SERVICE MARKETING INTERNAL NOTES

Q1. What are services and its unique characteristics?

According to Philip Kotler and Bloom any activity or benefit that one party can offer to another that
is essentially intangible and does not result in the transfer of any ownership. Its production may or
may not be tied to any physical product.

Every day we interact with so many economic activities like parcel getting delivered to requested
address, making phone calls to friends, relative or colleagues, taking metro to commute office. All
these activities are called services because they involve the deed or act offered by one party to
another for sale.

Unique Characteristics for services-

 Intangibility- Unlike products, services can neither be touched or sensed, tested or felt
before they are availed. A service is an abstract phenomenon.
 Inseparability- In case of production, distribution and consumption of services all these three
takes place simultaneously. These three functions cannot be separated. Also, personal
services cannot be separated from individual and some personalized services are created
and consumed simultaneously. For example, hair cut is not possible without the presence of
an individual. A doctor can only treat when his patient is present.
 Variability- You can never experience the same kind of services at a certain place because it
is impossible to provide similar services every time. There will always be a little variability
every time you buy certain services from the certain service provider. For e.g., Starbucks
coffee.
 Perishability- You can store goods up to a certain time period but it is impossible to store
services because service can become perishable immediately.
 Fluctuating Demand- services have high fluctuating demand. The changes in demand can be
seasonal, by weeks, by days or even hours. Certain products have high demand in their peak
hour and normal and low demand in off time period.
 Heterogeneity- The features of services provided by the provider cannot be standardised or
uniform. For e.g., a doctor may charge a higher fee from a rich patient and very low fees
from a poor one.

Q2. Difference between services and physical goods.

Basis Physical Goods Services

Meaning and Nature They are tangible and can be touched, sensed
and tested before they are availed.
Types Products are homogenous and can be
produced exactly the same
Ownership The ownership of goods can be transferred
from one party to another
Separability The function of distribution and consumption
of goods can be separated from the function
of production.
Perishability Good can be stored for a certain or longer
period of time. They are not perishable in
nature.
They are Intangible and they cannot be
touched, sensed or tested before they are
availed.
While services are heterogenous and cannot
be standardised or uniformed.
Ownership of services cannot be transferred
from one party to another
The services are inseparable in nature. The
Production, distribution and consumption of
the services are inseparable from one
another.
While services are perishable in nature and
cannot be stored.
Return Once purchased, they can be returned to the Once service are provided, it is impossible to
seller return them to the service provider.
Q3. What is Service Recovery.

In any given context of business service, service failure is inevitable, as all the services are confined
to the characteristics like intangible, heterogeneity, inseparability and others service failure can
happen anytime because no two services are completely alike in nature. A service failure is usually
described as service performance which falls below the customer expectations which will adversely
affect the customer satisfaction after service encounter.

Service Recovery is all about correcting your wrongs. It is the process of recovering from a bad
customer service experience to gaining it loyalty again. The key is to react as fast as possible and
correct your wrongs as soon as you spot them. For e.g., if a person has complained about the taste
of the coffee, as a gesture of goodwill you replace the coffee with another and also give them free
snacks for then inconvenience that has been caused is service recovery.

Implications of service recovery-

Firstly, the consumer research has shown that a customer thinks more highly of your business once
the problem has been rectified. And it is a situation that you can use to your advantage. This theory
means that even when a customer experiences service failure if you recover the situation well
enough, customers will be more loyal than they ever were before labelling as a service paradox
effect.

Secondly, a well designed and well documented service recovery strategy will aid in the
improvement efforts for service output, which correlates to “doing the right thing at the first time”
that contributes to the increased customer satisfaction and loyalty towards your organisation.

Thirdly, the services failure should not be ignored and handled effectively, the customers who are
dissatisfied with the services would be enraged as they are not served due justice and would become
irritated. These customers are more likely to be engaged in negative word of mouth and switch
providers. They believe that complaining to the provider will give them certain social benefits or they
can go through trouble for creating blogs and sharing stuff on internet to share their frustration with
others. The Consumer research has shown that the customers who are dissatisfied with the service
will likely talk to many people about it damaging the reputation in the process. \

Lastly, service employees will also be affected and demoralized should the service failure keeps
repeating themselves.

Service Recovery strategies

When a service failure occurs, service recovery strategies will be needed to be implemented by
service organizations. This long-term strategy will be embedded as part of organization’s overall
service strategy. Service recovery is about the combination of a variety of strategies to solve the
specific context of the problem.

 Make the service a Failsafe- Lets put it this way if you are teaching someone to drive the car,
you need to make sure that the car works properly. Thus, the first strategy is to make sure
that the service delivery is flawless. This requires proper commitment towards customer
from the management down.
  Track Complaints- There are 91% of the customers that do not bother to compliant instead
they switch to then competitors straight. So, if you want to retain your customer you need
to track complaints effectively whether it is through QR codes, toll free no or social media
handles. Or you can also ask them to share their feedbacks like a support ticking tool. You
should make it easier for your customers.
 Take immediate actions- It’s no surprise that the long waiting times will cost you at least 75%
of your customers. This will increase their frustration when they know that it will take hours
for you to respond. So, the quicker you can resolve the issue the better is the successful
service recovery. Let’s imagine that despite the best efforts you can do it will still take few
hours for the issue to get resolved tell them why it’s happening and also keep them
informed about the steps you are taking to resolve the issue. This will calm the customer
down.
 Explain the situation to the customer- Explain your customer that why the service failure
happened at the first place. Once the customer knows what actually happened, they would
be more than willing to forgive you for the issue. Ensure that you inform your customer
about the issue with much politeness and patience.
 Treat the customer Nicely- there are no if and buts here. At no point a customer should feel
that their issues are not getting the attention they deserve. They need to know that you are
doing everything in your power to resolve the issue as soon as possible. If they have through
many hassles, a freebie, or an extra can smooth over the hurt.
 Forge a strong relationship with your customers- For a strong relationship with customers,
they should feel that you will have their backs in case of a service issue. However, it cannot
be a one-sided relationship at all. When they trust you implicitly, you need to ensure that
you are worthy of their trust. When you have strong relationship with your customers, they
will be more forgiving you in your mistakes.
 Customer experience after recovery- The next is to determine what you customer felt after
their issue got resolved so that you can learn for your business from their experience.

Q4. Discuss the 7P’s of service marketing.

1. Product- Companies often think of their services as intangible products. Since their product
are intangible, they save their time that they might have spent on taking care of physical
aspects like design, packaging etc. They instead focus on telling their customer what all
services are included and how it can satisfy their wants and needs. Companies also consider
the service package that their competitors are offering.
2. Price- Pricing of services are way more difficult than pricing of goods. Pricing strategies
affects that how the customer would react to the price, recurring fees and discounts.
Customers often use the price to determine the quality of services. Hence, if a company is
offering a high-quality service, it is likely that they would attract customer with high prices.
Company also has to consider factors like- cost of advertising, insurance, rent, labour and
material. Cost of the competitors services, price of the packets that will educate the
customer about the offering of the company.
3. Place- Since businesses that sell their services often need their customers to come to them,
so location of the business is important. Customers often buy services which are closer to
where they live so the business is more likely to sell if it chooses a location which is closer to
their targeted audience. “Place” also refers to where and when their ads are present. The
company also considers the factors related to place like, what is the schedule of their
customers, whether the customer can access the business through walking or driving, where
the company advertises online and the location of their competitor’s business.
4. Promotion- Promotion helps in making the potential customers aware of the brands and
helping them determine about the brand services. Companies often offers the services
 which are similar to their competitors, so they use this promotional material to distinguish
itself. Businesses do this by advertising and targeting their advertisement to address the
wants and need of their targeted audience. The type of promotion activities is Contest,
Livestreams, Endorsement through influential figures, social media advertising.
5. People- This is for the people who works in the company in a customer facing roles. These
people can equally affect the customer level of satisfaction as much as the service they
provide because customer associates services with the person who delivers them. For e.g.,
The restaurant will be known for his food as well as the services given by their staff, similar
goes for the banks and departmental stores. So, customer service training staff has become
the top priority for most of the organisations.
6. Process- Businesses train their staff members to perform a service using a set process. These
processes ensure that the employee delivers a service efficiently and that customers can
expect a consistent standard of quality. Many companies use process mapping to teach their
staff what actions to perform when providing a service.
7. Physical evidence- Customers often use the physical aspects of a business to help them
judge the quality of the company's services. Physical evidence includes the space where the
service takes place and the tangible items that customers take as proof of purchase. Though
the service is intangible, giving customers a receipt or brochure allows them to associate
their service experience with a physical symbol.

Q5. Sevqual model or Gap model.

The gap model of service quality is a framework professionals use to analyse customer satisfaction
and identify areas for improvement. Most companies, regardless of whether they are sales- or
service-focused, involve some component of customer service. Some industries that use this tool
include retail, food, hospitality and health care. Also known as the five gaps model or the customer
service gap model.

There are 5 types of gap model which addresses the problems:

1. Gap between management perception and customer expectations- This gap measures what
customers expect and what management thinks they want. This can occur when
management doesn't have enough information about their customers' expectations. For
example, managers at a supermarket may think shoppers want more brand-name items and
self-checkout stations. However, shoppers are more concerned about the store's cleanliness
and employee friendliness.
2. Gap between Management perception and service quality specification- This gap examines
the difference between management's perception of quality service and the steps it takes to
provide that level of service. Managers may understand what their customers expect but
haven't established the necessary training or standards to meet these expectations. For
example, managers at a fast-food restaurant may tell staff members to fill orders quickly
without specifying the acceptable amount of time.
3. Gap between service quality and service delivery- This gap assesses the difference between
what level of service management tells expects from staff and what type of service the
customer actually receives. Customers may receive lower-quality service. At this stage,
managers might audit the customer experience to identify areas for improvement.
4. Gap between service delivery and external communication- This gap analyses the difference
between the service a company tells customers it provides and the service they actually
receive. It measures whether the company advertises and shares information about its
services accurately instead of exaggerating its claims. For example, a hotel's website and
 brochures might feature clean and modern-looking rooms, but if the staff doesn't properly
maintain the rooms between guests, there may be a gap between what customers expect
and what they receive
5. Gap between expected service and experienced service- This gap addresses the difference
between the level of service customers expect and the level they perceive. This can occur
when the company's claims are honest but misinterpreted by the customer For example, a
sales associate at a boutique clothing store may welcome guests, ask if they need help
finding anything, offer to prepare a dressing room and check on them to ensure the clothes
fit properly. While the sales associate may be providing the company's expected quality of
service, customers may perceive this service as overwhelming based on experiences
shopping at other stores.

Q6. What is consumer behaviour in services.

There are several information sources about consumer buyer behaviour when it comes to the
purchase of a physical product, but the unique characteristics of service products require a different
strategy from marketers. The most important characteristic of a service product is its intangibility.
Where physical (tangible) products are promoted, customers can be enticed to buying the product
by giving out samples, or they can look at and try out the product - all of these play a role in the
decision-making process. However, with a service product, these options are not available. In certain
cases, clients can be shown a picture to make the service more tangible, for instance when trying out
a new haircut, or they can form an impression of the service by looking at an architect's sketches
when building a new house. Many service business owners fail to understand that consumer
behaviour regarding services is different. You can gain significant competitive advantage by adjusting
your service delivery practices for these behavioural differences even as your competitors continue
business as usual.

Search Behavior: In contrast to products where physical evidence exists, consumers must depend on
subjective factors when searching for service providers. Prior experience plays a key role in the
search and selection process in instances where it exists. Lacking prior experience, however,
consumers may compensate by relying upon credible and unbiased word-of-mouth sources. The
implication is that your customers can be repeat customers based on excellent prior experiences,
and they can be valuable sources for recommendations to others.

Experience cues- Consumers often lack knowledge to objectively evaluate services after the service is
delivered. In these circumstances, they frequently substitute their experience with the service
provider as the basis for evaluating the service. For instance, because it's difficult to evaluate dental
services without being a dentist, consumers commonly rely on perceptions or "cues" of quality
service such as nicely furnished dental offices, friendly staff, no waiting and convenient hours.

Service Gaps: Marketers often refer to gaps between expected service and perceived service. Gaps
occur when consumer perceptions of service fall short of expectations. For example, a restaurant
that features linen tablecloths and tuxedoed wait staff creates the expectation of quality service and
food; this will disappoint if the service is slow and the food is cold. Gaps arise from services being
perishable and variable -- perishable because they cannot be repeated once provided and variable
because services can be different even from the same provider. In the restaurant example, the
service and the food might have been outstanding had a different waiter provided the service.
Q7. Challenges of services.

It is essential to remember that service products are a bit more challenging compared to physical
products due to its unique characteristics which are as follows:

 Services are intangible and so customers cannot see or hold them before they buy it. Buyers
are therefore uncertain about the quality of service and feel they are taking a risk. The buyer
is unable to conceptualize and evaluate a service from beforehand. From the seller’s
perspective he finds it challenging to promote, control quality and set the price of the
service he is provide. Unlike products the intangible nature of service causes difficulties to
both client and the firm.
 Defining and improving quality in the service industry is a major challenge. Very often
services are produced and consumed simultaneously. As a result, service quality
management faces challenges that the product industry never ever comes across. In the
product industry the manufacturer gets ample opportunity to test his products before they
reach the market. In case of a quality issue the problem is taken care of during the quality
check and customer satisfaction is taken care of. However, during service production, the
customer is right in front. To guarantee customer satisfaction in this scenario is a major
challenge.
 Service industry faces competition not only from fellow service industry but also from their
clients who often question themselves whether or not they should engage a service at all!
 Services are considered perishable because a business needs to sell a specific amount of
services in a designated time period to cover expenses and generate revenue. A hotel, for
example, needs to book out a specific number of rooms every week. When a room lies
empty due to lack of demand, that service pauses for that time period.
 While testing new services is a constant challenge communicating about these services
simultaneously is also not easy
 Standardization versus personalization is another major issue the service industry has to
face.
 Setting prices does not come easily for service industry.

Q8. What is service blueprint and its importance.

A service blueprint is a diagram showing the connections between various service elements
specifically connected to customer journey touchpoints. It helps service managers and improvers
understand the service delivery process from the customers’ perspective. It is used to divide a
service into logical components in the design stage, such as customer contacts, physical evidence,
etc.

Essential elements of service blueprints-

Customer action, Physical evidence, Visible employee contact/ front stage, invisible employee
actions/back stage, support processes.

How to understand a service blueprint

To understand the customer experience- Read the service blueprint from left to right while tracking
the customer action category. You may understand customer feedback by focusing on where they
arrive, their decisions, how involved they are in developing the service, and the physical proof of the
service from their point of view.
To understand the employee contact - Examine the diagram horizontally, Here you can see how
effective and efficient the process is, who interacts with the customer and how often, and if one or
numerous individuals handle a customer.

Why is service blueprint important

The service blueprint can better understand an organization’s services, resources, and processes.
There are a few reasons why a service blueprint is important.

 They help check the logical flow of the process, which in turn helps with identifying
bottlenecks or errors in the system.
 Blueprints help understand customer needs and wants and the impact a failed delivery
service has on customers  
 Using them you can isolate service systems that are slow, repetitive, overly complex, waste
resources, and toxic to the customer
 Helps with measuring the cost-of-service delivery and identifying opportunities for
improving the service delivery system  
 You can also use them to understand cross-functional relationships in your organization and
align front-stage and back-stage actions.