Services       marketingNOTE: View these pages as Notes Pages for more explanation of the content.                The cont...
Services marketing                  Business                  modelsNOTE: View these pages as Notes Pages for more explana...
WHY ENROLL IN THE S•O•SSM SERVICESPROGRAM?By enrolling in the S•O•SSM Services Program,a routine sampling interval can be ...
Services marketing   The offer
What is the                                difference                                between a                            ...
PRODUCT
IntangiblesComplementary assets                                                        80 per cent of the                 ...
Services marketing    Exercise
What are the barriers to purchaseand use?                          15
Technical           Political         Organisational          Financial           Emotional                    and        ...
Services marketing The life cycle
The life cycle           high             higher margin                            lower volume     margin                ...
The life cycle           high     margin             low                                time                     low      ...
The life cycle                                Demand creation   Fulfillment           high     margin             low     ...
The life cycle           high                                         volume                                         value...
The life cycle                                Demand creation   Fulfillment           high                                ...
The life cycle                                Demand creation   Fulfillment           high                                ...
Product and services life cycle                                        Demand creation              Fulfillment           ...
Product and services life cycle         SEGMENT                A   B   C         channel capability         channel capaci...
© Nicholas Coutts August 2010
Example: technology product distribution          Quantity          Value          Margin
Services marketing    Exercise
Services marketing    Service blueprinting
Blueprints                Examples1   Design engineering    Celoxica2   Account management    Hill&Knowlton3   Marketing a...
Why blueprint?Ensures the service delivery process matches client requirementsIdentifies required resources    people, ski...
Why blueprint? 2Enables planning for when something goes wrongEnsures capability and capacity are available to meet the re...
Why blueprint? 3Establishes policy and proceduresIdentified the critical business processesImportant to make the process e...
The blueprintSwim lanes    horizontal swim lanes for each function, department or resource    the top lane is usually the ...
Example blueprint – design engineering - Celoxica                                                                         ...
Example blueprint – account managementHill & Knowlton
Example blueprint – UKeU
Example blueprint – financial services Style© Nicholas Coutts August 2010
Example blueprint - BTWholesale© Nicholas Coutts August 2010
© Nicholas Coutts August 2010
© Nicholas Coutts August 2010
© Nicholas Coutts August 2010
© Nicholas Coutts August 2010
Example blueprint – Post Office Awareness Active Selling   Signed Contract   Fulfilment   After Sales
Servicesmarketing
Service types and theircharacteristics   Service type                  Characteristics Professional services    Barrier to...
Common mistakes in marketingof services •   Lack of differentiation •   Services allowed to become commodities •   Poor un...
The discipline of services marketing                                 Intangibility, Simultaneous consumption, Perishabilit...
How do service differenceschange marketing?                             •   Intangibility                             •   ...
How to address these differences                         Intangibility   brand presence            Simultaneous consumptio...
Differences in marketing of services Intangibility• Create “presence” through  physical things• Brand gives reassurance
Differences in marketing of servicesSimultaneous consumption• Customer care must be real• Service quality: no product to  ...
Differences in marketing of services  Perishability  • Capacity planning  • Special promotions
Differences in marketing of services Lack of ownership • Value positioning • Environmental design
Differences in marketing of services  Variability  • Process management  • Expectation management
Differences in marketing of services Inseparability of delivery personnel • People behaviour important
A summary of the differences betweenmarketing of services and products                     • The customer’s need for contr...
Summary of the principles ofmarketing of services                                     Make the intangible                 ...
For example: the phenomenon of control                                       •   Corporate brand                        Na...
Case study: Symbol Technologies                         • Analysed supermarket experience                         • Create...
“The Seven Ps”                                Product                                            PRODUCTS                 ...
Nature and roles of productmarketing              Pre-production                                Create awareness          ...
Nature and roles of servicemarketing                                Create awareness                  Pre-sale            ...
A framework for marketingservices                                       Marketing to            Marketing to       Marketi...
nicholascoutts@dsl.pipex.com www.nicholascoutts.co.uk 44 77 24 398 675                            skype ncoutts
Worth reading…Building Routes to       Creating Powerful Brands   Why Cant You Just Give   Building Great CustomerCustomer...
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  1. 1. Services marketingNOTE: View these pages as Notes Pages for more explanation of the content. The contents of this document remain the copyright of Nicholas Coutts. This document may be copied in whole or in part, provided the copyright holder is acknowledged.
  2. 2. Services marketing Business modelsNOTE: View these pages as Notes Pages for more explanation of the content. The contents of this document remain the copyright of Nicholas Coutts. This document may be copied in whole or in part, provided the copyright holder is acknowledged.
  3. 3. WHY ENROLL IN THE S•O•SSM SERVICESPROGRAM?By enrolling in the S•O•SSM Services Program,a routine sampling interval can be establlishedto build-up a trend of data over time. thattrend allows you to compare sample historyand more easily identify deviations from thenormal trend. This consequently adds value tothe data interpretation process with moremeaningful recommendations andrecommended actions.
  4. 4. Services marketing The offer
  5. 5. What is the difference between a product and an offer?© Nicholas Coutts August 2010
  6. 6. PRODUCT
  7. 7. IntangiblesComplementary assets 80 per cent of the impact, but only 20 per Quality cent of the costs perceptions Before sales Value service perceptions After sales During sales service service Delivery Guarantees Other Organisation user PRODUCT recommendations Availability Warranties Add - ons Advice Brand name Finance Reputation Corporate Services image Value networks Source: de Chernatony and McDonald
  8. 8. Services marketing Exercise
  9. 9. What are the barriers to purchaseand use? 15
  10. 10. Technical Political Organisational Financial Emotional and social • Barriers to purchase and use are lowered or eliminated by information, experience and by services. • This will tell you if you need to partner with a third party to provide some or all of the services. • Avoid giving away service, in order to sell the product. To sell service, you will need to track time spent on providing services, have a rate card for services and a billing system, to invoice the services. • Note that service marketing is theoretically and practically very different to product marketing. You may need to recruit service marketing skills.
  11. 11. Services marketing The life cycle
  12. 12. The life cycle high higher margin lower volume margin higher volume lower margin low time low volume high© Nicholas Coutts August 2010
  13. 13. The life cycle high margin low time low volume high© Nicholas Coutts August 2010
  14. 14. The life cycle Demand creation Fulfillment high margin low time low volume high© Nicholas Coutts August 2010
  15. 15. The life cycle high volume value € margin actual forecast low time low volume high© Nicholas Coutts August 2010
  16. 16. The life cycle Demand creation Fulfillment high volume value € margin actual forecast low time low volume high© Nicholas Coutts August 2010
  17. 17. The life cycle Demand creation Fulfillment high r2 volume r2 value € margin actual forecast low time low volume high© Nicholas Coutts August 2010
  18. 18. Product and services life cycle Demand creation Fulfillment high higher lower higher risk risk risk retained margin complexity retained margin low low knowledge in the market high naive user time expert user product volume© Nicholas Coutts August 2010
  19. 19. Product and services life cycle SEGMENT A B C channel capability channel capacity message© Nicholas Coutts August 2010
  20. 20. © Nicholas Coutts August 2010
  21. 21. Example: technology product distribution Quantity Value Margin
  22. 22. Services marketing Exercise
  23. 23. Services marketing Service blueprinting
  24. 24. Blueprints Examples1 Design engineering Celoxica2 Account management Hill&Knowlton3 Marketing and sales UKeU4 Financial services Style5 Telecomms BTWholesale6 Retail Post Office
  25. 25. Why blueprint?Ensures the service delivery process matches client requirementsIdentifies required resources people, skills, systems, time, budget, collateralIdentifies up-sell and cross sell opportunitiesIdentifies ways to add valueGets the right people doing the right things at the right time
  26. 26. Why blueprint? 2Enables planning for when something goes wrongEnsures capability and capacity are available to meet the revenue and transaction targets.Identifies minimum time requiredIdentifies the “moments of truth” which need to be managed to ensure the right brand experience Allows the handovers between channels to be engineered
  27. 27. Why blueprint? 3Establishes policy and proceduresIdentified the critical business processesImportant to make the process explicit to customers and partnersImportant for systems design especially customer relationship management systemsA valuable resource for training and communication
  28. 28. The blueprintSwim lanes horizontal swim lanes for each function, department or resource the top lane is usually the customerMoments of truth occur when something involves the customerMicrosoft Visio is a good tool for creating and maintainingthe blueprint document allows spreadsheets to be attached, as required, to show data on time and costThe blueprint may require adaptation for each customer segment
  29. 29. Example blueprint – design engineering - Celoxica Design services process Review noCustomer- legal Receives- engineering Customer order Licence- product management/ Order acknowledgm Enquiry placed? yes key Invoice marketing ent received received- project managemenetCustomer interface Clarify queries Issue Design Develop Proposal Prepare Approve Manage Notificatio Celoxica Rejection Issue requireme relevant Followup services solution process quotation PO account n received quotation Account Manager ct letter nts materials opportunity? reje Review Raise order services required? e.g.IP cores, bespoke training, engineering support Review notify Review acknowledgm Enquiry accept customer accepted ent and send Notificatio Inside sales account PO PO n received manager to customer specia end of sales process non-standard? Applications Engineering Manager l term Receives Licence Activate order Notificatio key support Support acknowledgm n received ??? s? issued services ent ?? copy Project Management Legal document s File Legal notify Progress Process PO Sales operations opportuni ty Services Projects team Proposal preparation Approve Senior management quotation File File Notificatio Invoice Finance Finance n received raised Sub-contractors Receives Timeline Prepare order Despatch Notificati acknowledgm document on of ation product ent despatch Lead qual Eval form process Order fulfilment, stock control Support and product services movement process processes Training process © Nicholas Coutts August 2010
  30. 30. Example blueprint – account managementHill & Knowlton
  31. 31. Example blueprint – UKeU
  32. 32. Example blueprint – financial services Style© Nicholas Coutts August 2010
  33. 33. Example blueprint - BTWholesale© Nicholas Coutts August 2010
  34. 34. © Nicholas Coutts August 2010
  35. 35. © Nicholas Coutts August 2010
  36. 36. © Nicholas Coutts August 2010
  37. 37. © Nicholas Coutts August 2010
  38. 38. Example blueprint – Post Office Awareness Active Selling Signed Contract Fulfilment After Sales
  39. 39. Servicesmarketing
  40. 40. Service types and theircharacteristics Service type Characteristics Professional services Barrier to entry is human expertise Administration and money Financial services management Technical services An infrastructure of technology High volume and based on Consumer services consumer offers
  41. 41. Common mistakes in marketingof services • Lack of differentiation • Services allowed to become commodities • Poor understanding of customer needs • Over-reliance on industry research reports • “One off” services • “Overclaim” • Lack of proposition • Product-led approach • Servility rather than service
  42. 42. The discipline of services marketing Intangibility, Simultaneous consumption, Perishability, American Lack of ownership, Variability, InseparabilityAbout 25 years old Nordic No product, Process outcomes are key French Support, Process, Output • Good application of the scientific process • Related to customer care and customer service • Not well known by industry
  43. 43. How do service differenceschange marketing? • Intangibility • Simultaneous consumption • Perishability • Lack of ownership • Variability • Inseparability
  44. 44. How to address these differences Intangibility brand presence Simultaneous consumption quality of service Perishability capacity planning Lack of ownership control Variability process design Inseparability people selection
  45. 45. Differences in marketing of services Intangibility• Create “presence” through physical things• Brand gives reassurance
  46. 46. Differences in marketing of servicesSimultaneous consumption• Customer care must be real• Service quality: no product to compensate• “Word of mouth”: people talk about experience
  47. 47. Differences in marketing of services Perishability • Capacity planning • Special promotions
  48. 48. Differences in marketing of services Lack of ownership • Value positioning • Environmental design
  49. 49. Differences in marketing of services Variability • Process management • Expectation management
  50. 50. Differences in marketing of services Inseparability of delivery personnel • People behaviour important
  51. 51. A summary of the differences betweenmarketing of services and products • The customer’s need for control • The importance of the service process • The customer learns the supplier’s process • Intangibility of consumption • Simultaneous consumption • Stress makes quality issues more intense • Emotional involvement • The importance of the corporate brand • Interdependency with customer care more intense • Importance of people and their behaviour
  52. 52. Summary of the principles ofmarketing of services Make the intangible tangible. People are part of Turn the corporate the offer. name into a brand. Marketing of services Manage the Manage the corporate brand as a processes. tangible image strategy. Segment customers by service Service must be preference and holistic. emotional needs.
  53. 53. For example: the phenomenon of control • Corporate brand Naive • People • ProcessMarketing to customer • Streamline process Experienced • Deploy technology • Self service The service process takes control from the customer New customers feel vulnerable Experienced customers want to regain control
  54. 54. Case study: Symbol Technologies • Analysed supermarket experience • Created new technology • Compared service • Attracted customers • Reduced costs
  55. 55. “The Seven Ps” Product PRODUCTS PRODUCTS Services Services Price Place Promotion People Presence Process© Nicholas Coutts August 2010
  56. 56. Nature and roles of productmarketing Pre-production Create awareness marketing Production Induce trial Word of Mouth communication Post -production Demonstrate marketing benefits Build brand Consumption preferences© Nicholas Coutts August 2010
  57. 57. Nature and roles of servicemarketing Create awareness Pre-sale marketing Induce trial Word of Mouth communication Demonstrate Post-sale benefits marketing Build brand Production Consumption preferences© Nicholas Coutts August 2010
  58. 58. A framework for marketingservices Marketing to Marketing to Marketing to Maximising new customers existing customers employees marketing potential • Managing the evidence • Branding the company Building a Turning marketing marketing into a line function organisation Managing and Doing the service Delivering Doing the service exceeding very right the quality right the first time customers’ second time service expectations Identifying the right service© Nicholas Coutts August 2010
  59. 59. nicholascoutts@dsl.pipex.com www.nicholascoutts.co.uk 44 77 24 398 675 skype ncoutts
  60. 60. Worth reading…Building Routes to Creating Powerful Brands Why Cant You Just Give Building Great CustomerCustomers: Proven Me The Number? An ExperiencesStrategies for Leslie de Chernatony, Executives Guide toProfitable Growth Malcolm McDonald, and Using Probabilistic Colin Shaw and Elaine Wallace Thinking to Manage Risk John IvensPeter Raulerson, 2010 and to Make Better 2005Jean-Claude Malraison, Decisionsand Antoine Leboyer2006 Patrick Leach 2006Managing Hybrid Marketing SystemsRowland T. Moriarty and Ursula MoranHarvard Business Review Nov-Dec 1990

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