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Service Marketing
Dr. Muhammad Jaber Hossain
Associate Professor
Dept. of Information Science and Library Management
University of Dhaka
What is Service?
Service is the action of doing something for
someone or something. It is largely intangible
A service tends to be an experience that is
consumed at the point where it is purchased, and
cannot be owned since is quickly perishes.
One of the first to define services was the
American Marketing Association, which, as early
as in1960, defined services as activities, benefits,
or satisfactions which are offered for sale, or
provided in connection with the sale of goods.
What is Service?
Lehtinen, in 1983, defined services as an activity or
a series of activities which take place in
interactions with a contact person or a physical
machine and which provides consumer
satisfaction.
Kotler and Bloom, in 1984, defined services as any
activity or 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.
What is Service?
According to Gronross, a service is an activity or
series of activities of more or less intangible nature
that normally, not necessarily, take place in
interactions between the customer and service
employees and/or physical resources or goods
and/or system of the service provider, which
are provided as solution to customer problems.
This definition takes into account the following important
features of services:
Features of service?
1. Services are by and large activities or they are
series of activities rather than things.
2. As a result services are intangible.
3. They take place in the interaction between the
customer and the service provider, which means
that services are produced and consumed
simultaneously.
4. Customer has a role to play in the production
process as the services are provided in
response to the problems of customers as solution.
Characteristics of service?
Intangibility means that unlike goods, services canít be seen,
touched and felt, tasted or smelledor even heard before
they are purchased.
Inseparability suggests that services are produced,
distributed, and consumed simultaneously.
Heterogeneity means that services delivered generally vary
in quality, time consumed in delivery, and the extent of
service provided. Since people deliver most services, they
are variable.
Perishability means that services can not be stored.
Service Marketing?
Services marketing is marketing based on
relationship and value. It may be used to market a
service or a product.
Activity or 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.
Service Marketing Triangle
To understand the complex role of
marketing in service companies Christian
Gronroos (2000) used a model, which also
referred by many other authors like Philip
Kotler (2005) and Valerie A. Zeithaml
(1996). This model is prominently known
as service marketing triangle .
Service Marketing Triangle
Company
(Library)
Service
Marketing
Provider
(Employee)
Customer
(User)
Internal marketing
E abli g pro ises
External marketing
Maki g pro ises
Interactive marketing
Deliveri g pro ises
1. External Marketing
Anything that communicates to the customers/users
before service delivery can be viewed as part of this
external marketing functions.
(Zeithaml and Bitner, 1996)
According to service marketing triangle external marketing
takes place between library and its users. This form of
marketing considers market research and product
development for an effective strategy making.
(Ahrnell and Nicou, 1989)
Customers /
Users
Company /
Library
External Marketing (cont.)
Making promises
1. U dersta di g usto ers eeds
2. Managing expectations
3. Maintaining marketing communications
Sales and promotion
Advertising
Internet and web site communication
I a ser i e orga izatio if you are ot ser i g the
usto er, you had etter e ser i g so eo e ho is.
- Jan Carlzon
2. Internal Marketing
According to Grönroos (2001) the meaning of internal
marketing is that, the management in a hierarchical
organization has to develop motivated and customer-
conscious employees.
It refers to all those planned and unplanned activities the
library carries out to train, motivate and reward its
employees so that they are able and willing to deliver the
promise which the external marketing function
communicates to the users.
(Zeithaml and Bitner, 1996)
Providers /
Employees
Company /
Library
Internal Marketing (cont.)
Enabling promises
1. Hiring the right people
2. Training and developing people to deliver service
3. Empowering employees
4. Developing support systems
5. Applying appropriate technology and equipment
6. Rewarding employees
It has been claimed that, Custo ers are attracted by the promises, but
retained through satisfaction, which is possible to deliver by the whole
company not by the marketing department o ly
_ (Philip Kotler, 1995)
Internal Marketing (cont.)
Co ti ued…
The standpoint of internal marketing is that, employees of an
organization are its first market. Hence, the concept of internal
marketing is based on the idea of employee as customer. Among the
first, who advocated that idea were Sasser and Arbeit. In their opinion,
internal marketing holds that, personnel are the first market of a
service organization (Sasser & Arbeit, 1976).
Berry, L. L. (1981) states that, the view of IM is, ie s e ployees jobs as
internal products, and the workforce as internal customers to each other .
The concept of internal marketing is not limited to the fro t-li e
customer service staff alone (De Bussy et al., 2003). Even the
employees who do not interact directly with customers may impact
upon perceived service quality because they directly influence the
service providers (George, 1990 in De Bussy et al., 2003). If all
employees perform their jobs well they are a value-added component
of the service and product offering.
Internal Marketing (cont.)
Elements of IM (Rafiq, 2000)
Rafiq (2000) identified five main elements of IM:
1. E ployees oti atio a d satisfa tio
2. Customer-orie tatio a d usto ers satisfa tio
3. Inter-functional coordination and integration
4. A marketing approach
5. Implementation of general marketing strategies
Rafiq (2000) defines IM as: a planned effort using a market like
approach to overcome orga izatio s resistance to change and to align,
motivate and inter-functionally co-ordinate and integrate employees
towards an effective implementation of corporate and functional
strategies in order to deliver customer satisfaction through the process
of creating motivated and customer-oriented e ployees
Co ti ued…
Internal Marketing (cont.)
In conjunction with this definition, Rafiq (2000) stresses that
there are three phases that are crucial for the successful
development and evolution of the IM concept:
Phase 1: E ployees motivation and satisfaction
Employees are responsible for inconsistent service delivery,
internal marketing places the focus on them. Therefore, it can
be said that, organizations which strive to deliver consistent
quality service to their customers need to emphasis
e ployees motivation and satisfaction.
Organization should view their employees as internal customers and
their job offerings to employees as products and services. Therefore, to
motivate employees and encourage job satisfaction, organizations
should devote the same care over job offerings to employees as over
the products and services offered to external customers.
Co ti ued…
Internal Marketing (cont.)
Phase 2: Customer consciousness
Customer-employee interaction provides organizations with
quality marketing opportunities. Therefore, organizations,
which want to take advantage a positive buyer-seller
interaction, must use internal marketing as a tool to develop
customer conscious employees (Rafiq, 2000). Moreover,
effective service to customers depends on the effective
coordination of job performances between frontline employees
and backroom support employees.
Gronroos in 1985 stated that, uses of marketing like activities is the
best method of motivating employees towards customer
consciousness. George in 1990 also suggested that, employees are
best motivated for service-minded attitudes and customer
consciousness behaviour by an active approach, where marketing
activities are used internally.
Co ti ued…
Internal Marketing (cont.)
Phase 3: Strategy implementation and change management
Rafiq in 2000 stated that, IM plays an integral part in the
managing of the orga izatio s human resources. In 1992,
Glassmann and McAfee emphasized this by suggesting that, IM
integrates the role of marketing and human resources to the
extent that employees across all the boundaries of the
organization become resources of the marketing function.
Therefore, internal marketing can be used as a tool for successful
implementation of organizational strategies, to overcome inter-
functional conflict, achieve better internal communication, reduce
departmental isolation, and overcome resistance to change.
(Rafiq, 2000)
Co ti ued…
Objectives of Internal Marketing
Co ti ued…
1. The duty of IM is to develop employee awareness of their roles
and help them to commit to active participation in the marketing
or exchange process, i.e. to make the corporation more
marketing-oriented (Varey, 2001; p. 214).
2. The main objective of the internal marketing function is to obtain
motivated and customer conscious personnel at every level, since
the internal marketing concept holds that the orga izatio s
personnel are the first market of a company (Ewing and Caruana,
1999; p. 18).
3. The purpose of IM is to motivate employees toward service-
mindedness and customer-oriented performance by an active
marketing-like approach, where a variety of activities are used
internally in an active and coordinated way (Grönroos, 1990 in
Dunne and Barnes, 2000).
Objectives of Internal Marketing (cont.)
Co ti ued…
4. The objectives of IM initiatives (Compton et al., 1987 in Dunne
and Barnes, 2000) are:
 To help employees understand and accept the importance of the
interactions with the customer and their responsibility for the total
quality and the interactive marketing performance of the firm;
 To help employees understand and accept the mission, strategies, goals,
services, systems and external campaigns of the firm;
 To continually motivate the employees and inform them about new
concepts, goods, services and external campaigns, as well as economic
results; and
 To attract and keep good employees.
Objectives of Internal Marketing (cont.)
Co ti ued…
6. Furguson and Brown (1991) proposed two objectives of internal
marketing:
 To recruit and keep the best people;
 To motivate employees to do the best possible job applying the philosophies
and practice of marketing to employees .
5. Two primary focuses of IM (MacStravic, 1985 in Dunne and
Barnes, 2000) are:
 To complement external strategic marketing efforts through the facilitation
of personal interaction between staff and internal clients. These interactions
are instruments for encouraging customer attraction and satisfaction;
 To develop and maintain motivated and satisfied work force that contributes
to the organizations external and strategic marketing objectives, as well as
to quality, productivity and efficiency.
Internal Marketing (cont.)
Activities/ Functions/ Elements of IM/
Factors influencing successful IM
Co ti ued…
Training
employees
Welcoming
environment
Knowing
e ployee s eeds
Offering a vision
[Empowering
employees
Rewarding on
performance
Activities of
Internal Marketing
Valui g e ployee s
knowledge
Employee
motivation
Internal
communication
3. Interactive Marketing
Service quality depends heavily on the quality of the employee-
user interactions during the service encounter. Interactive
marketing takes place where the service functions are executed
and the employees are in contact with the users all the time.
The concept is overlapping with the theory of Relationship
marketing.
The core idea of this type of marketing is face-to-face contact
between users and employees and the aim of building networks
of relations for maintaining and creating possible future
assignments.
Customers /
Users
Employees /
Staff
Interactive Marketing (cont.)
Delivering or Keeping promises
1. Service delivery
2. Face-to-face, telephone & online interactions
3. The Customer Experience
4. Customer interactions with service providers
5. The o e t of truth *
* A moment of truth occurs, when employee and customer have contact
THE END

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(E) service marketing triangle

  • 1. Service Marketing Dr. Muhammad Jaber Hossain Associate Professor Dept. of Information Science and Library Management University of Dhaka
  • 2. What is Service? Service is the action of doing something for someone or something. It is largely intangible A service tends to be an experience that is consumed at the point where it is purchased, and cannot be owned since is quickly perishes. One of the first to define services was the American Marketing Association, which, as early as in1960, defined services as activities, benefits, or satisfactions which are offered for sale, or provided in connection with the sale of goods.
  • 3. What is Service? Lehtinen, in 1983, defined services as an activity or a series of activities which take place in interactions with a contact person or a physical machine and which provides consumer satisfaction. Kotler and Bloom, in 1984, defined services as any activity or 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.
  • 4. What is Service? According to Gronross, a service is an activity or series of activities of more or less intangible nature that normally, not necessarily, take place in interactions between the customer and service employees and/or physical resources or goods and/or system of the service provider, which are provided as solution to customer problems. This definition takes into account the following important features of services:
  • 5. Features of service? 1. Services are by and large activities or they are series of activities rather than things. 2. As a result services are intangible. 3. They take place in the interaction between the customer and the service provider, which means that services are produced and consumed simultaneously. 4. Customer has a role to play in the production process as the services are provided in response to the problems of customers as solution.
  • 6. Characteristics of service? Intangibility means that unlike goods, services canít be seen, touched and felt, tasted or smelledor even heard before they are purchased. Inseparability suggests that services are produced, distributed, and consumed simultaneously. Heterogeneity means that services delivered generally vary in quality, time consumed in delivery, and the extent of service provided. Since people deliver most services, they are variable. Perishability means that services can not be stored.
  • 7. Service Marketing? Services marketing is marketing based on relationship and value. It may be used to market a service or a product. Activity or 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.
  • 8. Service Marketing Triangle To understand the complex role of marketing in service companies Christian Gronroos (2000) used a model, which also referred by many other authors like Philip Kotler (2005) and Valerie A. Zeithaml (1996). This model is prominently known as service marketing triangle .
  • 9. Service Marketing Triangle Company (Library) Service Marketing Provider (Employee) Customer (User) Internal marketing E abli g pro ises External marketing Maki g pro ises Interactive marketing Deliveri g pro ises
  • 10. 1. External Marketing Anything that communicates to the customers/users before service delivery can be viewed as part of this external marketing functions. (Zeithaml and Bitner, 1996) According to service marketing triangle external marketing takes place between library and its users. This form of marketing considers market research and product development for an effective strategy making. (Ahrnell and Nicou, 1989) Customers / Users Company / Library
  • 11. External Marketing (cont.) Making promises 1. U dersta di g usto ers eeds 2. Managing expectations 3. Maintaining marketing communications Sales and promotion Advertising Internet and web site communication I a ser i e orga izatio if you are ot ser i g the usto er, you had etter e ser i g so eo e ho is. - Jan Carlzon
  • 12. 2. Internal Marketing According to Grönroos (2001) the meaning of internal marketing is that, the management in a hierarchical organization has to develop motivated and customer- conscious employees. It refers to all those planned and unplanned activities the library carries out to train, motivate and reward its employees so that they are able and willing to deliver the promise which the external marketing function communicates to the users. (Zeithaml and Bitner, 1996) Providers / Employees Company / Library
  • 13. Internal Marketing (cont.) Enabling promises 1. Hiring the right people 2. Training and developing people to deliver service 3. Empowering employees 4. Developing support systems 5. Applying appropriate technology and equipment 6. Rewarding employees It has been claimed that, Custo ers are attracted by the promises, but retained through satisfaction, which is possible to deliver by the whole company not by the marketing department o ly _ (Philip Kotler, 1995)
  • 14. Internal Marketing (cont.) Co ti ued… The standpoint of internal marketing is that, employees of an organization are its first market. Hence, the concept of internal marketing is based on the idea of employee as customer. Among the first, who advocated that idea were Sasser and Arbeit. In their opinion, internal marketing holds that, personnel are the first market of a service organization (Sasser & Arbeit, 1976). Berry, L. L. (1981) states that, the view of IM is, ie s e ployees jobs as internal products, and the workforce as internal customers to each other . The concept of internal marketing is not limited to the fro t-li e customer service staff alone (De Bussy et al., 2003). Even the employees who do not interact directly with customers may impact upon perceived service quality because they directly influence the service providers (George, 1990 in De Bussy et al., 2003). If all employees perform their jobs well they are a value-added component of the service and product offering.
  • 15. Internal Marketing (cont.) Elements of IM (Rafiq, 2000) Rafiq (2000) identified five main elements of IM: 1. E ployees oti atio a d satisfa tio 2. Customer-orie tatio a d usto ers satisfa tio 3. Inter-functional coordination and integration 4. A marketing approach 5. Implementation of general marketing strategies Rafiq (2000) defines IM as: a planned effort using a market like approach to overcome orga izatio s resistance to change and to align, motivate and inter-functionally co-ordinate and integrate employees towards an effective implementation of corporate and functional strategies in order to deliver customer satisfaction through the process of creating motivated and customer-oriented e ployees Co ti ued…
  • 16. Internal Marketing (cont.) In conjunction with this definition, Rafiq (2000) stresses that there are three phases that are crucial for the successful development and evolution of the IM concept: Phase 1: E ployees motivation and satisfaction Employees are responsible for inconsistent service delivery, internal marketing places the focus on them. Therefore, it can be said that, organizations which strive to deliver consistent quality service to their customers need to emphasis e ployees motivation and satisfaction. Organization should view their employees as internal customers and their job offerings to employees as products and services. Therefore, to motivate employees and encourage job satisfaction, organizations should devote the same care over job offerings to employees as over the products and services offered to external customers. Co ti ued…
  • 17. Internal Marketing (cont.) Phase 2: Customer consciousness Customer-employee interaction provides organizations with quality marketing opportunities. Therefore, organizations, which want to take advantage a positive buyer-seller interaction, must use internal marketing as a tool to develop customer conscious employees (Rafiq, 2000). Moreover, effective service to customers depends on the effective coordination of job performances between frontline employees and backroom support employees. Gronroos in 1985 stated that, uses of marketing like activities is the best method of motivating employees towards customer consciousness. George in 1990 also suggested that, employees are best motivated for service-minded attitudes and customer consciousness behaviour by an active approach, where marketing activities are used internally. Co ti ued…
  • 18. Internal Marketing (cont.) Phase 3: Strategy implementation and change management Rafiq in 2000 stated that, IM plays an integral part in the managing of the orga izatio s human resources. In 1992, Glassmann and McAfee emphasized this by suggesting that, IM integrates the role of marketing and human resources to the extent that employees across all the boundaries of the organization become resources of the marketing function. Therefore, internal marketing can be used as a tool for successful implementation of organizational strategies, to overcome inter- functional conflict, achieve better internal communication, reduce departmental isolation, and overcome resistance to change. (Rafiq, 2000) Co ti ued…
  • 19. Objectives of Internal Marketing Co ti ued… 1. The duty of IM is to develop employee awareness of their roles and help them to commit to active participation in the marketing or exchange process, i.e. to make the corporation more marketing-oriented (Varey, 2001; p. 214). 2. The main objective of the internal marketing function is to obtain motivated and customer conscious personnel at every level, since the internal marketing concept holds that the orga izatio s personnel are the first market of a company (Ewing and Caruana, 1999; p. 18). 3. The purpose of IM is to motivate employees toward service- mindedness and customer-oriented performance by an active marketing-like approach, where a variety of activities are used internally in an active and coordinated way (Grönroos, 1990 in Dunne and Barnes, 2000).
  • 20. Objectives of Internal Marketing (cont.) Co ti ued… 4. The objectives of IM initiatives (Compton et al., 1987 in Dunne and Barnes, 2000) are:  To help employees understand and accept the importance of the interactions with the customer and their responsibility for the total quality and the interactive marketing performance of the firm;  To help employees understand and accept the mission, strategies, goals, services, systems and external campaigns of the firm;  To continually motivate the employees and inform them about new concepts, goods, services and external campaigns, as well as economic results; and  To attract and keep good employees.
  • 21. Objectives of Internal Marketing (cont.) Co ti ued… 6. Furguson and Brown (1991) proposed two objectives of internal marketing:  To recruit and keep the best people;  To motivate employees to do the best possible job applying the philosophies and practice of marketing to employees . 5. Two primary focuses of IM (MacStravic, 1985 in Dunne and Barnes, 2000) are:  To complement external strategic marketing efforts through the facilitation of personal interaction between staff and internal clients. These interactions are instruments for encouraging customer attraction and satisfaction;  To develop and maintain motivated and satisfied work force that contributes to the organizations external and strategic marketing objectives, as well as to quality, productivity and efficiency.
  • 22. Internal Marketing (cont.) Activities/ Functions/ Elements of IM/ Factors influencing successful IM Co ti ued… Training employees Welcoming environment Knowing e ployee s eeds Offering a vision [Empowering employees Rewarding on performance Activities of Internal Marketing Valui g e ployee s knowledge Employee motivation Internal communication
  • 23. 3. Interactive Marketing Service quality depends heavily on the quality of the employee- user interactions during the service encounter. Interactive marketing takes place where the service functions are executed and the employees are in contact with the users all the time. The concept is overlapping with the theory of Relationship marketing. The core idea of this type of marketing is face-to-face contact between users and employees and the aim of building networks of relations for maintaining and creating possible future assignments. Customers / Users Employees / Staff
  • 24. Interactive Marketing (cont.) Delivering or Keeping promises 1. Service delivery 2. Face-to-face, telephone & online interactions 3. The Customer Experience 4. Customer interactions with service providers 5. The o e t of truth * * A moment of truth occurs, when employee and customer have contact