CHAPTER – 11

MARKETING
STRATEGIES IN
SERVICES
 INTRODUCTION

The Fundamentals of the

Marketing Concept :
The service provider should
first determine the needs and
expectations of the target
group of customers.
 Organize the input to
deliver the service
Achieve customer
satisfaction and ultimately
earn profit.
Some Issues to be Focused
by a Service Firm

How to create and deliver

superior service?
How to sustain service
improvement efforts?
Many service firms are small,
unorganized and do not use
management techniques.
Some service firm believed it was
unprofessional to use marketing.
Some Service firm had great
demand for their services that
they saw no need for marketing.
FIG. 11.1 : ROLE OF MARKETING IN A TRADITIONAL PRODUCT SECTOR FIRM

Corporate Project
Ongoing mar-
Goals & Analysis
Ket intell-
Objectives Result
igence
Manufacturing HRM guide
Market & operating Lines &
Research constraints Constraints
studies
Enough info.
to make a decision

Product Pricing Distribution Promotional

Strategy Strategy Strategy Strategy

Info. Still
Current?

Keep current
Plan in place
The function of marketing
can be divided into two
separate sub function :
A specialist function
Interaction of buyer-seller
where the marketing tasks are
performed by the employees
 TYPES OF MARKETING IN
SERVICE FIRMS
There are three types of marketing
in service industries, they are:
External Marketing
Internal Marketing
Interactive Marketing
 Fig. 11.3 : Types of Marketing In
Service Firm
SERVICE FIRM

EXTERNAL MARKETING
INTERNAL MARKETING
- Setting the promise
- Enabling the promise

EMPLOYEES CUSTOMERS
INTERACTIVE MARKETING
- delivering the promise
The service triangle has a number of
fundamental strategic implications

(a)Customer focus and not

function is the key factor.
(b)Internal environment is
reflected in the external
culture.
(c) The service staff who
delivers the service must not
only have the skill, knowledge
but also the authority to serve
the customer to his
satisfaction. Etc….
 Gronroos explained the
market-oriented service
management in terms of
managing the “moments of
truth” – where the service
provider & customer confront
one another in the arena.
 EXTERNAL MARKETING

Anything that is conveyed to

the customer in any form
before the service delivery can
be viewed as a part of external
marketing function.
According to Zeithaml and Bitner the
customer’s expectation of the
service can be derived from these
sources:

Explicit Service Promise

Implicit Service Promise
Word of Mouth
Communication
Past Experience
Corporate Image
 INTERNAL MARKETING
According to Berry Internal marketing
is “the means of applying the
philosophy and marketing to people
who serve the external customers so
that:
The best possible people can be
employed and retained.
they do the best possible work.
 Internal marketing is thus a
management strategy – a
prerequisite for successful
external marketing, emphasizes
on how to develop customer
conscious employees using HR
and marketing approach.
 The basic concepts of
Internal Marketing

Every internal customer

should be convinced about the
quality of service they provide
to customers and achieve
organization’s mission.
 Every individual in a service
organization should recognize
that they have customers to
serve.
They are well motivated and
inclined to serve customers.
 ROLE OF INTERNAL
MARKETING

Customer service becomes a

significant element and the
entire organization is focused
on customer approach.
As it signifies the role of every
employee it reduces conflict
between the functional areas of
business.
An open management style
exists where all employees
cooperate and there is highest
level of commitment
It builds corporate image by
creating awareness and
appreciation of the company’s
aims and strength.
It helps the service firm to
compete aggressively giving
the organization a competitive
advantage.
 COMPONENETS OF
INTERNAL MARKETING
Training:
- Develop holistic view of
how a service strategy works,
the role of each individual in
the service system.
 - Developing and enhancing
favorable attitudes towards a
service strategy.
- Developing and enhancing
communication, sales and
service skills among
employees.
Continuous Interaction with
the management :
- Joint planning and
involvement of employees in
decision making bring about
commitment from them.
Internal Mass Communication
& Information Support :
- Employee need to be
informed about new service
oriented strategies and new ways
of satisfying customers for e.g.
Video tapes and other written
instruments.
STEPS IN IMPLEMENTING
INTERNAL MARKETING

Helen Woodruffe explains the

steps for a successful Internal
Marketing, they are:

Market Definition
Marketing Action
Marketing Communication
Marketing Orientation
Market Research
INTERACTIVE MARKETING

Gronroos points that the

customer’s perception of
service quality can be judged
on two aspects:
The Technical Quality
The Functional Quality
 The judgment on the basis
of technical and functional
qualities varies depending on
the type of service encounter :
Remote Encounter
Phone Encounter
Face-to-Face Encounter
 SUMMARY

Thus, in the Interactive

marketing, moment of truth or
the service encounter is where
the value to the customer is
created in the service delivery
process.