Services Marketing

? e service sector
› ? e services sector as been growing at a
rate of 8% per annum in recent years
› More t an alf of our GDP is accounted for
from t e services sector
› ? is sector dominates wit t e best jobs,
best talent and best incomes
 „? ere are no suc t ing as
service industries.? ere are only
industries w ose service
components are greater or less
t an t ose of ot er industries.
Everybody is in service.´

-? eodore Levitt-
 at is services?

It is t e part of t e product or t e full

product for w ic t e customer is
willing to see value and pay for it.
 at is a service?
› It is intangible.
› It does not result in owners ip.
› It may or may not be attac ed wit a
p ysical product
Difference between p ysical
goods and services
R

  

tangible intangible

omogeneous eterogeneous

Production and distribution are Production, distribution and

separated from consumption consumption are simultaneous
processes
A t ing An activity or process

Core value processed in factory Core value produced in t e buyer-seller

interaction
Customers do not participate in t e Customers participate in production
production process
Can be kept in stock Cannot be kept in stock

?ransfer of owners ip No transfer of owners ip

 Most products ave a service
component
? ey could be
› Equipment based
› People based ± varying skill levels
 Services could meet
› Personal needs ± aircuts, tution, massage
parlours
› Business needs ± courier services, office
cleaning services, delivering fres flowers
C aracteristics of services
› Intangibility
› Inseparability
› Peris ability
› Variability
? e t ree additional µP¶s of
Service Marketing
› People
› P ysical evidence
› Process
4ualities of services
› Searc qualities
› Experience qualities
› Credence qualities
Differentiation in services
› Offering
› Faster and better delivery
› Image
Managing Service quality
› Gap between management perceptions and
consumer expectations
› Gap between management perceptions and
service quality specifications
› Gap between service quality specifications and
service delivery
› Gap between service delivery and external
communication
› Gap between expected service and perceived
service
Determinants of service quality
› Reliability ± delivering on promises
› Responsiveness ± willing to elp
› Assurance ± inspiring trust and confidence
› Empat y ± individualising customers
› ?angibles- p ysical representation
 Moments of trut
› It is t e customer ± service encounter
› Every positive or negative experience of
t e consumer would ave fall-out on t e
overall service experience
 In services, t e last experience
remains uppermost in your mind.
? erefore, it is not enoug to be
good, you ave to be consistently
good
 Services Monitoring
› Continuous auditing of competitor service
levels versus own company
› Importance - performance analysis
 Importance ± Performance
Analysis
I
M
P
Concentrate Keep up t e
O ere good work
R
?
A
C Low priority Possible overkill
E

PERF OR MANCE
Service quality is directly
proportional to employee
satisfaction
  en customers visit a service
establis ment
? eir satisfaction will be influenced by
› Encounters wit service personnel
› Appearance and features of service
facilities ± exterior and interior
› Interactions wit self service equipment
› C aracteristics and be aviour of ot er
customers
 Customer Service Expectations
› Desired Service ± t e µwis ed for¶ service
› Adequate Service ± t e service t at would
be acceptable
 Vone of ?olerance

Difference between t e desired

service and t e adequate service
 Service Encounter ? emes
› Recovery
› Adaptability
› Spontaneity
› Coping
 Recovery
Don¶t Do
› Ignore customer › Acknowledge
› Blame customer problem
› Leave customer to › Explain causes
fend for imself
› Apologise
› Downgrade
› Compensate/upgrade
› Act as if not ing is
wrong › Lay out options
› µpass t e buck¶ › ?ake responsibility
 Adaptability
Don¶t Do
› Promise and fail to › Recognise t e
keep t em seriousness
› S ow unwillingness › Acknowledge
to try
› Embarrass t e › Anticipate
customer › Accommodate
› Laug at t e customer › Adjust
› Avoid responsibility › Explain rules/policies
 Spontaneity
Don¶t Do
› Ex ibit impatience › ?ake time
› Yell/laug /swear › Be attentive
› Steal from customers › Anticipate needs
› Discriminate › Listen
› Ignore › Provide information
› S ow empat y
 Coping
Don¶t Do
› ?ake customer¶s › Listen
dissatisfaction › ?ry to accommodate
personally › Explain
› Let customer¶s › Let go of t e
dissatisfaction affect customer
ot ers
 ?ypes of complainers
› Passives
› Voicers
› Irates
› Activists
 Customer complaints
› It pays to resolve customer complaints
› On an average only 5 % dissatisfied customers
complain. Ot ers simply go over to t e
competitor
› A satisfied consumer speaks to an average of 3
people on is er experience
› A dissatisfied consumer gripes to on an average
11 persons about is/ er unpleasant experience
 Companies t at pay importance
to resolving customer complaints
› Pay attention to quality and training of manpower
recruited
› Have clear benc marks on service quality and
communicate to employees
› ?ake remedial steps to improve customer
satisfaction and prevent repeats of customer
dissatisfaction
› Have a data base on customer complaints t at is
periodically analysed and policies adjusted
Satisfied employees will produce
satisfied customers
› Morale
› Motivation
› Mood
 Managing Service Productivity
› Giving quality service is an expensive business
› Not every consumer is willing to pay extra for
service quality
› Service providers would ave to find t eir
optimum service quality/cost ratios
› Can tec nology substitute part of t e labour
content?
› Can customers substitute part of t e labour
content?
› Making services obsolete by product innovations