Transcript Services Marketing Session 1st Dated: -07-03-2010

Services Marketing Session 1st
Dated: -07-03-2010
BY: -Neeraj Gupta
Definition of Service
“Service is an activity that has an element
of intangibility associated with it and
which involves the service provider’s
interaction either with customers or with
the property belonging to the customer”.
- Adrian Payne
What are services –Philip kotler
“Any activity of benefit that one party can
offer to another that is essentially
intangible and does not result in the
ownership of anything. Its production
may or may not be tied to a physical
product”.
Factors influencing growth of services as a
Sector
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Demographic changes
Social changes
Economic changes
Technological changes
Political & legal changes
Policy changes
Service Marketing Philosophy
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Three main points of this philosophy are as
follows: 
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Create Customers
Keep/retain Customers
Profitable Customers
Evolution of service firms
All Advertisements, brochures etc. of
southwest Airlines refer to the customer
with a capital ‘C’ which indicates the
company’s focus on the customer.
Differentiated services: Domino’s Pizza
promises free Pizza if it is not offered at
Customers’ door steps within 30 minutes
Definition – Services Marketing

Services marketing is marketing based on
relationship and value. It may be used to
market a service or a product. Marketing a
service-base business is different from
marketing a product-base business.
The Services Marketing Triangle
Company
Internal
Marketing
Front-Line
Employees
External
Marketing
Customers
Interactive
Marketing
The services marketing triangle
External marketing - interaction b/w co &
customers
 delivers quality service to customers
Information about products & services
to external customers through
communication-mix- Advertisements,
sales promotion, personal selling, direct
marketing and public relations
The services marketing triangle
Internal marketing - interaction b/w
co & front-line employees
 co enables its employees to
deliver quality service to customers
 Communicating information about
the co’s products & services to
employees of the organisation.
 Tools
in internal marketing
process
 Newsletters
 Video shows
 Staff forums
 Presentations
Interactive marketing – interaction
b/w front-line employees & the
customers
 determines customer retention
by service firms
 physical or monetary exchange
in the form of information
 Improves value delivered to the
customers in the form of a product
or service
Characteristics of services
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Intangibility
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These are the ways in which intangibility can be overcome:
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Perishability
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Visualization-Using visual aids
Association-Using personalities like endorsements by
celebrities
Physical representation-Uniforms, Logos, mascots, colours etc
Documentation, facts and figures-
Over-marketing
Managing Demand
Managing Supply
Variability
Inseparability
Characteristics of services
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Perishability
Managing Demand
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Rising Demand
Falling Demand
Zero Demand
Full Demand
Overfull Demand-Demand outstrips supply.
Negative Demand
Latent Demand
Seasonal or Irregular Demand
Unwholesome Demand-can be due to an unwanted change
in the product or the service.
Characterstics of Services
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Variability
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Training of Internal Customers
Recruitment and Selection of Internal Customers
Training of External Customers
Automation
Inseparability
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Training of internal customers
Adopting innovative methods of service-like group therapy
etc.
Video conferencing
Robotics
Difference between physical goods
and services
Physical goods
Services
tangible
intangible
homogeneous
heterogeneous
Production and distribution are
separated from consumption
Production, distribution and
consumption are simultaneous
processes
A thing
An activity or process
Core value processed in factory
Core value produced in the buyerseller interaction
Customers do not participate in the
production process
Customers participate in production
Can be kept in stock
Cannot be kept in stock
Transfer of ownership
No transfer of ownership
Generic Differences Between
Goods & Services
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Nature of the product
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Problems in quality control
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Involvement of the customer in production and
delivery
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Absence of inventory
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Structure and nature of distribution channels-Due
to time gap difference in the production and
distribution of products and services.
Generic Differences Between
Goods & Services
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Importance of prompt services
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Difficulty in evaluating service quality
Generic differences b/w goods &
Services
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Nature of the product
Pure tangible good – pencil, cup or car battery
Tangible good supplemented by some
services – fax machine with after-sale services
Services supplemented by a tangible good –
books provided by DDE
Pure service – hair-cutting
Generic differences b/w goods &
Services
Problems in quality control – perception
Hotel serves tasty food
Ambience is good
Waiters serve customers with a smile
*Fails to assist customer in finding a vacant
table & *take orders quickly
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Generic differences b/w goods &
Services
Involvement of the customer in production &
delivery
 Customer walks into a coffee shop
like coffee Day or Brista
Ask for a customized drink with no sugar or with a
chocolate flavor
If in a bad mood can shout on service assistant
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Generic differences b/w goods &
Services
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Involvement of the customer in production &
delivery
Replacing people with machines
Cashier replaced by ATMs
Telephone banking
Generic differences b/w goods &
Services
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Absence of inventories
opportunity if lost ---lost forever
Structure & nature of distribution channels
Absence of distribution channels- direct
marketing
Importance of prompt service
Transport service
Generic differences b/w goods &
Services
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Difficulty in evaluating service quality
WOM
Thank You