Marketing of Services

M S Sridhar
Head, Library & Documentation
ISRO Satellite Centre
Bangalore 560017

E-mail: sridhar@isac.gov.in & mirlesridhar@gmaill.com

A lecture delivered in the UGC Refresher Course on “Library and

Information Science” at Academic Staff College of Bangalore
University on March 22, 2001
 Marketing of Services
• What are we selling? Information? (‘we sell dreams’ – Raj Kapoor;
“in the factory we make cosmetics, in the the store we sell hope’ –
Revlon)
• Customer buy satisfaction and not what we make
– Customer needs are core to marketing; product should not
come in-between organisation and customer and block the
vision
• Know your customer
• Choose a segment for proper focus
– Define target market don’t offer one universal service to all
– If you don’t know where you want to go, any road will take you
there
• Chalk-out service marketing strategy; Positioning the service
• Environmental & SWOT analyses, goals, resource allocation
• Common questions, uncommon answers
– Type of business, customer, competitors, etc.
• Expand 4Ps to 8Ps and co-ordinate marketing mix (product, price,
place, promotion, people, physical evidence and process)
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 Marketing of Services contd.

• Marketing within the organisation

–what you can’t sell to your own staff, you can’t sell to the
customer either
• Do internal marketing ; real/ crucial heroes are front line
employees; social interaction between the customer and service
personnel, customer focus and care, etc.,
• Developing marketing connections with operations - Mutual
dependence of marketing and operations
• Continuous customer care, focus and maintenance - putting the
customer at the centre of all organisational efforts in the ultimate aim
• Tangiblise the intangibles; create physical evidence in service to
appeal to senses of customers
• Pricing should take care of perishability nature and fluctuations in
demand
• Do niche marketing with unique customised services

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Marketing by NFP Organisations & Extended Marketing Mix

Types of Marketing by NFP Extended Marketing Mix {(4+3+1) P}

Organisations for Marketing of Services
1. Commercial marketing 1. Product
2. Social marketing (a long 2. Price
term goal) 3. Place
– Dissemination of ideas 4. Promotion
– Changing the public’s 5. Physical evidence
attitudes 6. People (uniform / dress)
3. Marketing to donors 7. Process (equipment, furniture,
– Facilitating indirect etc.)
‘exchange’ 8. PR & social marketing
– Range & complexities of
motivations of donors Note: ‘Place’, ‘physical evidence,
4. Marketing to Official funders ‘people’ and ‘process’ are major
‘Barrier’ approach components relating to ‘creation of
‘Facilitator’ approach physical environment’

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 The economics of demand analysis
The internet and aviation are made for each other: flights are a high-value,
perishable commodity on which up-to-date information can be made
available electronically. The buyer is hungry for such information so he can
get the best deal. The airtimes, for their part, depend for their profits on
what they call yield - management systems, which are highly sophisticated
computerised models for altering the price of seats on the given flight to
reflect the demand over time. ⇒ Cheap tickets for early bankers and last
minute travelers needing flexible tickets pay much more for the privilege ( it
may be 20 times)
1. Price (negatively related)
2. Income - “What distinguishes want from effective demand is the
willingness and ability to pay the price asked’
(a) Normal goods (positively related) <1 income elasticity of demand
(b) Inferior goods (positively related) <1 income elasticity of demand
therefore shifting to better higher quality alternatives
(C )Superior or luxury goods positive increase by a greater
percentage than income i.e, income elasticity of demand >1

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 The economics of demand analysis contd...
3. Price of related goods
(a) Substitute goods (positive): Increase in price results in increase
in demand for the others
(b) Complimentary goods(-ve) : Increase in price of one results in a
decrease in the demand for the other (cross-price elasticity of
demand)
4. Tastes and preferences: Unlike essentials, books, journals etc.,
have positive income elasticity (i.e expenditure decreases as
income rises)
Demand types
1. Latent demand i.e, potential or unrealised
2. Induced or ‘generated demand
3. Diverted’ and ‘Substitute’ demand (e.g.: books Vs TV)
Capacity utilization or load factor
1. Pricing - Price discrimination; Membership scheme
2. Cost-plus price or full-cost price
2. Variable cost + gross profit (to cover FC and profits)
3. Marginal cost ( public sector)
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 ‘Physical Evidence’ in Marketing of Services

• Physical environment is ‘packaging’ for service

• Customer judges the service quality through the process of
deduction
• Creation of service environment (i.e., context) should not be left
to chance
• Both dominant and peripheral physical evidences should be co-
ordinate to achieve uniformity in its projected service image
• Peripheral evidences are small and trivial but have impact on
customer perception about services and are real sources of
competitive differentiation
• When it comes to perception “feelings are facts”
• Help to reinforce the proposed position and image of the
organisation, i.e.., tangibilise the intangible service

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 ‘People’ & ‘Process’ in Marketing of services

‘People’ in Marketing of ‘Process’ in Marketing of

services Services

• Service employees • Policies

– Training • Procedures
– Discretion • Systems
– Commitment • Use of technology
– Incentives • Customer involvement
– Appearance
• Customer direction
– Interpersonal
behaviours • Workflow
• Attitudes • Standardisation
• Customer contact • Employee discretion
• Customer interactions • Demand control
• Quality control

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 ‘Place’ in Marketing of Services
• Location is important for homogeneous services
– Site selection
– Choice of community, region, etc.
• Factors
– Convenience
– Operating cost
– Proximity to competitor
– Availability of support system
– Geographical or environmental factors
– Communication networks
– Transport facilities
• Channels /distribution / service centres

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 Interdependent Facets of Service Management

Objectives

Evaluation User
requirement
SERVICE
MANAGEMENT

Marketing of
Output Service
services
measurement quality

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 Interdependent facets of library services
1. Objectives - where you want to go?
– In line with the needs of users
2. User requirements
– Service which empower the customer will thrive & those that frustrate
the customer will shrivel
3. Marketing of services
– What are we selling ? Information?
– Customer seeks technology solutions to complex problems & buys
‘confidence’ or reduction of uncertainty surrounding the problem
4. Quality in service
– Greatest lever for marketing
– Intangible, relativistic, indivisible & has tendency to deteriorate
– Like ‘happiness' difficult to measure
– What a client expects of a service and how he perceives that the service
received lived up to those expectations
5. Output measurement
– Service & NFP nature cause many problems
6. Evaluation
– Only outcome can be evaluated & process is difficult to evaluate
– User evaluation is affected by service process, physical evidence &
Marketingquality
of Library of service personnel M S Sridhar, ISRO
Services 11
 How Consumers of Services differ from
Consumers of Goods in Evaluation ?

1. Rely more on personal sources of information

2. Greater post-purchase evaluation and information seeking
3. Price and physical facilities are used as major cues to service quality
4. Evoke a smaller set of alternatives
5. For nonprofessional services, self-provision is more frequentaly
considered
6. Adoption to innovation is slower
7. Perceive greater risk
8. Brand switching is less frequent
9. Part of the dissatisfaction is attributed to own inability to specify or
perform their part of the service
10 Complain less frequently due to the belief that they are partly
responsible
11 Intangibility, inseparability, heterogeneity and permissibility lead them
to possess high levels of experience and credence properties, which in
turn, make them more difficult to evaluate

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 Customer Management
1. Can timing of demand be influenced?
2. Does the customer have spare time while he is waiting?
3. Do customers and contact personnel meet unnecessarily face to face?
4. Are such contacts used to the maximum effect?
5. Are contact personnel doing respective work which the customer could
do himself (e.g. customer-operated machines)
6. Do the customers sometime try to 'get past' the contact personnel and
do things themselves? could that interest and knowledge be better
utilised?
7. Do the customers show interest in a knowledge about the tasks of the
contact personnel?
8. Is there minority of customers which disturbs the service delivery
system and its effectiveness?
9. Do the customers ask for information which is available elsewhere?
10. Can the customers do more work for each other, or use the resources
of `third parties'?
11. Can part of the service delivery process be relocated to decrease cost?
(e.g. cost of premises)
12. Can the customer be given an opportunity to choose between service
levels?
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 Conclusions
1. Customers give importance to:
Reliability (dependency, accuracy & consistency)
Responsiveness (quick & prompt delivery)
Assurance (courteous, knowledgeable & assuring
employee)
Empathy (individualised & personalised attention)
Tangibility (clean physical evidence & well groomed
employee)
Competency (of service employee)
Courtesy (of service personnel)
2. Patron judgments differ from those of experts
3. Satisfaction is heavily influenced by expectations.

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 References
Applegate, Rachel. “Models of satisfaction”. In Kent, Allen, ed.
Encyclopedia of library and information science. New York:
Marcel Dekker, 1997, v.60, Supplement 23, p 199-227.
Batra, Pramod. Simple ways to make your customers happy. New
Delhi, Think Inc., 1994.
Chase, R B and Tansik, D A. “The customer contact model for
organisational design”. Management Science, 29, 1983, p 1037
– 1050.
Chase, R B and Dasu, Sriram. “Want to perfect your company’s
service? Use behavioural science”. Harvard Business Review,
June 2001, p 79 – 84.
Czepiel, John A, et. al., eds. The service encounter. Lexington,
MA: Lexington Books, 1985.
Jones, Thomas O. “Why satisfied customers defect”. IEEE
Engineering Management Review 26 (3) Fall 1998, p16 – 26.
Lovelock, Christopher H. Managing services: marketing,
operations and human resources. New Delhi: Prentice Hall,
1988.

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 References contd.
Sridhar, M S. "Customer participation in service production and
delivery system", Library science with a slant to documentation and
information studies, 35 (3) September 1998, 157-163.
Sridhar, M S. "Waiting lines and customer satisfaction", SRELS journal of
information management, 38 (2) June 2001, 99-112.
Sridhar, M S. "Book procurement delay : a de-motivator to user
participation in collection development". In : Building Library
Collections and National Policy for Library and Information Services
: Seminar Papers presented in XXX All India Library Conference,
Rajasthan University, Jaipur, 28-31 January 1985. ed. by
P.B.Mangala. Delhi: ILA, 1985. 329-334.
Sridhar, M S. "Customer-characteristics as criteria for market-segmentation
in libraries". In: Marketing of library and information services in
India : Papers presented at the 13th National Seminar of IASLIC,
Calcutta, December 20 - 23 , 1988, ed. by S.K.Kapoor and Amitabha
Chatterjee. IASLIC Special Publication No. 28. Calcutta : IASLIC, 1988,
p43-52.
Sridhar, M. S. "Managerial quality and leadership". In: Management of
library and information centres. New Delhi: Indira Gandhi National Open
University, 1995, MLIS-05, Unit 3, p 43-68.
Wilson, Au brey. New directions in marketing: Business-to-business
strategies in 1990s. New Delhi: Excel books, 1995.
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About the Author

Dr. M. S. Sridhar is a post graduate in Mathematics and Business

Management and a Doctorate in Library and Information Science. He
is in the profession for last 36 years. Since 1978, he is heading the Library
and Documentation Division of ISRO Satellite Centre, Bangalore. Earlier
he has worked in the libraries of National Aeronautical Laboratory
(Bangalore), Indian Institute of Management (Bangalore) and University
of Mysore. Dr. Sridhar has published 4 books, 81 research articles, 22
conferences papers, written 19 course materials for BLIS and MLIS, made
over 25 seminar presentations and contributed 5 chapters to books. E-mail:
sridharmirle@yahoo.com, mirlesridhar@gmail.com, sridhar@isac.gov.in ;
Phone: 91-80-25084451; Fax: 91-80-25084476.

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