MARKETING OF SERVICES09-10-13

Unclaimed Baggage Center, USA

Marriage Market at people square Shanghai China

SUCCESS FAILURESTORY OF A DENTIST TREATING A CHILDSUNAYAN OPTICS IN MUMBAISTORY OF A REPAIRS ENGINEER CHARGING HEFTY AMOUNT BANK OF MAHARASHTRA TOKEN NO 13

DIVISION OF ALL ECONOMIC AND INDUSTRIAL ACTIVITIES3 MAIN GROUPSPRIMARYSECONDARYTERTIARY

PRIMARY

SECONDARY

TERTIARY

3 KINDS OF ECONOMIESUNDERDEVELOPED AGRL DOMINENT- THIRD WORLD COUNTRIES IN AFRICA,LATIN AMERICA-(PRIMARY)DEVELOPING PARADIGM SHIFT FROM AGRL TO INDUSTRY-BRIC NATIONS( SECONDARY)DEVELOPED ( EMERGENCE OF POST-INDUSTRIAL SOCIETY)- SERVICES SECTOR DOMINENT- USA AND OTHER EUROPEAN NATIONS(TERTIARY)CAUTION- NO WATERTIGHT COMPARTMENTS

DANIEL BELLAUTHOR OF THE BOOK- THE COMING OF POST-INDUSTRIAL SOCIETYIF AN INDUSTRIAL SOCIETY IS DEFINED BY THE QUANTITY OF GOODS AS MARKING A STANDARD OF LIVING,THE POST-INDUSTRIAL SOCIETY IS DEFINED BY THE QUALITY OF LIFE AS MEASURED BY THE SERVICES DESIRABLE AND POSSIBLE FOR EVERY ONE

CONCEPT OF SERVICEPERFORMED AND NOT PRODUCEDMORE PEOPLE BASED , THAN TECHNOLOGY BASEDSUPPLY OF SERVICE CAN NOT BE EASILY CHANGED TO MEET THE SUDDENLY CHANGED MARKET NEEDSSERVICE DEMAND HAS GREATER ELASTICITY-AGRAWAL PACKERS & MOVERSISSUE OF QUALITY CONTROL AND PROBLEMS IN CUSTOMER SERVICINGSERVICE QUALITY IS AN AMALGAM OF SERVICES

W J STANTON ON SERVICESERVICES ARE THOSE SEPERATELY IDEDNTIFIABLE ESSENTIALLY INTANGIBLE ACTIVITIES WHICH PROVIDE WANT STISFACTION, ARE NOT NECESSARILY TIED TO THE SALE OF A PRODUCT OR ANOTHER SERVICE.TO PRODUCE A SERVICE MAY OR MAY NOT REQUIRE USE OF A PRODUCT . HOWEVER WHEN SUCH USE IS REQURED, THEIR IS NO TRANSFER OF TITLE TO THESE TANGIBLE GOODS

What are services?DeedsProcessesPerformancesAll economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced, and provides added value in forms ( such as convenience, amusement, timeliness, comfort, health) that are essentially intangible concerns of its first purchaser

Service industries and companiesCore product is a serviceTaj hotels ( lodging)Indian airlines ( transportation)Fortis ( healthcare)Wide range of services as core offeringMourya Sheraton- Eva floor

Derived serviceAll products and physical goods are valued for the services they provide-Steve Vargo & Bob LuschValue derived from the physical goods is really the service provided by the good , not the good itselfPharmaceutical provides medical service; razor provides barbering service

Why services marketingMajor players in early development of services sector- banking, transportation , health careNeed for efficient services as they evolved and became more competitiveNow manufacturing industries also understanding importance of quality service to enhance both image and profitsGE in mid 1990 under leadership of Jack Welch- Third revolution aftermarket services , financial services , management consulting and so on

Services marketing- a different ball gameCore product in case of service is a deedChallenge- ensure consistency in quality to marketplaceEarly stages of growth in service sector- people from marketing ( of consumer goods) were selectedFound that skills were inadequateIssues and dilemma in marketing services because experiences were different

Services equals profitsInvesting in service initiatives and promoting service quality was used as a differentiator and to create competitive advantage in early stages of service sector growth Profit was the end result in such casesIn late 1990s, firms focused on bottom line effectiveness of service strategiesFocus on customer satisfaction , revenue generation , service quality was more profitable than focus on cost cutting or attempt to do both simultaneouslyBoth right choice and their implementation- a key

But service stinksTwo sectors where lot of developments occurred; health care and communicationResults can be seen in form of better longevity of human life in developed world Second case of communication- quick/fast/accurate information and its processing has altered livesHowever in both cases- service quality is perceived as poor

Failure in health service

Potential for new service offeringsTechnology basic force behind service innovationsATMs, interactive voice response systems, internet based companies as amazon.com e-bay Many new technology services are on horizonConnected car shall provide all kinds of existing and new services while on road

New ways to deliver serviceMore accessible , convenient , productive mannerPayment of telephone bills drop boxesTie up by mobile service providers with BEST buses in MumbaiTransition from face-to-face to telephone based to interactive voice response systems to internet based customer serviceSome companies coming full circle and now offering human contact as the ultimate form of customer service

Enabling both customers and employeesIn getting and providing serviceSelf-service by customers in an efficient mannerHelps employees in effective and efficient customer service120 point check of Maruti carsImmediate access to information about products and service offerings as well as particular customers and employeesAllows employees to customize servicesEarlier information used to be in papers and files

CURRENT SCENARIOTOO MANY PRODUCTS/SERVICESTOO MANY COMPANIESTOO MUCH OF NOISESHIFT IN POSITIONING OF PRODUCT TO POSITIONING OF MARKETING FUNCTION

Implications due to unique features of servicesCan not be storedCannot be easily patentedCannot be easily displayedPricing is difficultService delivery and customer satisfaction depends upon employee and customer actionQuality depends upon many uncontrollable elements

Implications continued..No sure knowledge that service delivered matches what was planned and promotedCustomers participate and can affect transactionCustomers affect each otherEmployees affect service outcomeDifficulty in mass productionDifficulty in synchronization of demand and supplyCannot be returned or resold

Challenges before Service MarketerHow to define service quality when product is intangible and non-standardized ?How to design and test new services when service is an essentially intangible process ?How can firm be certain it is communicating a consistent and relevant image ?How does the firm accommodate the fluctuating demand ?

Challenges continuedHow can a firm best motivate and select employees who shall be a critical part of product it self?How should the prices be set ?How should the firm be organized so that good strategic and tactical decisions are made ?How can the balance between standardization and personalization be determined to maximise efficiency or organization and satisfaction of customers ?

Tactical decision

BROAD CATEGORIES OF SERVICESUTILITIESLAW ENFORCING, CIVIL ADMINISTRATION, DEFENCE SERVICESTRANSPORT AND COMMUNICATIONDISTRIBUTION AND LOGISTICSINSURANCE, BANKING AND FINANCEBUSINESS & PROFESSIONAL SERVICESLEISURE ,RECREATIONMISCELLANEOUS

GROWTH OF A SPECIFIC SERVICE SEVERAL REASONS-TOURISMAFFLUENCEMORE LEISURE TIMESMALLER FAMILIESBENEFIT OF L T A EXPOSURE TO NEW PLACES THRU CHANNELS AS DISCOVERY AND NAT GEOPAYMENT OPTIONS OPEN

CURRENT SCENARIORAPID GROWTH IN PAST DECADELARGE NUMBER EMPLOYED IN THIS SECTORLESS GOVERNMENT RULES AND REGULATIONSGREAT VARIATION IN FORMATS/KINDSGOVERNMENT , PRIVATE NOT FOR PROFIT ,BUSINESS ORGANIZATIONS

REASONS FOR RAPID GROWTH OF SERVICE SECTORRISING AFFLUENCEMORE LEISURE TIMEMORE WOMEN IN WORK FORCEGREATER LIFE EXPECTANCYGREATER COMPLEXITY OF PRODUCTSINCREASING COMPLEXITY OF LIFECONCERN ABOUT ECOLOGY AND ENVIRONMENTINCREASING NUMBER OF NEW PRODUCTS

RISING AFFLUENCE

MORE LEISURE TIME

MORE WOMEN IN WORK FORCE

GREATER LIFE EXPECTANCY

INCREASING COMPLEXITY OF PRODUCTS

INCREASING COMPLEXITY OF LIFE

CONCERN FOR ENVIRORNMENT/ECOLOGY

NATURE & CHARACTERISTICS OF SERVICESINTANGIBILITYINSEPARABILITYHETROGENITYPERISHABILITYOWNERSHIPSIMULTENEOUS PRODUCTION AND CONSUMPTION

INTANGIBILITYCAN NOT BE SEENTASTEDFELTHEARDOR SMELLED BEFORE BUYINGAIR LINE TICKET BEFORE JOURNEYNO RESULT OF COSMETIC SURGERY BEFORE OPERATION

INTANGIBILITYSAMPLE OF A PRODUCT-CHECK THE BENEFITS IMMEDIATELYADMISSION TO A MANAGEMENT INSTITUTE BENEFITS AFTER PAYMENT OF FEESTEACHING/CONSULTANCY INTANGIBLESAIRPLANE TANGIBLE QUICK TRAVEL INTANGIBLE

INTANGIBILITYCAN NOT TOUCHPRICE STANDERDISATION NOT POSSIBLENO OWNERSHIP TRANSFERCAN NOT BE PATENTEDPRODUCTION AND CONSUMPTION INSEPARABLENO INVENTORIESROLE OF MIDDLEMAN - DIFFERENT

POOR SERVICE QUALITY-DISASTER

INSEPARABILITYDIFFICULT TO SEPARATE SERVICE FROM PERSON/FIRM PROVIDING ITPERSON- SKILL SINGERUSE OF AN EQUIPMENT- DRY CLEANINGALLOW ACCESS TO INFRASTRUCTURE- HOTEL/TRAINPHYSICAL PRESENCE OF A PLUMBER TO REPAIR TAPBEAUTICIAN TO BE PRESENT FOR MAKE UP

HETROGENITYINVOLVEMENT OF HUMAN ELEMENT IN SERVICE STANDERDISATION DIFFICULT6 SIGMA IN CASE OF PRODUCTSDIFFERENT BEHAVIOR OF A FAMILY DOCTOR IN CASE OF EYE INFECTION/CARDIAC PROBLEMBANK CLERK ON 1ST OF MONTH / LEAN DAY

hetrogenitySingapore airlines-luxury classKulala Airlines AfricaHumorous announcement on safety lectures on youtube

TASKREDUCTION OF HUMAN ELEMENTATMS BY BANKRULES AND REGULATIONS FOR VARIOUS SERVICESSTANDARDISED PROCEDURE FOR ROOM RESERVATIONHUMAN ELEMENT CAN SPOIL OTHER GOOD ASPECTS/CHANGE PERCEPTION

Rules/regulations

MARKETING TASKSBUYERS LOOK FOR SIGNALS OF SERVICE QUALITYEVIDENCE MANAGEMENTPRESENTATION TO CUSTOMERS OF ORGANIZED,HONEST EVIDENCE OF CAPABILITIES

Evidence management

PERISHABILITYCAN NOT BE STOREDREMOVAL OF CHAIRS OF ABSENT STUDENTS ?BIKE MECHANIC IN CASE OF NAGPUR BANDHSPARE BIRTH IN PLANES/VACANT SEATS IN A TRAIN-LOSSOTHR DIMENSION FLUCTUATING DEMAND PATTERNPEAK DEMAND FOR BUSES DURING OPENING/CLOSING OF OFFICE HOURSAGGREVATES PERISHABLE NATURE

OWNERSHIP ISSUE100% OWNER OF A PRODUCT AFTER PURCHASESERVICES NOT OWNED- CAN BE USEDPAYMENT NOT FOR PURCHASE BUT FOR ACCESS/USE OR HIRE OF ITEM/FACILITIESCORE BENEFIT- FROM PRODUCT/SERVICE MAIN REASON FOR BUYINGINTANGIBLE BENEFIT PROMINENT IN SERVICE

COMMONALITY IN MARKETING PRODUCTS/SERVICESMARKET RESEARCHPRODUCT/SERVICE DESIGNPRODUCT/SERVICE PLANNING AND DEVELOPMENTPRICINGPROMOTION AND DISTRIBUTIONIMORTANT TO UNDERSTAND SERVICE IMPLICATIONS

IMPLICATIONSINTANGIBILITYINSEPARABILITY

HETROGENITY

PERISHABILITY

OWNERSHIP

FOCUS ON BENEFITTRAIN PERFORMERS/WORK FASTERBEHAVIOR NORMS/CARFUL SELECTIONDEMAND/SUPPLY MATCH- PRICE REDUCTIONEASE IN PAYMENT SCHEME

SERVICE CLASSIFICATIONNATURE OF SERVICE ACTRELATIONSHIP BETWEEN SERVICE ORGANIZATION AND CUSTOMERSMETHOD OF DELIVERY OF SRVICETANGIBLE/INTANGIBLE PROPORTIONSERVICE INPUTSCONSUMER/SERVICE PROVIDER CONTACTPROFIT AND PUBLIC VERSUS PRIVATE SERVICES

TANGIBLE INTANGIBLEDIRECTED AT PEOPLE- (BODIES)SALONS,HEALTHCARE TRANSPORTATIONDIRECTED AT POSSESSION-LAWN CARE , DRY CLEANINGAT PEOPLES MINDS- EDUCATION,MUSEUMS,BROADCASTINGDIRECTED AT INTANGIBLE ASSETS-BANKING,INSURANCE,ACCOUNTING

ORGANIZATION-CUSTOMER RELATIONSHIPCAN BE CONTINUOUS/INTERMITANTCAN BE INDIVIDUAL/INSTITUTIONCUSTOMER NEED/ NEED NOT BE A MEMBER OF SERVICE ORGANIZATION

METHOD OF DELIVERYCUSTOMER TO SERVICE ORGANIZATIONORGANIZATION-TO-CUSTOMER

CUSTOMER/ORGANIZATION AT ARMS LENGTHTHEATRE BUS

LAWN CARE MAIL DELIVERY

CREDIT CARD-BROADCST

PROPORTION OF TANGIBILITY/INTANGIBILITYSHOSTACK CLASSIFICATION- ALL GOODS/SERVICES ON TANGIBILITY/INTANGIBILITY CONTINNUMLOW INTANGIBILITY CONTENT- FAST FOOD JOINTHIGH INTANGIBILITY- CONSULTANCY

SERVICE INPUTSEQUIPMENT BASED-FULLY AUTOMATED/EQUIPMENT MONITORING BY UNSKILLED PERSON(LIFT)OPERATED BY SKILLED PERSONS- QUALITY CONTROL,DIAGNOSTICS PEOPLE BASED

CUSTOMER/SERVICE PROVIDER CONTACTHIGH CONTACT/LOW CONTACT SERVICESPARAMETER- TIME USER NEED TO SPEND WITH A SERVICE ORGANIZATIONLOW CONTACT- DRY CLEANING,TELECOMMUNICATIONSHIGH CONTACT-EDUCATION, HOSPITALITY,THEATRE PERFORMANCE

PROFIT & PUBLIC VRS PRIVATE SERVICESAT PUBLIC AT LARGE OR INDIVIDUALSPUBLIC- TRANSPORT , COMMUNICATION , EDUCATION,PARK MUSEUMPRIVATE BEAUTY CARE, MEDICAL ADVICEISSUES OF PROCESSES,VOLUME AND DISTRIBUTION

PRODUCTS SERVICESPRODUCTPRICEPLACEPROMOTIONPRODUCTPRICEPLACEPROMOTIONPEOPLEPROCESSPHYSICAL EVIDENCE

People

PHYSICAL EVIDENCEFIXED MOBILELAYOUT OF HOTEL,INTERIOR-FIXEDSMALL ARTICLES FOR USE IN A ROOM AS PAPER PAD, MATCH BOX , ENVELOPE CAN BE TAKEN AWAY

Physical evidenceFacility designEquipmentSignageEmployee dressOther tangibles-ReportsBusiness cardsStatementsGuarantees

PROCESSKINDS OF LAY OUTLINE LAYOUT/FIXED LAY OUT ?STEPS IN THE PROCESSES CAN SOME BE ELIMINATED?REARRANGEDSELF-SERVICE COUNTRS AT NIRULAS AT PVR SAKET-DELHI

ProcessFlow of activities-StandardizedCustomizedNumber of steps-SimpleComplexCustomer involvement

PEOPLEWITHINOUTSIDE ORGANIZATIONWITHIN- WHO COME IN CONTACT WITH CUSTOMERS/WHO DO NOT COME IN CONTACT- WAITER AND COOKCUSTOMER/OTHER CUSTOMERS IN SERVICE ENVIRONMENT/GENERAL PUBLIC

PeopleEmployees-RecruitingTrainingMotivation RewardsCustomers-EducationTraining

DIFFERENCE IN WEST AND INDIABOTH HAPPENING SIMULTENEOUSLY AND NOT ONE AFTER OTHER AS WAS CASE WITH WEST

NEW, AWARE, CAUTIOUS,INFORMED, SUSPICIOUS BUYERCHECKS PRICES ON LINE; BUYS OFF-LINECOMPARISON OF AIRLINES TICKETS ON YAATRA.COMIN CASE OF CHEAP AIRLINES TICKETS, DETAILS OF PALNE ALSO ASKEDDEMAND FROM CUSTOMER MARKETER SHOULD BE HONEST IN COMMUNICATION AND AUTHENTIC

SHIFT IN PARADIGMTIME TO MARKET TO TIME TO ACCEPTANCEINTEGRATION OF MARKETING WITH DESIGN AND MANUFACTURINGINVOLVEMENT OF POTENTIAL CUSTOMERS IN DEVELOPMENT PROCESSTUNDRA TRUCKSINVOLVEMENT OF FARMERS/OPERATORSRADIO BUTTONS BIGGER, DRIVERS WITH GLOVES

TIME TO MARKET- TWO EXTREMESDAT FROM AIWA JAPANCOMPETITORS TOOK ONLY FOUR HOURS TO LAUNCH A SIMILAR PRODUCT3 BACHELORS- HINDI MOVIE PRODUCED 10 YEARS BACK- NOT RELEASEDSTARRING SHARMAN JOSHINOW- SUCCESS OF FERRARI KI SAWAARI PROMPTED THE PRODUCER TO BRING THE FILM IN MARKET AFTER 10 YEARS

CROWD SOURCING-THREAT TO ADVERTISING/PACKAGING COMPANIESACTIVE INVOLVEMENT OF CONSUMERS IN SOLVING VARIOUS PROBLEMSPACKAGING DESIGNLOGOADVERTISING SLOGANINCENTIVES TO CONSUMERS- MONEY,FEATURING IN COMPANY ADVERTISEMENT

SHIFT FROM 4PS TO 4 ESTHIS DOESNOT MEAN THAT 4 PS ARE DEADTHEY ARE RELEVANT FOR THE MARKETERS TO DELIVER VALUEFOR CAPTURING VALUE FROM SIDE OF THE CUSTOMER- 4 ES ARE RELEVANTEARMARK- PRODUCTS ( REST POSTPONED DUE TO INFLATION)EARNINGS- INCOME- PRICEEASE (IN BUYING)- PLACEENAMOUR-PROMOTION

SERVICE MARKETING TRIANGLE