Transcript .ESSENTIAS OF PLANNING - International University College

PRINCIPLES OF MARKETING-A2
Topic 11
Services Marketing
Assoc. Prof. A. Popissakov
2009-2010
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Topic Contents
1. What is Services Marketing
2. Services Marketing Management
3. Interactive Marketing
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Introduction
 Service Society?
 UK,
 Canada,
 Bulgaria???
 Although the basic principles of the
marketing mix are followed, there are
distinct differences in marketing tangible
products and services
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Perspectives on Service Markets
Services encompass a wide range of areas,
each with a varying degree of service
involved.
 There are few pure services. In reality,
many product 'packages' involve varying
degrees of service.
 Service products can be placed along a
spectrum running from a high to a low level
of service.
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Classifying Services
The services - product spectrum
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Special Characteristics of Service
Markets
5 key features
 Lack of ownership
 Intangibility
 Perishability
 Inseparability
 Heterogeneity
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Physical goods ownership
Buy a product (physical good) as a customeract like an owner
E.g. cars and computers
 Personal access to the product (unlimited
time)
 Do whatever you like.
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Service Characteristics: Lack of
ownership
In contrast, service products lack that quality
of ownership as there is no transfer of
ownership nor do tangible goods exchange
hands. The purchase itself is transient.
 E.g. rent-a-car
 Go to the movie
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Service Characteristics: Intangibility
Services cannot be readily displayed, so they
cannot be seen, tasted, felt, heard or smelt
before they are bought.
 The heart of the service is the experience
created for the customer.
 customers use a combination of criteria based
upon impressions, memories and expectations.
 E.g. Fly by BA
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Service Characteristics: Perishability
Services are manufactured at the
same time as they are
used/consumed.
Services cannot be stored for later
sale or use.
 E.g. “a brilliant concert”
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Service Characteristics: Inseparability
Services cannot be separated from their
providers, whether the providers are
people or machines.
 The type of customer can affect the quality
of the experience: positive customers may
receive better service than uncooperative
 E.g. Go to see a doctor
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Service Characteristics: Heterogeneity
Quality of services depends on who
provides them, as well as when, where
and how they are provided.
It is difficult to standardise the service, as
different employees within the same
organisation can produce variable levels of
customer service.
 E.g. How to standardise smiling?
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Services Marketing Management
This topic looks further at the implications of
the service characteristics for marketers in
terms of:
 formulating strategy,
 developing and measuring quality,
 training staff and
 maintaining productivity in the delivery of
the service product
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1. Marketing Mix -12 Factors
 Neil Borden first used the term “Marketing
Mix” in 1964 when he listed 12 factors,
which a company can control in a marketing
area.
 He suggested that a cocktail or mix of these
factors was necessary and that mix would
be dependent on circumstances.
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Neil Borden’s -12 Factors
Marketing Mix
Internal – Controllable Variables
1. Product policy
2. Pricing
3. Branding
4. Distribution
5. Servicing
6. Physical handling
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7. Promotion
8. Packaging
9. Display channels
10 Advertising
11. Personal selling
12. Fact finding and
analysis
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2. Classic Marketing Mix -”4 P’s”
Jerome McCarthy grouped Borden’s 12
factors into “4 Ps’ “ and this now appear in
most marketing books as the key
components for marketing actions.
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The “4 P’s” of Marketing MIX
Classical theory
Product
Price
Place
Promotion
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Marketing Mix
This
order can
be
reversed
according
to firm’s
approach.
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3. Extended Marketing Mix -”7 P’s”
Proposed by Booms and Bitner (1981)
adding
 People,
 Processes and
 Physical evidence
to the traditional 4Ps for the service sector in
particular, more fully to describe the
marketing activities that are going on.
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The “7 P’s” Marketing MIX
Product
Price
Place
Promotion
People
Marketing mix specially
proposed for
service sectors
Processes
Physical evidence
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”7 P’s” Marketing Mix - People
The ability of service provider to cope with
customers, to deliver the service reliability
and present an image consistent with
company
This relationship is called Interactive
marketing
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”7 P’s” Marketing Mix - People
 E.g. A customer's satisfaction with
hairdressing and dentistry services has as
much to do with the quality and nature of
the interaction between the customer and
the service provider as with the end result.
 Sometimes the interaction is more important
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”7 P’s” Marketing Mix - Processes
 Manufacturing processes, once they are set
up, are consistent and predictable and can
run automatically. (FMS, CAD-CAM)
 Service Processess, however, are
“manufactured” and consumed live, on the
spot, they do involve people and their skills,
consistency can be rather more difficult than
with normal manufacturing.
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”7 P’s” Marketing Mix - Processes
Service Processess to be considered:
 how the service is delivered;
 what QCs (quality controls) can be built in;
 queueing mechanisms: preventing waiting
to leave without purchase; (Billa’s queuing
standard)
 processing customer details and payment,
etc.
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”7 P’s” Marketing Mix - Processes
Application of Service Processess:
 banks, insurance companies, other retailers
of financial services,
 fast food and super/hyper market outlets,
 hairdressers and other personal service
providers,
 solicitors, doctors, management consultants,
 hospitality industry, etc.
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”7 P’s” Marketing Mix Physical evidence
Physical evidence is of particular
importance to retailers who maintain
premises from which a service is sold or
delivered.
It emphasize factors as:
 atmosphere,
 image and design of premises,
 prosperity of the company,

respect to customers, etc.
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”7 P’s” Marketing Mix Physical evidence
In other service situations, physical evidence
would relate to:
 aircraft in which you fly,
 the hotel in which you stay,
 the stadium in which you watch a match,
 the lecture room in which you learn,
 the washroom in which you powder your
nose,
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
etc.
Interactive Marketing: Service Quality
 Central to delivery of any service product is
interactive marketing, or the service
encounter between provider and customer.
 The serivce encounter is an important
determinant of quality as it combines all
the elements of the marketing mix.
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Interactive Marketing: Service Quality
The challenge for the marketer is to bring
quality, customer service and marketing
together to build and maintain customer
satisfaction.
Quality
Customer
Service
satisfaction
Marketing
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Interactive Marketing: Service Quality
Some aspects of service can be measured
objectively, especially where there are
tangible elements to assess.
Berry, Parasuraman and Zeithaml have
developed criteria for assessing service
quality through a survey called
SERVQUAL™ that collects data relating to
customer perceptions.
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10 criteria affecting the quality of service
Access: access to service by the customer;
Reliability: provider arrives on time; regularity
Credibility: trustworthy and believable;
Security: protected from risk or doubt;
Understanding the customer: use empathy, be
helpful;
6. Responsiveness: quick to respond to customer
needs;
7. Courtesy; smile, politness, manners …
8. Competence: provider staff properly trained to
meet the needs of the customer;
9. Communication; listen and explain, help to
understand;
10. Tangibles: does the appearance of the staff
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inspire confidence?
1.
2.
3.
4.
5.
Interactive Marketing: Service Quality
10 criteria affecting the quality of the outcome of the service
experience:
1. Access
2. Reliability
Influece the quality of the
outcome of the service
3. Credibility;
experience
4. Security
5. Understanding
the customer
6. Responsiveness
7. Courtesy
8. Competence
9. Communication
10.Tangibles
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Influece the quality of the
input of the service
experience
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Service Quality:
expectations, perceptions and gaps
Marketing actions
Word-of-mouth
Experience
Expectations of
*Access
* Responciveness
*Reliability * Courtecy
*Credibility * Competence
*Security * Communication
*Understanding * Tangibles
either
Satisfaction
Provider’s
misconception
of the customer
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or
Dissatisfaction
Inadequate
resources
Service
experience
Perceived oucomes of
*Access
* Responciveness
*Reliability * Courtecy
*Credibility * Competence
*Security * Communication
*Understanding * Tangibles
Inadequate or
inconsistent
service delivery
Exaggerated
promises
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Internal Marketing: Training and Productivity
The connection between staff performance and
customer satisfaction within the service
environment is relevant to:
Staff training
Training is essential to improve and maintain
high standards of service delivery.
Staff productivity
Employees who are enthusiastic about their
jobs communicate better and are more eager
to serve customers.
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Internal Marketing: Staff in service function
Direct
invovment
Indirect
invovment
Visible to customers
Invisible to customers
Airline cabin crew
Telephone services
Cashiers
Order takers
Sales assistants
Custom
Medical staff
Phone banking
Receptionists
E-commerce
Hotel chamber maids
Office cleaners
Supermarket shelf
Airline caterers
fillers
Security personel/
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services/
Administrative
staff
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Internal Marketing: Staff
productivity
There are several possibilities for delivering
services more efficiently:
 Staff improvement
 Systems and technology
 Reduce service levels
 Reduce mismatch between supply and
demand
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Internal Marketing: Staff productivity
Staff improvement
 Improved recruitment so staff have better
skills.
 Improve training
 Empowering frontline staff to make
appropriate decisions.
 Staff given responsibility and flexibility
to deal with real needs of customers.
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Internal Marketing: Staff productivity
Systems and technology
 Introduction of service process
monitoring technology.
Reduce service levels
 Fewer people responsible for greater
number of services
 Dangerous, as it can lead to the
perception of reduced quality.
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Internal Marketing: Staff
productivity
Customer interaction
 Changing how the customer interacts
with staff may improve productivity.
 Communication vital to support any
changes.
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Internal Marketing: Staff
productivity
Reduce mismatch between supply and
demand
 Accommodate fluctuations in demand:
for example, open more checkout tills
during peak periods to shorten queues.
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The End
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