B2B Services Case taken for Information Management students of PGDM at S P Jain Institute of Management at Mumbai campus

1. PGDM Year 2 – IM
(May 2014)
On Service Marketing
Prof S K Palekar
Session 1 : Marketing Concepts Relevant to IM
Session 2 : Case study : Marketing of B2B services

2. Session 1 Agenda
Introduction to services sector
Marketing Mix for services
Marketing Process
How marketing varies between products / services
Sectors within services
Marketing of professional services

3. WHY SHOULD YOU STUDY SERVICES ?
Growth in various sectors Rs ‘000 Crores Indian GDP

4. Inspectable Experience Faith
In reality there is no pure product or pure service

5. 3 ways of competing
My product best ( R&D / Tech Lead )
My price lowest ( Scale / Material Lead )
I am close to customer ( People / Service)
This is a service intensive paradigm
skpalekar@hotmail.com

6. Services are almost always a part of
what you sell
Product
Price
Place
Promotion
People
Process
Proof
Marketing Mix
What % of your costs are for services?

7. Sk.palekar@spjimr.org

8. Where is the Value in Services?
Intangible : Low search attributes
Person dependent : Variable
Reputation / Reference dependent : Reference dependent
Co-created with customer’s presence / input
Cannot be pre-made : Peak and Lean times
Embedded in MOT / Encounters
Handling of complaints
skpalekar@hotmail.com
Standardization and efficiency of machines  
Customization and warmth of people

9. Think : Managerial implications of these service characteristics
Which are different from those of products
Designed and produced to the need of the customer – on the fly
Frequently designed / produced at the same time.
Service quality depends a lot on customer-fronting employees
Customer present throughout design, production, delivery.
Many times other customers are also watching this.
Management cannot inspect all customer transactions
In service, machines assist service givers
Service giver visits customer or customer comes to service
Distribution and storage not possible.
Service has locations and catchment areas.
Look of the people and facilities is important in service.
skpalekar@hotmail.com

10. Service Providers Exhibit a Wide Range
Each type / context needs a different type of person
RARE EXPERTISE / JUDGEMENT / SKILL
Expertise / Experience Lawyer
Perform Singer, Dancer, Teacher, Priest
Judgment / Decision Doctor
MEDIUM EXPERTISE / JUDGEMENT / SKILL
Empathy Sales Executives
Conversation / Sociability Customer Relation Executives
Awareness and Feedback Barber, Tailor
LOW EXPERTISE / JUDGEMENT / SKILL
Physique Laborer, Guard
In most service businesses the service providers are the main value creators for the customers.
Therefore, in many service businesses, managing people is mainly an operations responsibility and
not the HR responsibility. Each business needs its own “People Strategies” of locating, sourcing,
recruiting, inducting, deploying, training and motivating the people. People strategies are more
important than marketing strategies for service firms. skpalekar@hotmail.com

11. Understanding High/Low-Contact services – 1
Location ( Where to locate )
High contact : Convenient to customer
Low contact : Near labor or Transportation source
Service Scape ( How to layout and do interiors)
High contact : set up like a customer reception / contact / service
area. Presentable, inviting, facilitate interaction with staff, and
waiting and serviceb.
Low contact : set up like a job work shop : for efficiency
 Quality Control
High Contact : customized benchmarks – customer present and
actively influences – can see all Ps - defects and all
Low Contact : since there is no customer during production, it is
possible to run using standard benchmarks and rework is possible
to correct the defects

12. Understanding High/Low-Contact services – 2
How the operations are organized ?
High Contact : Pace is set by the location and time of customer
requests for service. Customer is present, sees process,
intervenes, directs but also likes to see the process. A key issue is
how to handle demand peaks and how to shape the demand
Low Contact : Customer is absent and is concerned with
completion date and final result. He does not see the people and
the process. Hence grouping (batching) and scheduling is possible.
Pace can be set internally and can be the “average demand”.
Front Line Worker Skills
High Contact : Capable of interacting with customers, capable of
using judgment , capable of using his talent
Low Contact : Only Technical skills are needed

13. Understanding High/Low-Contact services – 3
Service Process
High contact : Mostly front-room activities. The service may
change during delivery in response to customer.
Low contact : Mostly backroom activities planned and executed
with minimal interference from customer
Service Package
High contact : Varies with customer : many choices and outcomes
Low contact : Fixed, less extensive

14. Discover Diagnose Design Deliver
Customer
Service Employees
Management
Management cannot create “Moments of Truth” for the customers.
But the management can create context, culture and employees.
“Service Value” is co-created between Customer & Service Employees
skpalekar@hotmail.com

16. High Contact Service Encounters
S E R V I C E S C A P E
MOOD
INTERACTION
PERSON
TRAINING / EXPECTATIONS
RESOURCES
MOOD
SCRIPT / INTERACTION
M O M E N T O F T R U T H
PERSON
NEED
EXPECTATION
encounter
Cannot avoid complaints in service business

17. skpalekar@hotmail.com +9821046013
Quality in High-Contact Services
Each “Service Encounter”
( Also called “Touch Point” or “Contact”)
Is a Moment of Truth (MOT)
It leaves a customer satisfied or dissatisfied.
SCANDANIVIAN AIRLINES EXAMPLE

18. Management Deals with Customers
Through The Employees
Management
BuyersEmployees
Much value is co-created as MOT ( Moments of Truth) at
the front line. Customers evaluate the service based on
many intangibles like responsiveness, competence,
courtesy, communication, appearance.
Managing employees so
that they manage
customers better.
Recruit, induct, train,
motivate, supervise,
compensate, control
Management needs to
have a “line of sight” to
what is happening at
service locations and also
needs to have a customer
satisfaction measuring
process in place to know
if service is getting
delivered.
skpalekar@hotmail.com

19. Upper Part of Maslow’s Pyramid
expands faster with affluence
Service
skpalekar@hotmail.com

20. What do customers expect in MOT ?
Note :
This slide is only for “Pure Service” but in reality there are only a
few “Pure Services”.
5 dimensions of service quality
Reliability : Dependably and consistently delivering value
Responsiveness : Not creating dissatisfaction due to waiting
Assurance : credentials, experience, reputation
Empathy : listening well and putting yourself in customer shoes
Tangibility : service scape

21. Customer Feedback and Word of Mouth
You hear from only 4% of “dissatisfied customers” :
96% do not bother to complain but 25% of them
have “serious problems”
Interestingly the 4% are likely to stay if targeted by
“customer recovery” process but 96% may go
away. 96% will stay if the issue was resolved
quickly and 60% will stay of the issue was resolved
A dissatisfied customer will tell 10-20 other people
A resolved customer will tell 5 people
A satisfied customer will not go and tell someone

22. High Contact Service
value creation
Customers are homogenized
through filtration, access, fencing, selection
Service providers are selected
Through filtration, access, fencing, selection
To match with the expectations of the customers
Service providers are prepared to handle the job
Customer expectations / scripts are communicated
Service delivery process is taught
Servicescape is appropriate : Facilities and
processes
Keep in mind technical logic, customer logic and employee
logic
Mechanism to handle complaints and counsel

23. Equipment –Intensive Services
Costs
Main investment and cost is in the machines
People Selection Criteria
Good technical qualification / knowledge
Trained to follow routine / standard operating process
Dealing with the Customer : Transactional
Classification
automated services
– vending machines, automated car washes
monitored by unskilled labor
– dry cleaning, door keepers, cleaning
operated by skilled labor
– excavators, airline pilots,

24. People-intensive Services
Costs : mainly in selection, training, motivation &
retention of people
People Selection Criteria
Good social skills of dealing with customers individually
and to have a good EQ .
– In professional service you need judgment and experience.
– In performing arts you need flair, temperament
Trained to follow
– Consultative, diagnostic, solution providing, counseling
Customer orientation at the front end
– routine / standard operating process at the back end
Classification
Low contact service : security guards, janitorial service
Medium contact : repair technicians, electricians
Professional services : law, medicine, consulting.

25. High Contact Service - 1
The value is created mainly through
employees dealing direct with the customers
Customer not well-anticipated in advance
Needs satisfied in real time when customer waits
Using “discover, diagnose, design, deliver” process
Main expectation of the customer is
Customization
Service with a smile – a human touch”

26. High Contact Service - 2
Machines are secondary : interaction is primary.
High variations in productivity and satisfaction.
Investment in
right (convenient to customers location,)
Right interiors and facilities : meet / greet
Right “qualified”, “trained” and “sensitized” service
providers