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  1. 1. Marketing Management MBA CP 205
  2. 2. Managing Services
  3. 3. <ul><li>Learning Objectives: </li></ul><ul><li>Know how services are defined and classified, and how do they </li></ul><ul><li>differ from goods. </li></ul><ul><li>Know how services are marketed. </li></ul><ul><li>Know how service quality can be improved. </li></ul><ul><li>Know how service marketers create strong brands. </li></ul><ul><li>Know how goods-producing companies can improve customer </li></ul><ul><li>support services. </li></ul>Managing Services
  4. 4. Managing Services Any act of performance that one party can offer another that is essentially intangible and does not result in the ownership of anything; its production may or may not be tied to a physical product. Service
  5. 5. Managing Services Government Business Retail Private Non-Profit Manufacturing Service Sectors
  6. 6. Managing Services Pure tangible good Pure service Hybrid Tangible with Accompanying services Service with Accompanying goods Categories of Service Mix
  7. 7. Managing Services <ul><li>Services vary whether they are equipment based or people based . </li></ul><ul><li>Companies can choose different processes to deliver services. </li></ul><ul><li>Some services require client’s presence, some do not. </li></ul><ul><li>Services differ whether personal or business needs met. </li></ul><ul><li>Service providers differ on objectives (profit, non-profit) and </li></ul><ul><li>ownership (private, public). </li></ul>Service Distinctions
  8. 8. Managing Services Continuum of Evaluation for different types of Products
  9. 9. Managing Services Intangibility Inseparability Variability Perishability Characteristics of Services
  10. 10. Managing Services <ul><li>Intangibility </li></ul><ul><li>Services can’t be seen, heard, felt, tasted or smelled before buying. </li></ul><ul><li>Service provider’s task is to manage the evidence, to tangibilize the </li></ul><ul><li>intangible. </li></ul><ul><li>Service providers can demonstrate their quality through physical </li></ul><ul><li>evidence and presentation . </li></ul><ul><li>Services marketers can make their positioning strategy tangible </li></ul><ul><li>through various marketing tools. </li></ul>
  11. 11. Managing Services <ul><li>The service marketing tools </li></ul><ul><ul><ul><li>Place. </li></ul></ul></ul><ul><ul><ul><li>People. </li></ul></ul></ul><ul><ul><ul><li>Equipment. </li></ul></ul></ul><ul><ul><ul><li>Communication material. </li></ul></ul></ul><ul><ul><ul><li>Symbols </li></ul></ul></ul><ul><ul><ul><li>Price </li></ul></ul></ul>
  12. 12. Managing Services <ul><li>Ways to improve service quality control </li></ul><ul><ul><ul><li>Investment in good hiring and training procedures. Well trained employees exhibit competence, a caring attitude, responsiveness, initiative, problem solving ability and goodwill. </li></ul></ul></ul><ul><ul><ul><li>Standardizing the service performance process across organization. </li></ul></ul></ul><ul><ul><ul><li>Monitoring customer satisfaction by employing suggestion & complaint system and customer surveys. </li></ul></ul></ul>
  13. 13. Managing Services Perishability, Matching demand and supply <ul><li>Demand side </li></ul><ul><li>Differential pricing. </li></ul><ul><li>Non-peak demand. </li></ul><ul><li>Complementary services. </li></ul><ul><li>Reservation systems. </li></ul><ul><li>Supply side </li></ul><ul><li>Part-time employees. </li></ul><ul><li>Peak-time efficiency. </li></ul><ul><li>Increased consumer Participation. </li></ul><ul><li>Facilities for future expansion. </li></ul>
  14. 14. Managing Services <ul><li>Demand side </li></ul><ul><li>Differential pricing , Shifts some demand from peak to off-peak </li></ul><ul><li>periods. </li></ul><ul><li>Non-peak demand , can be cultivated. </li></ul><ul><li>Complementary services , can be developed to provide alternatives to </li></ul><ul><li>waiting customers like ATMs in banks. </li></ul><ul><li>Reservation systems , are a way to manage demand level. </li></ul>
  15. 15. Managing Services <ul><li>Supply side </li></ul><ul><li>Part time employees , can be hired to serve peak demand. </li></ul><ul><li>Peak time efficiency routines , can be introduced. </li></ul><ul><li>Increased consumer participation , can be encouraged. </li></ul><ul><li>Shared services , can be developed. </li></ul><ul><li>Facilities for future expansion , can be developed. </li></ul>
  16. 16. Managing Services Internal Marketing External Marketing Interactive Marketing Employees Customers Company Holistic marketing for services Hospitality sector Financial/ banking sector Civil aviation sector
  17. 17. Managing Services Factors leading to customer switching behavior <ul><li>Pricing </li></ul><ul><li>High price </li></ul><ul><li>Price increases </li></ul><ul><li>Unfair pricing </li></ul><ul><li>Deceptive pricing </li></ul><ul><li>Inconvenience </li></ul><ul><li>Location/hours </li></ul><ul><li>Wait for appointment </li></ul><ul><li>Wait for service </li></ul><ul><li>Service Encounter failures </li></ul><ul><li>Uncaring </li></ul><ul><li>Impolite </li></ul><ul><li>Unresponsive </li></ul><ul><li>Not knowledgeable </li></ul><ul><li>Response to service failures </li></ul><ul><li>Negative response </li></ul><ul><li>No response </li></ul><ul><li>Reluctant response </li></ul><ul><li>Competition </li></ul><ul><li>Found better service </li></ul><ul><li>Ethical problems </li></ul><ul><li>Cheat </li></ul><ul><li>Hard-sell </li></ul><ul><li>Unsafe </li></ul><ul><li>Conflict of interest </li></ul><ul><li>Involuntary Switching </li></ul><ul><li>Customer moved </li></ul><ul><li>Provider closed </li></ul><ul><li>Core service failures </li></ul><ul><li>Service Mistakes </li></ul><ul><li>Billing errors </li></ul><ul><li>Service Catastrophe </li></ul>
  18. 18. Managing Services Service Quality Model
  19. 19. Managing Services Gaps that cause unsuccessful service delivery <ul><li>Gap between consumer expectation and management perception, Management does not perceive what customers want. </li></ul><ul><li>Gap between management perception and service-quality specifications, management may correctly perceive consumers’ needs but not set a performance standard. </li></ul><ul><li>Gap between service-quality specifications and service delivery, personnel are poorly trained or incapable. </li></ul><ul><li>Gap between service delivery and external communications, customer expectations affected by ads. </li></ul>
  20. 20. Managing Services <ul><li>Gap between perceived service and expected service, consumer misperceives service quality. </li></ul><ul><li>Determinants of service quality </li></ul><ul><ul><ul><li>Reliability: The ability to perform the promised service dependably and accurately. </li></ul></ul></ul><ul><ul><ul><li>Responsiveness: The willingness to help customers and provide prompt service. </li></ul></ul></ul><ul><ul><ul><li>Empathy: The provision of caring, individualized attention to customers. </li></ul></ul></ul><ul><ul><ul><li>Tangibles: The appearance of physical facilities, equipment, personnel and communication material. </li></ul></ul></ul>
  21. 21. Managing Services Determinants of service quality <ul><li>Reliability </li></ul><ul><li>Providing service as promised. </li></ul><ul><li>Dependability in handling </li></ul><ul><li>customers service problems. </li></ul><ul><li>Providing services at the </li></ul><ul><li>promised time. </li></ul><ul><li>Maintaining error-free records. </li></ul><ul><li>Responsiveness </li></ul><ul><li>Keeping customer informed as </li></ul><ul><li>to when services will be performed. </li></ul><ul><li>Prompt service to customers. </li></ul><ul><li>Willingness to help customers. </li></ul><ul><li>Readiness to respond to customers’ </li></ul><ul><li>requests. </li></ul>
  22. 22. Managing Services Determinants of service quality <ul><li>Empathy </li></ul><ul><li>Giving customers focused </li></ul><ul><li>attention. </li></ul><ul><li>Employees who deal in </li></ul><ul><li>caring fashion. </li></ul><ul><li>Convenient business hours. </li></ul><ul><li>Having the customers’ best </li></ul><ul><li>interests at heart. </li></ul><ul><li>Assurance </li></ul><ul><li>Employees who instill </li></ul><ul><li>confidence in customers. </li></ul><ul><li>Making customers feel </li></ul><ul><li>safe in their transactions. </li></ul><ul><li>Employees who are </li></ul><ul><li>knowledgeable. </li></ul><ul><li>Employees who are </li></ul><ul><li>consistently courteous. </li></ul>
  23. 23. Managing Services <ul><li>Strategic Concept. </li></ul><ul><li>Top-Management Commitment. </li></ul><ul><li>High Standards. </li></ul><ul><li>Self-Service Technologies. </li></ul><ul><li>Monitoring Systems. </li></ul><ul><li>Satisfying Customer Complaints. </li></ul><ul><li>Satisfying Employees. </li></ul>Best practices
  24. 24. Managing Services Choosing Brand Elements Establishing Image Dimensions Devising Branding Strategy Developing Brand Strategies For Services
  25. 25. Managing Services Customer Worries Failure frequency Downtime Out-of-pocket costs
  26. 26. <ul><li>Recap: </li></ul><ul><li>How services are defined and classified, and how do they </li></ul><ul><li>differ from goods. </li></ul><ul><li>How services are marketed. </li></ul><ul><li>How service quality can be improved. </li></ul><ul><li>How service marketers create strong brands. </li></ul><ul><li>How goods-producing companies can improve customer </li></ul><ul><li>support services. </li></ul>Managing Services
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