Introduction Any act or performance that one party can offer to another that is essentially intangible and does not result in ownership of anything. E.g. if we subscribe NTC Internet we don’t become its owner we just use the service. “ Service are deeds, process and performances. ”
Examples of Services Professional service- accounting, legal authorities, architecture Health care- hospital, eye care, dentistry Financial services- banking, insurance, advising, brokerage fires Hospitality services- restaurant, hotels Travel services- airlines, buses, agencies Other services- electrician, plumbing, health club, counseling services
Service - Contribution In WorldEconomy Sector World economy Nepal (2010) (2004) Agriculture 4% 35% Industry 32% 16% Services 62% 49%
Characteristics of Services Intangibility Heterogeneity Simultaneous production and consumption Perishability
Differences Between Services And Goods Goods Services Goods are tangible. Services are intangible. Goods are homogeneous. Services are heterogeneity. Goods are non perishable. Services are perishable. In case of goods, the consumption In case of services, production , consumption and distribution goes simultaneously, Trade marks/ Patent rights can be No such rights are there in services. gained in goods. Brand loyalty can be found in case of Brand loyalty cannot be found in case goods, of services.
Differences Between Services And Goods Goods Services Standard can be setup in goods, It is difficult to set up the standard in services. Demand and supply for the goods can In services, the firm cannot match be in equilibrium. demand and supply.; Goods are measured in terms of Services are measured in terms of quantity. quality. Goods can be stored for consumption Services cannot be in future. stored/inventoried for future The pricing of goods is easier due to As actual cost of production is hard availability about actual cost of to determine, the pricing is difficult production of goods. in services.
Service Marketing Mix Compilation of different factors that helps in selling a product. Service Marketing Mix Traditional Extended Price Promotional People ProcessProduct Place Physical evidence
Traditional “4” P’s Product Price Promotion Place• Physical good • Flexibility • Promotion on • Channel type features • Price level blend • Exposure• Accessories • Terms • Sales people • Intermediately• Packing • Differentiation • Adverting • Outlet• Branding • Allowances • Sales location• Product lines • discount promotion • Transportation• durability • publicity • storage
Extended “3” P’s Physical People Process evidence• People • Signage • Flow of activates • Equipment • Number of steps • Employee dress • Level of customer• Customer Employees involvement • Other tangible• Communicating cultures and values• research
Challenges of Service Marketers How would you define and improve service quality- exact definition not thereEg. Services provided by a dentist is difficult to define. Likewise, it is difficult to compare services provided by two different doctors. How would you design new service and how can one test when it is not there.Eg. The high price at KFC might not attract general income earners although it is a multinational company. One can’t store and one cant always match demand and supply and bring it in equilibrium How can one set up price when it is difficult to determine the actual cost of productionEg. It takes years and years, huge amount of money to be a dentist. If the dentist charges Rs.5000 to his/her patients, then people might not visit him/her because it is too expensive. But for dentist, it might be a fair price as he/she has completed dentistry devoting his/her time and huge amount of money.
Challenges of Service Marketers Service can’t be patented One cannot communicate your service It is always difficult to motivate and select right worker How would you set up standard One cannot expect services to be good all time
Service Marketing Triangle Company Internal Marketing External Marketing “Enable The “Setting Promise” Promise” Employee Customer Interactive Marketing “ Deliver The Promise ”