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Services Marketing

If an industrial society is defined by the quantity of goods are making a standard of living, the post industrial society is defined by the quality of life as measured by the services and amenities health, education, recreation, and the arts which are now deemed desirable and possible for everyone

List of selected services

Electricity Water Supply Law Enforcing, Civil

Distributive Traders
Wholesale, Retail, Dealers, Agents

Administrative & Defense Services

Police Army Navy Judiciary

Business, Professional & Scientific Activities

Advertising Marketing Research Accountancy Legal Medical Education Research Maintenance & Repairs Computer Programming Employment Agencies Leisure, Recreation Cinema, Theatre Clubs, Gymnasiums Video Game Parlors Self improvement courses Dry Cleaning, etc.

Civil Administration
Municipal services (sewage, disposal of corpses, maintenance of roads, parks and public bldgs.)

Insurance, Banking, Finance

Banks Share & Stock Brokers

Transport & Communication

Railways Air Transport Post & Telegraph Telephone & Telecommunication, etc.

Increasing Affluence: Greater Demand for services activities which consumers used to perform themselves such as interior decoration, laundry, care of household products care of garden, etc. More Leisure Time: Greater demand for recreation and entertainment facilities, travel to resorts, adult education and self improvement courses. High % of women in labor force: Greater demand for baby sitting facilities, household domestic help. Greater Life Expectancy: Great demand for nursing homes and healthcare. Great Complexity of products: Greater demand for skilled specialists to provide maintenance for complex products such as air conditioners, cars, computers

Increasing complexity of life: Greater demand for specialists in income tax, labor laws, legal affairs, marriage counselling, employment services. Greater concern about ecology and resource scarcity: Greater demand for purchased or leased services, car rental, travel, resort to time sharing rather than ownership basis. Increasing number of new products: The computers sparked development of such service industries as programming, repair and time sharing.

Characteristics of Services
Intangibility Inseparability Heterogeneity Perishability Ownership

Following are the intangible characteristics of services which make them distinct from products:
A service cannot be torched Precise standardization is not possible. There is no ownership transfer A service cannot be patented Production and consumption are inseparable There are no inventories of the service.

Service is provided by a person who possesses a particular skill like singer or a coach,
by using equipment to handle a tangible product (dry cleaning) or by allowing access to or use of physical infrastructure (hotel, train)

Plumber has to be physically present to provide the service. Beautician has to be available to provide beauty related services. This is in direct contrast to products which can be produced in the factory today, stocked for the next two, three or more months and sold when an order gets procured.

Human element is very much involved in providing and rendering services and this makes standardization very much difficult. E.g., doctor, bank clerk, reservation of a hotel room.

Service cannot be stored. Service is perishable. Below represents the service lost forever
A car mechanic who has no cars to repair today Spare berths on a train Unsold seats in a cinema halls

Most of the services face a fluctuating demand.

Peak demand timing for bus services in morning or evening Certain train routes are more heavily booked than others.

Product is owned when you buy it. Service cannot be owned.
Buying a ticket, one can see evening show. One can hire the services of a chauffer by paying wages, etc.

Service is purchased for the benefits it provides.

Marketing Mix
Product & Service Price Place Promotion People Process Physical Evidence

Product (Service)
Well known/trusted brand image Unusual or additional features Extended guarantees The Unique Sales Proposition (USP) Tangibility Different levels to analyze services:
Customer Benefit Concept Concerned with what benefits do customer seek Service Concept Concerned with what general benefit will the service offer.

Service Offer Concerned with greater detailed shaping of the service concept. Decision on:
Service Elements (tangible or intangible) Service Form (in what way and how) Service levels (quality and quantity)

Service Forms Service Delivery System Creating and delivery of service using guidelines built into service offer. Concerned with people processes, facilities, etc.,

Value added Special discount Preferential credit terms Use now, pay later scheme (Fly Now, Pay Later)

Extensive availability More outlet then competitor Portable unit/Mobile unit Innovative method e.g., telephone banking Careful selection of quality channels.
Hotels: Travel Agent, Tour Operators, Airlines, Tourist cabs Airlines: Travel Agents, Hotels, General Selling agents Life Insurance: Agents Shares: Stock Brokers, Financial Consultants Employment: Employment agencies, Consultants Financial Services: Banks, Financial Institutions, leasing cos. Products: Wholesalers, Stockists, Retailers, Agents

Innovative advertising campaigns Loyalty Promotions e.g., frequent flyer programmes Special offer Direct mail Public Relations Sponsorship Guidelines which can be kept in mind while promoting services are as follows:
Use simple, clear messages Emphasize the benefits of service Promise only that which can be delivered and does not exaggerate claims. Build on the word-of-mouth communication by using testimony of actually consumers in advertisements, and

Provide tangible clues to services by using well-known personalities or objects to help customers identify the service. E.g., Indian Airlines

Objectives of advertising have been identified as:

Creating an understanding of the company in the customers mind by describing the companys services, activities and its areas of expertise. Creating a positive image for the company Building a strong sense of identification with the customer by turning in to his needs, values and attitudes. Creating a positive background for the sales people to sell the services by providing all relevant information about the company.

Highly trained/skilled staff Better customer care High efficiency Personal Attention Quick Response Specialized Skill

Role of Employee in Services

Marketing High People Contact: People based service (Education, Dental, Medical Care, Restaurants, house maid)
Professional Non Professional

Low People Contact: Equipment based service (Automatic car wash, laundry, vending machine, cinema Primary Facilitating Ancillary

Staff Selection & Recruitment

Preliminary Stage
Identification of vacancy (may be a new post or replacement) Develop job profile review job description and person specification. Consider internal sources Consider using specialist recruitment agency Advertise internally and externally Process applications Screen applications for shortlisting

Selection Stage
Arranging interview; venue, timing, date Determine process for selection; formal/informal interviews, use of preselection test, presentations.

Conducting interviews Testing Offer / Acceptance and Formal Appointment

Follow up Stage
Induction Training and Ongoing staff development and appraisal.

Requirements for the job

Qualifications / Technical Knowledge Ability, Specialist skills and Aptitude Experience Proficiency in English and on local language Personality and personal Attributes

Recruitment issues in Service Sector

Traditional low rates pay Cutbacks Tightly structured pay scales Conditions of service Transfer of job Retirement benefits

Training & Development

Identification of Training needs Implementation of training programs Evaluation of training effectiveness Staff development training:
Functional Training Personnel Development Organizational Development (Cross Functional)

Appraisal Systems The task of designing and implementing training and development programmes lies with HRM even though the commitment and initiation of such programmes must be led by top management and involve all line management and employees.

Advances in technology e.g., automated queue systems, Cash Dispenser Fast Response times Customer Participation in the process:
Location of service delivery The service itself High contact or low contact services Degree of standardization Complexity of the service

Purpose of setting down clear outlines or blueprints for service delivery processes and transactions is as follows:
To ensure that the service is carried out in the fastest, most efficient and cost effective manner possible.

To enable service quality to be monitored ad benchmarks to be put in place, thus allowing accurate measurement of both quality and productivity. To facilitate staff training and enable individuals to carry responsibility for individual stages of the service transaction and delivery. To reduce the amount of divergence, thus enabling accurate budgeting and manpower planning, etc. take place

Physical Evidence
Comfortable surroundings Superior dcor Qualifications Evidence of standing membership of professional bodies. Strong, recognizable corporate image Stuff uniform House style Supporting literature Documentation High quality tangibles.

Fast Food Restaurant

Packaging Seating Overall appearance

Taste, smell, presentation, temperature

Style, color, environmentally friendly, convenience Comfort, layout, availability Hygiene, cleanliness, lighting, dcor, attractiveness of the restaurant (inside and outside), well maintained

Accessibility Car Parking, Location of entrances / exits, wheel chair access, geographical location Facilities Staff Corporate Image Service Delivery Toilets, childrens amusements, customer information, pay phones. Personal Appearance, Dress code, manner, efficiency Attitude towards the company image, logo, advertisements, brand loyalty, the individuals knowledge of the organization and its activities, Prompt, slow, slipshod, efficient

Atmosphere Welcoming, friendly, cold

In developing service positioning, organization must understand aspects of consumer behavior.
What attributes of the service do our consumers rate most highly? How do they rank our competitors performance against ours with regards to these attributes? Who makes the decision and how do they establish the criteria for such a decision?

Thank You