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An activity / performance given by a service provider to a service User to solve his problem and give satisfaction and at the same Time help the company to achieve its commercial and financial Objectives. A service product is mostly intangible in nature and the purchase Of a service product does not result in ownership by the user. A Service is not a thing E.G: Renting a room Transportation by any mode Seeing a movie Getting advice from a doctor / lawyer Education Banking services Buying insurance Hiring a taxi Performance by an actor / artist
MAJOR BUSINESS OBJECTIVES ( VIA CS/CD )
Sales (volume, value) Market share Growth rate Ranking Retaining existing and Developing new customers
Profit Return on investment (RoI)
WHAT? National wealth (GDP) creating activities CLASSIFICATION OF EA’s PRIMARY EA’s Agriculture, forestry, mining& fishing SECONDARY EA’s Manufacturing & construction TERTIARY EA’s Services
SECTORS OF ECONOMY
a) b) c) AGRICULTURE SECTOR, TREND MANUFACTURING AND CONSTRUCTION SECTOR, TREND SERVICES SECTOR, TREND
UNO CLASSIFICATION OF COUNTRIES
1. 2. 3. THREE BASES more developed countries (MDCS) less developed countries (LDCS) less least developed countries (LLDCS) TREND TOWARDS SERVICE ECONOMY IN MDCs.
best jobs.CHANGING TREND IN MDCs since the WW II. services sector 25%. agriculture sector 40%. fast growth rate 8%. c. EG: USA. manufacturing + construction sector 35%. we and JP. b. best talent future of services sector is bright. high income. PAKISTAN: a. . services sector of economy (all types of services) has grown fast in MDCs.
a) b) c) d) employment basis output basis expenditure on services role in export 3.PROBLEMS IN ASSESSING THE SIZE OF SERVICES SECTOR THREE PROBLEMS 1. 2. what is included / not included in services sector. different definition of a “service product”. different bases of measuring the size of services sector. poor quality of official / secondary data .
eas). more women work in services organizations better paid jobs. talent.FEATURES OF EMPLOYMENT IN SERVICES SECTOR more employment gender composition of workforce in services sector is changing. . b) most people are employed in services c) most expenditure is on services and d) export of services plays an important role. and careers (ba. it) more part-time workers SERVICE ECONOMY AN ECONOMY IN WHICH: a) a greater portion of the national wealth(GDP) is created by the services sector of economy (t.
2. 4. output of wealth employment consumer expenditure role of services in export trade . 3.CRITERIA USED TO JUDGE THE IMPORTANCE OF SERVICES IN THE ECONOMY 1.
advertising. labor productivity = output per employee why low productivity in services? a) decline in hours worked per person b) less/poorly trained manpower in services sector c) less/ slow use of technology in services. legal. research. 4) DEREGULATION AND PRIVATIZATION OF SERVICES BUSINESS (BIA.REASONS FOR THE GROWTH OF SERVICES IN ECONOMY 1) low labor productivity in services which has led to shift in employment. training services etc. COM etc) . insurance. 2) OVERALL GROWTH OF DEMAND FOR SERVICES FROM COMPANIES financial. has not benefited from EOS.
training institutions. EG: MRAS.people have turned to services expenditure b) life expectancy is increasing c) life is becoming complex d) more complex products 6) GROWTH OF DEMAND FROM CERTAIN PROFESSIONS 7) GLOBALIZATION OF BUSINESS 8) GROWTH OF GOVERNMENT SIZE . janitorial services COS etc. are being outsourced today. the lifestyle is changing . ADAS.transfer of certain kinds of household jobs to others . COS can now hire many types of services without owning them at less cost. SERVICES COs HAVE BEEN SET-UP. WHY? a) society is getting wealthier. THUS. 5) GROWTH OF DEMAND FOR SERVICES FROM CONSUMERS. engineering maintenance COS.3) OUTSOURCING OF BUSINESS SERVICES business services previously carried-out by the COS themselves. transport & food providers. thus.
GLOBALIZATION OF BUSINESSES INCREASED DEMAND FOR : COMMUNICATION SERVICES TRAVEL SERVICES INFORMATION SERVICES LEGAL SERVICES HOSPITALITY SERVICES .
REASONS FOR INCREASE IN SERVICES EXPENDITURE AND NEEDED SERVICES REASONS want more leisure time more working women increased life expectancy complexity of products complexity of life SERVICES NEEDED travel. internet etc. old-age hostels skilled labour / mechanics for maintenance and repair professional / consultants & advisers. adult educational centers increase in new products / technologies need for new services EG: computers. female servants health-care services. TVS. . hotels. day-care nurseries. fax.
SERVICES DEVELOPED DURING THE LAST 30 YEARS (A) CONSUMER SERVICES (B) BUSINESS SERVICES 1) day-care nurseries 1) contract maintenance 2) mobile phone services. ATM 2) consultant firms services 3) warehousing 3) TV/COMPUTER/FAX equipment 4) MRAS. 4) professionals/ consultants and 6) franchising services advisers 7) janitorial services 5) car rental services 8) office transport and food 6) travel agencies services 7) adult education centers 8) credit card services 9) physical fitness centers 10) beauty parlors 11) consumer leasing cos. . 5) contract r and d services. ADAS. repair services.
HISTORICAL CHANGES IN UNDERSTANDING A SERVICE PRODUCT .
J. ii. say rejected ADAM smith’s views. WHLS. RETS. iii. which satisfy customers’ needs. ALFRED marshal useful and need satisfying activities which get destroyed at the moment of their creation.B. different researchers business activities which do not change the physical form of a good but which are needed in moving products from the manufacturer to the end users. EG. accepted that services are useful activities. LATER ON: i. HOW HAS THE DEFINITION OF THE TERM “SERVICE”CHANGED OVER YEARS? EARLIER DAYS: ADAM SMITH services are barren and unproductive activities which perish instantly. ECT . are productive and add wealth to a nation. do not add wealth to a nation.
CHARACTERISTICS OF SERVICES 1) 2) 3) 4) 5) INTANGIBILITY PERISHABILITY INSEPARABILITY HETROGENEITY / VARIABILITY / INCONSISTANCY NO OWNERSHIP BY THE USER distinguish them from goods these characteristics create both challenges and opportunities in the marketing of services and affect their mmix .
reliability present customers physical environment facilitating equipment price processes methods used in creating and delivering services .HOW PEOPLE JUDGE QUALITY OF A SERVICE PRODUCT 1) 2) 3) 4) 5) 6) reputation of the service provider.
displayed. provider PROBLEMS CREATED: cannot be packaged. opinion about their quality can be obtained from others. . however. therefore.before purchase. patented. difficult to judge their quality before hand. makes choice difficult etc.INTANGIBILITY five senses what? cannot be seen. demonstrated. sampled. buyers have faith in the s. ------------.
plastic surgery: make drawings after the service has been applied . e.STRATEGIES TO OVERCOME PROBLEMS CREATED BY INTANGIBILITY a) show visuals of the benefits of a service product in promotional campaigns so that customers can see and judge quality before purchase.g. airlines: show a traveler enjoying legroom educational institutional: show learning environment in a class room hotel: show a decorated hotel room. a restaurant.
c) provide tangible “clues "which enable him to judge quality. .b) create a strong organization image. f) adopt post purchase communication. d) stimulate “WOM communication" to overcome “display problem” e) use brand names to overcome “patent problem”.
most services also consist of some tangible elements EG: air travel. tangibility is relevant to many services . nursing etc.HOW RELEVANT IN TANGIBILITY IN SERVICES? although intangibility is a key characteristic of services but very few services are purely intangible EG: teaching. banking. telecommunication etc. thus.
delivered and consumed at the same time. therefore. cannot be stored. if not used at the time a service is produced. loss of revenue PROBLEMS CREATED since services cannot be stored. therefore. 1) public transport 2) hotel rooms (holiday places) 3) telephone service . it gets destroyed for ever.PERISHABILITY what ? produced. • e. cannot be produced before hand and since their demand fluctuates too often.g. cannot be produced before hand. planning their demand and supply is relatively difficult.
. day / night* intermittent promotion. introduce a new product during idle time introduce reservation system *short term steps. habitual b) supply side use part-time employees temporary increase in equipment introduce self-service in stores.STRATEGIES TO OVERCOME PROBLEMS CREATED BY PERISHABILITY a) demand side offer flexible / differential pricing strategy at different times of the year. not continuous offer group discount* organize special shows. days of the week.
what? INSEPARABILITY cannot be separated from service provider or the source and often from the service user PROBLEMS CREATED 1) requires the presence of the service provider and the service user mostly produced. some services can be delivered electronically. quality depends on both service provider and service user. encounter points. mass production not possible 3) affects quality. professional and entertainment services are needed from a specific service provider. delivered and consumed at the same time. EAS). lot of interaction and customers’ participation. 2) limits the scale of operation. 4) direct sales is the main channel of distribution (except TAS. . this is an opportunity.
STRATEGIES TO OVERCOME PROBLEMS CREATED BY INSEPARABILITY 1) 2) 3) 4) 5) WORK IN LARGE GROUPS WORK FAST TRAIN MORE SERVICE PROVIDERS USE AUTOMATED MACHINES USE MULTISITE LOCATIONS .
HETROGENEITY / VARIABILITY / INCONSISTANCY what? each unit of service may differ in quality. when. examples doctors (who. where) PIA (different flights) franchise operations bank branches quality depends upon: a) service provider b) customer(s) c) when provided d) where provided e) facilitating equipment f) process of creating and delivering a service product 1) 2) variation in quality difficult to standardize quality PROBLEMS CREATED . customers are aware of it.
production and delivery processes 2) standardize physical environment / timing 3) constant training of s. 1) standardize service creation. providers 4) mechanize services 5) monitor CS periodically 6) standardize customers specifications .STRATEGIES TO OVERCOME PROBLEMS CREATED BY HETROGENEITY DIFFICULT TO STANDARDIZE EACH UNIT OF SERVICE.
payment is made for using the service / facility. PROBLEM CREATED some time no evidence of purchase and use STRATEGY TO OVER COME PROBLEM provide a physical clue . no transfer of ownership title.NO OWNERSHIP does not become owner. can use the service / facility.
EASILY COPIED PERISHABILITY CANNOT STORE MAKES PLANNING OF SUPPLY AND DEMAND DIFFICULT INSEPARABILITY REQUIRES THE PRESENCE OF S.MARKETING DIFFICULTIES / CHALLENGES WHICH ARISE DUE TO CHARACTERISTICS OF SERVICES CHARACTERISTIC INTANGIBILITY DIFFICULTIES / CHALLENGES CANNOT SAMPLE. PROVIDER & ALSO OFTEN OF THE CUSTOMER(S) MOSTLY SOLD DIRECTLY LIMITED SCALE OF OPERATION EACH UNIT OF SERVICE MAY DIFFER. DISPLAY & PACKAGE CANNOT JUDGE QUALITY BEFORE HAND MAKES PRICING DIFFICULT CANNOT BE PATENTED. DIFFICULT TO STANDARDIZE QUALITY NO EVIDENCE OF PURCHASE AND USE HETROGENITY NO OWNERSHIP . DEMONSTRATE.
SSP few products are either pure tangible or intangible most products are combination of both tangible and intangible elements.FRAMEWORKS TO HELP UNDERSTAND SERVICES AND PHYSICAL PRODUCTS PSS. EG: restaurants: CS comes from both food and the services given. courtesy. convenience etc. . environment. speed. customer satisfaction comes from both tangible and intangible elements of a product.
GOODS-SERVICES CONTINUUM MODEL
a model, which based on tangible and intangible elements, shows the range of products offered from pure tangibles to pure intangibles, for CS, in the market.
DEG OF INTANG. Es
DEG OF TANG. Es
BALANCE BETWEEN TANGIBLE AND INTANGIBLE ELEMENTS
FIVE CATEGORIES OF PRUDUCTS BASED ON G-S CONTINUUM
pure tangible products no PSS / accompanying services tangible products + PSS pure intangible service products service product + SSP accompanying minor tangible products tangible product + service product, in the same ratio. hybrid
SHOSTACK’S MOLECULAR MODEL OF A PRODUCT
this model suggests to think of a product as a molecule ,having tangible and intangible elements. based on whether the dominant elements are tangible or intangible, this model helps to visualize both a service product and a tangible product.
A. SERVICE PRODUCT
B. TANGIBLE / PHYSICAL PRODUCT
the molecule, including the nucleus of a S.PRODUCT, is dominated by intangible elements, no ownership of the source which produces the service.
the molecule, including the nucleus, is dominated by tangible elements. ownership of the physical product.
SHOSTACKS MOLECULAR MODEL OF A PRODUCT
KEY ELEMENTS OF A PRODUCT = TANGIBLE ELEMENTS = INTANGIBLE ELEMENTS
FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICES SERVICES cannot be felt before purchase. men .. PHYSICAL PRODUCTS can be……. rarely middleman is needed. short d. show lack of use of packaging difficult to sample / demonstrate / display patent not possible difficult to judge price & quality before hand requires presence of service provider simultaneous production & consumption direct sale. mostly in a package can be easily sampled / displayed patient is possible can judge not necessarily at different times mostly sold via m. channel if at all needed.
inventory not possible. easy to match can be owned a thing . when & where provided) cannot be stored. limited scale of operation. absence of mass production precise standardization of quality is difficult (who. can produced before hand less often. cannot produce before hand demand fluctuation is often & difficult to even-out cannot be owned an activity mass production possible can be stored.
SECTORS OF SERVICE PORVIDERS .CLASSIFICATION OF SERVICES.
rendered by skilled labour iii.CLASSIFICATION OF SERVICES no strict bases of classification.BASED SERVICES . equipment operated by professionals or skilled people iii. different authors have used different bases A. rendered by unskilled labour i. i. equipment operated by unskilled people EQUIPMENT. rendered by professionals / consultants ii. BASIC SOURCE OF SERVICE 1) PEOPLE-BASED SERVICES 2. automated equipment ii.
consumer shopping services quality – price comparison iii. time spent and frequency i. customer's presence necessary or not 2. provider iv. . consumer specialty services strong liking for a s. consumer services or business / industrial services shopping habit how a buyer purchases a service in terms of efforts. buyer related bases 1. buyer’s purchase motive 1. consumer convenience services frequently used. consumer unsought services 3. widely available ii. low price.B.
provincial and local government – business sector services – private non profit sector services FUNCTION PERFORMED BY SERVICES – communication. SECTOR WHICH PROVIDES THE SERVICE – Govt. SELLER RELATED BASES i. D. . educational. transportation.C. S. health services etc. financial. PROVIDER’S MOTIVE – profit (business services) – not-profit (charity services) ii. sector services federal.
CHARACTERISTICS OF VARIOUS TYPES OF CONSUMER SERVICES CHARACTERISTICS C. SPECIALITY SERVICES (MEDICAL ADVICE) CONSIDERABLE TIME & EFFORTS SPENT S. PROVIDERS PREFERENCE PRIOR PLANNING FOR PURCHASE PRICE LEVEL NO / LITTLE STRONG VERY STRONG NO / LITTLE YES YES LOW HIGH HIGH PRICE QUALITY COMPARISON PURCHASE FREQUENCY NO YES NO FREQUENTLY INFREQUENTLY INFREQUENTLY . CONVENIENCE SERVICES (TAXI) VERY LITTLE C. SHOPPING SERVICES (AIR TRAVEL) SOMEWHAT C.
tourism . professional and consultant services 8. recreation and leisure services 7. 2. banking and insurance services 4.SERVICE PRODUCT CATEGORIES 1. hotels & estate agents services 5. public administration and defense services 10. educational services 11. personal/health-care services 6. transportation and communication services. distribution services 9. ecology services 13. Utility services needed for household operations 3. rental and housing. construction and engineering services 12.
transportation companies.SECTORS OF SERVICE PROVIDERS (1) GOVERNMENT SECTOR SERVICE PROVIDERS. educational institutions. real estate agents. Pakistan railway. educational institutions. hospitals. security agencies. post office. (2) BUSINESS SECTOR SERVICE PROVIDERS banks. (3) PRIVATE NON-PROFIT SECTOR SERVICE PROVIDERS charity organizations. PTCL. hospitals. educational institutions. . courts. motion pictures . hospitals. insurance company.
MARKETING AND TYPES OF MARKETING IN A SERVICE COMPANY .
it started in 1975 when: a) marketing people moved from manufacturing companies to services companies b) development of services marketing literature c) teaching of services marketing Pakistan 1995 basically services are marketed in the same manner as the goods. . services marketing mix consists of 7 variable elements and not 4 ii. marketing of services is somewhat different and difficult. concepts.MARKETING OF SERVICES INTRODUCTION order of adoption of marketing marketing is less developed in services businesses. for example i. product differentiation is short lived. however. much more customer / employee interaction iii. patent protection is impossible due to intangibility. processes etc are same. principles. due to some characteristics of services. thus.
CHARITY ORGANIZATIONS . hotels).ORDER OF ADOPTION OF MARKETING A. IN THE BUSINESS SECTOR 1) consumer nondurable goods manufacturing companies 2) consumer durable goods manufacturing companies 3) industrial equipment and RMS manufacturing companies 4) consumer services companies (BIA. B.
. decisions in all departments are customer focused. isolated function. coordinated function not so in marketing management. CS the is responsibility of the marketing department only.DIFFERENCE BETWEEN THE MARKETING CONCEPT AND MARKETING MANAGEMENT TWO VIEWS ABOUT MARKETING a) MARKETING CONCEPT b) MARKETING MANAGEMENT everybody is customer focused.
win and retain sufficient number of satisfied customers. .PURPOSE OF BUSINESS to continuously create. to achieve it. profitably. a company needs to use the marketing concept.
should keep increasing internal marketing interactive marketing 3) 4) 5) 6) 7) . m. coordination at two levels: a) within the marketing department b) between marketing and all other departments. CS level (h. how accurately the needs of tm customers have been identified external marketing.CRITERIA TO ASSESS HOW CUSTOMER ORIENTED A COMPANY IS ? 1) 2) attitude and behavior of everybody towards the customers. whether or not key managers are in contact with customers. l).
. 1) DHL 2) CITIBANK 3) MARRIOTT HOTELS 4) SINGAPORE AIRLINE comply with criteria of a marketoriented company. NOT MARKET.EXAMPLES OF MARKET-ORIENTED OR NOT MARKET-ORIENTED SERVICE ORGANIZATIONS. MARKET.ORIENTED COMPANIES 1) PTCL 2) KESC 3) NBP do not comply with criteria of a market-oriented company.ORIENTED COMPANIES.
stating in everybody’s job description how his / her job affects cs. B.STEPS NEEDED TO IMPLEMENT THE MARKETING CONCEPT A. C. customeroriented culture. . if they don’t do so. ROLE OF TOP MANAGEMENT 1) be first to change to “customer focused” attitude and behavior. role model. 3) promote market-oriented executives in all departments. TRAINING IN CUSTOMERORIENTATION AND BASIC MARKETING to create “customer focused attitude and behavior” in everybody. 2) set objectives and incentives which are customer-focused. others will not do so.
WHEN MARKET-ORIENTATION MAY BE INAPPROPRIATE prevention by law professionally marketing is considered unethical in times of scarcity .
STATUS OF MARKETING IN SERVICES COMPANIES .
they are not trained in marketing. such businesses do not need marketing 4) demand is greater than supply. 5) prevented by law. 5) some services COS have monopoly or no / little competition. a) TWO CONFLICTING VIEWS marketing is less used / developed in services REASONS 1) problems created due to specific characteristics of services. 6) poor quality of management personnel in some services cos. therefore. . 7) overall lack of availability of “marketing know-how” about services marketing. 2) opposition to marketing from some professions 3) many services organizations are small and in direct contact with customers.
development of services marketing know-how and teaching services marketing in business schools . EG: BIA. are successfully fighting competition. products. EG: credit cards. have successfully introduced new s. hotels. movement of marketing personnel from manufacturing businesses to services cos. new insurance policies. consumer financing schemes.. car rental COS etc. different educational courses etc. removal of legal / professional barriers.b) SERVICES COMPANIES USE / HAVE DEVELOPED MARKETING REASONS 1) 2) 3) 4) 5) 6) positive change in attitude towards marketing in services COS during the last 30 years.
. less spread and poorly structured but it is developing.STATUS OF MARKETING IN SERVICES COMPANIES CONCLUSION use of marketing in services COS is slow.
actual delivery of service takes place during interactive marketing 3) . create ability. develop.THREE TYPES OF MARKETING IN A SERVICE COMPANY 1) 2) EXTERNAL MARKETING find needs of tm and make an appropriate m-mix to serve / satisfy the customers. train. willingness and job matching personality INTERACTIVE MARKETING teach customers’ serving skills (touch skills) such as courteously. gracefulness etc.win and retain them INTERNAL MARKETING select. motivate and compensate employees to serve customers well. concern. coach.
THREE TYPES OF MARKETING IN A SERVICE COMPANY COMPANY INTERNAL MARKETING EXTERNAL MARKETING EMPLOYEES INTERACTIVE MARKETING CUSTOMERS .
MARKETING-MIX IN SERVICES AND MARKETING STRATEGIES .
. according to their tm. in the most efficient way. changing one element of marketing mix. affects the other elements. determined by keeping in mind the marketing environment and the tm.mix. to achieve company’s commercial and financial objectives. via customer satisfaction different companies choose different marketing.MARKETING-MIX IN SERVICES BUSINESS WHAT marketing-mix means a combination of seven variable and controllable elements of marketing.
EXTERNAL UNCONTROLLABLE FACTORS WHICH MAKE THE MARKETING ENIRONMENT a) b) c) political/legal factors economic factors cultural/social factors demographic factors geographic factors technological factors competitive factors influence CB. all companies not knowing the m e is like a bird without FEATHERS(SAADI) it is useless to tell a river to stop running. best is to learn swimming in the direction it is flowing (Chinese proverb) . m-mix.
MARKETING-MIX IN SERVICES BUSINESS seven elements 4 traditional + 3 new ones ignoring any of them can lead to failure. people and physical environment/ evidence to judge the quality of a service product. . customers heavily rely on price.
service provider b) people who receive the service. need for quality service also necessitates inclusion of physical environment and physical evidence .REASONS FOR EXPANDING M-MIX FOR SERVICES 1. other customers 4. heterogeneity characteristic necessitates inclusion of processes 3. inseparability characteristic necessitates inclusion of people. traditional m-mix not sufficient to make customers buy and satisfy them 2. The customer. a) people who create and deliver the service.
intangibility characteristic of services makes consumer’s choice of different competing products difficult. planning supply and demand of services is difficult heterogeneity makes ensuring of uniform quality difficult.WHY MARKETING STRATEGIES FORMULATION IS DIFFICULT IN SERVICES UNIQUE CHARACTERISTICS OF SERVICES : unlike goods. perishability makes storage of services impossible. inseparability makes marketing strategy of services localized. opinion can be obtained from others. . relatively difficult to sell services on nationwide basis. thus.
CUSTOMER SATISFACTION (CS) .
and which makes a customer re-purchase the product. they should be the goal of marketing and also they should be used as a tool in promotion. .CUSTOMER SATISFACTION (CS) WHAT IS CS? a feeling of pleasure created in the mind of a customer. on use. when the actual product or brand performance matches with the buyer’s expected product performance. satisfied customers are an appreciating asset.
IT IS THE BYPRODUCT AND REWARD OF CUSTOMER SATISFACTION. .SALES AND PROFIT IS NOT THE OBJECTIVE OF MARKETING.
HIGHLY SATISIFIED OR DELIGHTED CUSTOMERS APP > THAN EPP show high loyalty towards the product or brand due to both emotional and rational affinity.LEVEL OR DEGREE OF CS 1) JUST SATISFIED CUSTOMERS APP = EPP show loyalty towards the product or brand and they may repeat purchase. DIS-SATISFIED CUSTOMERS APP IS <THAN EPP customer switches to another product or brand 2) 3) . they will repeat purchase.
BENEFITS OF CS A SATISFIED CUSTOMER buys again talks favorably to others. pays less attention to competing brands and to their promotion. makes easy to increase price by a reasonable margin. buys other products of the same company. .
ROI. DIVIDEND (FINANCIAL OBJECTIVES) .CHAIN OF EVENTS RESULTING FROM CV AND CS CV FIRST TIME PURCHASE APP MATCHES / EXCEEDS EPP BRAND LOYALTY REPEATS PURCHASE INCREASE IN SALES AND MS (COMMERCIAL OBJECTIVES) EOS (TOTAL UNIT COST REDUCES) INCREASE IN PROFIT.
. toll-free telephone number. on using the product. hospitals etc .often used by restaurants. think won’t do any good . .METHODS OF TRACKING CS track both own and major competitors’ CS level FOUR METHODS: 1) complaint and suggestion system .switch if not satisfied. . airlines.through a form. e-mail etc.less than 5% customers complain / give suggestions. fax. petrol stations. the company motivates customers to give feedback (likes / dislikes). hotels. .not a good method.
3) 4) lost customer analysis and interview with ex-customers a) the company monitors trend in customer loss rate and b) interviews ex-customers .the company interviews customers in person. to get feedback on their level of CS.periodically. ghost or mystery shopping . . containing findings.2) customer satisfaction survey .shopping by a ghost shopper. his report. both on own and competitors’ brands. forms basis of CS level. . over telephone or mails a questionnaire to a random sample of tm customers. both of company’s and competitors’ products.a ghost shopper is a hired customer.
SERVICE PRODUCT a) b) c) d) e) f) product mix and product mix dimensions quality quantity branding reliability warranty .
PRODUCT may be a) consumer service product b) business service product c) people.based d) equipment-based to analyze and plan a service product in details. it is better to divide it into 5 levels. no amount of promotion or price advantage will be helpful if the S.PRODUCT is bad and does not conform to the customer’s requirements.THE SERVICE PRODUCT the first and the most important element of the m-mix in services. each level adds both: a) customer value(benefits) and b) cost . S.
equipment potential product level service delivery system .FIVE LEVELS OF A SERVICE PRODUCT consumer benefit concept or core product level cr del brn comp xs primary and additional benefit(s) sought co service concept or basic expected product level qlty fs service offer or augmented product level f.
PRODUCT. benefits should be central or the main focus in designing a hotel room or any S. 6. comfort sleep facilities for personal preparation room service availability of snacks pleasant view etc. 3. FOR EXAMPLE: a hotel guest wants: rest. 2. thus. 5. 4. as benefits. when he rents a hotel room. main and additional reasons for purchase 1.CONSUMER BENEFIT CONCEPT CORE PRODUCT LEVEL this level shows primary and additional benefits which tm customers want. .
CONSUMER BENEFIT CONCEPT CORE PRODUCT LEVAL primary and additional benefits may change overtime. benefits may be: a) rational b) emotional . need for updating a S.PRODUCT periodically. thus.
it includes composition/ components. . sleep and facilities for personal preparation” would mean a hotel room having: . bed sheets etc. brand name. features.suitable furniture . FOR EXAMPLE “rest.SERVICE CONCEPT BASIC EXPECTED PRODUCT LEVEL means the basic service product expected by the customer.ALMIRAH . company name.bathroom with necessary facilities . based on primary and additional benefits sought.comfortable bed. quality etc.quiet environment give CS .
EXAMPLES: A) HOTEL ROOM free stay of children.used as CAS/DAS for product positioning and for CUSTOMER’S DELIGHT. late check-out. credit facilities B) FLIGHT movies. air port pick-up and drop. in house movies.SERVICE OFFER THE AUGMENTED PRODUCT LEVAL the service product offered by the company or the actual S. fresh flowers. music. service offer is made up of: a) service concept / the basic expected product plus b) extra unexpected services offered by the company and c) SSP . duty free merchandize selling. complimentary breakfast.PRODUCT which the customer gets. . anniversary celebrations etc. air to ground telephone facilities. TV.
TWO ASPECTS OF SERVICE OFFER AUGMENTED PRODUCT LEVEL 1. service quality and quantity . service elements 2.
. both must be controlled. frequents & convenient flights. in-flight services. attention must be paid to both types of elements. magazines. pre-flight services. the intangible elements are: punctual. news papers. tangible elements are easy to manage / control.ELEMENTS OF SERVICE OFFER AGUMENTED PRODUCT LEVEL two types of elements A) INTANGIBLE ELEMENTS FOR EXAMPLE: in air travel. duty-free merchandize etc. B) TANGIBLE ELEMENTS (IN AIR TRAVEL) comfortable seat. good food / drinks.
these are difficult to control.ELEMENTS OF SERVICE OFFER AGUMENTED PRODUCT LEVEL not all the elements are provided by the company. affect quality of service product and reputation of the company. . some elements are provided by the customers themselves. EG other guests / passengers’ behavior in a restaurant or on a flight.
FOR EXAMPLE: amount of attention given to a guest in a restaurant. QUALITY OF SERVICE . .amount of service benefits given. . quality affects size of demand and product positioning. QUANTITY OF SERVICE .problem to standardize and maintain quality in people-based services.SERVICE QUALITY AND QUANTITY it means quality and quantity of benefits as judged by the customer.degree or level of primary and additional benefits of the service offer.
POTENTIAL PRODUCT LEVEL means all the possible features/ benefits which can be added in the current product. in future .
appearance) the customer other customers b) physical evidence (environment / setting) place where service is delivered building.PRODUCT to the customer.PRODUCT is delivered to the customer? the system used to deliver the S. important and integral component of a service product. element of service delivery system a) people involved 1) company’s own staff customer contact staff customer non-contact staff 2) customers (their behavior. affects quality and cs. décor etc c) facilitating equipment d) process used . the two (sp and SDS) are inseparable.THE SERVICE DELIVERY SYSTEM how a S. interior lay-out.
FACTORS WHICH INFLUENCE A SERVICE COMPANAY’S PRODUCT LEVELS 1) primary and additional benefits sought by the customers 2) composition of intangible and tangible elements of a service product 3) quality of sp elements 4) quantity of sp elements 5) cost of S.PRODUCT 6) service delivery system .
3) cost keeping rising with each extra service / SSP . particularly those provided by the customer (s).DIFFICULTIES ARISING IN TRANSLATING “SERVICE CONCEPT” INTO “SERVICE OFFER” 1) which extra intangible and tangible elements to provide 2) difficulties in controlling various elements.
DIMENSIONS OF PRODUCT MIX .
most sell many products. product-mix:a company’s assortment of products. tm customers.PRODUCT-MIX AND PRODUCT-LINE few companies rely on a single product. new and old. offered to tm customers for CS / CD and to achieve company’s objectives. prices and which are distributed through the same channel. PMS/BMS) . each product-line is usually handled by a separate team of executives (group pm. product-line:a group of closely related products which have similar uses / functions.
iii. ii. decisions at mm / GPM level . costs lot of money. risky v. decision at highest level. takes a long time to develop and add a product-line.DIMENSIONS OF PRODUCT-MIX three dimensions of product-mix 1) product-mix breadth / width i. less risky. this means number of product .lines carried by a company. 2) product-line length this means number of different brands in a product line 3) product line depth variants of brands within a product-line. iv. take less time and investment. both number 2) and 3) are line-extensions. mix extension.
SERVICE PRODUCT-MIX OF A HOTEL PRODUCT-MIX WIDTH OR BREADTH AUTO MEETING RENTAL OUT-DOOR ROOMS SERVICES CATERING GUEST RESTAUROOMS RANTS SPORTS CURRENCY EXCHANGE PRODUCTLINE LENGTH AND DEPTH •tennis •TCS • normal • Pakistani •seminar hall •food •squash •CNS rooms • Chinese •training rooms •arrangements •swimming single • continental •personnel •indoor double • Thai games •executive • Japanese •cars •golf single •coaches double • suites • e-rooms • honeymoon rooms .
a company can also prune/contract its product-mix by eliminating a product-line or a product/brand / variant .DIMENSIONS OF PRODUCT-MIX a company can expand its product-mix and grow by adding new product-lines or by increasing product-line length or depth.
length and depth.PRODUCTS will it give optimum product-mix range. width. bargaining power less availability of substitutes 3) 4) 5) 6) 7) . litmus test : increase in profitability will it have distinct positioning less price sensitivity.FACTORS TO CONSIDER WHEN EXPANDING THE PRODUCT-MIX 1) 2) size and growth rate of segment / market match with company’s objectives resources management know-how will the NSP complement the existing S.
1) can we revitalize it 2) can we sell it abroad 3) will it improve profitability 4) resources saved can be allocated to more successful products 5) no disruptive effect on overall operation .FACTORS TO CONSIDER WHEN PRUNING THE PRODUCT-MIX GIVE NO IMPORTANCE TO SENTIMENTS.
NEW SERVICE PRODUCT .
EG: mobile telecommunication 4) invention a totally new service product. EG: banking services through ATMS. EG: telephone booths 3) innovation NSPS showing substantial improvement over the existing sp to better satisfy needs. . 5) an existing service but delivered through a new SDS. creates a new product class EG: satellite TV communication. 2) adapted product already available but adapted for a new market segment.A NEW SERVICE PRODUCT SEVERAL WAYS TO DEFINE A NSP 1) me-too product new to the company but already available from another company. not previously available and which meets an unsatisfied need.
SOURCES OF NEW SERVICE PRODUCTS acquisition through new product development process .
to smooth-out seasonal demand. to increase sales. ms. examples: unused space/ facilities in a sports centre. to reduce dependency on too-few products banks have many service products to exploit opportunities when a competitor may drop-out or new needs of customers may come-up. profit and the need to remain competitive by meeting changing requirements of customers. to utilize unused capacity/facilities. to maintain reputation of being leaders in brand . products. Examples: marriage halls for meetings / examination centre during off-season. products for success. to replace outdated s.WHY SERVICES COMPANIES NEED TO DEVELOP NEW SERVICE PRODUCTS 1) 2) 3) 4) 5) 6) 7) 8) cannot continue to rely on existing s.
cannot be patented less incentive to develop a NSP. concept testing is difficult home-use tests are also difficult high cost of new service product development high failure rate of NSPS . lack of resources financial. mostly small companies. etc. lack of motivation to innovate. management. with little competition / monopoly.WHY LACK OF NSPs IN SERVICE COMPANIES most services companies. except BIA do not have a product development department. reasons: many services companies are in the public sector. focus on me-too products.
promotion. lack of company-client interface during the development process of a NSP. faulty pricing. not based on the benefits sought by the tm customers. distribution or SDS inaccurate / unhealthy spread of image of a NSP by customers competitors fight harder than expected . good NSP but market potential has been overestimated. these are not customer wanted criteria.FAILURE OF NEW SERVICE PRODUCTS 70-80% FAILURE RATE REASONS: 1) 2) 3) 4) 5) 6) 7) the basic service product expected by the customer. wrong criteria used in market segmentation and product positioning. is not well designed.
. IDEAS GENERATION starting point. create as many new ideas as possible ideas may come either from inside or outside the company.STAGES IN NEW SERVICE PRODUCT DEVELOPMENT PROCESS 1. via: a) brainstorming session b) suggestion box c) marketing research. individual interviews d) visit to other countries. focus group. most ideas usually come from customers.
machines required. survived idea(s). to justify use of resources additional manpower. . space. development time. commercial aspects. a) concept development develop a meaningful verbal and pictorial description of the survived business proposal b) concept testing test the product concept with a suitable number of tm customers. on the following criteria.2. to judge their understanding and liking / disliking. IDEAS SCREENING BY A MANAGEMENT TEAM separate workable ideas from non-workable ideas by a management team. concept development and concept testing. using verbal and pictorial description. 3.
PRODUCT FOR TRIAL translate the NSP idea/proposal.4. investment ii. hiring and training of staff iii. as passed by the tm customers. DEVELOPMENT OF THE NEW S. 5. c) possible response / reaction of competitors. construction of operational facility iv. . DETAILED BUSINESS ANALYSIS OF THE PRODUCT BASED ON THE SELECTED IDEA a) estimated sales. costs and profit for three consecutive years b) probability of success or failure of NSP. designing SDS. into the new service product this means: i.
.2. MANAGEMENT’S FINAL DECISION GO / NO GO TEST MARKETING COMMERCIALIZATION OF NSP a) when 7. products fail at these stages. 8. many s.3 and 4 do not involve much costs.6. other stages involve lot of costs. b) where c) how stage 1.
concept testing is ignored in services.NEW SERVICE PRODUCT CONCEPT TESTING usually. product before its creation and introduction. opportunity to evaluate a s. results vary too-much. is very difficult. BENEFITS OF CONCEPT TESTING : 1) 2) . which depend on : – service provider – physical environment – the customer home-use tests are not possible. opportunity to get input on the specifications (intangible and tangible elements) of a new s. from the users. PROBLEMS IN CONCEPT TESTING : 1) 2) 3) concept testing is difficult of a service product because describing something which is mostly intangible. product.
cannot be patented. duty free items) b) banks (various kinds of accounts) 4) lack of new ideas in service innovation .PRODUCT is difficult. 3) great risk of being quickly copied. REASONS: 1) developing the desired specifications of a new S.based services. Examples: a) airlines (films. 2) testing of new services is difficult.DIFFICULTIES FACED IN INNOVATING SERVICE PRODUCTS research and development is not well developed in services companies as compared to in manufacturing companies. particularly of people.
QUALITY IN SERVICES COMPANIES .
QUALITY IN SERVICES COMAPANIES TWO TYPES OF QUALITY 1) 2) quality of the service product quality of the service delivery system. quality of customers and quality of physical environment. particularly the appearance and behavior of customer contact staff. .
SIGNS OF QUALITY SERVICE 1) people own customers contact staff customers non-contact staff customers the customer other customers physical environment and evidence facilitating equipment processes price 2) 3) 4) 5) .
these must be closed. thus.SERVICE QUALITY MODEL five gaps that cause quality problems and. 1) gap between consumer expectations and management’s understanding 2) gap between management’s understanding and service-quality standards. 3) gap between service-quality standards and the actual service delivery 4) gap between the actual services delivery and the promotional claims 5) gap between the actual service and the expected service .
SERVICE QUALITY MODEL EXPECTED SERVICE 5 ACTUAL SERVICE DELIVERED 1 3 MANAGEMENT’S SERVICE QUALITY STANDARDS 2 MANAGEMENT’S UNDERSTANDING OF CONSUMERS EXPECTIONS PROMOTIONAL CLAIMS 4 .
Swissair.96% CS ii. Citibank – phone call answered within 10 seconds iii. know tm customers and their needs 2) top management’s commitment to quality they must act as a role model of quality management can show its commitment to quality by: a) by setting objectives and incentives based on quality job done and not on quantity job b) promote quality oriented people in all departments c) provide TQM training to everybody set high quality standards EG: i. customers letter answered within two days 3) .HOW TO MAINTAIN QUALITY IN A SERVICE BUSINESS 1) be customer focused.
4) have a system for monitoring service performance i. suggestions and complaint form / toll free telephone number have a system to resolve complaints quickly satisfy both employees and customers state in everybody’s job description how his job affects customer satisfaction 5) 6) 7) . major competitors via ghost shopping. customer surveys. own ii.
HOW TO DEFEND MARKET POSITION? .
APPLICABLE TO MOST CUSTOMERS.POSITIONING AND FOR CUSTOMER SATISFACTION . FOR COMPETITIVE ADVANTAGE.HOW TO DEFEND MARKET POSITION • CREATE DIFFERENTIATION TO DEFEND • WHAT IS DIFFERENTIATION ? • DESIGNING AND BUILDING MEANINGFUL. AFFORDABLE AND SUSTAINABLE DIFFERENCES IN THE MMIX ELEMENTS. BELIEVABLE.
EXTRA SERVICES / SSPs CAN BE EASILY COPIED.HOW TO DEFEND MARKET POSITION • EIGHT WAYS TO CREATE DIFFERENTIATION : 1) OFFER EXTRA SERVICES AND SSPs. FACILITATING EQUIPMENT AND PROCESSES. P. EG HOTELS. MOTIVATED AND MORE EXPERIENCED PEOPLE. 2) HAVE BETTER SERVICE DELIVERY SYSTEM BETTER TRAINED. ENVIRONMENT/ EVIDENCE. . MAKE PROCESSES AUTOMATED / MECHANIZED FOR UNIFORMITY IN QUALITY 3) EXTENSIVELY USE A SYMBOL OR A LOGO OR A BRAND NAME TO FIX THE IMAGE OF THE COMPANY.
HOW TO DEFEND MARKET POSITION 4) MAKE EASY FOR THE CUSTOMER TO ORDER / GET THE SERVICE. FREQUENT FOLLOW-UP CONTACTS BY CUSTOMER CONTACT STAFF 8) ON-TIME COMPLETION OF WORK . 5) OFFER SERVICE WARRANTY 6) ADD FEATURES 7) PERSONAL INVOLVEMENT BY HIGHER MANAGEMENT.
MANAGING PRODUCTIVTIY IN SERVICES .
MANAGING PRODUCTIVITY IN SERVICES • VARIOUS COSTS ARE GOING-UP AND AN INCREASE IN PRICE IS LIMITED BY COMPETITION AND GOVT. PROVIDER TO WORK WITH A BIG GROUP EXAMPLES: A DOCTOR HANDLING MORE PATIENTS. 2) S. FOUR METHODS TO IMPROVE PRODUCTIVITY 1) HIRE AND DEVELOP MORE SKILLFUL WORKERS. THUS. REGULATIONS. • . EACH GETTING LESS TIME. NEED FOR PRODUCTIVITY TO KEEP THE COSTS DOWN. QUALITY MAY SUFFER TO SOME EXTENT.
MANAGING PRODUCTIVITY IN SERVICES 3) USE AUTOMATED EQUIPMENT AND STANDARDIZED PROCESSES.WEST AIRLINE USES AUTOMATED EQUIPMENT FOR TICKET PURCHASING AND BOARDING PASSES. INTRODUCE SELF-SERVICE TO REPLACE SERVICE FROM THE CO’s STAFF. EXAMPLE: KFC-SALAD BAR 4) . EXAMPLE: SOUTH .
BRANDING. WARRANTY AND AFTER SALE SERVICES .
SYMBOL AND A NUMBER TO A PRODUCT IN ORDER TO DIFFERENTIATE ONE PRODUCT FROM ANOTHER. BRAND. IN THE PAST. BRAND NAME .BRANDING • SERVICE PRODUCT BRANDING BRANDING MEANS GIVING A NAME. BRANDING WAS MAINLY USED IN CONSUMER GOODS.TRADEMARK EXAMPLEX MOAVAN ACCOUNT (FAYSAL BANK) IZAFA TERM CERTIFICATES (FAISAL BANK) INDIGO (MOBILINK) DJUICE (TELE NOR) JAZZ (MOBILINK) SMART (TELENOR) BAHBOOD SAVING CERTIFICATES (NATIONAL SAVINGS) • . TODAY IT IS ALSO BECOMING POPULAR IN SERVICES.
. FOR EXAMPLE – MUTUAL FUNDS – TERMS CERTIFICATAES ISSUED BY BANKS – GOVERNMENT SECURITIES BUILDS CONFIDENCE IN THE SP / CO.SERVICE PRODUCT WARRANTY AN UNDERTAKING BY A SELLER THAT THE SERVICE SOLD IS FIT FOR USE OR WILL PERFORM AS SPECIFIED. IMPORTANT IN CERTAIN SERVICES.
.AFTER SALE SERVICES • GIVING SOME EXTRA SERVICE AFTER HAVING USED THE MAIN SERVICE. • POPULAR IN SOME SERVICES FOR EXAMPLE. AIRLINES HELPING PASSENGERS IN HIRING TRANSPORT / BOOKING HOTEL ACCOMMODATION.
TOP) .MARKETING-MIX IN SERVICES PRICE • DEFINING PRICE • IMPORTANTACE OF PRICE FOR THE COMPANY AND THE CUSTOMER • PRICING OBJECTIVES • FACTORS WHICH AFFECT PRICE DETERMINATION • PRICING METHODS • PRICING STRATEGIES • PRICE LEVELS • DISCOUNTS • PAYMENT MODES AND TERMS (MOP.
. MEASURED IN SOME MONETARY UNITS.PRICING • DEFINITION:A) AMOUNT OF MONEY NEEDED BY A CUSTOMER TO OBTAIN A PRODUCT. B) WORTH OR VALUE OF BENEFITS OF A PRODUCT IN THE MIND A CUSTOMER. IT GENERALLY INCLUDES THE PRICE OF PSS OR SSP OFFERED BY THE COMPANY.
PRICE UNDER VARIOUS NAMES IN SERVICES MARKETING • • • • • • • • • • • • TUITION FEE INTEREST RATE RENT FARE FEE PREMIUM SALARY WAGE BRIBE INCOME TAX TOLL TAX HONORARIUM .
.CHARACTERITCS OF PRICE 1) AN ELEMENT OF M-MIX. PRICE CAN BE CHANGED QUICKLY. OTHER ELEMENTS INCUR COSTS. UNLIKE OTHER Ps OF M-MIX. IT IS THE MOST FLEXIBLE ELEMENT OF M-MIX SETTING PRICE AND FIGHTING PRICE COMPETITION IS NUMBER ONE PROBLEM FACING THE MARKETING EXECUTIVES. IT MUST BE CUSOMTER-ORIENTED 2) 3) 4) UNLIKE OTHER Ps OF M-MIX. PRICE GENERATES REVENUE.
PRICING OBJECTIVES 1. TO MAINTAIN STATUS QUO OF THE CURRENT PRICE LEVEL IN THE MARKET AND TO AVOID A PRICE WAR MANAGEMENT MUST DECIDE PRICING OBJECTIVES BEFORE SETTING THE PRICE • THE CLEARER A FIRM IS ABOUT ITS PRICING OBJECTIVES. 4. THE EASIER IT IS TO SET THE PRICE. 3. . SHORT TERM OBJECTIVE. 2. MAXIMIZATION OF CURRENT PROFIT HIGH CURRENT SALES VOLUME AND MS TO REFLECT PRODUCT QUALITY LEADERSHIP TO BE ENSURE SURVIVAL OF THE COMPANY. 5.
PRODUCT POSITIONING AND M-MIX STRATEGIES. A COMPANY SHOULD TRY TO BE A LOW-COST PRODUCER IT SETS THE FLOOR PRICE OF THE PRODUCT. 4. 3. PLC PRODUCTION CAPACITY TOTAL PRODUCT COST. . 5.FACTORS WHICH INFLUENCE PRICE DETERMINATION A) INTERNAL FACTORS:1. 2. PRICING OBJECTIVES.
EG: SALARIES OF EXECUTIVES. THE TOTAL COST OF A PRODUCT IS MADE-UP OF: 1. PMs ETC. RMs. . FIXED COSTS OR OVERHEADS (FC) THEIR TOTAL DOES NOT VARY WITH LEVEL OF PRODUCTION OR SALES. • TOTAL COST IS THE SUM TOTAL OF FIXED AND VARIABLE COSTS FOR A CERTAIN LEVEL OF PRODUCTION. RENT. EG: CONSUMABLES. 2.FACTORS WHICH INFLUENCE PRICE DETERMINATION AT A CERTAIN LEVEL OF PRODUCTION. DEPRECIATION ETC. VARIBLE PRODUCT COSTS (VPC) THEIR TOTAL VARIES WITH THE QUANTITY PRODUCED OR SOLD.
. • EFFECTS OF CUSTOMER PERCEIVED VALUE (CPV): 1) PRODUCT PRICE > CPV 2) PRODUCT PRICE < CPV 2) PRODUCT PRICE = CPV CUSTOMER DOES NOT BUY CUSTOMER BUYS BUYS OR BARGAINS. CPV IS DETERMINED VIA MARKET RESEARCH ON A REPRESENTATIVE SAMPLE OF TMCs. IT SETS THE CEILING PRICE OF A PRODUCT CPV INDICATES:A) PRODUCT’S WORTH OR VALUE IN THE MIND OF TM CUSTOMERS. B) PAYING CAPACITY OF TM CUSTOMERS.FACTORS WHICH INFLUENCE PRICE DETERMINATION B) EXTERNAL FACTORS:1) CUSTOMERS’ PERCEIVED VALUE (CPV).
FAIR PROFIT TO RESELLERS TO GAIN THEIR SUPPORT. 6) 7) 8) . INTERVENTION. POSSIBILITY OF GOVT. STAGE IN THE ECONOMY CYCLE AND THE PREVAILING ECONOMIC CONDITIONS (INFLATION.FACTORS WHICH INFLUENCE PRICE DETERMINATION 2) 3) 4) 5) ESTIMATED VOLUME DEMAND AT DIFFERENT PRICES. MAJOR COMPETITORS’ PRICES AND THEIR EXPECTED REACTION. EXCHANGE RATE) POSSIBILITY TO CHANGE THE PRICE IN FUTURE. INTEREST RATE. ELASTIC OR INELASTIC DEMAND.
COMPETITION-BASED PRICING METHOD OR GOING RATE PRICING METHOD. BREAK-EVEN ANALYSIS OR TARGET RETURN PRICING METHOD. 4) 5) 6) .MAJOR METHODS OF SETTING PRCIE 1) 2) 3) COST-PLUS. MARK-UP OR COST-BASED PRICING METHOD. VALUE PRICING METHOD SEALED-BID PRICING METHOD. CUSTOMER PERCEIVED VALUE PRICING METHOD.
IT HAS THREE STEPS 1) CALCULATE TOTAL VARIABLE AND FIXED COST PER UNIT 2) DECIED MARK-UP AND 3) ADD MARK-UP TO THE TOTAL UNIT COST.% MARK-UP .MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCT 1. USING THE FOLLOWING FORMULA PRICE = TOTAL UNIT COST 1.PLUS OR MARK-UP PRICING METHOD • ADDING A CERTAIN MARK-UP TO THE TOTAL COST OF PRODUCING . COST . MARKETING AND DELIVRING A SERVICE PRODUCT TO CUSTOMERS.0 .
PLUS PRICING METHOD IS FURTHUR DIVIDED INTO: a) PROFIT-ORIENTED COST-PLUS PRICING b) GOVERNMENT CONTROLLED COST-PLUS PRICING .MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCT COST.
COLLECTIVE WISDOM • . MARKET.MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCT 2.BASED OR COMPETITION-BASED PRICING MEATHOD FIXING THE PRICE OF A SERVICE KEEPING IN MIND THE PRICE OF STRATEGIC COMPETITORS POPULAR. WHY? • SIMPLE.
c) ABOVE THAT OF MAJOR COMPETITORS – DISTINCT BENEFITS. b) BELOW THAT OF MAJOR COMPETITORS. COST NOT CONSIDERED. TWO DRAWBACKS: – PRICE WAR – SERVICE USER PERCEIVES LOW QUALITY OF SP. NO PRODUCT DIFFERENCES.PROVIDER HAS HIGH IMAGE/ PRESTIGE/ SDS .MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCT • SERVICE PROVIDER’S PRICE MAY BE: a) SAME AS THAT OF MAJOR COMPETITORS. DISTINCT OR EXTRA SERVICES AND SSPs – S.
. • IT HAS FOUR STEPS : • • • • FIND TOTAL PER UNIT COST FIND OUT CPV VIA MARKETING RESEARCH KNOW STRATEGIC COMPETITORS’ PRICE FIX PRICE OF THE SERVICE PRODUCT CLOSE TO THE CPV.MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCT 3) CUSTOMER PERCEIVED VALUE PRICING METHOD SET PRICE CLOSE TO THE WORTH OF SP AS PERCEIVED BY TM CUSTOMERS. KEEPING THE MIND THE PRICE OF STRATEGIC COMPETITORS. FIND VIA MR. COST IS CONSIDERED.
1. DIFFERENTIAL / FLEXIBLE DISCRIMINATORY PRICING STRATEGY
TWO OR MORE PRICES OF THE SAME SERVICE TO ACCOMMODATE DIFFRENCES IN CUSTOMERS, LOCATIONS AND TIMINGS, etc
• THREE SUCH PRICING STRATEGIES, EACH FOR A DIFFERENT PURPOSE.
a) b) c) CUSTOMER- SEGMENT FLEXBLE PRICING STRATEGY LOCTION FLEXIBLE PRICING STRATEGY TIME FLEXIBLE PRICING STRATEGY
– MAJOR DISADVANTAGE: CUSTOMERS GET HABITUAL, DELAY PURCHASES
2. DISCRETE PRICING STRATEGY
QUOTING A PRICE WITHIN THE FINANCIAL AUTHORITY OF A DECISION MAKER WHO HAS SYMPATHTIC ATTITUDE TOWARDS A SERVICE PROVIDER.
3. DIVERSIONARY PRICING STRATEGY
OFFERING A LOW PRICE OF ONE OF THE MANY SERVICE PRODUCTS IN ORDER TO DEVELOP AN IMAGE OF A LOW PRICE COMPANY AND TO INCREASE CUSTOMERS TRAFFIC.
4. GUARANTEED PRICING STRATEGY
PAYMENT IS MADE BY A CUSTOMER ONLY IF CERTAIN RESULTS ARE GUARANTEED OR DELIVERED BY THE SERVICE PROVIDER
5. FIRST LOSS-ORDER PRICING STRATEGY
REDUCING PRICE FOR THE FIRST ORDER WITH THE HOPE OF GETTING FUTURE BUSINESS AT A BETTER PRICE
6. OFFEST PRICING STRATEGY
THE PRICE OF THE BASIC SP IS LOW BUT EXTRA SERVICES OR SSP CARRY HIGHER CHARGES
7. BUNDLE PRICING STRATEGY
OFFRING ONE PRICE OF A BUNDLE OF SERVICES WHICH IS LOWER THAN THE SUM TOTAL OF INDIVIDUAL PRICES
8. TWO-PARTS PRICING STRATEGY
a) FIXED PART b) VARIABL PART
PROMOTE THEIR PRODUCT ON THE BASIS OF BETTER AVAILABILITY AND SPTs. THEY BUY AS LONG AS A BRAND’S PRICE IS LOWEST. • CONSUMERS BENEFIT ON SHORT TERM BASIS. . MOST COMPANIES WANT TO AVOID IT AND. PRICE IS SET AS LOW AS POSSIBLE TO GAIN VOLUME SALES AND MS. MINIMUM PSS ARE OFFERED. • POSSIBILITY OF PRICE WAR. INSTEAD. IT IS USED WHEN PRODUCTS ARE SIMILAR.PRICE VS NON-PRICE COMPETITION (A) PRICE COMPETITION • PRICE IS THE PRIMARY BASIS FOR FIGHTING COMPETITION.
• THE SELLER HAS A GOOD PRICE AND INCREASES VOLUME SALES AND MS BY EMPHASIZING ON THE OTHER Ps OF M-MIX .PRICE VS NON-PRICE COMPETITION (B) NON-PRICE COMPETITION • PRICE IS NOT THE PRIMARY BASIS OF FIGHTING COMPETITION.
ADDITIONAL CLASSFIFCATION BASIS OF SERVICES FOR PRICING PURPOSE • • BASIS: WHO REGULATES / CONTROLS THEIR PRICE THREE CATEGORIES OF SERVICES FOR PRICING PURPOSE: 1) SERVICES SUBJECT TO GOVERNMENT PRICE CONTROL 2) SERVICES SUBJECT TO FORMAL PRICE REGULATION BY TRADE BODIES 3) SERVICES SUBJECT TO PRICE REGULATED BY MARKET FORCES .
.G 2 \ 10 . CASH DISCOUNT:FOR PAYING BILL WITHIN A SPECIFIED PERIOD. E. 2. 1. NET / 30.DISCOUNTS • PERCENTAGE REDUCTION IN THE LIST PRICE OF A PRODUCT. • TYPES OF DISCOUNTS. TRADE DISCOUNT: FOR PERFORMING CERTAIN DISTRIBUTION FUNCTIONS.
ENCOURAGES LARGE ORDERS. (b) CUMULATIVE BASIS DISCOUNT BASED ON TOTAL VALUE OR VOLUME PURCHASED IN A CERTAIN PERIOD. NONCUMULATIVE BASIS DISCOUNT BASED ON THE SIZE OF EACH INDIVIDUAL ORDER.G FFPs. FGPs . CUSTOMER IS TIED UP WITH THE SELLER. CAN BE ON:(a). E.DISCOUNTS 3. QUANTITY DISCOUNTS TO ENCOURAGE CUSTOMERS TO BUY LARGE QUANTITIES / AMOUNT.
SELLER’S . 5.DISCOUNTS 4. TO AVOID INVENTORY COST. SEASONAL DISCOUNT: SLACK / OFF-SEASON TO EVEN-OUT DEMAND AND SUPPLY. EG: DISPLAYS. PROMOTIONAL ALLOWANCE FOR PROMOTIONAL SERVICES PERFORMED BY THE MM. RETAILERS’ AD SHOWING PRODUCT.
MARKETING-MIX IN SERVICES PLACE • LOCATION. ACCESSIBILITY VIA PHYSICAL AND COMMUNICATION MEANS • DISTRIBUTION CHANNELS • DISTRIBUTION COVERAGE .
PLACE DISTRIBUTION • TWO ASPECTS/ DECISIONS A. LOCATION OF SERVICES PROVIDER SINGLE OR MILTI-SITE LOCATIONS FACTORS TO BE CONSIDERED IN LOCATION 1) DOES THE CUSTOMER GO TO THE SERVICE PROVIDER OR DOES THE SERVICE PROVIDER GO TO THE CUSTOMER 2) ACCESSABLE VIA PHYSICAL AND COMMUNICATION MEANS • .
PLACE DISTRIBUTION B. DISTRIBUTION CHANNEL STRUCTURE AND EXTENT OF COVERAGE. 3. USED LESS EXTENSIVE. 2. DIRECT DISTRIBUTION CHANNAL IS USED MOST OFTEN INDIRECT DISTRIBUTION CHANNEL. 1. SELECTIVE OR EXCLUSIVE DISTRIBUTION COVERAGE .
5 OR 7 INTEGRATED / COORDINATED FOR IMC .MARKETING-MIX PRODUCT PRICE PLACE PROMOTION PERSONAL SELLING ADVERTISING SALES PROMOTION TOOLS PUBLIC RELATIONS PUBLICITY MARKETING TOOLS FOR CS.4.
CONVINCE OR REMIND STRESS ON AVAILABILITY. RELATIONS AND PUBLICITY MAILING . PEOPLE. AND PHYSICAL ENVIRONMENT / EVIDENCE AND LOCATION • PROMOTIONAL-MIX: 1) 2) 3) 4) 5) PERSONAL SELLING ADVERTISING SALES PROMOTION TECHNIQUES P. CONSISTENT SERVICE QUALITY.MARKETING-MIX IN SERVICES • PROMOTION TO INFORM.
DEFINITION PROMOTION IS TO INFORM.PROMOTION DEFINITION PURPOSE TO COMMUNICATE WITH (TO INFORM. PURSUADE OR REMIND) AND TO INFLUENCE TM CUSTOMERS TO USE COMPANY`S PRODUCT(S). THROUGH VARIOUS METHODS OF PROMOTION. PERSUADE OR REMIND TARGET MARKET CUSTOMERS OF A PRODUCT OR A COMPANY. . IN ORDER TO ACHIEVE MARKETING OBJECTIVES.
EACH WITH DIFFERENT FEATURES AND SUITABLE IN DIFFERENT PROMOTIONAL SITUATIONS. 1) 2) 3) 4) 5) PERSONAL SELLING (PS)* ADVERTISING (AD)* SALES PROMOTION TOOLS OR TECHNIQUES (SPTs) PUBLIC RELATIONS (PR) PUBLICITY (PB) *PRIMARY METHOD .PROMOTIONAL METHODS • FIVE MTHODS. • IMC METHODS MUST BE COORDINATED FOR GREATEST IMPACT a) b) SEQUENSE SAME MESSAGE .
• MAJOR PROMOTIONAL METHOD FOR COMPLEX PRODUCTS. EITHER IN A FACE TO FACE SITUATION OR OVER PHONE (TELEMARKETING) DIRECTED AT INFLUENCERS. • WORD OF MOUTH COMMUNICATION • • PERSUADE SATISFIED CUSTOMERS TO TALK TO OTHER CUSTOMERS ENCOURAGE POTENTIAL CUSTOMERS TO TALK TO SATISFIED CUSTOMERS . THROUGH A REPRESENTATIVE. BUYER IS A PROFESSIONAL.PROMOTIONAL METHODS 1) PERSONAL SELLING • DIRECT PRESENTATION OF A PRODUCT TO A CUSTOMER OR A GROUP OF CUSTOMERS. END-CUSTOMERS OR ON MIDDLEMEN.
THROUGH FIVE ADVERTISING MEDIA. MASS PROMOTION OF A PRODUCT OR A COMPANY. DISPLAY AND TRANSIT MEDIA MAJOR PROMOTIONAL METHOD FOR SIMPLE PRODUCTS .PROMOTIONAL METHODS 2) ADVERTISING: • • • NON-PERSONAL. ELECTRONIC. PAID PRINT. BROADCAST & FILM.
PROMOTIONAL METHODS 3) • SALES PROMOTION TOOLS OR TECHNIQUES TEMPORARY AND SHORT TERM INCENTIVES. DURING AND AFTER A SALES PROMOTION TOOL HAS BEEN USED. TO JUDGE EFFECETIVENESS OF SPTs SUPPORTIVE PROMOTIONAL METHOD TO PERSONAL SELLING OR ADVERTISING. GIVEN TO SALES REPRESENTATIVES. . INFLUENCERS. MIDDLEMEN OR TO CONSUMERS. IN ORDER TO ENCOURAGE QUICKER AND BIGGER SALE OR PURCHASE OF A PRODUCT. DURING A SPECIFIED PERIOD. • • COMPARE SALE BEFORE.
PROMOTIONAL METHODS • THREE KINDS OF SALES PROMOTION TOOLS: a) SALES FORCE INCENTIVES b) TRADE INCENTIVES c) CONSUMER INCENTIVES • CHARACTERISTICS OF SALES PROMOTION TOOLS 1) 2) 3) YIELD FAST RESULTS WORK BEST WITH A SUPERIOR PRODUCT. WHY? a) b) c) CUSTOMERS AND MM ARE BECOMING INCENTIVE / DEAL ORIENTED COMPETITORS’ PRESSURE MANAGEMENT’S PRESSURE ON PM & SALES EXECUTIVES . BECOMING VERY POPULAR.
. GOVERNMENT. CHARITY. SUPPLIERS. USUALLY. TO CREATE A FAVOURABLE ATTITUDE / OPINION OF VARIOUS PUBLICS * TOWARDS THE COMPANY OR ITS PRODUCTS SO THAT SELLING BECOMES EASY. SCIENTIFIC). EMPLOYEES. SPONSORING EVENTS BUILDS RELATIONS. MEDIA PEOPLE. POLITICIANS ETC. NO SPECIFIC PRODUCT PROMOTIONAL MESSAGE IS COMMUNICATED IN PUBLIC RELATION (LITERARY.PROMOTIONAL METHODS 4) PUBLIC RELATIONS A VARIETY OF COMMUNICATION EFFORTS. PEOPLE OR PRODUCTS ETC. *PUBLICS : STOCKHOLDERS. • • EFFORTS. • USED AS A SUPPORTIVE PROMOTIONAL METHOD TO MAJOR METHODS OF PROMOTION. PR MODES / TOOLS: NEWSLETTERS. PRESSURE GROUPS. LOBBYING (INFLUENCING VIA PERSONAL CONTACTS). SOCIETY. CUSTOMERS. MADE BY A COMPANY. HOUSE MAGAZINE. SPORTS.RELEASING NEWS ABOUT COMPANY.
PHOTOGRAPHS. TO THE MASS MEDIA.PROMOTIONAL METHODS 5) PUBLICITY • A SPECIAL FORM OF PUBLIC RELATIONS. INVOLVES RELEASING NEWS. ARTICLES. ABOUT A PRODUCT OR THE COMPANY. IT IS NONPAID • HAS HIGH CREDIBILITY • USED AS A SUPPORTIVE PROMOTIONAL METHOD TO MAJOR METHODS OF PROMOTION .. HOLDING PRESS CONFERENCES ETC. FOR PUBLICATION / BROADCASTING AS A “NEWS” ITEM.
PROMOTIONAL MIX • AN APPROPRIATE COMBINATION OF PERSONAL SELLING. LIKING. SALES PROMOTION TECHNIQUES. RANKING. PUBLIC RELATIONS AND PUBLICITY. • PROMOTIONAL OBJECTIVES AWARENESS. IN ORDER TO ACHIEVE PROMOTIONAL AND MARKETING OBJECTIVES.RETAINING EXISTING AND DEVELOPING NEW CUSTOMERS AND PROFIT. BUY. LOYALTY AND TO HAVE BRAND NAME ON THE TOP OF MIND. • MARKETING OBJECTIVES: SALES. MS. ADVERTISING. KNOWLEDGE. GR. . PREFERENCE.
WHAT TO EMPHASIZE IN PROMOTION? a) b) c) d) UNIFORM HIGH QUALITY SERVICE PRODUCT CONVENIENT LOCATION CONFORTABLE AND CLEAN PHYSICAL ENVIRONMENT QUALITY OF SERVICE PERSONNEL COURTESY AND ATTENTIVENESS PERSONAL ATTENTION EXTRA SERVICES SSP EASE OF PURCHASE WHAT SATISFIED CUSTOMERS SAY HIGH REPUTATION OF THE SERVICE COMPANY e) f) g) h) i) j) .
ii. THEIR APPEARANCE AND BEHAVIOUR INVOLVE THEM IN SERVICE PRODUCTION AND DELIVERY PROCESS . PARTICULARLY “THE CUSTOMERS’ CONTACT STAFF” TWO CATEGORIES OF PEOPLE CO’S STAFF • • CUSTOMERS’ CONTACT STAFF CUSTOMERS’ NON-CONTACT STAFF THE CUSTOMER OTHER CUSTOMERS b) CUSTOMERS i.MARKETING-MIX IN SERVICES • • a) PEOPLE PLAY A CENTRAL ROLE IN BUILDING CS BY CREATING AND DELIVERING THE SERVICE.
CRITICAL FACTOR. WHY? CUSTOMER .NONCONTACT STAFF • PROVIDES MANAGEMENT SUPPORT AND VARIOUS RESOURCES . HE IS “THE COMPANY” BACKBONE OF CO. THEREFORE.TYPES OF STAFF CUSTOMER-CONTACT STAFF • • • • CONNECTS CO TO CUSTOMER CONNECTS CUSTOMER TO THE COMPANY.
MOTIVATE.CUSTOMER CONTACT STAFF DIFFERENTIATORS HIRE. EMPOWERED 6. GOOD COMMUNICATION 3. SELL THE JOB AND COMPENSATE BETTER CUSTOMER CONTACT STAFF THAN THAT OF MAJOR COMPETITORS. MOTIVATED 7. TRUSTWORTHY . GRACEFULL AND COURTEOUS 2. COACH. COMPETENT / SKILLFUL 4. RESPONSIVE/ CUSTOMER FOCUSED 5.DEVELOP. • STAFF DIFFERENTIATORS 1. TRAIN.
PHYSICAL ENVIRONMENT AND EVIDENCE .
FACILITATING EQUIPMENT . DECOR. PHYSICAL ENVIRNMENT A PLACE WHERE THE SERVICE IS CREATED OR DELIVERED OR WHERE THE INTERACTION BETWEEN THE SERVICE PROVIDER AND THE SERVICES USER TAKES PLACE. FURNITURE. PAY ATTENTION TO: 1) 2) 3) 4) LAYOUT OF BUILDING NOISE LEVEL COLOURS USED. TEMPERATURE etc.TWO ASPECTS OF PHYSICAL ENVIRONMENT AND EVIDENCE A.
IT ALSO REFLECTS THE IMAGE OF THE SERVICE PROVIDER . TANGIBAL CLUE A DOCUMENT WHICH SUPPORTS THAT THE CUSTOMER HAS PURCHASED AND USED THE SERVICE.TWO ASPECTS OF PHYSICAL ENVIRONMENT AND EVIDENCE B.
TWO ASPECTS OF PHYSICAL ENVIRONMENT AND EVIDENCE • BANKS. HOTELS . RESTAURANTS. • THESE ITEMS SHOULD MATCH WITH THE PRODUCT POSITIONING • POOR PHYSICAL ENVIRONMENT AND TANGIBAL CLUE CAN HURT A SERVICE COMPANY AND CONVEY A NEGATIVE MASSAGE AND IMAGE . AIRLINES etc. SPEND LOT OF MONEY ON PHYSICAL ENVIRONMENT AND THE TANGIBLE CLUE.
– WRITTEN – MECHANIZE – CUSTOMERS’ INVOLVEMENT • KINDS: PRODUCTION AND DELIVERY PROCESSES EXAMPLES: RESERVATION / APPOINTMENT SYSTEM. .MARKETING-MIX IN SERVICES • PROCESSES • WHAT INDIVIDUAL SMALL.SEQUENTIAL. RESTAURANTS etc. SPECIFIC AND VALUE ADDING STEPS CARRIED OUT TO PRODUCE AND DELIVER A SERVICE OR COMPLETE A TASK. SELF SERVICE IN STORES.
PROCESS • WHAT SMALL. “GOOD AFTERNOON” 2) ASK THE CUSTOMER TO GIVE HIS ORDER “ MAY I TAKE YOUR ORDER” 3) REPEAT BACK THE ORDER TO AVOID MISTAKES 4) ASK IF THERE IS SOMETHING ELSE THE CUSTOMER WOULD LIKE “WOULD YOU LIKE TO ORDER FRENCH FRIES” 5) ASK FOR PAYMENT 6) ANNOUNCE. THANK AND ASK THE CUSTOMER TO COME AGAIN. ASSEMBLE THE ORDER AND PRESENT IT WITH COURTESY. SEQUENTIAL. SPECIFIC AND VALUE ADDING STEPS TO COMPLETE A TASK • EXAMPLE FROM McDONALDS STEPS: 1) GREETING BY THE COUNTER ATTENDANT. .
SPECIALITY TO COMMODITY CONTINUUM MODEL .
TOP. . THIS SPECIALITY TO COMMODITY SLIDE RESULTS IN:A) LOW PRODUCT IMAGE B) LOW PRICE C) INCREASED COMPETITION D) LOW PROFIT • COMPETITION OF A SPECIALITY PRODUCT IS FOUGHT ON PERFORMANCE QUALITY. A COMMODITY PRODUCT. BENEFITS. OPTIONS. PLC • AS A SPECIALITY PRODUCT MOVES THROUGH ITS PLC. DURABILITY. FEATURES. REPAIRABILITY. PACKAGE. PSS ETC • COMPETITION OF A COMMODITY PRODUCT IS PRIMARILY BASED ON PRICE AND MODE / TERMS OF PAYMENT. OUTLOOK.SPECIALITY TO COMMODITY CONTINUUM MODEL • SPECIALITY. MOP. IT BECOMES A COMMODITY PRODUCT.
SPECIALITY TO COMMODITY CONTINUUM LOW HIGH COMPETITION SPECIALITY PRODUCT HIGH HIGH PRICE PROFIT COMMODITY PRODUCT LOW HIGH PRODUCT IMAGE LOW LOW .
MARKRT SHARE GROWTH STRATEGIES .
MARKET SHARE IT MEANS PERCENTAGE OF A MARKET OR OF A PRODUCT CLASS CONTROLLED BY A COMPANY OR BY A PRODUCT / BRAND .
SHIFT / SWITCH. RETAIN • USE MORE OFTEN.CURRENT USER STATUS USERS COMPETITORS` USERS •. OM . OM NON-BELIEVERS OF PRODUCT CLASS • FORGET • INFREQUENT. FREQUENT • LOYAL . OM • INTRODUCE NEW USES • RM NON-USERS OF PRODUCT– CLASS • CONVERT THEM TO USERS.
MARKET PENETRATION STRATEGY 3. PRODUCT DEVELOPMENT STRATEGY NEW MARKET 2. DIVERSIFICATION STRATEGY .MARKET SHARE GROWTH STRATEGY PRODUCT–MARKET EXPANSION MATRIX ANSOFF’S MATRIX CURRENT PRODUCTS NEW PRODUCTS CURRENT MARKET 1. MARKET DEVELOPMENT STRATEGY 4.
MARKET PENETRATION STRATEGY THIS STRATEGY CONSISTS OF INCREASING SALES AND MS OF A CURRENT PRODUCT IN THE CURRENT MARKET THROUGH DIFFERENT AND MORE AGGRESSIVE MARKETING-MIX STRATEGIES AND TACTICS .
IF THEY ARE INFREQUENT USERS. PRICING. IF STILL UNDECIDED. 2. ENCOURAGE CURRENT USERS TO REMAIN LOYAL AND USE MORE FREQUENTLY. MAKES SENSE IF THERE ARE MAJOR WEAKNESSES IN COMPETITORS’ PRODUCTS. OFFER INCENTIVES. CONVINCE NON-USERS OF THE PRODUCT-CLASS. E.G. SHIFT COMPETITORS’ USERS. ORGANIZE EVENTS etc. DISTRIBUTION.MARKET PENETRATION STRATEGY • THREE MARKETING TACTICS TO INCRESE MARKET SHARE 1. DO ENTERTAINMENT. . 3. DO SOMETHING DIFFERENT AND INNOVATIVE. PROMOTION OR THEY LACK FUNDS.
OTHER COUNTRIES B) ADULT TO CHILDREN C) GENDER SHIFT .MARKET DEVELOPMENT STRATEGY • CONSISTS OF INCRESING SALES AND MARKET SHARE OF A CURRENT PRODUCT BY ENTERING INTO A NEW GEOGRAPHIC OR DEMOGRAPHIC MARKET OR A NEW USEAREA. • TACTICS A) URBAN TO RURAL.
PRODUCT DEVELOPMENT STRATEGY • THIS STRATEGY CONSISTS OF INCREASING SALES AND MARKET SHARE OF A PRODUCT BY DEVELOPING EITHER A NEW PRODUCT OR IMPROVED VARIANTS. . FOR THE CURRENT MARKET TACTICS a) DEVELOP A NEW PRODUCT b) OFFER BENEFITS VIA NEW PRODUCT FEATURES.
Eg PIA : HOTEL BUSINESS. COSTLY AND LONG-TERM STRATEGY. AUTO RENTAL SERVICES ALFALAH : WARID THIS STRATEGY IS ADOPTED WHEN GROWTH IS NOT POSSIBLE FROM THE OTHER THREE STRATEGIES. RISKY. . SPEEDEX SAS: HOTEL BUSINESS.DIVERSIFICATION STRATEGY • ENTER A NEW MARKET WITH A COMPLETELY NEW PRODUCT. BOTH UNRELATED WITH THE CURRENT BUSINESS. TOP EXECUTIVES MAKE THIS DECISION.
4) REDUCE FCs VIA EFFECTIVENESS AND EFFICIENCY OF PEOPLE THROUGH TRAINING AND UPTO DATE USE OF TECHNOLOGY IN OPERATION. .PROFITABILITY • • PROFIT = REVENUE – COSTS = (UNITS X PRICE) – (VPCs + FCs) FOUR WAYS TO INCREASE PROFITABILITY 1) INCREASE VOLUME (UNITS) 2) INCREASE PRICE 3) REDUCE VPCs VIA BETTER PURCHASE OF INPUTS.
SEGMENTS OPERATION MARKETING INCREASE USAGE RATE & QUANTITY WIN COMPETITORS’ CUSTOMERS WIN NON-USERS OF P-CLASS * VPCs AND FCs .LONG-TERM PROFITABILITY PRODUCT OR BRAND INCREASE VOLUME INCREASE PRODUCTIVITY PRODUCT DEVELOPMENT MARKET DEVELOPMENT MARKET PENETRATION COST * REDUCTION IMPROVE FF AND LABOUR EFFECTIVENESS & EFFICIENCY ENTER NEW USE-AREAS ENTER NEW GEO. OR DEMO.
TO IMPROVE COMPANY’S MARKET RANKING. 2. . TO INCREASE LONG-TERM PROFITABILITY TO COMPENSATE INCREASING COSTS VS PRICE INCREASE.WHY DO COMPANIES NEED VOLUME GROWTH? 1. 4. TO OFFER A CHALLENGE TO PEOPLE. 3.
PRODUCT DIVERSIFICATION STRATEGY EG: AIRLINES HAVING OWN HOTELS . 4. 5.GROWTH STRATEGIES • NINE WAYS TO GROW : 1. INCREASE PRODUCT-LINES (INCREASE P-MIX WIDTH) INCREASE PRODUCT-LINE LENGTH AND DEPTH. 6. 3. MARKET PENETRATION STRATEGY (MORE USAGE) MARKET DEVELOPMENT STRATEGY(MORE USERS) PRODUCT DEVELOPMENT STRATEGY (BANKS: CREDIT CARDS). 2.
9) HORIZONTAL INTERRATION ACQUIRING / MERGIING WITH A SIMILER COMPANY . 8) BACKWARD INTEGRATION GOING INTO A NEW BUSINESS IN WHICH THE “OUTPUT” OF THE NEW BUSINESS CAN BE GAINFULLY USED AS AN “INPUT” FOR THE CURRENT BUSINESS EG : DRYCLEANING COMPANIES ACQUIRING EQUIPMENT MANUFACTURING COMPANIES.GROWTH STRATEGIES 7) FORWARD INTEGRATION GOING INTO A NEW BUSINESS IN WHICH THE “OUTPUT” OF THE CURRENT BUSINESS CAN BE GAINFULLY USED AS AN “INPUT” TO PRODUCE AN OTHER PRODUCT EG : DRYCLEANING EQUIPMENT MANUFACTURING COMPANIES GOING INTO DRYCLEANING BUSINESS.
DIVISIONS OF A SERVICE ORGANIZATION .
DELIVERY PROCESS . OTHER CUSTOMERS 4.CONSISTS OF: 1. INTERNAL AREAS 2.CONSISTS OF : 1.DIVISONS OF A SERVICE ORGANAIZATION A) INVISIBLE PART . CUSTOMER CONTACT STAFF 2. INTERNAL PROCESSES B) VISIBLE PART . FACILITATING EQUIPMENT 6. THE CUSTOMER 3. PHYSICAL SETTING 5. INTERNAL STAFF PROVIDES RESOURCES AND MANAGEMENT SUPPORT TO THE CUSTOMER CONTACT STAFF 3.
D….DIVISIONS OF A SERVICE ORGANIZATION SERVICE ORGANIZATION INVISIBLE PART THE CUSTOMER A VISIBLE PART • INTERNAL AREAS • INTERNAL STAFF (NON-CUSTOMER CONTACT STAFF) • INTERNAL PROCESSES • CUSTOMER CONTACT STAFF • PHYSICALSETTING • FACILITATING EQUIPMENT • PROCRSS TO DELIVER OTHER CUSTOMERS B.C. .
MIS AND MARKETING RESERACH .
THROUGH MR. . IT IS WORTHLESS.NEED FOR INFORMATION FOR DECISION MAKING DURING VARIOUS STAGES OF MANAGEMENT • CHARACTERISTICS OF INFORMATION 1) 2) 3) 4) 5) RELEVANT ADEQUATE TRUE / ACCURATE UPDATED ON TIME • • INFORMATION IS AVAILABLE BOTH FROM INSIDE AND OUTSIDE A COMPANY. UNLESS INFORMATION IS USED.
MARKETING INFORMATION SYSTEM MIS •ANALYSIS •PLANNING •ORGANISING •IMPLEMENATION •MONITOR/ CONTROL •ACTIONS • MARKET & CUSTOMERS • ME •CO’s PERFORMANCE • REACTIONS TO M-MIX 1 ICR MKT. . •ASSESS INFO NEEDS THROUGH INTERVIEWS •DEVELOP NEEDED INFO USING SUITABLE COMPONENT OF MIS •DISTRIBUTE INFO TO RIGHT MANAGERS FOR GOOD DECISION MAKING. I S 2 3 MDSS MR DATA / INFO ABOUT •MIS BEGINS AND ENDS WITH MARKETING MNGT.
WHAT IS MARKETING RESEARCH ? • IT IS A SYSTEMATIC PROCESS OF DESIGNING. OVERALL OBJECTIVES OF MARKETING RESEARCH i. ii. TO REDUCE UNCERTAINTIES IN DECISION MAKING. GATHERING. FOR DECISION MAKING. TO MONITOR / CONTROL PERFORMANCE OF MARKETING ACTIVITIES. UPDATED AND TIMELY INFORMATION ON A SPECIFIC MARKETING TASK. • . ADEQUATE. ANALYSING AND REPORTING RELEVANT. TO THE RELEVANT MARKETING PEOPLE. TRUE.
MARKETING RESEARCH IS A COMPONENT OF MIS. • IN MANY SERVICE BUSINESSES. IT IS NOT USED DUE TO VARIOUS REASONS. • RECOMMENDED SPENDING : 1-2% OF SALES • SMALL COs. .STATUS OF USE OF MR IN SERVICES BUSINESS • OFTEN USED IN AIRLINES. FAST FOOD RESTAURANTS etc. INSURANCE COs. FIVE STAR HOTELS. CAN ENGAGE STUDENTS FOR MR. IN SUCH COs. BANKS.
THE MARKETING RESEARCH PROCESS
• • MR PROCESS IS MUCH THE SAME IN ORGANIZATIONS MARKETING A PHYSICAL OR A SERVICE PRODUCT. EIGHT STEPS OF MR PROCESS:
1. DEFINE THE MARKETING TASK/ PROBLEM
• BE SPECIFIC EG :» » » » COPY TESTING PRICE RESPONSIVENESS CUSTOMER SATISFACTION LEVEL CONCEPT TESTING.
THE MARKETING RESEARCH PROCESS
DECIDE DATA / INFO SOURCE :
PRIMARY DATA NEW DATA GATHERED INTERNALLY OR EXTERNALLY. EXPENSIVE AND TIME CONSUMING. SECONDARY DATA ALREADY AVAILABLE INSIDE OR OUTSIDE. INEXPENSIVE SOURCES : CO’S INTERNAL RECORDS OR REPORTS FROM OUTSIDE SOURCES
– – – – GOVT. PUBLICATIONS TRADE / PROFESSIONAL BODIES MR FIRMS INSTITUTIONS
THE MARKETING RESEARCH PROCESS
3. DECIDE RESEARCH APPROACH FOR GATHERING P. DATA
i. ii. iii. SURVEY METHOD OBSERVATION METHOD EXPERIMENTAL METHOD
CHOICE OF METHOD DEPENDS UPON THE NATURE OF TASK, TIME AVAILABLE AND THE COST.
HOW TO GATHER PRIMARY DATA
PRIMARY DATA GATHERING METHODS
SURVEY METHOD GATHERING DATA/ INFO BY ASKING Qs
OBSERVATION METHOD PEOPLE’S ACTIONS, BEHAVIOUR, HEARING WHAT THEY SAY
EXPERIMENTAL METHOD SEEING RESULTS BY CHANGING ONE VARIABLE
INTERVIEW TELEPHONE PERSON(S)
DECIDE SAMPLE PLAN FOR P. i. iii. COLLECT DATA OWN OR OUTSIDE STAFF ACTIVE PHASE. PRONE TO ERROR 7. 6. PREPARE A QUESTIONNAIRE TO RECORD OBSERVATIONS. ii. i. WHICH TM TO SURVEY ? HOW MANY? WHICH ONES ? RESPONSES / 5. . PRESENT FINDINGS IN WRITING TO THE MANAGEMENT. DATA i. ii. TO QUESTIONS. EXPENSIVE PHASE. ii. ANALYSE DATA AND MAKE A REPORT TABULATE THE DATA. 8.THE MARKETING RESEARCH PROCESS 4. AVOID PRESENTING LOT OF DATA EXTRACT FINDINGS FROM THE DATA USING VARIOUS STATISTICAL TECHNIQUES.
RESPONSES OR OBSERVATIONS. • USED COMMONLY .QUESTIONNAIRE • IS A SET OF APPROPRIATE QUESTIONS. PRESENTED TO A RESPONDENT FOR RECORDING ANSWERS.
10 – 12 QUESTIONS ARE SUFFICIENT. F) NOT TOO MANY QUESTIONS. D) PERSONAL QUESTIONS TOWARDS THE END.QUESTIONNAIRE • CHARACTERISITCS OF A GOOD QUESTIONNAIRE A) SIMPLE WORDS B) SHORT AND SIMPLE QUESTIONS C) SEQUENTAL QUESTIONS. E) ONE SPECIFIC IDEA PER QUESTION. .
DIRECT AND INDIRECT). MULTIPLE CHOICE.QUESTIONNAIRE G) INCLUDE BOTH OEQs AND CEQs 1) OEQs (DICHOTOMOUS.REVEAL MORE INFO. SCALING. DO NOT MAKE THE RESPONDENT THINK . MAKE THE RESPONDENT THINK .GENERALLY.GENERALLY. TEST THE QUESTIONNAIRE BEFORE ITS USE ON A LARGE SCALE. . MULTIPLE CHOICE. DIRECT AND INDIRECT). . 2) CEOs (DICHOTOMOUS. . SCALING.ANSWERED IN RESPONDENT’S OWN WORDS .RESPONDENT MAKES HIS CHOICE OF ANSWER FROM THE PRE-SPECIFIED ANSWERS.
SUB-CLASSIFICATION OF OEQs AND CEQs 1) 2) 3) DICHOTOMOUS QUESTION GIVES CHOICE BETWEEN TWO ANSWERS MULTIPLE CHOICE QUESTION GIVES CHOICE BETWEEN MORE THAN TWO ANSWERS SCALLING QUESTION GIVES CHOICE OF ANSWER ON A NUMERICAL SCALE (MINIMUM TO MAXIMUM) DIRECT QUESTION A QUESTION WHICH CONTAINS THE WORD “YOU” OR “YOUR” TO MAKE IT A PERSONALIZED QUESTION INDIRECT QUESTION A QUESTION WHICH CONTAINS THE WORDS “OTHER PEOPLE” IN ORDER NOT TO MAKE IT A PERSONALIZED QUESTION 4) 5) .
. DEMAND IS MUCH GREATER THAN SUPPLY. BEAUTY PARLOURS. RELUCTANT ATTITUDE TOWARDS MR IN SERVICE ORGANIZATIONS. SMALL COMPANY SIZE AND BEING LOCAL IN OPERATION DOES NOT JUSTIFY EXPENDITURE ON MR. ALTHOUGH THE USE OF MR HAS GROWN IN SERVICES BUSINESS.PROBLEMS IN MR IN SERVICES ORGANIZATIONS THREE PROBLEMS 1. YET THERE IS RESISTANCE TO ITS VALUE IN SOME QUARTERS. REASONS ARE :a) b) c) REGARD MR UNETHICAL EG: PROFESSIONAL SERVICES. MONOPOLY IN BUSINESS. EG: REPAIR WORKSHOPS.
CLAIM THAT THE STAFF IS CLOSE AND IN DIRECT CONTACT WITH CUSTOMERS. DRAWBACKS OF SUCH CONTACTS i. TOO UNPLANNED TOO INFORMAL THUS. THUS. 2. ii. . POOR QUALITY AND QUANTITY OF SECONDARY DATA. COMPANIES. THE RESULTS ARE OFTEN WRONG.PROBLEMS IN MR IN SERVICES ORGANIZATIONS d) e) LACK OF MANAGERIAL KNOW-HOW IN MR AND ITS AWARENESS IN S. NO NEED TO SPEND ON AN EXTERNAL MR AGENCY.
PROBLEMS IN MR IN SERVICES ORGANIZATIONS 3. • EFFECTS ON MR REDUCES INCENTIVE FOR R&D (INNOVATION) THUS. 3) QUALITY STANDARDIZATION IS DIFFICULT. P. THE CUSTOMER AND OTHER CUSTOMERS PRESENT. QUALITY DEPENDS UPON THE S. PROVIDER. PROBLEMS RESULTING FROM THE CHARACTERISTICS OF A SERVICE PRODUCT CHARACTERISTIC 1) INTANGIBILTY THUS.EVIDENCE. FUCUS ON “ ME-TOO SERVICES” HOME-USE TESTS ARE NOT POSSIBLE. • • • . DIFFICULT TO OBTAIN PATENT AND RISK OF BEING COPIED QUICKLY 2) INSEPARABILITY THE PRESENCE OF SERVICE PROVIDER IS NECESSARY . CREATES PROBLEMS IN CONCEPT TESTING MR RESULTS MAY BE VERY WRONG OR DIFFERENT.
REASONS : 1) 2) 3) MONOPOLY IN MANY SERVICE CATEGORIES.MARKETING RESEARCH PUBLIC SECTOR OBJECTIONS • MR IS MUCH LESS DEVELOPED IN THE PUBLIC SECTOR THAN IN THE PRIVATE SECTOR. THIS IS UNLIKE IN THE PRIVATE SECTOR WHERE DISCRIMINATION IS DONE VIA MARKET SEGMENTATION. UNLIKE THE PROFIT CRITERION USED IN THE PRIVATE SECTOR SERVICES. NOT FOR A PARTICULAR SEGMENT OF SOCIETY. NO DISCRIMINATION. NON-PROFIT EVALUATION CRITERIA ARE USED IN JUDGING A PROPOSAL IN THE PUBLIC SECTOR SERVICES. GENERALLY. MARKETING AND MR IS REGARDED UNNECESSARY PUBLIC SECTOR SERVICES ARE FOR THE WHOLE COMMUNITY. 4) .
MARKET AND ENVIRONMANTAL ANALYSIS WHAT IS MARKET AND ENVIRONMANTAL ANALYSIS ? GATHERING AND ANALYSING DATA / INFO ABOUT THE MARKET AND THE MARKETING ENVIRONMENT (ME). MARKET AND ENVIRONMANTAL ANALYSIS IS DONE VIA MARKETING RESEARCH AND MARKETING INTELLIGENCE SYSTEM (FOR ME). MAKING CONCLUSIONS (IDENTIFYING Os and Ts) AND THEIR IMPACT ON THE M-MIX. MARKET AND ENVIRONMANTAL ANALYSIS A IS THE SAME BOTH FOR PRODUCTS AND SERVICES .
SIZE OF DEMAND / MARKET. 2. 3. . DO NEEDS / WANTS FOR A PARTICULAR SERVICE EXIST ? TO WHAT EXTENT THESE HAVE BEEN SATISFIED OR ARE UNSATISFIED? FIND VIA MR.MARKET AND ENVIRONMANTAL ANALYSIS MAJOR QUESTIONS WHICH MUST BE ANSWERED IN A MARKET AND ENVIRONMANTAL ANALYSIS 1.
8. PRICE WHICH THE CUSTOMER IS READY TO PAY. STRATEGIC COMPETITORS THEIR NUMBER. PROFITABILITY. 6. THEIR M-MIX AND THE TYPE OF COMPETITION. COST OF PRODUCING AND DELIVERING THE SERVICE BY THE COMPANY.MARKET AND ENVIRONMANTAL ANALYSIS 4. 7. AGGRESSIVENESS. MAJOR CHANGES IN THE EXTERNAL UNCONTROLLABLES . SIZE. 5.
STEPS OF MARKETING PLANNING PROCESS .
STUDYING AND ANALYSING FACTS ABOUT PAST & PRESENT PERIODS. COACHING COMMUNICATING AND EXECUTING THE PLAN . GIVING RESPONSIBILITIES. MONITORING. MAKING STRATEGIES / TACTICS DETERMING RESOURCES DECIDING MONITORING MECHANISM AND ITS TIMING 5) TAKING ACTIONS 3) ORGANIZING AND IMPLEMENTING 4) LEADING.TRAINING. MAKING CONCLUSIONS AND PREDICTING THEIR EFFECTS ON FUTURE 2) • • • • PLANNING SETTING OBJECTIVES. STAFFING. EMPOWRING. MOTIVATING ORGANIZATION STRUCTURE. DIRECTING.THE MANAGEMENT PROCESS FIVE PHASES OF MANAGEMENT 1) SITUATION ANALYSIS GATHERING.EVALUATING CONTROLLING.
METHOD OR A GAME PLAN. QUANTITATIVE AND QUALITATVE. END RESULTS SELECTED AFTER EVALUATING ALTERNATES. MUST BE :- 1) WRITTEN 4) MUTUALLY AGREED 5) MATCH WITH COMPANY’S OBJECTIVES STRATEGY 2) SMART 3) PURE 6) PRIORITIZED HOW A PERSON OR A COMPANY INTENDS TO ACHIEVE THE OBJECTIVE (S). PRODUCTS AND TARGET MARKET. EXPRESSED IN TERMS OF CUSTOMERS’ NEED. TACTICS • INVITE PARTICIPATION • LOOK FOR CREATIVITY • SHORT TERM . OVERALL AND NON-SPECIFIC ACTION. • GENERATE AND EVALUATE ALTERNATE STRATEGIES BEFORE SELECTING THE FINAL STRATEGY • INVITE PARTICIPATION • LOOK FOR CREATIVITY • LONG-TERM DETAILED AND SPECIFIC ACTIONS WHICH WILL BE TAKEN TO IMPLEMENT THE CHOSEN STRATEGY IN ORDER TO ACHIEVE THE OBJECTIVE (S).KEY PLANNING TERMS / CONCEPTS DEFINITIONS CONCEPT COMPANY MISSION OBJECTIVE DEFINITION AND CHARACTERISTICS THE PURPOSE FOR WHICH A COMPANY IS ESTABLISHED. WHAT BUSINESS THE COMPANY IS IN? WHAT A PERSON OR A COMPANY WANTS TO ACHIEVE .
A PLAN IS THE RESULTANT DOCUMENT PRODUCED AT THE END OF THE PLANNING STAGE A PLAN GIVES A CLEAR ROAD MAP TO FOLLOW. • IT IS A WORKING DOCUMENT .WHAT IS PLANNING? • ONE OF THE STAGES OF MANAGEMENT PROCESS DURING WHICH:A MANAGER AFTER HARD THINKING AND INTENSIVE CONSULTATION:1) SETS OBJECTIVES / GOALS 2) ESTABLISHES STRATEGY a) b) c) TM SCAs IN THE MARKETING-MIX PRODUCT POSITIONING • • • 3) DEVELOPS A DETAILED PLAN OF SPECIFIC ACTIONS / TACTICS 4) DETERMINES NEEDED RESOURCES 5) DECIDES A MONITORING OR CONTROLLING MECHANISM AND ITS TIMING NEEDED IN ALL COMPANIES. IN ALL BUSINESS FUNCTIONS AND AT ALL LEVELS.
STEPS IN PLANNING PROCESS SITUATIONAL ANALYSIS SET GOALS FROM ALTERNATIVES DECIDE TM DECIDE SCAs FOR TM DECIDE PRODUCT POSITIONING ESTABLISH MARKETING MIX STRATEGIES AND TACTICS FROM ALTERNATIVES DECIDE RESOURCES DECIDE MONITORING MECHANISM AND ITS TIMING .
STUDY AND ANALYSE INFO ON THE ME AND MARKET FOR THE BUDGET YEAR. . b) c) GATHER. IDENTIFY MAJOR Ss AND Ws IN THE M-MIX. SITUATION ANALYSIS a) STUDY COMPANY’S. -1YEAR AND -2 YEARS). PARTICULARLY IN PRODUCT(s) AS WELL AS IN THE COMPANY AND Os AND Ts IN THE ME AND MARKET. COMPETITORS’ AND MARKET’S PERFORMANCE FOR THREE YEARS (CURRENT. THIS WILLSHOW COMPANY’S TREND IN PERFORMANCE COMPARED TO THE COMPERTITORS AND MARKET PERFORMANCE.STEPS OF MARKETING PLANNING PROCESS 1. KNOW REASONS FOR GOOD / BAD RESULTS. SWOT ANALYSIS.
OUTSIDE THE MARKETING DEPARTMENT. WHICH AFFECT MARKETING ACTIVITIES OR DECISIONS ABOUT MARKETING-MIX OR MARKETING PERFORMANCE. • DIVIDED INTO MACRO AND MICRO EXTERNAL UNCONTROLABLE FORCES / ACTORS .MARKETING ENVIRONMENT (ME) • ACTORS AND FORCES.
5. POLITICAL AND LEGAL FORCES ECONOMIC FORCES CULTURAL AND SOCIAL FORCES GEOGRAPHIC AND NATURAL FORCES DEMOGRAPHIC FORCES TECHNOLOGICAL FORCES COMPETITIVE FORCES .MACRO EXTERNAL UNCONTROLLABLE FORCES 1. 3. 7. 6. 2. 4.
GR. RANKING • HUMAN RESOURCE AND THEIR SKILLS (QUANTITY & QUALITY) • NON-HUMAN RESOURCES (QUANTITY & QUALITY) • COMPANY IMAGE .LOCATION OF STRENGTHS AND WEAKNESSES (OWN AND COMPETITORS’) • • • VARIOUS Ps OF M-MIX PRODUCT SUPPORT SERVICES COMPANY PERFORMANCE A) SALES B) MS.
QUALITATIVE SWOT ANALYSIS •STRENGTHS • -----------------------------• -----------------------------•------------------------------• -----------------------------•OPPORTUNITIES • ----------------------------• ----------------------------•-----------------------------• -----------------------------•WEAKNESSES • -----------------------------• -----------------------------•------------------------------• -----------------------------•THREATS • -----------------------------• -----------------------------•------------------------------• ------------------------------ .
DO NOT COMPETE .BASIC PRINCIPLE FOR SUCCESS • MUST HAVE A SUSTAINABLE COMPETITIVE ADVANTAGE (s) (SCA) • WHAT IS A SCA? SOMETHING BETTER IN ANY OF THE ELEMENTS OF MARKETINGMIX. NECESSARY FOR LONG -TERM ABOVE AVERAGE SUCCESS OF A COMPANY. • CHARACTERISTICS OF A SCA (a) MEANINGFUL/ IMPORTANT (b) BELIEVABLE (c) AFFORDABLE (d) DIFFERENT (e) SUSTAINABLE IF YOU DO NOT HAVE A SCA.
QUALITATIVE (PURE) 3.b AND c UNDER STEP 1 AND a) UNDER STEP 3 IN MIND i. EG: PRICING ASSUMPTIONS. OBJECTIVES SETTING a) b) KNOW COMPANY OBJECTIVES SET OBJECTIVES KEEP a. SALES. PROFIT etc. . LAW AND ORDER SITUATION. QUANTITATIVE (WRITTEN. FORMULATE CRITICAL ASSUMPTIONS MADE FOR THE ACHIEVEMENT OF THE PLAN. ii.STEPS OF MARKETING PLANNING PROCESS 2. SMART).
iii. ESTABLISH STRATEGIES AND TACTICS : i.STEPS OF MARKETING PLANNING PROCESS 4. iv. v. ii. SELECT TM VIA SEGMENTATION CREATE SDAs DEVELOP DISTINCT PRODUCT POSITIONING DEVELOP AN APPROPRIATE M-MIX TO ACHIEVE CS DECIDE RESOURCES DECIDE MONITORING MECHANISM AND ITS TIMING . vi.
RECRUIT STAFF WITH ABILITY / TALENT.STEPS OF MARKETING PLANNING PROCESS 5. iii. CREATE AN APPROPRIATE ORGANIZATION. IMPLEMENT THE PLAN : i. ii. WILLINGNESS / MOTIVATION AND SUITABLE PERSONALITY. . EXECUTE THE PLANNED STRATEGIES AND TACTICS.
HELP.STEPS OF MARKETING PLANNING PROCESS 6. TAKE NEEDED ACTIONS : i. MONITOR / EVALUATE / CHECK ACTUAL RESULTS VS PLANNED RESULTS 7. ii. RECOGNIZE. REPLACE iii. APPRECIATE / REWARD. GIVE WARNING. REPRIMAND. CHANGE OBJECTIVES / STRATEGIES / TACTICS VERY OFTEN THE MISTAKE LIES IN THE EXECUTION OF STRATEGIES AND TACTICS .
REPRIMAND SERVERE VERBAL DISAPPROVAL OF A BIG WRONG ACT OF AN EXPERIENCED SUBORDINATE. BY HIS SENIOR .
AND RESPONDING TO CHANGE • IMPROVES EFFECTIVENESS AND EFFICIENCY DUE TO WELL THOUGHT SPECIFIC ACTIONS • MAKES OTHER STAGES OF MANAGENENT RUN EASY AND SMOOTH • ENSURES COORDINATION BETWEEN VARIOUS PEOPLE AND DEPARTMENTS . ANTICIPATING CHANGE AND ITS IMPACT.BENEFITS OF PLANNING • GIVES DIRECTION VIA GOALS • SETS YARDSTICK OR STANDARDS • REDUCES / AVOIDS UNCERTAINTY OR HAZARDS BY LOOKING AHEAD.
WHAT PLANNING WILL AND WILL NOT DO A) WILL DO a) b) c) d) e) f) g) PLANNING FORCES PEOPLE TO THINK. MAKES OTHER MANAGEMENT PHASES / TASKS EASY.” IT WILL NOT PREDICT FUTURE WITH 100% ACCURACY . IMPROVES EFFECTIVENESS AND EFFICIENCY DUE TO WELL THOUGHT SPECIFIC ACTIONS B) WILL NOT DO PLANNING WILL NOT GIVE A “PERFECT CRYSTAL BALL. GUIDES EFFORTS GIVES A YARDSTICK PLANNING MINIMISES UNCERTAINTY AND SURPRISE. PLANNING ENHANCES CREATIVITY.
WHERE ARE WE NOW ?
HOW WILL WE KNOW IF WE HAVE ARRIVED OR NOT ?
WHERE DO WE WANT TO Go TO ?
HOW WILL WE GET THERE ?
WHAT IS A MARKETING PLAN ?
• A PLAN IS THE RESULTANT DOCUMENT OF THE PLANNING PHASE OF MANAGEMENT PROCESS . IT CONTAINS:
1) EXECUTIVE SUMMARY, 2) SA, 3) OBJECTIVES, 4) STRATEGY AND TACTICS, 5) NEEDED RESOURCES 6) MONITORING MECHANISM AND ITS TIMING 7) PROFIT / LOSS 8) KEY SUCCESS FACTORS / ASSUMPTIONS
FOR THE BUDGET / PLANNING YEAR, TO GUIDE MANAGERS DURING THE REMAINING PHASES OF MANAGEMENT . IT IS A WORKING DOCUMENT
PERIOD OF PLANNING
A) STRATEGIC PLANNING / PLAN
1) LONG-TERM MORE THAN 5 YEARS TOP MANAGERS 2) MEDIUM-TERM 2-5 YEARS
B) OPERATIONAL OR TACTICAL PLANNING / PLAN
– – – SHORT-TERM, USUALLY 1 YEAR DERIVED FROM THE STRATEGIC PLAN MOSTLY ALL MANAGERS
MANY COMPANIES OPERATE WITHOUT FORMAL PLANS. NOT GOOD, NOT DO WELL.
WHY MARKETING STRATEGIES FORMULATION IS DIFFICULT IN SERVICES
a) UNIQUE CHARACTERISTICS OF SERVICES :
• • UNLIKE GOODS, INTANGIBILITY CHARATERISTIC OF SERVICES MAKES CONSUMER’S CHOICE DIFFICULT. OPINION CAN BE OBTAINED FROM OTHERS. INSEPARABILITY MAKES MARKETING STRATEGY OF SERVICES LOCALIZED. RELATIVELY DIFFICULT TO SELL SERVICES ON NATIONWIDE BASIS. PERISHABILITY MAKES STORAGE OF SERVICES IMPOSSIBLE, THUS, PLANNING SUPPLY AND DEMAND OF SERVICES IS DIFFICULT HETROGENEITY MAKES ENSURING OF UNIFORM QUALITY DIFFICULT.
SITUATION ANALYSIS AND PLANNING PHASE • SITUATION ANALYSIS AND PLANNING PHASE IS HOMEWORK FOR A MANAGER. THE MORE EASY IT BECOMES TO CARRY-OUT THE REMAINING PHASES OF MANAGEMENT . • THE BETTER IS THE HOMEWORK DONE.
WHO DOES PLANNING IN A COMPANY? STRATEGIC PLANNING TOP MANAGERS TOP MANAGERS MIDDLE LEVEL MANAGERS OPERATIONAL PLANNING FIRST LEVEL MANAGERS .
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