This document discusses pricing strategies and revenue management for services businesses. It covers setting prices based on costs, competition, and customer value. Key points include using cost-based, competition-based, and value-based pricing. It also discusses revenue management techniques like reserving capacity for high-paying customer segments and using price fences to segment customers. The goal of pricing and revenue management is to maximize revenue and profits through effective pricing of services.
This document summarizes key concepts in production and operations management related to product development and management. It discusses that organizations exist to provide goods/services to customers and focus on core products. The product life cycle includes introduction, growth, maturity, and decline phases. It's important for operations to successfully introduce new products. Other topics covered include product strategy, design, development processes, and responding to environmental changes.
This document contains 30 multiple choice questions about services marketing concepts. Some key points covered include:
- Services are intangible activities or benefits offered for sale that do not result in ownership.
- Distinct characteristics of services include intangibility, inseparability, variability, and perishability.
- Examples of services include banking, hotels, and tax preparation.
- Services are typically produced and consumed simultaneously, demonstrating inseparability.
- Variability means the quality of service can vary with each transaction.
- Perishability means services cannot be stored for later sale and consumption.
This document summarizes key concepts from Chapter 2 of the textbook "Services Marketing". It discusses a framework for understanding customer behavior in service encounters using a three-stage model of the service consumption process: pre-purchase, service encounter, and post-encounter stages. In the pre-purchase stage, customers seek solutions to needs, evaluate service options, and consider risks. The service encounter stage examines customer participation and interactions during service delivery. In the post-encounter stage, customers evaluate service quality, experience satisfaction or dissatisfaction, and determine future intentions toward the service provider. The document also outlines different categories of services and their implications for customer behavior.
The document discusses production and materials management. It covers topics like production planning and control, plant location and layout, materials management, stores management, and inventory management. Production management deals with transforming materials into finished products through man-machine organization. The scope of production management includes product planning, production administration, execution of plans, and department services. Major decisions include strategic decisions about systems design and tactical decisions about daily operations.
The document discusses various process strategies including process focus, repetitive focus, product focus, and mass customization. It describes the characteristics of each strategy and compares them in terms of factors like volume, variety, equipment used, and costs. The document also covers topics like process analysis and design tools, production technology alternatives, using technology in services, and process reengineering.
This document provides an overview of value analysis, including:
- Classifying value into utility value, esteem value, cost value, and exchange value.
- Origins of value analysis developing after WWII at General Electric to find cost-effective substitutes with reduced costs or improved products.
- Benefits including cost reduction without compromising quality, improving effectiveness, and applying an organized approach at the design stage.
This document provides an overview of services marketing. It discusses four categories of services: people processing, possession processing, mental stimulus processing, and information processing. It also discusses the traditional marketing mix (product, price, place, promotion) applied to services, as well as the extended services marketing mix of physical evidence, process, and people. Key characteristics of services are discussed, including intangibility, inseparability, heterogeneity, and perishability. The document also covers consumer behavior models for services, including the three-stage model of service consumption and the servuction model. It defines factors that influence customers' expectations and perceptions of service quality. Finally, it discusses differentiated and undifferentiated marketing strategies and how they relate to market
The document outlines various location strategy concepts including factors that influence location decisions, methods for evaluating location alternatives, and the importance of strategic location decisions. Specifically, it discusses:
1) Key factors that affect location decisions include labor costs, exchange rates, proximity to markets/suppliers, and clustering near competitors.
2) Common location evaluation methods are the factor-rating method, locational break-even analysis, and center-of-gravity method which aim to quantitatively assess alternative locations.
3) Strategic location decisions have long-term impacts and greatly influence a firm's costs, so these decisions require careful analysis of multiple location-specific factors.
This document summarizes key concepts in production and operations management related to product development and management. It discusses that organizations exist to provide goods/services to customers and focus on core products. The product life cycle includes introduction, growth, maturity, and decline phases. It's important for operations to successfully introduce new products. Other topics covered include product strategy, design, development processes, and responding to environmental changes.
This document contains 30 multiple choice questions about services marketing concepts. Some key points covered include:
- Services are intangible activities or benefits offered for sale that do not result in ownership.
- Distinct characteristics of services include intangibility, inseparability, variability, and perishability.
- Examples of services include banking, hotels, and tax preparation.
- Services are typically produced and consumed simultaneously, demonstrating inseparability.
- Variability means the quality of service can vary with each transaction.
- Perishability means services cannot be stored for later sale and consumption.
This document summarizes key concepts from Chapter 2 of the textbook "Services Marketing". It discusses a framework for understanding customer behavior in service encounters using a three-stage model of the service consumption process: pre-purchase, service encounter, and post-encounter stages. In the pre-purchase stage, customers seek solutions to needs, evaluate service options, and consider risks. The service encounter stage examines customer participation and interactions during service delivery. In the post-encounter stage, customers evaluate service quality, experience satisfaction or dissatisfaction, and determine future intentions toward the service provider. The document also outlines different categories of services and their implications for customer behavior.
The document discusses production and materials management. It covers topics like production planning and control, plant location and layout, materials management, stores management, and inventory management. Production management deals with transforming materials into finished products through man-machine organization. The scope of production management includes product planning, production administration, execution of plans, and department services. Major decisions include strategic decisions about systems design and tactical decisions about daily operations.
The document discusses various process strategies including process focus, repetitive focus, product focus, and mass customization. It describes the characteristics of each strategy and compares them in terms of factors like volume, variety, equipment used, and costs. The document also covers topics like process analysis and design tools, production technology alternatives, using technology in services, and process reengineering.
This document provides an overview of value analysis, including:
- Classifying value into utility value, esteem value, cost value, and exchange value.
- Origins of value analysis developing after WWII at General Electric to find cost-effective substitutes with reduced costs or improved products.
- Benefits including cost reduction without compromising quality, improving effectiveness, and applying an organized approach at the design stage.
This document provides an overview of services marketing. It discusses four categories of services: people processing, possession processing, mental stimulus processing, and information processing. It also discusses the traditional marketing mix (product, price, place, promotion) applied to services, as well as the extended services marketing mix of physical evidence, process, and people. Key characteristics of services are discussed, including intangibility, inseparability, heterogeneity, and perishability. The document also covers consumer behavior models for services, including the three-stage model of service consumption and the servuction model. It defines factors that influence customers' expectations and perceptions of service quality. Finally, it discusses differentiated and undifferentiated marketing strategies and how they relate to market
The document outlines various location strategy concepts including factors that influence location decisions, methods for evaluating location alternatives, and the importance of strategic location decisions. Specifically, it discusses:
1) Key factors that affect location decisions include labor costs, exchange rates, proximity to markets/suppliers, and clustering near competitors.
2) Common location evaluation methods are the factor-rating method, locational break-even analysis, and center-of-gravity method which aim to quantitatively assess alternative locations.
3) Strategic location decisions have long-term impacts and greatly influence a firm's costs, so these decisions require careful analysis of multiple location-specific factors.
The document discusses various topics related to products and services, including:
1. It defines what constitutes a product and different types of products such as consumer goods, industrial goods, durable goods, and nondurable goods.
2. It outlines the new product development process which involves idea generation, concept development and testing, marketing strategy development, and commercialization.
3. It describes the product life cycle which consists of introduction, growth, maturity, and decline stages.
4. Additional topics covered include product attributes, branding, packaging, and labeling.
This document discusses different types of process flows and classifications for production processes. It describes three main types of process flows: line flow, intermittent/batch flow, and project flow. Line flow involves a linear sequence of standardized operations, like an assembly line. Intermittent flow involves production in batches using flexible, general-purpose equipment. Project flow is for unique, one-off products like works of art. The document also discusses how process selection decisions impact costs, quality, flexibility and other operational factors.
Lecture notes of production & operation managementComplaint2015
Lectures notes
On
Production and Operation Management
Prepared by
Dr. Sarojrani Pattnaik
Dr. Swagatika Mishra
Assistant Professor
Department of Mechanical Engineering
VSSUT Burla
.
This document discusses balancing demand and productive capacity in the service industry. It notes that services cannot be stockpiled like products, which causes issues with fluctuating demand. The goal is to utilize staff, equipment, and facilities as productively as possible. The document outlines different factors to consider when matching demand and capacity, including defining capacity, understanding demand levels and patterns, and employing strategies like adjusting capacity, marketing, queues and reservations systems. It discusses analyzing demand by segment, identifying predictable and random demand patterns, and managing demand through various approaches like pricing. Overall, the key is understanding demand in order to effectively match it with capacity.
Product layouts are used for repetitive assembly of standardized products. The workstations are arranged in a straight line so items can pass smoothly from one station to the next. This allows for mass production with low cycle times but lacks flexibility.
Process layouts group similar processes together, like all sewing stations in one area. This requires more space but allows for production of various items and easier changes to processes. Cycle times are longer but it allows for process specialization and more efficient use of equipment.
The type of layout chosen impacts operations through factors like costs, cycle times, productivity levels, flexibility, and specialization of labor or equipment.
This document discusses various e-commerce business models. It begins by defining key elements of a business model, including value proposition, revenue model, market opportunity, competitive environment, competitive advantage, market strategy, organizational development, and management team. It then examines several business-to-consumer and business-to-business models like e-tailers, marketplaces, exchanges, and industrial networks. It also briefly mentions consumer-to-consumer, peer-to-peer, and mobile commerce models. The document aims to categorize e-commerce business models and analyze their common components.
Scheduling
Routing
Prioritizing
Dispatching
What is Scheduling ?
Forward Scheduling
Backward Scheduling
Finite LOADING
infinite loading
Schedule Gantt Chart
Line balancing
GOAL AND OBJECTIVE
LINE BALANCING PROCEDURE
Strategies and Costs
as early as possible
as last as possible
Services Marketing
Chapter – 9
Pricing Of Services
Introduction
Pricing or Price is the key element in the traditional marketing mix (the 4Ps) and also the enhanced marketing mix (the 7 Ps). This is the element which earns revenue. This is highly critical because this is the strategy which can make or mar the business.
The firms must make it both ways –the price must
(1) get profits for the firm, and
(2) give value to its customers.
Names of Service Pricing
Pricing for goods is easy and straight forward, while for services it is complicated, may be controlled by several authorities, varies with time, place, people, etc.
For goods the price has a single name “PRICE”, but for services it has several names like :
Names of Service Prices
What Makes Service Pricing Different?
No Ownership of Services
Higher Ratio of Fixed Costs to Variable Costs
Variability of Both Inputs and Outputs.
Many Services Are Hard to Evaluate
The document outlines Parasuraman, Berry, and Zeithaml's Gaps Model of Service Quality which identifies gaps between customer expectations and perceptions that can occur within an organization, and it discusses their SERVQUAL framework for measuring service quality across five dimensions: tangibles, reliability, responsiveness, assurance, and empathy. The Gaps Model is used to show how four internal gaps within a company relating to understanding customer expectations, service design, service delivery, and communications can contribute to an overall gap between customer expectations and perceptions of service quality.
The document discusses facility planning, including defining facility planning, important factors to consider in evaluating facility plans, and methods for analyzing alternative facility plans. Specifically, it outlines the engineering design process for facility planning, which involves formulating the problem, analyzing alternatives, evaluating designs, and selecting a preferred design. It also describes techniques for comparing factors and plans, such as pairwise comparison and factor analysis, to help identify the best facility plan.
This document provides an overview of customer oriented logistics management. It defines logistics as planning, implementing, and controlling the efficient flow of goods, services, and information from point of consumption to meet customer requirements. The objectives of logistics are listed as cost reduction, capital reduction, and service improvement. Logistics planning tackles customer service levels, facility planning like warehousing, inventory management, and transportation decisions around mode, route, and freight consolidation. Factors affecting transportation costs include product characteristics like density and market factors like locations and seasonality.
Service blueprints provide a visual map of a service process from the customer's perspective. They show customer actions and touchpoints, as well as frontstage and backstage employee actions and support processes. The key components are the customer actions line, line of visibility separating visible and invisible employee actions, line of internal interaction separating employee actions from support processes, and evidence of service. Service blueprints can be used for new service development, improving reliability, service recovery strategies, and informing various business functions like human resources, technology, marketing, and operations management.
The document discusses process strategy and selection. It covers various types of process strategies including process focus, product focus, and repetitive focus. Process focus can take the form of job shops, batch processing, repetitive/assembly, or continuous processes. Product and repetitive focused strategies organize facilities by product or assembly lines respectively. The document also discusses technology, automation, facilities layout, tools for process design like flow diagrams and process charts, and techniques for improving service productivity such as separation, self-service, and automation.
The document provides an overview of operations management concepts including:
- The 10 decision areas of operations management including product/service design, quality, and capacity planning.
- Different types of production systems such as job shop, batch, and mass production and factors to consider when selecting a process.
- Key facility location factors and the general procedure for evaluating location alternatives.
Production Planning and Control
Objective of PPC
There are three stages in PPC
Classification/Functions of PPC
Benefits of PPC
Limitations of PPC
Production Planning / Operations Planning
Factors determining Production Planning Procedures
Production Planning System
Production Control
Factors Determining PC procedures
Main Functions of Production Planning
& Control Department
Plant Planning & Facility Planning
The document discusses product and service design. It covers key aspects of product and service design including objectives, phases in the design process, differences between product and service design, guidelines for successful service design, and how design impacts operations strategy. The overall goal of design is to translate customer needs into high-quality, cost-effective products and services that satisfy customers and contribute to business success. Legal and ethical considerations must also be taken into account in the design process.
This document discusses product design and development. It outlines the key stages in product development: idea generation, feasibility study, preliminary design and testing, and final design and process. It also covers product life cycles and the importance of research and development for product design. R&D helps improve products, capture market share, and adapt to global demands. The objectives of R&D include creating new products and processes, improving quality, and gaining advantages from incentives.
The document discusses key aspects of product development and management. It defines what a product is, explains why products fail, and outlines the new product development process. This includes idea generation, concept development and testing, determining marketing strategy, business analysis, product development, test marketing, and commercialization. Developing and updating product lines is important for organizational success, while failure to change could lead to declining sales amid competition. The new product development process aims to bring superior products to market through rigorous planning and testing.
This document discusses ways for operations management to go green. It provides examples of facilities improvements like LEED certification and motion sensors. It also discusses reducing waste from equipment, vehicles, and the office. Methods include recycling, digitizing documents, limiting printing, and using mugs instead of disposable cups. The benefits are lower costs from energy efficiency and waste reduction as well as increased customer loyalty and profits. Going green is important as consumer awareness of sustainability issues rises.
It is a presentation on facility layout which covers the definition of layout, objectives of good layout, factors affecting layout and types of layout.
The document provides an overview of promotion as part of the marketing mix for services. It defines promotion as advancement within an organization to a higher position with more pay, responsibility and status. Promotional methods for services are discussed, including personal selling, advertising, sales promotions, publicity, and the use of print media, television, radio, and celebrity endorsements. The purposes of promotion for employees are also mentioned, such as developing skills for higher level jobs and reducing employee turnover.
The document discusses pricing strategies for services. It notes that pricing services is more difficult than pricing products because the costs of services are more subjective. It outlines several approaches to setting prices for services, including cost-based pricing, customer-based pricing, and competitor-based pricing. A few key challenges in pricing services are that the costs of intangible services are hard to calculate, the value delivered can vary, and services are difficult for customers to evaluate. The document also discusses using price to signal quality and establishing prices based on customer perceptions of value.
The document discusses various topics related to products and services, including:
1. It defines what constitutes a product and different types of products such as consumer goods, industrial goods, durable goods, and nondurable goods.
2. It outlines the new product development process which involves idea generation, concept development and testing, marketing strategy development, and commercialization.
3. It describes the product life cycle which consists of introduction, growth, maturity, and decline stages.
4. Additional topics covered include product attributes, branding, packaging, and labeling.
This document discusses different types of process flows and classifications for production processes. It describes three main types of process flows: line flow, intermittent/batch flow, and project flow. Line flow involves a linear sequence of standardized operations, like an assembly line. Intermittent flow involves production in batches using flexible, general-purpose equipment. Project flow is for unique, one-off products like works of art. The document also discusses how process selection decisions impact costs, quality, flexibility and other operational factors.
Lecture notes of production & operation managementComplaint2015
Lectures notes
On
Production and Operation Management
Prepared by
Dr. Sarojrani Pattnaik
Dr. Swagatika Mishra
Assistant Professor
Department of Mechanical Engineering
VSSUT Burla
.
This document discusses balancing demand and productive capacity in the service industry. It notes that services cannot be stockpiled like products, which causes issues with fluctuating demand. The goal is to utilize staff, equipment, and facilities as productively as possible. The document outlines different factors to consider when matching demand and capacity, including defining capacity, understanding demand levels and patterns, and employing strategies like adjusting capacity, marketing, queues and reservations systems. It discusses analyzing demand by segment, identifying predictable and random demand patterns, and managing demand through various approaches like pricing. Overall, the key is understanding demand in order to effectively match it with capacity.
Product layouts are used for repetitive assembly of standardized products. The workstations are arranged in a straight line so items can pass smoothly from one station to the next. This allows for mass production with low cycle times but lacks flexibility.
Process layouts group similar processes together, like all sewing stations in one area. This requires more space but allows for production of various items and easier changes to processes. Cycle times are longer but it allows for process specialization and more efficient use of equipment.
The type of layout chosen impacts operations through factors like costs, cycle times, productivity levels, flexibility, and specialization of labor or equipment.
This document discusses various e-commerce business models. It begins by defining key elements of a business model, including value proposition, revenue model, market opportunity, competitive environment, competitive advantage, market strategy, organizational development, and management team. It then examines several business-to-consumer and business-to-business models like e-tailers, marketplaces, exchanges, and industrial networks. It also briefly mentions consumer-to-consumer, peer-to-peer, and mobile commerce models. The document aims to categorize e-commerce business models and analyze their common components.
Scheduling
Routing
Prioritizing
Dispatching
What is Scheduling ?
Forward Scheduling
Backward Scheduling
Finite LOADING
infinite loading
Schedule Gantt Chart
Line balancing
GOAL AND OBJECTIVE
LINE BALANCING PROCEDURE
Strategies and Costs
as early as possible
as last as possible
Services Marketing
Chapter – 9
Pricing Of Services
Introduction
Pricing or Price is the key element in the traditional marketing mix (the 4Ps) and also the enhanced marketing mix (the 7 Ps). This is the element which earns revenue. This is highly critical because this is the strategy which can make or mar the business.
The firms must make it both ways –the price must
(1) get profits for the firm, and
(2) give value to its customers.
Names of Service Pricing
Pricing for goods is easy and straight forward, while for services it is complicated, may be controlled by several authorities, varies with time, place, people, etc.
For goods the price has a single name “PRICE”, but for services it has several names like :
Names of Service Prices
What Makes Service Pricing Different?
No Ownership of Services
Higher Ratio of Fixed Costs to Variable Costs
Variability of Both Inputs and Outputs.
Many Services Are Hard to Evaluate
The document outlines Parasuraman, Berry, and Zeithaml's Gaps Model of Service Quality which identifies gaps between customer expectations and perceptions that can occur within an organization, and it discusses their SERVQUAL framework for measuring service quality across five dimensions: tangibles, reliability, responsiveness, assurance, and empathy. The Gaps Model is used to show how four internal gaps within a company relating to understanding customer expectations, service design, service delivery, and communications can contribute to an overall gap between customer expectations and perceptions of service quality.
The document discusses facility planning, including defining facility planning, important factors to consider in evaluating facility plans, and methods for analyzing alternative facility plans. Specifically, it outlines the engineering design process for facility planning, which involves formulating the problem, analyzing alternatives, evaluating designs, and selecting a preferred design. It also describes techniques for comparing factors and plans, such as pairwise comparison and factor analysis, to help identify the best facility plan.
This document provides an overview of customer oriented logistics management. It defines logistics as planning, implementing, and controlling the efficient flow of goods, services, and information from point of consumption to meet customer requirements. The objectives of logistics are listed as cost reduction, capital reduction, and service improvement. Logistics planning tackles customer service levels, facility planning like warehousing, inventory management, and transportation decisions around mode, route, and freight consolidation. Factors affecting transportation costs include product characteristics like density and market factors like locations and seasonality.
Service blueprints provide a visual map of a service process from the customer's perspective. They show customer actions and touchpoints, as well as frontstage and backstage employee actions and support processes. The key components are the customer actions line, line of visibility separating visible and invisible employee actions, line of internal interaction separating employee actions from support processes, and evidence of service. Service blueprints can be used for new service development, improving reliability, service recovery strategies, and informing various business functions like human resources, technology, marketing, and operations management.
The document discusses process strategy and selection. It covers various types of process strategies including process focus, product focus, and repetitive focus. Process focus can take the form of job shops, batch processing, repetitive/assembly, or continuous processes. Product and repetitive focused strategies organize facilities by product or assembly lines respectively. The document also discusses technology, automation, facilities layout, tools for process design like flow diagrams and process charts, and techniques for improving service productivity such as separation, self-service, and automation.
The document provides an overview of operations management concepts including:
- The 10 decision areas of operations management including product/service design, quality, and capacity planning.
- Different types of production systems such as job shop, batch, and mass production and factors to consider when selecting a process.
- Key facility location factors and the general procedure for evaluating location alternatives.
Production Planning and Control
Objective of PPC
There are three stages in PPC
Classification/Functions of PPC
Benefits of PPC
Limitations of PPC
Production Planning / Operations Planning
Factors determining Production Planning Procedures
Production Planning System
Production Control
Factors Determining PC procedures
Main Functions of Production Planning
& Control Department
Plant Planning & Facility Planning
The document discusses product and service design. It covers key aspects of product and service design including objectives, phases in the design process, differences between product and service design, guidelines for successful service design, and how design impacts operations strategy. The overall goal of design is to translate customer needs into high-quality, cost-effective products and services that satisfy customers and contribute to business success. Legal and ethical considerations must also be taken into account in the design process.
This document discusses product design and development. It outlines the key stages in product development: idea generation, feasibility study, preliminary design and testing, and final design and process. It also covers product life cycles and the importance of research and development for product design. R&D helps improve products, capture market share, and adapt to global demands. The objectives of R&D include creating new products and processes, improving quality, and gaining advantages from incentives.
The document discusses key aspects of product development and management. It defines what a product is, explains why products fail, and outlines the new product development process. This includes idea generation, concept development and testing, determining marketing strategy, business analysis, product development, test marketing, and commercialization. Developing and updating product lines is important for organizational success, while failure to change could lead to declining sales amid competition. The new product development process aims to bring superior products to market through rigorous planning and testing.
This document discusses ways for operations management to go green. It provides examples of facilities improvements like LEED certification and motion sensors. It also discusses reducing waste from equipment, vehicles, and the office. Methods include recycling, digitizing documents, limiting printing, and using mugs instead of disposable cups. The benefits are lower costs from energy efficiency and waste reduction as well as increased customer loyalty and profits. Going green is important as consumer awareness of sustainability issues rises.
It is a presentation on facility layout which covers the definition of layout, objectives of good layout, factors affecting layout and types of layout.
The document provides an overview of promotion as part of the marketing mix for services. It defines promotion as advancement within an organization to a higher position with more pay, responsibility and status. Promotional methods for services are discussed, including personal selling, advertising, sales promotions, publicity, and the use of print media, television, radio, and celebrity endorsements. The purposes of promotion for employees are also mentioned, such as developing skills for higher level jobs and reducing employee turnover.
The document discusses pricing strategies for services. It notes that pricing services is more difficult than pricing products because the costs of services are more subjective. It outlines several approaches to setting prices for services, including cost-based pricing, customer-based pricing, and competitor-based pricing. A few key challenges in pricing services are that the costs of intangible services are hard to calculate, the value delivered can vary, and services are difficult for customers to evaluate. The document also discusses using price to signal quality and establishing prices based on customer perceptions of value.
Service prices vary for several reasons:
1. Supply and demand - prices are higher during peak demand and lower during slow periods to maximize sales.
2. Individual customer needs differ in terms of factors like age, health risks, and insurance coverage, leading to variations in pricing.
3. Yield management aims to maximize profits by charging higher prices when demand is high and offering discounts when demand is low to fill unused capacity.
The document discusses key aspects of pricing strategies and revenue management for services. It covers the objectives of service pricing, the pricing tripod approach using cost-based, value-based and competition-based pricing, and how revenue management aims to maximize revenue by setting prices according to customer demand segments. Ethical concerns in pricing are also addressed, such as ensuring fair and transparent pricing schedules and communications.
price is to set a monetary cost for products and services of financial and ba...MengsongNguon
This document discusses pricing strategies for financial services. It explains that pricing is a complex element of the marketing mix that must balance customer and supplier interests. Several approaches to setting prices are described, including cost-based pricing, market-based pricing, and regulation-based pricing. Specific factors considered for pricing different financial products like savings, investments, credit, and insurance are also outlined. The goal is to select a pricing objective and determine demand in order to optimize profitability while meeting customer needs.
This document discusses positioning of services and integrated service marketing communication. It covers key topics such as:
1. Positioning involves launching new brands and repositioning old brands to differentiate services for consumers who are increasingly confused. The key is to promote a company's strengths.
2. Services can be positioned based on attributes, use, price/quality, class, users, or competitors. Successful positioning makes a service easier for consumers to understand.
3. Integrated service marketing involves external marketing to consumers, internal marketing to employees, and interactive marketing during customer service. It is important for all aspects of the marketing mix to be coordinated.
This document discusses service mapping and customer expectations in services marketing. It provides the following key points:
1) A service map is a graphical display that illustrates the components required to deliver a service, including hardware, software, roles, and relationships between components. Service maps are useful for managing service delivery and understanding complex systems.
2) An example service map for a SharePoint collaboration service is provided to illustrate how it can help answer questions about availability, impacts of changes, problem diagnosis, and testing.
3) Factors that influence customer expectations include personal needs, philosophies about service, and derived expectations from other people. Pricing strategies for services consider customer perceptions and aim to improve profits through various approaches like
This document provides an overview of pricing principles and strategies for estimating costs. It discusses factors to consider when setting prices like customer value and profitability. Various pricing models are outlined, including fixed pricing, subscriptions, and cost-plus pricing. The document also covers pricing strategies, constructing cost models, analyzing project risks, and reviewing estimates. The key aspects of pricing covered are customer value, profitability, cost analysis, and risk assessment.
This document provides guidance on pricing services for a business. It outlines three common methods for setting prices: cost-based pricing, competition-based pricing, and customer-based pricing. Cost-based pricing involves calculating costs and adding a markup. Competition-based pricing uses competitors' prices as a benchmark. Customer-based pricing considers customer demand and perceived value. The document also discusses factors like monitoring costs, determining profit margins, using hourly or flat rates, testing new prices, and raising prices over time. The overall message is that properly pricing services is important for business success but also subjective, requiring an understanding of costs, customers, and the market.
The document discusses pricing as the fourth P of the marketing mix. It covers various topics related to pricing such as introduction to pricing, case studies, questions to consider in pricing, functions of price, setting the price, estimating demand, and estimating costs. The key steps in setting price include selecting the pricing objective, determining demand, estimating costs, analyzing competitors, selecting a pricing method, and selecting the final price.
The document discusses pricing as the fourth P of the marketing mix. It covers introduction to pricing, setting price, factors affecting price, and pricing strategies for different products. The key points are:
1) Pricing is one of the four Ps of marketing along with product, promotion, and place. It is the process of determining what a company will receive in exchange for its products.
2) Setting price involves determining pricing objectives, estimating demand and costs, analyzing competitors, selecting a pricing method, and determining the final price.
3) Price should achieve financial goals, fit market realities, and support product positioning. It is influenced by other marketing mix elements.
The document discusses various pricing strategies and concepts. It describes goals of pricing like capturing market share. Pricing strategies explained include bundling, price skimming, revenue management, and various types of price promotions and discounts. Key factors in evaluating effective pricing strategies are also enumerated.
PRICING
IMPORTANCE OF PRICING
OBJECTIVES OF PRICING DECISIONS
FACTORS AFFECTING THE PRICE DETERMINATION
COSTS OF PRICING
NATURE OF THE MARKET AND DEMAND
This document reviews best practice in pricing processes to provide a reference against which current practices and proposals can be tested. Our objectives have been: to research the attributes of world-class pricing through publications and academic sources; to investigate how these attributes are applied in practice to products and services; to assess pricing processes in successful businesses.
In recent years a new attitude toward pricing has emerged. Deregulation and international free trade agreements have increased competition. Price promotion has eroded the power of brand loyalty. Pricing has assumed greater importance to most businesses.
As markets increasingly assume a global dimension, customers can more easily compare prices between one region or country and another, using the internet or a fax machine. They can often locate the same product, or an
acceptable substitute, from another source. Customers are more demanding and fickle, and their expectations increasingly difficult to fulfil.
Price inflation in western economies is now at its lowest for decades. Price increases are no longer accepted without protest from customers, if at all.
The Chairman of General Electric has predicted the onset of the ‘Value Decade’. Global price competition will strengthen because of: reduced product differentiation; global over-capacity for production; significantly diminished trade barriers; efficient information and distribution systems; providing customers with easy access to the prices of suppliers; a growing lack of customers’ loyalty to individual suppliers. Choice will be increasingly driven by price.
This is a challenging scenario that reinforces the need for an integrated strategy and concerted managerial action on pricing.
Pricing processes have lagged behind developments in the market place. They are often characterised by internal conflict between accountants wishing to maximise profit per unit and marketing specialists who seek to maximise
throughput. They are also affected by the potential for strained relations with good customers.
Some companies have downsized their operations to a level where diminishing returns cause them to question the benefits of continuing to focus upon reducing costs. As they switch their attention from cost cutting to adding
value, pricing naturally assumes increased weight in the marketing mix.
We have found many companies reluctant to discuss their own processes.
Some may wish to avoid betraying a lack of sophistication.
Group 6 presented on pricing strategies for service offerings. They discussed various pricing strategies like penetration pricing, preemptive pricing, and premium pricing. Services are classified into classes A, B, and C depending on how customer valuation correlates with time of arrival. Pricing objectives can be quantitative like profits or qualitative like customer relationships. Factors like corporate image, geography, discounts, and price discrimination impact pricing strategies. Getting the pricing strategy right is important for the long-term success and financial viability of a service business.
This document discusses various pricing strategies and considerations for setting prices. It begins by explaining that pricing is one of the most difficult stages in the business control cycle, as the price must match the market structure while covering costs and generating profits. Several pricing methods are then outlined, including cost-plus pricing, market penetration pricing, psychological pricing, market skimming pricing, departmental pricing, and differential pricing. The document also discusses pricing considerations like cover price, minimum price, discounting pricing, and discriminatory pricing. Overall, the document provides an overview of different approaches to setting prices and factors to take into account.
RM technologies and changing customer behavior affect segmentation and revenue management. Proper segmentation involves meaningful groups that represent valuable customers, not assumed preferences. CRM data can help identify these segments. Integrating CRM and RM through segmentation can increase understanding, monitor behavior, and build trust. This requires matching RM to CRM technologies and defining important customer features. Experts advise seeking help with segmentation to minimize failure and maximize benefits like increased profits through targeted pricing. Multidimensional segmentation into smaller groups accounts for multiple customer criteria and purchasing situations.
Transcript The Marketing Process ContinuumMission statementTh.docxedwardmarivel
The documents discuss several key marketing concepts for hospitality businesses. The Marketing Concept suggests focusing all efforts on identifying and satisfying customer needs. The Strategic Marketing Concept adds that businesses must sustain a competitive advantage. The Societal Marketing Concept states that businesses should consider the impact on society. Marketing myopia can occur when businesses define themselves too narrowly around specific goods and services rather than customer needs. The service-profit chain model suggests that treating employees well leads to improved customer satisfaction and loyalty, and ultimately better financial performance.
VideoEgg is an online video advertising company founded in 2004 by three Yale graduates. It delivers ads to social media, video, and gaming sites. VideoEgg created AdFrames that allow users to roll over ads to watch sponsored content. Unlike traditional CPM or CPC models, VideoEgg charges advertisers $0.75 per user roll over, splitting the fee with content sites. This innovative pricing scheme differs from standard online advertising models.
This document discusses managing service promises and the communication gap between a company's promised service and a customer's perceived service. It identifies four key gaps:
1) Company perceptions of customer expectations vs actual customer expectations
2) Customer-driven service designs and standards vs company service quality specifications
3) External communications to customers vs service delivery
4) Expected service vs perceived service
The document provides strategies for companies to integrate their marketing communications, manage service promises and customer expectations, improve customer education, and coordinate internal marketing communications to close these gaps. It emphasizes the need to make realistic promises and deliver a service that meets or exceeds what was promised through external and internal communication.
METS Lab SASO Certificate Services in Dubai.pdfsandeepmetsuae
Achieving compliance with the Saudi Standards, Metrology and Quality Organization (SASO) regulations is crucial for businesses aiming to enter the Saudi market. METS Laboratories offers comprehensive SASO certification services designed to help companies meet these stringent standards efficiently. Our expert team provides end-to-end support, from initial product assessments to final certification, ensuring that all regulatory requirements are meticulously met. By leveraging our extensive experience and state-of-the-art testing facilities, businesses can streamline their certification process, avoid costly delays, and gain a competitive edge in the market. Trust METS Laboratories to guide you through every step of achieving SASO compliance seamlessly.
Discover How Long Do Aluminum Gutters Last?SteveRiddle8
Many people wonder how long aluminum gutters last. In this ppt, we will cover the lifetime of aluminum gutters, appropriate maintenance procedures, and the advantages of using this material for gutter installation.
The Fraud Examiner’s Report –
What the Certified Fraud Examiner Should Know
Being a Virtual Training Paper presented at the Association of Certified Fraud Examiners (ACFE) Port Harcourt Chapter Anti-Fraud Training on July 29, 2023.
Job Vacancies in Norway 🇳🇴
Warehouse Workers for Clothing
2year WORKPERMIT 👍
Salary: €3900-4300 per month (Paid twice a month).
Requirements:
* Duties include quality control of products, order picking, packing goods, and applying stickers and labels.
* Work schedule: 8-10 hours per day, 5 days a week.
Documents 📄
*Adhar
Pan
Photo
Education documents
Basic English**o
Education documents
Basic English**
Photo
Education documents
Basic English**
Top 10 Challenges That Every Web Designer Face on A Daily Basis.pptxe-Definers Technology
In today’s fast-moving digital world, building websites is super important for how well a business does online. But, because things keep changing with technology and what people expect, teams who make websites often run into big problems. These problems can slow down their work and stop them from making really good websites. Let us see what the best website designers in Delhi have to say –
https://www.edtech.in/services/website-designing-development-company-delhi.htm
Stay updated on Siddhivinayak Temple events and timings in Houston, TX. Join our spiritual and community gatherings. Visit us now! gaurisiddhivinayak.org
Biomass Briquettes A Sustainable Solution for Energy and Waste Management..pptxECOSTAN Biofuel Pvt Ltd
Biomass briquettes are an innovative and environmentally beneficial alternative to traditional fossil fuels, providing a long-term solution for energy production and waste management. These compact, high-energy density briquettes are made from organic materials such as agricultural wastes, wood chips, and other biomass waste, and are intended to reduce environmental effect while satisfying energy demands efficiently.
Best Web Development Frameworks in 2024growthgrids
Best Web Development Frameworks: In 2024, the landscape of web development frameworks is diverse, with different frameworks excelling in various aspects such as 1. React, 2. Jquery, 3. MySQL, and 4. ASP.NET. With a strategic blend of manual testing and cutting-edge automated tools, we guarantee a flawless user experience. Partner with Growth Grids and elevate your software quality to new heights.
Contact Us :-
Email: [business@growthgrids.com]
Phone: [+91-9773356002]
Website : https://growthgrids.com
Electrical Testing Lab Services in Dubai.pptxsandeepmetsuae
An electrical testing lab in Dubai plays a crucial role in ensuring the safety and efficiency of electrical systems across various industries. Equipped with state-of-the-art technology and staffed by experienced professionals, these labs conduct comprehensive tests on electrical components, systems, and installations.
Best Immigration Consultants in Amritsar- SAGA StudiesSAGA Studies
Want to fulfill your study abroad dream? Searching for the best Immigration Consultants?
SAGA Studies is the best immigration consultants in Amritsar, provides student admissions, study visa, spouse and dependent visas, tourist visas, PTE exam assistance,and many more.
The study compares AMUSE's FDM and MJF 3D printing technologies.pptxAmuse
AMUSE offers cutting-edge HP MJF 3D printing services in India that facilitate the effective creation of challenging designs for all kinds of industries.
https://amuse3d.in/hp-mjf-3d-printing-service/
By refining the layout and replacing furnishings, people can more effectively enjoy themselves in their home environment. If you want to enhance the visual appeal of your home, then residential painting services are at your service. We take responsibility for transforming your dull spaces into vibrant ones. This PPT unveils the difference that professional painters make in elevating the look of your home.
Electrical Testing Lab Services in Dubai.pdfsandeepmetsuae
An electrical testing lab in Dubai plays a crucial role in ensuring the safety and efficiency of electrical systems across various industries. Equipped with state-of-the-art technology and staffed by experienced professionals, these labs conduct comprehensive tests on electrical components, systems, and installations.
Sustainable Solutions for Chemical Waste Disposal by Summerland Environmental...Summerland Environmental
Welcome to the presentation on Sustainable Solutions for Chemical Waste Disposal by Summerland Environmental. We will explore innovative methods and technologies for eco-friendly waste management.
Forex Copy trading is the mode of trading offering great opportunities to the traders lacking time or in-depth market knowledge, yet willing to use currency trading as a form of investment and to increase their initial funds.
If you want a spell that is solely about getting your lover back in your arms, this spell has significant energy just to do that for your love life. This spell has the ability to influence your lover to come home no matter what forces are keeping them away. Using my magical native lost love spells, I can bring back your ex-husband or ex-wife to you, if you still love them and want them back.
Even if they have remarried my lost love spells will bring them back and they will love you once again. By requesting this spell; the lost love of your life could be back on their way to you now. This spell does not force love between partners. It works when there is genuine love between the two but for some unforeseen circumstance, you are now apart.
I cast these advanced spells to bring back lost love where I use the supernatural power and forces to reconnect you with one specific person you want back in your existence. Bring back your ex-lover & make them commit to a relationship with you again using bring back lost love spells that will help ex lost lovers forgive each other.
Losing your loved one sometimes can be inevitable but the process of getting your ex love back to you can be extremely very hard. However, that doesn’t mean that you cannot win your ex back any faster. Getting people to understand each other and create the unbreakable bond is the true work of love spells.
Love spells are magically cast with the divine power to make the faded love to re-germinate with the intensive love power to overcome all the challenges.
My effective bring back lost love spells are powerful within 24 hours. Dropping someone you adore is like breaking your heart in two pieces, especially when you are deeply in love with that character. Love is a vital emotion and has power to do the entirety glad and quality, however there comes a time whilst humans are deserted via their loved ones and are deceived, lied, wronged and blamed. Bring back your ex-girlfriend & make them commit to a relationship with you again using bring back lost love spells to make fall back in love with you.
Make your ex-husband to get back with you using bring back lost love spells to make your ex-husband to fall back in love with you & commit to marriage & with you again.
Bring back lost love spells to help ex-lover resolve past difference & forgive each other for past mistakes. Capture his heart & make him yours using love spells.
His powerful lost lover spell works in an effective and fastest way. By using a lover spell by Prof. Balaj, the individuals can bring back lost love. Its essential fascinating powers can bring back lost love, attract new love, or improve an existing relationship. With the right spell and a little faith, individuals can create the lasting and fulfilling relationship everyone has always desired.
Visit https://www.profbalaj.com/love-spells-loves-spells-that-work/ for more info or
Call/WhatsApp +27836633417 NOW FOR GUARANTEED RESULTS
Merchants from high-risk industries face significant challenges due to their industry reputation, chargeback, and refund rates. These industries include sectors like gambling, adult entertainment, and CBD products, which often struggle to secure merchant accounts due to increased risks of chargebacks and fraud.
To overcome these difficulties, it is necessary to improve credit scores, reduce chargeback rates, and provide detailed business information to high-risk merchant account providers to enhance credibility.
Regarding security, implementing robust security measures such as secure payment gateways, two-factor authentication, and fraud detection software that utilizes machine learning systems is crucial.
Bridging the Language Gap The Power of Simultaneous Interpretation in RwandaKasuku Translation Ltd
Rwanda is a nation on the rise, fostering international partnerships and economic growth. With this progress comes a growing need for seamless communication across languages. Simultaneous interpretation emerges as a vital tool in this ever-evolving landscape. When seeking the best simultaneous interpretation in Rwanda, Kasuku Translation stands out as a premier choice.
A Dojo Training PPT focuses on hands-on, immersive learning to enhance skills and knowledge. It emphasizes practical experience, fostering continuous improvement and collaboration within your team to achieve excellence.
2. Exploring Business Models: Pricing
and Revenues
Module: Services Marketing
Module Instructor: Ma’am Shahwana
Group Members: Ali Zaidi BBS-14-06
Nida Fatima BBS-14-07
Maria Naveed BBS-14-08
Tooba Javed BBS-14-31
Ezza Zahid BBS-14-58
Bahauddin Zakariya University, Sub-Campus Sahiwal
2
3. Effective pricing is central to financial
success
What is business model ?
Use of effective pricing mechanism:
Sales are transformed into revenues
Costs are covered
Value is created for the owners of the business.
Pricing in services is complicated like fee schedules of cell phone services provider.
Services organization even use different terms to describe the prices they set.
E.g universities tuition fee, bank impose interest and services charges.
Consumer often find services pricing difficult to understand like insurance products
or hospital services.
3
4. Objectives for establishing prices
Revenue and profit objectives
Seek profit
Make the largest possible contribution or profit
Achieve a specific target level , but don’t seek to maximize profit.
Cover cost
Cover fully allocated costs, including corporate overhead.
Cover cost of providing one particular service , excluding overhead.
Cover incremental
4
5. Patronage and user base-related
objectives
Build demand
Maximize demand .provided a certain minimum level of revenue is achieved.
Achieve full capacity utilization.
Build a user base
Encourage trail and adoption of services. cell phone service subscription or life insurance
plans
Build market share or large user base. If development or fixed costs are high.
5
6. Pricing strategy
stands on three
foundation
It consists on three legs
Cost based pricing
Competition
Value to customer
6
7. Cost based pricing
Its involves setting prices relative to financial costs. Companies seeking to make a
profit must set a price sufficient to recover the full costs, variable, semi-variable,
and fixed of producing and marketing a services.
Service business with high fixed cost include those with expensive physical
facilities such as hospital or colleges.
Activity based costing
Which recognize that virtually all activities taking place within a firm directly or indirectly
support the production, marketing, and delivery of goods and services.
This type of strategy used in textile and food production.
7
8. Competition-Based Pricing
When customers don’t see a difference between competitive offerings, they choose the
cheapest
Price competition is reduced when
Non- price related costs of using competing alternatives are high
Personal relationships matter e.g hairdresser, family medical care
Switching costs are high
Time and location specificity reduce choice
When competing on price take into account the entire cost to customers including:
All related financial and non-monetary costs PLUS switching costs
Compare this cost to the competition
8
9. Value-Based Pricing
In value-based pricing, the price is based on what customers are willing to pay. The
more value your product or service has to your customers, the higher the price you can
charge. Value-based pricing strategies therefore are based on the value of the product
to individual.
Examples of Value-Based Markets
The fashion industry is an example of a sector where value-based pricing is common. If a particular
designer becomes popular, the designer can charge more for the goods they create than if they
were not as popular. This same principle can apply to other markets where the idea of the
consumer’s outward image may be affected by possessing the item in question. Other industries
subject to value-based pricing include the automotive industry, name-brand pharmaceuticals,
cosmetics and personal care.
9
10. Value-Based Pricing:
Understanding Net Value
Net value
= Perceived benefits to customer (gross
value) minus all Perceived outlays (Money, Time,
Mental/Physical effort)
Consumer surplus:
Difference between price paid and amount
customer would have been willing to pay in
absence of other options.
10
11. Value-based Pricing:
Strategies for Enhancing Net Value
Enhance gross value—benefits delivered
Add benefits to core product
Enhance supplementary service
Manage perceptions of benefits delivered
11
12. Value-based Pricing:
Enhancing Perceptions of Gross Value
Reduce uncertainty
Service guarantees
Benefit-driven—pricing aspect(s) of service that create value
Flat rate (quoting a fixed price in advance)
Relationship pricing
Nonprice incentives
Discounts for volume purchases
Discounts for purchasing multiple services
Low-cost leadership
Convince customers not to equate price with quality
Keep economic costs low to ensure profitability at low price
12
13. REDUCING RELATED MONETARY AND
NONMONETARY COSTS
When we consider customer net value, we need to understand the customers
perceived costs .From a customer point of view, the price charged by a supplier is only
part of the cost involved in buying and using a service.
Incremental financial outlays
Customers often incur significantly financial costs in searching for purchasing and
using their service, above and beyond the purchase price paid to the supplier. For
instance the cost of an evening at the theater for a couple with young children usually
for exceeds the price of the two tickets. Because it can include such expenses as hiring
a babysitter, travel, parking, food and beverages.
13
14. REDUCING RELATED MONETARY AND
NONMONETARY COSTS
Non-monetary costs
Non-monetary cost reflect the time, effort and discomfort associated with search
purchase and use of a service. Non monetary tends to be higher when customer
involved in the production and must travel to service site. Services high on experience
and credence attributes. There are four categories of nonmonetary costs.
Time costs: time usage
Physical costs: fatigue and discomfort
Psychological (mental) costs: mental effort, perceived risk, cognitive dissonance, fear etc
Sensory costs; unpleasant sights, sounds, feel, tastes, smells
14
17. Revenue Management:
What it is and How it works
Many services business now focus on strategies to maximize the revenue that can be
derived from valuable capacity at an given point in time . revenue management is
important in value creation.
Revenue management is most effective when applied to business service
characterized by:
Higher fixed cost structure and relatively fixed capacity , which results in perishable
inventory.
Variable and uncertain demand.
Varying customers price sensitivity.
17
18. Reserving Capacity for High-Yield Customers
Revenue management also know as yield management involve setting prices
according to predicated demand among different market segment. the least price
sensitive segment is first to be allocated capacity, paying the highest price, other
segments follow at lower prices for example business travelers often reserve airline
seats .hotel rooms, and rental cars at short notice but vacationers may book leisure
travel months in advance and convention organizer often block hotel space years in
advances of a big event.
A well designed management system can predict with reasonable accuracy how
many customers will use a given service at a specific time at each of several different
price and then relevant amount of capacity at each level.
18
19. How does competitor pricing affect revenue
management
Because revenue management system monitor booking pace , they indirectly pick
up the effect of competitors . if a firm price is to low , it will experience higher
booking pace, and it cheaper seats fill up quickly .that is not good and it means
higher share of late booking but higher fare paying customers will not be able to
get their seats confirmed and will therefore fly on competing airlines.
19
20. Price Elasticity
For management revenue to work effectively, there need to be two or more
segments that attach different value to the service and have different price
elasticity. To allocate and price capacity effectively, the revenue managers need to
determine how sensitive demand is to price and what net revenue will be
generated at different prices for each target segment.
Price elasticity = Percentage change in demand
Percentage change in price
When price elasticity is at unity ales of a service rise by the same percentage the
price falls. If a small change in price has a big impact on sales demand for that
product is said to be elastic.
20
21. Designing Rate Fences
The basic idea of price customization is simple. Have people pay prices based on the
value they put on the product? Obviously you can not just hang out a sign saying ,”Pay
me its what to you or its $80 if you value it that much but only $40 if you do not.” You
have to segment customers by their valuation. You have to built a fence between high
and low valued customers.
Physical fences:
Tangible product differences related to the different prices such as seat location in
cinema hall and etc.
Non-physical fences:
Refer to the consumption, transaction or buyer characteristics. For example cancelation
or change in reservation, using helpline centres and etc.
21
22. Examples of common rate fences (Table
5.2)
Physical (product related) fences:
Basic Product (class of travel, seat location in theatre).
Amenities (free breakfast at hotel, free clothes against shopping).
Service Level (Dedicated service hotlines, dedicated account management team)
Non-physical fences:
Transaction characteristics
Time of booking (full payment before departure).
Location of booking (different prices from different booking locations in different
countries for same route).
Flexibility of ticket use(fees on cancelation or changing reservation)
22
23. Non-physical fences (cont.)
Consumption characteristics
Time or duration of use (must stay for 5 hours or 5 nights).
Location of consumption (prices vary by locations).
Buyer characteristics
Frequency of consumption (platinum member).
Group membership (children, students, senior citizens).
23
25. Ethical Concerns in Service Pricing
Do you sometimes have difficulty understanding how much it going to cost you to use a
service? Do you believe that many prices are unfair? If so, you are not alone. The fact is,
service users can not always be sure in advance what they will receive in return for their
payments. There’s an implicit assumption among many customers that a higher priced
service should offer more benefits and batter quality than a lower priced.
Are Services Pricing Schedules too Complex?
Many people find it difficult to forecast their own usage which makes it hard to compute
comparative prices when evaluating competing supplier whose fees are based on variety
of usage-related factors.
25
26. Designing fairness into revenue
management
Design price schedules
and fences that are
clear, logical and fair.
(no show or
cancelation charges.)
1
Use high published
prices and frame
fences as discounts.
2
Use bundling to
“Hide” discounts.
3
Take care of loyal
customers.
4
Use service recovery
to compensate for
overbooking.
5
26
27. Putting Service Pricing into Practice
1. How much should be charged for this service?
The reason went into business selling to customers was to make profit. If service marketers
giving away services for less than cost, or just breaking even, then it’s mean he is operating
a non-profit venture- or a business that’s likely to fail. So, service marketers should create
and implement a well-thought pricing strategy.
What costs are the organization attempting to recover?
The organization trying to achieve a specific profit margin or return on investment by
selling the service.
How sensitive are customers to various prices?
The customers which are paying a money against any services are sensitive to various prices
What prices are charged by competitors?
Service marketers need to be aware of what competitors are charging for similar services in
marketplace
27
28. Putting Service Pricing into Practice
What discounts should be offered from basic prices?
Need to know how much and when discount should be offered
Are psychological pricing points customarily used?
Need to know either using odd pricing such as charging $4.95 instead of $5 or not
2. What should be the basis of pricing?
Define a unit of service as the specified basis for pricing. Many options may exist:
Completing a task:
Price may be based on completing a promised service task (such as repairing a piece
of equipment or cleaning a jacket)
28
29. Putting Service Pricing into Practice
Admission to a service facility:
Price may be based on admission to a service performance (such as educational
program or a sport event)
Units of time Percentage commission on the value of the transaction:
Price may be related to a monetary value associated with service delivery, as when an
insurance company scales its premium to reflect the amount of coverage provided
Physical resources are consumed:
Service prices are tied to the consumption of physical resources such as food ,drinks,
natural gas
Geographic distance covered:
Calculation of an average cost per mile
29
30. Putting Service Pricing into Practice
Weight or size of object serviced:
Freight companies using a combination of weight and distance to set their rates
Should each service element be billed independently?
Service marketers may charge price component elements separately
Should a single price be charged for a bundled package?
Service marketers may charge an inclusive price for all elements
3. Who should collect payment?
Customers appreciate when a firm makes it easy to obtain price information and make
reservations. They also expect well-presented billing and convenient procedures for
making payment
30
31. Putting Service Pricing into Practice
The organization that provides the service:
The firm that provides the services to the customer itself collect the payment
A specialist intermediary:
Firm may delegate these tasks to intermediaries such as travel agents, retailer etc.
How should the intermediary be compensated for this work:
Original supplier pays a commission (flat fee or percentage commission)
4. Where should payment be made?
Service delivery sites are not always conveniently located
The location at which the service is delivered:
Consumer pay against the service at the place where one get the service directly from
company or intermediaries
31
32. Putting Service Pricing into Practice
A convenient retail outlet or financial intermediary:
Another way of paying against the service is to hand-over the money at the location of
intermediaries
The purchaser's home:
Another way where the payment can be made is at the purchaser’s location
5. When should payment be made?
Before or after delivery of the service:
A service provider may ask for an initial payment in advance of service delivery, with
the balance due later. This approach is quite common for expensive repair
At which times of day:
Sometimes it is inconvenient to pay each time a regularly patronized service such as
the Postal Service or public transport
32
33. Putting Service Pricing into Practice
6. How should payment be made?
When choosing payment methods, think about their advantages and disadvantages
affect the customers
Cash:
Cash may appear to be the simplest method, but it raises security problems
Electronic funds transfer:
It’s the electronic transfer of money from one bank account to another, either within a
single financial institution or across multiple institutions
Charge card (credit or debit):
Credit and debit cards can be used around the world. As their acceptance has become
almost universal, business that refuse to accept them increasingly find themselves at a
competitive disadvantage
33
34. Putting Service Pricing into Practice
Vouchers:
Vouchers are sometimes provided by social service agencies to elderly or low income
citizens
Third-party payment:
It’s may be done by third party such as insurance company
7. How should prices be communicated to the target market?
People need to know the price for some product offerings well in advance of purchase.
They also need to know how, where and when that price is payable
Through what communication medium:
Which medium service marketers should use to communicate the prices to the target
market such as advertising, electronic display, salespeople, customer service personnel
What message content:
The message should be easily understandable and comprehensive. The content of the
message should be attractive
34