Services Marketing

Consumer Behavior
 So far…
• What makes services different?
• How to position service? Marketing vs.
production orientation.
• 3 additional p’s of Services Marketing.
• Internal, Interactional and External Marketing
• Gaps Model.
 Organization External Marketing
Internal Marketing 1. Culture
2. Perceptions Technical/
3. Analysis Physical /Corporate
4. Strategy
Job Environment / 5. Implementation Quality and Brand
Employee 6. Control Image/Information
Benefits
Customer Service Patronage/
orientation/ Process Payment/
Development/ Recommendation/
Information
Information
Service Functional Service Quality/Delivery/
Production/ Information Customers
Providers 1. Culture
1. Culture 2. Perceptions
2. Perceptions 3. Motivations
3. Motivations
4. Expectations
4. Expectations
Functional Service Quality/Delivery/
Production/ Information

Interactive Marketing

Service Marketing Trinity

 Management Skills required…
Customization/worker discretion
High
TOP DOWN MANAGEMENT
1. Productivity Improvement Consulting/ B-School Teaching/ Specialty
2. Measurement Intensive Hospitals/ High-end Hotels and restaurants
3. Standardized Formats
4. Focus is on telling what to
do

Price
Low High

Schools/ Supermarkets /
Government Departments/ Fast
Bottoms-up Management
Food joints etc.
1. Quality control is with service
provider
2. Focus is on Hiring/Training/
PA/Motivation
Low 3. Use Customer Satisfaction
Index as a measure of quality
 1 Issue—Risk
st

• Uncertainty regarding buying goals (Consequence)

• Uncertainty regarding brands (Choice)
• Uncertainty on chosen brand.
• Specifically for services—Expectation Management
– What to expect? Standardize? Advertisement?
– Knowledge. Co-Producers?
• Ability
• Attitude
• What reduces risk
• Communication—”Tangibility” issues?
• Price—”Fair Price” issues
• Information—”Tangibility” Issues?
• Guarantees—”Tangibility” & “Fairness” issues?
• How does the consumer manage risks
– Problem Recognition
– Search & Evaluation
– Purchase– Lack of Surrogate Consumption (who controls the transaction) and Service
Encounter Issues
– Post Purchase—Satisfaction Issues
 Formation of Expectations

Enduring Service
Intensifiers
Explicit Service
Desired Service Promises

Personal Needs
Implicit Service
Zone Promises

of
Transitory Service Tolerance Word-of-Mouth
Intensifiers

Past Experience
Perceived Service
Alternatives
Adequate Service

Self-Perceived Predicted
Service Role
Service
Situational
Factors
 Perceived Control
• Why Control?
– Human need to demonstrate one’s competence, superiority,
and mastery over the environment and other people!
• Who Controls?
– Management?
– Customer?
– Employees?
– Environment?
 Control Conflicts

Ex
ng

te
eti Firm

rn
k
ar

al
(Procedures and Environment)
lM

M
a

ar
n
er

ke
Int

tin
Autonomy/Control Satisfaction/Control

g
Vs. Vs.
Efficiency Efficiency

Contact Personnel Customers

Control—Customer, Employee or
Environment
Attribution for failure or Success
—Customer, Employee or
Environment
 Attribution– Who is responsible?
• Accept Responsibility for Success and reject
responsibility for failures
• Overestimate their ability to cause an
outcome that is actually determined by
chance—Lake Wobegon Syndrome
• Believe that their own behavior is driven by
situational factors and that the other’s
behavior is determined by their personality
traits.
 Issues
• Can we increase the perceived control and
thereby increase the perceived value for
money?
• Increase the cognitive control element by
customer education (reduce uncertainty)?
• Can we build perceived control into our
service encounter?
 2 Issue—Trust
nd

• Service Consumption is more risky and therefore

trust relationship is more relevant to services
marketing.
• Market Offerings are difficult to evaluate. The degree
varies between low difficulty for search goods and
high for belief (credence goods)
• Most goods have low level of trust relationship while
services have a high level of trust relationships.
 Generalized Personality based
Trust—
Trust— --General tendency to trust/distrust
Derived from social norms based on personality traits

Consumer
Trust

Process Based
System Trust—
Trust— Developed through
Derived from legal system or repeated interactions
Professional or Bureaucracy Firm/Brand Specific
 Tradeoffs…
• Higher Systems trust makes it easy for
communication/ branding/ etc.
• Higher Personalized Trust makes customer
satisfied
 The Service-Trust Tradeoff

Degree of Interaction and Customization

Low High

Service Factory
Low •Airlines Service Shop
Degree of labor Intensity

•Trucking •Hospitals
•Hotels •Auto Repair
•Resorts & Recreation •Other Repair Services

Mass Service Professional

•Retailing
•Wholesaling Service
High •Schools •Doctors
•Retail Banking •Accountants
•Consultants

So, very important issue! Not all services need

the same strategy!
 News Paper Report on Air Emirates

• Air Emirates reported to the Security Guards

of the Kolkata Airport on Arrival that a
customer misbehaved with the crew.
• Reports suggest that the altercation started
when the customer wanted to be served an
early dinner so that he can have his medicines
• So, what is to be done?