Benchmarking allows companies to compare their key metrics and performance to other businesses in their industry. This helps companies identify how well they are performing and where they can improve. The benchmarking process involves determining metrics to measure, identifying best competitors, collecting data, comparing performance, identifying gaps, establishing action plans, setting targets, implementing plans, and monitoring progress. There are three levels of benchmarking: internal between a company's units, competitive between directly comparable companies, and functional which compares specific functions like distribution across industries.

1. Benchmarking

2. • Benchmarking as a way to compare key metrics to
other businesses in the industry. This allows
companies to see how well they are performing and
identify ways they can become more competitive in
the industry.
• Companies use benchmarking as a way to help
become more competitive. By looking at how other
companies are doing, they can identify areas where
they are underperforming. Companies are also able
to identify ways they can improve their own
operations without having to recreate the wheel.
They are able to accelerate the process of change
because they have models from other companies in
their industry to help guide their changes.

3. Process of benchmarking :
• Determine Parameters to Measure
• Identify Best Competition
• Determine Data Collection Method
• Compare Competitor’s Performance with
Organization’s Performance
• Identify Factors which Contribute to the Performance
Gap
• Establish Action Plans to Close Gaps
• Set targets to Measure Progress
• Implement Action Plans
• Monitor Performance Against Targets
• Repeat

4. Levels of Benchmarking :
• 1) Internal benchmarking : can be carried out in
the larger organization by way of comparisons
between operations units.
• E.g. The supermarket chain might benchmark
operations across stores, a financial institution
across branches, different hospitals under the same
health authority, different college under the same
education authority. Clearly of paramount
importance is how performance is measured, and
this has a clear link to the strategy of the
organization.

5. • 2) Competitive benchmarking : This is probably the
most frequently used where comparisons are made
with directly competitive organizations. This can be
achieved relatively easily in some service
environments because of the necessity for the
customer to participate in the process.
• As a hotel owner, it is possible to ‘sample’ the
service of a competitor simply by ‘posing’ as a
guest. Often, however, this is done in an informal
manner.

6. • 3) Functional or Generic Benchmarking : Which
compares specific functions, such as distribution
and after-sales service. The advantage here is that
information is sometimes easier to obtain then
when comparisons are being made with
competitors.

7. Marketing challenges in services business
• INTRODUCTION : Marketing is not only applicable for
physical tangible goods. It is equally useful to intangible
offers like services. Marketing fundamentals, like
concepts, functions, strategies, processes, etc., can be
applied in service sectors to achieve goals. All service
providers – individuals, institute, or industry – need to
market their services.
From marketing viewpoint, they can apply all marketing
tactics and techniques for better consumer satisfaction.
Banking, insurance, transportation (roadways, railway,
pipe ways, and airways) hotels, resorts, postal, phone,
consultancy, etc., rigorously apply marketing theory
and philosophy to offer maximum satisfaction to their
customers.

8. Problems in Marketing Services :
• 1. A service cannot be demonstrated.
• 2. Sale, production and consumption of services
takes place simultaneously.
• 3. A service cannot be stored. It cannot be produced
in anticipation of demand.
• 4. Services cannot be protected through patents.

9. • 5. Services cannot be separated from the service
provider.
• 6. Services are not standardized and are inconsistent.
• 7. Service providers appointing franchisees may face
problems of quality of services.
• 8. The customer perception of service quality is
more directly linked to the morale, motivation and
skill of the frontline staff of any service
organization.