Services Marketing

Marketing
Is the task of creating, promoting and delivering goods/services to consumer & businesses.

What is a Product?
Anything that can be offered to a

market for attention, acquisition, use, or consumption and that might satisfy a want or need.
Includes: Goods, services,

events, persons, places, organizations, ideas, etc.

What is a Service?
A form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. A service is any act or performance that one can offer to another that is essentially intangible & doesnt result in the ownership of anything. Its production may or may not tied to a physical product.

Services are deeds, processes, and

performances. - Valarie Zeithaml & Mary Jo Bitner

The Nature of A Service

A service firm, unlike a

manufacturing firm It does not manufacture but rather performs something for the customer. It delivers an experience that is intangible, variable, inseparable and imperishable in nature

Characteristics of Services

Intangibility:
Difficult to sample and to evaluate
Cannot be seen ,tasted, smelled, heard or felt

Implications of Intangibility

Services cannot be inventoried Services cannot be patented Services cannot be readily

displayed or communicated Pricing is difficult

Variability
The quality of the service

depends on who provides them ,when , where and how.

Strategies for Variability

customer surveys and feedback training in interpersonal and technical

skills provide product knowledge use standardisation strategies

franchising, scripts

build quality into all processes

Inseparable
simultaneous production and

consumption the service provider is the product

the customer is involved (partial employee) other customers may be present

Strategies for inseparability

manage the service encounter scripts and roles front-line staff need both technical and

interpersonal skills (recruit & train) manage customer interactions manage the physical evidence develop customer service policies and service recovery procedures

Perishable
services cannot be stored
need to manage supply and

demand

Implications of Perishability

It is difficult to synchronize

supply and demand with services Services cannot be returned or resold

How can demand be managed?

accurate demand forecasting

develop off-peak and on-peak

strategies use reservation systems and differential pricing employ part-time staff extend hours of operation Provide self-service options (i.e. ATMs, internet banking)

Services Marketing Mix

Traditional Marketing Mix

All elements within the control of the firm that

communicate the firms capabilities and image to customers or that influence customer satisfaction with the firms product and services: Product Price Place Promotion

An expanded marketing mix for services

People
Place & Place, Time

Product (service)

Process
Price Price

Customers Customer Customers s

Promotion Physical evidence

Expanded Marketing Mix for Services

People All human actors who play a part in service delivery and thus influence the buyers perceptions: namely, the firms personnel, the customer, and other customers in the service environment.
customer service employees other customers

Physical Evidence
The environment in which the service

is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.

atmosphere decor, music etc. equipment facilities uniforms

Process The actual procedures, mechanisms, and flow of activities by which the service is deliveredthe service delivery and operating systems.
service delivery systems back stage front stage procedures policies

Challenges for Services

Defining and improving quality Communicating and testing new services Communicating and maintaining a consistent

image Motivating and sustaining employee commitment Coordinating marketing, operations and human resource efforts
Setting prices Standardization versus personalization

Three Types Of Service Marketing

Internal Marketing
External Marketing Interactive Marketing

The Services Marketing Triangle

Company (Management)
Internal Marketing External Marketing

enabling the promise

setting the promise

Employees

Interactive Marketing

Customers

delivering the promise

1. External Marketing :
"Setting the Promise"

Marketing to END-USERS. Involves pricing strategy, promotional activities, and all communication with customers. Performed to capture the attention of the market, and arouse interest in the service.

2. Internal Marketing :
"Enabling the Promise"

Marketing to EMPLOYEES. Involves training, motivational, and teamwork programs, and all communication with employees. Performed to enable employees to perform the service effectively, and keep up the promise made to the customer.

3. Interactive Marketing :
(Moment of Truth, Service Encounter)

This refers to the decisive moment of interaction between the front-office employees and customers, i.e. delivery of service. This step is of utmost importance, because if the employee falters at this level, all prior efforts made towards establishing a relationship with the customer, would be wasted.

Services Marketing Triangle

Overall Strategic Assessment
How is the service

Ways to Use the

Specific Service Implementation

What is being promoted

organization doing on all three sides of the triangle? weaknesses? strengths?

and by whom?

How will it be delivered

and by whom?

Where are the

Are the supporting

What are the

systems in place to deliver the promised service?

Challenges for Services Industry

Defining and improving quality Communicating and testing new services Communicating and maintaining a consistent

image Motivating and sustaining employee commitment Coordinating marketing, operations and human resource efforts
Setting prices Standardization versus personalization

GAPs Model of Service Quality

CUSTOMER
GAP 5 Perceived Service Service Delivery GAP 3 Customer-driven service designs and standards GAP 2 Company perceptions of consumer expectations GAP 4 External Communications to Customers Expected Service

COMPANY
GAP 1

Key Factors Leading to the Customer Gap

Customer GAP

Customer Expectations

Provider Gap 1: Not knowing what customers expect Provider Gap 2: Not selecting the right service designs and standards Provider Gap 3: Not delivering to service standards Provider Gap 4: Not matching performance to promises

Customer Perceptions

Key Factors Leading to Provider Gap 1

Customer Expectations

GAP 1

Inadequate Marketing Research Orientation

Insufficient marketing research Research not focused on service quality Inadequate use of market research

Lack of Upward Communication

Lack of interaction between management and customers Insufficient communication between contact employees and managers Too many layers between contact personnel and top management

Insufficient Relationship Focus

Lack of market segmentation Focus on transactions rather than relationships Focus on new customers rather than relationship customers

Inadequate Service Recovery

Company Perceptions of Customer Expectations

Key Factors Leading to Provider Gap 2

Customer-Driven Service Designs and Standards

GAP 2

Poor Service Design Unsystematic new service development process Vague, undefined service designs Failure to connect service design to service positioning Absence of Customer-Driven Standards Lack of customer-driven service standards Absence of process management to focus on customer requirements Absence of formal process for setting service quality goals Inappropriate Physical Evidence and Servicescape

Failure to develop tangibles in line with customer expectations

Management Perceptions of Customer Expectations

Key Factors Leading to Provid GAP 3

Customer-Driven Service Designs and Standards

GAP 3

Deficiencies in Human Resource Policies

Ineffective recruitment Role ambiguity and role conflict Poor employee-technology job fit Inappropriate evaluation and compensation systems Lack of empowerment, perceived control and teamwork

Failure to Match Supply and Demand

Failure to smooth peaks and valleys of demand Inappropriate customer mix Over-reliance on price to smooth demand

Customers Not Fulfilling Roles

Customers lack knowledge of their roles and responsibilities Customers negatively impact each other

Problems with Service Intermediaries

Channel conflict over objectives and performance Channel conflict over costs and rewards Difficulty controlling quality and consistency Tension between empowerment and control

Service Delivery

Key Factors Leading to Provid GAP 4

Service Delivery

GAP 4

Lack of Integrated Services Marketing Communications Tendency to view each external communication as independent Not including interactive marketing in communications pla Absence of strong internal marketing program Ineffective Management of Customer Expectations Not managing customer expectations through all forms of communication Not adequately educating customers Overpromising Overpromising in advertising Overpromising in personal selling Overpromising through physical evidence cues Inadequate Horizontal Communications Insufficient communication between sales and operations Insufficient communication between advertising and opera Differences in policies and procedures across branches or

External Communications to Customers

Module 1. Ends

THANK YOU