SERVICES MARKETING

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Introduction Reasons for the growth in service sector Difference b/w Product & Service. Marketing mix Importance of Customer satisfaction in service industry

LIST OF SELECTED SERVICES

Utilities Electricity Water Supply Law Enforcing, Civil Administrative & Defense Services Police Army Navy Judiciary Civil Administration Municipal services (sewage, disposal of corpses, maintenance of roads, parks and public bldgs.) Insurance, Banking, Finance Banks Share & Stock Brokers Transport & Communication Railways Air Transport Post & Telegraph Telephone & Telecommunication, etc.

Distributive

Traders Wholesale, Retail, Dealers, Agents Business, Professional & Scientific Activities Advertising Marketing Research Accountancy Legal Medical Education Research Maintenance & Repairs Computer Programming Employment Agencies Leisure, Recreation Cinema, Theatre Clubs, Gymnasiums Video Game Parlors Self improvement courses Dry Cleaning, etc.

REASONS

Increasing Affluence: Greater Demand for services activities which consumers used to perform themselves such as interior decoration, laundry, care of household products care of garden, etc. More Leisure Time: Greater demand for recreation and entertainment facilities, travel to resorts, adult education and self improvement courses. High % of women in labor force: Greater demand for baby sitting facilities, household domestic help. Greater Life Expectancy: Great demand for nursing homes and healthcare. Great Complexity of products: Greater demand for skilled specialists to provide maintenance for complex products such as air conditioners, cars, computers

Increasing complexity of life: Greater demand for specialists in income tax, labor laws, legal affairs, marriage counselling, employment services. Greater concern about ecology and resource scarcity: Greater demand for purchased or leased services, car rental, travel, resort to time sharing rather than ownership basis. Increasing number of new products: The computers sparked development of such service industries as programming, repair and time sharing.

CHARACTERISTICS OF SERVICES

Intangibility Inseparability Heterogeneity Perishability Ownership

INTANGIBILITY

Following are the intangible characteristics of services which make them distinct from products:
A service cannot be toched Precise standardization is not possible. There is no ownership transfer A service cannot be patented Production and consumption are inseparable There are no inventories of the service.

INSEPARABILITY
Service is provided by a person who possesses a particular skill like singer or a coach, by using equipment to handle a tangible product (dry cleaning) or by allowing access to or use of physical infrastructure (hotel, train) Plumber has to be physically present to provide the service. Beautician has to be available to provide beauty related services. This is in direct contrast to products which can be produced in the factory today, stocked for the next two, three or more months and sold when an order gets procured.

HETEROGENEITY

Human element is very much involved in providing and rendering services and this makes standardization very much difficult. E.g., doctor, bank clerk, reservation of a hotel room.

PERISHABILITY

Service cannot be stored. Service is perishable. Below represents the service lost forever A car mechanic who has no cars to repair today Spare berths on a train Unsold seats in a cinema halls Most of the services face a fluctuating demand. Peak demand timing for bus services in morning or evening Certain train routes are more heavily booked than others.

OWNERSHIP
Product is owned when you buy it. Service cannot be owned. Buying a ticket, one can see evening show. One can hire the services of a chauffer by paying wages, etc. Service is purchased for the benefits it provides.

Service is much more than processing customers & their orders, it is the appearance of the facilities ,the behaviour of employees ,the presence of the other customers & the impressions made when the customers contact with all these elements.

MARKETING MIX

Product Price Place Promotion People Process Physical Evidence

PRODUCT (SERVICE)

Well known/trusted brand image Unusual or additional features Extended guarantees The Unique Sales Proposition (USP) Tangibility Different levels to analyze services: Customer Benefit Concept Concerned with what benefits do customer seek

Service Concept Concerned with what general benefit will the service offer.

CONTINUED.
Service

Offer Concerned with greater detailed shaping of the service concept. Decision on:
Service Elements (tangible or intangible) Service Form (in what way and how) Service levels (quality and quantity)

Service

Forms Service Delivery System Creating and delivery of service using guidelines built into service offer. Concerned with people processes, facilities, etc.,

PRICE

Value added Special discount Preferential credit terms Use now, pay later scheme (Fly Now, Pay Later)

PLACE

Extensive availability More outlet then competitor Portable unit/Mobile unit Innovative method e.g., telephone banking Careful selection of quality channels.

Hotels: Travel Agent, Tour Operators, Airlines, Tourist cabs Airlines: Travel Agents, Hotels, General Selling agents Life Insurance: Agents Shares: Stock Brokers, Financial Consultants Employment: Employment agencies, Consultants Financial Services: Banks, Financial Institutions, leasing cos. Products: Wholesalers, Stockiest, Retailers, Agents

PROMOTION

Innovative advertising campaigns Loyalty Promotions e.g., frequent flyer programmes Special offer Direct mail Public Relations Sponsorship Guidelines which can be kept in mind while promoting services are as follows: Use simple, clear messages Emphasize the benefits of service Promise only that which can be delivered and does not exaggerate claims. Build on the word-of-mouth communication by using testimony of actually consumers in advertisements, and

CONTINUED.
Provide tangible clues to services by using wellknown personalities or objects to help customers identify the service. E.g., Indian Airlines Objectives of advertising have been identified as: Creating an understanding of the company in the customers mind by describing the companys services, activities and its areas of expertise. Creating a positive image for the company Building a strong sense of identification with the customer by turning in to his needs, values and attitudes. Creating a positive background for the sales people to sell the services by providing all relevant information about the company.

PEOPLE

Highly trained/skilled staff Better customer care High efficiency Personal Attention Quick Response Specialized Skill

ROLE OF EMPLOYEE IN SERVICES

Marketing High

People Contact: People based service (Education, Dental, Medical Care, Restaurants, house maid)
Professional Non Professional

Low

People Contact: Equipment based service (Automatic car wash, laundry, vending machine, cinema Primary Facilitating Ancillary

STAFF SELECTION & RECRUITMENT

Preliminary Stage Identification of vacancy (may be a new post or replacement) Develop job profile review job description and person specification. Consider internal sources Consider using specialist recruitment agency Advertise internally and externally Process applications Screen applications for short-listing Selection Stage Arranging interview; venue, timing, date Determine process for selection; formal/informal interviews, use of pre-selection test, presentations.

PROCESS

Advances in technology e.g., automated queue systems, Cash Dispenser Fast Response times Customer Participation in the process: Location of service delivery The service itself High contact or low contact services Degree of standardization Complexity of the service Purpose of setting down clear outlines or blueprints for service delivery processes and transactions is as follows: To ensure that the service is carried out in the fastest, most efficient and cost effective manner possible.

CONTINUED
To enable service quality to be monitored ad benchmarks to be put in place, thus allowing accurate measurement of both quality and productivity. To facilitate staff training and enable individuals to carry responsibility for individual stages of the service transaction and delivery. To reduce the amount of divergence, thus enabling accurate budgeting and manpower planning, etc. take place

PHYSICAL EVIDENCE

Comfortable surroundings Superior dcor Qualifications Evidence of standing membership of professional bodies. Strong, recognizable corporate image Staff uniform House style Supporting literature Documentation High quality tangibles.

Customer Satisfaction is a function of expectations & perceptions both of which can be influenced by the marketer.

o When

advertising promises customer what the business cannot deliver customer becomes disenchanted with the business & management might conclude wrongly that advertising is a waste of time.

Dissatisfied customers might not report their concerns to the service business but they do tell ,their family ,friends & other acquaintances.

No Failure of service No customer complaint

No Failure of service Still customer complaint

Failure of service No customer complaint

Failure of service Customer complaint

THANK YOU