Services Marketing

Services Marketing

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Services are highly intangible Benefits are felt over a period of time Creating confidence in the customer’s mind

SERVICES MARKETING
Plant & Machinery

Consumer Durables Tangible

Pure Services Intangible

Categories of Service Mix

Pure Tangible Good

Tangible Good w/ Services

Hybrid

Major Pure Service Service w/ Goods

Services Marketing

Passion for understanding customer expectations and perceptions Linking them to product design & delivery, as well as operational planning

Classification of Services
Tangible

Restaurant / Health Care A Education / Management Consultancy
People

Transportation / Warehousing B Legal services / Insurance D
Objects/Products

Intangible

C

Classification of Services

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A : People processing services B : Product or possession processing services C : Mental stimulus processing services D : Information processing services

Paradigms in Services Marketing
 

Service as a process. Internal customer focus is as important as external customer orientation. Having a mindset of doing it right the first time, as there is no 99% quality in the service product and no question of reworking or repairing of bad service product. Speed & accuracy in responding to the customer holds the key. Keeping customer’s perspective always.

Intangibility Services cannot be seen, tasted, felt, heard, or smelled before purchase

Inseparability Services cannot be separated from their providers

Services
Variability Quality of services depends on who provides them and when, where, and how Perishability Services cannot be stored for later sale or use

Characteristics of Service Marketing
Intangibility Customer’s decision is dependent on understanding of service Belief in marketer’s promise of future performance Customer dissonance Comfort zones Credible medium of communication Negative ripple effect  Low price sensitivity Customers are willing to pay a higher price as long as they Feel reassured that they are getting a 100% quality product.

Characteristics of Service Marketing
No inventory Zero time gap between production & consumption. Profitability & viability are extremely critical.  Value Creation Process People/ Process/ Proof of Performance/ Pace Value service product is created through an integrated marketing mix of 8 Ps  Tangibility Provided by service provider Communication & speed Create an appropriate set of beliefs.

Intangibility Use cues to make it tangible

Inseparability Increase productivity of providers

Services
Variability Standardize service production & delivery
Perishability Match supply and demand

Customer Expectation & Zone of Tolerance

Past experience & Reference Group
Service Providers

Personal needs

Desired Service
Ideal Service Image Decision Criteria Competition Uniqueness of Service Situation (ideal state) Zone of Tolerance

Communications

Adequate Service (threshold level)

Perceived Service Alternatives

Situational Factors
Predicted Service

Customer Expectations & Zone of Tolerance

Understand customer expectations and integrate them with the service design & delivery. Expectations are influenced by the experience of the customer & their immediate reference groups. These are also shaped by communications from and about the service provider. Most customers have an ideal image influenced by customer’s personal needs. However most customers understand realitiesorganizations have resource constraints and environmental factors impact organizational performance.

Customer Expectations & Zone of Tolerance

  

Minimum or Threshold level of service is termed as Adequate service. The gap between desired and adequate service has been called Zone of Tolerance Service below Threshold level > Dissatisfaction Service above Threshold level > Satisfaction No gap between delivered and desired service > Delight

Decision Criteria & Zone of tolerance
Min

Zone of Tolerance

Max Low High Criticality of Decision Criteria

Zone of Tolerance varies inversely across Decision criteria depending on criticality of the criteria

Marketing Strategies for Service Firms

A Shifting Customer Relationship A Customer Service Democracy to Meritocracy Holistic Marketing for Services

Three Types of Marketing in Service Industries
Company

Internal marketing

External marketing

Cleaning/ maintenance services

Financial/ banking services

Restaurant industry

Employees

Interactive marketing

Customers

Service Differentiation
Offer
Delivery Image

Factors leading to Consumer Switching Behavior

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Pricing Inconvenience Core Service Failure Service Encounter Failures Response to Service Failure Competition Ethical Problems Involuntary Switching

Service-Quality Model
Word-of-mouth communications Consumer Personal needs Expected service Gap 5 Perceived service Service delivery (including pre- and post-contacts) Gap 3 External communiGap 4 cations to consumers Past experience

Gap 1 Marketer

Translation of perceptions to service-quality specifications Gap 2 Management perceptions of consumer expectations

Determinants of Service Quality
 

Reliability- The ability to perform the promised service dependably & accurately. Responsiveness- The willingness to help customers & to provide prompt service. Assurance- The knowledge & courtesy of employees & their ability to convey trust & confidence. Empathy- The provision of caring, individualized attention to customers. Tangibles- The appearance of physical facilities, equipment, personnel & communication materials.

Service Excellence
Strategic Concept  Top-Management Commitment  High Standards  Monitoring Systems  Satisfying Customer Complaints  Satisfying Both Employees & Customers  Managing Productivity

©2000 Prentice Hall

Importance-Performance Analysis
Extremely important Fair performance

4 5 7 10

3 6

9 11 12

8

13

14
D. Possible overkill

C. Low priority
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Slightly important

# = Attributes

Excellent performance

A. Concentrate here

12

B. Keep up the good work

Complaint Resolution
Hiring Criteria & Training for Employees  Develop Guidelines for Fairness  Remove Complaint Barriers  Analyze Types & Sources of Complaints

©2000 Prentice Hall