Service marketing

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Service marketing

  1. 1. DESIGNING AND MANAGING SERVICES Designing and Managing Services by Ram, Saurabh, Rishikesh and Chinmaya 1
  2. 2. DEF: services are intangible elements which  satisfy the needs of the consumer Services marketing: process of identifying  needs and wants of customers then designing the service along with the strategies to deliver satisfaction to the consumers profitably Sunday, April 05, 2009 2
  3. 3. Services are said to have four key characteristics The 4 I’s:  Intangibility-no physical attributes  Inseparability-cannot be separated from the provider  Inconsistency –tend to vary  Inventory- (simultaneous production /consumption) Sunday, April 05, 2009 3
  4. 4. Services cannot be inventoried. Services cannot be patented. Services cannot be readily displayed or communicated. Pricing is difficult. Sunday, April 05, 2009 4
  5. 5. • Service delivery and customer satisfaction depend on employee actions. 1 • Service quality depends on many uncontrollable factors. 2 • There is no sure knowledge that the service delivered matches with what is planned and promoted. 3 Sunday, April 05, 2009 5
  6. 6. • Customers participate in and affect the transaction. 1 • Customers affect each other 2 • Employees affect the service outcome. 3 • Decentralization may be essential. 4 • Mass production is difficult. 5 Sunday, April 05, 2009 6
  7. 7. • It is difficult to synchronize supply and demand with services 1 • Services cannot be returned or resold 2 Sunday, April 05, 2009 7
  8. 8. Goods Services Resulting Implications Tangible Intangible Services cannot be inventoried. Services cannot be patented. Services cannot be readily displayed or communicated. Pricing is difficult. Standardized Heterogeneous Service delivery and customer satisfaction depend on employee actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted. Production Simultaneous Customers participate in and affect the transaction. separate from production and Customers affect each other. consumption consumption Employees affect the service outcome. Decentralization may be essential. Mass production is difficult. Nonperishable Perishable It is difficult to synchronize supply and demand with services. Services cannot be returned or resold. Sunday, April 05, 2009 8
  9. 9. Company (Management) Internal External Marketing Marketing “enabling the “setting the promise” promise” Employees Customers Interactive Marketing “delivering the promise” Sunday, April 05, 2009 9
  10. 10. Product Price Place Promotion People Process Physical Evidence Sunday, April 05, 2009 10
  11. 11. PRODUCT PLACE P R O M O T IO N P R IC E P h y s ic a l g o o d C h a n n e l ty p e P ro m o tio n F le x ib ility fe a tu re s b le n d Q u a lity le v e l E x p o s u re S a le s p e o p le P ric e le v e l A c c e s s o rie s In te rm e d ia rie s A d v e rtis in g T e rm s P a c k a g in g O u tle t lo c a tio n S a le s D iffe re n tia tio n p ro m o tio n W a rra n tie s T ra n s p o rta tio n P u b lic ity A llo w a n c e s P ro d u c t lin e s S to ra g e B ra n d in g Sunday, April 05, 2009 11
  12. 12. PEO PLE P H Y S IC A L PROCESS E V ID E N C E E m p lo ye e s F a c ility d e s ig n F lo w o f a c tiv itie s C u s to m e rs E q u ip m e n t N u m b e r o f s te p s C o m m u n ic a tin g S ig n a g e L e v e l o f c u s to m e r c u ltu re a n d v a lu e s in v o lv e m e n t E m p lo ye e re s e a rc h E m p lo ye e d re s s O th e r ta n g ib le s Sunday, April 05, 2009 12
  13. 13. Expected CUSTOMER Service Customer Gap Perceived Service External Service Delivery COMPANY Communications GAP 4 to Customers GAP 1 GAP 3 Customer-Driven Service Designs and Standards GAP 2 Company Perceptions of Consumer Expectations Sunday, April 05, 2009 13
  14. 14. Services are of different types address  towards different types of customers depending upon the type of benefit desired. Classified as:- 1.By market –segmentation 2.By Skills 3.By Goal of Services 4.By Labour intensiveness 5.By Customer Contact 14 Sunday, April 05, 2009
  15. 15. By Market By Skills:- By Goal of Services:- Segmentation:- 1.Professional Services 1.Profit Making 1.Consumer Services E.g.. Engineering, E.g.. Commercial Co., E.g.. Healthcare, Medical, Management Export-Import oprns. Travel -Related 2.Non-Professional 2.Non-Profit Making 2.Business Services E.g.. Domestic E.g.. NGO, E.g.. Consultancy, Services Redcross Market-Research By Labour Intensiveness:- By Customer –Contact:- 1.Labour Based Services 1.High-Contact E.g.. Hospitals 2.Equipment Based Services 2.Low-Contact E.g.. After-Sales Sunday, April 05, 2009 15
  16. 16. Qualitative Quantitative (psychological) (operational) Relates more to service Relates to the way in which accessibility. service is provided and perceived. Models in this aspect are Models in this aspect are empirical analytical and typically originate in nature and originate from social in operations research (queuing sciences and marketing theory) Sunday, April 05, 2009 16
  17. 17. Sunday, April 05, 2009 17
  18. 18. Queues in service operations are often the arena where customers, service providers (servers, or agents) and managers establish contact, in order to jointly create the service experience. Process-wise, queues play in services much the same role as inventories in manufacturing. But in addition, “human queues” express preferences, complain, abandon and even spread around negative impressions. Sunday, April 05, 2009 18
  19. 19. The simplest and most-widely used such model is the M/M/s queue the simplest queuing model of a call center requires the estimation of calling rate and mean service (holding) times. Moreover, the performance of call centers in peak hours is extremely sensitive to changes in its underlying parameters. It follows that an extremely accurate estimation/forecasting of parameters is a prerequisite for a consistent service level and efficient operation. Sunday, April 05, 2009 19
  20. 20. M/M/s:FCFS/∞/∞ Multi-channel queuing model Several service stations(s) Random arrival and service rates Customers are served on first come first served basis Any no of customers can be accommodated in the queue Customer population is also infinite Sunday, April 05, 2009 20

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