Module 2

MARKETING MIX OF SERVICES

Agenda

• Product in Services
• PLC
• Price
• Promotion
• Place
• Physical Evidence
• Process
• People
Service Encounter (SE)/ Moment of Truth
(MOT)

• To solve the problems of the

patient, the doctor should
personally meet the patient and
interact with them
• This is called SE
• In other words, the service
provider has to understand the
issues and problems of the
customer
• SE may be defined as “a period of
time during which a consumer
directly interacts with a service”
• It is also known as ‘Moment of
Truth (MOT)’
Critical Incidents
• Sometimes the customers may
find it difficult to accept some
services as they may not match with
their expectations (e.g. The
customer comes to know that the
network of BSNL is very poor after
subscribing to it) or they may be
beyond their reach in terms of price
(The hospital service of Apollo is
very costly and hence everyone
cannot afford it)
•These mismatching situations (i.e.
requirements and expectations of
the service provider and customer
are not matching) are called “Critical
Incidents”
Marketing Mix

. 4 Ps- Already explained in Module 1

Service Marketing Mix

• Neil Borden viewed marketer as a

‘decider’, or ‘artist’ or a ‘mixer of
ingredients’ who plans various means of
competition
• “He may follow a recipe prepared by
others, or prepare his own as he goes
along, or adopt a recipe to the ingredients
immediately available, or experiment with
or invent ingredients no one else has
tried”
• If a marketer was a “mixer of ingredients”,
what he designed was a “marketing mix”
• The following are the marketing mix
components (7 Ps) in services marketing:
Already explained in Module 1
 Product/ Service

• Product refers to the service offering

Price

• Price refers to the service charge

• E.g. Consulting Fees of Doctor, Tuition
Fess in a University etc.
Price
• Aspects that must be considered while setting prices for services:
a) Cost- basis: how much cost you incurred for producing that service
b) Competition- basis: how much the competitor is charging for the
same service
c) Demand- basis: If demand for the service is high, price can be
raised and vice versa
 Place
• Place refers to the distribution
channel of service- i.e. how the service
has to reach the consumer?
• For example, a Management
Education Center. Where it has to be
located? How the consumers
(students) can get that service? What is
the level of demand for that course? All
these issues are considered and a
management school will be established
in a place convenient to a large number
of students who are interested in
availing management education. Thus
“place” concept in services refer to the
accessibility of service provided
 Place

• Traditionally., most services have been

sold directly from the producer to
consumer
• Middlemen are usually not used as
service cannot be separated from the
seller
• But this absence of middlemen limits
the geographical markets that the
service provider can reach
• Therefore, sometimes the channel
includes one agent middleman
• For example, agent or broker is often
used in the marketing of securities,
travel arrangements, entertainment and
housing rentals
Place

• Different distribution strategies are

there:
• Franchising: means granting another
person or institution to exploit a trade
name, trade mark or product in return
for lump- sum payment or for royalty.
E.g. McDonalds, KFC
• Integrated Service System: It is
another recent trend in the
distribution of services. In this system,
the service provider offers additional
related services to the customers. E.g.
Travel agencies offer "Package Tours”
in which they take care of not only
travel but also visa, foreign exchange,
reservations etc.
Promotion

• Promotion is used to build image

and reputation, to attract new
customers and to generate
customer loyalty
• Objectives of Promotion: To
inform, to remind and to
persuade prospective customers.
For example, information about
price reduction, new products
and services, information to
build consumer confidence and
to generate customer loyalty
Promotion
• The promotion should be aimed not only at prospective customers,
but also at channel customers (wholesalers, retailers, brokers, agents
etc.)
• For instance, contests for retailers, special gifts for agents/ retailers
if they sell more of our product etc.
Promotion
• Elements of Promotion Mix:
a)Advertising: Definition, Advertiser,
Advertising Agency, Objectives of
Advertising- Refer MM Text
b)Sales Promotion: Refer MM Text
c)Personal Selling: Refer MM Text
d)Public Relations: Refer MM Text
e)Direct Marketing: Refer MM Text
People

• Service Personnel
• Customers
 Physical Evidence

• Types of Physical Evidence:

a) Peripheral Evidence: is that which can be possessed by the consumer
but has little independent value. E.g. Movie Ticket, Fee Receipt etc.
b) Essential or Dominant Evidence: It cannot be possessed by the
consumer but forms a dominant part of service facilities. E.g. Aero
plane, Hotel Building, University Building, Bank Office Building etc..
 Process

• The system by which the

target audience receive
delivery of the service
constitutes the process
• i.e. the process by which the
service is produced and
delivered to the ultimate
customer
 Process

• Kinds of Delivery Process

a) Line/ Assembly Line Operations
b) Job shop Operations
c) Intermittent Operations
 Process
a) Line/ Assembly Line Operations: Here, the consumer moves
through logically arranged operations which are arranged in a
sequence. E.g. In a super market, the customer takes the items he
need, puts it in a trolley and pays for them at the exit
b) Job shop Operations: When the consumers require a combination
of services using different sequences, the job shop type of
operation is more useful. E.g. In a hospital, some patients need
only consultation, some others may need consultation and
medication while some patients require hospitalization, some
others require hospitalization and surgery
 Process

c) Intermittent Operations : are useful when the type of service is

rarely repeated. For example, firms offering consultancy for projects
and advertising use this kind of delivery system since each project or
advertising campaign requires a unique set of input factors.
 Benchmarking

• Benchmarking is the art of learning

from companies that perform certain
tasks better than other companies
• There can be as much as a ten fold
difference in the quality, speed and
cost performance of a world class
company versus an average company
THANK YOU !!!