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MBA Unit1 Marketing Of Services


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Introduction of Marketing of Services.

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MBA Unit1 Marketing Of Services

  1. 1. Marketing of services Unit.1 Introduction to service Marketing-Understanding Service, The Nature of Service Marketing, Classification of Service. Made by:- Miss Kiran soni
  2. 2. Understanding Services <ul><li>Factor Influencing the Growth of the Service Sector. </li></ul><ul><li>Service Defined. </li></ul><ul><li>Tangibility Spectrum. </li></ul><ul><li>Characteristics of Services. </li></ul><ul><li>Generic Difference between Goods & Services. </li></ul><ul><li>Classification of Services </li></ul><ul><li>Developing Frameworks for Analyzing Services </li></ul><ul><li>Myths about Services. </li></ul>Made by:- Miss Kiran soni
  3. 3. Factor Influencing the Growth of the Service Sector. <ul><li>Demographic Changes. </li></ul><ul><li>Social Changes </li></ul><ul><li>Economics Changes. </li></ul><ul><li>Technological Changes. </li></ul><ul><li>Political & Legal Changes. </li></ul><ul><li>Policy Changes </li></ul>Made by:- Miss Kiran soni
  4. 4. Service Defined:-Services are those Activities which satisfy wants . <ul><li>Tangibility Spectrum :- The Major factor that differentiates a service to its Product from its Intangibility. </li></ul><ul><li>A pure Tangible Good:- wheat, sugar, </li></ul><ul><li>A tangible good with accompanying services:-cars, computers ( after-sales services) </li></ul><ul><li>A major accompanying minor goods & services:-( child-care centers provide food to the babies under their care). </li></ul><ul><li>A pure service:- teaching </li></ul>Made by:- Miss Kiran soni
  5. 5. Characteristics of Services <ul><li>Intangibility:- which can not be touched. </li></ul><ul><li>Heterogeneity:- not in uniform. </li></ul><ul><li>Inseparability:- delivery & consumption of a service are inseparable. </li></ul><ul><li>Perishability:- can not be inventoried or stored. </li></ul>Made by:- Miss Kiran soni
  6. 6. Classification of Services <ul><li>Classification based on Degree of Involvement of the Customer:- </li></ul><ul><li>People Processing:- The customer is highly involved in the services process & needs to be physically present in order to experience the service. Ex. School or training centers. </li></ul><ul><li>Possession Processing:-the customer doesn't require to be present but has to submit his property to the service provider. Ex car </li></ul><ul><li>Mental Stimulus Processing:-the attention of the customer must be directed on the service in order to experience the service. Ex advertising </li></ul><ul><li>Information Processing this type of service requires services personnel to collect information, analyze it, interpret & appropriate advice to the client. </li></ul><ul><li>Ex. market research </li></ul>Made by:- Miss Kiran soni
  7. 7. Classification based on the Service Tangibility <ul><li>Highly Tangible:- the customer obtains a tangible Product in hand. As cell phone on rent. </li></ul><ul><li>Service Linked to tangible goods:- some organization offer on warranty period to customer who purchase products from them. As photocopying machine . </li></ul><ul><li>Tangible goods linked to Services:- some service offer a tangible product along with the service requested by the customer. As Airlines services offer food & magazines to passengers. </li></ul><ul><li>Highly intangible:- the services which do not provide customers with any tangible product. As massage parlor </li></ul>Made by:- Miss Kiran soni
  8. 8. Classification based on Skills & Expertise Required <ul><li>Professional Services:- the service provider to be formally trained to deliver the service. Ex Doctor, Pilot. </li></ul><ul><ul><li>Non Professional services:- these Service do not require the service provider to undergo any training to deliver the service. </li></ul></ul>Made by:- Miss Kiran soni
  9. 9. Classification based on Business Orientation of Service Provider <ul><li>Not-for-profit organization:- the main objectives of the service providers is to serve society & not to make profits. Ex. Government schools, Social service organizations. </li></ul><ul><li>Commercial organization:- the main objectives of the service provider is to earn revenues & make profits. Ex Airlines Insurance firms. </li></ul>Made by:- Miss Kiran soni
  10. 10. Classification based on Type of End-User <ul><li>Consumer services:- purchased by individuals customer for their own consumption. Ex Beauty Care, Hair Cutting. </li></ul><ul><li>Business to Business:- These service are purchased by the organization. Ex Market research, Advertising. </li></ul><ul><li>Industrial services:- Based on a contract between organization & service providers. Ex Machine installation, plant maintances. </li></ul>Made by:- Miss Kiran soni
  11. 11. The Nature of Service Marketing <ul><li>Evolution of Service Firms. </li></ul><ul><li>A Different Approach for Marketing Services. </li></ul><ul><li>The Service Marketing Triangle. </li></ul><ul><li>The Services Marketing Mix </li></ul><ul><li>Key Marketing Issues Before a Service Organization. </li></ul><ul><li>New Avenues in Service Marketing. </li></ul>Made by:- Miss Kiran soni
  12. 12. Evolution of Service Firms <ul><li>While Service firms in the earlier days gave very little importance to :- </li></ul><ul><li>Segmentation </li></ul><ul><li>Customer satisfaction </li></ul><ul><li>New Product Development </li></ul><ul><li>Service Quality & some others. </li></ul><ul><li>Today’s firms stress on these aspect to enhance </li></ul><ul><li>customer satisfaction. </li></ul><ul><li>Develop Business. </li></ul>Made by:- Miss Kiran soni
  13. 13. Further, Service firms did not pay due attention to service quality Earlier. However, today they emphasize on service quality by assuring the customer of their commitment to address Instances of less than perfect service quality. The assurance of best quality service by firms is in the form of guarantees or refund of money compensation in the event that the customer is dissatisfied. For ex Domino’s Pizza promises that it will offer its pizza free if it is not delivered at the customers doorstep’s with in 30 minutes of the order being placed. Made by:- Miss Kiran soni
  14. 14. A Different Approach for Marketing Services <ul><li>Narrow definition of marketing by service providers. </li></ul><ul><li>Lack of Appreciation for marketing skills in service organization. </li></ul><ul><li>Difference in organizational structure of service firms. </li></ul><ul><li>Problem in determining costs for pricing of services. </li></ul><ul><li>Constraints & opportunities for not-for-profit service organization. </li></ul>Made by:- Miss Kiran soni
  15. 15. 1.Narrow definition of marketing by service providers <ul><li>Earlier, service marketers had very narrow definition for marketing & consider it function that consisted only of advertising, sales promotion & public relations. Very few extended this definition to include sales & market research as well. </li></ul><ul><li>Other marketing such as segmentation, positioning, customer service, services diffraction, new product development, emphasize service quality etc. were not paid adequate attention by service marketers. </li></ul>Made by:- Miss Kiran soni
  16. 16. 2.Lack of Appreciation for marketing skills in service organization:- <ul><li>There is less emphasize on sales training & sales activities in service firms, unlike in manufacturing companies. </li></ul><ul><li>3.Difference in organizational structure of Service firms:- In such organization structures, the top management frames strategies, which are then implemented by personnel at the lower levels. </li></ul>Made by:- Miss Kiran soni
  17. 17. 4.Problem in determining Costs for prices. <ul><li>The heterogeneous and intangible nature of services makes it difficult to deterring pricing of a service using the cost-based strategy. </li></ul><ul><li>the usual pricing method available to marketers do not suggest any techniques to set for a price for the skill, expertise & value that are involved in service. </li></ul>Made by:- Miss Kiran soni
  18. 18. 5.Constraints & opportunities for not-for-profit service organization <ul><li>The major constraints faced by not-for-profit service organization are funding & lack of adequate & appropriate infrastructural facilities. Constraints such as these make it difficult for these organization to improve their operation & functioning. </li></ul><ul><li>this is turn has an adverse impact on the effectiveness of these organization to deliver quality service. </li></ul>Made by:- Miss Kiran soni
  19. 19. Other Challenges <ul><li>Being intangible in nature, service can not be touched, smelt, seen or tested. This make it difficult to market a service due it difficulty in making the customers conceptualize the service. </li></ul><ul><li>Another challenges that arises due to heterogeneity of service is the difficulty in standardizing the service & ensuring quality control. </li></ul>Made by:- Miss Kiran soni
  20. 20. COMPANY CUSTOMER FRONT-LINE EMPLOYEES The service marketing Triangles External marketing Internal marketing Interactive Marketing (i) (ii) (iii) Made by:- Miss Kiran soni
  21. 21. The service marketing triangle Consist of three components of the service delivery process, namely the company, the front-line employees & the customers. In the service marketing triangles , the company, front lines employees & the customer make up three corners of the triangles. (i) Company & customer External marketing) The company communicates information about its products & service to the external customers by means of marketing communication mix comprising advertisement, sales promotion, personal selling, direct marketing & public relations. Made by:- Miss Kiran soni
  22. 22. ( ii) Company – front line ( Internal marketing). The interaction between the company & the front-lines employees constitute internal marketing by means of which the company enables its employees to deliver quality service to customer. The internal marketing process makes use of tools such as newsletters, video shows etc. (iii) Front-Lines Employees & Customer (Interactive Marketing) this is the most important one that finally determines customer retention by service firms by interactive marketing All three-internal, external & Interactive marketing-play an important role in service marketing neglecting any of these will result in the failure of a service organization in achieving its marketing goals. Made by:- Miss Kiran soni
  23. 23. The Services Marketing Mix <ul><li>The marketing mix for service is considered to consists of 7P’s which are:- </li></ul><ul><li>Product </li></ul><ul><li>Price </li></ul><ul><li>place </li></ul><ul><li>promotion </li></ul><ul><li>People </li></ul><ul><li>Physical evidence </li></ul><ul><li>Process. </li></ul>Made by:- Miss Kiran soni
  24. 24. Key Marketing Issues Before a Service Organization <ul><li>Managing Differentiation among services. </li></ul><ul><li>Managing Productivity. </li></ul><ul><li>Managing services quality. </li></ul>Made by:- Miss Kiran soni
  25. 25. Managing Differentiation among services <ul><li>The intangible nature of service marketing it difficult for service providers to differentiate themselves from their competitors on aspect other than plan. </li></ul><ul><li>the following tangible elements may be used to differentiate service businesses. </li></ul><ul><li>Service premises. </li></ul><ul><li>Packaging </li></ul><ul><li>Service personnel. </li></ul><ul><li>Tools & equipment used. </li></ul><ul><li>Customers. </li></ul><ul><li>Convenience. </li></ul><ul><li>Name of the service establishment. </li></ul>Made by:- Miss Kiran soni
  26. 26. Managing Productivity <ul><li>Managing productivity in service organization is difficult task due to the multifunctional nature of service jobs. For ex. In a fast food outlet, the service personal perform various task which include preparing the food (production), delivering the food to the customers (retail service), ensuring that the customer have an enjoyable eating experience (customer service), & accepting payment & tendering the change (transaction processing). </li></ul>Made by:- Miss Kiran soni
  27. 27. Managing services quality <ul><li>The intangibility, heterogeneity, & inseparability characteristics of service make it difficult to control the service quality since the service cannot be tested, measured & verified accuracy before it delivering it to the customer. </li></ul><ul><li>managing quality in service firms require an understanding & identification of the service characteristics that make it difficult to control service quality. </li></ul>Made by:- Miss Kiran soni
  28. 28. New Avenues in Service Marketing <ul><li>Service provider are looking for new ways to attract new customers by promising them a pleasant service experience. </li></ul><ul><li>trade shows & trade fairs serve as avenues for companies to attract customers & generate new leads. </li></ul>Made by:- Miss Kiran soni
  29. 29. THANKS Made by:- Miss Kiran soni