Marketing in Services

7/31/2019 Marketing in Services

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Emergence & Growth of Service Marketing

Prof. Annada Padmawat

MIM


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What is services?

It is the part of the product or the fullproduct for which the customer is

willing to see value and pay for it.


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Types of Services

Railways Airlines

Local Passenger transportation

Helicopter services

Road transportation

Water transportation

TransportationServices

Water supply services Electric supply

Gas SupplyPublic Utility

services

Telephone

Postal & Courier

Radio and TV Satellite

Telecommunication

Communications

Renting

Investment Consultant

Property consultants

Building and real estate management

Real State Services


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Types of Services

Banking Leasing

Retail Banking

Insurance

Security and brokerage

Financial &Insurance Services

Wholesaling and RetailingTrading Services

Marketing Consultancy

Advertising

Telemarketing New Product Testing

Market research

Marketing RelatedServices

Defense

Police

Education

Medical and others

Government Provided

Services


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Types of Services

Equipment inspection Designing

Construction design

ERPTechnical Research

Engineering Services

Game parlour Discos

Clubs

Party

Theme parks

EntertainmentServices

Records management

Management consultancy

Legal Accountancy

Office management

Business &professional services

Hotels & Restaurants

Catering

Home DeliveryHospitality Services


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Types of Services

Security

Public Relations

Printing

Data processing

Speech writing Professional speaking

Training

Travel related

Courier

Health and hospital

Equipment rental

Interior designing Laundry

Computer programming

Personal grooming

Fax

Old age homes

Repair and maintenance

Home help

Other Services


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The service sector in India The services sector has been growing at a

rate of 8% per annum in recent years

More than half of our GDP is accounted for

from the services sector

This sector dominates with the best jobs,

best talent and best incomes


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The service sector in India Liberalization, Privatization and globalization

(LPG) has brought unprecedented changes in

the economic, trade, and industrial scenario.

LPG environment has exposed various

organisations including the service sector to

the challenges.


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The service sector in India India ranks fifteenth in the services output

and it provides employment to around 23%

of the total workforce in the country. The

various sectors under the Services Sector in

India are construction, trade, hotels,

transport, restaurant, communication andstorage, social and personal services,

community, insurance, financing, business

services, and real estate.


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The service sector in India

The Services Sector contributes the most to theIndian GDP. The Sector of Services in India has the

biggest share in the country's GDP for it accounts

for around 53.8% in 2005. The contribution of the

Services Sector in India GDP has increased a lot inthe last few years. The Services Sector contributed

only 15% to the Indian GDP in 1950. Further the

Indian Services Sector's share in the country's GDP

has increased from 43.695 in 1990- 1991 to around

51.16% in 1998- 1999. This shows that the Services

Sector in India accounts for over half of the

country's GDP.


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Marketing Challenges for service marketer

Service quality when product is intangible New services design

Communicating a consistent and relevant image

Accommodate fluctuating demand Motivate and select service employees

Service price when actual cost is not determined

Strategic and tactical decision making

Protection of new service concept

Communicate quality and value to customer

Delivery of consistent quality services


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Marketing Challenges for service marketer

Service Marketing Environment

PEST

Impact

Political Legal Forces

Economic

ConditionsTechnology

Social Cultural Forces


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Need for services

Age (Old Age care)

Dieting services

Dental-Eye care

Hair styling Hospitals

Mental Health services

Museums

Baby Care

Video conferences

Courier services

Mobile phone services

Astrological

Need


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Need for services

Birthing services

Restaurants

Camping

Recreation Pet care services

Mailing services

Water services

Security services

Publishing

Fashion Designing

Need


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Key reasons for Growth of service sector

Cause

Technological Advances

Globalization

Deregulation policies

Competitions and need for higherproductivity

Cost effectiveness drives

Computer Explosion

Overall increase in prosperity

Effect

Higher complexity of products

More business internationalization

Privatization of regulated sectors

Specialization/expert knowledge

Optimum manpower usesubcontracting less critical functions

Speed of work performance, soundmotion picture

Increased spending power andcomfort


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Key reasons for Growth of service sector

Cause

Increasing percentage of working

womenMore leisure time

Greater life expectancy

Increased complexity of life

Scarcity of resources

Demographic Changes

Urbanisation

Effect

Work performed by women

Shift towards pleasure

Desire to live long

Need for service of specialist

Need for services

Dual career families

Fast, mechanical and self centeredlife


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What is a service? It is intangible.

It does not result in ownership.

It may or may not be attached with a

physical product


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Services could meet Personal needshaircuts, tution, massage

parlours

Business needscourier services, office

cleaning services, delivering fresh flowers


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Difference between physical

goods and servicesPhysical goods Services

tangible intangible

homogeneous heterogeneous

Production and distribution areseparated from consumption

Production, distribution andconsumption are simultaneous

processes

A thing An activity or process

Core value processed in factory Core value produced in the buyer-seller

interaction

Customers do not participate in the

production process

Customers participate in production

Can be kept in stock Cannot be kept in stock

Transfer of ownership No transfer of ownership


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Characteristics of services Intangibility

Inseparability

Perishability

Variability


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Most products have a service

componentThey could be

Equipment based

People basedvarying skill levels


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The three additional Ps of

Service Marketing People

Physical evidence

Process


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Qualities of services Search qualities

Experience qualities

Credence qualities


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Differentiation in services Offering

Faster and better delivery

Image


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Managing Service quality Gap between management perceptions and

consumer expectations

Gap between management perceptions andservice quality specifications

Gap between service quality specifications andservice delivery

Gap between service delivery and externalcommunication

Gap between expected service and perceivedservice


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Determinants of service quality Reliabilitydelivering on promises

Responsivenesswilling to help

Assuranceinspiring trust and confidence

Empathyindividualising customers

Tangibles- physical representation


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Moments of truth It is the customerservice encounter

Every positive or negative experience of

the consumer would have fall-out on the

overall service experience


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In services, the last experience

remains uppermost in your mind.

Therefore, it is not enough to begood, you have to be consistently

good


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Services Monitoring Continuous auditing of competitor service

levels versus own company

Importance - performance analysis


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ImportancePerformance

Analysis

Concentrate

here

Keep up the

good work

Low priority Possible overkill

I

M

P

O

R

T

A

CE

P E R F O R M A N C E


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Service quality is directlyproportional to employee

satisfaction


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When customers visit a service

establishmentTheir satisfaction will be influenced by

Encounters with service personnel

Appearance and features of service

facilitiesexterior and interior

Interactions with self service equipment

Characteristics and behaviour of other

customers


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Customer Service Expectations Desired Servicethe wished for service

Adequate Servicethe service that would

be acceptable


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Zone of Tolerance

Difference between the desired

service and the adequate service


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Service Encounter Themes Recovery

Adaptability

Spontaneity

Coping


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RecoveryDont

Ignore customer

Blame customer Leave customer to

fend for himself

Downgrade

Act as if nothing iswrong

pass the buck

Do

Acknowledge

problem

Explain causes

Apologise

Compensate/upgrade Lay out options

Take responsibility


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AdaptabilityDont

Promise and fail to

keep them Show unwillingness

to try

Embarrass the

customer Laugh at the customer

Avoid responsibility

Do

Recognise the

seriousness

Acknowledge

Anticipate

Accommodate Adjust

Explain rules/policies


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SpontaneityDont

Exhibit impatience

Yell/laugh/swear

Steal from customers

Discriminate

Ignore

Do

Take time

Be attentive

Anticipate needs

Listen

Provide information

Show empathy


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CopingDont

Take customers

dissatisfactionpersonally

Let customers

dissatisfaction affect

others

Do

Listen

Try to accommodate

Explain

Let go of the

customer


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Types of complainers Passives

Voicers

Irates

Activists


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Customer complaints It pays to resolve customer complaints

On an average only 5 % dissatisfied customers

complain. Others simply go over to thecompetitor

A satisfied consumer speaks to an average of 3

people on his her experience

A dissatisfied consumer gripes to on an average

11 persons about his/her unpleasant experience


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Companies that pay importance

to resolving customer complaints Pay attention to quality and training of manpower

recruited

Have clear benchmarks on service quality andcommunicate to employees

Take remedial steps to improve customersatisfaction and prevent repeats of customer

dissatisfaction Have a data base on customer complaints that is

periodically analysed and policies adjusted


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Satisfied employees will produce

satisfied customers Morale

Motivation

Mood


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Managing Service Productivity Giving quality service is an expensive business

Not every consumer is willing to pay extra for

service quality Service providers would have to find their

optimum service quality/cost ratios

Can technology substitute part of the labour

content? Can customers substitute part of the labour

content?

Making services obsolete by product innovations

Documents

Marketing in Services