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Intro-features and characteristics Consumer Behaviour and STP Services Marketing Mix – 7P’s Service Quality and Demand Management Relationship Marketing Aligning Service Strategy to organization Understanding specific service industries.
Why study services marketing?
Significantly different from goods
marketing Relatively new discipline with a strong interdisciplinary base importance of services sector
70% - 80% GDP in highly dev.
economies Service sector in India approx 50%
Transformation of the service economy
International Government -isation regulation • ‘Hollowing • Deregulation/ out’ effect privatisation • Increased • New trade services agreements in trade services • Global customers Social changes • Increased consumer expectations • Increased affluence and leisure time • Working women Advances in technology • Relaxation of • Convergence professional assn. of computers standards and • Marketing telecommuniemphasis by noncations profit • Miniaturisation organisations • Outsourcing • Digitalisation • Quality • Enhanced movement software • Franchising
Increased demand and competition Facilitated by information technology Growth and focus on service marketing and management
ideas.What is a Product? Anything that can be offered to a market for attention. use. events. places. persons. organizations. Includes: Goods. or consumption and that might satisfy a want or need. acquisition. . services. or some combination thereof.
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benefits. and performances”. processes. or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.” “Services are deeds. .What is a Service? “A form of product that consists of activities.Valarie Zeithaml & Mary Jo Bitner .
“ Something that can be bought and sold but which cannot be dropped on your foot !” .
eye care Professional Services accounting. ski resort. dentistry. architectural Financial Services banking. rafting Travel airlines. counseling services. insurance Hospitality restaurant. legal. pest control.Examples of Service Industries Health Care hospital. health club . theme park Others: hair styling. plumbing. bed & breakfast. investment advising. medical practice. travel agencies. lawn maintenance. hotel/motel.
wmv ..Fed Ex Example Clip .\Clips\service\fedex.
The Nature of A Service “ The service product is essentially a bundle of activities.” .which in Federal Express’ case consists of transporting packages overnight and delivering them next morning to the addressee. consisting of the core product . plus a cluster of supplementary services.
The Nature of A Service The Example of Federal Express Advice and Communication Bill Statements Order Taking Supplies Overnight Transportation and Delivery of Packages Problem Solving Pick-up Documentation Tracking .
Characteristics of Services .
Tangibility of goods and services .
Implications of Intangibility Services cannot be inventoried Services cannot be patented Services cannot be readily displayed or communicated Pricing is difficult .
Product qualities affect ease of evaluation Furniture Clothing Computer repair Legal services Vacation Restaurant meals Medical surgery Motor vehicle Lawn Fertiliser High in search qualities High in experience qualities High in credence qualities Consultancy project Easy to evaluate Difficult to evaluate .
membership cards.e. certificates) reduce risk emphasise reputation and qualifications service guarantees inform and educate customers . uniforms. logos) tangible cues (i.Strategies for intangibility provide tangible evidence symbolic cues (i.e. ticket.
Heterogeneity (Variable) service quality varies across service encounters service encounter is the interaction between service employee and customer ‘moments of truth’ service people are central to service delivery service is delivered in ‘real’ time .
Implications of Heterogeneity Service delivery and customer satisfaction depend on employee actions Service quality depends on many uncontrollable factors There is no sure knowledge that the service delivered matches what was planned and promoted .
Strategies for Variability customer surveys and feedback training in interpersonal and technical skills provide product knowledge ensure back-stage systems support front line staff 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 .
Implications of Simultaneous Production and Consumption Customers participate in and affect the transaction Customers affect each other Employees affect the service outcome Decentralization may be essential Mass production is difficult .
Strategies for inseparability manage the service encounter scripts and roles front-line staff need both technical and interpersonal skills (recruit & train) educate the customer (provider –marketer) 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 .
internet banking) . ATMs.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.
Goods versus Services .
People Processing 2.Classification of Services Based on Degree Of Cust. Possession Processing 3. Mental Stimulus Processing 4. Information Processing . Involvement ( Lovelock) 1.
financial services .g. accounting.g.g. repair services. education. consulting. psychotherapy. landscaping. hospitals.Four Categories of Services Based on the Process Used People Processing Toward People e. airlines. hair stylists.g. broadcasting Information Processing Intangible Acts Directed Toward Intangible Assets e. house cleaning services Tangible Acts Directed Mental Stimulus Processing Intangible Acts Directed Toward People e. fitness centers Possession Processing Tangible Acts Directed Toward Possessions e. banking.
b a s e d S e r v ice s Low .S ta r G o o d A ir lin e H o m e Emphasizes encounters with service personnel H a ir C u t H o te l M a n a g e m e n t C o n s u ltin g R e s ta u r a n t T r a v e l (E c o n .) Te le p h o n e B a n k in g R e ta il B a n k in g M o te l C a r R e p a ir In su r a n ce D r y C le a n in g Fa st F o o d M o v ie T h e a te r s C a b le T V P u b lic Tr a n s it H o m e B a n k in g M a il B a se d R e p a ir s Emphasizes encounters with equipment I n te r n e t.Levels of Customer Contact with Service Organizations High N u r s in g 4 .
Professional & non professional Business Orientation of service provider Type of end user .g Based on Skills and Expertise Required-e.Other Classification of Services Degree of Tangibility e.g.
Services Marketing Mix .
Traditional Marketing Mix All elements within the control of the firm that communicate the firm’s capabilities and image to customers or that influence customer satisfaction with the firm’s product and services: Product Price Place Promotion .
Place & cyberTime space & time Product (service) Process Price Price Customers Customers Customers Promotion Physical evidence .An expanded marketing mix for services People Place.
the customer. the firm’s personnel. and other customers in the service environment.People All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely. customer service employees other customers .
•atmosphere décor.Physical Evidence The environment in which the service is delivered and where the firm and customer interact. music etc. and any tangible components that facilitate performance or communication of the service. •equipment •facilities •uniforms .
Process The actual procedures. mechanisms. service delivery systems •back stage •front stage procedures policies . and flow of activities by which the service is delivered—the service delivery and operating systems.
Expanded Marketing Mix for Services .
Expanded Marketing Mix for Services PEOPLE Employees Customers Communicating culture and values Employee research PHYSICAL EVIDENCE Facility design Equipment Signage Employee dress Other tangibles PROCESS Flow of activities Number of steps Level of customer involvement .
The Services Marketing Triangle Company (Management) Internal Marketing “enabling the promise” External Marketing “setting the promise” Employees Interactive Marketing “delivering the promise” Customers .
Services Marketing Triangle Overall Strategic Assessment • How is the service Specific Service Implementation • What is being promoted and Ways to Use the by whom? by whom? organization doing on all three sides of the triangle? weaknesses? strengths? • How will it be delivered and • Are the supporting systems • Where are the • What are the in place to deliver the promised service? .
Marketing Analysis Framework Customers Market Intelligence Competitors 3 C’s 3 C’s Company S (Segment) Product Price (Target) T P (Position) Promotion Place 4 P’s 4 P’s .
operations and human resource efforts Setting prices Standardization versus personalization .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.
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