Recap Session: What are the Fundamentals of

Service Marketing ?

Case discussion on Susan the service consumer

.Tangibility continuum
. Product vs services
.Classification of services
.Low Contact Vs High Coontact Services .
.Stages in buying of services
.Evaluation criteria
Course tutor: Dr Surabhi
Goyal
What services did Susan consumed and
which were co-produced?

 Broadcasting
 Transport Service
 Postal service
 Education services
 Classroom

 Language workshop

 Cafetaria facility-
 Coproduced all
 burger king but differently
 Home delivery

 Self service

Self care facility

 Laundry and dry cleaned clothes
 Insurance services
 Health care
 Banking & Cash
Tangibility
continuum
 Uniqueness of services :
INTANGIBILITY

• Implications • Strategy
• Cannot be stored • Tangible clues
• Cannot be patented • A good price
• Cannot be readily • WOM
displayed • Organizational
• Difficult to image
communicate • Positioning
• Difficult to price • Advertising
Uniqueness of services
:PERISHABILITY

• Implications • Strategy
• Cannot hold • Cope with
inventory fluctuating
• How to manage demand
demand • Better match
fluctuation through process
• Improve the speed
and quality of
operation
• Eg early bird
discounts, dyna
fares
Uniqueness of services:
HETEROGENEITY (VARIABILITY)

• Implications • Strategy

• Difficult to standardize • Industrialize

• Difficult to control quality • Customize
• Standardize
procedures
Uniqueness of services INSEPARABILITY
(simultaneous production and
consumption)

• Implications • Strategy
• Consumer is involved in • Selection and
production training of
• Difficult to mass contact person
produce • Manage
• Other consumers consumer
impact on the • Multi-site
customers experience location
Further Classification is
necessary

 Help to understand what tangibles and

intangible cues can the service provide
 What sorts of processing is done
 Where do customers fit into the operation
 Helps marketers to develop different
strategies for different types of services
 Categorizing service processes

What is the nature Who or what is the direct recipient of the service
of the service act PEOPLE POSSESSIONS

TANGIBLE People Possession

ACTIONS processing processing

Mental
INTANGIBLE stimulus Information
ACTIONS processing processing
 Processing
Customers needs to be physically present
Customers must be prepared to spend time co-operating
with the service providers

Peoples’ bodies

Strategy:
Tangible Design simple processes in service
actions Beauty
salons factory
Passenger Design servicescape around the
customer
transports
Customize as far as possible
Health care
Enhance the experience for
Gyms repurchase
Restaurants
Shopping
 Mental Stimulus Processing

Peoples’ mind  Services that interact with

people's mind include education,
news and information.
Intangible
actions Strategy:
Education Easy on the mind of the
Broadcasting consumer
Add tangible clues
Theatre
Feedbacks & follow ups
Museums
 Possession
Processing

Peoples’ tangible  Physical treatment to customers

possession belongings
 Production and consumption are
Tangible
often not simultaneous ~ quasi-
actions Freight manufacturing
transport  Customers are less physically
Auto repairs involved
Laundry & Dry Drop off and pick up
cleaning Service factory may have to go to the
customer
Tailoring
Veterinary care Strategy: Problem must be
solved with some tangible
enhancement
Accompanied with a convenient
service
 Information Processing

Peoples’ Intangible  The most intangible form of

assets service output but may be
transformed into more tangible
In forms
Tangible Banking  Customer involvement may be
actions fairly limited
Insurance  Face to face contact is not strictly
Legal services necessary but often desirable
Accounting  Relationships and trust are
important
Strategy
Intensive use of IT
“Anywhere, anytime”
New service features through
websites, email, internet
More opportunities for self-
 Services classified according to level of
contact

Emphasizes encounters
High with service personnel
N ur si n g H o m e
H a ir Cut
4 - Sta r H ote l
M a na ge me nt Co n sulti n g
G o od Re sta ur a n t
Tel e p h one Ba n k i n g
A i rl i n e Tr a ve l ( Eco n .)

Reta il Ba nk i n g Ca r Re pa i r
M otel I n sur a n ce
Dr y Cl ea n i ng
Fa st Foo d
Movie Theater

Subway Ca b l e TV

• Internet Banking

Emphasizes Mail Based Repairs

encounters with Internet-based

Low
Services
equipment
Technology is a sign of prosperity but has two
sides

Good side Bad Side

 Potential of new features  Leads to disorder

 Empowering both  Leads to dependence

customers and  Leads to human

employees ignorance or
 New ways to deliver disconnection
quicker and affordable  Leads to human

services separation
 Extending global reaches
 eg – ATM, Online  Eg- Initial resistance to
ordering, online banking online LMS


Services classified according to
attributes
Most Most Services
Goods

Easy Difficult
to evaluate to evaluate
Clothing

Haircut
Restaurant meals
Chair

Education
Computer repair
Foods
Motor vehicle

Entertainment

Legal services
Lawn fertilizer

Complex surgery
High in High in High in
search experience credence
Source: Adapted from Zeithaml
 Purchase Process of services
The Purchase Process – services

Awareness of need

2. Information search Pre purchase

stage

Evaluation of alternative supplier- review

documentation/ talk to people / visit the supplier

4. Request service from chosen supplier/ self service

Service
encounter
5. Service delivery

6. Evaluation of service performance

Post
purchase
7. Future Intentions
 The Purchase Process for Services

Prepurchase Stage
Prepurchase Stage
Wanting a hair cut
• Wanting a dress for the
interview Selection criteria : Location &
fast
• Selection criteria :
quality & Location Service Encounter Stage
Service Encounter Stage Waited for a while
• Work not done, rude Hair colour was defined and
replies and no promises new style suggested by hair
dresser
Postpurchase Stage
I got hair shampooed
• Negative feedback
Suggest a good hair cut
• Ready to switch
Postpurchase Stage
Statistics on service sector of India

in GDP in Workforce
Agriculture 17.2% 50%
Industry 29.1% 10%
Services 25%
52.7%
India ranks fifteenth worldwide in services' with GDP
is 6.5 % in 2009
 Why service sector
changing
• Service sector got deregulated eg airlines &
telecommunications
• More feeder services to enhance core product eg
reliance
• Outsourced hub due to highly skilled low cost
educated workers
• Social set up changing – more working women
• More disposable income