Services Marketing

SERVICE (Defn) :
It is an activity which has some element of intangibility associated with it, which involves some interaction with customer and / or with property in their possession and does not result in transfer of ownership

MARKETING :
A process of matching an organizations resources to the needs of the market
SERVICES MARKETING

Growth of Service Sector

1.Demographic Changes
Life expectancy risen and hence increase in retired population ; the sector has created new demands Development of rural area ; need for infrastructure and support services

2.Economic Changes
Globalization Specialist services providers are looked at
SERVICES MARKETING

Growth of Service Sector

3.Social Changes
Increase in working women ; child care, fast food and other personal services are need of an hour Husband - Wife working ; more income, more / better customer service needed more disposable income to spend on services like club membership, holiday home, personal finance Communication & travel have increased aspirations

4.Political & Legal Changes

Government is growing in size New demands on legal & other professional services
SERVICES MARKETING

Types of Products
Four Types of Products
Pure tangible good (e.g. Salt) Tangible good accompanying service (e.g. computer with service back-up) Major service with accompanying minor goods (e.g. Airline sector) Pure service (e.g. baby sitting)

SERVICES MARKETING

Characteristics of Services
Characteristics of most commonly ascribed services are :
Intangibility (cannot be seen, only be felt) Heterogeneity (non - standard & highly variable) Inseparability (produced & consumed at the same time with customer participation in process) Perishability (cannot be stored)
SERVICES MARKETING

Classification of Services
Various factors are :
1. 2. 3. 4. 5. 6. Type of service Type of seller Type of purchaser Demand characteristics Rented v/s owned services Degree of intangibility

SERVICES MARKETING

Classification of Services
Various factors (cont.)
7. Buying Motives 8. Equipment based v/s people based 9. Amount of customer contact 10.Services delivery requirement 11. Degree of customisation 12. Degree of labour intensity

SERVICES MARKETING

Services Marketing
Three Key Components :
1. The Marketing Mix - important internal elements 2. Market Forces - external opportunities or threats 3. A Matching Process - strategic and managerial process which ensure marketing mix is appropriate to market forces
SERVICES MARKETING

Services Marketing
Market Forces :
1. Customer Buying behaviour Buying habits Environment Size of market Buying power

SERVICES MARKETING

Services Marketing
Market Forces (cont.): 2. Industry behaviour Motivations Practice & attitude of retailers Intermediaries & other members of supply chain

3. Competitors 4. Government & regulatory bodies

SERVICES MARKETING

Services Marketing
Marketing Mix (Expanded)
Product Price Place Promotion People Processes

SERVICES MARKETING

Relationship Marketing
Defn : It involves creating, maintaining and enhancing strong customer relationship Relationship marketing involves all the companys departments work together with marketing as a team to serve the customer. It involves building relations at many levels social, economical, technical, legal etc resulting in high customer loyalty.

SERVICES MARKETING

Relationship Marketing
Five Levels of Relationship
(a) Basic - e.g. Salesman sells product (b) Reactive - Basic + responsive to customer call for a problem (c) Accountable - Salesman calls customer to check the product performance (d) Proactive - Salesman keeps in touch with customer about improvement in product (e) Partnership - Company works with customer/s to discover ways to deliver better
SERVICES MARKETING

Relationship Marketing
Many Medium Few

Accountable Reactive Basic Proactive Accountable Basic Partnership Accountable Reactive

High Medium Low

N o. of C u s to m e rs

Profit Margin <----------SERVICES MARKETING

Transaction v/s Relationship Marketing

Transaction Marketing
Focus on Single sale Orientation on product features Short time scale Little emphasis on service Limited customer commitment Moderate Customer contact Quality is a concern of production

Relationship Marketing
Focus on customer relations Orientation on product benefits Long time scale High customer service High customer commitment High customer contact Quality is a concern for all

SERVICES MARKETING

Relationship Marketing
Ladder of Customer Loyalty
1. Prospect 2. Customer 3. Client / Account 4. Supporter 5. Advocate In first 2 phases the emphasis is on new customer In subsequent phases, emphasis is on developing and enhancing relationship with customers.
SERVICES MARKETING

Relationship Marketing in Company

How to Develop ?
1. Identify key customer/s 2. Assign skilled relationship manager to each key customer 3. Develop a clear job description for each relationship manager 4. Ask relationship manager to develop annual long range customer relationship plan 5. Appoint an overall manager
SERVICES MARKETING

Relationship Marketing
Complementary Perspective
1. Long term customer retention 2. Development and enhancement of more enduring relationship with other external market 3. A recognition that quality, customer service and marketing activities need to be brought together

SERVICES MARKETING

Service Quality Gap Model

Word of Mouth communication Personal Needs Expected Service Past Experience

Consumer

Gap 5

Perceived Service Service Delivery (including pre & post contract)

Gap 3 Gap 1 Gap 4

Marketer

Translation of Perception into service quality specs

Gap 2

External Communication to consumer

Management perception of consumer expectations

SERVICES MARKETING

Service Quality Gap Model

Gap 1 :- Between consumer expectation and Management Perception Gap 2 :- Between management perception and service quality specifications Gap 3 :- Between service quality specifications & service delivery Gap 4 :- Between service delivery and external communications Gap 5 :- Between perceived service and expected service
SERVICES MARKETING

Service Quality
Two Important Components :
1. Technical Quality :- outcome dimension of the service operation process 2.Functional Quality :- the process dimension in terms of the interaction between customer and the service provider

SERVICES MARKETING

Service Quality
Factors Influencing Service Quality :
1. Tangibles :- physical facilities, appearance of personnel 2. Reliability :- ability to perform the desired service dependably, accurately & consistently 3. Responsiveness :- willingness for prompt service and help customers 4. Assurance :- Employees knowledge, courtesy and ability to convey trust and confidence 5. Empathy :- caring, individual attention
SERVICES MARKETING

Services Marketing
Reference Books :
Managing Services
by Lovelock

The Essence of Services Marketing (PHI)

by Adrien Payen

SERVICES MARKETING