1. Services Marketing
“Services are going to move in this
decade
to being the front edge of the industry.”
Services – Intangible economic activity.
2. Services
► Services:
Example: IBM.
► Technically
“All Economic activities whose output is not a physical
product or construction, consumed at the time it is produced
and provides added value in forms, that are essentially
intangible concerns of its first purchaser.”
3. Characteristics Of
Services Compared To Goods
Goods Services
Resulting Implications
Tangible Intangible
►Services cannot be inventoried
►Services cannot be readily displayed
►Services cannot be patented
Standardized Heterogeneity
Service quality depends on many
uncontrollable factors
Production
separate from
consumption
Simultaneous production
and consumption
Customer participate in and affect the
transactions
Decentralization may be required
Nonperishable Perishable
Services cannot be resold or returned
4. Methods to overcome the features of
services
► Intangibility
Visualization, Physical representation, Association……….
► Heterogeneity
Training the internal customers, Automation……..
► Simultaneous Production and Consumption
Adopting new methods of service, Robotics, Video
conferencing.
► Perishability
Over marketing, Managing demand…….
5. Services Marketing Mix
► Traditional Marketing Mix
Product
Place
Promotion
Price
► Expanded Marketing Mix For services
People
Physical evidence
Process
6. GROWTH OF SERVICE SECTOR
The reasons for the growth of service sector can be summarized as
follows –
► Affluence
The increase in the per-capita-income is an indicator of the increase in
the general affluence level. This increase in affluence has given rise
to services like pest-control, personal security, interior designer etc.
► Leisure time
People do get some time to travel and holiday and therefore there is a
need for travel agents, resorts, hotels and entertainment.
► Life expectancy
The health programmes have significantly contributed to an increase in
life expectancy give rise to services like old-age homes, nursing
homes, healthcare etc.
7. ► Working wives
As more and more women have started working, the need for day
care for children has increased and so is the case with packed
food and home delivery
► Product complexity
A large number of products are now being purchased in
households which can be serviced only by specialized
persons like water purifiers, microwave ovens, home
computers etc, giving rise to the needs for services like after
sales service agents for durables, maintenance service
providers
► Life’s complexity
As the daily routine gets busier, individual find it difficult to
manage things on their own. This leads to an obvious need
for tax consultants, legal advisors, property advisors etc
8. ► Resource scarcity and ecology
As the natural resources are depleting and the need for
conservation is increasing, we have seen the coming
up of service providers like pollution control
agencies, carpools, water management etc.
► New products
The development in information technology has given
rise to services like telecom services, web shopee etc.
9. Classification of services
1) Classification based on Ultimate user
► Consumer: services which are directly provided to consumer to
Leisure like hair dressing, package holidays, dry-cleaning,
laundry.
► Business to business: This provides services to business
operations like advertising agencies, printing, accountancy, and
consultancy.
► Industrial: plant maintenance and repair, installation, project
management.
10. 2) Classification based on level of tangibility
► Highly tangible: Ex. Car rentals, vending machines, and
telecommunications.
► Service linked tangible goods: Ex. Domestic appliance repair,
automobile service to enhance consumer appeal.
► Highly intangible: The offer consists primarily of services like
consultancy, legal service, psychotherapy, baby sitting, massaging
etc
► Major services linked with minor tangible goods service: Ex.
Airline passengers buying transportation service without anything
tangible to show for their expenditure
11. 3) Classification based on Service Options
►People based services: high contact with the
people. For example education, dental care,
restaurants, medical services, tourism, insurance.
►Equipment based low contact: low contact with
people for example cinema, vending machine,
automatic teller machine
12. 4) Classification based on specialization
►Professional services: for example medical
services, legal services, accountancy, tutoring
►Non- professional services: for example baby
sitting, care taking, and casual labour.
13. 5) Classification based on profit orientation
►Non-profit orientation: Orphanages, Charitable
institutions.
►Commercial / profit orientation: in this type of
firms the orientation is to earn profit like Banks,
air lines, tour operators, hotel and catering
services.
14. 6) Classification based on external- internal service to
manufacturers
► External services: many services are concerned with the
distribution, installations and upkeep of physical
objects; they include car repairs, landscape maintenance,
computer installation etc
► Internal services: Cover a wide range of activities
including recruitment, publications, legal services, pay
roll administration, office cleaning, internal transport
etc. if the same services are provided by the outside
agencies it becomes external service.
15. 7) Classification based on Customer- Employee presence
► Self service: in this type of organisations we can find the
presence of customer only. For example ATM, vending
machines etc
► Interpersonal services: in this type of organisation there
will be presence of both customer and employee. For
example, educational institutions, dry cleaners.
► Remote service: in this type of organisation there will be
presence of employee. For example insurance company.
16. The Customer Gap
The customer gap is the difference between customer expectations and
perceptions. Customer’s expectations are standards or reference points
that customers bring in to the service experience, whereas customer
perceptions are subjective assessment of actual service experience.
Expected Services
Perceived Services
Customer
Gaps
17. five dimensions in assessment of service quality
► Reliability: Ability to perform the promised service dependably and
accurately (example: flights depart and arrive on schedule).
► Responsiveness: Willingness to help customers and provide prompt
service (example: no waiting at the hospital).
► Assurance: Employee’s knowledge and courtesy and their ability to
inspire trust and confidence. (Example: insurance co., & services).
► Empathy: Caring, individualized attention given to customers (example:
specific type of room provided to the guest based on his previous stay,
acknowledges customer by name, Counseling for the students in seat
selection ).
► Tangibles: Appearance of physical facilities, equipment, personnel and
written materials (example: seating and air conditioning in a theatre).
18. The provider GAPS
These gaps occur within the organisation providing the
service (hence the term provider gaps).
It includes 4 gaps:
► Provider Gap 1: Not knowing what customers expect
► Provider Gap 2: Not selecting the right service designs and
standards
► Provider Gap 3: Not delivering the service standards
► Provider Gap 4: Not matching performance to promises
19. Provider Gap1:
► Not knowing what customers expect:
This gap is the difference between customer
expectations of service and company understanding of
these expectations. Service firm’s executive may not
always understand what features connote high quality to
consumers in advance, what features a service must
have in order to meet customer needs and what levels of
performance on those features are needed to deliver
high quality service.
20. Provide Gap 2:
► Not selecting the right service designs and standards:
A company might correctly identify the customers’
needs but may not set a specific performance standard.
This may occur because management sometimes
believes that customer expectations are unreasonable or
unrealistic. Also availing of other factors like resources
constraints, market conditions and/or management
indifference – may result in discrepancy between
company perception of consumer expectation and the
actual specification established for a service.
21. Provider Gap 3:
► Not delivering the service standards:
This is the gap between service quality specifications and actual
service delivery. Even if there is customer driven service
standards, a high quality service delivery is not a certainty. The
main reason for this gap is involvement of human beings in the
service delivery – especially the role of contact personnel. The
variability in employee performances makes it hard to maintain
standardized quality. Failure to match demand and supply,
customers not fulfilling their roles and problem with service
intermediaries may also result in creating this gap.
22. Provider Gap 4:
► Not matching performance to promises:
This is essentially a gap between what you deliver and
your external communication. Media advertising and
other communication by a firm can affect consumer
expectations. Therefore, a company must be certain not
to promise more in communication that it can deliver in
reality. Promising more than what can be delivered will
raise initial expectations but lower perception of quality
when the promises are not fulfilled.
23.
24.
25. Customer Expectation of Services
►Levels of Expectations
Desired Services
Adequate Services
Zone of Tolerance
27. Factors That Influence Customer
Expectations of Services
• Sources of Desired Service Expectations
Personal Needs.
Lasting Service Intensifiers.
• Sources of Adequate Service Expectation
• Temporary Service Intensifier
• Percieved Service Alternatives
• Situational Factors
• Predicted Services
