You are on page 1of 21

Contents

Executive Summary ...................................................................................................................................... 3 Introduction .................................................................................................................................................. 4 Services marketing mix: ............................................................................................................................... 6 1. 2. 3. 4. 5. 6. 7. Product .............................................................................................................................................. 6 Place .................................................................................................................................................. 6 Promotion ......................................................................................................................................... 6 Price .................................................................................................................................................. 6 People ............................................................................................................................................... 6 Physical evidence .............................................................................................................................. 7 Process .............................................................................................................................................. 7

Servicescape ................................................................................................................................................. 7 Individual Behavior: .................................................................................................................................. 7 Social interaction: ..................................................................................................................................... 7 Internal responses to the servicescape: ................................................................................................... 7 Environment and cognition: ................................................................................................................. 7 Environment and Emotion: ................................................................................................................... 8 Environment and Physiology: ............................................................................................................... 8 Holistic environment:................................................................................................................................ 8 Perceived servicescape: ........................................................................................................................ 8 Physical environment dimension: ......................................................................................................... 8 Focus on the customer ................................................................................................................................. 9 Consumer expectation of services: ........................................................................................................... 9 Desired services: ................................................................................................................................... 9 Adequate services: ................................................................................................................................ 9 Predicted services: .............................................................................................................................. 10 Service quality: ........................................................................................................................................... 11 Reliability:................................................................................................................................................ 11 Responsiveness: ...................................................................................................................................... 11 Assurance: ............................................................................................................................................... 12 Empathy: ................................................................................................................................................. 12 Tangibles: ................................................................................................................................................ 12

Understanding customer requirements .................................................................................................... 12 Listening to customers through research ............................................................................................... 12 Building customer relationship: .............................................................................................................. 12 Service recovery: ..................................................................................................................................... 13 Gap 4: External Communication to the Patient ........................................................................................ 14 Key Service Communication Challenges ................................................................................................. 14 Pricing of Services....................................................................................................................................... 15 Service Pricing Strategies: ....................................................................................................................... 15 Factors Contributing to Incremental profits in a Business: .................................................................... 16 The Elements of Competitive Advantage .................................................................................................. 16 Appendix..................................................................................................................................................... 17

Executive Summary
Service marketing is relatively new for most service providers. A few large manufacturers and global players are aware of it, but this is new territory for most medium-to-smaller sized manufacturers and independent service providers. Something that many forget is that, like any other product, service products need ongoing management. Services and prices need to be adjusted over time to track customers changing needs, competition, and the effect of new products on aging products. Costs can go up or down, competitors become weaker or stronger, new service technologies may be employed. Marketing should be tracking these things, adjusting for them, and supplying information and training to those who sell or deliver these services. When the time comes to sunset a product, marketing should be developing plans to phase out services on certain products, or handing over support to independents. It is a rapidly growing specialty, however, with demand for service marketers outstripping the supply. This indicates the need of study of service marketing in ever aspects of our life and main motto behind selecting this topic.

Introduction
The subject of service quality has aroused considerable recent interest among business people and academics. Of course, buyers have always been concerned with quality, but the increasing competitive market for many services has led consumers to become more selective in the services they choose. Conceptualizing the quality for services is more complex than for goods. Because of the absence of tangible manifestations, measuring service quality can be difficult but there are possible research approaches. Comprehensive models of service quality and there limitations can be studied. Understanding just what dimensions of quality are of importance to customers is not always easy in their evaluation process. It is not sufficient for companies to set quality standards in accordance with misguided assumptions of customers expectations. A further problem in defining service quality lies in the importance which customers often attach to the quality if the service provider is distinct from its service offers the two cannot be separated as readily as in the case of goods. Finally, issues relating to the setting of quality standards and implementation of quality management should be studied. Services marketing typically refer to both business to consumer (B2C) and business to business (B2B) services, and include marketing of services like telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional services. The range of approaches and expressions of a marketing idea developed with the hope that it be effective in conveying the ideas to the diverse population of people who receive it. Services are economic activities offered by one party to another. Often timebased, performances bring about desired results to recipients, objects, or other assets for which purchasers have responsibility. In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved. There has been a long academic debate on what makes services different from goods. The historical perspective in the late-eighteen and early-nineteenth centuries focused on creation and possession of wealth. Classical economists contended that goods were objects of value over which ownership rights could be established and exchanged. Ownership implied tangible possession of an object that had been acquired through purchase, barter or gift from the producer or previous owner and was legally identifiable as the property of the current owner. Marketing a service differs from promoting a tangible product because consumers often need tobe educated about a service. Service marketing often requires more explanation as to why the customer needs the product, how it works and why you are the best entity to deliver the service. The world economy nowadays is increasingly characterized as a service economy. This is primarily due to the increasing importance and share of the service sector in the economies of most developed and developing countries. In fact, the growth of the service sector has long been considered as indicative of a countrys economic progress. Economic history tell s us that all developing nations have invariably experienced a shift from agriculture to industry and then

to the service sector as the main stay of the economy. This shift has also brought about a change in the definition of goods and services themselves. No longer are goods considered separate from services. Rather, services now increasingly represent an integral part of the product and this interconnectedness of goods and services is represented on a goods-services continuum. The service sector is going through almost revolutionary change, which dramatically affects the way in which we live and work. New services are continually being launched to satisfy our existing needs and to meet needs that we did not even know we had. Not even 10 years ago, few people anticipated a need for email, online banking, Web hosting, and many other new services. Today, many of us feel we cant do without them. Similar transformations are occurring in business-to-business markets. Service organizations vary widely in size. At one end of the scale are huge international corporations operating in such industries as airlines, health care services, banking, insurance, telecommunications, and hotels. At the other end of the scale is a vast array of locally owned and operated small businesses, including restaurants, laundries, optometrists, beauty parlors, and numerous business-to-business services, to name a few.. Stated simply, Services Marketing refers to the marketing of services as against tangible products. As already discussed, services are inherently intangible, are consumed simultaneously at the time of their production, cannot be stored, saved or resold once they have been used and service offerings are unique and cannot be exactly repeated even by the same service provider. Marketing of services is a relatively new phenomenon in the domain of marketing, having gained in importance as a discipline only towards the end of the 20th century. Services marketing first came to the fore in the 1980s when the debate started on whether marketing of services was significantly different from that of products so as to be classified as a separate discipline. Prior to this, services were considered just an aid to the production and marketing of goods and hence were not deemed as having separate relevance of their own. The 1980s however saw a shift in this thinking. As the service sector started to grow in importance and emerged as a significant employer and contributor to the GDP, academics and marketing practitioners began to look at the marketing of services in a new light. Empirical research was conducted which brought to light the specific distinguishing characteristics of services. By the mid-1990s, Services Marketing was firmly entrenched as a significant sub discipline of marketing with its own empirical research and data and growing significance in the increasingly service sector dominated economies of the new millennium. New areas of study opened up in the field and were the subject of extensive empirical research giving rise to concepts such as the product-service spectrum, relationship marketing, franchising of services, customer retention etc. Importance of service marketing given the intangibility of services, marketing them becomes a particularly challenging and yet extremely important task. A key differentiator: Due to the increasing homogeneity in product offerings, the attendant services provided are emerging as a key differentiator in the mind of the consumers. E.g.: In case of two Major hospital in India serving a similar treatment (Apollo Hospitals and All India Institute of Medical sciences), more than the product it is the service quality that distinguishes the two brands from each other. Hence, marketers can leverage on the service offering to differentiate them from the competition and attract consumers. Importance of relationships: Relationships are a key

factor when it comes to the marketing of services. Since the product is intangible, a large part of the customers buying decision will depend on the degree to which he trusts the seller. Hence, the need to listen to the needs of the customer and fulfill them through the appropriate service offering and build a long lasting relationship which would lead to repeat sales and positive word of mouth. Customer Retention: Given todays highly competitive scenario where multiple providers are vying for a limited pool of customers, retaining customers is even more important than attracting new ones. Since services are usually generated and consumed at the same time, they actually involve the customer in service delivery process by taking into consideration is requirements and feedback. Thus they offer greater scope for customization according to customer requirements thus offering increased satisfaction leading to higher customer retention.

Services marketing mix:


1. Product: It is a multi-specialist hospital. The hospital specializes in orthopedics and gynecology. The product available at hospital are: Obstetrics and Gynecology Orthopedics Surgery Pediatrics and Neonatology 2. Place: The hospital is situated in Bariatu. The only drawback is it is not located in main road like Alam hospital and Apollo hospital. 3. Promotion: As such there is no promotional activity carried out by the hospital. They do not have any website which could increase the reach of the hospital. 4. Price: Consulting fees to meet any specialist is Rs.250. the same amount is charged to take appointment for Gynecologist. The price of major and minor surgery, and delivery charges is variable but relatively cheaper to other branded and well established chain of hospitals such as Orchid hospital, Apollo hospital and Fortis Escort. 5. People: All the human actors participating in the delivery of the services provides cues to the customer regarding the nature of the service itself. Their attitudes, behavior, how these people are dressed, and their personal appearance all influence the customer perceptions of the services. All the employees of the hospital which includes doctor, nurses, ward boy, receptionist, assistant doctor, operation theatre staff, lab technician,

guard etc. in this situation customer cannot affect the service delivery because they do not know the procedure of treatment and diagnosis. Only doctor can determine the service delivery that has the skill to treat a disease. 6. Physical evidence: The environment in which the service is delivered and where the firm and customer interact, as well as any tangible components that facilitate performance or communication of the services. The physical evidence of the hospital includes brochure, prescription, medical reports, signage, medical equipment, infrastructure of hospital, ambulance, Facebook page, parking, canteen, waiting area etc. Physical evidence all includes the physical facility where the service is offered the servicescape. For pregnant ladies, doctor cabin and ultrasound room is just beside the waiting room, so that they do not have to take stress to meet the doctor. Health ambience is also created by putting goddesss deity in the waiting room. 7. Process: The procedures, mechanisms, and flow of the activities by which the services is delivered- the service delivery and operating systems. The procedure to take an appointment with doctor is fairly a simple process and the flow of activities on the day of appointment is also smooth. There are some times discrepancy arises but most of the time the flow of activities is smooth.

Servicescape:
Individual Behavior: Environmental psychologist suggest that individuals react to places with
two general, and opposite, forms of behavior; approach and avoidance. Approach behaviors include all positive behaviors. To gain approach behavior towards the hospital, they have designed the ambience in such a way that will develop a desire to stay in the hospital. It has a fountain and a statue of Sai Baba to create an atmosphere where pregnant lady would like to stay. Every picture hanged on the walls depicts motherhood establishing a connection with the patients. The hospital has tried to avoid, avoidance behavior a desire not to stay, to explore, to work, or to affiliate.

Social interaction: In addition to its effect on their individual behavior, the servicescape
influences the nature and quality of customer and employee interactions, most directly in interpersonal services.

Internal responses to the servicescape:


Environment and cognition: The perceived servicescape can have an effect on peoples beliefs about a place and their beliefs about the people and products found in the place. It can also be

understood as a nonverbal communication, imparting through what is called object language. The ambience, apparel of receptionist, nurses and assistant to doctors, furniture and fixtures influences the patients beliefs about whether the service is expensive, successful and trustworthy. The atmosphere and environment created in the waiting room also influences the perception of the patient. Environment and Emotion: In addition to influencing beliefs, the perceived servicescape can directly elicit emotional responses that, in turn, influences behaviors. For some people, certain environment stimuli (noises, smells) which are common in hospital can bring in immediate fillings of fear and anxiety. The hospital has tried to capture both pleasure/displeasure and degree of arousal (amount of stimulation or excitement). The hospital has focused on pleasing and avoiding arousal of the patient. Servicescape of the hospital is designed to provide relaxing environment for patient as during pregnancy its advisable to avoid anxiety. Environment and Physiology: Noise that is too loud may cause physical discomfort, the temperature of a room may cause people to shiver or perspire, and the air quality may make it difficult to breathe. All these physical responses may, in turn, directly influence whether people stay in and enjoy a particular environment. The hospital takes good care to avoid all the aspects which could bring discomfort to the patient. The waiting room for patient is also situated at a place from where Pathology lab and minor O.T is far away. Noise and smell coming from the aforesaid place might bring anxiety to the patient adversely affect the health of the mother and child.

Holistic environment:
Perceived servicescape: The patients have reviewed that doctors are very cooperative and caring. Especially Dr. Sushma Priya, name was mentioned by many patients praising her amiable behavior. All the staff members are also very good and helpful. Most of the patients rated them good, in terms of behavior. Every patient was given special attention and all the need were taken care by the hospital. Doctors also address the patient if a request is dropped to them. They are also very responsive and reach the hospital at the earliest, if, an emergency case arrives. Physical environment dimension: Physical environment consists of ambience conditions, spatial layout and functionality, and Sign, symbols, artifacts. Ambient conditions include background characteristics of the environment such as temperature, lighting, noise, music, scent and color. It affects the five senses. All the factors affect how people feel, think, and respond to a service establishment. Ambience of the hospital has been created in such a way that relaxes the patient. All types of noise are avoided and that is one of the reasons why it is not situated on road side. Ambience is created in such a way which provides a stress free environment to the patient. Spatial layout refers to the ways in which machinery, equipment, and furnishings are arranged; the size and shape of those items. Functionality refers to the ability of the same items to

facilitate the accomplishment of customer and employee goals. Hospital performs different types of surgery and procedures. The hospital has Stat of the art Operation Theatre Complex with four specialized theatre and high dependency unit. It is also equipped with Image intensifier and latest Monitors. The hospital has a logo but do not reflect the vision and mission statement of the hospital.

Focus on the customer


Customer expectation is the standards or reference points against which performance is judged. The customer compares the perception of performance with that of reference points and standards to evaluate service quality. Knowing what the customer expects is the rst and possibly most critical step in delivering good quality service. To understand the customer expectation, we should understand the type of expectation customer hold about services, factors affecting the formation of these expectations and how can a service company meet or exceed customer expectations?

Consumer expectation of services:


Desired services: Personal need: The need of the person is to get treated. The person wants to get best care and opinion for his/her ailment. Personal service philosophy: A second on the desired services expectation is personal service philosophy. The patients who in any way related to health industry or friend of any doctor, the level of tolerance is low. Derived service expectation: The service expectation of people is derived by another person or group of people. Head of the family decides which hospital to visit for treatment and their caution level is intensified because he/ she have to answer the whole family. The expectation of the service delivery is high. Adequate services: Perceived service alternative: The patients have different alternatives such as Apollo hospital, RIMS, Alam Hospital and Rani Hospital in the same catchment area. The competitors pricing is costlier when compare to Hill View hospital. Those persons who perceived the Hill View hospital as one of the best hospital, their zone of tolerance is high compared to those who have alternatives.

Situational factors: In uncontrollable situational factors the zone of tolerance is high. During any case of emergency the tolerance level increase as the situation is not under the control of the service provider. Predicted services: Explicit service promises: The services promised by the hospitals are well equipped super deluxe rooms for elite people, 24-hr canteen facilities, 24-hour ambulance facility, 24-hour STD/ISD facility, 24- hour uninterrupted power supply, 24- hour pharmacy facility, fully computerized medical records section, cashless facility for BPL card holders. Implicit service promises: Implicit service promises are services cues, other than explicit promises that lead to inference about what the services should and will be like. The promise of super duplex and AC room itself means that the service delivery will be good and the cost will also be high. Word-of-mouth communication: For example- social network conveys to customers what the service will like be and influence both predicted and desired service. Past experience: The past experience of the patient will also determine the probability of him/her coming back for treatment.

Customer perceptions of the service: Perceived service quality focusses specifically on dimensions of service. Service quality is a focused evaluation that reflects the customers perception of reliability, assurance, responsiveness, empathy and tangibles. Satisfaction, on the other hand, is more inclusive: it is influenced by the perceptions of service quality, product quality and price, as well as situational factors and personal factors.

Service quality:
Service quality is a critical factor which will determine the customer satisfaction. Following is the graphical representation of the relationship between the service quality and customer satisfaction.

Reliability: Dr. Sushma Priya is a well-trained and qualified doctor. She has been practicing for
many years and is a very famous gynecologist. All promises are kept by her and her team.

Responsiveness: The hospital provides prompt service in case of emergency. Even when a
special request is made to meet the doctor, doctor address the patient.

Assurance: Dr. Sushma provides detail information about the disease to the patient and
educated them about dos and donts. The successful cases of previous patients and discussing the treatment beforehand are shared by the patient to relax the patient and to gain confidence in the patient.

Empathy: Dr. Sushma gives personal attention to every patient. She also is also very caring and
gives every minute detail to the patient to avoid blunders from customer side.

Tangibles: All the employees are well dressed and hi-tech equipments are used in treatment.
Waiting area is well furnished and the ambience is tranquil.

Understanding customer requirements


It is crucial to understand the customer requirement to deliver what customer expects from us. There are cases where there is discrepancy between customers expectation and what companies believe they expect.

Listening to customers through research


In services, as with any offering, a firm that does no customer research at all is unlikely to understand its customers. A firm that does customer research, but not on the topic of customer expectations, may also fail to know what is needed to stay in tune with the changing customer requirements. In hill view, they have feedback system in place through which customer requirement were understood. All the feedbacks were recorded in database of MIS to get insight about the requirement and expectations of the customer. They also keep record of the medical history of a particular patient and once a registered patient is always remain in the database. On the basis of data, according to the medical history, patients were treated if they do not have their reports with them. The customers are satisfied with the services backed by IT support. The feedback which is given to the company is positive and upgrading is done on the feedbacks. According to Dr. Sushma they not only give suggestions to their patients but take suggestions from them to improve the functioning of the hospital.

Building customer relationship:


Among his patients, either with complete strangers or acquaintances of friends, Dr Sushma behaves very friendly and attends to their needs and expectations. The behavior has led to

converting the stranger into acquaintance and later into friend, thereby enhancing the customer life time value. The primary goal of relationship marketing is to build and maintain a base of committed customers who are profitable for the organizations. As customers make transitions from satisfaction-based acquaintanceships to trust based friendships to commitment-based partnerships, increase are required both the value received and the level of operation. The value derived by customer from treatment is not enough and now relationship building comes into play. At this stage, the value derived is also in term of doctors care, relationship build by the doctor, the responsiveness of the staff and the doctor. Thus the patients are retained and enhanced and they do not loose customer and the cost is also reduced.

Service recovery:
A service failure is generally described as service performance that falls below a customers expectations in such a way that leads to customer dissatisfaction. Failures occurs for all kinds of reasons- the service may be unavailable when promised, it may be delivered late or too slowly the outcome may be incorrect or poorly executed, or employees may be rude or uncaring. Service recovery refers to the actions taken by an organization in response to a service failure. To fix the customer it is required by the hospital to be responsive to their complaints. The ability to provide immediate responses requires not only systems and procedures that allow quick action but also empowered employees. There should be appropriate flow of communication between both the parties. It is necessary to communicate the seriousness of the situation. A beforehand communication to the patient about the outcome of the operation, will lead to no complain. Patients also want justice and fairness in handling the case. There has to be fairness during the whole procedure of resolving the complaint. Relationship building is also a key to fix the customer because who have a strong relationship with the firm are often more forgiving of service failures and more open to the firms service recovery efforts. To fix the problem by encouraging and tacking complains and learn from past experiences. They keep track records of the patient to ensure minimum failure. They also learn from lost customers and try to determine the fail points to avoid loss of customer in near future.

Gap 4: External Communication to the Patient


Key Service Communication Challenges
Service Intangibility: The hospital undertakes constant training for the nurses and also encourages the Doctors to visit conferences and seminars. Management of service promise Keeping promise by personal touch while consulting with the patient & through physical evidence cues. Displaying the recognized medical practice certificate. Management of customer expectations Outperforming the customer expectation by conveying the message that their service is for everyone but they need to follow the proper guidance of the doctors. Customer education Informing the patient on the different checkup schemes best suited for them. Internal marketing communication Series of sessions by upper management are conducted to motivate the employees for internal marketing.

Pricing of Services
Problems:
Monetary price must be adjusted to reflect the value of non-monetary cost. Information on service costs less available to customers, hence price may not be a central factor.

Problems:
Costs difficult to trace. Labor more difficult to price than material. Costs may not equal value.

Problems:
Small firms may charge too little to be viable Heterogeneity of services limits comparability. Prices may not reflect customer value

Service Pricing Strategies:


Discounting Odd Pricing Synchro-pricing Penetration Pricing Prestige Pricing Skimming Pricing

Value is Low Price

Value is Everything I Want in a Service

Value is the Quality I Get for the Price I Pay


Value Pricing Market Segmentation Pricing

Value is All that I Get for All that I Give


Price Framing Price Bundling Complementary Pricing Results-based Pricing.

Factors Contributing to Incremental profits in a Business:


Profit derived from increased purchases of the service. Profits from reduced operating costs. Profits from referrals to other patients. Profits from Price premium. Cashless medical insurance for more than 50+ firms. Cashless facility for BPL Card holders.

The Elements of Competitive Advantage

Sources of Advantage
Superior Skills: Training Superior Resources: Service scape Superior Control: Interaction with higher management

Positional Advantage
Superior Customer Value: Personalized experience Lower Relative Costs: Patients are Friends

Performance Objective
Satisfaction: Highly satisfied Patients Market Share: 30% of the Market

Reinvestment
Prolong the competitive advantage

Appendix