Service Marketing

Services Marketing

Current Competitive Trends
Customer Satisfaction and Customer Focus
Value
TQM and Service Quality
Service as a key differentiator in Manufacturing Firms
New measurement systems linking C.S with financial goals and operational measurements
Emerging Technology
Internationalisation of Services

Characteristics Of Services
Intangibility
Inseparability
Heterogeneity
Ownership
Experiential
Perishability
Implication of these characteristics ???

The Product Continuum Goods Salt Shoes VCR Automobile Fast Food Cruise Consulting Insurance Education Ideas / Services Tangible dominant Intangible dominant Products contain both tangible and intangible components; predominantly tangible products are called goods , and predominantly intangible products are considered services.

Mahatma Gandhi on Customer Orientation
A customer is the most important person in our premises
A customer is not dependent on us , we are dependent on him
A customer is not an interruption in our work, he is the purpose of it.
We are not doing a favour by serving him, it is he who does a favour by giving us the opportunity to do so.
A customer is not someone to argue or match wits with. Nobody ever won an argument with a customer
A customer is a person who brings us his wants. It is our job to handle them profitably to him and to ourselves.

Services Marketing Mix
Product
Price
Promotion
Place
People
Physical evidence
Processes

Service Triangle Management Employee Customer Delivering the promise Selling the promise Enabling the promise External Marketing Internal Marketing Interactive Marketing

Common Traps
Regarding internal communications as less important
Playing “favorites” and the opposite, i.e. automatically treating some people less well
Forgetting the effect on the external customer
Being more concerned with “the system” than the end result
Having a messy filing system
Reacting quickest to those who “shout loudest ”
Placing your own priority on the item
Internal paperwork nearly always affects the external customer. Process it quickly and efficiently

Customer Satisfaction = f (x, y) X = Y = Your Performance Customer Expectations Performance > Expectations Delight / Wow Performance = Expectations Satisfaction Performance < Expectations Dissatisfaction Customer Satisfaction

Gap 1 : Not knowing what customers expect Gap 2 : Not selecting the right service design standards Gap 3 : Not delivering to Service Standards Gap 4 : Not matching Performance to Promises Gap 5 : Perceived Service and Expected Service Service Quality Gaps

GAP - 1 CUSTOMER EXPECTATIONS Key Factors
Insufficient marketing research
Inadequate use of Marketing research
Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management
MANAGEMENT OF PERCEPTIONS OF CUSTOMER EXPECTATIONS

GAP - 2 Key Factors
Inadequate management commitment to service quality
Absence of formal process for setting service quality goals
Inadequate standardization of tasks
Perception of infeasibility – that customer expectations cannot be met
Co-Driven Standards
MANAGEMENT OF PERCEPTIONS OF CUSTOMER EXPECTATIONS SERVICE QUALITY SPECIFICATIONS

GAP - 3 Key Factors
Lack of teamwork
Poor employee – job fit
Poor technology job fit
Lack of perceived control ( contact personnel)
Inappropriate evaluation / compensation system
Role conflict / ambiguity among contact employees
Failure to match demand and supply
Customers not fulfilling their roles and responsibilities
SERVICE QUALITY SPECIFICATIONS SERVICE DELIVERY

GAP - 4 Key Factors
Inadequate communication between salesperson & operations
Inadequate communication between advertising & operations
Differences in policies and procedures across branches or departments
Exaggeration in advertising
Exaggeration in personal selling
SERVICE DELIVERY EXTERNAL COMMUNICATION TO CUSTOMERS

Why Study Consumers?
The psychology of consumers: how they think, feel, reason, and select between different alternatives
Psychology of how the consumer is influenced by his or her environment
The behavior of consumers while shopping
Information Search
Evaluation of service alternatives
Service Purchase and consumption
Post-purchase evaluation

Behavior refers to a consumer’s response (or lack of response) to a given stimuli. Switchers Vs. Loyals First Level Segmentation - Demographics & Psychographics Second Level Segmentation - Desired Benefits Third level Segmentation - Behavior Segmentation Dynamics

DIMENSIONS OF QUALITY
Reliability
Tangibles
Responsiveness
Assurance
Empathy

The Five Dimensions of Service Service Dimension Definition Reliability The ability to perform the promised service dependably & accurately Tangibles The appearance of physical facilities, equipment, personnel & communication materials Responsiveness The willingness to help customers & provide prompt service Assurance The knowledge & courtesy of employees and their ability to convey trust & confidence Empathy The caring, individualised attention provided to the customer

The flower of Service Information Consultation Order Taking Hospitality Caretaking Exceptions Billing Payment CORE

Creating and Delivering New Services CORPORATE OBJECTIVES AND RESOURCES Market Opportunity Analysis Resource Allocation Analysis Market Positioning Statements Operating Assets Management Service Marketing Concept Service Operations Concept SERVICE DELIVERY PROCESS Performance Evaluation

Service Blueprints

Gap Analysis Grid Low Priority Current company strength Low High Low High IMPORTANCE SATISFACTION Attributes that need attention - area where priorities should be focused Unnecessary strengths - possible overkill

Key reasons for provider GAP 4 Service Delivery Key Factors Related to Pricing: Assuming that customers hold reference prices for services Narrowly defining price as monetary cost Signalling the wrong quality level with an inappropriate price Not understanding customers’ value definitions Not matching price strategy to customers’ value definitions External communications to Customers GAP 4

Image Value Product Value Services Value Monetary Price Time cost Energy cost Psychic cost Total customer value Total customer cost Customer delivered value Determinants Of Customer Added Value

Customer definitions of value
“ Value is low price ”
Discounting
Odd Pricing
Syncro-pricing
Penetration Pricing
“ Value is everything I want in a service”
Prestige pricing
Skimming Pricing
“ Value is the quality I get for the price I pay”
Value Pricing
Market Segmentation Pricing
“ Value is all that I get for all that I give”
Price Framing
Price Bunding
Complementary pricing

Key reasons for provider GAP 3 Customer-Driven Service Designs and Standards Key Factors Related to Demand and Capacity:
Failure to smooth the peaks and valleys of demand
Overuse of capacity
Attracting inappropriate customer segments to build demand
Relying too much on price to smooth demand
Service Delivery GAP 3

Strategies for shifting demand to match capacity Shift Demand Demand too low Demand too high Use Signage to communicate busy days and times Offer incentives to customers for usage during nonpeak times Take care of loyal or ‘regular’ customers first Advertise peak usage times and benefits of non peak use Charge full price for the service - no discounts Use Sales and advertising to increase business from current market segments Modify the service offering to appeal to new market segments Offer discounts or price reductions Modify hours of operation Bring the service to the customer

Strategies for flexing capacity to match demand Flex Capacity Demand too low Demand too high Stretch time, labor, facilities, and equipment Cross- train employees Hire part-time employees Request overtime work from employees Rent or share facilities Rent or share equipment Subcontract or outscore activities Perform, maintenance, renovations Schedule vacations Schedule employee training Lay off employees

Elements of Physical Evidence Servicescape Facility Exterior Exterior Design Signage Parking Landscape Surrounding Environment Facility Interior Interior Design Equipment Signage Layout Air quality / Temp . Other Tangibles Business cards Stationery Billing statements Reports Employee dress Uniforms Brochures

Typology of the Service Organisations based on variations in form and use of Servicescape. Servicescape usage Lean Elaborate Complexity of the Servicescape Self-Service (Customer only) Remote Service (employee only) Telephone company Insurance company Utility Professional services Telephone mail -order desk Automated voice-messaging based services Essel World Golf course ATM Vending machines

Typology of the Service Organisations based on variations in form and use of Servicescape. Servicescape usage Lean Elaborate Complexity of the Servicescape Interpersonal Services (both customer and employee) Hotels Restaurants Health clinic Hospital Bank Airline School Dry cleaner Hair saloon

How Do Customers Form Expectations
Word of mouth
Price
Past experience
Brand image and your communications
Your competitors communications
Independent research agencies
Business Drivers / End Customers Expectations

LEVELS OF EXPECTATION THE SERVICE QUALITY LADDER CUSTOMER BEOMES CHAMPION DESIRED SERVICE ZONE OF TOLERNACE ADEQUATE SERVICE UNSATISFACTORY

Approaches for managing customer expectations Communicate realities in the service industry Communicate criteria for service effectiveness Create tiered-value offerings Offer choices Delivery > or = Promise

Thank You

Service Marketing

by Mohit Singla on Feb 05, 2010

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Service Marketing — Presentation Transcript