Summary of Marketing Management, 11Ed. Chapter 13

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Philip Kotler, Kevin Lane Keller and Abraham Koshy

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Summary of Marketing Management, 11Ed. Chapter 13

  1. 1. logo copy.tif Designing and Managing Services Chapter 13 Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha SUMMARY by Today as product companies find it harder and harder to distinguish their physical products, they turn to service differentiation. Service providers find significant profitability in delivering superior services. How do we define and classify services and how do they differ from goods • A service is any act or performance one party can offer to another that is intangible and does not result in the ownership of anything .Its production may or may not be tied to physical product Categories of services mix. • Services can be equipment based or people based & they differ in their objectives and ownership. • Service companies can choose among different processes to deliver their service. • Services needs client presence & may meet a personal or business need. Pure Tangible Goods Tangible Goods with accompanying services Hybrid Major service with accompanying minor goods and services Pure Service Service marketingis different from goods marketing as service consumer relies on word of mouth, they rely heavily on price, personnel & physical cues to judge quality. They are highly loyal to service providers who satisfy them & because switching costs are high, consumer inertia can make it challenging to entice a customer away from a competitor. Designing and Managing 3 Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha SUMMARY by Today as product companies find it harder and harder to distinguish their physical products, service differentiation. Service providers find significant profitability in delivering superior services. How do we define and classify services and how do they differ from goods A service is any act or performance one party can offer to another that is intangible and does not result in the ownership of anything .Its production may or may not be tied to physical product Categories of services mix. Services can be equipment based or people based & they differ in their objectives and ownership. Service companies can choose among different processes to deliver their service. Services needs client presence & may meet a personal or business need. Categories of services mix • No services accompany the product. E.g Soap,toothpaste Pure Tangible Goods •The offering accompanied by one or more services E.g Computers, Cell Phones & cars Tangible Goods with accompanying services •The offering contains equal parts goods and services. E.g restaurants Hybrid •The offering consists of major service along with additional services or supporting goods. E.g Airplane travel alog with its services Major service with accompanying minor goods and services •The Offering consists of only a service.E.g psycotherapyPure Service Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha Today as product companies find it harder and harder to distinguish their physical products, service differentiation. Service providers find significant profitability in delivering How do we define and classify services and how do A service is any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything .Its production may or may not be tied to physical product Categories of services mix. Services can be equipment based or people based & they differ in their objectives and Service companies can choose among different processes to deliver their service. Services needs client presence & may meet a personal or business need. Categories of services mix No services accompany the product. E.g The offering accompanied by one or more services E.g Computers, Cell Phones & cars The offering contains equal parts goods and services. E.g The offering consists of major service along with additional services or supporting goods. E.g Airplane The Offering consists of only a service.E.g psycotherapy
  2. 2. Chapter External Marketing •It describes the normal work of preparing,pricing,distribut ion,and promoting the service to customers. Intangibility Inseparability Variability Perishability Distinctive Characteristics of Services Developing Brand Strategies for services Identify what is most valuable to customer and include repair & maintainence services Create a brand hierarchy and brand portfolio that permits positioning, targeting of desgin marketing communication, information programs and building brand personality Chapter 13 - Designing and Managing Services Holistic Marketing for Services External Marketing It describes the normal preparing,pricing,distribut ion,and promoting the service to customers. Internal Marketing •It describes the training and motivating employees to serve the customers well.Engage every employee in the organization to practise marketing • Services are intangible Service marketers must be able to transform intangible services into concrete benefits.Intangibility • Services are typically produced and consumed simultaneously .Thus service providers must learn to work in larger groups to provide services to customers Inseparability •Services are variable and buyers are aware of this variability and often talk to others about quality before selecting a services. •Invest In Good Hiring •Standardize the service-performance process •MonitorCustomer Satisfaction process Variability •Services cannot be stored hence there is always a mismatch between demand & supply.Stratgies that marketers must use : •Demand Side - Differential Pricing,Nonpeak Demand,Complementary Services,Reservation Systems •Supply Side - Part-Time employees ,Peak Time efficiency,Increased consumer participation,shared services,Facilities for future expansion Perishability Distinctive Characteristics of Services Developing Brand Strategies for services Provide Post-Sales support Identify what is most valuable to customer and include repair & maintainence services Devising Branding Stratgey Create a brand hierarchy and brand portfolio that permits positioning, targeting of different market segments Establishing Image Dimensions desgin marketing communication, information programs and building brand personality Chosing Brand Elements Focus on logos,symbols,slogans to build brand awareness Designing and Managing Services Marketing for Services Interactive Marketing •It describes the employee skills in serving the client Services are intangible Service marketers must be able to transform intangible services into concrete benefits. Services are typically produced and consumed simultaneously .Thus service providers must learn to work in larger groups to provide Services are variable and buyers are aware of this variability and often talk to others about quality before selecting a services. performance process Services cannot be stored hence there is always a mismatch between demand & supply.Stratgies that marketers must use : Differential Pricing,Nonpeak Demand,Complementary Time employees ,Peak Time efficiency,Increased consumer participation,shared services,Facilities for future expansion Distinctive Characteristics of Services Developing Brand Strategies for services Sales support Identify what is most valuable to customer and include repair & maintainence services Devising Branding Stratgey Create a brand hierarchy and brand portfolio that permits positioning, targeting of Establishing Image Dimensions desgin marketing communication, information programs and building brand personality Focus on logos,symbols,slogans to build brand awareness
  3. 3. Best Practices of Service Quality Management Chapter 13 - Designing and Managing Services Trends STRATEGIC COMPONE NT •Top companies are customer obsessed •They have clear sense of target customer and their need TOP MANAGEM ENT COMMITME NT •Thorough commitme nt to service e.g Marriot,Xer ox •Both financial & service performanc e monitored by top manageme nt HIGH STANDARDS •Setting high service standards •developing reliable,resi lient & innovative customer Intefrace systems SELF- SERVICE TEHNOLOGI ES •replacing person to person interaction s with self service technologie s e.g ATMs •Helping customers to use these facilities MONITORIN G SYSTEMS •Auditing service performanc e of own & competitor s SATISFYING EMPLOYEES & CUSTOMERS •Instilling a possitive attitude about customer satisfaction in employees

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