Services Marketing

Course Facilitator
Aziz Seyid Contact Campus Ext. : 412 Mobile: 9818341339 Ph: (0124) 4111356 EMAIL:

Course Outline
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Intro-features and characteristics Consumer Behaviour and STP Services Marketing Mix – 7P’s Service Quality and Demand Management Relationship Marketing Aligning Service Strategy to organization Understanding specific service industries.

Why study services marketing?
 Significantly different from goods

marketing  Relatively new discipline with a strong interdisciplinary base  importance of services sector
 70% - 80% GDP in highly dev.

economies  Service sector in India approx 50%

Transformation of the service economy
International Government -isation regulation • ‘Hollowing • Deregulation/ out’ effect privatisation • Increased • New trade services agreements in trade services • Global customers Social changes • Increased consumer expectations • Increased affluence and leisure time • Working women Advances in technology • Relaxation of • Convergence professional assn. of computers standards and • Marketing telecommuniemphasis by noncations profit • Miniaturisation organisations • Outsourcing • Digitalisation • Quality • Enhanced movement software • Franchising

Business trends

Increased demand and competition Facilitated by information technology Growth and focus on service marketing and management

services. acquisition. ideas. persons. events. places.What is a Product?  Anything that can be offered to a market for attention. . Includes: Goods. or consumption and that might satisfy a want or need. or some combination thereof. use. organizations.

.\Clips\service\interM1....\Clips\service\nyl_insurance_store.mpg S3.\Clips\service\HSBC-Soc.mpeg) (Gals).\Clips\cadbury's.mpg S2.\Clips\service\qantas.Goods Vs Services G1 G2 (Guys.mpg S1...wmv .\Clips\audi-quatro.mpeg S4.

processes.Valarie Zeithaml & Mary Jo Bitner . and performances”. benefits.What is a Service? “A form of product that consists of activities. or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. .” “Services are deeds.

“ Something that can be bought and sold but which cannot be dropped on your foot !” .

bed & breakfast. architectural  Financial Services  banking. dentistry. insurance  Hospitality  restaurant. investment advising. hotel/motel. legal. travel agencies. health club . rafting  Travel  airlines.Examples of Service Industries  Health Care  hospital. eye care  Professional Services  accounting.  ski resort. theme park  Others:  hair styling. medical practice. pest control. lawn maintenance. plumbing. counseling services.


Fed Ex Example Clip .\Clips\service\fedex..wmv .

” .which in Federal Express’ case consists of transporting packages overnight and delivering them next morning to the addressee. plus a cluster of supplementary services. consisting of the core product .The Nature of A Service “ The service product is essentially a bundle of activities.

The Nature of A Service The Example of Federal Express Advice and Communication Bill Statements Order Taking Supplies Overnight Transportation and Delivery of Packages Problem Solving Pick-up Documentation Tracking .

Characteristics of Services .


Tangibility of goods and services .

Implications of Intangibility Services cannot be inventoried Services cannot be patented Services cannot be readily displayed or communicated Pricing is difficult .

Product qualities affect ease of evaluation Furniture Clothing Computer repair Legal services Vacation Restaurant meals Medical surgery Motor vehicle Lawn Fertiliser High in search qualities High in experience qualities High in credence qualities Consultancy project Easy to evaluate Difficult to evaluate .

uniforms. membership cards.e.Strategies for intangibility  provide tangible evidence  symbolic cues (i. certificates)  reduce risk  emphasise reputation and qualifications  service guarantees  inform and educate customers .e. ticket. logos)  tangible cues (i.



Heterogeneity (Variable)  service quality varies across service encounters  service encounter is the interaction between service employee and customer  ‘moments of truth’  service people are central to service delivery  service is delivered in ‘real’ time .

Implications of Heterogeneity  Service delivery and customer satisfaction depend on employee actions  Service quality depends on many uncontrollable factors  There is no sure knowledge that the service delivered matches what was planned and promoted .

scripts  build quality into all processes .Strategies for Variability  customer surveys and feedback  training in interpersonal and technical skills  provide product knowledge  ensure back-stage systems support front line staff  use standardisation strategies  franchising.



Inseparable  simultaneous production and consumption  the service provider is the product  the customer is involved (partial employee)  other customers may be present .

Implications of Simultaneous Production and Consumption  Customers participate in and affect the transaction  Customers affect each other  Employees affect the service outcome  Decentralization may be essential  Mass production is difficult .

Strategies for inseparability  manage the service encounter  scripts and roles  front-line staff need both technical and    interpersonal skills (recruit & train)  educate the customer (provider –marketer) manage customer interactions manage the physical evidence develop customer service policies and service recovery procedures .


Perishable  services cannot be stored  need to manage supply and demand .


Implications of Perishability  It is difficult to synchronize supply and demand with services  Services cannot be returned or resold .

How can demand be managed?  accurate demand forecasting  develop off-peak and on-peak strategies  use reservation systems and differential pricing  employ part-time staff  extend hours of operation  Provide self-service options (i. ATMs. internet banking) .e.

Goods versus Services .

Mental Stimulus Processing 4. Possession Processing 3. People Processing 2. Information Processing . Involvement ( Lovelock) 1.Classification of Services Based on Degree Of Cust.

Four Categories of Services Based on the Process Used  People Processing Toward People  e. airlines.g. consulting. psychotherapy.g.g. education. hospitals. broadcasting  Information Processing  Intangible Acts Directed Toward Intangible Assets  e. financial services . accounting. hair stylists.g. banking. fitness centers  Possession Processing  Tangible Acts Directed Toward Possessions  e. repair services. house cleaning services  Tangible Acts Directed  Mental Stimulus Processing  Intangible Acts Directed Toward People  e. landscaping.

) Te le p h o n e B a n k in g R e ta il B a n k in g M o te l C a r R e p a ir In su r a n ce D r y C le a n in g Fa st F o o d M o v ie T h e a te r s C a b le T V P u b lic Tr a n s it H o m e B a n k in g M a il B a se d R e p a ir s Emphasizes encounters with equipment I n te r n e t.b a s e d S e r v ice s Low .S ta r G o o d A ir lin e H o m e Emphasizes encounters with service personnel H a ir C u t H o te l M a n a g e m e n t C o n s u ltin g R e s ta u r a n t T r a v e l (E c o n .Levels of Customer Contact with Service Organizations High N u r s in g 4 .

g. Professional & non professional  Business Orientation of service provider  Type of end user .Other Classification of Services  Degree of Tangibility e.g  Based on Skills and Expertise Required-e.

Services Marketing Mix .

Traditional Marketing Mix All elements within the control of the firm that communicate the firm’s capabilities and image to customers or that influence customer satisfaction with the firm’s product and services:  Product  Price  Place  Promotion .

Place & cyberTime space & time Product (service) Process Price Price Customers Customers Customers Promotion Physical evidence .An expanded marketing mix for services People Place.

People  All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely. customer service employees other customers . the firm’s personnel. the customer. and other customers in the service environment.

music etc.Physical Evidence  The environment in which the service is delivered and where the firm and customer interact. •equipment •facilities •uniforms . •atmosphere décor. and any tangible components that facilitate performance or communication of the service.

mechanisms.Process  The actual procedures. service delivery systems •back stage •front stage procedures policies . and flow of activities by which the service is delivered—the service delivery and operating systems.

Expanded Marketing Mix for Services .

Expanded Marketing Mix for Services PEOPLE Employees Customers Communicating culture and values Employee research PHYSICAL EVIDENCE Facility design Equipment Signage Employee dress Other tangibles PROCESS Flow of activities Number of steps Level of customer involvement .

The Services Marketing Triangle Company (Management) Internal Marketing “enabling the promise” External Marketing “setting the promise” Employees Interactive Marketing “delivering the promise” Customers .

Services Marketing Triangle Overall Strategic Assessment • How is the service Specific Service Implementation • What is being promoted and Ways to Use the by whom? by whom? organization doing on all three sides of the triangle? weaknesses? strengths? • How will it be delivered and • Are the supporting systems • Where are the • What are the in place to deliver the promised service? .

Marketing Analysis Framework Customers Market Intelligence Competitors 3 C’s 3 C’s Company S (Segment) Product Price (Target) T P (Position) Promotion Place 4 P’s 4 P’s .

operations and human resource efforts  Setting prices  Standardization versus personalization .Challenges for Services  Defining and improving quality  Communicating and testing new services  Communicating and maintaining a consistent image  Motivating and sustaining employee commitment  Coordinating marketing.

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