Services Marketing



Defn: A service is any act or performance that one party can offer to another that is essentially intangible and doesn't result in the ownership of anything . Its production may or may not be tied to a physical product. E.g : Airlines, hotels,banks,insurance,brokers , real estate companies, police,post office, colleges,hospitals.

Reasons for growth in service industry
Changing lifestyle
Increase in affluency Increase in leisure time women in working places

Changing world
Increased life expectancy Increased complexities in life

Changing economies
Globalisation Privatisation/deregulation Changing technology Range of new products Range of complex products

A Partial List of services
Transportation services Railways,Airlines,Local/Interstate Passenger Transportation, Road transportation, Helicopter services, Private aircraft services, water transport Public utilities services water supply , electric supply,gas supply. Communication Telephone,mobile, postal and courier, radio/TV broadcasting/satellite, tele-conferencing Trading services wholesaling/retailing Financial and Insurance Services Banking, Leasing, Security , Brokerage, Investment/retail Banking,Insurance , credit reporting

Government Provided services Defence.A Partial list of services Real Estate Services Renting. Police.catering. Property consultants. Tele-marketing. PR. game parlours. Advertising. . theme parks. Investment consultants. infrastructural etc. home delivery Entertainment services motion pictures. discos. Transport. clubs etc. medical. Building and real estate management. video parlour. Marketing related services Marketing consultancy. Broadcasting. bowling alleys. education . Hospitality services Hotels and restaurants. event management. Marketing research.

BPO (CALL CENTERS etc. educational. equipment rental . . computer programming . interior designing . old age homes. training (software. warehousing . printing . pet care. Legal. annual repairs and maintenance .brand consultants etc.A Partial List of Services Business & Professional Services Management Consultancy. data processing . creche services.) . public speaking etc. Accounting(C. laundry and cleaning . travel and tourism . internet café.). health and hospital.A) Other services Security. airhostess. Lawn care.

Product Price Place promotion .

Physical Evidence Customers judge the service quality through the physical evidence defn : The environment in which the service is delivered and where the firm and the customers interact.and any tangible commodities that facilitate performance or communicate the service. Physical evidence enhances customer¶s perception of quality. The general elements of physical evidence include (Organisational Physical facilities)(service scape) 1) Exterior facilities Exterior design Signage Parking Landscape Surrounding environment .

Physical evidence 2) Interior Facilities .Interior design Equipment Signage Layout Air quality/temperature 3) Other tangibles Business cards Stationery Billing statements Reports Employee dress/uniform Brochures .

Physical Evidence .customer point of view Physical Evidence Airline lounges Duty free shops Terminal Exteriors Air plane exterior Air plane interior décor seats ambience music Theme Park Gate area Parking area Signage Layout Rides Lighting Music Insurance Interiors décor seats ambience SERVICE Airlines Other Tangibles Tickets Embarkation cards Uniformed employees Food beverages Brochures Tickets costumed characters uniform Policy document Brochures Periodic statements .

Responsiveness : willingness to help customer and provide prompt service. and communication materials(physical evidence of facilities).equipment . . Tangibles: Appearance of physical facilities . personnel. individualized attention the firm provides its customers.Five Dimensions of Quality Reliability: Ability to perform the promised service dependably and accurately. Assurance: Knowledge and accuracy of employees and their ability to convey trust and confidence. Empathy : caring .

1)When a loan officer says he will ca ll back in 15 minutes . equipment. 3) co mpetency of bank emp loyees to transact the requirements of customers 1)Does the bank employee have pleasant demeanour? 2) A re the telephone operators in the credit card company consistently polite when answering calls? .. does he do so 2)Is my credit card statement free of error? 3)Airlines Ensuring That The Baggage Arrives On Same Flight At Same Destination 4)Waiters bringing the ordered dishes tot he right table 1) 2) Responding to a customer query quic kly Is the electrician willing to give me specific time when he will co me and repair Responsiveness Willingness to help customers and provide prompt service Co mpetence Possession of the required skills and knowledge to perform the service Courtesy Politeness . consideration and friendliness of contact personnel 1)Tourist informat ion staff knowing exactly where places are located and best time to go and visit these places 2) When call is made to credit card co mpany.Dimensions/Determinants of Quality-Berry. personnel and communicat ion materials Ability to perform the pro mised services dependably and accurately 1)bank¶s facilities 2) Modern airline fleet 3) Modern instruments used by the repair person. respect . is the person at the other end able to answer all queries. Parsuraman. Zeithml Dimension Definition/feature Examples Tangible Relaib ilitty Appearance of physical facilities.

explanation of services offered 1) 2) 3) Understanding the customer Taking efforts to know the customers and their needs 1) 2) 3) 4) A hotel providing ³safe´ for e xpensive items How safe is the banks ATM machines Is my credit card safe fro m unauthorised use Hotel answering call in 2-3 rings Tourist informat ion centers open 7 days a week and located near the tourist spot Cred it card co mpany having 24 hour service and toll free te lephone number Does the bank exp lain the various loan schemes in simple non technical language? Does the repair firm ca ll when they are unable to keep a scheduled appointment? Does the tourism emp loyee exp lain the various tourist spots/[packages available in simp le terms Hotel reception staff ma king guests feel we lco me on arrival The bank employee calling you by name when you visit the bank I s the repair firm flexible enough to accommodate my schedule? Does the stock broker suggest the various investment plans possible after understanding the financial object ives? Security Freedom form danger. honesty of the service provider 1)T ravel agent offering advice about long haul flights 2)Reputation of the bank 3)Are the interest rates/fees charged by the credit card company consistent with the service provided 1) 2) 3) 1) 2) 3) Co mmunicat ion Keeping customers informed in a language which they can understand and listening to them. believability.Dimensions/Determinants Of Quality Cred itability Trustworthiness. risk or doubt Access Approachability and ease of contact .

This gap be closed by standardizing service delivery process wherever possible and setting right organization goals . Berry Model of service quality-1985 Consumer evaluates service quality experience as the outcome of gap between expected and perceived quality. lack of vision . This gap can be narrowed through adequate research Gap 2: The standard Gap or Lack of Development ( Gap between management perceptions and service quality specifications)e. limited resources or wrong strategy.g : The management may not be committed to implement what is necessary either due to ignorance.g : Management team at a hotel might decide that provision of a newspaper at bedroom door is not required but customer expects that. The model identifies five gaps that can cause unsuccessful service delivery. Ziethaml.The Parsuram. Gap 1 : The Knowledge Gap or Lack of Understanding (gap between consumer expectation and management perception) e.

This gap can be eliminated by providing employees with adequate support system and HR policies and improving teamwork Gap 4 : Unrealistic expectations or the Internal Communication Gap ( Gap between service delivery and what is communicated about the service to the consumers) This gap can be eliminated through efficient and effective communication system and also by not giving false promises to customers that leads to higher expectations gap 5 : Service gap or Perception gap : ( Gap between perceived and expected service) By bridging gaps 1-4 . The management understands the level of service desired by customer and specifies an appropriate set of standards. gap 5 can be reduced . However service delivery may not be of appropriate quality owing to poor employee performance may be due to improper training or less motivation.Gap 3: Delivery Gap ( gap between service quality specifications and the service actually delivered).

Zeithamel. and Berry ± Introduced in 1988 5 .SERVQUAL A gap analysis research instrument ± created by Parasuraman.

SERVQUAL Model 6 .

SERVQUAL Model Gaps Gap 1 ± The difference between actual customer expectations and management¶s idea or perception of customer expectations Management Perceptions of Customer Expectations Expected Service 7 .

SERVQUAL Model Gaps Gap 2 ± Mismatch between manager¶s expectations of service quality and service quality specifications Service Quality Specifications Management Perceptions of Customer Expectations 8 .

SERVQUAL Model Gaps Gap 3 ± Poor delivery of service quality Service Delivery Service Quality Specifications 9 .

SERVQUAL Model Gaps Gap 4 ± Differences between service delivery and external communication with customer Service Delivery External Communications to Customers 10 .

SERVQUAL Model Gaps Gap 5 ± Differences between Expected and Perceived Quality Expected Service Perceived Service 11 .

check in and baggage control Trusted name . competence and experienced staff . Air Travel Keeping the flights to published schedule Prompt and speedy handling of ticketing. comfo rtable waiting area . uniformed employees and aircraft. baggage areas. problem fixed right first time and delivered as promised Responsiveness No waiting. good lay out of workshop. easy to access and willingness to respond to requests Assurance Knowledge of the mechanics to rectify the fault/problem Empathy Accessibility and understanding of the problem . modern equipment for repairing Physical facilit ies like waiting lounge. check-in ± counter.How customers apply quality determinants-examples Service Car Repair Reliability Mean Time failure. calling customer by name and knowing the history of the car Understanding and anticipating needs and problems of customers Tangibles Unifo rmed employees. high performance levels .

Tangibles Reliability Responsiveness competence courtesy credibility security access Communication Understanding the customer Tangibles Reliability Responsiveness Assurance Empathy .

flexibility . the employees of a company have tio play an important role.People Service encounter : For service marketers. ability to understand and satisfy customer needs . To deliver the satisfactory services . To achieve customer satisfaction appropriate processes are designed to ensure that the service encounter meets customer expectations. which is known as service encounter. Employees must possess personal qualities . Friendly and warm employees increase customer loyalty. The management in order to deliver satisfactory service must develop jobs to satisfy individuals needs of employees and address following issues:--- . skills and knowledge. Carlzon(1987) described this interaction as ³moment of truth ³. the core of the service element is the interaction between those providing services and the customer .

PEOPLE A) Employees : Recruitment Training Motivation Team Work B) Customers Education Training C) Communicating Culture and values D) Employee Research .

interpersonal behavior . attitude of contact personnel. Empathy and Responsiveness. Tangibles. . The employees should be developed to deliver the quality dimensions Reliability. child care. ticketing. Assurance. it is the contact employee who is delivering service . The frontline managers are the impression makers of an organization In many services like hair dressing. legal services.People Employees Customer perceives quality of service from appearance. medical services.

Differentiable : segments are conceptually distinguishable and respond differently to different marketing mix elements and programs . Suppose a perfume company finds that heavy users of its brand are single women who are out late at night and frequent bars .: The segment can be effectively reached and served. Certain segmentation variables are difficult to measure.g It would not be worthwhile for an automobile manufacturer to develop cars for persons who are shorter then 4 feet.Requirements for effective segmentation Measurable : The size . Accessible . purchasing power and profile of the segments can be measured. For e. they will be difficult to reach. If married and unmarried women respond similarly to sale of fur coats . Unless these women live or shop at certain places and are exposed certain media . Actionable : Effective programs can be formulated for attracting and serving the segments. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program. they don¶t constitute separate segments. E.g It is difficult to find the size of segment of teenage smokers who smoke primarily to rebel against their parents. Substantial : The segments are large and profitable enough to serve.g A small airline identified 7 market segments but its staff was too small to develop separate marketing programs for each segment . e.

.g Tourism : booking systems for travel and accommodation. aesthetics and ease of use by customer. E. It is the process through which consumers interact with service provider. ..PROCESS Process is the way of undertaking transaction . supplying information and providing services in a way which is acceptable to the customer and effective to the organization. security . design of queuing system at visitor attraction. the process designer has to maintain a balance between functionality.(Inseparability). While designing a process . use of credit cards for payments. Services are rendered and experienced simultaneously.

The above concept is called service blueprinting . Preparation of Blue Print : 1) Represent the service in the form of its molecular structure. post delivery 4) staff and suppliers. It is a detailed map or flow chart. 2) Break down the process into logical steps. By monitoring service encounters it is possible to design service delivery systems which guide the interaction between 1) front-line staff and customers 2) front-line and support staff 3) pre-delivery. delivery.Critical Moments : Customer remains an integral part from preconsumption stage through to post-visit feedback. Service Blue Print : is a visual portrayal of a service plan. This is a technique which is used when planning a new or revised process and prescribing how it ought to function. 3) Recognize the variability in the process 4) Identify the back stage elements in the process .

Greet customer on arrival Direct customer to waiting area Ask customer for haircut requiremnts cut hair ask customer for product requirments Receive Thank customer payments on departure.Blue Print of Gents barber -front stage. .

Blue Print of Gents barber -. back stage opening times select furniture order newspaper magazines training and update on style laundry towel And apron sweep and clear hair m eet prepare sales rep cash statement bank transfer. . front stage Greet customer on arrival Direct customer to waiting area Ask customer for haircut requiremnts cut hair ask customer for product requirments Receive Thank customer payments on departure.

Service Mapping Service Mapping is a technique which is used to portray an existing service situation and provides an useful tool to assess and identify service evidence opportunities.The process of service delivery. . Service maps provides 2 additional features 1) provides greater attention to customer interaction 2) provides a visual representation of the structure of the service. role of customers and employees and the visible elements of the service are simultaneously displayed by the service map.

Service Mapping <-------------Process------------------------> Customer Front line employees support staff structure management services Line of intetraction Line of visibility line of internal interaction line of implemetation .

Service Map of ³Overnight hotel stay´ customer arrives gives bags check in go to room receive bags sleep at hotel to bell boy shower call order room servicefood eat check out contact person (visible greets and takes registers bag registration system delivers bag delivers food process check out invisible process take food order prepare food .

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