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Services marketing mix

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  • 1. UNIT - II
  • 2. Key Elements of Services Marketing  Product – Pricing - Communication Mix  Distribution – People –Physical Evidence – Process  Positioning – Market Segmentation  Balancing of Demand & Capacity  Branding of Services – Problems &Solutions
  • 3. Marketing Mix – a set of variables for achieving marketing and strategic goals of an organization  Standard Product Price Promotion Place  Extended People Physical Evidence Process (Productivity) (Professionalism) (Pro–activeness)
  • 4. Product Place PromotionPrice Standard Marketing Mixes – 4’Ps C
  • 5. PRODUCT
  • 6. Product Product is an object which is developed, produced, delivered and consumed (Goods) Product is a bundle of features and benefits related to a specific target market (Services)
  • 7. Total Product Concept - Core or Genetic (Communication) - Basic (Features & Design, Quality, Brand Name, Packaging) - Expected (Look, Light Weight, Battery, Colour Display, Polyphonic Ringtones etc., ) (Normal Expectation) - Augmented (FM, MP3, BlueTooth, Camera, Voice Dialing) (beyond normal expectation) - Potential (Internet, E-Mail, TV, GPS) (Possible Evolution)
  • 8.  Product Life Cycle - Introductory Phase - Growth Phase - Maturity Phase - (Saturation Phase) - Decline Phase - (Rejuvenation Phase) - (High Growth Phase)
  • 9. Service Package The core Service Facilitating Services Supporting Services The Service Concept Consumer Participation InteractionAccessibility of the Services
  • 10. Developing New Service Offer Consumer Benefit Concept What benefits consumers seek Service Concept What benefits the organization should offer Service Offer Elements – Tangibles and Intangible Form – What way/ How Levels – Quality Image Quantity - Volume Service Delivery Processes People Facilities Managing Image Support Perceptions Go beyond
  • 11. New Service Development  Idea Generation  Idea Screening  Concept Development  Concept Testing  Business Analysis  Pilot Development  Pilot Testing  Commercialization  Review
  • 12. PRICE
  • 13. Price  Price alone brings the revenue.  Pricing translates potential business into reality
  • 14. Profit Maximization Revenue Maximization , Prestige. • Survival , Product Quality Leadership PRICE
  • 15. Penetration pricing Here the organisation sets a low price to increase sales and market share. Once market share has been captured the firm may well then increase their price. FOR EG: A television satellite company sets a low price to get subscribers then increases the price as their customer base increases.
  • 16. Skimming pricing. . Skimming pricing: The organisation sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer. For eg: A games console company reduces the price of their console over 5 years, charging a premium at launch and lowest price near the end of its life cycle.
  • 17. Competition pricing. Setting a price in comparison with competitors. Really a firm has three options and these are to price lower, price the same or price higher For eg; Some firms offer a price matching service to match what their competitors are offering.
  • 18. Bundle Pricing The organisation bundles a group of products at a reduced price. Common methods are buy one and get one free promotions or BOGOF's as they are now known. For eg:Health clubs offer a range of facilities at a single price.
  • 19. Psychological pricing The seller here will consider the psychology of price and the positioning of price within the market place The seller will therefore charge 99p instead £1 or $199 instead of $200. The reason why this methods work, is because buyers will still say they purchased their product under £200 pounds or dollars, even thought it was a pound or dollar.
  • 20. Differential pricing. Different price will be charged for different customer segments. For eg: children below ten charged less in amusement parks.
  • 21. Psychological pricing The seller here will consider the psychology of price and the positioning of price within the market place The seller will therefore charge 99p instead £1 or $199 instead of $200. The reason why this methods work, is because buyers will still say they purchased their product under £200 pounds or dollars, even thought it was a pound or dollar.
  • 22. Frame work for Pricing Decisions  Cost Considerations  Profit Considerations  Demand Considerations  Competitive Considerations  Legal Considerations (Govt. Policies)  Customer Considerations  Product Considerations (Technology)
  • 23. PROMOTION
  • 24. Objectives Promotion Mix Salespeople Kind Number Selection Training Motivation Evaluation Advertising Targets Kinds of ads Media type Copy thrust Prepared by whom Sales promotion PR Publicity PROMOTION
  • 25. Promotion Promotion is the communication tool of the service to target the Customers. Promovere (Greek Word) means to shift the attention of people from one end of the spectrum to another.
  • 26. Promotion Objective  Communication related to the Service  Develop Personal Relations  Create the Image of the Organization.
  • 27. Promotion Tools  Advertising  Public Relations  Sales Promotion  Personal Selling  Word of Mouth  Direct marketing.
  • 28. Paid form of non personal communication. To build awareness,add knowledgeof the service. To differentiate the service and persuade the customer to buy the service.
  • 29. PLACE / DISTRIBUTION Objectives Channel type Market Exposure Kinds of Intermediaries Kinds and locations of Outlets How to handle transporting and storing Service levels Recruiting Intermediaries Managing Channels
  • 30. Place or Distribution  Place Gives customers access and availability to its services.
  • 31. Key Issues  Channel Options  Agents/ Brokers  Sellers / Buyers Agents  Electronic Channels  Franchisees  Channel Design  Location and Logistics.
  • 32. Answer  How to deliver the service to the customer?  Where and when should the delivery of service take place?  What roles do intermediaries or middlemen have to play in the service delivery process?  How can a marketer juggle the delivery of the tangible and intangible components of a service offer?  How can the location be made to positively affect service encounter?
  • 33. Christopher Lovelock’s approach to classification of Services  The Customer goes to the Service Provider. Eg. Restaurants, Health Clubs, Beauty Clinics  The Service Provider goes to the Customer. Eg. Home Delivery  The Service Provider and the Customer transact from a distance. Eg. Internet Banking, Mobile Banking, Online Reservation.
  • 34. Flexibility Location & Consumer LOCATION DECISIONS ORIENTED TOWARDS PRODUCERS e.g. Visiting Ganapatipule, Maharashtra for a beach holiday TRADE OFF BETWEEN EASE OF ACCESS AND COST OF THAT ACCESS e.g. Mobile banking CAN THE SERVICE ACTUALLY TAKE PLACE? e.g. Hospital trauma centers LOCATION DECISIONS ORIENTED TOWARDS CONSUMERS. e.g. Home appliance and building maintenance. Low High High
  • 35. Design of a Distribution Channel Specify the role of Distribution within the Marketing mix Select type of distribution Channel Determine appropriate Intensity of Distribution Choose specific Channel members A well designed Distribution Channel Ch 1 Ch 2 Ch 3 Ch 4 Ch 5
  • 36. Channel Option for Service Companies Service Provider Customer ZERO LEVEL ONE LEVEL TWO LEVEL ONE LEVEL Agent or Broker Seller’s Agent Buyer’s Agent Franchised or Contracted Service deliverer
  • 37. Factors affecting choice of location. Nature of interaction Nature of service
  • 38. Nature of customer’s demand Competitive positioning Natural geographic location
  • 39. Technological advancements Dependance on other services Infrastructural facilities
  • 40. Product Place Promotion Price Objectives Physical Chars. Prod. Class Service Features Benefits Quality Accessories Installation Instructions Warranty Product Line(s) Packaging Branding NPD? &/or Elimination? PLC Implics. An Extended Product Concept Objectives Channel type Market Exposure Kinds of Intermediaries Kinds and locations of Outlets How to handle transporting and storing Service levels Recruiting Intermediaries Managing Channels Channel Co-op (Not Conflict) is Goal – Who Has Power? Objectives Initial Pricing -Penentration -Skimming -Combo P Flexibility P Sensitivity P Level over PLC Geographic terms Discounts Allowances Legal Implics. Factors Infl. Basic P Det. Strategic Decision Areas Objectives Promotion Mix Salespeople Kind Number Selection Training Motivation Evaluation Advertising Targets Kinds of ads Media type Copy thrust Prepared by whom Sales promotion PR Publicity
  • 41. PEOPLE
  • 42. People  Most important resource which represents the organization to the customers.  Useful tool in Internal and Interactive Marketing.  An employee should be Service – minded and Customer – oriented.  Performance cannot be separated from the people.
  • 43. Service Personnel  Low Contact Services  High Contact Services  Consumer Service Employees  Professional Service Employees  Back Office Staff  Support Staff  Management
  • 44. Planning for People  Select Right Person  Provide Adequate Training  Offer a Vision  Continuously impart Skills & Knowledge.  Develop their Creativity.  Enforce Performance Appraisal.  Offer Promotion & Rewards.  Give Feedback.
  • 45. Objectives of Internal Marketing Strategic Level Objective Create an Internal Supportive Environment. Choose Management Methods Adopt Transparent Personnel Policy. Have an Internal Trading Policy. Built a System of Planning and Controlling. Tactical Level Objectives Make People understand why they are expected People are the First Market. to Perform. Support the Service Systems. Built a Customer Friendly Environment. Built Internal Information / Communication Channels.
  • 46. Managing the Internal Environment  Competence and Skills related to the Job.  Clear Knowledge of Product Features and Benefits.  Physical Appearance of People.  Positive Attitude of People.  Presence of Mind and Speed of Response.
  • 47. Managing the External Environment  Understand the Customer (and his Family)  Understand his Needs and Expectations.  Blend Differentiations.  Be a Psychologist.  Under Promise, Over Deliver
  • 48. PHYSICAL EVIDENCE
  • 49. Physical Evidence  A Physical Object is self – defining; a Service is not.  Key is to Offer Tangible Clues for Intangible Service. Think about an Advertisement offering tangible clue of a pure Service (Assignment)
  • 50. Tools for Physical Evidence Services capes Business Cards Employee Dress Reports Signage Equipment Statements Facility Design Other Tangibles
  • 51. 3 – D of Physical Environment PHYSICAL ENVIRONMENT SOCIAL FACTORS Appearance, behaviour, number of employees etc. -Quality and quantity of other customers. DESIGN FACTORS Aesthetics - Architecture, colour scheme etc. -Functional dimensions of Design in terms of layouts, comfort etc. AMBIENT FACTORS -Air equality (temperature, humidity etc.) -Quality of scent - Degree of circulation
  • 52. Role of Evidence in Service Marketing  Shaping First Impressions.  Managing Trust  Facilitating Quality of Service  Changing the Image  Providing Sensory Stimuli  Socializing Employees
  • 53. Frame work for Environmental User Relationship Physical Environmental Dimensions Holistic Environmental Internal Responses Behavior Cognitive Emotional Physiological Employee Responses Cognitive Emotional Physiological Customer Responses Perceived Services cape Individual Behavior Individual Behavior Social Interaction Signs, Symbols And Artefacts Ambient Conditions Space / Function
  • 54. PROCESS MANAGEMENT
  • 55. Process ◦ The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems. Service delivery systems •Back stage •Front stage Procedures Policies
  • 56. Characteristics of Process  Divergence – Services vary from customer to customer  Complexity – Many activities in a single service  Service Location -  Customer Participation and Interaction  Service Itself – Process Based or Technology Based. Types of Process  Line or Flow Operations  Job Shop Operations
  • 57. Issues in Process Management No Area of Operations Explanation 1 Process Planning and Control Operation specification to achieve service output in terms of quantity, quality, delivery and cost. 2 Operations Planning Detailed specification of each sub system. 3 Facilities Design Design, layout, locations, materials handling and maintenance 4 Scheduling Detailing the timings at which service operations should be completed by agreed delivery promises within available resources and with their economic utilization. 5 Inventory Planning and Control Planning and controlling the inventory of people and capacity. 6 Quality Control Quality standards are attained in each service system. 7 Operations Control Information flows into and out of service systems and ensures that operations are undertaken at specific times as per schedule. 8 Forecasting and Long term planning Anticipating demands and forecasting capabilities that need to be inducted in the system.
  • 58. Attributes of Process  Service Design and Development  Design of Flow of Activities  Standardized Process  Customized Process  Number of Steps in the Process  Simple  Complex  Customer Involvement  Blueprints.
  • 59. 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.  Services are rendered and experienced simultaneously.(Inseparability). It is the process through which consumers interact with service provider. E.g Tourism : booking systems for travel and accommodation., use of credit cards for payments, design of queuing system at visitor attraction.  While designing a process , the process designer has to maintain a balance between functionality, security , aesthetics and ease of use by customer..
  • 60.  Critical Moments : Customer remains an integral part from pre- consumption stage through to post-visit feedback.  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, post delivery  4)staff and suppliers.  The above concept is called service blueprinting .
  • 61. SERVICE Blue Print  it is a visual portrayal of a service plan.  It is a detailed map or flow chart.  This is a technique which is used  when planning a new or revised process and  prescribing how it ought to function.
  • 62. Preparation of service blueprint.  Represent the service in the form of its molecular structure.  Break down the process into logical steps.  Recognize the variability in the process  Identify the back stage elements in the process
  • 63. Blue Printing - Elements  Customer’s Action (Line of Interaction)  Onstage Employee Actions (Line of Visibility)  Backstage Employee Actions (Line of Internal Interaction)  Invisible Support Actions & Processes
  • 64. Why Blue Printing?  Marketing & Operations personnel can interact with each other.  Provides a check on the logical flow of the whole process.  Identification of Bottlenecks.  Balanced Production line  Effective tool to recognize the changing system to process  To have targets based on customers expected level of service.
  • 65. Steps in Blue Printing 1. Identify the Process: 2. Map process from Customer’s point of View 3. Draw Line of Interaction 4. Draw line of Visibility 5. Map process from Contact Personnel’s view 6. Draw line of Internal Interaction 7. Link Customer and Contact person activities to support functions.
  • 66. Physical - - - - - - - - - - - - - - - Evidence - - - - - - - - - - - - - - - Customer Action Line of Interaction Onstage Contact Employee Actions Line of Visibility Backstage Contact Employee Actions Line of internal Interaction Support Process
  • 67. Service BluePrint Template
  • 68. Service Blue Print for Check –In to Check-Out for overnight Hotel Stay
  • 69. Airlines BluePrint
  • 70. conclusion  The marketing mix for a service has additional elements because the characteristics of a service are different to the characteristics of a product  Firms marketing a service need to get each of these elements correct.

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