Services marketing


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  • Services marketing

    1. 1. Services Marketing<br />1<br />
    2. 2. Marketing<br />Marketing as per Peter Drucker – the aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.<br />Chartered institute of marketing– marketing as the process of discovering, expecting and suiting the customer needs and at the same time making profits.<br />2<br />
    3. 3. Services<br />“When u build a manufacturing plant, it starts depreciating on the day it opens.<br /> The well – served customer, on the other hand, is an appreciating asset.<br /> Every small act on his or her behalf ups the odds for repeat business and priceless word – of – mouth referral”<br /> -Tom Peters management guru<br />3<br />
    4. 4. Services<br />4<br />
    5. 5. Services <br />Traditionally difficult to define.<br />Which services are created and delivered to customer are difficult to define because many inputs & outputs are intangible.<br />5<br />
    6. 6. Service …definition<br />Service is an act or performance offered by one party to another . Although the process may be tied to a physical product, the performance is essentially intangible and does not result to any owner ship of any factor of production.<br />Services are economic activities that create value and provide benefits for customers at specific times, place. <br />Philip Kotler ---”service is any activity of benefit that one party can offer to 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<br />6<br />
    7. 7. Service sector….<br />Comprises of bulk of today’s economy.<br /> US – 73% & Canada 67% of GDP.<br />Consists of vide variety of industries that sell to individual customers , business customers , government customers , NGO’s.<br />Change in economy – boom in agriculture, manufacturing – increased demand for brand new services and traditional services.<br />Japan -- is it still known for being a manufacturing country ??????<br />India too is following the footsteps…..<br />7<br />
    8. 8. Service organizations…<br />Large international corporations –airlines , banking, telecom, hotel chains, freight transportation…..<br />Locally owned small business– restaurants, laundries, taxi services, internet services, courier etc.,…<br />B-2- B services…<br />Franchised service outlets--- food , education…<br />8<br />
    9. 9. Gats Classification.<br /><ul><li>General agreement on trade in services classifies 155 activates as service.
    10. 10. Major 11 categories are</li></ul>Business services.<br />Communication.<br />Construction & Engg.<br />Distribution.<br />Education.<br />Environment.<br />Finance.<br />Health.<br />Tourism.<br />Recreation.<br />Transport<br />9<br />
    11. 11. Classification of services..<br />10<br />
    12. 12. 11<br />
    13. 13. Reasons for growth of services industry…<br />12<br />
    14. 14. Tangibility -- The quality of being perceivable by touch.<br />Intangibility--The quality of being intangible and not perceptible by touch<br />13<br />
    15. 15. Tangibility Spectrum<br />14<br />
    16. 16. Differentiating services from goods…<br />15<br />
    17. 17. Goods vs. services<br />Unique characteristics that distinguish goods from service<br />Services are performance , deeds efforts.<br />Services can’t be felt, seen ,tasted or touched as goods.<br />Example movie tickets vs. shoes.<br />16<br />
    18. 18. Characteristics of services<br />Intangibility<br />Heterogeneity<br />Inseparability.<br />Perishability<br />17<br />
    19. 19. Intangibility<br />Product is physical.--- Can be felt ,seen , smelt, tested..<br />Service is not tangible till it is experienced or consumed.<br />Different people have different expectations with regard to the same service…<br />Quality of service not strictly measurable…..<br />18<br />
    20. 20. Problems with intangibility - <br />Lack of ability to be stored.<br />Lack of protection of patents.<br />Difficulty in displaying or communicating services.<br />Difficulty in pricing services.<br />19<br />
    21. 21. Solutions to intangibility problems.<br /><ul><li>Use of tangible clues. – assist customer in making service evaluation.</li></ul> ( insurance advt. in media…)<br /> ( ICICI bank --- strong ATM network….)<br /><ul><li>Use of personal source of information.</li></ul> ( due to lack of objective means of evaluation customer looks to wards friends , family )<br /> offering incentive to existing customers for roping in new customers)<br /><ul><li>Creation of strong organizational brand.</li></ul> ( results in loyalty i.e. Maruti , Sony)<br /><ul><li>In separatibility– 1.Service provider physical connection to service being provided.</li></ul> 2.Customer’s involvement in the service process.<br /> 3.Involvement of other customer in the service process.<br />20<br />
    22. 22. Problems caused by inseparability<br />Physical presence of the service provider ---like dentist.<br />Evaluation of the service provider done by language, clothing, personal hygiene, IP communication skills.<br />Face to face interaction with customer– make employee satisfied.<br />Involvement of customer in the service production process…<br /> a) customer to be physically present to receive service.<br /> b) Customer need to be present to start the service –dry cleaning, auto repair etc..<br /> c) Need of the customer to be mentally present -- thru internet..<br />21<br />
    23. 23. Unlike goods which are first produced ,sold , consumed…services are first sold, produced and consumed.<br />22<br />
    24. 24. Involvement of other customers…<br />Restaurants --- Smoking in non smoking areas..<br /> Parking full means better service / food.<br />23<br />
    25. 25. Challenge in mass production of service…<br />How to successfully mass produce service…<br />24<br />
    26. 26. Solutions to inseparable problems..<br />Emphasis on selection ,training public contact personnel.<br />Consumer management. ( reservation in restaurant…)<br />Use of multi site locations (ATM , McDonald's…..)<br />25<br />
    27. 27. Heterogeneity<br />Heterogeneous is an adjective used to describe an object or system consisting of multiple items having a large number of structural variations. <br />It is the opposite of homogneous.<br />26<br />
    28. 28. Heterogeneity<br />Goods & services –Another difference- un ability to control the service quality before it reaches the customer.<br />Service offered by one employee may differ from the other…<br />Example - McDonald's franchise – moods swings of individuals before service.<br />27<br />
    29. 29. Solutions to heterogeneity<br />28<br />
    30. 30. Perish ability..<br />Service can’t be inventoried. ( Like movie tickets , airline tickets etc..)<br />Matching the demand & supply in service is a challenge…<br />29<br />
    31. 31. Solution to perish ability..<br />Creative pricing- (early bird incentive , happy hours )<br />Demand strategy – (reservation system, complimentary system, development of non peak demand)<br />Supply strategy. - Part time utilization. capacity sharing (Doctors sharing cost of equipment), advance preparation of expansion, utilisation of third party, Increase in customer participation.<br />30<br />
    32. 32. Service marketing -- system<br />Service marketing triangle<br />31<br />
    33. 33. Issues before a service organization<br />Services premises.<br />Packaging.<br />Service personnel.<br />Tools & equipment used.<br />Customers.<br />Convenience.<br />Nature of service establishment.<br />Managing productivity.<br />Managing service quality.<br />32<br />
    34. 34. Nature of service marketing.<br />Narrow definition of marketing. By service providers. – Had only Advt, sales promotion, segmentation rare, --differentiation , new product development, service quality…????<br />Lack of appreciation of marketing. Skills in service org.<br />Difference of org. structure of service firms.<br />Problems in determining the cost of services.<br />33<br />
    35. 35. c.s. --- Federal express..<br />34<br />
    36. 36. Service marketing system for high contact service<br />35<br />
    37. 37. Service marketing system for Low contact service<br />36<br />
    38. 38. Tangible elements & communication components in SM<br />37<br />
    39. 39. Customer expectation & perception of service<br />38<br />
    40. 40. Desired service --- Adequate service<br />It is the level of service the customer hopes to receive // the level of performance wished for. <br />Lower level of service expectation that the customer is willing to accept.—based on past experience, lack of remuneration to the service provider , socio -economic background of the service provider etc…<br />39<br />
    41. 41. Zone of tolerance<br />40<br />
    42. 42. 41<br />
    43. 43. 42<br />
    44. 44. Diff. Between characteristics of goods and service<br />Different goods and services have varying magnitudes of search, experience & credence qualities<br />search qualities of goods can be estimated before purchase -- experience quality can be estimated only after purchase.<br />Qualities that can`t be assessed completely are called<br /> Credence qualities.<br />43<br />
    45. 45. Dimensions of S.E.C. qualities<br />44<br />
    46. 46. Search quality<br />For services include…..<br />Price,<br />Convenience.<br />Mannerisms of service personnel.<br />Promptness of service.<br />45<br />
    47. 47. Experience qualities<br />Taste of home delivered food.<br />Wear ability of dress bought from boutique etc.<br />Service have higher experience characteristics than goods.<br />E.g. air line travel…courtesy of cabin crew, departure & arrival, quality of food, seating comfort etc..<br />46<br />
    48. 48. Credence qualities<br />Customer often lack the knowledge & experience to judge the credence qualities of the service.<br />E.g….. Bread may claim to have nutrition's..difficult for the customer to ascertain..<br />Services of professionals –doc, consultants,…services are accepted on faith.<br />47<br />
    49. 49. Customer<br />Decision <br /> Making<br />Process<br />& implications on service provider.<br />48<br />
    50. 50. Customer decision making process..<br />Need perception.—difference in actual state & desired <br /> (Hungry –need to buy food-remove hunger)<br />Search for info.-need felt-decides to purchase- search for info. To full fill needs (from –personal ,commercial ,public source, experimental) & perceived risks.(financial risk, functional ,physical, psychological, social, time risk)<br />Evaluation of alternatives.—compare & evaluate services of alternatives. (Well defined attributes )e.g interior decoration –different from home to home & customer to customer.( emotions- influence on customer-evaluation ability)<br />Purchase & consumption.- trail purchase, repeat purchase, long term commitment purchase)<br />Post purchase evaluation.– compares performance vs. expectations. –satisfied customer becomes loyal,<br />49<br />
    51. 51. Implications for service providers<br />Customer gather info. From personal source– marketer needs to be careful in satisfying existing customers.<br />Services are intangible- customer needs assistance to assess value of high credence qualities.<br />50<br />
    52. 52. 51<br />
    54. 54. Customer expectation<br />Five dimensions to measure service quality<br />Assurance --- to use knowledge & courteous behavior to instill trust and confidence in customer regarding service.<br />Empathy– ability to show concern for customers and devote individual attention to each customer.<br />Reliability—ability of service provider to accurately perform promised service.( efficiency , handling of customer complaints, pricing etc).<br />Responsiveness – prompt & service.<br />Tangibles -- physical facilities- equipment of service, dress & appearance of service personnel.<br />53<br />
    55. 55. Service level expectation<br />desired<br />adequate<br />Zone of tolerance<br />low<br />high<br />54<br />
    56. 56. Factors influencing desired service factors influencing adequate service<br />Customer needs – Maslow's hierarchy of needs. –customer hungry wants food immediately – customer thirsty wants water immediately.<br />Enduring service intensifiers<br />Transitory service intensifiers – pizza does not come in 20 minutes or C.C. not accepted when buying medicines in emergency.<br />Perceived service alternatives -- housing loans form different sources.<br />Self perceived service role – dress designer find dress as per expectations.<br />Situational factors – power failure interupts service of cable.<br />Predicted service expectations.– flight will be delayed due to weather but reaches on time.<br />Derived service expectation<br />Customer philosophy<br />Attitude & service providers conduct<br />Conducted tour—expect food & travel arrangement <br />55<br />
    57. 57. Customers criteria for service evaluation<br />Speed.<br />Certainty.<br />Ease<br />Personal recognition.<br />56<br />
    58. 58. Customer perceptions<br />Service encounter – customer estimates the quality of service during encounter – e.g. – banks.<br />Service evidence – personnel , process & physical environment. E.g.- hotels<br />Image – perceived image in the mind of the customer.<br /> a +ve image can ignore some poor service, however repeated bad service will change the same.<br />Price – tangible nature of service – customer assume the quality of service<br />57<br />
    59. 59. Strategies to influence customer satisfaction<br />Enhance customer satisfaction thru service encounters.- recover from service failure, flexibility in delivering service, assistance in handling difficult customers.<br />Reflect evidence of service- behavior & physical evidence.<br />Communicate & create realistic image.- make promises & keep them.<br />Enhance customer perception of quality & value thru price.<br />58<br />
    60. 60. Market research in service<br />Post transactional survey- immediately after service- questioner after dinner or questioner just before aircraft lands.<br />Customer complaints comments & inquiry survey – use feedback and analyzing comments and taking remedial actions helps improve service.<br />Total market survey – take opinion from all customers – existing, lost , potential customers.– find out customers needs.-take suitable actions.<br />Employee survey –opinion of front line employees who come in direct contact with the customer.<br />59<br />
    61. 61. Service Quality -- Dimensions<br />Reliability – Ability to perform promised service dependably & accurately. e.g FedEx…..<br />Responsively – Willingness to help customers & provide prompt service. <br />Assurance – Employees ability to inspire trust & confidence. E.g.- Insurance , brokerage, legal services<br />Empathy – Caring , Individual attention to customers. E..g. customized services..E.g.-- Hotel<br />Tangibles – Appearance of physical facilities equipment, personnel & written materials. E.g. – travel agents putting attractive pictures..<br />60<br />
    62. 62. Servqual scale<br />Measures five dimensions on a scale of 7 points.<br />Generic dimensions used by customer to evaluate services<br />Credibility, Security, Access, Communication, Understanding customer, Tangible, Reliability, Responsiveness, Competence, Courtesy…..<br />61<br />
    63. 63. Gap Analysis<br />Gap 1- Not knowing what the customer expects.<br />Gap 2 – Not selecting the write service designs & standards.<br />Gap 3 - Not delivering to service standards.<br />Gap 4 - Not matching performance to promises.<br />62<br />
    64. 64. Gap model – service quality<br />63<br />
    65. 65. Process of market research<br />Define the problem & research objectives <br />Develop scales of measurement<br />Develop & implement the research program.<br />Coding & tabulating data.<br />Interpreting. and analyzing findings<br />Reporting findings<br />64<br />
    66. 66. Approach to upward communication<br />65<br />
    67. 67. Analysis customer needs.<br />There buying pattern.<br />Ways in which they can be satisfied.<br />Analysis helps in ::<br />Identify the competition in the market.<br />To identify ,why customer choose one product/service over the other.<br />To analysis the present strategies of the co. vis. Competition.<br />Customer analysis<br />66<br />
    68. 68. Strategic issues in service marketing<br />67<br />
    69. 69. Market segmentation & targeting<br />Mkt. Segment- a group of customers who respond in a similar way to a given set of market stimuli<br />Mkt. segmentation- the process of dividing a market into distinct groups of buyers with different needs/ characteristics / behavior, who might require separate products or marketing mix..<br />Targeting .. A process of estimation & comparison previously identified segments for selecting one or more segments that fetch best result for business.<br />68<br />
    70. 70. Mkt. Segments<br />Undifferentiated Mkt. approach – mass marketing. Approach aimed at all consumers by offering single product / service.<br />Differentiated Mkt. approach.- targeting various customers segments with different products & services. <br />(Nokia – Hi flyers, Trendsetters, Social contact, Assured)<br />Concentrated mkt. approach.- single segment strategy to serve limited segments in a total market.<br />69<br />
    71. 71. Targeting<br />Basis of targeting – <br />Segment size & growth potential.<br />Structural attractiveness<br />Companies objectives & resources.<br />70<br />
    72. 72. Targeting strategies<br />Single segment strategies.- target single segment, develop single marketing mix & gain specialization.<br />e.g. – software firm catering to logistic solutions only<br />Selective specialization – targeting more than one segments. <br /> e.g. financial firm target retired persons & working women.<br />Product specialization – single product or service to various segments e.g. conference halls in hotels used for corporate meetings, birthday parties, get together, kitty parties etc.. <br />Market specialization- target segment remains same , company tries to cater to different needs by offering products / services<br />e.g – your institution – various courses.<br />Full mkt. coverage.—various products & services for the entire market<br /> E.g.– hindi movie released with sub tittles abroad.<br />71<br />
    73. 73. 72<br />
    74. 74. Positioning<br />“Positioning is not what u do to the product, Positioning is what u do to the mind of the prospect…”<br />by unknown<br />Positioning is defined as the process of establishing & maintaining a distinctive place in the market for an organization or for its individual; products/ services in offering.<br />73<br />
    75. 75. Positioning strategies by potter<br />Product differentiator<br />Low cost leader.<br />Nicher.<br />Company should concentrate in one strategy rather than trying to be good in all and failing subsequently.<br />74<br />
    76. 76. Specific positioning strategies….<br />Attribute positioning – service provider positions on attributes / feature e.g.- Allahabad bank positions as oldest bank in India <br /> however Positioning service strategy based on feature does not work too well.<br />Benefit positioning – offer add on benefits as customer pschye is to analyze the benefits e.g – ICICI bank , Citi Bank –ATMs & internet banking, bill payments etc..<br />Use / application positioning.—positioned as best for a certain application –SBI – positioned best for education loans.<br />User positioning – positioned for specific target users – India as destination for tourists<br />75<br />
    77. 77. Specific positioning strategies….cont.<br />Competitor positioning strategy– positioned against competition ..e.g. IIPM positioned against IIMs- “dare to think beyond IIMs”.<br />Category positioning– category leader & becomes synonymous with the service– e.g. Essel world for entertainment.<br />Quality & price positioning-service is positioned as possessing a certain standard, at a particular price… Taj Hotels high quality service at high price.<br />76<br />
    78. 78. Differentiation<br />A company is said to have achieved differentiated competitive advantage when its customers perceive the service offered as different from competition based on elements of marketing mix– product / service , price, promotion , distribution etc…<br />DELL , AMWAY……<br />77<br />
    79. 79. Differentiating attributes<br />To meet the following criteria…<br />Important – customers in the target group view the difference offered by the firm as very important & high value to it.<br />Distinctive– service offered is not offered by its competitor or unique service offered.<br />Superior – the firms makes it an obvious choice for customers to opt for..<br />Communicable– difference offered by firm should be easily explained & communicated to customers.<br />78<br />
    80. 80. Preemptive- Difference offered in service is not easily copied by competitors.<br />Affordable – customer should be able to pay for the difference in price.<br />profitable.– Firm should be able to offer difference to customer with out losing out on profitability.<br />Differentiating attributes…cont<br />79<br />
    81. 81. Managing demand & capacity<br />80<br />
    82. 82. Managing demand<br />Contraction & recession.– economy contracts in recession . Economy is said to have hit recession when the growth rate is substantially lower than normal for 6 continuous months<br /> Depression is a serious form of depression.<br /> Demand of goods & services decreases.<br />81<br />
    83. 83. Managing demand…cont<br />Expansion or Boom…increase in overall activity & growth.<br />Demand of goods & services increases.<br />82<br />
    84. 84. Managing demand…cont<br />Technological developments..e mail, internet, CAD(compute aided designs)<br />Demographics—demand has increase since independence.<br /> ( for goods & services)<br />Natural & other disasters– increase or decrease the demand of goods & services<br />83<br />
    85. 85. Demand patterns<br />Sketching demand patterns– Co. has to track & sketch the demand level. (Done by maintaining customer data base & monitoring the varying demand over a period of time)Demand of services can be easily predicted.<br />Foreseeable cycles-- demand of financial services increases around financial year close. <br />Random demand variation – some demands cycles are variable – healthcare & insurance?<br />Demand pattern by Mkt. segment- Maintain data base – tour operators , insurance ,tax saving schemes.<br />84<br />
    86. 86. Capacity constraints<br />Capacity constraint<br />85<br />
    87. 87. Strategies to match demand & capacity<br />Demand shift .. Shift customers to a time when demand is low e.g. cell phone call rates….<br />Varying the original service offer– catering during non marriage season – economical.<br />Communicating with customers – Banks talk to customers when salaries etc are been handled..some customers choose to come at another time..<br />Altering the time of service delivery – Banks worked 6 days –now 7 days <br />Price differentiation – price variations between high demand vs. low demand—happy hours<br />86<br />
    88. 88. Adjusting capacity to meet demand..<br />Time – extended hours to meet excess demand.<br />Labour- employed on contract basis - get as per demand<br />Facilities – increase capacity –restaurant putting extra tables, more seats in theatre, airlines adding more flights…<br />Equipment—hire additional when needed ( owen , computers etc)<br />Cross training of employees to meet extra demand.<br />87<br />
    89. 89. Marketing <br /> mix <br /> for <br /> services<br />88<br />
    90. 90. Traditional marketing. mix<br />4 P`s—product- place- price – promotion<br /> Adequate for product marketing.<br /> however they are inadequate<br /> for <br /> services …..<br /> because ___________<br />89<br />
    91. 91. Inadequacy of 4 P’s<br />Product are tangible – Services are intangible in nature.<br />Part of promotion of services takes place at the time of consumption itself.<br />PSU producing services –partly subsidized, standardized – Mkt.mix ignores this aspect.<br />Dual role of service customers – co- producers and end consumers- unnoticed by 4Ps.<br />4ps fails to capture – distribution services.<br />90<br />
    92. 92. Expanding the traditional P’s<br />91<br />
    93. 93. The extended P’s<br />People- Co. invest in People(attracting, Training, retaining best talent<br />Process – ATMs- reduce human intervention / errors/ increase customer satisfaction.<br />Physical evidence – TV commercial / brochures etc for holiday destination..<br />92<br />
    94. 94. Product :: service packaging<br />Product – can be defined as an idea, a service or a good that involves a mix of tangible or intangible elements, with an aim to satisfying customers.<br />Packaging a service is a critical component of mkt. mix.<br />E.g.--burger at McDonald's viz. road side burger.<br /> British airways vs. other cheaper airlines.<br /> Difference is the quality and the service packed along – for a price.<br />93<br />
    95. 95. Service product level<br />94<br />
    96. 96. Service product level..cont<br />Core product – core benefit of any product is to satisfy the basic needs of a customer.<br />Example– a tax consultant- core service is to calculate tax to be paid- also files return, sell some financial instrument, advises on investments.<br />95<br />
    97. 97. Actual product<br />Tangible aspect attached to a service ,along with the service is the product itself.<br />This facilitates the delivery of core product to the customer.<br />Marketers develop the actual product after the core benefits are decided.<br />Characteristics of actual product are –features, design , quality level, packing & brand name.<br />96<br />
    98. 98. Actual product<br />qq<br />Design<br />Actual product level<br />Brand name<br />Quality level<br />Core product<br />packaging<br />Features<br />97<br />
    99. 99. Augmented product<br />The intangible aspects that support a service constitute the augmented product along with the actual product.<br />Warranty , installation support, delivery, customer service – etc are augmented products.<br />E.g.– caterer hired for wedding,-- core product food .—if decoration ,inviting guests, serving them is also done by caterer then these are augmented products..<br />98<br />
    100. 100. Potential product<br />Features or benefits that can be added & which would be of value to the customer .<br />Hair styling – computer aided pictures to help decide<br /> a suitable hair style…..<br />99<br />
    101. 101. Service product decisions – growth strategies<br />New products<br />Existing products<br />Existing markets<br />New markets<br />“Ansoff’s” product growth matrix<br />100<br />
    102. 102. PLC<br />Develop strategy<br />Turn around strategy<br /> Stabilize strategy <br />Harvesting strategy<br />101<br />
    103. 103. Pricing <br /> services<br />102<br />
    104. 104. “The key to making the sale is to communicate VALUE ! Do it so strongly…that the price seems reasonable in relation to the product or service you are offering”<br />A customer perception of what is a “reasonable price” is important than what you want to charge for your product or service. And the customer decides what’s reasonable based on perceived value for money, not price. it’s creating this perception of value that tells the customer -<br /> ”the price is right”<br /> Noel Peebles author “Sell your business the easy way”<br />103<br />
    105. 105. Key characteristics of pricing in service<br />Customer’s perceptions are different for goods & services.<br />Customer finds easy to pay for a home theatre than flying by a particular airline or choosing a holiday destination.<br />Price is a measure of quality of service::Customer turns to pricing to assess the quality of service , in absence of info from other source.<br />E.g. a beauty parlor charges 250/- instead of 150 for the same service & is considered to offer better quality service…<br />Non monetary cost & pricing:: Non monetary cost perceived as time cost, search cost , psychological cost & convenience cost.<br />Difficulty in comparing prices of services::<br />104<br />
    106. 106. Pricing objectives<br />Survival<br />Present profit maximization.<br />Present revenue maximization.<br />Prestige.<br />Product quality leadership.<br />105<br />
    107. 107. Other options<br />Pricing can be done to make market unattractive for competition.<br />How would co. like to position its services.<br />How do the competition react to price changes.<br />What is the duration of life cycle of services.<br />How does the elasticity of demand fluctuate.<br />Is the service capability over utilized or underutilized.<br />106<br />
    108. 108. Approaches to pricing services.<br />107<br />
    109. 109. Promotion of services<br />Many attempts to communicate are mollified by saying too much………<br />108<br />
    110. 110. Promotion thru communication<br />109<br />
    111. 111. Modes of communication<br />1.Oral<br />2.Written<br />3.Face to face<br />4.Online communication<br />5.Media.<br />Type of communication<br />Internal <br />external<br />110<br />
    112. 112. Elements of promotion mix<br />Direct marketing<br />Sales promotion<br />Promotion elements mix<br />Personal selling<br />Publicity & public relations<br />advertising<br />111<br />
    113. 113. Promotional mix …cont<br />Personal selling :: -develop rapport with customer- expensive – sales training to offer good service needed- relationship building with customer.<br />Advertising :: cinemas, print, broadcast, outdoor & retail.<br />Sales promotion :: used to encourage existing customers to use service more frequently, or attract new customers.<br />Publicity & PR:: publicity-used to bring awareness in existing & new customers on offers. PR – maintain good relations with employees, customers , share holders, govt. etc.<br />Direct marketing:: contact with customers –telemarketing, direct mail , on line marketing., …<br />112<br />
    114. 114. Promotional strategies for services.<br />Services can’t be inventoried..decrease use in peak & increase during lean times.<br />Reduce role of intermediaries :: <br />Role of service personnel::<br />Service delivery location<br />Customer as a co- product.:: chef cooks food in front of customer, as per requirement.<br />113<br />
    115. 115. Strategies for effective promotion<br />Effective planning.<br />Focused objective.<br />Perfect timing.<br />Value added thru tie-ups & promotions.<br />Employee motivation.<br />Well differentiated campaign.<br />Regular evaluation of campaign .<br />114<br />
    116. 116. Promotional techniques<br />Sampling.<br />Premium<br />Prize promotion.<br />Price /quantity promotion<br />Refunds & future discounts.<br />Coupons…<br />115<br />
    117. 117. Design of a service promotion<br />Which service to promote.<br />Who would be the target customer.<br />What value addition be there to the brand.<br />Is the timing right for promotion<br />Duration of promotion.<br />Who is benefited from promotion.<br />116<br />
    118. 118. Relationship marketing --definitions<br />Relationship mkt. is attracting, maintaining & (in multi-service organizations) enhancing customer relationship.<br />An integrated & coordinated effort to identify, maintain & build up a network with individual customers & employees & continuously strengthen the network for mutual benefits of both sides , through interactive, individualized & value added contacts continiously over a longer period of time.<br />Relationship mkt. is to identify , establish, maintain & enhance,& when necessary terminate relationships with customers so that the objective regarding economic & other variables of all parties are met. This is achieved thru exchange & fulfillment of promises.<br />117<br />
    119. 119. Benefits of R.M.<br />Long term relationship for both customer & organization.<br />Lower cost & increased profitability.<br />Requirements & expectations of customer base.<br />Reliable service provider.<br />118<br />
    120. 120. R.M.---Benefits to Co.<br />Customers will continue to avail the services..<br />Increase revenue from existing customers.<br />Existing customers will provide FREE word of mouth publicity.<br />By establishing & strengthening relationship –easy to retain customers.<br />With relationship & quality of services –very few customers will go to competition.<br />119<br />
    121. 121. R.M.---Benefits to customers<br />Customer opts for service repeatedly-<br />Saves on time & effort on choosing new S.P.<br />Personalized services <br />Special services.<br />120<br />
    122. 122. 6 market models for R.M.<br />121<br />
    123. 123. Customers markets<br />Efforts required to maintain existing customers.<br />Satisfied customer will come again & avail the services.<br />Employees & managers to work as a team to make the experience more pleasant.<br />Co. should work on complaints & suggestions –update the customer about the steps taken.<br />Service experience to go beyond expectations – leads to actively recommendations of service to others.<br />122<br />
    124. 124. Internal markets<br />Employees – internal customers – internal markets<br />Better facilities & good atmosphere leads to satisfies employees-better services to customers.<br />Cos. Strive to win employee loyalty & commitment.<br />Helps in retaining employees- better service to customers with complete commitment.<br />123<br />
    125. 125. Suppliers Mkt.<br />Cos need basic infrastructure & facilities to provide service.<br />Cos. Depend on suppliers to provide them.<br />Good relations with suppliers.<br />E.g.--Courier & airlines<br />124<br />
    126. 126. Referral Mkt.<br />Referral Mkt – existing customers , intermediaries , consultants etc.<br />Good relations helps in better service & more business for Co.<br />Reward referrals…..<br />125<br />
    127. 127. Recruitment market<br />Attracting talent from institutes…<br />Cos. need to maintain contacts with institute heads etc .<br />Sponsor student events , conduct work shops etc..<br />Placement agencies, head hunters <br />126<br />
    128. 128. Influence markets<br />Share holders , financers, consumer protection groups, environmentalists, government, media, trade unions, general public…<br />127<br />
    129. 129. 128<br /> Services Blue print<br />
    130. 130. Internal marketing<br />Viewing employees as customers – viewing jobs as internal products that satisfies the needs of internal customers while addressing the objectives of organization. <br />129<br />
    131. 131. Role of Internal marketing…<br />Customer attraction & retention.<br />Employee retention & motivation.<br />Corporate image.<br />Change management.<br />Cos. Performance & continuity.<br />130<br />
    132. 132. Components of internal marketing….<br />Recruitment & selection<br />Motivation.<br />Education & training.<br />Coordination.<br />Empowerment.<br />Rewards.<br />Communication.<br />Knowledge sharing.<br />131<br />
    133. 133. SERVICES FUNCTIONSAND BLUEPRINT <br />132<br />
    134. 134. New service development process<br />Generation of idea<br />Screening<br />Service launch<br />Testing the concept<br />Infrastructure development<br /> Business analysis <br /> & <br /> Design of service<br />Test marketing<br />
    135. 135. Customer Service Management Cycle <br />Customer Service <br />Where you want it to be <br />Customer Service<br />Where it is now<br />Stage 1 <br />Understand the service <br />Seekers <br />Stage 5<br />Provide proactive<br />Problem solving <br />Stage 4<br />Check up regularly<br />Stage 2<br />Set customer service <br />Standards <br />Stage 3<br />Build a winning <br />Team <br />134<br />
    136. 136. STAGE 1: UNDERSTAND THE CUSTOMER<br />Specific service niche : Determined by the targeted services and the service seekers<br />Characteristics<br />People/Things orientation<br />High/Low tech <br />Personal Interaction : Physical, Mental, Emotional<br />Time involvement<br />Location<br />Complexity: Actual, Visual<br />Flexibility<br />Numbers served per transaction<br />Training<br />Supervision<br />135<br />
    137. 137. Developing the Service seeker profile<br />Values and beliefs<br />Attitudes<br />Social habits and norms<br />Preferences<br />Expectations<br />136<br />
    138. 138. Customer Perception of the service and service provider <br />The service profile: Service characteristics, Service seekers wants and needs and perceptions of requisite characteristics<br />Characteristics include<br />The service purpose<br />The degree of necessity<br />The magnitude of importance<br />View of results<br />Relative cost and benefits<br />Perceived risks <br />137<br />
    139. 139. STAGE 2::SET CUSTOMER STANDARDS <br />Establish a target<br />Communicate expectations<br />Create a valuable management tool<br />Dimensions in strong customer service: Procedural and personal<br />Standard areas of procedural dimension: Timing, Flow, Flexibility, Anticipation, Communication, Customer Feedback, Organization and Supervision <br />Standard Areas of personal dimension : Appearance, body language and tone of voice, attentiveness, tact, guidance, selling skills, gracious problem solving <br />138<br />
    140. 140. Writing customer service standards<br />Timeliness<br />Anticipation<br />Attitude<br />Customer Feedback<br />Appearance<br />Guidelines for developing customer service standards<br />139<br />
    141. 141. STAGE 3: BUIDING A WINNING TEAM<br />Design customer service jobs<br />Writing job specifications<br />Screening job applicants<br />Training for customer service<br />Practice leadership skills<br />Supportive organizational environment<br />140<br />
    142. 142. STAGE 4: CHECK UP REGULARLY<br />Service Audit system<br />Service seeker feedback system<br />Employee feedback system<br />141<br />
    143. 143. STAGE 5: PROACTIVE PROBLEM SOLVING<br />Create supportive climate for solving problems<br />Appoint teams to identify problem areas<br />Select teams to improve through brainstorming<br />Transferring team problems and complaints into opportunities <br />142<br />
    144. 144. COMPONENTS OF SERVICE BLUEPRINT <br />Customer Actions <br />Line of External Action<br />Onstage Contact Employee action <br />Line of visibility <br />Backstage Contact<br />Employee Action <br />Line of internal action <br />Support Process<br />143<br />
    145. 145. Components…….. <br />Line of External Interaction: <br /> Line above which all customer interactions take place e.g. Interactive Marketing<br />Line of Visibility: <br /> Area up to which the customer knows of organizational processes.Influenced by visible interactions<br />Line of Internal Interaction: <br /> Not Visible; helps in effective service delivery; Customer is ignorant <br />144<br />
    146. 146. Components……….<br />Contact Employee Actions:<br />Onstage contact employee action between the lines of interaction and visibility<br />Backstage contact Employee actions taking place between lines of visibility and internal interaction<br />Support Processes:<br />Support contact employees in service delivery<br />Occur behind the line of internal interaction<br />145<br />
    147. 147. STEPS IN SERVICE BLUEPRINTING <br />Identification of service to blueprinted:Purposeand goals identified for inside and outside customers<br />Service blueprinted from customers point of view: Customers steps in purchase, consumption and delivery to be mapped /eliminate unnecessary activities<br />Identification of employee actions: Identify Both onstage and backstage actions/linkages between customers and contact personnel and between employee<br />Identification of support activities: Support activities also to be identified and blueprinted <br />Giving physical evidence to each customer action step: Customer needs to undergo experience; hence to reduce perceived risk will decide based upon the tangibility of physical evidence <br />Identification of employee actions: Identify Both onstage and backstage actions/linkages between customers and contact personnel and between employees<br />146<br />
    148. 148. CLASSIFICATION OF EMPLOYEES<br />Contactors <br />Frequent/regular customer contact<br />Well Trained/motivated to serve customers on day to day basis<br />Recruitment based on responsiveness<br />E.g. Zenith and Eureka Forbes, Outbound Call centers <br />Modifier<br />Not directly involved<br />Frequent customer contact<br />High levels of customer relationship skills<br />E.g. Receptionists, Inbound call centers<br />147<br />
    149. 149. Classification……<br />Influencers<br />Sparse/No Customer contact<br />Implementation of organizational marketing strategy<br />Evaluated according to customer oriented Performance standards/opportunities <br />E.g. Product development firms,Market Research Firms(Automotive research centers, Harris Interactive) <br />Isolators<br />Performance of support functions<br />Critical for better performance<br />Understand Their contribution to better performance <br />Purchasing,Personnel,C.A. Firms performing audit <br />148<br />
    150. 150. Classification.…<br />High Contact Services: Long duration contact.E.g. Educational institutions, hospitals and restaurants<br />Low Contact Services: Interaction for shorter time with systems E.g.banks,post offices and retailing<br />Professional Service Employees: High qualifications and perceived status<br />Consumer Service Professionals: Relatively standardized services;high on task based skills<br />149<br />
    151. 151. STRATEGIES FOR CUSTOMER ORIENTED SERVICE DELIVERY<br />Hiring the right people: Competing for the best people,hiring for service competence and inclination,being the preferred employer<br />Developing employees to deliver service and quality: Training for technical and interactive skills, empowering employees, promoting team work<br />Providing needed support to employees<br />Retaining the best employees:Including employees in the customers vision, treating employees as customers, measuring and rewarding best performers <br />150<br />
    152. 152. DEVELOPING MARKETING –ORIENTED SERVICE ORGANIZATION <br />Shared<br />Values<br />Strategy<br />Style<br />Structure<br />Systems<br />Skills / <br />Staffing<br />Shared values<br /><ul><li>We will become a fully customer-driven organization.
    153. 153. Customer comes first
    154. 154. Marketing expenditure are an investment.
    155. 155. Services paramount.</li></ul>Style<br /><ul><li>Top management support for marketing through symbolic actions and commitment of time to marketing and customer related activities.
    156. 156. Open communications between all functional groups and marketing staff.
    157. 157. Recognition and reward of customer/market – oriented behavior.</li></ul>Strategy:<br /><ul><li>Integrated plan for development of marketing orientation.
    158. 158. Formulized definitions of markets and mission.
    159. 159. Detailed specification of marketing objectives.
    160. 160. Commitment to implementation.</li></ul>Systems<br /><ul><li>Customer intelligence reports.
    161. 161. Competitor intelligence reports.
    162. 162. Marketing planning and control systems.
    163. 163. Remuneration and performance appraisal systems geared to support marketing orientation.</li></ul>Structure<br /><ul><li>Simple structure based on markets/geography.
    164. 164. Key account sales structure to service most important customers
    165. 165. Decentralized marketing staff to provide close and fast support to customers.
    166. 166. Staff rotation to non marketing staff through customer contact positions</li></ul>Skills / Staffing<br /><ul><li>Recruitment of an adequate number of people with requisite marketing skills
    167. 167. Marketing training programs and facilities.
    168. 168. Knowledge of market.
    169. 169. Analytical skills in segmenting markets and identifying decision-making units.</li></ul>151<br />