service marketing

1. Services Marketing
1

2. Marketing
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.
Chartered institute of marketing– marketing as the process
of discovering, expecting and suiting the customer needs
and at the same time making profits.
2

3. Services
• “When u build a manufacturing plant, it
starts depreciating on the day it
opens.
• The well – served customer, on the other
hand, is an appreciating asset.
• Every small act on his or her behalf ups the
odds for repeat business and priceless
word – of – mouth referral”
-Tom Peters management guru
3

4. Services
1.
• Service is performance
• Service does not mean ownership of anything
2.
• Goods are produced.
• Services are performed.
3.
• Service is purchased.
• Service purchased –is just the use of/access to facility.
4

5. Services
• Traditionally difficult to define.
• Which services are created and
delivered to customer are
difficult to define because many
inputs & outputs are intangible.
5

6. Service …definition
• 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.
• Services are economic activities that create value and provide benefits for
customers at specific times, place.
• 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
6

7. Service sector….
• Comprises of bulk of today’s economy.
• US – 73% & Canada 67% of GDP.
• Consists of vide variety of industries that sell to individual customers ,
business customers , government customers , NGO’s.
• Change in economy – boom in agriculture, manufacturing – increased
demand for brand new services and traditional services.
• Japan -- is it still known for being a manufacturing country ??????
• India too is following the footsteps…..
7

8. Service organizations…
• Large international corporations –airlines , banking, telecom, hotel chains,
freight transportation…..
• Locally owned small business– restaurants, laundries, taxi services,
internet services, courier etc.,…
• B-2- B services…
• Franchised service outlets--- food , education…
8

9. Gats Classification.
 General agreement on trade in services classifies 155 activates as service.
 Major 11 categories are
1. Business services.
2. Communication.
3. Construction & Engg.
4. Distribution.
5. Education.
6. Environment.
7. Finance.
8. Health.
9. Tourism.
10. Recreation.
11. Transport
9

10. Classification of services..
High
contact
services
Medium
contact
services
Low
contact
services.
10

11. High C.S.
Medium C.S.
Low C.S.
• Hair dressing
• medical services Banking,
purchase of retail goods.
• Management consulting
• Insurance
• Personal financial services.
• Radio services
• Information processing services.
• Remote fixes of software
11

12. Reasons for growth of services industry…
Reason Effect Service effected
Affluence Per capita income Pest control, personal security,
Interior design. beauty parlors,
event management etc..
Leisure time Travel & Holiday Travel agencies, Hotels,
entertainment, career prospects
Health Consciousness Awareness Health clubs, Spas, Old age homes ,
gyms, yoga, meditation
Working Couples Working wives Day care centers, home delivery,
packed food
Product complexity Variety available Water purifiers, Microwaves, PC,
(= AMC)
Life complexity Lack of time Tax consultants, legal service,
property advisors, Investment
advisors..
Resource scarcity & Ecology Need of conservation Car pools, water management,
high rise apartments ..
New Products IT PCO, pager, e- commerce , Internet
service provider, mobile service
providers, cyber café
12

13. • Tangibility -- The quality of being
perceivable by touch.
• Intangibility--The quality of being
intangible and not perceptible by touch
13

14. Tangibility Spectrum
14

15. Differentiating services from goods…
Pure tangible goods Wheat ,sugar, soap, cosmetic etc.
Tangible good –Accompanied service Computer, cars air conditioners,
machinery-after sales service
Major service accompanying minor
goods & service
Beauty saloon providing cosmetics
Child care centers providing baby
food.
Pure service Surgery, consultancy teaching
15

16. Goods vs. services
• Unique characteristics that distinguish goods from service
• Services are performance , deeds efforts.
• Services can’t be felt, seen ,tasted or touched as goods.
• Example movie tickets vs. shoes.
16

17. Characteristics of services
• Intangibility
• Heterogeneity
• Inseparability.
• Perishability
17

18. Intangibility
• Product is physical.--- Can be felt ,seen , smelt, tested..
• Service is not tangible till it is experienced or consumed.
• Different people have different expectations with regard to the same
service…
• Quality of service not strictly measurable…..
18

19. Problems with intangibility -
• Lack of ability to be stored.
• Lack of protection of patents.
• Difficulty in displaying or communicating services.
• Difficulty in pricing services.
19

20. Solutions to intangibility problems.
 Use of tangible clues. – assist customer in making service evaluation.
( insurance advt. in media…)
( ICICI bank --- strong ATM network….)
 Use of personal source of information.
( due to lack of objective means of evaluation
customer looks to wards friends , family )
offering incentive to existing customers for
roping in new customers)
 Creation of strong organizational brand.
( results in loyalty i.e. Maruti , Sony)
 In separatibility– 1.Service provider physical connection to service being
provided.
2.Customer’s involvement in the service process.
3.Involvement of other customer in the service process.
20

21. Problems caused by inseparability
• Physical presence of the service provider ---like dentist.
• Evaluation of the service provider done by language, clothing, personal
hygiene, IP communication skills.
• Face to face interaction with customer– make employee satisfied.
• Involvement of customer in the service production process…
a) customer to be physically present to receive service.
b) Customer need to be present to start the service –dry cleaning,
auto repair etc..
c) Need of the customer to be mentally present -- thru internet..
21

22. Unlike goods which are first produced ,sold , consumed…
services are first sold, produced and consumed.
22

23. Involvement of other customers…
• Restaurants --- Smoking in non smoking areas..
Parking full means better service / food.
23

24. Challenge in mass production of service…
• How to successfully mass produce service…
24

25. Solutions to inseparable problems..
• Emphasis on selection ,training public contact personnel.
• Consumer management. ( reservation in restaurant…)
• Use of multi site locations (ATM , McDonald's…..)
25

26. Heterogeneity
• Heterogeneous is an adjective used to describe an object or system
consisting of multiple items having a large number of structural variations.
• It is the opposite of homogneous.
26

27. Heterogeneity
• Goods & services –Another difference- un ability to control the service
quality before it reaches the customer.
• Service offered by one employee may differ from the other…
• Example - McDonald's franchise – moods swings of individuals before
service.
27

28. Solutions to heterogeneity
Customization. … Dell
customization & service.
Standardization…. ATM , auto
car wash, Key in orders on line.
28

29. Perish ability..
• Service can’t be inventoried. ( Like movie tickets , airline tickets etc..)
• Matching the demand & supply in service is a challenge…
29

30. Solution to perish ability..
• Creative pricing- (early bird incentive , happy hours )
• Demand strategy – (reservation system, complimentary system,
development of non peak demand)
• Supply strategy. - Part time utilization. capacity sharing (Doctors
sharing cost of equipment), advance preparation of
expansion, utilisation of third party, Increase in
customer participation.
30

31. Service marketing -- system
Service marketing triangle
31

32. Issues before a service organization
• Services premises.
• Packaging.
• Service personnel.
• Tools & equipment used.
• Customers.
• Convenience.
• Nature of service establishment.
• Managing productivity.
• Managing service quality.
32

33. Nature of service marketing.
• Narrow definition of marketing. By service providers. – Had only Advt, sales
promotion, segmentation rare, --differentiation , new product development,
service quality…????
• Lack of appreciation of marketing. Skills in service org.
• Difference of org. structure of service firms.
• Problems in determining the cost of services.
33

34. External marketing--
making promises
Interactive marketing—
keeping promises
Internal marketing –
enabling promises
c.s. --- Federal express..
34

35. Service marketing system for high contact service
35

36. Service marketing system for Low contact service
36

37. Tangible elements & communication components in SM
37

38. Customer expectation & perception of service
Customer
expectations
Adequate
service
Desired
service
38

39. Desired service --- Adequate service
1. It is the level of service the customer hopes to receive // the level of
performance wished for.
2. 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…
39

40. Zone of tolerance
40

41. 41

42. 42

43. Diff. Between characteristics of goods and service
• Different goods and services have varying magnitudes of
search, experience & credence qualities
• search qualities of goods can be estimated before purchase --
experience quality can be estimated only after purchase.
• Qualities that can`t be assessed completely are called
Credence qualities.
43

44. Dimensions of S.E.C. qualities
Search qualities Experience qualities Credence qualities
Tangibility Access Competence
Credibility Courtesy Security
Reliability
Responsiveness
Understanding customer
communications
44

45. Search quality
• For services include…..
• Price,
• Convenience.
• Mannerisms of service personnel.
• Promptness of service.
45

46. Experience qualities
• Taste of home delivered food.
• Wear ability of dress bought from boutique
etc.
• Service have higher experience characteristics than goods.
• E.g. air line travel…courtesy of cabin crew,
departure & arrival, quality of food, seating
comfort etc..
46

47. Credence qualities
• Customer often lack the knowledge & experience to judge the credence
qualities of the service.
• E.g….. Bread may claim to have nutrition's..difficult for the customer to
ascertain..
• Services of professionals –doc, consultants,…services are accepted on
faith.
47

48. Customer
• Decision
• Making
»Process
& implications on service provider.
48

49. Customer decision making process..
• Need perception.—difference in actual state & desired
(Hungry –need to buy food-remove hunger)
• 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)
• 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)
• Purchase & consumption.- trail purchase, repeat purchase, long term
commitment purchase)
• Post purchase evaluation.– compares performance vs. expectations. –
satisfied customer becomes loyal,
49

50. Implications for service providers
• Customer gather info. From personal source– marketer needs to be careful in
satisfying existing customers.
• Services are intangible- customer needs assistance to assess value of high
credence qualities.
50

51. 51

52. Customer expectations
• SATISFACTION IS THE LEVEL OF A CUSTOMER`S FELT STATE RESULTING
FROM COMPARING A PRODUCT`S OR SERVICE`S PERCEIVED
PERFORMANCE STANDARD AGAINST THE CUSTOMER`S EXPECTATION…..
• KOTLER
52

53. Customer expectation
• Five dimensions to measure service quality
• Assurance --- to use knowledge & courteous behavior to instill trust and
confidence in customer regarding service.
• Empathy– ability to show concern for customers and devote individual
attention to each customer.
• Reliability—ability of service provider to accurately perform promised
service.( efficiency , handling of customer complaints, pricing etc).
• Responsiveness – prompt & service.
• Tangibles -- physical facilities- equipment of service, dress & appearance
of service personnel.
53

54. Service level expectation
adequate
desired
low high
Zone of tolerance
54

55. Factors influencing desired service factors influencing adequate service
• Customer needs – Maslow's hierarchy of
needs. –customer hungry wants food
immediately – customer thirsty wants
water immediately.
• Enduring service intensifiers
• Transitory service intensifiers – pizza
does not come in 20 minutes or C.C.
not accepted when buying medicines
in emergency.
• Perceived service alternatives --
housing loans form different sources.
• Self perceived service role – dress
designer find dress as per
expectations.
• Situational factors – power failure
interupts service of cable.
• Predicted service expectations.–
flight will be delayed due to weather
but reaches on time.
Derived
service
expectation
Customer
philosophy
Attitude &
service
providers
conduct
Conducted
tour—expect
food & travel
arrangement
55

56. Customers criteria for service evaluation
• Speed.
• Certainty.
• Ease
• Personal recognition.
56

57. Customer perceptions
• Service encounter – customer estimates the quality of
service during encounter – e.g. – banks.
• Service evidence – personnel , process & physical
environment. E.g.- hotels
• Image – perceived image in the mind of the customer.
a +ve image can ignore some poor service, however repeated
bad service will change the same.
• Price – tangible nature of service – customer assume the quality of
service
57

58. Strategies to influence customer satisfaction
• Enhance customer satisfaction thru service encounters.- recover from service
failure, flexibility in delivering service, assistance in handling difficult customers.
• Reflect evidence of service- behavior & physical evidence.
• Communicate & create realistic image.- make promises & keep them.
• Enhance customer perception of quality & value thru price.
58

59. Market research in service
• Post transactional survey- immediately after service- questioner after
dinner or questioner just before aircraft lands.
• Customer complaints comments & inquiry survey – use feedback and
analyzing comments and taking remedial actions helps improve service.
• Total market survey – take opinion from all customers – existing, lost ,
potential customers.– find out customers needs.-take suitable actions.
• Employee survey –opinion of front line employees who come in direct
contact with the customer.
59

60. Service Quality -- Dimensions
• Reliability – Ability to perform promised service dependably & accurately.
e.g FedEx…..
• Responsively – Willingness to help customers & provide prompt
service.
• Assurance – Employees ability to inspire trust & confidence. E.g.-
Insurance , brokerage, legal services
• Empathy – Caring , Individual attention to customers. E..g. customized
services..E.g.-- Hotel
• Tangibles – Appearance of physical facilities equipment, personnel &
written materials. E.g. – travel agents putting attractive
pictures..
60

61. Servqual scale
• Measures five dimensions on a scale of 7
points.
• Generic dimensions used by customer to evaluate services
• Credibility, Security, Access, Communication,
Understanding customer, Tangible, Reliability,
Responsiveness, Competence, Courtesy…..
61

62. Gap Analysis
• Gap 1- Not knowing what the customer
expects.
• Gap 2 – Not selecting the write service designs
& standards.
• Gap 3 - Not delivering to service standards.
• Gap 4 - Not matching performance to
promises.
62

63. Gap model – service quality
63

64. Process of market research
Define the problem &
research objectives
Develop scales of
measurement
Develop & implement the
research program.
Coding & tabulating data.
Interpreting. and analyzing
findings
Reporting findings 64

65. Approach to upward communication
UPWARD
COMMUNICATION
Research on
customers
Executive visit to
customers
Management listening
approach
Research on internal
customer
Employee
suggestion
Research on
external
customers
65

66. • Analysis customer needs.
• There buying pattern.
• Ways in which they can be satisfied.
• Analysis helps in ::
• Identify the competition in the market.
• To identify ,why customer choose one product/service over the other.
• To analysis the present strategies of the co. vis. Competition.
Customer analysis
66

67. Strategic
issues in
service
marketing
67

68. Market segmentation & targeting
• Mkt. Segment- a group of customers who respond in a
similar way to a given set of market stimuli
• 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..
• Targeting .. A process of estimation & comparison
previously identified segments for selecting one or
more segments that fetch best result for business.
68

69. Mkt. Segments
• Undifferentiated Mkt. approach – mass marketing. Approach
aimed at all consumers by offering single product / service.
• Differentiated Mkt. approach.- targeting various customers
segments with different products & services.
(Nokia – Hi flyers, Trendsetters, Social contact, Assured)
• Concentrated mkt. approach.- single segment strategy to
serve limited segments in a total market.
69

70. Targeting
• Basis of targeting –
• Segment size & growth potential.
• Structural attractiveness
• Companies objectives & resources.
70

71. Targeting strategies
• Single segment strategies.- target single segment, develop single
marketing mix & gain specialization.
e.g. – software firm catering to logistic solutions only
• Selective specialization – targeting more than one segments.
e.g. financial firm target retired persons & working women.
• 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..
• Market specialization- target segment remains same , company tries to
cater to different needs by offering products / services
e.g – your institution – various courses.
• Full mkt. coverage.—various products & services for the entire market
E.g.– hindi movie released with sub tittles abroad.
71

72. Positioning
&
Differentiation
of services
72

73. Positioning
• “Positioning is not what u do to the product,
Positioning is what u do to the mind of the
prospect…”
by
unknown
• 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.
73

74. Positioning strategies by potter
• Product differentiator
• Low cost leader.
• Nicher.
• Company should concentrate in one strategy rather than trying to be good
in all and failing subsequently.
74

75. Specific positioning strategies….
• Attribute positioning – service provider positions on attributes / feature e.g.-
Allahabad bank positions as oldest bank in India
however Positioning service strategy based on feature does not work too well.
• 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..
• Use / application positioning.—positioned as best for a certain application –SBI –
positioned best for education loans.
• User positioning – positioned for specific target users – India as destination for
tourists
75

76. Specific positioning strategies….cont.
• Competitor positioning strategy– positioned against competition ..e.g.
IIPM positioned against IIMs- “dare to think beyond IIMs”.
• Category positioning– category leader & becomes synonymous with the
service– e.g. Essel world for entertainment.
• Quality & price positioning-service is positioned as possessing a certain
standard, at a particular price… Taj Hotels high quality service at high
price.
76

77. Differentiation
• 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…
• DELL , AMWAY……
77

78. Differentiating attributes
• To meet the following criteria…
• Important – customers in the target group view the difference offered by
the firm as very important & high value to it.
• Distinctive– service offered is not offered by its competitor or unique
service offered.
• Superior – the firms makes it an obvious choice for customers to opt for..
• Communicable– difference offered by firm should be easily explained &
communicated to customers.
78

79. • Preemptive- Difference offered in service is not easily copied by
competitors.
• Affordable – customer should be able to pay for the difference in price.
• profitable.– Firm should be able to offer difference to customer with out
losing out on profitability.
Differentiating attributes…cont
79

80. Managing
demand
&
capacity
80

81. Demand patterns
• 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.
• Foreseeable cycles-- demand of financial services increases around
financial year close.
• Random demand variation – some demands cycles are variable –
healthcare & insurance?
• Demand pattern by Mkt. segment- Maintain data base – tour operators
, insurance ,tax saving schemes.
84

82. Capacity constraints
Facilities
Labourtime
equipment
Capacity
constraint
85

83. Strategies to match demand & capacity
• Demand shift .. Shift customers to a time when demand is low e.g. cell
phone call rates….
• Varying the original service offer– catering during non marriage season –
economical.
• Communicating with customers – Banks talk to customers when salaries
etc are been handled..some customers choose to come at another time..
• Altering the time of service delivery – Banks worked 6 days –now 7 days
• Price differentiation – price variations between high demand vs. low
demand—happy hours
86

84. Adjusting capacity to meet demand..
• Time – extended hours to meet excess demand.
• Labour- employed on contract basis - get as per demand
• Facilities – increase capacity –restaurant putting extra tables, more seats in
theatre, airlines adding more flights…
• Equipment—hire additional when needed ( owen , computers etc)
• Cross training of employees to meet extra demand.
87

85. Marketing
mix
for
services
88

86. Traditional marketing. mix
• 4 P`s—product- place- price – promotion
• Adequate for product marketing.
• however they are inadequate
• for
• services …..
• because ___________
89

87. Inadequacy of 4 P’s
• Product are tangible – Services are intangible in nature.
• Part of promotion of services takes place at the time of consumption itself.
• PSU producing services –partly subsidized, standardized – Mkt.mix ignores
this aspect.
• Dual role of service customers – co- producers and end consumers-
unnoticed by 4Ps.
• 4ps fails to capture – distribution services.
90

88. 91

89. The extended P’s
• People- Co. invest in People(attracting, Training, retaining best talent
• Process – ATMs- reduce human intervention / errors/ increase
customer satisfaction.
• Physical evidence – TV commercial / brochures etc for holiday
destination..
92

90. Product :: service packaging
• 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.
• Packaging a service is a critical component of mkt. mix.
• E.g.--burger at McDonald's viz. road side burger.
• British airways vs. other cheaper airlines.
• Difference is the quality and the service packed along – for a price.
93

91. Service product level
Core
product
Actual
product
Augmented
product
Potential
product
94

92. Service product level..cont
• Core product – core benefit of any product is
to satisfy the basic needs of a customer.
• Example– a tax consultant- core service is to calculate tax to be
paid- also files return, sell some financial instrument, advises on
investments.
95

93. Actual product
• Tangible aspect attached to a service ,along with the service is the product
itself.
• This facilitates the delivery of core product to the customer.
• Marketers develop the actual product after the core benefits are decided.
• Characteristics of actual product are –features, design , quality level,
packing & brand name.
96

94. Actualproductlevel
qq
Core product
Quality level
Design
Brand name
Features
packaging
Actual product
97

95. Augmented product
• The intangible aspects that support a service
constitute the augmented product along with
the actual product.
• Warranty , installation support, delivery,
customer service – etc are augmented
products.
• 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..
98

96. Potential product
• Features or benefits that can be added & which would be of value to the
customer .
• Hair styling – computer aided pictures to help decide
a suitable hair style…..
99

97. Service product decisions – growth strategies
Market penetration Product/service development
Market development Diversification
Existing
markets
New
markets
Existing products New products
“Ansoff’s” product growth matrix
Mkt. penetration Product /service
development
Market development diversification
Sell more of existing
product for bigger
mkt. share
New product
/service in existing
mkts.
New markets with
existing services
New market with
new products
100

98. PLC
Develop strategy
Stabilize strategy
Turn around strategy
Harvesting strategy
101

99. Pricing
services
102

100. “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”
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 -
”the price is right”
Noel Peebles author “Sell your business the easy way”
103

101. Key characteristics of pricing in service
• Customer’s perceptions are different for goods & services.
Customer finds easy to pay for a home theatre than flying by a particular
airline or choosing a holiday destination.
• 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.
E.g. a beauty parlor charges 250/- instead of 150 for the same service & is
considered to offer better quality service…
• Non monetary cost & pricing:: Non monetary cost perceived as time cost,
search cost , psychological cost & convenience cost.
• Difficulty in comparing prices of services::
104

102. Pricing objectives
• Survival
• Present profit maximization.
• Present revenue maximization.
• Prestige.
• Product quality leadership.
105

103. Other options
• Pricing can be done to make market unattractive for competition.
• How would co. like to position its services.
• How do the competition react to price changes.
• What is the duration of life cycle of services.
• How does the elasticity of demand fluctuate.
• Is the service capability over utilized or underutilized.
106

104. Approaches to pricing services.
Cost based pricing
• Cost plus pricing/basic
cost covering
• Contribution pricing
• Working back
method/ expected
return
Market oriented
pricing/demand
based pricing
• Market skimming
• Penetration
pricing.
• Price to meet
customer
expectation.
• Discount & sales
Competition based
pricing
• Destroyer pricing
• Price matching
• Price bidding
107

105. Promotion
of
services
• Many attempts to communicate are mollified by saying too much………
108

106. Promotion
thru
communication
109

107. Modes of communication
1.Oral
2.Written
3.Face to face
4.Online communication
5.Media.
Type of communication
Internal
external
110

108. Elements of promotion mix
Promotion
elements
mix
Direct
marketing
Personal
selling
advertising
Publicity &
public relations
Sales
promotion
111

109. Promotional strategies for services.
• Services can’t be inventoried..decrease use in peak & increase during lean
times.
• Reduce role of intermediaries ::
• Role of service personnel::
• Service delivery location
• Customer as a co- product.:: chef cooks food in front of customer, as per
requirement.
113

110. Strategies for effective promotion
• Effective planning.
• Focused objective.
• Perfect timing.
• Value added thru tie-ups & promotions.
• Employee motivation.
• Well differentiated campaign.
• Regular evaluation of campaign .
114

111. Promotional techniques
• Sampling.
• Premium
• Prize promotion.
• Price /quantity promotion
• Refunds & future discounts.
• Coupons…
115

112. Design of a service promotion
• Which service to promote.
• Who would be the target customer.
• What value addition be there to the brand.
• Is the timing right for promotion
• Duration of promotion.
• Who is benefited from promotion.
116

113. Relationship marketing --definitions
1. Relationship mkt. is attracting, maintaining & (in multi-service
organizations) enhancing customer relationship.
2. 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.
3. 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.
117

114. Benefits of R.M.
• Long term relationship for both customer &
organization.
• Lower cost & increased profitability.
• Requirements & expectations of customer
base.
• Reliable service provider.
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115. R.M.---Benefits to Co.
• Customers will continue to avail the services..
• Increase revenue from existing customers.
• Existing customers will provide FREE word of mouth publicity.
• By establishing & strengthening relationship –easy to retain customers.
• With relationship & quality of services –very few customers will go to
competition.
119

116. R.M.---Benefits to customers
• Customer opts for service repeatedly-
• Saves on time & effort on choosing new S.P.
• Personalized services
• Special services.
120

117. Customers markets
• Efforts required to maintain existing customers.
• Satisfied customer will come again & avail the services.
• Employees & managers to work as a team to make the experience more pleasant.
• Co. should work on complaints & suggestions –update the customer about the
steps taken.
• Service experience to go beyond expectations – leads to actively
recommendations of service to others.
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118. Internal markets
• Employees – internal customers – internal markets
• Better facilities & good atmosphere leads to satisfies employees-better services to
customers.
• Cos. Strive to win employee loyalty & commitment.
• Helps in retaining employees- better service to customers with complete
commitment.
123

119. Suppliers Mkt.
• Cos need basic infrastructure & facilities to provide service.
• Cos. Depend on suppliers to provide them.
• Good relations with suppliers.
• E.g.--Courier & airlines
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120. Referral Mkt.
• Referral Mkt – existing customers , intermediaries , consultants etc.
• Good relations helps in better service & more business for Co.
• Reward referrals…..
125

121. Recruitment market
• Attracting talent from institutes…
• Cos. need to maintain contacts with institute heads etc .
• Sponsor student events , conduct work shops etc..
• Placement agencies, head hunters
126

122. Influence markets
• Share holders , financers, consumer protection groups, environmentalists,
government, media, trade unions, general public…
127

123. 128
Services Blue print

124. Internal marketing
• Viewing employees as customers – viewing jobs as internal products that
satisfies the needs of internal customers while addressing the objectives
of organization.
129

125. Role of Internal marketing…
• Customer attraction & retention.
• Employee retention & motivation.
• Corporate image.
• Change management.
• Cos. Performance & continuity.
130

126. Components of internal marketing….
• Recruitment & selection
• Motivation.
• Education & training.
• Coordination.
• Empowerment.
• Rewards.
• Communication.
• Knowledge sharing.
131

127. SERVICES
FUNCTIONS
AND
BLUEPRINT
132

128. New service development process
Generation of idea
Testing the concept
Screening
Business analysis
&
Design of service
Test marketing
Infrastructure development
Service launch

129. Customer Service Management Cycle
Customer Service
Where you want it to be
Customer Service
Where it is now
Stage 1
Understand the service
Seekers
Stage 4
Check up regularly
Stage 2
Set customer service
Standards
Stage 3
Build a winning
Team
Stage 5
Provide proactive
Problem solving
134

130. STAGE 1: UNDERSTAND THE
CUSTOMER
• Specific service niche : Determined by the
targeted services and the service seekers
• Characteristics
» People/Things orientation
» High/Low tech
» Personal Interaction : Physical, Mental, Emotional
» Time involvement
» Location
» Complexity: Actual, Visual
» Flexibility
» Numbers served per transaction
» Training
» Supervision 135

131. Developing the Service seeker profile
• Values and beliefs
• Attitudes
• Social habits and norms
• Preferences
• Expectations
136

132. Customer Perception of the service and service
provider
• The service profile: Service characteristics, Service seekers
wants and needs and perceptions of requisite characteristics
• Characteristics include
» The service purpose
» The degree of necessity
» The magnitude of importance
» View of results
» Relative cost and benefits
» Perceived risks
137

133. STAGE 2::SET CUSTOMER STANDARDS
• Establish a target
• Communicate expectations
• Create a valuable management tool
• Dimensions in strong customer service: Procedural and
personal
• Standard areas of procedural dimension: Timing, Flow,
Flexibility, Anticipation, Communication, Customer Feedback,
Organization and Supervision
• Standard Areas of personal dimension : Appearance, body
language and tone of voice, attentiveness, tact, guidance,
selling skills, gracious problem solving
138

134. Writing customer service standards
• Timeliness
• Anticipation
• Attitude
• Customer Feedback
• Appearance
• Guidelines for developing customer service standards
139

135. STAGE 3: BUIDING A WINNING TEAM
• Design customer service jobs
• Writing job specifications
• Screening job applicants
• Training for customer service
• Practice leadership skills
• Supportive organizational environment
140

136. STAGE 4: CHECK UP REGULARLY
• Service Audit system
• Service seeker feedback system
• Employee feedback system
141

137. STAGE 5: PROACTIVE PROBLEM SOLVING
• Create supportive climate for solving problems
• Appoint teams to identify problem areas
• Select teams to improve through
brainstorming
• Transferring team problems and complaints
into opportunities
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138. COMPONENTS OF SERVICE BLUEPRINT
Customer
Actions
Onstage
Contact
Employee
action
Backstage Contact
Employee Action
Support
Process
Line of internal
action
Line of visibility
Line of External Action
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139. Components……..
• Line of External Interaction:
Line above which all customer interactions take place e.g.
Interactive Marketing
• Line of Visibility:
Area up to which the customer knows of organizational
processes.Influenced by visible interactions
• Line of Internal Interaction:
Not Visible; helps in effective service delivery; Customer is
ignorant
144

140. Components……….
• Contact Employee Actions:
» Onstage contact employee action between
the lines of interaction and visibility
» Backstage contact Employee actions taking
place between lines of visibility and
internal interaction
• Support Processes:
» Support contact employees in service
delivery
» Occur behind the line of internal
interaction
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141. STEPS IN SERVICE BLUEPRINTING
• Identification of service to blueprinted: Purpose and goals identified for inside
and outside customers
• Service blueprinted from customers point of view: Customers steps in
purchase, consumption and delivery to be mapped /eliminate unnecessary activities
• Identification of employee actions: Identify Both onstage and backstage
actions/linkages between customers and contact personnel and between employee
• Identification of support activities: Support activities also to be identified and
blueprinted
• 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
• Identification of employee actions: Identify Both onstage and backstage
actions/linkages between customers and contact personnel and between employees
146

142. CLASSIFICATION OF EMPLOYEES
• Contactors
» Frequent/regular customer contact
» Well Trained/motivated to serve customers on day
to day basis
» Recruitment based on responsiveness
» E.g. Zenith and Eureka Forbes, Outbound Call
centers
• Modifier
» Not directly involved
» Frequent customer contact
» High levels of customer relationship skills
» E.g. Receptionists, Inbound call centers 147

143. Shared values
• We will become a fully customer-driven
organization.
• Customer comes first
• Marketing expenditure are an investment.
• Services paramount.
StructureSystems
Strategy
Shared
Values
Style
Skills /
Staffing
Strategy:
• Integrated plan for
development of marketing
orientation.
• Formulized definitions of
markets and mission.
• Detailed specification of
marketing objectives.
• Commitment to
implementation.
Systems
• Customer intelligence
reports.
• Competitor intelligence
reports.
• Marketing planning and
control systems.
• Remuneration and
performance appraisal
systems geared to
support marketing
orientation.
Skills / Staffing
• Recruitment of an adequate number of
people with requisite marketing skills
• Marketing training programs and facilities.
• Knowledge of market.
• Analytical skills in segmenting markets
and identifying decision-making units.
Style
• Top management support for
marketing through symbolic
actions and commitment of
time to marketing and
customer related activities.
• Open communications
between all functional groups
and marketing staff.
• Recognition and reward of
customer/market – oriented
behavior.
Structure
• Simple structure based on
markets/geography.
• Key account sales structure
to service most important
customers
• Decentralized marketing
staff to provide close and
fast support to customers.
• Staff rotation to non
marketing staff through
customer contact positions
DEVELOPING MARKETING –ORIENTED SERVICE ORGANIZATION
151