Service marketing

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Service marketing

  1. 1. ServicesMarketing 1
  2. 2. Current Competitive Trends• Customer Satisfaction and Customer Focus• Value• TQM and Service Quality• Service as a key differentiator in Manufacturing Firms• New measurement systems linking C.S with financial goals and operational measurements• Emerging Technology• Internationalisation of Services 2
  3. 3. Characteristics Of Services• Intangibility • Ownership• Inseparability • Experiential• Heterogeneity • Perishability Implication of these characteristics ??? 3
  4. 4. The Product ContinuumGoods TangibleSalt dominantShoes Products contain bothVCR tangible and intangibleAutomobile components; predominantlyFast Food tangible products are calledCruise goods, and predominantlyConsulting intangible products areInsurance considered services.Education IntangibleIdeas / Services dominant 4
  5. 5. Mahatma Gandhi on Customer Orientation• A customer is the most important person in our premises• A customer is not dependent on us , we are dependent on him• A customer is not an interruption in our work, he is the purpose of it.• We are not doing a favour by serving him, it is he who does a favour by giving us the opportunity to do so.• A customer is not someone to argue or match wits with. Nobody ever won an argument with a customer• A customer is a person who brings us his wants. It is our job to handle them profitably to him and to ourselves. 5
  6. 6. Services Marketing Mix• Product• Price• Promotion• Place• People• Physical evidence• Processes 6
  7. 7. Service Triangle Management g Ex t in ter rk eEnabling the Selling the na Mapromise promise lM l ark na er et Int ing Interactive MarketingEmployee Customer Delivering the promise 7
  8. 8. Common Traps• Regarding internal communications as less important• Playing “favorites” and the opposite, i.e. automatically treating some people less well• Forgetting the effect on the external customer• Being more concerned with “the system” than the end result• Having a messy filing system• Reacting quickest to those who “shout loudest ”• Placing your own priority on the item Internal paperwork nearly always affects the external customer. Process it quickly and efficiently 8
  9. 9. Customer Satisfaction = f (x, y) X = Your Performance Y = Customer Expectations Performance > Expectations Delight / Wow Performance = Expectations Satisfaction Performance < Expectations Dissatisfaction 9
  10. 10. Service Quality GapsGap 1 : Not knowing what customers expectGap 2 : Not selecting the right service design standardsGap 3 : Not delivering to Service StandardsGap 4 : Not matching Performance to PromisesGap 5 : Perceived Service and Expected Service 10
  11. 11. GAP - 1 CUSTOMER EXPECTATIONS Key FactorsInsufficient marketing researchInadequate use of Marketing researchLack of interaction between management and customersInsufficient communication between contact employeesand managersToo many layers between contact personnel and topmanagement MANAGEMENT OF PERCEPTIONS OF CUSTOMER EXPECTATIONS 11
  12. 12. GAP - 2 MANAGEMENT OF PERCEPTIONS OF CUSTOMER EXPECTATIONS Key FactorsInadequate management commitment to service qualityAbsence of formal process for setting service quality goalsInadequate standardization of tasksPerception of infeasibility – that customer expectationscannot be metCo-Driven Standards SERVICE QUALITY SPECIFICATIONS 12
  13. 13. GAP - 3 SERVICE QUALITY SPECIFICATIONS Key FactorsLack of teamworkPoor employee – job fitPoor technology job fitLack of perceived control ( contact personnel)Inappropriate evaluation / compensation systemRole conflict / ambiguity among contact employeesFailure to match demand and supplyCustomers not fulfilling their roles and responsibilities SERVICE DELIVERY 13
  14. 14. GAP - 4 SERVICE DELIVERY Key FactorsInadequate communication between salesperson &operationsInadequate communication between advertising & operationsDifferences in policies and procedures across branches ordepartmentsExaggeration in advertisingExaggeration in personal selling EXTERNAL COMMUNICATION TO CUSTOMERS 14
  15. 15. Why Study Consumers?• The psychology of consumers: how • Information Search they think, feel, reason, and select • Evaluation of between different alternatives service alternatives• Psychology of how the consumer is • Service Purchase influenced by his or her environment and consumption• The behavior of consumers while • Post-purchase shopping evaluation 15
  16. 16. Segmentation DynamicsFirst Level Segmentation - Demographics & PsychographicsSecond Level Segmentation - Desired BenefitsThird level Segmentation - Behavior Behavior refers to a consumer’s response (or lack of response) to a given stimuli. Switchers Vs. Loyals 16
  17. 17. DIMENSIONS OF QUALITY• Reliability• Tangibles• Responsiveness• Assurance• Empathy 17
  18. 18. The Five Dimensions of ServiceService Dimension DefinitionReliability The ability to perform the promised service dependably & accuratelyTangibles The appearance of physical facilities, equipment, personnel & communication materialsResponsiveness The willingness to help customers & provide prompt serviceAssurance The knowledge & courtesy of employees and their ability to convey trust & confidenceEmpathy The caring, individualised attention provided to the customer 18
  19. 19. The flower of Service InformationPayment ConsultationBilling Order CORE TakingExceptions Hospitality Caretaking 19
  20. 20. Creating and Delivering New Services CORPORATE OBJECTIVES AND RESOURCESMarket Opportunity Analysis Resource Allocation AnalysisMarket Positioning Statements Operating Assets Management Service Marketing Concept Service Operations Concept SERVICE DELIVERY PROCESS Performance Evaluation 20
  21. 21. Service Blueprints 21
  22. 22. Gap Analysis Grid SATISFACTIONI Low HighM Attributes that need CurrentP High attention - area companyO where priorities strength should be focusedRTA UnnecessaryN Low Low Priority strengths - possible overkillCE 22
  23. 23. Key reasons for provider GAP 4 Service Delivery Key Factors Related to Pricing:Assuming that customers hold reference prices for services GNarrowly defining price as monetary cost ASignalling the wrong quality level with an inappropriateprice PNot understanding customers’ value definitions 4Not matching price strategy to customers’ value definitions External communications to Customers 23
  24. 24. Determinants Of Customer Added ValueImage Value TotalProduct Value customerServices Value value CustomerMonetary Price delivered valueTime cost TotalEnergy cost customerPsychic cost cost 24
  25. 25. Customer definitions of value“Value is low price” “Value is everything I• Discounting want in a service”• Odd Pricing • Prestige pricing• Syncro-pricing• Penetration Pricing • Skimming Pricing“Value is the quality I “Value is all that I get get for the price I pay” for all that I give”• Value Pricing •Price Framing• Market Segmentation •Price Bunding Pricing •Complementary pricing 25
  26. 26. Key reasons for provider GAP 3 Customer-Driven Service Designs and StandardsKey Factors Related to Demand and Capacity:• Failure to smooth the peaks and valleys of demand G• Overuse of capacity A• Attracting inappropriate customer segments to P build demand 3• Relying too much on price to smooth demand Service Delivery 26
  27. 27. Strategies for shifting demand to match capacity Demand too Demand too low high Shift DemandUse Signage to communicate Use Sales and advertising tobusy days and times increase business from current market segmentsOffer incentives to customersfor usage during nonpeak Modify the service offering totimes appeal to new market segmentsTake care of loyal or ‘regular’customers first Offer discounts or price reductionsAdvertise peak usage timesand benefits of non peak use Modify hours of operationCharge full price for the Bring the service to theservice - no discounts customer 27
  28. 28. Strategies for flexing capacity to match demand Demand too Demand too low high Flex CapacityStretch time, labor, facilities,and equipment Perform, maintenance,Cross- train employees renovationsHire part-time employees Schedule vacationsRequest overtime work fromemployees Schedule employee trainingRent or share facilities Lay off employeesRent or share equipmentSubcontract or outscoreactivities 28
  29. 29. Elements of Physical EvidenceServicescapeFacility Exterior Exterior Design Other Tangibles Signage Business cards Parking Stationery Landscape Surrounding Environment Billing statements ReportsFacility Interior Interior Design Employee dress Equipment Uniforms Signage Brochures Layout Air quality / Temp. 29
  30. 30. Typology of the Service Organisations based on variations in form and use of Servicescape. Complexity of the ServicescapeServicescape usage Elaborate LeanSelf-Service Essel World ATM(Customer only) Golf course Vending machinesRemote Service Telephone company Telephone mail(employee only) Insurance company -order desk Utility Automated voice- Professional services messaging based services 30
  31. 31. Typology of the Service Organisations based on variations in form and use of Servicescape. Complexity of the ServicescapeServicescape usage Elaborate LeanInterpersonal Hotels Dry cleanerServices Restaurants Hair saloon(both customer and Health clinicemployee) Hospital Bank Airline School 31
  32. 32. How Do Customers Form Expectations Word of mouth Price Past experience Brand image and your communications Your competitors communications Independent research agencies Business Drivers / End Customers Expectations 32
  33. 33. ES THE SERVICE OM BE ION QUALITY ER MP OM HA ED LADDER ST C R ECU SI IC DE RV SE F CE O E NA ON LER CE Z VI TO S ER TE UA RY EQ TO LEVELS OF AD FACEXPECTATION IS AT U NS 33
  34. 34. Approaches for managing customer expectationsCommunicate realities in the serviceindustry DeliveryCommunicate criteria for service > or =effectiveness PromiseCreate tiered-value offeringsOffer choices 34
  35. 35. 35

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