7P Examples

8/8/2019 7P Examples

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The First P: Service Product or Service Package:

A service is a bundle of features and benefits. However these benefits have relevance to aspecific target market. Hence while developing a service package it is important that thepackage of benefits in the service offer must have a customer perspective. Gronroos

constructed that the services are product offers consists of 3 levels. The first level is thatof basic service package which includes core service, facilitating services and supportingservices. The 2nd level is that of an augmented service offering where accessibilityinteraction and customer participation is given equal importance in delivering the serviceproduct . the third level is that of the market communication of the service offering as inits absence the augmentation service package doesnt have any relevance to the customer.

The service package:The package concept of service product suggests that what you offer to the market is abundle of different services, tangible and intangible, but there is a main or substantive orcore service and around it are built the auxiliary or peripheral or facilitator services. It is

important to note that facilitating services are mandatory and if these were left out, theentire service would collapse. In the service package there are yet other type of servicescalled supporting services. The basic difference between the 2 is that supporting servicesdont facilitate the consumption of core services but are used to increase the value andthus differentiate it from competitione.g. in a 500 room hotel the core service is lodging and room service, bellboy servicesare facilitating services and health club , car rental are support services. However it maynot always be possible to draw a line of distinction between facilitating and supportservices. For e.g. in a typical city hotel business center might be the support service butin a business and convention hotel the same service would be facilitating service

The augmented service offering:The basic service package is not equivalent to the service product the customerperceives, which is infact based on customer experience and evaluation. Therefor there isa need to involve the customer in the production of service offering and therebyreinforcing that the basic service package has to be expanded to a more holistic model ofaugmented service offering. The issues related to the accessibility of the serviceinteraction with the service organisation and consumer participation are also integralelements of the service product.

Market communication of the service offering:A favorable image enhances the service experience and a bad image may even destroy it.In such a scenario the issue of management of image through communication becomes a

integral part of developing the service product but the important point to note here is thatapart from the conventional methods of promotion corporate image and word of mouthare, if not more, equally important. A negative comment from a fellow customer is morethan adequate to neutralize the effect of your efforts of mass media advertising, mediablitz and direct promotion.


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Developing a service offering:The first step in developing a new service offering is to assess the customer benefits,which is done through market research and available appropriate information.

In the second step, these consumer benefits have to be translated into core, facilitatingand support services, with a view to defining what general benefits these serviceorganizations would offer to its customers.The third stage is that of developing the augmented service offer.A careful planning at the fourth stage is essential because of the right service in the rightform and in the right quality and quantity is not delivered, the entire customer orientedplan would collapse.

Finally the appropriate market communication strategy should be prepared and itsimplementation plan should be defined not only to inform and persuade the customersbut also to enhance the desired image.

The 2nd P: PricingA particular product or service is acceptable to the customer at a particular price and ifthe price ids increased it is likely that the same product or service might become less


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acceptable to the customer. Another issue related to pricing is that of perceptions aboutquality. Generally to most customers high price means high quality.

Service pricing follows the principles and practices of pricing of goods and thereforethey are either cost based or market based.Following aspects should be taken into consideration while pricing services:

1. Demand fluctuations should be successfully handled2. Service prices should be based on costs so as to take into account the tangible

clues3. Service pricing should be such as to provide value addition and quality indication4. The pricing strategy should cope up with the degree of competition.

Pricing objectives:The pricing of services is greatly influenced by the basic service characteristics. Howeverin setting price objectives several factors in relation to the overall marketing strategy ofthe corporation should be considered

Planned market position for the service product: Gitlow suggested that price not onlyinfluences the market position but also affect the customers perceptual positioning. It istherefore important to keep market or customer position while deciding on pricingstrategyProduct life cycle: the stage of life cycle of the service product is of utmost importance.For instance, At the introductory stage if there is no competition and the demand is highyou may opt for high price, to make maximum gains in the short term (skimmingpolicy). In a similar situation but with a low demand you may opt for low prices topenetrate into the market. Also you have to consider the elasticity of demand i.e. whetherthe demand is sensitive to the change in price or not.Competition: competition should be studied both from the point of interbrand and also

from the viewpoint of the brand that provides the same need satisfaction. For e.g. aprivate airline is facing competition from the national and other private airlines but alsofrom the railways faster trains on the same routes during convenient timingsStrategic role of pricing: Lastly it is important to understand the strategic role of pricingin your overall marketing strategy. For e.g. a hotel chain might offer a package of lowprice or discount with a view to making people try out their services. It is likely that inthe short run it might be a loosing proposition but in the long run, it may give morecustomer satisfaction and thereby better utilization of services

The 3rd P: Place:Because of intangibility of services they cannot be stored, transported and

inventoried. Also because of inseparability, they must be created and sold at the sametime. These 2 characteristics make the channel very short and direct. Most service isdistributed through direct sales at best one direct agent and middleman can be added to it.For e.g.: an insurance agent, courier service. Keeping in view the characteristics and


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potential management problems, there are distinct channel configurations that can benoticed:

The dominant channel configuration in the service sector is where agents andbrokers play an imp role. The major function of these agents and brokers is to bringtogether the producer and consumer of service. These agents can be classified as brokeror sales agents. E.g.: travel agents

The agents may be trained in the creation and production of service and thenfranchised to sell it. E.g.: Shehnaz Hussain beauty parlours.In some cases actual product is not transferable & therefore tangible representations arecreated and transferred. This kind of tangible is used for marketing insurance serviceswhere a contact document exists as a physical & tangible representation of the service.

Delivery of service involves creating time and place utilities, thus, factor oflocation keeping in mind the potential markets is significant in channel selectiondecision. The problem of standardisation and uniformity restrains the use of middlemen& the geographical area that can be catered. Thus, it is impt to select a good location toattain maximum coverage of the market place.

The 4th P: PromotionThere are clear differences in information usage between goods and services. First, thedifference is that the consumers of services are less likely to purchase withoutinformation, than those of goods. Second, the consumer of services will prefer personalsources to impersonal sources of information. And third, the basic characteristics ofservices have implications for communication strategies. The above three differencesinfluence the decisions regarding theCommunications objectives


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Target audiencesPlanning of each of the sub elements in the promotion mix

Promotion objectives: the basic objective of promotion would be to develop publicrelations and create a brand image. The promotion mix should use indirect sellingtechniques, packaging and customization.

Target audiences: In service sector there should be a direct contact between thecustomers and there service providers. Therefore some promotion should be directedtowards the employees so as to motivate them to serve the customers better. The targetaudience also includes buyers, influencer and the decider or user of the buying cycle.

Planning the Promotion mix: a customer is buying the performance of the servicepersonnel and therefore the advertising in service industry shouldnt only restrict itself toencouraging consumption, but also it should encourage employees to perform well.Effective advertising programs should be such that they have a positive effect on contact personnel, capitalize on word of mouth, provide tangible clues, make offer easily

understandable and contribute continuity.

Planning for promotion mix: planning the promotiom mix calls for the right advertisingstrategies, consumer promotions, efficient selling methodologies and good publicrelations for the right kind of publicity.

Advertising of services:Consumer promotions in service marketing: in execution of any kind of promotionscheme, the service marketer should carefully consider six basic elements, namely,product scope, market scope, value, timing, identification of the beneficiary & protectionagainst competition.

To give an element of intangibility, premiums can be frequently used.Price/quantity promotion can help generating long term commitment from consumers eg.Group rates for hotels.Prize promotions can be used frequently and add excitement and involvement.

Selling services: since services are intangible in nature, it is of utmost importance to sellthem in a manner, that will convince your target customer.

The sales person must develop a personal relationship with the client. Quite often it is the personal relationship rather than the service itself that results in satisfaction ordissatisfaction of the service.The seller must adopt a professional orientation and make a strong impression ofcompetency, honesty and sincerity.He can use indirect selling techniques by creating a derived demand or playing the roleof a buying consultant. Eg most hotels first sell the location and then the hotel to thecustomer.They have to build and maintain a favourable image as public opinion and word ofmouth publicity plays an important role in the marketing of services.


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A service seller deals with a host of services rather than one. Their thoroughness on eachand ability to package them to suit each customer's need would determine the success.Therefore the ability of the seller to customize the service offering is very important.

Public relations and publicity:Promotional activities like community relations, event management, media blitz,corporate identity programmes have relevance and should be used effectively bymarketers.Eg: a medical doctor specialising in eye care running his own clinic cum nursing homeand organizing free eye camps in competence. all over the region. This communityservice will not only spread his name but also prove his

Communication strategy:The service marketer should attempt to reflect a consistent & attractive personality in allmanifestations of the organizations that reach the public.Also one must aim for a recognizable human personality to endorse the service.Stress on specialization, rather than all things for all people. This will help in creating a

unique positioning.

The 5th P: PeopleIt is the employees of an organisation which represent the organisation to its customers.

In a service organization, employees are essentially the contact personnel with customer.

Therefore, an employee plays an important role in the marketing operations of a serviceorganisation.

To realize its potential in services marketing, a firm must realize its potential in internalmarketing - the attraction, development, motivation and retention of qualified employee-customers through need meeting job-products. Internal marketing paves way for externalmarketing of services. In internal marketing a variety of activities are used internally inan active, marketing like manner and in a coordinated way.


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The starting point in internal marketing is that the employees are the first internal marketfor the organization.

The basic objective of internal marketing is to develop motivated and customer consciousemployees.

A service company can be only as good as its people. A service is a performance and it isusually difficult to separate the performance from the people. If the people dont meetcustomers' expectations, then neither does the service. Therefore, investing in peoplequality in service business means investing in product quality.

BANKING

1. PRODUCT MIXThe banks primarily deal in services and therefore, the formulation of product mix isrequired to be in the face of changing business environment conditions. Of course thepublic sector commercial banks have launched a number of policies and programs for the

development of backward regions and welfare of the weaker sections of the society but atthe same time it is also right to mention that their development-oriented welfareprograms are not optimal to the national socio-economic requirements. A proportionalcontraction in the number of customers is found affecting the business of public sectorcommercial banks. The changing psychology, the increasing expectation, the risingincome, the changing lifestyles, the increasing domination of foreign bans and thechanging needs and requirements of the customers at large make it essential that theyinnovate their service mix and make them of worked class. The development of new


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generic product, especially when the business environment is regulated is found adifficult task. However, it is pertinent that banks formulate a package in tune with thechanging business conditions. Against this background, we find it significant that thebanking organizations minify, magnify, combine and modify their service mix.In the formulation of service mix, the banks can follow two guidelines, first is related tothe processing of product to market needs and the second is concerned with theprocessing of market needs to product. In the first process, the needs to the target marketare anticipated and visualized and therefore, we expect the prices likely to be productive.In the second process, the banks react to the expressed needs and therefore we consider itreactive. It is essential that every product is measured up to the accepted technicalstandards. This is because no consumer would buy a product, which contains technicalfaults. Technical perfection in service is meant prompt delivery, quick disposal, andpresentation of right data, right filing, proper documentation or so. If computers startdisobeying, the command and the customers get wrong facts, the use of technologywould be a minus point, and you dont have any excuse for your faults.Marketing aims not only offering but also at creating\innovating the services\schemesfound new to the competitors vis-a vis- to the customers. The enhanced customer

patronage would be a reward to the bank. The additional attractions, the productattractiveness would be a plus point of your mix, which would help you in many ways.This makes it essential that the banking organizations are sincere to the innovationsprocess and try to enrich their peripheral services much earlier than the competitors. Wealso find the product portfolio of the banks. While formulating the services mix, it isalso pertinent that the bank professionals make possible affair synchronization of coreand peripheral services. To be more specific, the peripheral services need an intensivecare since the core services are found by and large the same. Innovating the peripheralservices thus appears to be an important functional responsibility of marketingprofessionals. We cant deny the fact that if the foreign banks have been getting apositive response; the credibility goes to their innovative peripheral services. Thus, the

formulation of product mix is found to be a difficult task that requires world-classprofessionalism.

2. PROMOTIONAL MIX:Promotion mix includes advertising, publicity, sales promotion, word of mouthpromotion, personal selling and telemarketing. Each of these services needs to be appliedin different degree. These components can be useful in the banking business in thefollowing ways:

AdvertisingAdvertising is paid form of communication. Banking organizations use this componentof the promotion mix with motto of informing, sensing and persuading the customers.While advertising it is essential to be aware of key decision making areas so thatinstrumentally helps banks at micro and macro levels.

Finalizing the budget:This is related to the formulation of the budget for advertisement. The bankprofessionals, senior executives and even the policy planners are found to be involved inthe process. The business of a bank determines the scale of the advertisement budget. In


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addition, the intensity of competition also plays a decisive role since in the majority ofcases; we find a increase in the budget due to a change in the competitors strategy.

Selecting a suitable vehicle:There are a number of devices to advertise, such as broad cast media, telecast media andprint media. In the face of the budgetary provisions, it is necessary to select a suitablevehicle. For promoting the banking business, the print media is found to be economic aswell as effective.

Making possible creative:The advertising professionals bear the responsibility of making the appeals, slogans andmessages more creative. Here, creative means making the advertisement programsdistinct to the competitive organizations, which are active in influencing the impulse ofthe customers and successful in informing and sensing the customers. This requires an in-depth knowledge of the receiving capacity of the target market for which theadvertisements are designed.

Testing the effectiveness:It bears an analogous significance that our advertisements are effective in influencing theimpulse of customers by energizing persuasion. For making the process effective, it isessential to test the effectiveness before launching of the commercial advertisements.

Instrumentality of branch managers:At micro level, a branch manager bears the responsibility of advertising locally so thatthe messages reach the target audience.

Characters and themes:At apex level it is also important that while advertising the senior executives watch the

process minutely and select events, characters having a regional orientation. The popularcharacters and sensational moments are likely to be impact generating. The theme forappeals and messages also needs due attention. Of course, they have a legitimate right ofadvertising but it is not meant that like the goods manufacturing organizations, theservice generating organizations also start making invasion on culture. It is necessary toregulate a bias to gender, profession, region or so.

Public relations:In the banking services the effectiveness of public Relations is found in high magnitude.It is in this context that difference is found in designing of the mix for promoting thebanking services.

Telemarketing:The telemarketing is a process of promoting the business with the help of sophisticatedcommunication network. Telemarketing is found instrumental in advertising the bankingservices and the banking organizations can use this tool of the promotion mix both foradvertising and selling. This minimizes the dependence of banking organizations on salespeople and just a counter or center as listed in the call numbers may service multi-dimensional services.


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Telemarketing is likely to play an incremental role in marketing the banking services.The leading foreign banks and even some of the private sector commercial banks havebeen found promoting telemarketing and they have been getting positive results for theirefforts.

Word-Of- Mouth:Much communication about the banking services actually takes place by word- of- mouthinformation, which is also known as word- of- mouth promotion. The oral publicity playsan important role in eliminating the negative comments and improving the services. Thisalso helps the banker to know the feedback, which may simplify the task of improvingthe quality of services. This component of promotion mix is not to influence budgetadversely or generate additional financial burden. By improving the quality of servicesand by offering small gifts to the word- of- mouth promoters, bankers can get morebusiness command in their area.The above facts make it clear that such kind of promotion is influenced by a number offactors. The most dominating factor is the quality of services offered. The bank professionals, the frontline staff and the senior executives should realize that

degeneration in quality would make this tool effective.

3. PRICE MIX:In the formulation of marketing mix, the pricing decisions occupy a place of outstandingsignificance. The pricing decisions include the decisions related to interest and fee orcommission charged by banks. Pricing decisions are found instrumental in motivating orinfluencing the target market. The RBI regulates the rate of interest and the IndianBanks Association controls other charges. In our country, the price mix is moreimportant because the banking organizations are also supposed to sub serve the interestsof the weaker sections and the backward regions. Also in making the pricing decisions,the Government Of India instrumentalists or commands everything as a shadow policy

maker. This also complicates the price mix for banking sector.Pricing policy of a bank is considered important for raising the number of customers vis--vis the accretion of deposits. Also the quality of service provided has direct relationshipwith the fees charged. Thus while deciding the price mix customer services rank the topposition. Banks also have to take the value satisfaction variable in to consideration. Thevalue and satisfaction cannot be quantified in terms of money since it differs from personto person. Keeping in view the level of satisfaction of a particular segment, the bankshave to frame the pricing strategies.The banking organizations are required to frame two- fold strategies. First, the strategy isconcerned with interest and fee charged and the second strategy is related to the interest paid. Since both the strategies throw a vice- versa impact, it is important that banksattempt to establish a correlation between two. It is essential that both the buyers as wellas the sellers have feeling of winning.

4. THE PEOPLESophisticated technologies no doubt, inject life and strength to our efficiency but theinstrumentality of sophisticated technologies start turning sour id the human resourcesare not managed in a right fashion. We cant deny the fact that if foreign banks areperforming fantastically; it is not only due to the sophisticated information technologiesthey use but the result of a fair synchronization of new information technologies and a


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team of personally committed employees. The moment they witness lack of productivehuman resources even the new generation of information technologies would hardlyproduce the desired results. In addition to the professional excellence, the employeesworking in the foreign banks are generally value- based. Thus we accept the fact thatgeneration of efficiency is substantially influenced by the quality of human resources.The quality for banking sector is an aggregation of all the properties, which are foundessential for generating the efficiency and projecting a fair image. Even efficiencyessentially is supported by ethical dimension, humanity and humanism.The development of human resources makes the ways for the formation of humancapital. Human resources can be developed through education, training and bypsychological tests. Even incentives can inject efficiency and can motivate people forproductive and qualitative work.

5. THE PROCESSFlow of activities: all the major activities of banks follow RBI guidelines. There has tobe adherence to certain rules and principles in the banking operations. The activitieshave been segregated into various departments accordingly.

Standardization: banks have got standardized procedures got typical transactions. In factnot only all the branches of a single-bank, but all the banks have some standardization inthem. This is because of the rules they are subject to. Besides this, each of the banks hasits standard forms, documentations etc. Standardization saves a lot of time behindindividual transaction.Customization: There are specialty counters at each branch to deal with customers of aparticular scheme. Besides this the customers can select their deposit period among theavailable alternatives. Number of stores: numbers of steps are usually specified and a specific pattern isfollowed to minimize time taken.Simplicity: in banks various functions are segregated. Separate counters exist with clear

indication. Thus a customer wanting to deposit money goes to deposits counter anddoes not mingle elsewhere. This makes procedures not only simple but consume lesstime. Besides instruction boards in national boards in national and regional languagehelp the customers further.Customer involvement: ATM does not involve any bank employees. Besides, duringusual bank transactions, there is definite customer involvement at some or the other placebecause of the money matters and signature requires.

6. THE PHYSICAL EVIDENCEThe physical evidences include signage, reports, punch lines, other tangibles, employeesdress code etc. The companys financial reports are issued to the customers to emphasisor credibility. Even some of the banks follow a dress code for their internal customers.This helps the customers to feel the ease and comfortSignage: each and every bank has its logo by which a person can identify the company.Thus such signages are significant for creating visualization and corporate identity.Tangibles: banks give pens, writing pads to the internal customers. Even the passbooks,chequebooks, etc reduce the inherent intangibility of services.Punch lines: punch lines or the corporate statement depict the philosophy and attitude ofthe bank. Banks have influential punch lines to attract the customers.


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Banking marketing consists of identifying the most profitable markets now and infuture, assessing the present and future needs of customers, setting business developmentgoals, making plans-all in the context of changing environment.

8 Ps of TRAVEL INDUSTRY

PRODUCT ELEMENTS

BENEFIT MEANING WITH RESPECT TO THE TRAVELAND TOURISM INDUSTRY

1. COREBENEFIT

The fundamental benefit or service thatthe customer is buying

Traveling

2 BASICPRODUCT

Basic, functional attributes Ticketing, hotel reservation

3 EXPECTEDPRODUCT

Set of attributes/conditions the buyernormally expects

Customer friendliness, good food

4 AUGMENTEDPRODUCT

That meets the customers desiresbeyond expectations

Prompt services, comfortable andconvenient trip, spectacular sights,music

5 POTENTIALPRODUCT

The possible evolution to distinguishthe offer

Totally customized tour packages, Agrade service at every stage

The services a product offers consist of three levels.The first level is that of the basic service package which includes core service,facilitating services and supporting services. In the case of the travel and tourismindustry, the core services would include traveling, ticketing, hotel reservations, foodservices etc.The second level is that of an augmented service offering where accessibility, interactionand customer participation is given equal importance in delivering the service product.


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Accessibility of Service- N umber and skills of personnel- Working hours and time used in performing various tasks- Location of service outlet- Exterior and interior of service outlet- Infrastructure, hardware, documentation- The number and knowledge of consumers simultaneously involved in the process

Interaction with service organization- Interactive communication between employees and customers

- Interactions with the physical and technical resources of the organization needed inthe service production process

- Interaction with other customers involved in the process.

Customer Participation- How well is the customer aware about the process of service delivery and his or her

role- How well is the customer prepared to share information- How well is the customer willing to share information or use the service equipment

The third level is that of the market communication of the service offering as in itsabsence the augmentation service package does not have any relevance to the customer.

PLACEBecause of intangibility (from production to sales) of services, they cannot be stored,transported and inventoried. Hence traditional distribution channels available for productmarketing like wholesalers and other intermediaries cannot be used. Even the retailingcannot be an independent activity. Similarly, because of the inseparability, i.e., in case ofservices production cannot be separated from selling, services must be created and sold atthe same time.These two characteristics make the channel very short and direct. Most services aredistributed through direct sales. At best one agent or middleman can be added to it, likein the case of insurance, travel agency, courier service, etc.So we see that there is a little controversy regarding the distribution of services. There isone school, which says that since the service cannot be separated from the producer of

the service, direct selling sales channel are the only method of distribution available forservices. The advantage of direct selling is that the service can be offered to the customerat a lower cost. The other school partially disagrees with this theory and suggests that itis possible to have intermediaries but the channel of distribution would be rather shortand simple as compared to tangible goods.

PROCESS


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The importance of process management is that it assures service availability andconsistent quality. Without sound process management, balancing service demand withservice supply is extremely difficult. Service cannot be inventoried; therefore, it becomesessential to find out ways and means to handle peak load to optimize different customerneeds with varied expertise levels within the service organization.In marketing management, operations management has been recognized as an integralfunction. In manufacturing sector, for example, logistics in distribution are vital to satisfycustomer needs. Similarly, in services sector, where there is no tangible product, theoperations management is vital to deliver satisfaction because here the operationsmanagement would decide how the process of service delivery would function, or inother words, the interactive experience that would deliver the service benefits to theconsumers.Shostack gave a much-simplified version and described the 'process' in three stages. First,a process can be broken down in logical steps to facilitate analysis and control. Second,there are more than one available options of processes in which output may differ.Finally, each system includes the concept of deviation or tolerance standards inrecognition that the processes are 'real time' phenomena that do not conform perfectly to

any model or description, but function within a norm.One can observe how changes in complexity and divergence influence their market position. For managers in service industries, taking a structural approach can helpincrease their control over some of the critical elements of the service systemmanagement. Therefore, for marketers in service industries, process design may be a toolthat can substantially increase their impact and role in marketing their services.

PRODUCTIVITIY /QUALITYProductivity in services refers to how you transform the inputs into outputs, which arevalued by the customer. Quality refers to the degree to which the service satisfies thecustomer by meeting their wants and expectations. Productivity and quality need to be

omnipresent for the industry to complete its service obligations aptly. Only if your firmis productive and the quality meets the requirements of the customers can yourperformance be graded as excellent.Here are five key things to consider when developing the performance strategy for yourbusiness.Have you found a way to fit marketing into your schedule?Do you keep track of both your long and short-term projects (including marketingprojects), and review that list daily?Do you have a way of combating procrastination and delay?Do you maintain the highest standards of integrity and excellence?Are you continually working to improve your skills in all areas of your business?In a service organization, employees are essentially the contact personnel with thecustomer. Therefore an employee plays an important role in the marketing operations ofa service organization.According to him, "the internal marketing concept states that the internal market ofemployees is best motivated for service-mindedness and customer-oriented performanceby an active marketing like approach where a variety of activities are used internally inan active, marketing like and coordinated way." The starting point in internal marketingis that the employees are the first internal market for the organization.


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To realize its potential in services marketing, a firm must realize its potential in internalmarketing - the attraction, development, motivation and retention of qualified employee-customer through need-meeting job-products. Internal marketing paves the way forexternal marketing of services.The companies that practise internal marketing most effectively willcompete aggressively for talent market share,offer a vision that brings purpose and meaning to the workplace,equip people with the skills and knowledge to perform their service roles excellently,bring people together to benefit from the fruits of team play,leverage the freedom factor,nurture achievement through measurement and rewards, andbase job-product design decisions on research.

PROMOTION AND EDUCATIONIt is now established that there are clear differences in information usage between goodsand services. First, the difference is that consumers of services are less likely to purchasewithout information than those of goods. Second, the consumer of services will prefer

personal sources over impersonal sources of information. And third, the basiccharacteristics of services have implications for communication strategy. George andBerry keeping in view the intangibility of services, proposed that in the case of services acustomer is buying the performance of the service personnel and therefore the advertisingin service industries should not only restrict itself to encouraging consumption, but also itshould encourage employees to perform well. They proposed the following six basicguidelines to help design effective advertising programmes.The advertising should have positive effects on contact personnel. . It should capitalizeon the word of mouth.It should provide tangible clues to the customers.It should make the service offering easily understood.

It should contribute to the continuity.It should promise only what is possible.

Here are five key things to consider when developing the promotional strategy for yourbusiness:Are you networking enough? For many service businesses, networking is the keypromotional technique. Join organizations; get to know people; get involved; keep intouch with people; do what you can to help them; be visible in your community.Do you have a good, solid marketing letter that highlights your benefits and movespeople to take action? This one inexpensive marketing tool is one of the most powerfulwhen written properly.Do you do personal PR such as speaking and writing? Again, these don't take muchmoney but pay big dividends. Speak at Rotary, your Chamber of Commerce, at businessassociations and alumni groups. Write for your local paper; the trade journal of yourindustry, or even for someone else's newsletter. You can use the reprints later forcredibility.Are you mailing to people on your list? This is an absolute must. Don't let people forgetwho you are and how you can help them. From two to six times a year send clients andprospects a newsletter or other type of keep-in-touch mailing.


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Do you have a Web Site? You should. It doesn't take a lot of money to create a web pageand even less to post it. This is a powerful media that can serve as a combination directmail piece, brochure and newsletter. Given the price of entry, it's crazy not to have one.

Glynn Shostack once observed, "A physical object is self defining; a service is not" andtherefore the marketing task in service industries is "defining for the service what theservice cannot define for itself."Though a customer cannot see a service, but definitely he can see various tangible cluesof the service offer like facilities, communication material, objects, employees, othercustomers, price, etc. On the basis of his perceptions on the tangible clues, the customermakes the purchase decision. These clues might be both intended and unintended onesand, therefore, managing evidence is integral to the service marketing mix. Shostackeven observed that the management of evidence comes first for service marketers.The argument here is that the physical environment, facilities and atmosphere; giveenough physical evidence to help shape customer perceptions. Many service marketershave neglected this aspect while the others gave due emphasis to issues like exterior ofbuildings, office furniture, layout, colour 0. interiors, and even carry-bags, tickets, cash

memos, labels, etc. The advocators of public relations have even coined a specific termcalled 'corporate identity' and suggested that such tools can create a visual identity thatthe public as customers can recognize. The corporate identity media can successfullycontribute towards the marketing objectives provided they are attractive, distinctive andmemorable.

PRICE AND OTHER USER COSTSPricing is yet another variable of the marketing mix. A particular product or service isacceptable to the customer at a particular price and if the price is increased, it is likelythat the same product or service might become less acceptable to the customer. The otherissue, which is related to pricing, is that of perceptions about quality. Generally, to most

customers, high price means high quality. However, some customers don't need thehighest quality at the maximum price. Detergents are one such example where averagequality detergents at moderate prices are market leaders.Service pricing follows the principles and practices of pricing of goods and, therefore,they are either cost based or market based.Within these categories prices may be profit oriented, government controlled,competitive or customer oriented. However, the characteristics of services do influencethe pricing and, therefore, different methods of pricing are to be followed.

There are some basic guidelines for pricing of services. These guidelines may help indeveloping an appreciation of the framework for service pricing.1. For services, the pricing strategy should be such that demand fluctuations aresuccessfully handled. Since services are perishable, they cannot be inventoried. In such asituation pricing strategy should be such that it should encourage the customers to delaytheir use of services till the period of low demand.2. Service prices should be based on costs so as to take into account the cost of tangibleclues of intangible services. To the first time users of services the "services offer-package" is less understood if it is primarily dominated by intangibles. Therefore, thetangible and material content of the service product should be integrated in the 'service-offer package', which has definite cost implications.


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3. The service pricing should be such a to provide value addition and quality indicationto the customers. In situations of "homogeneous" services, the pricing strategy may bemarket oriented or customer oriented. But in heterogeneous services, the price may beused as a quality indicator.4. The pricing strategy should be such as to cope-up with the degree of competitionoperating within a certain geographic and time zone. Services are inseparable from theperson who provides them and the service providers have both geographic and timelimits or markets, which can be served by them.

The 8 Ps with reference to The Taj Mahal Hotel

Product ElementThis gracious turn-of-the century hotel is located 32 km from the airport and

minutes away from Mumbai's commercial, shopping and banking districts. The TajMahal Hotel has an old-world Heritage Wing and a contemporary Tower Wing. Thehotel's premium suites have been used by royalty and Heads of State.

Taj believes that the their core product is space. This space is supplemented withthe services they provide like the restaurants, health club, banquets, discotheque, bar,business centers etc. Their other supplementary products also include travelarrangements, ticketing, airport pick-ups, sightseeing etc. The hotels various otherdepartments like the house keeping, front office, food and beverage, room service andmaintenance, all provide the supplementary services to the customer.

A few of the Facilities and Services offered are as follows:-Types of Accommodation

582 centrally air-conditioned rooms including 49 suites.

Tower Wing Rooms: With easy access to the Business Centre, these contemporaryrooms offer guest amenities like Internet connectivity, 2-line speaker phones withinternational direct dial facility and voice mail. Mini bar, personal safe, channel musicand television with satellite programmes. A complimentary in-room fax can be providedon request. Guests have a choice of rooms that overlook the city or face the Gateway ofIndia and the Arabian Sea.

Heritage Wing Rooms: These rooms are renowned for their architecture and exude anaura of old-world elegance. Each corridor in this Wing resembles an art gallery, and thedesign, dcor and furnishing ensure that no two rooms are alike. Guests have a choice ofrooms that overlook the city or pool or face the Gateway of India and the Arabian Sea.

Taj Club: Located on the top floors of the Heritage Wing, Taj Club is designed for thediscerning business traveler. Guest amenities and services include complimentary airportlimousine transfers, private check-in at the Club desk, in-room fax, personal safe, acomplimentary bottle of wine, valet service and complimentary deluxe Continentalbreakfast. Taj Club guests can also enjoy complimentary tea/coffee throughout the dayand cocktails during the Cocktail Hour at the Club Lounge. Taj Club also offers guestsexclusive Meeting Rooms and a Business Service Unit on the Club Floor.


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Suites: Choose from elegantly appointed Junior Suites, Executive Suites, tastefullydecorated Large Suites, newly renovated Luxury Suites or spacious, plush Grand LuxeSuites. The finest suites at The Taj Mahal are the luxuriously appointed PresidentialSuites. Each of these suites is decorated with original paintings and antiques thattransport guests into a world of regal luxury and grandeur. Grand Luxe and PresidentialSuite guests can also avail of a personal Valet Service.

Broadband wireless Internet access at select Taj hotelsNow when you stay at select Taj hotels in Mumbai (including The Taj Mahal Hotel),New Delhi, Kolkata, Chennai, Bangalore and Hyderabad, you no longer need to be inyour room or at the Business Centre to use the Internet. Multiple 'hot spots' locatedacross the hotels lets you get onto the Internet from almost any place in the hotel -quickly and without plugging in! What's more, there is a Cyber Butler on call, shouldyou need anyassistance with getting connected.

Facilities and Services

Swimming pool, fitness centre and spa, beauty parlour, barber shop, travel desk, carrental, pastry shop, book shop, shopping arcade, currency exchange, doctor-on-call andbabysitting. Complimentary use of steam, Jacuzzi and gymnasium at the fitness centrefor all guests. Arrangements for golf, badminton, squash, billiards, tennis and table tennison request. 24-hour room service and laundry service

Place and TimeAs far as place is concerned, all the Taj services and facilities are provided at one

point. To ensure timely delivery of their services, they have set processes in place andincase of failure or delay of service, they have built in contingencies and trained theirstaff to communicate the delay to the customer in the right manner.

One of the incidents that Mr. Vivek Sah, the Training Manager at Taj provided uswith to explain this concept further is of the implementation of the contingency planduring the breakdown of the elevator. In case of breakdown of the elevator, the RoomService makes use of the elevator in the other wing to ensure timely delivery to thecustomer.They also have complaint management systems where they encourage customerfeedback. Each of their feedback form is numbered and hence if any feedback form ismissing, the staff is held liable for it. This is to ensure that the management views everyfeedback form.To ensure standadization in their services, they have Standard Operating Procedures(SOP), e.g the food that is served in the restaurant will be of the same quality and taste atany given day and time.

ProcessIn order to ensure that the core product and the supplementary product is

developed and delivered in the right manner and at the right time, the hotel has formedcertain set processes. When the room is being prepared for customer check-in , the


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house-keeping department make sure that all the room amenities are provided as per thecheck list. For e.g. certain room amenities like 3 embroidered laundry bags, 2 closedslippers with logo, 2 shoe bags, etc. are provided by The Taj Mahal Hotel.Infact the processes are so specifically laid down that hotel staff are even advised onwhat to say and what words to use while talking to a customer. The following examplewill illustrate this better. When a customer asks for something to be done instead ofsaying no problem, the staff is taught to say most certainly.

The Taj Blueprint

When the service provider comes in contact with the customer, he needs to surpass thecustomers expectations, for which a blue print is made and followed by the serviceprovider, in this case the Taj Mahal Hotel.

Dinner Service Sequence

Procedure

1 Greet Guests Entrance Host(ess) / Manager 2 Smile using appropriatesalutation,correct posture,eye-contact and guest name wherepossible.

Entrance Host(ess) / Manager

3 Smoking/Non-smokingpreference to be confirmed.

Entrance Host(ess) / Manager

4 Assist guests to their seats. Restaurant Host(ess) / Manager

5 Unfold the napkins, ladies firstRestaurant Captain

6 Suggest the Dinner buffet, anddescribe the buffet highlights -

specials etc.

Table Captain / Manager

7 Present the food menu alongwith the beverage list/ winemenu, if A La Carte is desiredby the guest. Suggest dailyspecials and advice nonavailability`s, prior to foodorders.

Table Captain / Manager

8 Suggest bottled water andoffer wine by glass.

Table Captain

9 For wine service, appropriateglassware to be present on the

table.

Table Captain / Server

10 For all orders, serve ladiesfirst


11 Clear plates accordinglybefore guests return aftersecond helping from buffet.



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12 For A La Carte orders, platesto be cleared only after allcomplete their meal.


13 Replenish the cuttleryaccordingly.


14 Napkins to be folded neatly inhalf and placed on the leftarm-chair, when guests leavefor second helping.


15 For A La Carte orders, offerdessert menu and describleitems.


16 Offer tea / coffee after entreand side plates are cleared.


17 Always maintain table topclean, before resetting thetable


18 Place bill folder with chequeon table for signature, as perguest convinience


19 Thank all guests using theirnames respectively.

Table Captain / Server / Host(ess) /Manager

20 Bid farewell. Restaurant Captain / Server / Host(ess) /Manager

21 Upon guest departure, cleartable immediately.


Productivity

The Taj as a hotel does not compare itself to only Indian hotels, but even with thehotels internationally as it claims to have World Class Quality. In order to ensure thatits inputs are transformed into desired outputs, they provide extensive training to theiremployees irrespective of the field they come from.

The Taj Mahal hotel has various quality tools to enhance quality. This involvesevery department, as they have to make sure that the raw material as well as the finishedproduct is of top quality. At The Taj, it is the responsibility of the purchase department tomake sure that the raw materials are purchased at the Right Time, Right Place, RightCost and from the Right Source, in order to avoid any hindrances in their productivityand quality.Taj has developed enormous credibility in terms of trustworthiness being the oldest brand

of hotels, with the reputation of being World class and honest service provider. Security,Communication and understanding the customer psychology are special assets the Tajmanagement has mastered with time.

PeoplePeople here mean the customers, employees, management and the society. It is

the final customer who is to be satisfied and this can be done only with the help of theemployees, who are directed and guided by the management. In the end the final motive


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of Taj is to provide consistently and relentlessly an Indian experience of warmth andhospitality by anticipating and exceeding guest expectations. They also provide variouscustomer services such as The Taj Inner Circle Group, Taj Advantage and TajEpicure.

In order to ensure the productivity of their employees they provide them withvarious facilities such as medical help, consultation, traveling facilities, perks andbonuses. The employers here each have their own lockers in which they keep theiruniforms and other belongings, they also have bunkers with small beds so that theemployees working in shifts can catch some sleep if need be.

In spite of the fact that human resources management is such an integral part ofthe service industry of which hotels form a major part, its role has begun to beacknowledged only recently. The Taj Group of Hotels is probably one of the first Indianhotel chains to have recognised and respected the significance of HR in the hospitalityindustry. Says K S Srinivasan, GM-corporate human resources, The Taj Mahal Hotel,Mumbai, Functions like sales, marketing and HR are not hotel-specific, unlike those ofchefs, housekeepers, bartenders, stewards and the like. They are, in fact, common to allbusinesses.

He asserts that HR, as a function, is like a partner in the business in anyorganisation and not a stand-alone function. It is the key to effective utilisation of themanpower that the hotel industry is so dependent on. And the Indian hotel industry isamong the most labour intensive since the number of people serving guests is themaximum here. It is precisely for this reason that the significance of HR requires to beappreciated.

It is not merely monetary rewards that employees seek today; the intriguingaspect is the learning experience that the job promises. It is precisely with this verythought in mind that the Taj Group of Hotels, a Tata enterprise and one of the oldesthotel chains in the country, decided on a training programme for the operations trainees,explains Srinivasan.

Interactive sessions between the Taj management and the director of the TataInstitute of Social Sciences (TISS), a Tata educational and research institution, led to aninteresting and comprehensive tailor-made course curriculum being chalked out. Thuswas born the Taj TISS HR Associate Programme, a one-year course comprising fourmodules that are designed to give equal importance to and impart balanced knowledge of both the theoretical and the practical aspects of all HR-related functions of the hotelindustry.

After finalising the course details, the Taj made announcements about the course,offering interested trainees with two to three years of work experience an opportunity toapply. The response was encouraging and five trainees were shortlisted for the first batchof the training programme.

Each of the four modules have four sections. The first stage consists of theoreticallessons, providing a sound background to the practical application of the knowledgerequired of them in the second stage. In the third stage, the students return to the Instituteand their performance is evaluated by professors of TISS. In the fourth and final stage,grades are awarded. While practical training sessions for the first three modules havebeen organised at the Taj hotels across the country, the fourth modules practical sessionshad students of the first batch working in Tata companies such as TISCO and TataConsultancy Services (TCS). This gave them a wider scope and more exposure, besidesmaking them realise that HR skills in a service-specific industry like the hotels are much


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more challenging than their application in the manufacturing or any other industry,observed Srinivasan. He said he himself had started off in the manufacturing industryand only later did he move over to the service industry. I have been in the industry forover a decade now and am well-set here, he added.

The key to retaining staff and ensuring the success of any business organisationlies with the HR department and its effective functioning. Any organisation, includinghotels, incur heavy expenditure on their employees, especially between the time ofrecruitment and the employees acquisition of the skills imparted during their training. Itcan be inferred, therefore, that a high employee turnover rate lowers the efficiency of thestaff as a whole owing to their constant on-the-job training and skill enhancement.An organisation must be able to create for itself a unique place and image in the mindsof the employees, both present and prospective. This enables the employees to aspire tobe a part of the organisation, giving it their very best, says Srinivasan. Though thetraining programme has and will continue to cost us money, we believe that it is trulyworthy investment, he added.The Taj group, says Srinivasan, is an expanding organisation and we are a people-oriented company. What we need are people who can match our organisational standards.

We are also looking to create and ensure a constant supply of good quality HRprofessionals, which is why we decided to impart training of an extremely specialisednature to our management trainees. I have observed them at the end of the programmeand must say that they appear all charged up and raring to go, he remarked.The Taj-TISS joint programme is expected to create a demonstration effect in theindustry with more hotel groups placing additional emphasis on the HR trainingprogrammes.To be a successful HR professional, what is required most is the aspirants ability tochallenge themselves as well as their colleagues. Only then can they get the very bestfrom themselves and their team. Challenges in the HR field are immense and since it isso people-centric, it is only obvious that professionals should have strong people-

management skills, explains Srinivasan. Besides this, a right attitude towards the joband life in general is extremely essential. As a manager myself, what I would look for inan applicant would be the ability to fit into my organisation perfectly and be emotionallybalanced, competent and above all, be a cultural fit, fulfiling the basic values that the Tajis known for, concludes Srinivasan.

Promotion and EducationThey carry out their promotions by the means of calendars, monthly letter to their

Inner Circle Customers, informing them about their upcoming events and offers. Tajhas television advertisements on popular channels like CNBC, and print ads in magazinesand newspapers. Taj takes part in exhibitions like wherein they promote their holidaypackages. They also have special offers during the off-season etc. Also The Taj is theonly hotel chain to personify itself and in promotion campaigns and advertisements theTaj is often referred to as She The print ads for the Taj are :-

Physical Evidence

The Taj Mahal Hotel was built in 1903. The architect was Sitaram Vaidya. It had a veryethnic look to it, which kept up their image of providing an Indian experience of warmth


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and hospitality. They realized that modernization is the name of the game and had TheTaj redesigned by Mr. Chambers, Mr. Wilkes and Mr. Bernard from Singapore.

Some of the recent renovations that have been carried out at the Taj areThe exterior has been given a new and modern look while still retaining the old worldcharm of the building.

The entrance has splendidly carved bronze and glass doors Soaring onyx columns stretchto a luminous alabaster ceiling; while underfoot, rich hand-woven carpets set off amagnificent floor painstakingly inlaid with semi-precious stones. The eclectic mix ofwestern contemporary style and traditional Indian motifs creates a veritable feast for thesense.The city's most exclusive restaurant, The Zodaic Grill provides a graceful setting for anintimate dining experience. Under a magnificent trompe l'oeil dome, they serve the finestgourmet cuisine complemented by an extensive wine list, as a classically trained pianistentertains patrons.

Price and Other User Costs

Taj realizes that their prices are high and not affordable by all, but this is due to variousoverheads that it incurs and the superior quality that it offers. For e.g. a roadsidesandwich seller sells his sandwich for Rs.10 as he has no overheads and has no qualitystandards to maintain, like the quality of the bread and the vegetables. But at The Taj,they serve the best quality and also incur overhead expenses.Also the target audience that the Taj caters to are the ones who come to the Taj for itsambience and world class standards, therefore they say that their prices are justified as

they help The Taj retain the exclusivity that it stands for.

7 Ps of marketing for hospitals

Product:


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The service product is an offering of commercial intent having features of both

intangible and tangible, seeking to satisfy the new wants and demands of the consumer.

Hospital industry is action oriented and there is a lot of interaction with the customers

(patients). The service product of the hospitals normally have the following features:

o Quality Level: When we talk about marketing hospitals, it is natural that

we are very particular about managing our services in the right fashion.

Supportive services play an important role in improving the quality of

medicare. These services which include laboratory, blood-banks,

catering, radiology and laundry, in a true sense determine the quality of

services made available by medical and para-medical personnel. They

get a strong base for treatment since the diagnostic aspect determines

a direction. To get the best result from OT, it is natural that

equipments are properly sterlised. In addition, the dresses and clothes

are also required to be made bacteria free. The patients are required

to wear disinfected linen which should be made available. The radiology

department should have hi-tech facilities keeping in view the pressure

of work. Of late, we find sophisticated equipments and unless hospitals

make the same services available the same, the quality of services

cannot be improved.

o Accessories: This is a very good way of segmenting customers. Many

hospitals provide additional services such as catering, laundry, yoga

sessions, cafeterias, etc. for the customers (patients)who are willing to

pay extra. Hospitals have different wards - General and Special.

Certain hospitals provide services for the family members of the

patients (when they are not from the same city) accommodation and

catering.

o Packaging: It is the bundling of many services into the core service. Eg:

Apollo hospital offers a full health check-up to the patients. Similarly

other hospitals also offer package deals for health check-ups. For


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example if a person has to undergo a bypass surgery, he can pay a lump

sum amount during admission, say rupees 1 lakh for all procedures,

tests, stay, etc, at once.

o Product line: hospitals through their services offer many choices to the

patients and cover a wide range of customer needs. For example: Apollo

hospital has dental department, cardiology department, etc. and within

the dental department it has dental surgery, root canal, etc.

o Brand name: The hospitals, to differentiate themselves, and their services

from others use a brand name. The intangibility factor of the service

makes it all the more important for the hospitals to do so.

o Place

Under hospital marketing, distribution of Medicare services plays a crucial role. This

focuses on the instrumentality of almost all who are found involved in making services

available to the ultimate users. In case of hospitals the location of hospital plays a very

important role. The kind of services a hospital is rendering is also very important for

determining the location of the hospital.

Eg. Tata memorial hospital specializes in cancer treatment and is located at a centre place

unlike other normal hospitals, which you can find all over other places.

It can be unambiguously accepted that the medical personnel need a fair blending of two

important properties i.e. they should be professionally sound and should have in-depth

knowledge at psychology. A particular doctor might be famous for his case handling

records but he may not be made available for all the patients because of the place factor.

Now in this case the service provided, that is the doctor may be a visiting doctor for

different hospitals at different locations to beat the place factors.

Unlike other service industries, under hospital marketing all efforts should be for making

available to the society the best possible medical aid.


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In a country like India, which is geographically vast and where majority of the population

lives in the rural areas, place factor for the hospitals play a very crucial role. A typical

small village / town may be having small dispensaries but they will not have super speciality

hospitals. For that they will have to be dependent on the hospitals in the urban areas.

People

Under hospital marketing the marketing mix variable people includes all the different

people involved in the service providing process (internal customers of the hospitals) which

includes doctors, nurses, supporting staff etc. The earliest and the best way of having

control on the quality of people will be by approving professionally sound doctors and other

staff.

Hospital is a place where small activity undertaken can be a matter of life and death, so

the people factor is very important. One of the major classifications of hospitals is

private and government. In the government hospital the people factor has to be specially

taken care of. In Indian government hospitals except a few almost all the hospitals and

their personnel hardly find the behavioural dimensions significant. It is against this

background that even if the users get the quality medical aid they are found dissatisfied

with the rough and indecent behaviour of the doctors.

Under hospital marketing a right person for the right job has to be appointed and they

should be adaptable and possess versatility. The patients in the hospitals are already

suffering from trauma, which has to be understood by the doctors and other staff. The

people of the hospital should be constantly motivated to give the best of their effort.

Process

Process generally forms the different tasks that are performed by the hospital. The

process factor is mainly dependent on the size of the hospital and kind of service it is

offering. A typical process involved in a medium sized hospital can be as follows.


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Apart from this flow there are other allied activities like record keeping administration at

services etc which fall under the process factor. These stages do not exist separately but

are interlinked. The most important elements are lines of communication within the setup.

The experience of the patient depends on the final interplay of all these factors.

Physical evidence

It does play an important role in health care services, as the core benefit a customer

seeks is proper diagnosis and cure of the problem. For a local small time dispensary or

hospital physical evidence may not be of much help. In recent days some major super

speciality hospitals are using physical evidence for distinguishing itself as something

unique.

Physical evidence can be in the form of smart buildings, logos, mascots etc. a smart

building infrastructure indicates that the hospital can take care of all the needs of the

patient.

Examples -


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1. Lilavati hospital has got a smart building, which helps, in developing in the minds of

the people, the impression that it is the safest option among the different

hospitals available to the people.

2. Fortis and Apollo hospitals have a unique logo, which can be easily identified.

Physical evidence also helps in beating the intangibility factor.

Promotion:

Hospitals for promotion use either advertisement or PR or both after taking into

consideration the target customers, media type, budget and the sales promotion.

Since a few years the prime times in T.V. are reserved for advertising social issues like

family planning, use of different types of contraceptives, care for the girl child and so

on. These commercials use the common man approach for reference group appeal. In

case of health care products and services use for common man appeal is widely

prevalent. The use of celebrities is not as effective as that of a common man. An

ordinary person thinks that if it works well for people like him, it will also work equally

well for him. The identification with the common man is easy and quick.

Besides TV, other media of promotion are to be used innovatively. Unlike the urbanarea, in rural areas newspapers and magazines do not have the same impact in

conveying messages. In villages, hoardings and wall writings near the markets and

recreation centers attract the attention of villagers. This market consists of 180

million strong middle income group and a small income group. This group has a large

discretionary income. These discerning consumers are very careful in choosing health

care services. The last decade has witnessed a health, appearance and nutrition

conscious population.

The health care field has become very competitive. Although around one-fourth of our

population stays in urban India, three fourths of the total doctors have engaged

themselves in this part. Many of these doctors visit the contiguous rural areas, but

they may operate from the urban area. The patients of upper middle and upper income

group have a wide choice to make from a number of clinics and hospitals. Therefore,


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many hospitals have abandoned traditions and adopted marketing strategies to woo

more and more patients to their clinics.

Word-of-mouth plays a very important role in promotion of hospitals. A person in need

of a health care service does not know for sure where to search for relevant

information. He consults his family members, relations and friends first. The patients

who come to a hospital generally have the old patients of that hospital as referrals.

Word-of-mouth plays an important role during information acquisition stage of the

customers as there are no objective performance measures to judge the various

alternatives available to them. Therefore, satisfied past patients of a hospital can

bring more number of patients to that hospital than a number of advertisements.

In a competitive market place, the images of the firms swill affect their competitive

standing. One factor that is likely to have a significant impact on the health care scene

is the growth of hospital chains such as Apollo Hospitals, Birla Health Centres ,etc.

Artificial heart transplants and other complex operations although are few in number

and generate a small portion of the total revenue, they help in generating word-of-

mouth which health care providers are actually interested. Many of these companies

are spending a lot in corporate advertising for Image building.


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MARKETING MIXES IN THE INSURANCE INDUSTRY

PRODUCT MIX

The formulation of product mix for the insurance business makes it significant to take alook at the services and schemes of insurance organisations. The product portfolio isknown and the process of formulating a package should be known. It is natural that theusers expect a reasonable return for their investments. It is quite natural that theinsurance organisations want to maximise profitability. Both of these dimensions arefound interrelated.

It is well known that the key objectives of insurance business are mobilisation ofsavings and channelisation of investments. This makes it essential that insurance

business is made lucrative so that the users /potential users get incentives to buy apolicy or to invest in the insurance organisations. The insurance organisations also

need to promote the underwriting activities, which would activate the process of

arresting the regional imbalance. In the context of formulating the product mix, itis essential that the insurance organisations promote innovation and in the productportfolio include even those services and schemes which are likely to get a positiveresponse in the future.

The corporate objectives indicate that the insurance organisations are required to becareful, especially while launching a new policy. The policies should not only generateenough premium but it is also important that the policies cover persons working in theinformal sector, serving as porter, working as manual labourers, or engaged in farmsector. It is the need of the hour that the insurance organisations make their serviceinternationally competitive. This makes a strong advocacy in favour of innovative

product mix strategy for the public sector insurance organisations. Thus the formulationof product mix should be in face of innovative product strategy. Strategies of foreign andprivate insurance companies should be taken into consideration while initiating theinnovative process.

The formulation of product strategy should assign due weightage to the rural segmentemerging as a big profitable segment especially in the 21st century. The policies andschemes should have rural orientation so that backward and neglected regions of thecountry get priority attention and the regional imbalance is minimised.

In this context, it is also pertinent that the insurance organisation make possible welfare

orientation and include in the product portfolio even those policies and schemes whichbecome instrumental in safeguarding the interest of the weaker sections of the society.The formulation of package is also found important. Designing a package on the basis ofthe needs and requirements of the concerned segment would make the product mix morecompetitive.

The partially tapped or totally untapped profitable segments of the future should beidentified and tapping the potentials optimally is also important.


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A sound product portfolio is the need of the hour and therefore the regulatory barriers orconstraints in activating the innovation process should be minimised.

Product Planning & DevelopmentThe purpose of insurance business is to generate profits besides subserving the socialinterests. The present business is likely to be more competitive.Product is like a stage on which the entire drama of successful marketing is acted. It islike an engine that pulls the rest of the marketing programmes. It is in this context thatthe product management in an insurance organisation needs an intensive care.Yesterday, the policyholders had limited hopes and aspirations but today they expectmore and they would even like something more tomorrow. This focuses on the fact thatstrategic decisions are influenced by the environmental conditions.The product development needs a new vision, a new approach and a new strategy. Tillnow the public sector insurance organisations have made possible an optimum utilisationof their marketing resources especially in rural areas where tremendous opportunities areavailable. Thus they should assign due weightage to the development services /schemeswhich cater to changing needs and requirements of the rural segment.

In the development of product, the corporate investments need due priority.Channelising the corporate investments influences the rate of profitability of insurancecompanies and also contributes considerably to the socio-economic transformationprocess.

Thus the product planning and development should:Give due weightage to the socially and economically backward classesMaximise the mobilisation of savings by offering lucrative schemes.Assign due weightage to interests of investors.Maintain economy in business by promoting cost effectiveness.Act as a trustee of policyholders.

Keep in mind the emerging trends in business environment.Improve the quality of customer / user services.

PROMOTION MIX

With the advent of private players in the insurance, companies resort to rampantpromotion. Promotion mix for this sector is as follows:

AdvertisementAdvertisement can be done through the telecast media, broadcast media and print media.Insurance companies have been making optimal use of all the three kinds. Use of WorldWide Web, as media is almost negligible and will not be very frequent in the near futureconsidering the fact that the majority of customer base of these companies is not yetexposed to the Internet. The telecast media has been the most effective of all in case ofthe insurance sector. Most of the companies have their separate advertising section totake care of this aspect. An important consideration while making the decision as to theselection of the media is budgetary constraint. Since the insurance companies work on alarge scale, usually this constraint does not stand as an obstacle.

Publicity


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It is a device to promote business without making any payment and therefore it could bealso called as unpaid form of persuasive communication bearing a high rate ofsensitivity. Developingrapport with the media is an important aspect of publicity. This makes it essential thatthe PR officers working in the insurance organisations maintain contacts with the mediapersonnel, organise press conference, and offer small gifts and momento to them. Thesedays LGD marketing is gaining popularity the world over. It also can be applicable here.At the apex and regional levels, the PROs bear the responsibility of projecting positiveimage of the organisation. Thus it is necessary to select suitable personnel for this. Theyshould be in particular taught to deal with people, simple things like talking, greeting etc.

Sales PromotionIncentives to the end users for taking the policy play an important role in promoting theinsurance business. Since the insurance business is also related to achieving of aparticular target, it is pertinent that the policymakers assign due weightage to the same.The offering of small gifts during a particular period, the rebate, discount, bonus can

increase business of organisation by leaps and bounds. Besides, there can be gifts for theinsurance agents also.

Personal SellingPersonal selling in case of the insurance organisations is quite important considering theexistence of the insurance agents spread at all levels. Selection of these agents, theirtraining is responsibility of the organisation. There is difference in urban and ruralmarket. Rural customers might be uneducated / uninformed etc. compared to the urbancustomer. Hence the organisations will have to make selections of the rural and urbanagents accordingly.

Word of Mouth Promoting.The word of- mouth communications result into wider publicity, which substantiallysensitise the process of influencing the impulse of users/prospects of the insuranceservices. The satisfied group of customers, opinion leaders, the social reformists, thepopular personalities act as word of mouth communicators. The advertisement slogansmay be insensitive, the publicity measures may be ineffective but the positive feelings offriends and relations communicated cannot be ineffective. This makes it clear that themost important thing in the promotion of any business is the quality of services.

TelemarketingWith the development of satellite communication facilities and with the expansion of thetelevision network, we find telemarketing gaining popularity the world over. Theinsurance organisations in general need to promote telemarketing. The foreign insurancecompanies have been assigning due weightage to this and in India this is beginning togain importance with the advent of competition in this sector. The telemarketer issupposed to be well aware of the telephonic code so that the task of satisfying thecustomers/their queries will not consume much of time.

World Wide Web


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task of identifying the moral hazard is found difficult. The premium charged is to bemade rational to cater to the payment of claims on a priority basis including thecatastrophic losses, management expenses & margin of profit. It is essential that variousrelated to both the hazards are estimated in a scientific way. The actual process of ratingconsists of three steps, e.g. classification, discrimination & scheduling.

The price mix decisions are:

Making possible cost of effectivenessRestructuring of premiumDue priority to profit generating investments.Rationalizing or optimizing the social costsPaving avenues for channelising the productive investmentsAssigning dude weightage to the policies meant for the socially & economicallybackward classesMaking the ways for maximizing profit

PLACE

The first component of the marketing mix is related to the place decisions in which ourfocus would be on the two important facets managing the insurance personnel andlocating a branch. The management of agents and insurance personnel is foundsignificant with the viewpoint of maintaining the norms for offering the services. This isalso to process the services to the end user in such a way that a gap between the services-promised and services offered is bridged over. In a majority of the service generatingorganizations, such a gap is found existent which has been instrumental in aggravatingthe image problem. The policy makers make provisions; the senior executives specify the

standards and quality and the branch managers with the cooperation of the front-line staffand others bear the responsibility of making available the promised services to the endusers. The public sector insurance organizations have failed in both the areas. The agents,rural career agents, the front-line staff and even a majority of the branch managers havebecome a party gap.

The transformation of potential policyholders to the actual policyholders is a difficulttask that depends upon the professional excellence of the personnel. The agents and therural career agents acting as a link lack professionalism. The front-line staff and thebranch managers are found not assigning due weightage to the degeneration process. Theinsurance personnel if not managed properly would make all efforts insensitive. Even ifthe policy makers make provision for the quality upgradation, the promised serviceshardly reach to the end users. This makes it significant that the insurance organizations ingeneral and the public sector insurance organizations in particular keep their minds inchanging the expectations of customers and the prospects. The behavioral profile ofinsurance personnel is studied in a right fashion and the changes required due to thechanging perception of expectation are incorporated. It is essential that they have ruralorientation and are well aware of the lifestyles of the prospects or users. They arerequired to be given adequate incentives to show their excellence. While recruitingagents, the branch managers need to prefer local persons and by conducting refresher


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courses to brush up their faculties to know the art of influencing the users/prospects. Inaddition to the agents, the front-line staff also needs an intensive training programme.This makes it essential that the branch managers organize an ongoing trainingprogramme, which focuses on behavioral management.

Another important dimension to the Place Mix is related to the location of the insurancebranches. While locating branches, the branch manager needs to consider a number offactors, such as smooth accessibility, availability of infrastructural facilities and themanagement of branch offices

and premises. In addition it is also significant that the branch managers assign dueweightage to the safety provisions. The management of offices makes it significant thatthe branch mangers are particular to the office furnishing, civic amenities and facilities,parking facilities and interior office decoration.

Thus the place management of insurance branch offices needs a new vision, distinctapproach and an innovative style. This is essential to make the work place conducive,

attractive and proactive to the generation of efficiency. The motives are to offer thepromised services to thee end users without any distortion and making the branch officesa point of attraction. The branch managers need professional excellence to make placedecisions productive.

PEOPLE

People are most important component of marketing mix for the insurance industry.Sophistication in the process of technological advances makes the ways for the personnelin such a way that an organization succeeds in making possible a productive utilization oftechnologies used or likely to be used. Professional qualification requirements change as

technological develops & evolves. The use of computers microcomputers, fax machines,sophisticated telephonic service, e-mailing, intra-net service have been found throwing abig impact on the perception of quality of service. This makes it essential that theinsurance organizations also think in favour of developing personnel in line with thedevelopment and use of information technologies.

The front-line-staff as well as the branch managers are required to be given the trainingfacilities so that they in position to make possible an effective use of the technologies.The insurance organizations bear the responsibility of developing the credentials of theiremployees. In this context, it is also significant that they think about the behavioralprofile of insurance personnel. It is pertinent that the employees are well aware of thebehavioral management. They know & understand the changing level of expectations ofusers & make sincere efforts to fulfill the same. In this context, it is also significant thatthe senior executive while recruiting, training & developing the insurance personnelmake it sure that employees serving the organization have a high behavioral profile inwhich empathy has been given due place. The psychological attributes becomesignificant with the viewpoint of influencing the prospects or retaining the users. It is inthis context that the insurance companies need a rational plan for the development ofinsurance personnel.


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PHYSICAL EVIDENCE

Physical evidence includes facility design, equipment, signage, employee dress,tangibles, reports & statements.

Signage:Signage personifies the insurance company. It gives an identity by which users recognizethe company. A signage depicts the companys philosophy & policy.

Documents

7P Examples