Classification of Services

It is required to design & apply marketing

techniques to completely satisfy the customer &

increase profits & identify new emerging services.

Classifications can be done on following basis:

Classification by end user
Classification by Industry
Classification by Target Effect
Skill level of service provider (Professional/ Nonprofessional)
Labor intensiveness (People-based/Equipment-based)
Degree of customer contact (High / Low)
Goal of the service provider (Profit /Nonprofit)

Classification by end user

Individual consumer services consumed by

individual.
Business to business end-user
Industrial end user

Classification By Industry
Entertainment industry
b. Education
c. Telecommunications
d. Finance & Insurance
e. Transportation
f. Government services
g. Health
h. Hospitality Industry
a.

Classification By Target Effect

Based on Degree Of Customer Involvement:

1.

People Processing: Services aimed at physical

care e.g. Healthcare, clinics, restaurant,
hospitals, hair stylists, fitness centers

2.

Mental Stimulus Processing: Services aimed

at mind of customer e.g. Education, information,
entertainment, consulting

Classification By Target Effect (contd.)

3. Possession Processing: Services aimed at
physical possession & tangible assets e.g. repair &
maintenance, laundry, repair services, house
cleaning services
4. Information Processing : Services for intangible
assets e.g. Banking, legal consultation, brokerage,
financial services.

Degree of customer contact

High Degree (Every day) TV channels,

mobile etc.
Moderate Degree (Regular) Teacher,

Barber, etc.
Low Degree ( Occasional ) ATMs, etc.

Expertise
Highly professional services doctors, etc.
Non- professional services cobblers, tailors, etc.

Orientation towards profit

Commercially oriented Airlines, banking, etc.
Not for profit organizations

Issues arising in the classification of services

Service

industries remain
dominated by an
operations perspective and managers insisting that
their service industries sector is different from other
service industry sectors.
Mangers mindset states that marketing is also
different in different services.
Strategic marketing insight should be there.

Classification attempts to answer five specific questions:

What is the nature of the service act?
What style of relationship does the service

organization have with its customers?

How much room is there for customization and
judgment?
What is the nature of demand and supply for the
service?
How is the service delivered?

Factor Influencing the Growth of the Service

Sector
Demographic Changes.
Social Changes
Economic Changes.
Technological Changes.
Political & Legal Changes.
Policy Changes

Evolution of Service Firms

While Service firms in the earlier days gave very

little importance to : Segmentation

Customer satisfaction
New Product Development
Service Quality & some others
Todays firms stress on these aspect to enhance
Customer satisfaction.
Develop Business.

A Different Approach for Marketing Services

Narrow definition of marketing by service

providers.
Lack of Appreciation for marketing skills in service
organization.
Difference in organizational structure of service
firms.
Problem in determining costs for pricing of
services.
Constraints & opportunities for not-for-profit
service organization.

1.Narrow definition of marketing by service providers

Earlier,

service marketers had very narrow

definition for marketing & consider it function that
consisted only of advertising, sales promotion &
public relations. Very few extended this definition
to include sales & market research as well.
Other
marketing
such
as
segmentation,
positioning, customer services, new product
development, emphasize service quality etc. were
not paid adequate attention by service marketers.

2.Lack of Appreciation for marketing

skills in service organization:-There is
less emphasize on sales training & sales
activities in service firms, unlike in
manufacturing companies.
3.Difference in organizational structure of
Service firms:- In such organization
structures, the top management frames
strategies, which are then implemented by
personnel at the lower levels.

4.Problem in determining Costs for prices

The heterogeneous and intangible nature of services

makes it difficult to deterring pricing of a service

using the cost-based strategy.
The usual pricing method available to marketers do
not suggest any techniques to set for a price for the
skill, expertise & value that are involved in service.

5.Constraints & opportunities for not-for-profit service

organization

The major constraints faced by not-for-profit

service organization are funding & lack of adequate

& appropriate infrastructural facilities. Constraints
such as these make it difficult for these
organization to improve their operation &
functioning.
This in turn has an adverse impact on the
effectiveness of these organization to deliver
quality service.

Other Challenges
Being intangible in nature, service can not be

touched, smelt, seen or tested. This make it difficult

to market a service due it difficulty in making the
customers conceptualize the service.
Another challenges that arises due to heterogeneity
of service is the difficulty in standardizing the service
& ensuring quality control.

Service Marketing Mix

Four Ps
Four Ps

Marketing Mix
Product
Price
Promotion
Place

Marketing Mix
The offer you make to your customer can be altered

by varying the mix elements.

So for a high profile brand, increase the focus on

promotion and desensitize the weight given to price.

Target Market is the key

Competition

Designing the right marketing mix

The most creative & challenging step in marketing is

designing the right marketing mix

The marketing mix is the specific collection of
actions & associated instruments employed by an
organization to stimulate acceptance of its ideas,
products & services

Total Offer to the Customer

First, the firm chooses the product to meet the

identified need of the target segment

Second, the right distribution channel is used to
make the product available
Third, the firm undertakes eye catching promotion
Fourth, the price platform is acceptable to the
customer & firm

4Ps & 4Cs

Product- Customer /Consumer
Price- Customer cost
Place- Convenience
Promotion- Communication

4Ps & 4Cs

Four Cs
The Four Ps is also being replaced by the Four Cs

model, consisting of consumer, cost, convenience,

and communication.
The Four Cs model is more consumer-oriented and
fits better in the movement from mass marketing to
niche marketing.

Product- Consumer
The product part of the Four Ps model is replaced by

consumer or consumer models, shifting the focus to

satisfying the consumer.

Price- Cost
Pricing is replaced by cost, reflecting the reality of

the total cost of ownership.

Promotion- Communication
Finally, the promotions feature is replaced by

communication.
Communications represents a broader focus than
simply promotions.
Communications can include advertising, public
relations, personal selling, viral advertising, and any
form of communication between the firm and the
consumer.

Booms & Bithner

People all people who directly or indirectly influence the

perceived value of the product or service, including knowledge

workers, employees, management and consumers.

Process procedures, mechanisms and flow of activities which lead

to an exchange of value.

Physical evidence the direct sensory experience of a product or

service that allows a customer to measure whether he or she has

received value. Examples might include the way a customer is treated
by a staff member, or the length of time a customer has to wait, or
the environment in which a product or service is delivered

Extended- Marketing Mix

Physical evidence
There are many examples of physical evidence,

including some of the following:

Packaging.
Internet/web pages.
Paperwork (such as invoices, tickets and dispatch
notes).
Brochures.

Physical Evidence
Furnishings.
Signage (such as those on aircraft and vehicles).
Uniforms.
Business cards.
The building itself (such as prestigious offices or

scenic headquarters).

7Ps & 7Cs

The 7 Ps

The 7 Cs

Organisation Facing

Customer Facing

Product =

Customer/ Consumer

Price =

Cost

Place =

Convenience

Promotion =
People =

Communication
Caring

Processes =

Co-ordinated

Physical Evidence =

Confirmation

Product
Product:
A product, service or idea is that which satisfies the

needs & wants of the customers

Product
A tangible object or an intangible service that is mass

produced or manufactured on a large scale with a

specific volume of units.
Intangible products are often service based like the
tourism industry, the hotel industry, etc.

Product
Instruments that aim at satisfaction of the

prospective exchange partys needs

Examples: Product characteristics, options,
assortments, packaging, guarantees, quality,
features, style, brand name, size & packaging,
services, warranties/guarantees, returns &
replacements

Price
The price is the amount a customer pays for the

product.
It is determined by a number of factors including
market share, competition, material costs, product
identity and the customer's perceived value of the
product.
The business may increase or decrease the price of
product if other stores have the same product.

Price
List Price
Discounts
Allowances
Payment Period
Credit Terms

List Price
In retail, price regularly quoted to customers before

applying discounts. List prices are usually the prices

printed on dealer lists, invoices, price tags, catalogs,
or dealer purchase orders.

Discounts & Allowances

Discounts and allowances are reductions to a

basic price of goods or services.

Payment Period & Credit Terms

The stipulation by a business as to when it should be

paid for goods or services supplied, for example, cash

with order, payment on delivery, or within a
particular number of days of the invoice date

Factors affecting Pricing

Target segment
Cost
Competition
Society & Law

Place
Place represents the location where a product can be

purchased.
It is often referred to as the distribution channel. It
can include any physical store as well as virtual
stores on the Internet.

Place
Physical distribution are activities involved in

transporting products from the producer to the

consumer:
Mode of transport
Warehousing & Storage
Order processing
Inventory control

Place
Instruments that determine the intensity & manner

in which goods or services will be made available

Channels
Coverage
Locations
Inventory
Transportation
Logistics

Promotion
Promotion activities are meant to communicate &

persuade the target market to buy the companys

products
This is done by:

Advertising
Personal selling
Sales promotion- POS
Public Relations
Word of mouth Viral advertising

Integrated Communication Approach

A management concept that is designed to make all

aspects of marketing communication such as

advertising, sales promotion, public relations, and
direct marketing work together as a unified force,
rather than permitting each to work in isolation.

Promotion
Personal Selling: Face to face personal

communication- Eureka Forbes

Advertising- Mass communication efforts
through media
Sales Promotion- Communication through
contests, trade shows, free samples, yellow pages,
call helplines

Promotion (contd.)
Publicity- Communicating with an audience by

personal or non-personal media that are not paid for

delivering the message

People
People are important because:

Providing a service

Quality of personal relationships between

company and clients becomes vital.
New staff needs thorough training and constant
monitoring.
Staffing costs
the highest cost
Recruiting specialist staff
time
consuming and expensive.
Strategies and tactics for recruiting, training
and safeguarding relationships.

People Include...

Higher
managers

Middle managers

Lower managers

Others like:
Technicians
Dealers
Other Employees

(BPO Employees)

People has following attributes:

Employees
Recruitment
Training
Channel partners
Business Process Outsourcers
Motivation
Rewards
Teamwork
Customers
Education

People are the most visible aspects in service

marketing
Both customers as well as providers constitute
people
Quality of service delivery is affected by the fact
that people are not consistent
Inconsistency is due to differing backgrounds,
moods, motivation, involvement, skills and
attitudes
Training and correct recruitment is the only way
the people fact or can be harnessed as a tool
decisive competitive advantage.

Physical Evidence
Facility design
Equipment
Signage
Employee dress
Reports
Business cards
Statements

Process
A tactical tool for the service marketer to achieve his

strategic goal.
Blueprinting needs to be done.

Flowcharting of a service operation.

To help out service firms in mapping the sequences before the
beginning of service delivery or any encounter.

Process