Birat Shrestha

NCM, BBA,
KU,
March/April
2020
 Services are economic activities offered by one
party to another, employing time-based
performances to bring about desired results in
recipients themselves or in objects or other
assets for which purchasers have responsibility
 In exchange for their money, time, and effort,
service customers expect to obtain value
from access to goods, labor, professional
skills facilities, networks, and systems
 The customers normally do not take ownership
of any physical elements involved
 Services are acts, deeds, performances or
efforts
 Services dominate the economy in most nations –
the services as a percent of GDP in increasing in
developed and most of other countries
 Most of the money people spend is on services –
health care, education, hospitality,
transportation, entertainment
 Services are attached to the products that people
buy – delivery, warranty, after-sales service
 Services has become an important criteria to
customers in product or brand choice
 Service products cannot be inventoried
◦ Services being performance are ephemeral – transitory
and perishable cannot be stocked
◦ Implications – customers may need to wait
◦ Marketing tasks - demand and capacity need to
be managed through promotions, reservations,
and dynamic pricing
 Intangible elements dominate value creation
◦ Many services include physical elements like hotel beds,
theatre screens, spare-parts, cards, but value creation is
from processes, expertise and staff attitude
◦ Implications – customers cannot see, touch, smell
services and its difficult to evaluate services
◦ Marketing tasks – create physical evidences, vivid
images
in advertising, branding
 Services are often difficult to visualize and understand
◦ Services are “mentally intangible” that its difficult to visualize
and experience in advance of purchase
◦ Implications – customers perceive greater risk and
uncertainty in service purchase
◦ Marketing tasks – educate customers in service brand choice
criteria and show physical evidences
 Customers may be involved in co-production
◦ Customers need to cooperate with service personnel in
saloons, doctor visits, classes, SST (Self-Service
Technologies) like ATMs and customer friendly Websites
◦ Customers are partial employees
◦ Implications – customers interact with provider’s equipments,
facilities, and system
◦ Marketing tasks – develop user friendly equipments, train
customers to use the equipments and provide support staffs
 People may be part of the service experience
◦ Employees directly interacting with customers as “boundary
spanners”
◦ Co-customers affecting the quality of service by disturbing or
assisting another customer
◦ Implications – appearance, attitude, and behavior of service
personal and other customers can shape the experience and
affect satisfaction
◦ Marketing tasks – recruit, train, and reward employees to
reinforce the planned service concept and target the right
customers
 Operational inputs and outputs tend to vary more
widely
◦ Service is delivered directly and consumed as its produced as
final assembly takes in real time
◦ Implications – harder to maintain consistency, reliability and
service quality or to lower costs through higher productivity
and difficult to shield customers from results of service failures
◦ Marketing tasks – set quality standards based on customer
expectations, redesign product elements, provider interactions
for improvements and have service recovery procedures
 The time factor often assumes great importance
◦ Many services are delivered in real time while customers are
physically present
◦ Implications - customers expect service as per their
convenience and are willing to pay extra to save-time like
in priority banking
◦ Marketing tasks – find ways to compete on speed of delivery,
minimize burden of waiting, offer extended service hours
 Distribution may take place through non-physical
channels
◦ Some service business are able to use electronic channels to
deliver some of their services (ATMs, online banking, online
bookings of tickets)
◦ Implications – information-based services can be delivered
through electronic channels like Internet or telephone, but
core products need physical contacts
◦ Marketing tasks – seek to create user-friendly, secure websites
and free access by telephone and ensure all required
information-based service elements be downloaded from web-
site
 Core product as a service – Hyatt Hotels (lodging),
Lufthansa Airlines (air transportation), Standard
Chartered (financial services), Fortis (healthcare)
 Services as products – intangible product offerings
- HP/IBM (IT consulting), Macy’s Departmental Store
(gift wrapping and delivery), Pet’s Mart (pet
grooming and training)
 Customer services – support to core products
(counseling, recommendation, installation, retail
store employee assistance)
 Derived services – services provided by the goods –
Computers (data storage, analysis, information,
communication), TV (entertainment),
Refrigerators (fresh preservation of foods)
 Working in Unison: The 8Ps of Service Marketing

Product Elements
Process
Place & Time
Physical
Price & Other Environment
User People
Outlays
Productivity &
Promotion & Quality

Education
1. Product elements (service concept with core service for primary
need, and supplementary services to help use the core service for
customer value)
2. Place and time (service delivery through branches, electronic
channels, Internet, agents)
3. Price and other user outlays (dynamic pricing as per customer type,
time and place of delivery, demand level and capacity, service
location)
4. Promotion and education (providing needed information and advice
to customers, through mass media advertising, salespeople, f r o n t -
line staff, website, display screens, self-service equipments)
5. Process (how the firm does things is important as what the firm
does
– creating and delivering product elements requires design and
implementation of effective process when customers are acting as
co-producers – flow of activities, SOP)
6. Physical environment (building appearance, interiors, servicescape,
equipments, uniforms, printed materials, corporate IDs, visible cues,
vehicles)
7. People (motivating front-line staff interacting with customers in
service performances)
8. Productivity and quality (service quality through user-friendly
technology usage)
 Service marketing mix of 8Ps is a
strategic tool of service marketing that
incorporates human resource,
operations and production functions
Operations Marketing
 Marketing, operations, and human Management Management
resources functions need to collaborate
to serve the customer
 Operations managers are involved in
product and process design including Customers
aspects in physical environment and
quality improvement programs
 HR is responsible for employee job
definition, recruitment and training,
reward systems and quality of work life Human Resource
and monitoring service delivery process Management
with good employee behaviors
 The Service Marketing Triangle
COMPAN
Y

Interactive Marketing CUSTOMERS

EMPLOYEE
S
 Focus on Both Customers and Competitive Markets
A Framework for Developing Effective Service Marketing Strategies
UNDERSTANDING CUSTOMER NEEDS, DECISION –MAKING, AND
BEHAVIORS IN SERVICE ENCOUNTERS

BUILDING THE SERVICE BUSINESS MODEL: The Value Proposition

Develop service concept: core & supplementary
Select physical and electronic channels for service delivery
Educate customers and promote the value proposition
Position the value proposition against competing alternatives

MANAGING THE CUSTOMER INTERFACE

Design and manage service process
Balance demand against productive capacity
Plan the service environment
Manage service employees for
competitive advantage
IMPLEMENTING PROFITABLE SERVICE STRATEGIES
Create customer relationships and build loyalty
Plan for service recovery and create customer feedback systems
Continuously improve service quality and productivity
Organize for change management and service leadership
Thank You/Best Wishes