UNDERSTANDINGSERVICES                1
Contents                1 . Understanding Services.           2. Understanding Service Customers.3. Creating Services and ...
The Marketing Machine          Government                 Technology                       Uncontrollables         Competi...
The Marketing MachineIf you know how the marketing machine works, and can turn    the crank, you will always produce the c...
The Marketing MachineIf the machine never changes, then there is no such thing as:   International Marketing   Industrial ...
(A mental view of a scene)                 Perspective           SET OF PERSPECTIVES IN             CONSUMER BEHAVIOR     ...
Realistic view   This realistic view is important to the     marketer because ,   2. It gives an external view of the cust...
Comparison of two perspectives   Perspective              Marketer’s         Customer’s   characteristics          perspec...
What are services• Services are deeds,processes and  performance• Intangible, but may have a tangible  component• Generall...
Basic Differences betweenGoods and Services   • Customers do not obtain ownership of services   • Service products are int...
Challenges for Services• Defining and improving quality• Communicating and testing new services• Communicating and maintai...
The Service Sector• Includes businesses, government agencies, nonprofits• Jobs range from high-paid professionals and tech...
GDP by Industry in india ,      1999                                A g r ic u ltu r e , F o r e s tr y,                  ...
Changing Structure of Employmentas Economic Development EvolvesShare ofEmployment                Agriculture              ...
Some Industries in the ServiceSector•                             •   Health care    Banking, stockbroking                ...
Internal Services•   Service elements within an organization that facilitate creation of--or    add value to--its final ou...
Figure 1-1              Tangibility Spectrum Salt       Soft Drinks              Detergents                    Automobi...
Differences BetweenGoods and Services  Intangibility   Heterogeneity Simultaneous  Production      Perishability     and C...
Implications of IntangibilityServices cannot be inventoriedServices cannot be patentedServices cannot be readily  displ...
Implications of HeterogeneityService delivery and customer satisfaction depend on employee actionsService quality depend...
Implications of SimultaneousProduction and Consumption Customers participate in and affect the   transaction Customers a...
Implications of Perishability It is difficult to synchronize supply and  demand with services Services cannot be returne...
Services are Different     Goods                 Services                Resulting Implications     Tangible              ...
The Services Marketing Triangle                                 Company                               (Management)       I...
Ways to Use theServices Marketing Triangle                              Specific Service Implementation                   ...
The Services Triangle                      and Technology                                Company                          ...
Distinctive Aspects ofService Management                         27
The Service ManagementDecision Framework                                                W h a t B u s in e s s A r e W e I...
Service Decision FrameworkWhat Business Are We In?      • With what industry is our service        associated?      • With...
The “8Ps” of Integrated ServiceManagement vs. the Traditional “4Ps”              •   Product elements              •   Pla...
8Ps: (1) Product ElementsAll Aspects of Service Performance that Create Value• Core product features• Bundle of supplement...
8Ps: (2) Place, Cyberspace, and TimeDelivery Decisions: Where, When, and How• Geographic locations served• Service schedul...
8Ps: (3) ProcessMethod and Sequence in Service Creation and Delivery•   Design of activity flows•   Number and sequence of...
8Ps: (4) Productivity and QualitySynergy in Value Creation for Customers and the Firm•   Achieve productive transformation...
8Ps: (5) People The Human Side of the Enterprise •   The right employees performing tasks well      – job design      – re...
8Ps: (6) Promotion and EducationInforming, Educating, Persuading, and Reminding Customers• Marketing communication tools  ...
8Ps: (7) Physical EvidenceProviding tangible evidence of service performances•   Create and maintaining physical appearanc...
8Ps:(8) Price and Other User Costs   Managing Customer Outlays Relative to Corporate Revenues   •   Quoted price level and...
The PRICE of Marketing          P          R     s Planning          I     s Research          C     s I mplementation    ...
Hospitality and Travel Marketing SystemPlanning & Research                             1. Where are we now?Analysis & Stra...
The Iceberg Nature of   Hospitality and Travel MarketingIn some ways, hospitalityand travel marketing is                  ...
The Iceberg Nature of   Hospitality and Travel MarketingIn some ways, hospitality                                         ...
The Iceberg Nature of  Hospitality and Travel MarketingWhat we tend to notice and                                       Mo...
Factors Stimulating Competition and Innovation inthe Service Economy•   Government Policies (e.g., regulations, trade agre...
Some Impacts of TechnologicalChange•   Radically alter ways in which service firms do business:     – with customers (new ...
Relating the 8Ps to theService Decision Framework                                                          W H A T B U S I...
Services MarketingGap Theory:   Satisfaction is a function of the gap between expected service     and perceived service. ...
tksabarwal@gmail.com                       48
Upcoming SlideShare
Loading in …5
×

1 understanding services

0 views

Published on

Published in: Business, News & Politics
2 Comments
0 Likes
Statistics
Notes
  • Be the first to like this

No Downloads
Views
Total views
0
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
23
Comments
2
Likes
0
Embeds 0
No embeds

No notes for slide

1 understanding services

  1. 1. UNDERSTANDINGSERVICES 1
  2. 2. Contents 1 . Understanding Services. 2. Understanding Service Customers.3. Creating Services and Managing Service Delivery Process. 4. Managing Demand and Capacity. 5. Pricing of Services and Revenue Management. 6. Communicating and Promoting Services. 7. Managing Physical Evidence of Service. 8. Managing People in Service Industry. 9. Managing Service Quality. 10. Managing Relationships and Building Loyalty. 11. Marketing of Banking Services. 12. Marketing of Insurance Service. 13. Marketing of Telecom Services. 14. Marketing Tourism Services. 15. Marketing of Hospitality Services. 2
  3. 3. The Marketing Machine Government Technology Uncontrollables Competitors Needs Marketing Concept Environmental Analysis Behavior and Segmentation Analysis Marketing Marketing Research Strategy Marketing Mix 3
  4. 4. The Marketing MachineIf you know how the marketing machine works, and can turn the crank, you will always produce the correct marketing strategy. The machine does not change. The only thing that changes are the inputs. Different inputs produce different outputs. 4
  5. 5. The Marketing MachineIf the machine never changes, then there is no such thing as: International Marketing Industrial Marketing Services Marketing eMarketing Non-Profit Marketing ………..??? 5
  6. 6. (A mental view of a scene) Perspective SET OF PERSPECTIVES IN CONSUMER BEHAVIOR MARKETER CONSUMER PUBLIC POLICY MAKETERS AND CONSUMERS ARE ACTIVE ON DAILY BASIS MARKETING DECISIONSCONTROLLABLE (4P’s) UNCONTROLABLE(5C’s) Customers Channels Marketing mix Conditions Competitors elements Company, 6
  7. 7. Realistic view This realistic view is important to the marketer because , 2. It gives an external view of the customer. 3. An aggregate view of the customer 4. A product specific view of the customer 5. A brand preference /purchase point of view 6. A behavioral influence orientation • who does or does not use the product • Who uses the competitors Brand 7
  8. 8. Comparison of two perspectives Perspective Marketer’s Customer’s characteristics perspective perspective Point of view External Internal (buyers) (me) Level of interest Aggregate Individual (markets) (myself) Scope of interest Product specific Across products (what I make) (what I buy) correct choice Brand specific Best alternative (my brand) (best brand for me) Role of influence Influence Handle behavioral behavior influences 8
  9. 9. What are services• Services are deeds,processes and performance• Intangible, but may have a tangible component• Generally produced and consumed at the same time• Need to distinguish between SERVICE and CUSTOMER SERVICE 9
  10. 10. Basic Differences betweenGoods and Services • Customers do not obtain ownership of services • Service products are intangible performances--not objects • Customers often actively involved in production process • Other people may form part of product experience • More variability in operational inputs and outputs-- harder to improve productivity, control quality • Often difficult for customers to evaluate • Absence of inventories after production • Time factor is more important--speed may be key • Delivery systems include electronic and physical 10 channels
  11. 11. Challenges for Services• Defining and improving quality• Communicating and testing new services• Communicating and maintaining a consistent image• Motivating and sustaining employee commitment• Coordinating marketing, operations and human resource efforts• Setting prices• Standardization versus personalization
  12. 12. The Service Sector• Includes businesses, government agencies, nonprofits• Jobs range from high-paid professionals and technicians to minimum-wage positions• Service organizations can be any size--from huge global corporations to local small businesses• In most countries, adds more economic value than agriculture, raw materials and manufacturing combined• In India -- world’s largest democracy-- services account for 46% of GDP 12
  13. 13. GDP by Industry in india , 1999 A g r ic u ltu r e , F o r e s tr y, F is h in g a n d M in in g F in a n ce , In s u r a n ce 7% a n d R e a l E s ta te 20% M a n u fa c tu r in g 16% W h o le s a le a n d G o ve rn m e n t R e ta il Tr a d e ( M o s tly S e r v ic e s ) 17% 12% O th e r S e r v ic e s S E R V I C E S 10% Tr a n s p o r t, U tilitie s B u s in e s s a n d C o m m u n ic a tio n s H e a lth 8% S e rv ice s 5% 5%Source: Bureau of Economic Analysis, December 2000 13
  14. 14. Changing Structure of Employmentas Economic Development EvolvesShare ofEmployment Agriculture Services Industry Time, per Capita Income Source: IMF 14
  15. 15. Some Industries in the ServiceSector• • Health care Banking, stockbroking • Education• Lodging • Wholesaling and retailing• Restaurants, bars, • Laundries, drycleaning catering • Repair and maintenance• Insurance • Professional (e.g., law,• News and entertainment architecture, consulting)• Transportation (freight • Internet and Web services and passenger) • BPO 15
  16. 16. Internal Services• Service elements within an organization that facilitate creation of--or add value to--its final output• Includes: – accounting and payroll administration – recruitment and training – legal services – transportation – catering and food services – cleaning and landscaping• Increasingly, these services are being outsourced 16
  17. 17. Figure 1-1 Tangibility Spectrum Salt  Soft Drinks  Detergents  Automobiles  Cosmetics Fast-food  Outlets  Intangible DominantTangible Dominant Fast-food Outlets  Advertising Agencies  Airlines  Investment Management  Consulting  17 Teaching
  18. 18. Differences BetweenGoods and Services Intangibility Heterogeneity Simultaneous Production Perishability and Consumption 18
  19. 19. Implications of IntangibilityServices cannot be inventoriedServices cannot be patentedServices cannot be readily displayed or communicatedPricing is difficult 19
  20. 20. Implications of HeterogeneityService delivery and customer satisfaction depend on employee actionsService quality depends on many uncontrollable factorsThere is no sure knowledge that the service delivered matches what was planned and promoted 20
  21. 21. Implications of SimultaneousProduction and Consumption Customers participate in and affect the transaction Customers affect each other Employees affect the service outcome Decentralization may be essential Mass production is difficult 21
  22. 22. Implications of Perishability It is difficult to synchronize supply and demand with services Services cannot be returned or resold 22
  23. 23. Services are Different Goods Services Resulting Implications Tangible Intangible Services cannot be inventoried. Services cannot be patented. Services cannot be readily displayed or communicated. Pricing is difficult. Standardized Heterogeneous Service delivery and customer satisfaction depend on employee actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted. Production Simultaneous Customers participate in and affect the transaction. separate from production and Customers affect each other. consumption consumption Employees affect the service outcome. Decentralization may be essential. Mass production is difficult. Nonperishable Perishable It is difficult to synchronize supply and demand with services. Services cannot be returned or resold.Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, “Problems and Strategies in Services Marketing,”Journal of Marketing 49 (Spring 1985): 33-46. 23
  24. 24. The Services Marketing Triangle Company (Management) Internal External Marketing Marketing“enabling the “setting thepromise” promise”Employees Interactive Marketing Customers “delivering the promise” Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler 24
  25. 25. Ways to Use theServices Marketing Triangle Specific Service Implementation • What is being promoted and byOverall Strategic whom? Assessment • How will it be delivered and by • How is the service whom? organization doing on all three sides of the • Are the supporting systems in triangle? place to deliver the promised service? • Where are the weaknesses? • What are the strengths? 25
  26. 26. The Services Triangle and Technology Company Technology Providers CustomersSource: Adapted from A. Parasuraman 26
  27. 27. Distinctive Aspects ofService Management 27
  28. 28. The Service ManagementDecision Framework W h a t B u s in e s s A r e W e In ? W h a t S e r v ice P r o ce s s e s C a n B e U s e d in W h o A r e O u r C u s to m e r s a n d H o w S h o u ld O u r O p e r a tio n ? W e R e la te to T h e m ? W h a t S h o u ld b e th e C o r e a n d S u p p le m e n ta r y E le m e n ts o f O u r S e r v ic e P r o d u c t? W h a t P r ice S h o u ld W e C h a r g e H o w S h o u ld W e C o m m u n ic a te W h a t fo r O u r S e r v ic e s ? O u r S e r v ic e H a s to O ffe r ? W h a t A r e th e O p tio n s fo r D e liv e r in g H o w C a n W e B a la n c e P r o d u c tiv ity O u r S e r v ice ? a n d Q u a lity ? H o w S h o u ld W e M a tc h D e m a n d a n d P r o d u c tiv e C a p a c ity ? W h a t A r e A p p r o p r ia te R o le s fo r P e o p le a n d Te c h n o lo g y ? H o w C a n O u r F ir m A c h ie v e S e r v ic e L e a d e r s h ip ? 28
  29. 29. Service Decision FrameworkWhat Business Are We In? • With what industry is our service associated? • With what other goods and services do we compete? • What forces for change do we face? • What solutions do we offer to meet customer needs? (How do we create value?) 29
  30. 30. The “8Ps” of Integrated ServiceManagement vs. the Traditional “4Ps” • Product elements • Place, cyberspace, and time • Process • Productivity and quality • People • Promotion and education • Physical evidence • Price and other user outlays 30
  31. 31. 8Ps: (1) Product ElementsAll Aspects of Service Performance that Create Value• Core product features• Bundle of supplementary service elements• Performance levels relative to competition• Benefits delivered to customers• Guarantees 31
  32. 32. 8Ps: (2) Place, Cyberspace, and TimeDelivery Decisions: Where, When, and How• Geographic locations served• Service schedules• Physical channels• Electronic channels• Customer control and convenience• Channel partners/intermediaries 32
  33. 33. 8Ps: (3) ProcessMethod and Sequence in Service Creation and Delivery• Design of activity flows• Number and sequence of actions for customers• Providers of value chain components• Nature of customer involvement• Role of contact personnel• Role of technology, degree of automation 33
  34. 34. 8Ps: (4) Productivity and QualitySynergy in Value Creation for Customers and the Firm• Achieve productive transformation of inputs to outputs – efficiency (cost control, avoidance of waste) – effectiveness (value added, including quality and timeliness)• Attain customer-defined quality standards – reliability – responsiveness – competence/trust – human dimensions – tangibles 34
  35. 35. 8Ps: (5) People The Human Side of the Enterprise • The right employees performing tasks well – job design – recruiting/selection – training – motivation – evaluation/rewards – empowerment/teamwork • The right customers for the firm’s mission – fit well with product/processes/corporate goals – appreciate benefits and value offered – possess (or can be educated to have) necessary skills – firm is able to manage customer behavior 35
  36. 36. 8Ps: (6) Promotion and EducationInforming, Educating, Persuading, and Reminding Customers• Marketing communication tools – media elements (print, broadcast, outdoor, retail, Internet, etc.) – personal selling, customer service – sales promotion – publicity/PR• Imagery and recognition – branding – corporate design• Content – information, advice – persuasive messages – customer education/training 36
  37. 37. 8Ps: (7) Physical EvidenceProviding tangible evidence of service performances• Create and maintaining physical appearances – buildings/landscaping – interior design/furnishings – vehicles/equipment – staff grooming/clothing – other tangibles• Select tangible metaphors for use in marketing communications 37
  38. 38. 8Ps:(8) Price and Other User Costs Managing Customer Outlays Relative to Corporate Revenues • Quoted price level and trade margins • Discount terms • Price-setting mechanism – determined by seller – negotiation/barter – auction/reverse auction • Credit terms • Strategies to minimize other user costs – out-of-pocket financial expenses (e.g., travel, phone) – time investments and mental/physical effort – negative sensory experiences 38
  39. 39. The PRICE of Marketing P R s Planning I s Research C s I mplementation E s Control s Evaluation Morrison, A.M.
  40. 40. Hospitality and Travel Marketing SystemPlanning & Research 1. Where are we now?Analysis & Strategy 2. Where would we like to be?Implementation 3. How do we get there?Control Morrison, A.M. 4. How do we make sure we get there?40
  41. 41. The Iceberg Nature of Hospitality and Travel MarketingIn some ways, hospitalityand travel marketing is Morrison, A.M.like an iceberg s Some of it is “above-the-waterline” and marketing ‘people’ tend to notice it more and pay the most attention to it. s The “I” in PRICE. s This is also the part of marketing that is most ‘visible’ to customers; the advertising and other promotions done by our industry.
  42. 42. The Iceberg Nature of Hospitality and Travel MarketingIn some ways, hospitality Morrison, A.M.and travel marketing islike an iceberg s Most of it is “below-the-waterline” and is what we tend not to notice and pay the least attention to. s This is not something that the customer sees. s The “PRCE” in PRICE.
  43. 43. The Iceberg Nature of Hospitality and Travel MarketingWhat we tend to notice and Morrison, A.M.pay most attention to Implementation What we tend not to notice and pay the least attention to Research Control Planning Evaluation But remember, it’s not the tip of the iceberg -- the part that we see most readily -- that sinks the ship!
  44. 44. Factors Stimulating Competition and Innovation inthe Service Economy• Government Policies (e.g., regulations, trade agreements)• Social Changes (e.g., affluent, time poor, seek experiences)• Business Trends – Manufacturers offer service – Growth of chains and franchising – Pressures to improve productivity and quality – More strategic alliances – Marketing emphasis by nonprofits – Innovative hiring practices• Advances in IT (e.g., speed, digitization, wireless, Internet)• Internationalization (travel, transnational companies) 44
  45. 45. Some Impacts of TechnologicalChange• Radically alter ways in which service firms do business: – with customers (new services, more convenience) – behind the scenes (reengineering, new value chains)• Create relational databases about customer needs and behavior, mine databanks for insights• Leverage employee capabilities and enhance mobility• Centralize customer service, be faster and more responsive• Develop national/global delivery systems• Create new, Internet-based business models 45
  46. 46. Relating the 8Ps to theService Decision Framework W H A T B U S IN E S S A R E W E I N ? W h a t S e rv ic e P ro c e s s e s C a n B e U s e d in W h o A re O u r C u s to m e r s a n d O u r O p e ra ti o n ? ( P R O C E S S ) H o w S h o u ld W e R e la t e t o T h e m ? W h a t S h o u ld b e t h e C o r e a n d S u p p le m e n t a r y E le m e n t s o f O u r S e r v i c e P r o d u c t? ( P R O D U C T E L E M E N T S ) W h a t P r i c e S h o u ld W e C h a r g e ? H o w to C o m m u n i c a te ? ( P R O M O T I O N & (P R IC E A N D O TH E R U S E R O U TL A YS ) E D U C A TIO N , P H YS IC A L E V ID E N C E ) O p t i o n s f o r D e li v e r y ? ( P L A C E , C Y B E R S P A C E H o w C a n W e B a la n c e & TIM E , P H YS IC A L E V ID E N C E ) P R O D U C T IV ITY A N D Q U A L ITY ? H o w S h o u ld W e M a t c h D e m a n d a n d P r o d u c t i v e C a p a c i t y ? W h a t A r e A p p r o p r i a t e R o le s f o r P e o p le a n d T e c h n o lo g y ? ( P E O P L E ) H o w C a n O u r F irm A c h ie v e S e rv ic e L e a d e rs h ip ? 46
  47. 47. Services MarketingGap Theory: Satisfaction is a function of the gap between expected service and perceived service. An extension of buyer behavior What you thought was going to happen versus your perception of what happened Key is to minimize the gap Give the customer what they expect…? 47
  48. 48. tksabarwal@gmail.com 48

×