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Services Marketing

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Services MarketingServices are highly intangibleBenefits are felt over a period of time

Creating confidence in the customers mind

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SERVICES MARKETING

Plant & Machinery

PureServices

Intangible

Tangible

Consumer Durables

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PurePureServiceService

Categories of Service Mix

TangibleTangibleGoodGood

w/w/

ServicesServices

Major Major ServiceService

w/ Goodsw/ GoodsHybridHybrid

PurePureTangibleTangible

GoodGood

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Services MarketingPassion for understanding customer expectations and perceptions

Linking them to product design & delivery, aswell as operational planning

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Classification of ServicesRestaurant /Health Care A

Transportation /Warehousing B

Education /

Management CConsultancy

Legal services /

Insurance D

Tangible

Intangible

People Objects/Products

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Classification of ServicesA : People processing servicesB : Product or possession processing services

C : Mental stimulus processing servicesD : Information processing services

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Paradigms in Services MarketingService as a process. Internal customer focus is asimportant as external customer orientation.

Having a mindset of doing it right the first time, asthere is no 99% quality in the service product and noquestion of reworking or repairing of bad service

product.

Speed & accuracy in responding to the customer holds the key.Keeping customers perspective always.

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ServicesServices

InseparabilityServices cannot

be separatedfrom their providers

InseparabilityServices cannot

be separatedfrom their providers

PerishabilityServices cannotbe stored for

later sale or use

PerishabilityServices cannot

be stored for later sale or use

IntangibilityServices cannotbe seen, tasted,

felt, heard, or smelled before

purchase

IntangibilityServices cannotbe seen, tasted,

felt, heard, or smelled before

purchase

VariabilityQuality of

services dependson who providesthem and when,where, and how

VariabilityQuality of

services dependson who providesthem and when,where, and how

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Characteristics of Service MarketingIntangibilityCustomers decision is dependent on understanding of serviceBelief in marketers promise of future performanceCustomer dissonanceComfort zonesCredible medium of communication

Negative ripple effectLow price sensitivity

Customers are willing to pay a higher price as long as they

Feel reassured that they are getting a 100% quality product.

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Characteristics of Service Marketing

No inventoryZero time gap between production & consumption.Profitability & viability are extremely critical.

Value Creation ProcessPeople/ Process/ Proof of Performance/ PaceValue service product is created through an integratedmarketing mix of 8 Ps

TangibilityProvided by service provider Communication & speedCreate an appropriate set of beliefs.

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ServicesServices

InseparabilityIncrease

productivity of providers

InseparabilityIncrease

productivity of providers

PerishabilityMatch supplyand demand

PerishabilityMatch supplyand demand

IntangibilityUse cues to

make it tangible

IntangibilityUse cues to

make it tangible

VariabilityStandardizeservice

production& delivery

VariabilityStandardize

serviceproduction& delivery

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Customer Expectation & Zone of TolerancePast experience & Reference Group

Desired Service

(ideal state)

Zone of Tolerance

Adequate Service

(threshold level)

Service Providers

Communications

Perceived ServiceAlternatives

Predicted Service

Personal needs

Ideal Service Image

Decision Criteria

Competition

Uniqueness of ServiceSituation

Situational Factors

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Customer Expectations & Zone of

ToleranceUnderstand customer expectations and integratethem with the service design & delivery.

Expectations are influenced by the experience of thecustomer & their immediate reference groups. Theseare also shaped by communications from and aboutthe service provider. Most customers have an ideal

image influenced by customers personal needs.However most customers understand realities-organizations have resource constraints andenvironmental factors impact organizational

performance.

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Customer Expectations & Zone of Tolerance

Minimum or Threshold level of service is termed as Adequate service.

The gap between desired and adequate service has been called Zone of ToleranceService below Threshold level > DissatisfactionService above Threshold level > Satisfaction

No gap between delivered and desired service >Delight

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Decision Criteria & Zone of toleranceMin

Zone of Tolerance

Max

Low High

Criticality of Decision Criteria

Zone of TolerancevariesinverselyacrossDecision

criteriadependingon criticalityof thecriteria

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Marketing Strategies for Service FirmsA Shifting Customer Relationship

A Customer Service Democracy to

MeritocracyHolistic Marketing for Services

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Three Types of Marketing

in Service Industries

Internalmarketing

CompanyCompany

CustomersCustomers

Externalmarketing

EmployeesEmployees Interactivemarketing

Cleaning/maintenance

services

Financial/bankingservices

Restaurantindustry

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Service Differentiation

Offer

Delivery

Image

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Factors leading to Consumer SwitchingBehavior

PricingInconvenience

Core Service FailureService Encounter FailuresResponse to Service Failure

CompetitionEthical ProblemsInvoluntary Switching

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Service-Quality Model

Expected service

Management perceptionsof consumer expectations

Marke ter

Marke ter

Consumer

Consu mer

Gap 1Service delivery (including

pre- and post-contacts)

Gap 3Translation of perceptions

to service-quality specifications

Gap 2

Gap 5 Perceived service

Externalcommuni-cations to

consumersGap 4

Personal needs Past experienceWord-of-mouthcommunications

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Determinants of Service Quality Reliability- The ability to perform the promised servicedependably & accurately.

Responsiveness - The willingness to help customers & to

provide prompt service. Assurance - The knowledge & courtesy of employees &their ability to convey trust & confidence.

Empathy - The provision of caring, individualized attentionto customers.Tangibles - The appearance of physical facilities,equipment, personnel & communication materials.

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2000 Prentice Hall

ServiceServiceExcellenceExcellence

ServiceServiceExcellenceExcellence

Strategic ConceptStrategic Concept Top-Management CommitmentTop-Management Commitment High StandardsHigh Standards Monitoring SystemsMonitoring Systems Satisfying Customer ComplaintsSatisfying Customer Complaints Satisfying Both Employees & CustomersSatisfying Both Employees & Customers Managing ProductivityManaging Productivity

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2000 Prentice Hall

A. Concentrate here B. Keep up the good work

D. Possible overkillC. Low priority

Importance-PerformanceImportance-PerformanceAnalysisAnalysis

Importance-PerformanceImportance-PerformanceAnalysisAnalysis

Extremely important

Slightly important

Excelle

ntp erfo rmance

Fairp erfor manc e

1 2

9

1113 12 14

34

5 678

10

# = At t r ibutes

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Complaint ResolutionComplaint ResolutionComplaint ResolutionComplaint Resolution

Hiring Criteria & Training for EmployeesHiring Criteria & Training for Employees Develop Guidelines for FairnessDevelop Guidelines for Fairness Remove Complaint BarriersRemove Complaint Barriers Analyze Types & Sources of ComplaintsAnalyze Types & Sources of Complaints