Upload
abhicshetty
View
218
Download
0
Embed Size (px)
Citation preview
8/8/2019 2.Services Marketing(Mkt Mix)
1/92
Service Product MixPricing of services
Service Promotion MixPlace factor in services marketing
People in servicesService Process
Capacity planningCapacity scheduling
8/8/2019 2.Services Marketing(Mkt Mix)
2/92
Formulating marketing mix for services is as important asfor products.
It is the set of tools that a firm uses to pursue its marketingobjectives in the target market
Service expectation levels of consumers are at an all timehigh, hence formulation of service marketing mix needs to bedone on a professional level, by experts
Offering quality services is not enough,Proper promotion,sound pricing strategy, placement decisions, hiring right staffand studying consumers enhances service delivery process
This has resulted in broadening & modification of the
market mix i.e due to the inadequacy of the 4ps anextended mkt mix is devised
8/8/2019 2.Services Marketing(Mkt Mix)
3/92
services
8/8/2019 2.Services Marketing(Mkt Mix)
4/92
An expanded marketing mix for services
Customers PricePlace &
Time
Promotion
Product
(service)PeopleProcess
Physicalevidence
Customers Price
Customers
Place,
cyber-
space &
time
8/8/2019 2.Services Marketing(Mkt Mix)
5/92
People All human actors who play a part in
service delivery and thus influence thebuyers perceptions: namely, thefirms personnel, the customer, and
other customers in the serviceenvironment.
customer
service employees
other customers
8/8/2019 2.Services Marketing(Mkt Mix)
6/92
8/8/2019 2.Services Marketing(Mkt Mix)
7/92
8/8/2019 2.Services Marketing(Mkt Mix)
8/92
Physical Evidence The environment in which the service is
delivered and where the firm andcustomer interact, and any tangiblecomponents that facilitate performance
or communication of the service.
atmosphere
dcor, music etc.
equipmentfacilitiesuniforms
8/8/2019 2.Services Marketing(Mkt Mix)
9/92
8/8/2019 2.Services Marketing(Mkt Mix)
10/92
ProcessThe actual procedures, mechanisms,
and flow of activities by which theservice is deliveredthe servicedelivery and operating systems.
service delivery systemsback stage
front stageprocedures
policies
8/8/2019 2.Services Marketing(Mkt Mix)
11/92
8/8/2019 2.Services Marketing(Mkt Mix)
12/92
8/8/2019 2.Services Marketing(Mkt Mix)
13/92
PEOPLE PHYSICALEVIDENCE
PROCESS
Employees Facility design Flow of activities
Customers Equipment Number of steps
Communicatingculture and values
Signage Level of customer involvement
Employee research Employee dress
Other tangibles
Expanded MarketingExpanded Marketing
Mix for ServicesMix for Services
8/8/2019 2.Services Marketing(Mkt Mix)
14/92
Product mix
Product mix decides the magnitude ofsuccess, intensityofprofits and satisfaction levels of the consumer
Factors influence the product mix based on the type ofservice provided
Eg: Hotel service, quality of consumers
Transport services-emerging lifestyles, levels ofurbanization
Personal care services- trends, tastes, fashion
8/8/2019 2.Services Marketing(Mkt Mix)
15/92
Consumers buy not
Speed/comfort An air ticket
Adventure/fun Tour package
Bill paying convenience Credit cards
Beauty Beauty treatments/cosmetics
8/8/2019 2.Services Marketing(Mkt Mix)
16/92
Service Product MixService product is intangible and
perishable , inseparable & heterogeneous innature.
Conceptualization of the service product
Step 1-costumer benefit concept
Step 2-service concept
Step 3-Service offer
Step 4-service delivery system
8/8/2019 2.Services Marketing(Mkt Mix)
17/92
Potential product
Augmented product
Expected productBasic product
Core benefit
8/8/2019 2.Services Marketing(Mkt Mix)
18/92
productCore product seat in a theatre, room in a
hotel, services in a bank
Expected product consumer perception(speed in a bank, expertise/accuracy inconsultancy services, security in insurance)
Augmented product - additional attractionprovided to get an edge over competition,this helps to keep marketing efforts proactive
Potential product process of discoveringnew ways to attract more customer, retainexisting and fight competition (24x7 callcentres, banks open on Sunday)
f i ff i
8/8/2019 2.Services Marketing(Mkt Mix)
19/92
Nature of service offering Three components are to be kept in mind when we
want to design the service offering.
Core service: The most basic component is the coreservice and it addresses questions like What is thecustomer really purchasing, What business are wein? etc. It supplies the central problem solving
benefits that customers seekEx: Transport solves the need to move from one
location to another etc.
Core delivery process: The second component
concerns the core delivery process i.e - how the coreproduct is delivered to the customer, the customersrole in the process, how long the process is and styleof service offered.
8/8/2019 2.Services Marketing(Mkt Mix)
20/92
Supplementary services: This is the thirdcomponent and it augment(increases) ,
facilitates & enhancesThe core service by making it easy to use and by
increasing the value and appeal.
Each of the supplementary elements may requiretheir own delivery system and
Prescribed service level.
Flowcharting offers an excellent way to understand & identify the many types of supplementaryservices accompanying a core product
IDENTIFYING AND CLASSIFYING SUPPLEMENTARY
8/8/2019 2.Services Marketing(Mkt Mix)
21/92
IDENTIFYING AND CLASSIFYING SUPPLEMENTARYSERVICES:
Supplementary services can be identified
as-
8/8/2019 2.Services Marketing(Mkt Mix)
22/92
THE service flower
8/8/2019 2.Services Marketing(Mkt Mix)
23/92
Service product decision
A service provider may start with a singleservice, than provide a range of services ordevelop a new offering or enter a new market
These service product decision can be made byusing product/market matrix called Ansoffmatrix-
8/8/2019 2.Services Marketing(Mkt Mix)
24/92
Market penetration-no change in service ormarketstrategies to improve demand
a) introduce schemes
b) attract non-users
c) grabbing competitors share
Market developmentgeog, age-group, socialclass
Diversificationnew service-new market
8/8/2019 2.Services Marketing(Mkt Mix)
25/92
Managing services offeringNew service development
Style changes
Service improvements
Process line extension
Supplementary services/new service
Product line extension.
major innovation
8/8/2019 2.Services Marketing(Mkt Mix)
26/92
development
* Idea generation concept screening testing
the conceptdesign service & assess marketpotential cost analysis test marketing finallaunch
* Need identification size of market cost-
benefit analysis introduction of new product
* product life cycle launch, growth, maturity, &decline
8/8/2019 2.Services Marketing(Mkt Mix)
27/92
Designing of new serviceRe-engineering service processcost, speed &
productivity considerationUse of flow charts, blue prints, review alternative
delivery methods, eliminate supplementaryservices, rethink the process
Using research to design new service-askcustomers what features & price will createvalue
ac ors o e no e w e
8/8/2019 2.Services Marketing(Mkt Mix)
28/92
ac ors o e no e w edeveloping service product
mix Enrich peripheral services
Understand service quality expectations
Study behavioral profile of the consumers(offering product is as important as formulating it)
Take support of information technologies
Product for all (single product for all/offer differentspecialisation in same product)
8/8/2019 2.Services Marketing(Mkt Mix)
29/92
Attributes Benefits Values
Culture
User
Personality
B di f i
8/8/2019 2.Services Marketing(Mkt Mix)
30/92
Branding of services
Difficult to create a distinct brand image forservices due to lack of consistency in servicedeliveryneed for the entire org to worktowards it.
Even so brand loyalty is high for services
Need for patronage in order to obtainoptimum satisfaction
8/8/2019 2.Services Marketing(Mkt Mix)
31/92
No Brand Loyalty
(customer will change)No Brand Loyalty
(customer will change)
Satisfied Customer
(no reason to change)Satisfied Customer
(no reason to change)
Satisfied & Switching CostSatisfied & Switching Cost
Values the Brand(brand as friend)
Values the Brand(brand as friend)
Devoted
to BrandDevoted
to Brand
8/8/2019 2.Services Marketing(Mkt Mix)
32/92
BrandingDecision
Brand
No brand
Brand-SponsorDecision
Manu-facturerbrand
Distribu-tor
(private)brand
Licensedbrand
Brand-Name
Decision
brandnamesBlanketfamilynameSeparate
familynamesCompany-individualIndividualnames
Brand-Repositioning
Decision
Reposi-tioning
Noreposi-tioning
Brand-StrategyDecision
Lineextension
Brandextension
Multi-
brandsNewbrands
Cobrands
8/8/2019 2.Services Marketing(Mkt Mix)
33/92
Brand
Extension
New
Bra
nd
Nam
e
Product Category
Line
Extension
Existing
Existing
MultibrandsNew New
Brands
8/8/2019 2.Services Marketing(Mkt Mix)
34/92
SuggestProductBenefits
Distinctive
Lack PoorForeign
LanguageMeanings
SuggestProductQualities
Easy to:
PronounceRecognizeRemember
P i i f i
8/8/2019 2.Services Marketing(Mkt Mix)
35/92
Pricing of services Research and expertise pertaining to the
pricing of services is found lacking
Pricing approaches developed forproducts are applied to services too
The challenge is to determine a price atwhich the service product is sold and alsogives profitable returns
The price must be acceptable to the targetcustomer & should accurately reflect onthe other elements of the marketing mix
8/8/2019 2.Services Marketing(Mkt Mix)
36/92
Perception of value for a consumer theprice determines the value attached by theservice provider & it should correspondwith the customers perception of value
There are various factors that influenceprice to be charged:-
Range of service offered
Demand & capacity constraints Kind of organization
Market structure
Competitors price
Th diff b t
8/8/2019 2.Services Marketing(Mkt Mix)
37/92
Three differences betweenpricing for goods & services
Customer have limited knowledgeregarding reference prices for
services
Price is an important signal ofquality
Monetary price is not the onlyrelevant price to the customer
8/8/2019 2.Services Marketing(Mkt Mix)
38/92
Pricing objectives
Survival
Maximization of current profit
Maximization of current revenue
prestige/ image
Patronage & user based objective
i i
8/8/2019 2.Services Marketing(Mkt Mix)
39/92
pricing1. Cost based pricing - difficult as very small
portion of tangible goods sold, intangible servicedifficult to price, profit considerations also includedafter total cost is computed. The formula forcost based pricing is
Price = direct cost + overhead cost profit marginDraw back :-
Defining the unit in which service is purchased
Cost are difficult to identify
Calculation of peoples time
8/8/2019 2.Services Marketing(Mkt Mix)
40/92
2. Competition based pricing Not mean
charging the same price as the competitorsbut only using it as a base for determiningones own price .Used usually were services are almoststandardized
Drawbacks :-Competitors may not be the best parameter,service standards/delivery processes may differ.
Small firms may charge comparatively lowprices, should we consider this firms
8/8/2019 2.Services Marketing(Mkt Mix)
41/92
3. Value based pricing
How customer defines valueCustomers are weighing the perceived
benefits against the perceived cost they willincur
Recognize trade off customers are willing tomake
Quantify non-monetary & monetary value tothe customer
People perceive different set of values,identify one or more bundle that addresses asegment.
8/8/2019 2.Services Marketing(Mkt Mix)
42/92
4. Demand based pricing --
It is associated with the customer ratherthan the cost or competition
Relationship between price & demandDrawbacks:-Considers only the monetary aspect of
cost of service, however non-monetarycost & benefit must be factored
Customer is willing to pay higher pricewhen he is able to save time & effort
capturing & communicating
8/8/2019 2.Services Marketing(Mkt Mix)
43/92
capturing & communicatingvalue
Satisfaction based pricing Service guarantees,benefit driven or flat rate pricing
Relationship pricing encourages a customer toexpand his dealings with service provider
Efficiency pricing- understanding , managing &reducing cost . Providing value for money. Reducing
monetary burden to the consumers by providingbest service and a cost effective one. Efficiencythrough innovation, making it difficult forcompetitors to imitate
Satisfaction based pricing
8/8/2019 2.Services Marketing(Mkt Mix)
44/92
Satisfaction based pricingService guaranteesa powerful re-assurance,gives them a recourse-usually a price
reduction or a refund. It symbolizes cocommitmentenhances confidence
Benefit driven based on how it is used & how
it creates value. Service that directly benefitscustomer. Customers feels more satisfiedthan uncertain, than if the price of aservice is unrelated to the benefit it delivers
Flat rate pricingwhere service prices areun predictable & cost are badly managed
Relationship pricing
8/8/2019 2.Services Marketing(Mkt Mix)
45/92
Relationship pricing
Long term contract price & non-priceincentives are offered to strengthen the
existing relationship & build a new one.
Price bundling selling two or more service
selling together. Provides various benefits tothe service provider.
Managing the perception of value value is
subjective, not possible to assess the truevalue of services especially for credencequalities, hence necessary to communicate
8/8/2019 2.Services Marketing(Mkt Mix)
46/92
Reducing the related monetary & non-
monetary cost price paid also includesnon-monetary cost which is of 4 types
Time cost
Physical cost
Psychological cost
Sensory cost
Price discrimination (different prices for
different consumers), penetration, skimming,follow the competitor, are also few of thestrategies for pricing effectively used
Place in services
8/8/2019 2.Services Marketing(Mkt Mix)
47/92
Place in servicesMainly considered in terms of location, time &
cost (channels involved in distribution)
The decision regarding location are the mostcrucial and accessibility and availability form an
significant base for location decisions.
Accessibility refers to convenience with whichthe service can be purchased & availability
refers to the extent to which the service isobtainable
location
8/8/2019 2.Services Marketing(Mkt Mix)
48/92
location
Nature of service
Nature of interaction required
Customers needs & wants
Dependency of other services
Use of technology
The three possible interaction between serviceprovider & customer:-
The customer goes to the service provider
The service provider goes to the customer
Interact at arms length
Decision about location
8/8/2019 2.Services Marketing(Mkt Mix)
49/92
Decision about location Factors influencing Location (Nature of
services, competition etc)
Low contact services: remote sites, lessexpensive
High contact services: accessibility, visibility,
customer convenience
location constraints: operational requirementseg airports, resorts with certain special facilities,
economies of scale
locating in multi purpose facilities; near workplaces
Decisions about time
8/8/2019 2.Services Marketing(Mkt Mix)
50/92
Decisions about timeToday for some highly responsive service
operations the standard has become 24/7, neverthe less there are many firms who resist the trendof 7 days operation.
Factors that encourage extended operating hours:-
Economic pressure from consumers
Changes in legislation
To improve asset utilization
Automated self service facilitiesAvailability of workers to work for extended hours
Pressure from competition
Direct distribution
8/8/2019 2.Services Marketing(Mkt Mix)
51/92
Direct distributionThe inseparable, intangible and the
perishable nature of services makes directdistribution and indispensible option forensuring quality and care to the customer
Advantages of direct distribution
Greater control & monitoring
Closer and amicable relationship with the
customersEnsure confidentiality & secrecy
Elimination of certain costs
Channels decisions
8/8/2019 2.Services Marketing(Mkt Mix)
52/92
Channels decisionsChannel decision may be influenced by the
following factors
Ease and accessibility for the customers
The added value or service or benefit theyprovide
The cost to the company & the margins theyseek
Their reputation and reliability
Their expertise, ability and compatibility
The vital role that they play
8/8/2019 2.Services Marketing(Mkt Mix)
53/92
Primary channels in service distribution
Services
created by
company
Franchises
Electronics
Agents/brokers
Target
customer
Widely used distribution channels in service include-
Agent or broker
Franchised or contracted service deliveriesElectronics
d li
8/8/2019 2.Services Marketing(Mkt Mix)
54/92
delivery1. Control strategythepre requisites for
employing control strategy are uniqueness of theservice offer, strong consumer demand, highloyalty in target mkt
Approaches to implement control strategies:-
Measurement Review
2. Partnering strategies learn about end users,
improve delivery quality, communicate honestly Approaches to partnering
Integration of goals
Participation & co-operation
8/8/2019 2.Services Marketing(Mkt Mix)
55/92
3 . Empowerment strategy- effective in thefollowing context:-
Service principal is new to the market Lacks sufficient power to manage the channel
The service intermediary is more talented
Approaches to empowerment:- Provide needed support
Train the intermediary to deliver quality service
Enable to develop customer driven service
processes Change to co-operative management structure
People in services
8/8/2019 2.Services Marketing(Mkt Mix)
56/92
People in services Includes both, employees and consumers - moment of
truth is dependent on both
Most demanding job in the service business are the socalled front line jobs, they play a key role inanticipating customers needs, building customerrelations, loyalty, customization, recovery etc
Importance can be summed up as i) they are the corepart of the product ii) they represent the firm iii)they are the brand
Success depends on firms commitment to HR
employees
8/8/2019 2.Services Marketing(Mkt Mix)
57/92
employeesHigh contact services
Low contact services
Professional service employees
Consumer service employees
Challenges faced & sources ofconflictsEmotional labor
boundary spanningPerson/role conflict
Organization/client conflict
Inter client conflict
service delivery
8/8/2019 2.Services Marketing(Mkt Mix)
58/92
service delivery
Hire right people
i) competing for the best people
ii)hiring for service competence & serviceinclination
iii) being the preferred employer
Develop/train employees to deliver services as perstandards
i) Training for technical & interactive skills
ii) Empowering employees-3 power tools
iii) Promoting team work
Provide needed support system to employees
8/8/2019 2.Services Marketing(Mkt Mix)
59/92
Retaining the best employees
i)Rewards & appreciation & recognization
ii)Including employees in companies vision
Study target market/potential & current customers
* Observe service delivery process, keeping people inmind
Give due importance to consumers feedback
Employ CRM identify, attracting, differentiating andretaining customers
services
8/8/2019 2.Services Marketing(Mkt Mix)
60/92
services* Includes everything tangible
It plays a major role in shaping service experience& delivering customer satisfaction
It applies to all types & sizes of service org, though
use of physical evidence is extensive in serviceslike hospitals, hotels and minimal in insuranceservice, postal services, laundry services etc
Due to the intangibility physical evidence is used asan vital quality proxy & firms take great pain tosignal quality & portray a desired image
8/8/2019 2.Services Marketing(Mkt Mix)
61/92
Service environment is also called as servicescape
Many servicescape may be purely functional , as theyare not the only one that shape customers perception
Impact of service environment on buying behavior:-
A) as an attention creating medium
B) as a message creating medium
C) as an effect creating medium
Designing a service env is considered an art & takes
considerable time & efforts. It requires considerationabout ambient conditions, space, functionality etc
evidence
8/8/2019 2.Services Marketing(Mkt Mix)
62/92
evidencePeripheral evidence:- those items that confirm
the service or are complementary to the service
Essential evidence:-includes physical elementsintegral to the service though may not be always
passed on.
Elements of physical evidence:-
Physical environment
Communication
Price
Personnel
Corporate image & identity
Elements of physical env
8/8/2019 2.Services Marketing(Mkt Mix)
63/92
Elements of physical env
Atmospheric
SightSoundSmell
Touch
ServicescapeExterior design
SignageParking
LandscapeSurrounding env
InteriorsEquipments
FacilitiesLayout , etc
dimensions
8/8/2019 2.Services Marketing(Mkt Mix)
64/92
dimensions
8/8/2019 2.Services Marketing(Mkt Mix)
65/92
Designing of servicescape will depend upon whetherit is a elaborate or lean servicescape , elaborateservice scape communicates heavily through
physical evidence
Communication:-
Tangibilizing the service
Tangibilizing the message
Price:-it is a visible indicator of service quality & level
Too low price
Too high price
Personnel
Corporate image & identity
id
8/8/2019 2.Services Marketing(Mkt Mix)
66/92
evidenceShaping first impression
Managing trust
Managing service quality
Managing differentiation
Re-positioning
Improving productivity
Service process
8/8/2019 2.Services Marketing(Mkt Mix)
67/92
Service process
Service design should essentially satisfy thecustomers as well as be operationally efficient. It involves series of activities, theirsequence, procedures that have to beefficiently performed for delivery of service.
Service process involves three concepts:-
A series of procedure
Creation & delivery of the serviceCustomer involvement & participation
Factors to be considered while designing service process
8/8/2019 2.Services Marketing(Mkt Mix)
68/92
Factors to be considered while designing service process
Nature of service -divergence, complexity
Service location
Customer participation
Level of contact
The service itself:
a) Process based
b) Technology, machinery, equipment based
Basic concepts for designing a process
* Process should be broken into logical steps
* process should be flexible* should include the concept of deviation
process
8/8/2019 2.Services Marketing(Mkt Mix)
69/92
processLine & flow operation
Job shop process
Decisions in service process planningBasic technological decision
Specific equipment decisionLocation & layout decision
Peoples decision
Operation structure
Process flow decisionblue print, flow charts,
& benchmarks
blue print as a key tool in
8/8/2019 2.Services Marketing(Mkt Mix)
70/92
p yservice design
It is the visual depiction of the process of service delivery,the roles of the employees & customers & the visibleelements of the service.
It takes an holistic view about the delivery process
mechanism keeping in mind the customer
A blue print should address the following aspects:-
Service staff should understand what is required of them
Customer should have knowledge of his role
The time frame involved for each activity should be stated
8/8/2019 2.Services Marketing(Mkt Mix)
71/92
Support processes
Line of interaction
Line of visibility
Contact employees action
Line of internal interaction
8/8/2019 2.Services Marketing(Mkt Mix)
72/92
Flow charting for services
8/8/2019 2.Services Marketing(Mkt Mix)
73/92
Flow charting for servicesInvolves presentation of the process visually
& in sequence
Useful in defining the points in the processwhere the consumer uses core service &
where he uses the supplementary service
Next step would be to put all these customerinteractions linearly into a sequence in which
they occur
Benchmarking
8/8/2019 2.Services Marketing(Mkt Mix)
74/92
BenchmarkingThis technique helps companies to become as good or
better than the best in most imp aspects of the org
Objective:-
Gives companies a standard to measure performance
It allows companies to identify best ways to get
competitive advantageAllows companies to overcome problems or pursue
targets to confirm competitive advantage
Benchmarking is not a single job but is a continuousprocess requiring commitment from all
Approaches of benchmarking
8/8/2019 2.Services Marketing(Mkt Mix)
75/92
pp gIt may be related to:-
Customer serviceDistribution channels
Improving human resources
Quality managementManufacturing systems, cost etc
Product development
Inventory control and loads of other issuesconcerned with effectively managing ofbusiness activities
Steps in benchmarking
8/8/2019 2.Services Marketing(Mkt Mix)
76/92
Steps in benchmarkingIdentify the items to be benchmarked
Create a bench mark team
Trace out the bench mark pattern
Identify the data collection process
Termination of the benchmarking study
Implement the findings
8/8/2019 2.Services Marketing(Mkt Mix)
77/92
Service Promotion MixGuidelines for an optimum promotion mix Develop word of mouth communication
network (Customers refer friends etc) Dont over-promise Tangibilize the intangible factors Feature working relationships between
customer and service provider Propagate minimum/zero variance in service
delivery Focus on service quality dimension Position & differentiate the service via the
delivery process Make the service more easily understood
Developing promotion
8/8/2019 2.Services Marketing(Mkt Mix)
78/92
Developing promotion
strategy Select target market
Develop firms positioning strategy
Develop promotion/communication budget and mix
Define communication objectives (in line with PLC)
Divide communication objectives and target audience for users, non users, etc.
mi
8/8/2019 2.Services Marketing(Mkt Mix)
79/92
mix
Advertising TV, radio, newspapers,magazines, outdoor, POP etc.
Publicity
Sales promotion gifts, contests, discounts,commission, fairs
Personal selling
Word of mouth
Telemarketing
ServicesServices
8/8/2019 2.Services Marketing(Mkt Mix)
80/92
capacity
8/8/2019 2.Services Marketing(Mkt Mix)
81/92
capacityFluctuating demand and perishable nature of services
poses a major challenge for service organizations
This problem becomes especially prominent for anycapacity constraint service & can be effectivelysolved by two ways:-
Adjusting capacity to meet the change in the demandthrough proper operations & H.R management
And by managing the level of demand throughdevising effective marketing strategies
Managing capacity
8/8/2019 2.Services Marketing(Mkt Mix)
82/92
g g p yThe problem is familiar it is either feast or
famine!
At any given point a fixed capacity service mayface one of the four conditions:-
Excess demand denied service, business lost
Demand exceeds optimum capacity:- quality maysuffer
Demand and supply are well balanced:- idealsituation
Excess capacity- low productivity , low utilization.
shrinking)
8/8/2019 2.Services Marketing(Mkt Mix)
83/92
shrinking)Some capacity is elastic in absorbing extra demand
eg transportation services, hotels & restaurants by
switching to higher capacity or by extending the time
Chasing demand strategy:-
Schedule down time during period of low demand
Use part time employees
Rent or share extra facilities & equipments
Cross train employees
Managing demand
8/8/2019 2.Services Marketing(Mkt Mix)
84/92
Managing demandFirst it is important to understand the patterns of demand
as there may be seemingly random causes.
Several factors affect demand & thus service providershould approach the situation in the foll manner:-
1) Examine whether the demand follows the predictable
cycle or not-- & than try to identify that underlining factor2) Examine whether demand level changes randomly
3) Examine whether it can be associated to a particularsegment & than divide demand by market segment
demand
8/8/2019 2.Services Marketing(Mkt Mix)
85/92
Using marketing mix elements to shapedemand
Product variation
Modifying the timing and location of delivery
Pricing strategies
i i d d h h i i
8/8/2019 2.Services Marketing(Mkt Mix)
86/92
Invent rising demand through queuing & reservation
Queuing system
a) Easy operational logic
b) Establish a reservation process
c) Differentiate waiting customers on the basis of:-
Importance
Urgency of job
payment of premium priceDuration of service transaction
8/8/2019 2.Services Marketing(Mkt Mix)
87/92
Service blueprint/ service
mapping
Benchmarking
CLASS PARTICIPATION ACTIVITY
Capacity planning
8/8/2019 2.Services Marketing(Mkt Mix)
88/92
Capacity planningThrows light on the quality and quantity of service needed
in future
Market conditions, likes, tastes, expectations of consumersare studied
Their potential is rated
Lapses in current process are identified and correctivemeasures taken
Firm tries to match the service offerings to the marketdemand
Problems - Task of predicting behaviour of users is difficult
Unavailability of sufficient lead time in many cases
Capacity planning
8/8/2019 2.Services Marketing(Mkt Mix)
89/92
Capacity planning
important for Staying in business Fighting competition
Enhancing profits
Enhancing growth curve of the service firm
Preparing the firm for anticipated/sudden changesin demand, quality of services, new trends,changing tastes etc (Decreasing response time)
8/8/2019 2.Services Marketing(Mkt Mix)
90/92
Capacity scheduling Based on capacity planning
It helps schedules capacity according to the plan man, machines, money, materials
A detailed scheduling of need and usage of abovefactors is essential on a time map
Helps optimum utilisation of time and otherresources
Reduces wastages
8/8/2019 2.Services Marketing(Mkt Mix)
91/92
8/8/2019 2.Services Marketing(Mkt Mix)
92/92
CaseA passenger with a confirmed ticket on early morning flight fromAhmedabad to Mumbai could reach Ahmedabad only by 3.30 pm becausethe train by which he was traveling to Ahmedabad got marooned due tofloods at night. He reached Ahmedabad traveling by special buses arrangedby the railways.
When he went to the airlines reservation office in town, the assistantwanted to know whether he had any certificate from the railways confirmingall this. He did not. He was then told as per rules, he had to be treated a NoShow and he would get no refund on the earlier ticket. He could buy a freshticket for either of the evening flights, both of which were late and fullybooked. He could take his chances at the airport. He agreed.
The assistant then endorsed the morning ticket for either of the eveningflight (without any extra charges) and told him to go to the airportimmediately and enter his name among the wait-listed passengers. Whenhe reached the airport in about 30 minutes, he found that his name wasalready among the wait-listed passengers. Apparently the assistant in theoffice had called up and entered his name in the list