Introduction to services and service industry

WHAT ARE SERVICES?

COMPARATIVE ANALYSIS: PRODUCT AND SERVICE
CHARACTERISTICS OF SERVICES
WHY MARKET SERVICES?
CONTRIBUTION OF SERVICES MARKETING
SERVICES IN DEVELOPING COUNTRIES
CLASSIFICATION OF SERVICES
CONCEPT IN SERVICES MARKETING
MYTHS ABOUT SERVICES
 Current trends

 Service sector contributes one-third of global GVA, half of global employment, one-fifth of
global trade and around half of global FDI flows.
 Currently, United States is world’s largest service provider, followed by China and Japan at
second and third position. In terms of services GVA, India is 10th largest economy.
 However, India showed the fastest service sector growth with a CAGR of 8.6 per cent during
2008-14. In 2014 India’s service sector grew at 10.3 per cent was noticeably higher than that of
China at 8.0 per cent.
 In 21 states and union territories, Service Sector is a dominant economic sector contributing more
than half of the gross state domestic product (GSDP). In all states except Sikkim and Arunachal
Pradesh, Service Sector contributes more than 40% of the GSDP.
 This proves that India is truly a service economy. In 2014-15, while total FDI equity inflows grew
by 27.3%, FDI equity inflows to the services sector grew by a whopping 70.4%.
Role of services in modern economy

 It affects the way in which we live & work

 Contributes towards the growth of the economy & creates maximum
employment opportunities.
 Opening of service economy means greater competition ,which will in
turn stimulate innovation through application of new & improved
technologies.
 Optimum utilization of resources
* Accelerates capital formation
* Increases standard of living
* Investment in R & D – better technology, increased speed, better
efficiency, meeting increased supply, up to date MIS
Factors stimulating the growth of service sector

 Government policies-changes in regulation, LPG, customerisation ,

new agreements on trade in services.
 Social changes-rising consumer expectations, more affluence, use of
technology
 Business trends-Providing value, competition, stress on quality, Imp of
marketing , Innovation
 Development in IT-computerisation , web connectivity, benefit of
internet, wireless networking
 Internationalization / globalization-growth of MNC transnationals,
Mergers alliances, acquisitions', international trade etc1
Reasons/ factors for growth of service sector
 Demographic changes

 Social changes

 Economic changes

 Political changes
Reasons for growth of services (verma)

 Higher disposable income , economic affluence

 Women in work force
 Growing fashion consciousness ,urbanization
 Professionalism in fields (E.g. education)
 Information explosion / IT revolution
 Increased sophistication/civilized lifestyles
 Government activities – cultural exchange policies, trade policies,
global partnerships etc
 Concern for environment
 Demographic shifts / Life expectancy/ migration
 Innovations , new products, product complexity
Services in developing
countries
 Huge untapped potential
 Basic services- healthcare, education not developed
 Quality of services- low
 No service delivery standards set
 Lack of market research
 Need for government intervention
 Proper channels to human, financial and intellectual resources needed
 Potential to contribute to country’s GDP and economic development
Service marketing environment (bhattacharjee)

 External environment for service firms consists of SLEPT factors:

 Socio-cultural factors-
--- Socio-cultural changes--* consumption * Beliefs & values
--- Demographic changes--*age composition, * gender composition, *
changing role of women.
Services that received a big boost due to this factor are
Retailing, health & personal care, education, BPO travel & transportation
etc
 Legal factors- are the percolation of the political & govt factors, there
are more laws & regulations for the service industry.
 Eg of legal implications—closure of BPOs, FERA guidelines,
reservation of certain sectors, CRR,SLR, environmental guidelines etc
 Economic factors—the govt economic policies have tremendous impact on
mgt of service sector. An economy has a business cycle consisting of –
 Recession
* Recovery
 Growth
 Decline
Some economic pointers of the impact on services
--with globalization there has been a spurt in the demand for communication &
information services.
--with increased specialization there has been an demand for specialized
services such as M.R, ERP, mgt consultancy, financial consultants etc
--knowledge based economy
 Political factors—service firms have been greatly affected by the
policies & decisions made by the government, the regressive tax
regime on services contributed in damping growth-
 Eg of impact of government policies is the leisure, travel & tourism
industry, retail sector, education.

 Technological factors-some technological development which affected

services:—
 Universal product code
 Credit cards
 Electronic data capture
 Internet, ATMs with V-SAT, cellular phones
 Data mining & data warehousing technology
 Quick response inventory management system
Internal or Micro environment factors
 External customers/ consumers
 Internal customer/ channel pattern/ providers
 Competitors- to gain competitive advantage ,a service firm must do
either of the following:-
--Provide product value but operate more efficiently than its rivals(lower
cost )
--Operate in a unique way that creates greater product value & command
premium price.
Four different types of competition are:-
Direct, Indirect, substitute & new entrant competition.
 Suppliers
 Regulators
What are services?
 Services are activities, benefits or satisfaction which are offered for sale,
and are provided in connection with the sale of goods

 Service is action of an organization that maintains and improves the well

being and functioning of people.

 Payne has defined service as an activity which has some element of

intangibility associated with it, which involves some interaction with
customers or property in their possession and does not result in transfer
of ownership.

 In simple terms services are intangible deeds, activities, processes, and

performances that cannot be touched, seen or felt but can be experienced&
which benefits and satisfies the consumer.
services
PERFORMED
BY
INDIVIDUALS
OR MACHINES

SERVICE
IS AN IS AN
ACTIVITY,
INTANGIBLE
INTANGIBLE RENDERED
RENDERED FOR
SERVICES FOR PROFIT,
PROFIT,BENEFIT
ACT, SS
DEED,DEED,
DEED,ACTIVIT
ACT, R
&BENEFIT &
SATISFACTION
EFFORT
ACT,
EFFORT
EFFORT,
OR
OR
PERFORMANCE
PERFORMANC SATISFACTION
E
RENDERED
DIRECTED TO
CUSTOMERS
TO
OR INANIMATE
CUSTOMERS
OBJECTS
Some of the distinctive aspects that emerge from the above definitions are
as follows;-

 Services are intangible, however some of these may include a final

tangible component eg reports, notes
 They do not result in ownership of anything
 Services are activities performed by the provider
 Customer interaction & co-operation is integral to service creation,
delivery and consumption.
 Services are actions bought for their ability to provide satisfaction or
benefit
 Service production may be some times tied to goods and are an
integral offerings of many manufactured goods for eg warranties,
deliveries, installations
Four Categories of product as distinguished by Philips
Kotler

 A pure tangible good- eg tooth paste, salt rice where no service

accompanies product.

 A tangible good accompanying service- consumer durables ,to

enhance consumer appeal/satisfaction.

 A major service accompanying minor goods &services- 1st class air

travel, premium hotel stay.

 A pure service- consultancy, teaching ,babysitting etc

The continuum of goods & services
Pure Combination of Pure
goods goods & services services
 In the world of marketing there are very few pure products or services,
instead the market offerings can be visualized to be falling on a
continuum with two ends being tangible & intangible dominance .
 Shostack presented the idea of tangible & intangible scale to classify
market offering as below
 Pure goods
 Goods major service minor
 Tangible & intangible equal
 Major services minor goods
 Pure services
Tangibility Spectrum
 The term goods can be interchangeably used with product, a product can be
defined as a comprehensive package of goods or services or both, which adds
value to the consumer.

 Intangibility is the key characteristic of a service, however there are few

goods & services that are purely tangible or purely intangible.

 To put in simply. services tend to be more intangible than goods and goods
tend to be more tangible than services
Continuum of tangibility
 Classification of services
Classification of services on the basis of customer involvement
-People Processing-customer has to actively co-operate eg health care, beauty
salons, being transported etc

-Possession processing-service offered to physical

Objects -both living & inanimate, that belong to the customer. Eg courier, car
repair/maintenance , dry cleaning

-Mental stimulus processing-services that interacts with peoples minds, eg

Psychotherapy, education, counseling.

-Information processing-services that are highly dependent on effective

collection and processing of information eg financial services ,medical
diagnosis, M.R
 Classification on the basis of tangibility
 Highly tangible-car rental , wending mac, ATM etc.
 Service linked to tangible goods- installation, maintenance
 Tangible goods linked to services-restaurant, health care, education.
 Highly intangible-housekeeping, hairdressing etc

 Classified on the basis of expertise

 Professional- medicine, legal, accountancy, teaching
 Non professional- baby sitting, housekeeping.
 Profit-Oriented—i)Non profit ii) commercial
 Based on end user—i) consumer ii)B2B- iii)Industrial
 property management, housekeeping, and industrial cleanup, for example,
often sell these services exclusively to other businesses, rather than individual
consumers.
 Major categories of services
 Business and professional services – banking, insurance, accountancy,
medicine, lawyers, advocates
 Infrastructural services – roads, railways, motor transport, power, oil
 Public services – police, defense
 Trade services – wholesale & retail , distribution
 Personal services – education, medical, gymnasiums, hotels,
spas ,health
 Individual & group services – beauty parlors, medical, coaching
classes (education)
 Environment
 Finance- banking, insurance, investment
 Travel , tourism, hospitality, recreation
Characteristics of services
 Intangibility—visualization, association, physical representation and
service marks, facts & figures.

 Perish ability– over marketing, managing demand & supply.

 Heterogeneity (Quality aspect)– Training of internal & external customers,

automation, quality recruitment & selection, developing service minded
culture.

 Inseparability/simultaneity (of creation and delivery)-training internal

customers, use of technology

 Ownership/Resell
 Quality measurement—feedback, monitoring.
 Nature of Demand (by season, by time – e.g. peak hours)
Some eg of service marks
 Alliance group insurance --- “the power on your side”
 AT & T --- “It is within your reach”
 British Airways--- “ The worlds favorite airline”
 Taj Business Hotels– “Nobody cares as much”
 Discovery channel– “explore your world”
 Godrej – “promise of good living”
 Jet Airways– “the joy of flying”
 Holiday Inn Hotels– “ Be yourself”
Comparative analysis: Product
and service
 Tangibility

 Transferability (Physical transfer)

 Existence

 Heterogeneity

 Reselling
Service culture meaning
 Service culture exists if there is appreciation for good service

 Good service given to internal as well as external customer

 Service culture is a way of life and a source of competitive advantage

 Building a service culture requires sustained attention to :-

 A) hiring right people
 B) retaining the best people
 C) developing the people to deliver service quality
 D) providing support system
 Service culture in organisations
 Developing and maintaining a customer centric approach
 i) Seek feedback
 Ii) communicate and establish consistency
 Iii) reward and recognise
 Iv) set policies and train

 Relationship marketing- attracting, maintaining and enhancing customer

relationship.

 Benefit to firm- retention of customers, increased revenue, reduction of

promotion expenses, reduced service gap,better understanding between
customers and front line staff
 Benefits to customers- saves search time and efforts, personal attention
 Relationship marketing
 Customers become partners
 Keeping and improving relationship with current customers rather
than on acquiring new customers.
 No customer is tempted to move to their competitors

 Attracting Customers. Relationship marketing begins with the

first impression of your brand that customers see. ...
 Converting Customers. ...
 Retaining Customers. ...
 Delighting Customers.
Six market model- conquering six markets
 Role of service employee

 Product designer
 Performer
 Technician and associate
 Friend, empathiser
 Assurer
 Marketing Intelligence
 Salesmen
 Researcher
 Boundary spanner
Role of customer in service process
 Generic difference between goods &services

 Nature of the product

 Absence of inventories
 Customer involvement in the prod process
 People as part of the product
 Quality control problems
 Importance of time factor
 Structure & nature of distribution channels
offered to physical goods differ
 Harder for customer to evaluate
Categories of qualities of consumer goods or services-
 Search quality- these attributes can be determined even before purchase
of product. For e.g color, style, price, hardness etc. Goods are high in
search quality & services being in-tangible are low in search qlty.

 Experience quality- attributes that can be discerned after purchase or

consumption. For e.g vacation, restaurant meal etc. or through others
who have experienced it.

 Credence qualities- Difficult or impossible to evaluate even after

consumption or usage, due to the tech, lack of expertise or nature of
service it is difficult to evaluate. For e.g heart surgery, kidney
transplant, dental service, auto repairs, etc.
 Marketing challenges of services
Narrow definition of marketing— some service executives continue to define
mkt as simply advt, sales promotion & P.R, where as crucial areas for a service
firm are, new product development, pricing STP, customer service, service
quality.

 Lack of appreciation for marketing skills— the prevailing environment not

only restricts the resources allocated to marketing but also inhabits the
creativity of the service marketer.

 Different org structure-- service org should try and achieve an org structure
which will integrate marketing & operational considerations, in order to ensure
high level of service quality & satisfaction.

 Limited data on competitive performance— Unlike consumer goods segment,

the service sector is inhibited by lack of sufficient detailed market data on a
product to product basis
 Two key uses of market research data are :-
i) Determination of customer needs and preferences
ii) Measures of service specific customer satisfaction.

Problems in determining costs for pricing— In comparison to manf firms it is

more difficult to determine which fixed & operating costs are associated with
which products especially when several services are being produced
concurrently by the same organization.

The basic difference between goods & services may lead to myriad other
challenges & questions that marketer may face which can be as follows:-
 * How does the firm accommodate fluctuating demand when the capacity is
fixed and the service itself is perishable eg theatre

 * How can the firm best motivate and select service employees who, because
the service is delivered in real time become a part of the product itself.

 * How can a balance between standardization & personalization be

determined to maximize both the efficiency of the org and the satisfaction of its
customers as well as its employees.

 * How can the org protect new service concepts from competitors when service
process cannot be patented legally.
 * How can organizations ensure delivery of consistent quality service
when, both the organizations employees and customers themselves
affect the service outcome.

 The service Marketing Triangle

The challenges faced by the service managers can be conceptualized in
the service marketing triangle.
According to Gronross there are three types of marketing activities that
must be successfully carried out for service org to succeed, namely
external marketing, internal marketing and interactive marketing.
Types of marketing in service firms Service triangle

Service Firm

Internal marketing External marketing

enabling promise
the promise setting the promise

Employees Customers
Interactive mkt
 Internal marketing – directed towards employees

 External marketing - directed towards consumers

 Moment of truth
 External marketing
 Anything that is communicated to the customer before the service delivery-that
an org engages in the set up of its customers expectations & make promises to the
customers regarding what is to be delivered.
 It includes advt, sales promotion, P.R,, sales management , direct marketing ,
the firms physical facilities & the process of service delivery.

Internal Marketing
• It suggests a critical role which enables employees to keep the promise that
have been made to the customers.
• The employees are considered the first internal market for the org & every
individual play an imp role in mkt of the service.
• It includes any efforts such as training, customer knowledge, sales –mkt
knowledge ,motivation by the org to satisfy its customers
Internal marketing
 Definition:- attracting, developing, motivating, and retaining
qualified employees through job products that satisfy their needs.
 Components of internal marketing:-
 Motivation
 Co-ordination
 Information
 Education
 Proposed Process of Internal Marketing Programs
 Attract best talent
 Motivate
 Impart knowledge
 Emphasize on Team work
 Empower
 Reward
 Interactive marketing or moment of truth

 Emphasized by Scandinavian airlines system(SAS), has become popular as

MOT or moment of truth.

 Though companies strive to design effective service products, communicate its

promise to the customers train, convince & enable its front line providers it is
only the provider who keeps the promise.

 The provider becomes the face of the company & all their perception of
quality & satisfaction entirely depends on the provider.
 Finally it is the responsibility of the provider to convey the sincerity of
purpose & validity of promise that is to be kept, to put their best foot
forward, smiling , being extra polite, going out of way to help the
customer, to make their experience memorable. These encounters are termed
as MOM or Moment of truth.eg train journey & SAS
The servuction model
 Is used to illustrate factors that influence service experience
 The experiential aspect of consumption becomes important when
service firms provide complex bundle of benefits.
 All those who come in contact with the customer help in the service
delivery & affect service encounter & experience
 This model is relevant in those services where there is a high degree of
involvement of the consumer like ATM, buffet lunch, self service in
petrol pumps etc
 Consumer tends to add their own bundle of benefits taking off from
the given offer.
Myths about services
 A service economy produces services at the cost of other sectors
 Service jobs are low paying & menial
 Service production is labor intensive & low in productivity
 Service is necessary evil for manufacturing firms
 Managing service is just as managing a manufacturing business.
 The growth of the government is the reason we are a service economy.
Consumer Behavior
 Difference between evaluation process between goods & services
 Implication of the difference for service providers
 Customer decision making process
 Service gap & Zone of tolerance
 Customer expectation—Types, factors influencing customer
expectations, Managing & Exceeding service expectations.
 Customer Perception—Factors influencing perception ( service
encounter, service evidence, image & Price)
 Strategies for influencing customer Perception
Categories of qualities of consumer goods or services-
 Search quality- these attributes can be determined even before purchase of
product. For e.g color, style, price, hardness etc. Goods are high in search
quality & services being in-tangible are low in search qlty.

 Experience quality- attributes that can be discerned after purchase or

consumption. For e.g vacation, restaurant meal etc. or through others who have
experienced it.

 Credence qualities- Difficult or impossible to evaluate even after consumption

or usage, due to the tech, lack of expertise or nature of service it is difficult to
evaluate. For e.g heart surgery, kidney transplant, dental service, auto repairs,
etc.
Conclusion- goods & services high is search quality are easily evaluated
& that which are high in experience qualities are somewhat difficult & those
high in credence qualities are very difficult to evaluate.
Service gap
 Primary objectives of service provider is to develop &
provide offerings that satisfy consumer needs &
expectations, thereby ensuring survival
 To remain competitive & survive in today's business env
companies need to understand consumer behavior
thoroughly
 Service marketers need to be able to close the gap between
expectations & perceptions of the consumer as shown in the following
fig:-

Expected service
Service gap

Perceived service
 Customer expectations & perceptions
 Understanding the customers wants , perception & expectations is crucial, if
customers perception of service recd is less than expected it will lead to dis-
satisfaction thus customer should be given more than his expectation
(customer delight)

 Customer expectations—formed from variety of influencing factors such as

past exp, current needs, feed back.

Types of service expectations-

 a) desired level-which he hopes to receive but may not be always possible
 b) adequate level-it is the minimum tolerable expectation or the lower level of
expectation or the service that the customer will accept.
 Zone of tolerance
 The variation between desired service & adequate service is called as zone of
tolerance, it is the extent to which customers recognize & are willing to accept
this variation. A performance below the tolerance zone will frustrate the
customer & above it will delight him. One may consider the zone of tolerance
as a range or window in which customer does not particularly notice service
performance.
Limit of expectation

Zone of tolerance

Desired service

Adequate service
 Managing customer expectations

 Customers main expectations of service are quite simple & basic, they
expect companies to do what they are supposed to do, they expect
fundamentals and not false promises

 Service org can manage expectations by managing the following 3 things

 Ensuring promise reflect reality

 Performing the promised service reliably
 Communicating effectively with customers.
 Exceeding service expectations

It involves delighting & surprising the customers by giving them more

than they expect, it helps in intensifying customer loyalty & ruling out
competitive options

 Foll are some of the things that companies can do:

 Strive constantly to provide additional customer value in every
transaction
 Use a flexible service envelop around the core service to generate
surprise benefits
 Constantly surpass the benefits that the customer has built around the
service
 Treatthe customer as if he is the most imp customer and offer
personalized package.
Customer Perception
It may be defined as the process by which people select, organise & interpret
information to form a meaningful picture of the world.
Factors that influence customer perception
 There are four primary factors, these are service encounter, evidence of
service, image & price
1. Service encounter:- for any customer a clear impression of the service
occurs when the customer interacts with the service & starts using the
service.
 Types of service encounters—
 Remote encounters
 Phone encounters
 Face to face encounters
 Sources of satisfaction & dis- satisfaction
 Recovery
 Adaptability
 Spontaneity
 coping
2. Service evidence:-Due to the intangible nature of the services customer
searches for evidence in every interaction that they have with the
organization.
Customer will experience three types of service evidences:-
 People
 Process
 Physical evidence
 These three are not mutually exclusive, rather they are interrelated
3. Image:- a favorable image is an asset to an org, because it can impact
perception of quality, value & satisfaction
4. Price:- it is a visible indicator of service level & quality , it sends clues
about the service.
 Levels/ types of contact

 High contact service

 Medium contact
 Low contact

Elements of service encounter

 Customer
 Service provider
 The delivery system
 Physical evidence
Examples of service encounter

 Seeing an advertisement
 Being greeted
 Ambience
 Experience
 Delivery
 Image, buzz word
 Communication, language, attitude, quality of interaction
Factors influencing Consumer Behavior
 4- different types of consumers
 Loyal Consumers: Loyal consumers are likely to comprise a small segment of your
consumer base. However, because of their loyalty, they are valuable to every
business. According to a recent study, only between 12 percent and 15 percent of
consumers are loyal to a single retailer. However, that small group tends to
generate between 55 percent and 70 percent of brand sales.
 How can a brand successfully market to a loyal consumer? The keys are
personalisation, individualised attention, and repeated marketing contact. These
kinds of marketing strategies will yield the biggest return on investment.

 Discount Consumers: Discount consumers are always on the hunt for discounts,
Like loyal consumers, they also have a tendency to frequent the same organisations
and brands. However, they only make purchases when there is some kind of sale
or discount.
 To market to the discount consumer, you need to advertise your offers and specials!
Social media is a great way to share sales and ongoing promotions, as are
personalised emails or brochures. If you have a sale going on, you need to let
your customers know.
 Impulsive Consumers:
Impulse consumers are the most difficult when it comes to maximizing marketing
collateral. These consumers often don’t shop with a specific product or service
in mind, let alone a brand. Rather they make purchases capriciously, buying
when something strikes their fancy.

Need-Based Consumers:
Need-based consumers purchase to fulfil a need. Maybe they have run into
financial trouble and need advice. Perhaps they are going on vacation and need
a new set of luggage. They could be approaching a milestone in their life and
are seeking legal advice. In order to market to a need-based consumer, your
marketing strategy needs to anticipate these needs effectively.
 VARIATION IN CUSTOMER
INVOLVEMENT
 Customer involvement is a state of mind which:-
 Motivates the consumer to identify with the product/service
 Understand their consumption pattern and behaviour.

• Nature of involvement

 Types of involvement:-
 Situational
 Enduring
 four types of consumer buying behavior on the basis of buyer involvement while
purchasing any product.

High involvement Low involvement

Significant differences between Complex buying behaviour Variety seeking behaviour

brands (motor cycle ) (washing detergent)

Few differences between brands Dissonance buying behaviour Habitual buying behaviour (toothpaste)
(floor tiles)
 High involvement:- the term means when the consumer is highly involved
while buying a product. Generally this situation happens in case of expensive
or luxuries goods.

 Low involvement:- this term means when the consumer is not highly involved
while buying a product. It happens in case of low price goods.

 Significant differences between brands:- it means when there are significant

differences between brands.

 Few differences between brands:- it means when there are very little
differences between brands.
 1) Complex buying behavior:- when the consumer is highly involved in the
buying and there is significant differences between brands then it is called complex
buying behavior. So in this case the consumer must collect proper information
about the product features and the marketer must provide detailed information
regarding the product attributes.

 2) Variety seeking behavior:- in this case consumer involvement is low while

buying the product but there are significant differences between brands. Consumers
generally buy different products not due to dissatisfaction from the earlier product
but due to seek variety..

 3) Dissonance buying behavior:- here consumer is highly involved in the

purchase but there are few differences between brands. Like consumer while
buying a floor tiles buy them quickly as there are few differences between brands.

 4) Habitual buying behavior:- in this case there is low involvement of the

consumer and there are few differences between brands. The consumer buys the
product quickly. For eg. Toothpaste.
Customer decision making process involves four main
sub-processes:-

i) Search for the information—a)Use of sources-personal & non

personal b) greater Perceived risk-as services are intangible, non- std, no
warranties.

i) Evaluation of alternatives-depends on emotions & moods of consumer &

availability of alternatives.

ii) Purchase & consumption-dramatizing the service experience,

compatibility of service customer.

iii) Post purchase evaluation- Attribution of dis-satisfaction ,customer loyalty

Consumer buying /purchase process
 Awareness

 Search and comprehension

 Attitude development

 Evaluation of alternatives

 Purchase

 Adaption and post purchase behaviour

Buying Roles

Decision making role

Initiator

Influencer

Gatekeeper

Decider

Buyer

User
Market segmentation
 Process of market segmentation in services– service provider has three
alternatives:-

 Undifferentiated segment– no recognition of distinct segment– known as

market aggregation. Eg laundry, courier etc

Company Customers

Service
Undifferentiated
Marketing
Market
Mix
 Differentiated Marketing approach —separate market segment identified
and separate marketing mix developed to target the segment. Eg tours &
travels, insurance etc

Marketing Mix 1 Segment 1

Company Customers
Marketing Mix 2 Segment 2

Marketing Mix 3 Segment 3

Marketing Mix 4 Segment 4

Marketing Mix 5 Segment 5

 Concentrated marketing approach —separate segment is identified, but
efforts are concentrated on only one or two specific segment. Eg driving
school

Segment 1

Segment 2
Company Customers
Service
Marketing Segment 3
Mix
Segment 4

Segment 5
Basis for market segmentation
 Demographic segmentation:- age, gender, income, family, education,
occupation etc. eg insurance, investment banks, travel & tourism, hotels .

 Geographic :- scope factors– local , regional , state etc

features factor– density of population, climate related.

• Psychographic:- social class, lifestyle, personality eg hotels, health clubs,

pubs etc

* behavioral:- usage, knowledge, attitude.

Positioning of services
 It involves establishment of a competitive position.
 It is largely a communication issue dealing with psychology of the
service seeker.
 It deals with identifying the need of the customer and fulfilling it by
identifying a unique selling proposition.
 It offers an opportunity to create a differentiation in the minds of the
service seeker

 Levels of positioning:-
 Industry positioning
 Organizational positioning
 Service sector positioning
 Individual service positioning
 Implementing positioning
 Ensure recall value
 Service should stand out distinct from its competitors
 Positioning should be evaluated from time to time, less it does not become
outdated—repositioning

 Marketing mix is the key to implementing an effective positioning

strategy:-
 The service itself
 The price
 The promotion
 The place
 Process
 People
 Physical evidence
 Key characteristics of effective positioning
 It should be meaningful
 It should be believable
 It must be unique
 It needs to keep competitors out & not draw them in.

 Steps in developing positioning strategy

 Determining level of positioning
 Identifying the key attributes of importance to selected segment
 Location of attributes on position map
 Evaluating position options