service marketing basic

7/29/2019 Service Marketing Basic

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Services Marketing


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Marketing

Is the task of creating,

promoting and deliveringgoods/services to consumer& businesses.


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What is a Product?

Anything that can be offered to amarket for attention, acquisition, use,or consumption and that might satisfy awant or need.

Includes: Goods, services,events, persons, places,

organizations, ideas, etc.


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What is a Service?A form of product that consists of activities, benefits, or

satisfactions offered for sale that are essentiallyintangible and do not result in the ownership ofanything.

A service is any act or performance that one can offer toanother that is essentially intangible & doesnt result inthe ownership of anything. Its production may or maynot tied to a physical product.

Services are deeds, processes, andperformances.

- Valarie Zeithaml & Mary Jo Bitner


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The Nature of A Service

A service firm, unlike amanufacturing firm

It does not manufacture but ratherperforms something for thecustomer.

It delivers an experience that isintangible, variable, inseparableand imperishable in nature


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Characteristics of Services


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s


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Intangibility:

Difficult to sample and to

evaluate

Cannot be seen ,tasted, smelled,

heard or felt

Cannot be seen ,tasted, smelled,

heard or felt

Difficult to sample and to

evaluate


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Implications of Intangibility

Services cannot be inventoried

Services cannot be patentedServices cannot be readilydisplayed or communicated

Pricing is difficult


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Variability

The quality of the servicedepends on who provides them

,when , where and how.

The quality of the servicedepends on who provides them

,when , where and how.


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Strategies for Variability

customer surveys and feedback

training in interpersonal and technicalskills

provide product knowledge

use standardisation strategiesfranchising, scripts

build quality into all processes


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Inseparable

simultaneous production andconsumption

the service provider is the product

the customer is involved(partial employee)

other customers may be present

the customer is involved(partial employee)

othercustomers may be present


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Strategies for inseparability

manage the service encounter scripts and roles

front-line staff need both technical andinterpersonal skills (recruit & train)

manage customer interactions

manage the physical evidence

develop customer service policies and servicerecovery procedures


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Perishable

services cannot be stored

need to manage supply and

demand


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Implications of Perishability

It is difficult to synchronizesupply and demand withservices

Services cannot be returned orresold


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How can demand bemanaged?

accurate demand forecasting

develop off-peak and on-peakstrategies

use reservation systems anddifferential pricing

employ part-time staffextend hours of operation

Provide self-service options (i.e.

ATMs, internet banking)


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Traditional Marketing Mix

All elements within the control of the firm thatcommunicate the firms capabilities and imageto customers or that influence customer

satisfaction with the firms product andservices:

Product

Price

Place Promotion

A d d k ti i f


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An expanded marketing mix forservices

Customers PricePlace &Time

Promotion

Product

(service)People Process

Physicalevidence

Customers

PriceCustomersPlace,


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Expanded Marketing Mix forServices


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People

All human actors who play a part in

service delivery and thus influencethe buyers perceptions: namely, thefirms personnel, the customer, andother customers in the serviceenvironment.

customer

service employeesother customers


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Physical Evidence

The environment in which the serviceis delivered and where the firm andcustomer interact, and any tangiblecomponents that facilitateperformance or communication of theservice.

atmospheredecor, music etc.

equipmentfacilities

uniforms


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Process

The actual procedures, mechanisms,and flow of activities by which theservice is deliveredthe servicedelivery and operating systems.

service delivery systemsback stagefront stage

procedurespolicies


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Challenges for Services

Defining and improving quality

Communicating and testing new services

Communicating and maintaining a consistentimage

Motivating and sustaining employeecommitment

Coordinating marketing, operations andhuman resource efforts

Setting prices

Standardization versus personalization


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Three Types Of Service

MarketingInternal Marketing

External Marketing

Interactive Marketing


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The Services MarketingTriangle

Internal

Marketing

Interactive Marketing

External

Marketing

Company(Management)

CustomersEmployees

enabling thepromise

delivering the promise

setting thepromise


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1. External Marketing :

"Setting the Promise" Marketing to END-USERS.

Involves pricing strategy, promotionalactivities, and all communication withcustomers. Performed to capture the attention of

the market, and arouse interest in theservice.


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2.Internal Marketing :

"Enabling the Promise" Marketing to EMPLOYEES.

Involves training, motivational, andteamwork programs, and allcommunication withemployees.

Performed to enable employees toperform the service effectively, andkeep up thepromise made to the customer.


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3.Interactive

Marketing : (Moment of Truth, Service Encounter)

This refers to the decisive moment ofinteraction between the front-office

employeesand customers, i.e. delivery of service. This step is of utmost importance, because ifthe employee falters at this level, all prior

efforts made towards establishing arelationship with the customer, would bewasted.

Ways to Use the


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Ways to Use theServices Marketing Triangle

Overall StrategicAssessment

How is the serviceorganization doing on

all three sides of thetriangle?

Where are theweaknesses?

What are thestrengths?

Specific ServiceImplementation

What is being promotedand by whom?

How will it be deliveredand by whom?

Are the supportingsystems in place to

deliver the promisedservice?


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Challenges for Services Industry

Defining and improving quality

Communicating and testing new services

Communicating and maintaining a consistentimage

Motivating and sustaining employeecommitment

Coordinating marketing, operations andhuman resource efforts

Setting prices Standardization versus personalization


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GAPs Model of Service Quality

Service Delivery

GAP 4

CUSTOMER

COMPANYExternal

Communications to

Customers

Customer-drivenservice designs and

standards

Company perceptions of

consumer expectations

Expected

Service

Perceived

Service

GAP 2

GAP 3

GAP 5

GAP 1


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Provider Gap 1: Not knowing what customers expect

Provider Gap 2: Not selecting the right service designs and standards

Provider Gap 3: Not delivering to service standards

Provider Gap 4: Not matching performance to promises

CustomerExpectations

CustomerPerceptions

Key Factors Leading to theCustomer Gap

CustomerGAP

Key Factors Leading to Provider


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Customer

Expectations

Company Perceptions ofCustomer Expectations

Inadequate Marketing Research OrientationInsufficient marketing researchResearch not focused on service qualityInadequate use of market research

Lack of Upward CommunicationLack of interaction between management and customersInsufficient communication between contact employeesand managersToo many layers between contact personnel and topmanagement

Insufficient Relationship Focus

Lack of market segmentationFocus on transactions rather than relationshipsFocus on new customers rather than relationshipcustomers

Inadequate Service Recovery

Key Factors Leading to ProviderGap 1

GAP

1

Key Factors Leading to Provider Gap 2


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Customer-Driven Service Designsand Standards

Management Perceptions ofCustomer Expectations

Poor Service DesignUnsystematic new service development processVague, undefined service designsFailure to connect service design to servicepositioning

Absence of Customer-Driven StandardsLack of customer-driven service standardsAbsence of process management to focus oncustomer requirementsAbsence of formal process for setting service

quality goals Inappropriate Physical Evidence and Servicescape

Key Factors Leading to Provider Gap 2

GAP

2

Failure to develop tangibles in line with customer

expectations

Key Factors Leading to Provi


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Service Delivery

Customer-Driven Service Designsand Standards

Deficiencies in Human Resource PoliciesIneffective recruitmentRole ambiguity and role conflictPoor employee-technology job fit

Inappropriate evaluation and compensation systemsLack of empowerment, perceived control and teamwork

Failure to Match Supply and DemandFailure to smooth peaks and valleys of demandInappropriate customer mixOver-reliance on price to smooth demand

Customers Not Fulfilling RolesCustomers lack knowledge of their roles and responsibilitiesCustomers negatively impact each other

Problems with Service IntermediariesChannel conflict over objectives and performanceChannel conflict over costs and rewardsDifficulty controlling quality and consistencyTension between empowerment and control

Key Factors Leading to ProviGAP 3

GAP

3

Key Factors Leading to Provi


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Service Delivery

Lack of Integrated Services Marketing CommunicationsTendency to view each external communication as

independentNot including interactive marketing in communications plAbsence of strong internal marketing program

Ineffective Management of Customer ExpectationsNot managing customer expectations through all forms ofcommunicationNot adequately educating customers

OverpromisingOverpromising in advertisingOverpromising in personal selling

Overpromising through physical evidence cues Inadequate Horizontal Communications

Insufficient communication between sales and operationsInsufficient communication between advertising and operDifferences in policies and procedures across branches o

External Communications toCustomers

Key Factors Leading to ProviGAP 4

GAP

4


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THANK YOU

Module 1. Ends

service marketing basic

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