3. Overview: Why Services Matter
Services are growing dramatically
Services are growing dramatically
Service leads to customer retention and
loyalty
Service leads to customer retention and
loyalty
Service leads to customer retention and
loyalty
Service leads to profits
Service leads to profits
Services help manufacturing companies
differentiate themselves
Services help manufacturing companies
differentiate themselves
Services help manufacturing companies
differentiate themselves
4. Why do firms focus on Services?
Services can provide higher profit margins and
growth potential than products
Services can provide higher profit margins and
growth potential than products
Services can provide higher profit margins and
growth potential than products
Customer satisfaction and loyalty are driven by
service excellence.
Customer satisfaction and loyalty are driven by
service excellence.
Customer satisfaction and loyalty are driven by
service excellence.
Services can be used as a differentiation
strategy in competitive markets
Services can be used as a differentiation
strategy in competitive markets
Services can be used as a differentiation
strategy in competitive markets
5. Why study Services Marketing?
Service-based economies.
Service-based economies.
Service as a business imperative in
manufacturing and IT.
Service as a business imperative in
manufacturing and IT.
Service as a business imperative in
manufacturing and IT.
Deregulated industries and professional service
needs.
Deregulated industries and professional service
needs.
Deregulated industries and professional service
needs.
Services marketing is different.
Services marketing is different.
Service equals profits.
Service equals profits.
6. What is Service? The Old View
Service is a technical after-sale function that
is provided by the service department.
Service is a technical after-sale function that
is provided by the service department.
Service is a technical after-sale function that
is provided by the service department.
Old:
Service =
wrench time
Old view of service =
Customer Service Center
7. What is Service? The New View
Service includes every interaction between
any customer and anyone representing the
company, including:
Service includes every interaction between
any customer and anyone representing the
company, including:
Service includes every interaction between
any customer and anyone representing the
company, including:
Service includes every interaction between
any customer and anyone representing the
company, including:
Customer
8. Service Can Mean all of These
Service as a product
Service as a product
Customer service
Customer service
Services as value add
for goods
Services as value add
for goods
Services as value add
for goods
Service embedded in a
tangible product
Service embedded in a
tangible product
Service embedded in a
tangible product
9. 21-9
Meaning
Service is any act or performance that
one party can offer to another that is
essentially intangible and does not result in
ownership anything. It may or may not be tied
to a physical product.
Customer service is the service
provided in support of a Companies core
product.
10. Definition
“Any activity or benefit that one party can
offer to another that is essentially intangible
and does not result in the ownership of
anything”.
“Any activity or benefit that one party can
offer to another that is essentially intangible
and does not result in the ownership of
anything”.
“Any activity or benefit that one party can
offer to another that is essentially intangible
and does not result in the ownership of
anything”.
“Any activity or benefit that one party can
offer to another that is essentially intangible
and does not result in the ownership of
anything”.
“Any activity or benefit that one party can
offer to another that is essentially intangible
and does not result in the ownership of
anything”.
(Kotler)
(Kotler)
21-10
11. 21-11
Characteristics Of
Services
1. Intangibility
Service intangibility means that
services cannot be seen, tasted or touched
before they are bought.
For e.g. ‒ Airline passengers have
nothing but a ticket on the promises that they &
their luggage will arrive safely at the intended
destination.
15. 21-15
Differences between Goods and Services.
Tangibility:
Goods: Goods are found tangible since we
can view, touch, feel the goods bought by us.
Service: Services are found intangible
because it is not possible to view, touch the
services.
We can just realize the services used by us.
16. 21-16
Differences between Goods and Services.
Transferability:
Goods: The goods can be transferred
from one place to another. We can carry goods
bought by us. Goods can be transferred from the
point of sale to the point of use.
Service: On the other hand, it is not possible
to transfer the services from the point of sale to
the point of use.
17. 21-17
Differences between Goods and Services.
Existence:
Goods: The goods bought remain existent.
Services: While services bought are
nonexistent.
Re-selling:
Goods: The goods bought by us can be
resold. After a limited use.
Services: The same thing is not possible
with the services. We don't bear the right of
18. 21-18
Differences between Goods and Services.
Standardized.
Services: The services can hardly be
standardized.
Goods: Contrary to it the goods can be
standardized. It is very difficult to measure the
quality of services but it is easier to measure the
quality of goods.
19. Challenges for Services
Defining and improving quality.
Defining and improving quality.
Ensuring the delivery of consistent quality.
Ensuring the delivery of consistent quality.
Designing and testing new services.
Designing and testing new services.
Communicating and maintaining a consistent
image.
Communicating and maintaining a consistent
image.
Communicating and maintaining a consistent
image.
20.
Accommodating fluctuating demand.
Accommodating fluctuating demand.
Motivating and sustaining employee
commitment.
Motivating and sustaining employee
commitment.
Motivating and sustaining employee
commitment.
Coordinating marketing, operations, and
human resource efforts.
Coordinating marketing, operations, and
human resource efforts.
Coordinating marketing, operations, and
human resource efforts.
Setting prices.
Setting prices.
Finding a balance between standardization
Finding a balance between standardization
versus customization.
versus customization.
versus customization.
21. Types of Services
Health Care
Health Care
hospital, medical practice, dentistry, eye care
hospital, medical practice, dentistry, eye care
Professional Services
Professional Services
accounting, legal, architectural
accounting, legal, architectural
Financial Services
Financial Services
banking, insurance
banking, insurance
22.
Hospitality
Hospitality
restaurant, hotel/motel, bed & breakfast, ski
resort, rafting
restaurant, hotel/motel, bed & breakfast, ski
resort, rafting
restaurant, hotel/motel, bed & breakfast, ski
resort, rafting
Travel
Travel
airline, travel agency, theme park
airline, travel agency, theme park
Others
Others
hair styling, pest control, plumbing, lawn
maintenance, counseling
hair styling, pest control, plumbing, lawn
maintenance, counseling
hair styling, pest control, plumbing, lawn
maintenance, counseling
24. 21-24
a) External Marketing:
1.Making Promises to customers regarding
what they can expect and how it will be
delivered.
2.For services the 7Ps [Service Marketing
Mix] communicate the promise to the
customers.
25. 21-25
b) Interactive Marketing:
1. Interactive marketing deals with 'Keeping
Promises‘.
2. Service promise are most often kept or
broken' by the employees of the firm or by
third party providers.
26. 21-26
b) Interactive Marketing:
1. Interactive marketing deals with 'Keeping
Promises‘.
2. Service promise are most often kept or
broken' by the employees of the firm or by
third party providers.
27. 21-27
3. Hence interactive marketing is defined as
'marketing by a service firm that recognizes
the perceived service quality depends heavily
on the quality of buyers- seller interactions.
28. 21-28
c) Internal Marketing:
Internal marketing refers to 'Enabling
Promises'.
In order for providers and service systems
to deliver on the promises made they must
have the skills, abilities, tools and motivation to
deliver.
29. 21-29
c) Internal Marketing:
Service firm has to train and effectively
motivate its employees [Marketing executives /
Employees in constant touch with customers]
and all supporting service people to work as a
team to provide' customer satisfaction.
32. P ro v id e r G a p 1 : N o t k n o w in g w h a t c u s to m e rs e x p e c t
P ro v id e r G a p 2 : N o t s e le c tin g th e rig h t s e rv ic e d e s ig n s a n d s ta n d a rd s
P ro v id e r G a p 3 : N o t d e liv e rin g to s e rv ic e s ta n d a rd s
P ro v id e r G a p 4 : N o t m a tc h i n g p e rfo rm a n c e to p ro m is e s
Key Factors Leading to the Customer
Gap
Customer
Expectations
Customer
Perceptions
Customer
Gap
33. Gaps Model of Service Quality
Customer Gap:
Customer Gap:
difference between customer expectations and perceptions
difference between customer expectations and perceptions
Provider Gap 1 (Knowledge Gap):
Provider Gap 1 (Knowledge Gap):
not knowing what customers expect
not knowing what customers expect
Provider Gap 2 (Service Design & Standards Gap):
Provider Gap 2 (Service Design & Standards Gap):
not having the right service designs and standards
not having the right service designs and standards
34. Gaps Model of Service Quality
Provider Gap 3 (Service Performance Gap):
Provider Gap 3 (Service Performance Gap):
not delivering to service standards
not delivering to service standards
Provider Gap 4 (Communication Gap):
Provider Gap 4 (Communication Gap):
not matching performance to promises
not matching performance to promises
37. CUSTOMER
COMPANY
Gap 2: The Design and Standards Gap
Customer-Driven
Service Designs and
Standards
Company
Perceptions of
Consumer
Expectations
Provider Gap 2
