Transcript Services Marketing

Services Marketing
MBA-SEM-III
TERM-01-2012
MODULE-02
MODULE-02A
Duration-4 Lectures.
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FUNDAMENTALS OF SERVICE
MARKETING
Assessing service marketing opportunities.
Expanded marketing mix for services .
Perceptions of services
Customer behavior specific to usage of
services
Service quality Determinants.
The service sector
► The
services sector has been growing at a
rate of 8% per annum in recent years
► More than half of our GDP is accounted for
from the services sector
► This sector dominates with the best jobs,
best talent and best incomes
“There are no such thing as service
industries.There are only industries
whose service components are
greater or less than those of other
industries. Everybody is in service.”
-Theodore Levitt-
What is services?
It is the part of the product or the
full product for which the
customer is willing to see value
and pay for it.
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/limited transfer of
ownership/ conditional transfer of ownership.
Services could meet
► Personal
needs – haircuts, tuition,
restaurants.
► Business needs – courier services, office
cleaning services, delivering fresh flowers
Marketing Of Services-
MARKETER IS VIEWED
AS A DECIDER AN
ARTIST OR/& A MIXER
OF INGREDIENTS”
Service Marketing
► Creating
a market for services offered by
market communication .
Marketing Mixes
► Traditional
ProductPrice
Place
Promotion
Mixes 4Ps
The Four additional ‘P’s of Service
Marketing
► People
► Physical
evidence
► Process
► Productivity
and quality management
Integrated Services Marketing Mix
- the 8Ps
Product
Price
Promotion
Processes
Customer
service/
Experience
Place
Productivity
& Quality
People
Physical
evidence
Applying the Services Marketing
Mix
Organisational perspective Customer perspective
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Product
Price
Promotion
Place
Physical evidence
People
Process
Productivity & Quality
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Customer value
Cost
Explanation/Communication
Convenience
Confirmation
Consideration
Co-ordination/concern
Experience
Why Classify Services?
► Differences
among services affect customer
behaviour
► Help to understand what the service organisation
actually does
► What sorts of processes are involved
► Where do customers fit into the operation
► Useful in benchmarking
► Classification helps marketers develop different
strategies for different types of services
Four Categories of Services
Employing Different Underlying Processes
What is the
Nature of the
Service Act?
TANGIBLE
ACTS
INTANGIBLE
ACTS
Who or What is the Direct Recipient of the Service?
DIRECTED AT PEOPLE
DIRECTED AT POSSESSIONS
People Processing
e.g., airlines, hospitals,
haircutting, restaurants hotels,
fitness centers
Mental Stimulus
Processing
e.g., broadcasting, consulting,
education, psychotherapy
Possession
Processing
e.g., freight, repair, cleaning,
landscaping, retailing,
recycling
Information Processing
(directed at intangible assets)
e.g., accounting, banking,
insurance, legal, research
Awareness of need
prepurchase
stage
Needs &expectations
Purchase
process
for services
Service
encounter
stage
Clues to service
quality
Post purchase
stage
Expectation vs.
Perception
Information search
Evaluation of
alternative
service suppliers
Request service from
chosen supplier
Service delivery
Evaluation of
service performance
Future intentions
Factors that Influence
Customer Expectations of Services
Personal Needs
Desired Service
Beliefs about
What Is Possible
Explicit & Implicit
Service Promises
Word-of-Mouth
Past Experience
ZONE
OF
TOLERANCE
Perceived Service
Alterations
Adequate Service
Predicted Service
Situational Factors
Source: Adapted from Zeithaml, Parasuraman & Berry
Components of Customer
Expectations
► Desired
Service Level:
wished-for level of service
quality that customer believes can and should be delivered
► Adequate
Service Level: minimum acceptable
► Predicted
Service Level:
level of service
service level that customer
believes firm will actually deliver
► Zone
of Tolerance: range within which customers are
willing to accept variations in service delivery
Qualities of services
► Search
qualities
► Experience qualities
► Credence qualities
Intangible Attributes, Variability, and
Quality Control Problems Make Services
Hard to Evaluate
► Search
attributes – Tangible characteristics that allow
customers to evaluate a product before purchase
► Experience
attributes – Characteristics that can be
experienced when actually using the service
► Credence
attributes – Characteristics that are
difficult to evaluate confidently even after consumption
► Goods
tend to be higher in search attributes,
services tend to be higher in experience and
credence attributes
► Credence attributes force customers to trust that
desired benefits have been delivered
How Product Attributes Affect
Ease of Evaluation)
High in search
attributes
Complex surgery
Legal services
Computer repair
Entertainment
Most Services
Haircut
Lawn fertilizer
Restaurant meals
Foods
Motor vehicle
Chair
Easy
to evaluate
Clothing
Most Goods
Difficult
to evaluate
High in experience High in credence
attributes
attributes
Source: Adapted from Zeithaml
Determinants of service quality
► Reliability
– delivering on promises
► Responsiveness – willing to help
► Assurance – inspiring trust and confidence
► Empathy – individualising customers
► Tangibles- physical representation
Managing Service quality
BY REDUCING THE GAPS► Gap between management perceptions and
consumer expectations
► Gap between management perceptions and
service quality specifications
► Gap between service quality specifications and
service delivery
► Gap between service delivery and external
communication
► Gap between expected service and perceived
service
Service quality is directly
proportional to employee
satisfaction
Satisfied employees will produce
satisfied customers
► Morale
► Motivation
► Mood
When customers visit a service
establishment
Their satisfaction will be influenced by
► Encounters with service personnel
► Appearance and features of service facilities
– exterior and interior
► Interactions with self service equipment
► Characteristics and behavior of other
customers
Managing Service Encounters
► Service
encounter: A period of time during which
customers interact directly with a service
► Moments
of truth: Defining points in service
delivery where customers interact with employees
or equipment
► Critical
incidents: specific encounters that result in
especially satisfying/dissatisfying outcomes for
either customers or service employees
Types of complainers
► Passives
► Voicers
► Irates
► Activists
Customer complaints
► It
pays to resolve customer complaints
► On an average only 5 % dissatisfied customers
complain. Others simply go over to the competitor
► A satisfied consumer speaks to an average of 3
people on his her experience
► A dissatisfied consumer gripes to on an average
11 persons about his/her unpleasant experience
Companies that pay importance
to resolving customer complaints
► Pay
attention to quality and training of manpower
recruited
► Have clear benchmarks on service quality and
communicate to employees
► Take remedial steps to improve customer
satisfaction and prevent repeats of customer
dissatisfaction
► Have a data base on customer complaints that is
periodically analysed and policies adjusted
Managing Service Productivity
► Giving
quality service is an expensive business
► Not every consumer is willing to pay extra for
service quality
► Service providers would have to find their
optimum service quality/cost ratios
► Can technology substitute part of the labour
content?
► Can customers substitute part of the labour
content?
► Making services obsolete by product innovations
In services, the last
experience remains uppermost
in your mind. Therefore, it is
not enough to be good, you
have to be consistently good
Assignment
► CASE
STUDY - Ginger Hotels