Objectives

Define Services Identify Characteristics of Services Developing Marketing Strategies for Services.

Changing Structure of Employment with Economic Development

Agriculture Services

Industry

Time, per Capita Income

Source: IMF

A General Idea about Service Definition Of Service. Service Provider ( Man, Machine,Both) Service can be directed towards( Individual, Object). Extent to which Service has gone (IRCTC).

SERVICES: DEFINITION
A SERVICE IS AN ACTIVITY OR A SERIES OF ACTIVITIES OF MORE OR LESS INTANGIBLE NATURE THAT NORMALLY, NOT NECESSARILY, TAKES PLACE IN INTERACTIONS BETWEEN THE CUSTOMER & EMPLOYEE/ PHYSICAL RESOURCE OF SERVICE PROVIDER, WHICH ARE PROVIDED AS SOLUTION TO CUSTOMER PROBLEMS.

Service Defined
Instrumental activity For consumption Consumer participation No ownership

CHARACTERISTICS OF SERVICES

Intangibility

Inseparability

The Service

Heterogeneity

Perish ability

Characteristics of Services
Intangibility
Cant be seen, tasted, felt, heard, or smelled before purchase. Cant be separated from service providers.

Inseparability

Heterogenity
Quality depends on who provides them and when, where and how.

Perishability

Cant be stored for later sale or use.

Meaning of Intangibility

Services cannot be inventoried Services cannot be patented Services cannot be readily displayed
or communicated Pricing is difficult

Intangibility-Tangibility Spectrum
Salt

Soft Drinks
Detergents Automobiles Cosmetics Fast-food Outlets

Intangible Dominant Tangible Dominant

Fast-food Outlets Advertising Agencies Airlines Investment Management Consulting Teaching

Intangibility: Implications & Strategies

Cannot see or feel, smell, hear, or taste Cannot be Stored No ready Display Communication Problem No Patent
Youre in good hands with Indian Airlines.

Stress symbolic Clues Associate tangible symbol with service Tangible cues like membership cards WOM, Personal Source Organizational Image Post Purchase Communication

Meaning of Perishability

It is difficult to synchronize supply

and demand with services Services cannot be returned or resold

Perish ability: Implications & Strategies

Cannot be stored No Inventorization Lost sale = lost income Demand management to Cope up with Fluctuations Forecasting Supply management Better Match through Processes Pricing adjustments

Meaning of Heterogeneity

Service delivery and customer satisfaction

depend on employee actions, therefore Standardization is difficult. Service quality depends on many uncontrollable factors, so Quality Control is Difficult . There is no sure knowledge that the service delivered matches what was planned and promoted

Heterogeneity or Variability: Implications & Strategies

Provided by people Inherent variance Standardization and quality Control difficult Standardization Personnel selection Training Automation Industrialization Customization

Meaning of Inseparability: Simultaneous Production & Consumption Customers participate in and

affect the transaction Customers affect each other Employees affect the service outcome Decentralization may be essential Mass production is difficult

Inseparability: Implications & Strategies

Time

Tangible products
Production Sale Consumption Selection & Training of Contact Persons Manage Customers Multi-site Operations

Intangible products
Sale Production Consumption

Six Distinctions: Between Goods & Services

Marketing Intangibles

Relationships of Provider to Customer The Service Encounter Connection Simultaneous Production and Consumption No Storage or Inventory

Quality Control

Service Characteristics and Marketing Implication for Strategic Decisions

Service Characteristics Intangibility Marketing Implications Cannot be stored, No patents, Communication problem, No ready display, Pricing difficulties Consumer involved in production, No mass production, Supply demand match Strategies Tangible clues, Personal sources, Post purchase comm. WOM, Organizational image Cost accounting for prices Selection training of contact person, Manage consumer, Multi-site location &

Inseparability

Heterogeneity

Standardization & Industrialize Quality control difficult Customize No inventorization

Perishability

Cope with fluctuating demand & match through process

The Services Marketing Triangle

Company (Management)
Internal Marketing
Enabling

External Marketing Setting the Promise

the Promise

Employees

Interactive Marketing Delivering the Promise

Customers

Ways to Use the Services Marketing Triangle

Overall Strategic Assessment

Specific Service Implementation

How is the service organization doing on all three sides of the triangle? Where are the weaknesses? What are the strengths?

What is being promoted and by whom?

How will it be delivered and by whom?

Are the supporting systems in place to deliver the promised service?

The Services Triangle & Technology

Company

Technology

Providers

Customers

ISSUES IN FRONT OF THE MARKETER

Company

Managing Differentiation
Offers Delivery Image
Technology

Providers

Customers

Managing Quality
Strategic Concept Commitment of Top Management High Standards Monitoring System Customer Complaints Satisfying Employees.

ISSUES IN FRONT OF THE MARKETER Contd. Company

Managing Productivity
Reduce Cost Train Employees
Technology

Providers

Customers

Product Support Service Management

Product Reliability Duration of Downtime Overheads After Sales Support

7 Ps of Integrated Service Management

Product elements
Promotion and education Place, cyberspace, and time

Price and other user costs

People Process Physical evidence

(1) Product Elements

All Aspects of Service Performance that Create Value Core product features Bundle of supplementary service elements Performance levels relative to competition Benefits delivered to customers Guarantees

The Service Package

The Services Concept The core service

Accessibility of Services

Facilitating service

Supporting service

Interaction

Consumer Participation

MARKETING COMMUNICATION

Elements of Augment Service Offerings

Accessibility of Service
No. of skilled personal Working Hours Location Exterior and interior of service outlet Infrastructure, hardware, documentation The number and knowledge of consumers simultaneously involved in the process
Interaction between the employees and consumers Interaction with the physical and technical resources With customers involved Customer awareness Customer preparedness to share the information Customers willingness to share information and use service equipment

Interaction with service organization

Customer Participation

Developing New Service Offering

Stage I Consumer Benefit Customer seek Concept Should offer Element, form, level, quantity

Stage II Service concept Stage III Service offer Stage IV Service Delivery System

Benchmarks, process, people and facility Stage V Managing Image Support, perception & Communication enhancement.

(2) Price
GUIDELINES Handle demand fluctuations Based on cost take into account the tangible clues Provide vale addition and quality indication competitive

Pricing of Services
Managing Customer Outlays Relative to Corporate Revenues Quoted price level and trade margins Discount terms

time, volume, user sensitive

determined by seller or negotiation/barter auction/reverse auction

Price-setting mechanism

Credit terms

Pricing Tactics of Services

DIFFERENTIAL / Flexible pricing

Discount Pricing Diversionary pricing Guarantee pricing HIGH PRICE MAINTENENCE pricing

Loss leader pricing