example, a restaurant may choose to have a Service Design agency change the way its menu is set out, or change the layout of the restaurant to improve the customer's experience. Customers can mean paying patrons, but also can be within an organization, so long as they are the direct recipients of a service e.g. an organization implements a new payroll interface for its staff - therefore the staff are effectively 'customers' of the payroll interface. To do this, Service Design methodologies are used to plan and organize people, infrastructure, communication and material components used in a service. The increasing importance and size of the service sector, both in terms of people employed and economic importance, requires services to be accurately designed in order for service providers to remain competitive and to continue to attract customers. The design (or redesign) of a service may involve re-organizing the activities performed by the service provider (Back office), e.g. how letters from customers are processed internally; and/or the redesign of interfaces and interactions that customers use to contact the service provider (Front office) e.g. website, in person, telephone, blogs etc.

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Service Design is increasingly used by blue-chip private and public sector organizations as a means of creating the step change their customers require in terms of service experience. Service Design agencies apply design tools, techniques and thinking to service challenges, either to improve existing services or to create new ones. Typically, the work is based upon deep insights gathered by shadowing service users. This technique produces more accurate insights into the usability of a service than traditional remote surveys because what people say they do is frequently different to what they actually do. Concepts and ideas generated are captured in sketches or in service prototypes. The strong visual element, combined with the opportunity to test and rapidly change services and interfaces, delivers real value in today's competitive markets. The active participation of customers and other actors traditionally considered as external to a firms boundary emphasize the need for a proper design activity that organizes the interaction among those actors, thus planning sequences of events, material and information flows. Furthermore the involvement of non technical actors, such as customers, implies that the activity of service design be analyzed not only from a functional perspective (with the aim of optimizing flows and resources and reducing time of operations) but also from the emotional perspective (creating meaningful events, motivating customers, communicating the service). Because of those considerations service design became the focus of studies and research in the discipline of design, initially as part of the activities related to web design and Interaction Design, and later as an autonomous professional and research area. Service Delivery: Positioning involves both launching new brands into the marketplace (new brand positioning), and repositioning old brands. It is concerned with the differentiation of products and service and ensuring that they do not degenerate into a commodity. To maximize its potential, a company should position itself in its core market segments, whether it is objective or subjective, differentiated in a positive way over competing offerings. Positioning is particularly importance for services in the market. As a result of competitive pressure, the huge offering of services within each market sector is increasingly confusing the customer. These offerings are communicated by a vast number of advertising messages promoting different features of the services. The key to a successful positioning strategy is to promote the feature, which the company is best at, and which exactly matches the needs of the customer. Because of intangibility and other features associated with services, consumers find that differentiation of services can be more difficult and complex. Successful positioning makes it easier for the customer to see a company services as being different from others and exactly what is wanted. Positioning is a strategic marketing tool, which manages to determine what their position is now, what they wish it to be and what actions are needed to attain it. It permits market opportunities to be identified, by considering positions, which are not met by competitors products. It therefore, helps influence both product development and the redesign of existing products. It also allows consideration of competitors possible moves and responses so that appropriate action can be taken. The concept is often considered at the product level although it is also relevant at the market segment, the reason for buying your services and thus underlines the whole marketing strategy. It also offers guidelines for development of a marketing mix with each element of it being consistent with the positioning.

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Q.4 Construct a service gap for an imaginary service based company assuming that there are several gaps found in its functioning.
Ans.: Suppose there are five gaps: 1. Consumer expectation management perception gap. 2. Management perception service quality expectation gap. 3. Service quality specifications service delivery gap. 4. Service delivery external communications to consumers gap. 5. Expected service perceived service gap. Gap 5 is the service quality shortfall as seen by the customers, and gaps 1-4 are shortfalls within the service organization. Thus gaps 1-4 contribute to gap 5. These gaps are given in the following figure.

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Q. 5. Examine the recent issues in services marketing.

Ans: Recent issues in marketing: Service Marketing Management There are a number of marketing managements that have special significance for services marketing. It is worth commenting on some of those aspects, as they are important in developing an awareness of problems and key issues in services marketing. Productivity and Quality In striving to gain and maintain competitive advantage, both productivity and quality are of key importance. However, the nature of services implies that it is difficult to avoid a trade-off situation, when improvements in service productivity can lead to sacrifices in the level of quality. This is most sensitive in productivity and can lead to sacrifices in the level of quality. This is most sensitive also in services marketing where people are the service delivers. If a bank cashier or travel agent needs to process customers more quickly to improve productivity, how can organizations ensure that is no resulting drop in quality? Service quality is measured on two levels: Technical Quality the overall efficiency with which a bank handles its customer accounts in terms of prompt statements, rates of interest offered and so on. Functional Quality the way the service is actually delivered; this includes personal courtesy, the service environment in terms of comfort and dcor, and the customers own role. The importance, which is attached to functional and technical quality, depends on the type of service, and the benefit sought by the consumer. Services Marketing Triangle A useful way to conceptualize the questions and decisions that need to be made is presented in the services marketing triangle. Company (Management)

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The triangle suggests that there are three types of marketing that must be successfully carried out in a service organization to succeed, and that all of them revolve around making and keeping promises to customers. On the right side of the triangle are the external marketing efforts that the firm engages in, to set up its customers expectations and make promises to customers regarding what is to be delivered. Anything that communicates to the customers before service delivery can be viewed as part of this external marketing function. In service firms, there are many factors that communicate to customers beyond the traditional elements of advertising, special promotions, sales, and public relations, for example, the firms personnel and the physical facilities themselves. On the bottom of the triangle is what has been termed interactive marketing, or what some refer to as real-time marketing. Here the actual service delivery takes place-the firms employees interact directly with customers. It is at this point that the promise is delivered or not delivered. Having a positive link between what is promised through the external marketing in the world is useless if promises cannot be kept. The left side of the triangle suggests the critical role played by internal marketing, which enables employees to keep the promises that have been made to customers. Internal marketing refers to the activities the firm must carryout; to train, motivate, and reward its employees. Unless service employees are able and willing to deliver on the promises made, the firm will not be successful keeping its promises and the services marketing triangle will collapse. Internal marketing hinges on the assumption that employee satisfaction and customer satisfaction are inextricably linked. What the triangle implies is that all three sides are critical to successful services marketing and management. Without one of the sides in place in the triangle, the total marketing effort cannot be supported. Each side represents significant challenges for most service businesses, and as we proceed through the text we will find approaches and strategies for dealing with all three. 1) Marketing Implications Intangibility presents several marketing challenges. Services cannot be inventories, and therefore fluctuations in demand are often difficult to manage. For example, there is tremendous demand for resort accommodations in Simla/Ooty in May, but little demand in December. Yet resort owners have the same number of rooms to sell year-round. Services cannot be patented legally, and new service concepts can therefore be communicated to competitors. Services cannot be readily displayed or easily communicated to customers, so quality may be difficult for consumers to assess. Decisions about what to include in advertising and other promotional materials are challenging, as is pricing. The actual cost of a unit of service is hard to determine and the price/ quality relationship is complex. 2. Inseparability Services are created and consumed simultaneously and generally they cannot be separated from the provider of the service. The service provider customer interaction is a specialty of service marketing. Unlike the tangible goods, service cannot be distributed using conventional channels. Inseparability makes direct sales as the only possible channel of distribution and thus delimits the markets for the

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sellers services. This characteristic also limits the scale of operation of the service provider. For example, a doctor can give treatment to limited number of patients only in a day. This characteristic also emphasizes the importance of the quality provided to clients in services. This poses another management challenge to the service marketer. For example, an airline company may provide excellent fight service, but a discourteous onboard staff may keep the customer permanently off that company. There are exemptions also to the inseparability characteristic. A television coverage, travel agency or stock broker may represent and help marketing the service provided by another service firm. Marketing Implications Because services often are produced and consumed at the same time, mass production is difficult if not impossible. The quality of service and customer satisfaction will be highly dependent on what happens in real time, including actions of employees and the interactions between employees and customers. 3. Heterogeneity This characteristic is referred to as variability by Kotler. We have already seen that services cannot be standardized. They are highly variable depending upon the provider, the time and place where they are provided. A service provided on a particular occasion is somewhat different from the same service provided on other occasions. Also the standard of quality perceived by different consumers may differ accordingly. For example, the treatments given in a hospital to different persons on different occasions cannot similar. Consumers of services are aware of this variability and by their interaction with other consumers they also get influenced or influence others in the selection of service provider. Marketing Implications The services are heterogeneous across time, organizations, and people ensuring consistent service is fully controlled by the service supplier; such as the ability of the consumer to articulate his or her needs, the ability and willingness of personnel to satisfy those needs, the presence (or absence) of other customers, and the level of demand for the services. 4. Perishability and Fluctuating Demand Perishability refers to the fact that a seat in an airplane or in a restaurant, an hour of a lawyers time, or telephone line capacity not used cannot be reclaimed and used or resold at a later time. This is in contrast to goods that can be in inventory or resold another day, or even returned if the consumer is unhappy. Marketing Implications A primary issue that marketers face in relation to service perishability is the inability to inventory. Demand forecasting and creative planning for capacity utilization is therefore important in challenging the decision areas. The fact that services cannot typically be returned or resold also implies a need for strong recovery strategies when things do go wrong. For example, while a bad haircut cannot be returned, the hairdresser

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can and should have strategies for recovering the customers goodwill if and when such a problem occurs.

Q. 6 Duress Components Ltd. wants to use technology in its CRM system. Kindly help the company with suitable suggestions.
Ans.: Developing technology for CRM: A service company should focus especially on customer service and keep customer satisfaction levels under constant review. Usually there is a need for a complaint system, which allows unhappy customers to be identified, and corrective action taken. Above all else, a service company needs to stay in touch with the changing needs of the customers in terms of customer service. Channels A channel, according to the American Marketing Association, is the structure of intra company organization units and extra company agents and dealers wholesale and retail, through which a commodity, product or service is marked. It includes all the stages and organizations through which a product passes between its points of production and consumption. In the process, three participants, viz., the service provider, intermediaries and customers are involved. The principal function of a distribution channel is to provide a link between the production and consumption by filling away the gaps/discontinuities existing. The discontinuities mentioned above may arise from a number of causes/some of them are: 1) Geographic separation 2) Time (in services fluctuations in supply and demand are generally unlikely and so this factor may not have much relevance), 3) Information, 4) Ownership (this also has little importance in services as transfer of legal title to ownership rarely occurs), 5) Sorting. A channel may be simple when there is a single, direct transaction between producers and consumers. This form of distribution is common in some service sectors (e.g. professional services). When there is a concentrated production and the consumers are widely diffused, different channels develop and coexist with a variety of intermediaries such as advertising agencies which act as brokers for a number of related services including media buying, print and production. Travel agents act as middlemen for airlines, hotels and leisure services. A recruitment agency provides a service as intermediary between employer and employee. The broad channel options for services are outlined in the following figure and include: Direct sales e.g. accounting and management consulting services. Agent or broker, insurance broker, estate agent and travel agent. Sellers and buyers agents or brokers, e.g. stockbrokers and affinity groups. Franchises and contracted service deliverers e.g. fast food, car services and dry-cleaning.

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This illustrates that although many services are intangible and inseparable and direct sales may be the appropriate channel, services can be distributed by considerable number of other channel options. In financial services sector range of distribution options are being used. These include the following. Direct face-to-face sales Use of tied or untied sales representatives Direct mail Telemarketing Computer networked distribution Professional service firms, e.g. estate agents and consultants Cable TV One approach to considering the channels is how they compare with those of the competitors, is suggested by Light. His framework has these main sectors: The channel participants and their relationship The various functions that participants perform using material and technological supports. The service they create. Location and Channel Choice The choice of both distribution and channels for service largely depends on the particular requirements of the market and the nature of the service itself. Technology has some instances, changed the advantage to be gained by proximity of a service to the customers market. For example, electronic banking has removed the need for banks to deliver their services. Many banking transactions can now be performed easily without personal contact. Technology has allowed changes in the location decision in many service industries, but the decision o where and how to distribute services is often still dependent on the needs of the customers. Services delivery channels are often the service providers. This highlights the importance of the selection of the appropriate delivery channel. CRM uses the electronic media to operate and simplify customer related business processes, reducing the cost of customer facing operations. While achieving the CRMs primary goal is to enhance the

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customer experience, it ensures that various companies share a single view of the customers, and that the customers get a single view of the company. CRM derives from CRM techniques, which leveraged call center and direct marketing technology to market mass-produced goods and services to small market sub-segments. CRM expands on this technology by using next generation segmentation and analysis technologies, comprehensive customer interaction data multi-channel communications and one-to-one interactions to market customized products and services to ever-more precise segments. CRM is essentially the adoption of CRM in the commerce environment and helps build and sustain customer relationships using the net. It is a net based business strategy that requires development of a set of integrated software applications to deal with all aspects of customer interactions like sales, marketing, field support and customer service. It provides closed loop integration between the outbound marketing efforts and the inbound customer responses to these, by analyzing them for efficient business operations. Thus, a CRM exercise would mainly focused upon acquiring new customers, enhancing profitability of existing customers, segment high value customers and maximize lifetime value of profitable customers. In simplest terms CRM provides companies with a means to conduct interactive, personalized and relevant communications with customers across both electronic and traditional channels. It utilizes a complete view of the customer to make decisions about messaging, offers and channel delivery. It synchronizes communications across otherwise disjoint customer-facing systems. It adheres to permission-based practices respecting individuals preferences regarding how and whether they wish to communicate with you and it focuses on understanding how the economics of customer relationships affect the business. Thus precisely, CRM is customer centric on-line business model that optimizes the customer experience across all phases of the on-line customer life-style, using a personalized and customized approach to interact with prospects and customers.

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