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27. SERVICE LIFE CYCLE
The service life cycle consists of the same four stages at the product life cycle: introduction, growth, maturity and decline.
The characteristics of each stage are the same. The only difference lies in the strategies that can be used.
INTRODUCTORY STAGE
A new service or a new form of a current service is said to be in the introductory stage when it is first offered. As with goods,
many new services never obtain acceptance by customers and never get past the first stage of the service life cycle. An
advantage that services have over goods is that many new services can be introduced on a small scale and expanded if
acceptance grows. This small scale introduction reduces the financial risk associated with the introduction, making failure
less costly.
GROWTH STAGE
During the growth stage, the industry is growing rapidly. Most firms offering the new service are seeing a positive cash flow.
For eg: a patient can learn about the incubation period for chicken pox by either talking to a nurse or dialing into a vast
library of prerecorded tapes. Second, patients can seek advice about routine illnesses such as congestion or abdominal pain.
MATURITY STAGE
During the maturity stage, industry sales level off. Competition becomes very intense since the only way a firm can gain the
market share or increase sales is to take them away from a competitor. The result of this increased competition is a decrease
in overall industry profits. Weaker firms will be shaken out of the industry. At this stage in the service life cycle, consumers
see very few distinguishable characteristics among the various firms in a service industry.
DECLINE STAGE
During the decline stage, industry sales decline. This sales drop is often due to a new technology that has been developed.
For eg, typewriter repair services declined bcoz typewriters were largely replaced by computers which resulted in a need for
a computer service technicians and computer programmers.

28. Companies with services in the decline part of the life cycle have five options: divest,
harvest, prune, retrench, or rejuvenate.
a. When using the divestment option, timing is a critical decision. The highest price can be obtained
if the divestment decision is made early in the decline stage or even in the latter part of the maturity stage.
b. A second strategy available to firms is to harvest the service. A harvesting strategy implies the firm
wants to reduce expenditures as far as possible to extract as much profit from the service as possible.
Recognizing demand will continue to fall allows a firm to reap the maximum profit possible before the service is
discontinued or sold. Due to labour intensive nature of services, this strategy is seldom used.
c. A third strategy is pruning. Pruning involves reducing the number of services offered by a firm. The
most unprofitable services are discontinued while the most profitable services are kept. Pruning is a common
strategy for service operations.
d. Retrenchment is a fourth strategy and it involves selling off or closing the unprofitable accounts
while keeping or expanding the profitable ones. This strategy is good for large firms with multiple outlets and for
the business-to-business service sector.

29. Product life cycle strategies
The product life cycle contains four distinct stages: introduction, growth, maturity and decline. Each stage is
associated with changes in the product's marketing position. You can use various marketing strategies in each stage
to try to prolong the life cycle of your products.
Product introduction strategies
Marketing strategies used in the introduction stages include:
rapid skimming - launching the product at a high price and high promotional level
slow skimming - launching the product at a high price and low promotional level
rapid penetration - launching the product at a low price with significant promotion
slow penetration - launching the product at a low price and minimal promotion
During the introduction stage, you should aim to:
• establish a clear brand identity
• connect with the right partners to promote your product
• set up consumer tests, or provide samples or trials to key target markets
• price the product or service as high as you believe you can sell it, and to reflect the quality level you are
providing
• You could also try to limit the product or service to a specific type of consumer - being selective can boost
demand.

30. Product growth strategies
Marketing strategies used in the growth stage mainly aim to increase
profits. Some of the common strategies to try are:
•improving product quality
•adding new product features or support services to grow your market
share
•entering new markets segments
•keeping pricing as high as is reasonable to keep demand and profits
high
•increasing distribution channels to cope with growing demand
•shifting marketing messages from product awareness to product
preference
•skimming product prices if your profits are too low
The growth stage is when you should see rapidly rising sales, profits
and your market share. Your strategies should seek to maximise
these opportunities.

31. Product maturity strategies
When your sales peak, your product will enter the maturity stage. This
often means that your market will be saturated and you may find that
you need to change your marketing tactics to prolong the life cycle of
your product. Common strategies that can help during this stage fall
under one of two categories:
•market modification - this includes entering new market segments,
redefining target markets, winning over competitor's customers,
converting non-users
•product modification - for example, adjusting or improving your
product's features, quality, pricing and differentiating it from other
products in the marking

32. Product decline strategies
During the end stages of your product, you will see declining sales and profits. This
can be caused by changes in consumer preferences, technological advances and
alternatives on the market. At this stage, you will have to decide what strategies to
take. If you want to save money, you can:
•reduce your promotional expenditure on the products
•reduce the number of distribution outlets that sell them
•implement price cuts to get the customers to buy the product
•find another use for the product
•maintain the product and wait for competitors to withdraw from the market first
•harvest the product or service before discontinuing it
Another option is for your business to discontinue the product from your offering. You
may choose to:
•sell the brand to another business
•significantly reduce the price to get rid of all the inventory
Many businesses find that the best strategy is to modify their product in the maturity
stage to avoid entering the decline stage.

34. Developing Brand new services:
New Service Characteristics:
Since services are intangible, it has to have 4 basic characteristics:
1.It must be objective, not subjective
2.It must be precise, not vague.
3.It must be fact driven, not opinion driven.
4.It must be methodological, not philosophical.

38. 5 MARKETING MIX
It is the set of tools that the firm uses to pursue its
marketing objectives in the target market Decisions must
be made for both the distribution channels and the final
consumers

39. MARKETING MIX
7 P’s OF MARKETING
The price should be right.
To create the right marketing mix, businesses have to meet the following conditions:
The product has to have the right features – e.g. it should look good and work well.
The price should be right.
The goods must be in the right place at the right time.
The target group needs to be made aware of the existence and availability of the
product through promotion. Successful promotion helps a firm to spread costs over a
larger output.

40. PRODUCT
To find out what customers want & need & then develop a product to meet
the need of the potential customers.
If The competitors products offer the same benefits, same quality, same price
then differentiate your product with the following:
Design
Technology
Usefulness
Convenience
Quality
Packaging
Warranty

41. Price
A product is only worth what a customer is prepared to pay for it.
Premium Pricing
Use of high pricing where there is a uniqueness about the product or service. This
approach is used where a substantial competitive advantage exists.
Penetration Pricing
It is the strategy of entering the market with a low initial price to capture greater market
share.
Price Skimming. charging a relatively high price for a short time where a new,
innovative, or much-improved product is launched into a market.
The prices are set high in order to attract least price sensitive customers to generate high
profits.
Competitive pricing: product is sold at the lowest price regarding all your competitors.
For instance, when the products are basically the same, this strategy will usually
succeed.

42. Promotion
This is the way in which you communicate to your potential customers about your product.
It includes the various ways of communicating to the customers of what the company has to offer. It is about
communicating the features/ benefits of using a particular product or service.
Promotion
Advertisement: It takes many forms like TV, radio, internet, newspapers, yellow pages, Leaflets, Posters etc.
Sales Promotion: Buy One Get One Free. Others include couponing, money-off promotions, free accessories (such
as free blades with a new razor), introductory offers (such as buy digital TV and get free installation) and so on.
Personal Selling: It is an effective way to manage personal customer relationships. The sales person acts on behalf
of the organization.
Promotion mix Blended Mix of Promotion Tools
Personal selling
Advertising
Public
Relations
Sales
Promotion
Direct
Marketing

43. Place
It refers to the place where the customers can buy the product and how the product reaches out to that
place. This is done through different channels like:
Retails
Wholesale
Internet
Mail orders
Direct Sales
People Use of appropriate staff and people.
Recruiting the right staff and training them appropriately in the delivery of their service is essential if the
organization wants to obtain a form of competitive advantage.
Staff should have the appropriate interpersonal skills, attitude, and service knowledge to provide the
service that consumers are paying for.
Process Methods and processes in providing a service
Customer should be well informed
Done through help desk, citizen charters and by the counter personnel

44. PHYSICAL EVIDENCE
It is the only physical items that a customer will see and so it must reflect the image that the service
is trying to project. Done through
Internet/web pages.
Brochures.
Furnishings/ infrastructure
Signage
Uniforms.
Business cards.
The building itself (look and feel)
Example: If you walk into a restaurant your expectations are of a clean, friendly, hygienic
environment which will want you to visit again.

45. Ask the following questions to devise effective marketing strategies:
Who are my customers and potential customers?
What kind of people are they?
Where do they live?
Can and will they buy?
Am I offering the kinds of goods or services they want at the best place, at the best
time and in the right amounts?
Are my prices consistent with what buyers view as the product's value?
Are my promotional programs working?
What do customers think of my business?
How does my business compare with my competitors?

48. According to the Service Marketing Triangle, three types
of marketing must be carried out successfully for a service
organization to succeed. Christian Gronross developed
Service Marketing Triangle, one of the most popular
strategic models for developing an overall marketing
strategy.
The service marketing trinity or the service marketing triangle
includes the different types of marketing that service-based
businesses use. There are also three key groups within the
triangle: the company, employees and customers. ... This type
of marketing happens before the service delivery.
The Services Marketing Triangle is a strategic marketing model.
... The model is based on the fact that all services businesses
are about promises. The business makes promises to its
customers through external marketing. The business facilitates
its employees to keep those promises through internal
marketing.
The service triangle outlines all the relationships that
exist between the company, the employees and the
customers.

91. Customer perceptions of services
Perception is the meaning that consumers ascribe to what they see
around them. The meaning that is given is influenced by:
•Past experience or learning
•Preconceived notions, prejudice and assumptions
•Expectations and personality
•Family background, previous acculturation, values, and beliefs and
other social factors, and
•Genuine knowledge and awareness.

93. Difference between customer expectation
and perception
•The key difference between customer expectation and
customer perception lies in the customer aspirations
and mindset; Customer expectation is an assumption
in deciding the purchase whereas customer
perception is an interpretation of collective
information after purchase.

104. SERVICE FAILURE & RECOVERY

123. BUILDING CUSTOMER RELATIONSHIPS

124. •CUSTOMER LOYALTY

129. DISTRIBUTION OF SERVICES
•A distribution channel consists of a sequence of firms
distributing a service from a producer to a consumer. There
are two methods of distribution of services, namely, Direct sale
and. Delivery of service through intermediaries.

137. SETTING SERVICE PRICE