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Module - 2Marketing Environment


Topics to be coveredUnderstanding the market

environment – Assess the impact of micro and macro environment

Services – Importance, distinctive characteristics of services, service mix


QuestionWhat is the need of the study of

marketing environment?


Marketing EnvironmentIncludes all forces and institutions external to the organisation which affect

the organisation’s ability to develop and organization has to maintain timely, relevant and appropriate adaptation to these factors so as to be successful in carrying out business operations.

It is required to assess the marketing environment to help secure the right fit between the environment and the business unit; which is the crux of marketing. Due to the changing environment scenario, the product life is getting shorter and therefore, to survive longer, one has to continuously assess the environment in which the company operates and take steps to recast its marketing plan and strategy to perform optimally.

Eg. BSNL was the only department in the domain of telecom till late nineties, so it had a monopoly and was providing only basic telephony. Later on, new players came into the business like Reliance Telecom, Idea, Vodafone, Tata Indicom etc. BSNL also took it as a challenge and started providing mobile phones, broadband services and latest 3G services and thus still surviving in the market.

Hindustan Motors ‘ Ambassador is obsolete now as it didn’t make any changes as per the needs of the customer.


QuestionWhat are the major

macroenvironmental factors and how does it affect the marketing process?


Macro Environmental Factors influencing business

Internal Organizational

processes

Demographic Environment

natural Environment

Political-Legal Environment

Technological Environment

Economic Environment

Social – Cultural

Environment


Demographic EnvironmentDemography is the study of population and its

characteristics. Population is monitored because people make up markets. Marketers are always interested in population related growth indices because eventual market growth rate in the long run depends largely on growth of population.

Marketers are keenly interested in – Size and growth rate of population Population Age Mix Ethnic Markets Educational Groups Household Patterns Geographical shifts in population


Size and Growth rate of population – Population is showing explosive growth. India’s population was 310 million in 1947 and 1000 million in 2001, next only to China.Rural population is 74% and urban population is 26% of total population. A growing population does not mean growing markets unless these markets have sufficient purchasing power.

Population growth has been a source of major concern for two reasons :

Certain resources needed to support this much human life (fuels, foods and minerals)are limited and may run out at some point.Such uncontrolled growth of population will lead to insufficient food supply, depletion of key mineral and useful resources and increase in pollution level.

Population growth is highest in countries and communities that can least afford it. Less developed regions of the world currently account for 76% of the world population and are growing at 2% pert year whereas population in more developed countries is growing at only 0.6% per year.


Population Age Mix – Population is subdivided into six age groups – preschool, school age children, teens, young adults age 25 – 40, middle aged adults age 40-65, and older adults age 65 and up.The most populous age groups shape the marketing environment.

For eg. Japan has more of old age population above 60 , and thus demand for products that support digestion, viewing and mobility and services like nursing and old age care will be high.Mexico has more young population so there is more demand of diapers, school supplies, toys etc.

Marketers are identifying age groups within age groups as possible target markets. Few acronyms used by marketer –

SKIPPIES – School kids with income and purchasing power. MOBYS – Mother Older, Baby Younger DINKS – Double Income, No Kids DEWKS – Dual Earners With Kids PUPPIES – Poor Urban Professionals WOOFS – Well off Older Folks.Each group has a known range of product and service needs and

media and retail preferences, which helps marketers fine tune their market offers.


Ethnic Markets- Countries vary in their ethnic and racial makeup. At one extreme is Japan, where almost everyone is Japanese; at the other extreme is the United States, with people from virtually all nations. People call the United States a “salad bowl” society with ethnic groups maintaining their ethnic differences, neighborhoods and cultures. In Indian market, the consumption, lifestyle and habits of people in different states varies significantly, putting pressure on the marketer to localize his offer for each of these markets.A consumer durable company has to offer a festive discount program throughout the year in different parts of the country. E.g. during dussehra in east, onam in the south, diwali in the north.


Educational Groups – Population in any society falls into five educational groups : illiterates, high school dropouts, high school degrees, college degrees and professional degrees. Literacy levels indicate consumption pattern and influencers of consumption decisions. Promotional activities are being designed keeping in mind the literacy level of the consumers.For eg. People of high literacy level are more brand oriented and people in rural areas take commodity based decisions.

High no. of educated people in US spells a high demand for quality books, magazines and travel.


Household Patterns – Size of the family (Joint family and Nuclear family) – Size of the

family affects the stock keeping unit size and growth of small size, convenient products on the retail shelf.

Pattern of the family (Traditional- Husband, Wife and children, Non traditional – single live-alones, adult live-togethers of one or both sexes, single parent families, childless married couples, SSWD group – single, separated,widowed,divorced) – Need smaller apartments, inexpensive and smaller appliances, furniture and furnishings and smaller size food packets. Haier has low cost electronic appliances for bachelors.

Working and non-working ladies – Market for fast food, restaurants, convenience, processed and packaged foods, consumer durables like refrigerators, washing machines, vacuum cleaners for working women. MTR – Ready to Eat packs, Cut vegetables, Readymade Parothas for working ladies.

Geographical Shifts in Population – People are migrating from rural areas to urban areas. Makers of “ Ready to Assemble” furniture might find a strong consumer base among all the migrants.Migrants are responsible for taking urban brands to the rural markets and increasing the awareness level of rural people towards urban product. Rural market is on a rise because for villagers, urban product is a status symbol.


Natural EnvironmentCorporate Environmentalism is the recognition of the importance of

environmental issues facing the firm and the integration of those issues into the firm’s strategic plans.Four major trends in the natural environment –

Shortage of raw materials – The earth’s raw materials consist of the infinite, the finite renewable and the finite nonrenewable. Finite nonrenewable resources – oil,coal, platinum, zinc pose a particularly serious problem as the point of depletion approaches. Firms making products that require these increasingly scarce minerals face substantial cost increases.

Increased energy costs – As oil prices soar to record levels, companies are searching for practical means to harness solar, nuclear, wind and other alternative forms of energy. The Indian Railways, which is one of the largest consumers of high-speed diesel, is looking to develop sustainable fuels such as Jatropha oil to power its locomotives.

Reva – an electric driven car has been launched.


Increased Pollution Levels – Some industrial activity will inevitably damage the natural environment. Littering of environment with non-biodegradable plastic, bottles etc. Factories are mixing DDT and chemical pollutants in the soil and food supplies. A large market has been created for pollution-control solutions such as scrubbers, recycling centers and landfill systems.

McDonalds and Burger King eliminated their polystyrene cartons and now use smaller recyclable paper wrappings and paper napkins.

Changing role of Government in environmental protection – In India, the Union Government of Delhi implemented the rule that public transportation vehicles like autorickshaws and buses use only compressed natural gas (CNG) as fuel instead of diesel and petrol.They have set up a separate industrial area away from residential area. Judiciary of India has been active in enforcing anti-pollution norms.


Economic EnvironmentIt has the highest influence on the marketing decisions as it affects

the purchasing power of the consumer.In a declining economy, company which sells price value products has more scope to get customer as compared to a luxury brand

Business fluctuations - Dynamic business fluctuations that tend to follow a cyclic pattern, composed of four stages –

1. Recession2. Depression 3. Recovery 4. Prosperity Type, direction and intensity of a firm’s marketing strategy

depend on the economic climate and business fluctuations.Marketer should be aware about the economy’s relative position in the business cycle and how it will affect the position of his business.More aggressive marketing can be called for in periods of lessened buying interests so that companies can push their products through larger consumer benefits.


Income Distribution – Income distribution of households in India has been changing significantly over time.Households belonging to the lower income segment have been steadily declining over the years and the middle income households have been showing an increase.These are the results of economic growth.

Categories of Indian consumers – 1. Destitute (annual household income of Rs. 16000) not active

participants in market exchange for a wide range of goods.2. Aspirants (annual household income of Rs 16000-22000)

new entrants into the consumption systems due to increase in their real income.

3. Climbers (annual household income between Rs. 22000-45000) have desire and willingness to buy but have limited cash at hand.

4. Consuming class (annual household income of Rs. 45000-215000) households that form the majority of consumers, have money and are willing to spend.

5. Rich – those who have money and own a wide range of products.


Contd.

Five different income-distribution patterns :1) Very low incomes 2) mostly low incomes

3) very low, very high incomes 4) low, medium, high incomes, and 5) mostly medium income

In Mumbai rich have grown richer, the middle class has shrunk, and the poor have remained poor. This is leading to a 2-tier Mumbai market with affluent people buying expensive goods and working class people spending more carefully, shopping at discount stores and factory outlet malls, and selecting less expensive store brands.


Lifestyle patterns – Lifestyle is the way a person decides to live his/her life.Concerns one’s family, job, social activities and consumer decisions.Reflection of activities, interests and opinions.Changing lifestyle influences marketing.

. Eg. DINK culture affecting the demand pattern of products targeted for children segment.

Retirement ages are changing very fast. People retiring early to enjoy life and travel to different parts of country, giving a scope for travel and tourism industry.

Savings, Debt and Credit availability – In case of High Savings, consumers are able to get loan at a much lower interest rates.

High debt to income ratio – Retards further expenditure on housing and large ticket items.

Inflation – Rising price level resulting in reduced purchasing power for the consumers.


Technological EnvironmentWonders such as I-Pod, LCD, LED and 3D TV are released due to

technology.Every new technology is a step for ‘creative destruction’. Xerography hurt the carbon paper business, autos hurt the rail road, and TV hurt the newspaper.

New technology creates major long run consequences – that should be observed minutely. Contraceptive pill for eg led to smaller families, more working wives and larger discretionary incomes- resulting in higher expenditures on vacations travel, durable goods and luxury items.

Following trends in technology should be watched : Accelerating pace of technological change – Time lag between

new ideas and their successful implementation is decreasing rapidly and the time between introduction and peak

production is shortening considerably. Advent of PCs and fax machines has made it possible for people to

telecommute. – i.e. work at home instead of travelling to offices. This trend will reduce auto pollution, bring the family close together and create more home centred activity and entertainment.


Unlimited opportunities for innovation – Exciting work is being done in biotechnology, robotics, computers, microelectronics. Researchers are working on AIDS vaccines, nonfattening tasty nutritious foods.

Virtual Reality – Companies are already harnessing the power of Virtual Reality, the combination of technologies that allows users to experience three dimensional, computer generated environments through sound, sight and touch. Already been applied in medicine, entertainment and architecture.

Varying R & D Budgets – Increasing opportunities emerging as a result of globalization are forcing many companies to increase their R&D efforts. In India, as a result of economy opening up to global competition, all large pharmaceutical companies have started putting greater vigor into R&D.


Increased regulation of technological change – Govt. has expanded its agencies powers to investigate and ban potentially unsafe products . Under the Drug and Cosmetics Act, manufacture, sale and distribution of drugs in India is regulated by the state and the central govt. agencies.

Label of Agmark for food products, ISI mark for Consumer Durables and Hallmark for Jewellery.


Political – Legal EnvironmentConsists of laws, govt. agencies and pressure groups that

influence and limit various organization and individuals. Sometimes it gives new business opportunities. For eg. Mandatory recycling laws gives recycling industry a major boost and spurred the creation of dozens of new companies making new products from recycled materials.

Increase in Business Legislation – Business legislation has four main purposes – to protect companies from unfair competition, to protect consumers from unfair business practices, to protect the interests of society from uncontrolled business behaviour, and to charge businesses with the social costs created by their products or production processes.

Political environment affecting marketers includes supernatural organizations which can directly or indirectly affect companies. Trading Blocs like EU, ASEAN, NAFTA, SAARC, BRIC etc. allow trading between certain countries only. Worldwide Inter govt. organisations like WTO, IMF, ILO etc. protects the legal rights.


Deal with issues as competition , product safety and liability, fair trade and credit practices and packaging & labelling. In India, food companies need special approval to launch brands that duplicate what already exists on the market., such as another cola drink or brand of rice. Govt. has made mandatory that all packaged food products should carry the green dot to denote pure veg and red dot to indicate non veg. Packaged products should mention MRP and ingredients and nutritional value in the packaging itself.


Growth of special interest groups – Consumerist movement – an organized movement by the citizens and govt. to strengthen the rights and powers of buyers in relation to sellers. In order to protect the interest of consumers, govt. of India has passed legislation under the Consumer Protection Act 1986. Six rights of consumers are recognized –

1. Safety – Right to be protected against the marketing of goods and services that are hazardous to life and property.

2. Information – Protection against unfair trade practices, and the right to be informed about the quality, quantity, purity, standard and price.

3. Choice – Right to choose a variety of products and services at competitive prices.

4. Representation – The right to be heard and be assured that the consumer’s interests are received due considerations at appropriate forums.

5. Redressal – Right to seek redressal against unfair and restrictive trade practices and exploitation of consumers.

6. Consumer Education – Right to consumer education.

Legislation ensures establishment of consumer dispute redressal forums such as District Forums and prescribes specific processes to address consumer complaints with speed and in an inexpensive manner.


Social-Cultural EnvironmentSociety shapes the beliefs, values and norms that largely

define consumer tastes and preferences. India is a land of diversity with different languages, cultures and religious beliefs. Regional differences in languages, customs social systems, values, habits, religions and caste system make the social cultural environment complex.

Languages – Different languages are being spoken. Decision concerning Marketing Communication.

Dress Code – Different dresses are being worn in different parts of the country.

Food Habits – Marketer has to keep in mind the food habits of different parts of the country.

For eg. HUL markets different blends of tea under the same brand name to address the regional preferences of consumers.

Mc Donalds has introduced Mc Aloo Tikki made of potatoes for Indian consumers instead of pork and beaf.


Core cultural values and secondary cultural values – Core cultural values passes on from parents to children and by institutions like schools , churches, govt. etc. Secondary beliefs are open to change.Believing in the institution of marriage is a core belief and believing that people ought to get married early is a secondary belief.

Existence of subcultures – Various groups with shared values emerging from their special life experiences or circumstances. Eg. Teenagers – Common beliefs, preferences and behaviours.


Indian Women – Traditionalism & Self sacrifice (Lower socioeconomic class )

Westernization & Individualism(Higher socioeconomic class)

Based on shopping habits of women- 1. Liberated Youngsters (13%) – Mobile phones 2. Modern Mums(18%) – Diapers , Sippers3. Behind the times (20%) – No fast foods4. Rebellious Youngsters(22%) – Bars, Electronic Gadgets5. Orthodox Mothers (27%) – Cloth Nappy In India, Dettol has a high impact due to burning sensation,

whereas Savlon does well in Europe due to mild nature.

Rural India – Black Shampoo as it makes hair look glossier.


QuestionWhat do you understand by fads,

trends and megatrends?


Fads, Trends and MegatrendsA fad is unpredictable, short lived and

without social , economic and political significance. Eg – A particular hairstyle, dress.

Trend is a direction or sequence of events that has some momentum and durability.eg Percentage of people who value physical fitness has risen steadily.

Megatrends are large social, economic and political and technological changes that are slow to form and once in place , they influence us from 7-10 years.eg. Boom in IT sector leads to rise in consumption and purchasing power.


QuestionWhich are the major

microenvironmental factors?


MicroenvironmentElements which affect the company directly constitute the

microenvironment. Internal Marketing Environment – Factors within other

functions of their own firm like HR recruiting personnel, Finance setting the price , Production manufacturing the products.

Customers – No customer, No business. Organization should know its customers so well that it is able to predict what they will require next rather than wait until it is possibly too late and then follow. Understand changing needs by an appropriate MIS and carry out research in collecting, analyzing and disseminating information.

Intermediaries – Marketing channels through which the product is being sold. Help in promoting products. Eg. Food manufacturers who do not get shelf space in the major supermarkets may find it difficult to achieve large sales volume.


Suppliers and Vendors – Provide an organization with goods and services which are transformed by the organization into value added products for customers. Companies operating in highly competitive environment where differentiation between products is minimal, obtaining supplies at the lowest possible price may be vital in order to be able to pass on cost savings in the form of lower prices charged to customers.

Toyota following JUST IN TIME strategy and thus function of supplies becomes very important.

Other stakeholders – 1) Local Community Groups – may object to a new production factory or service outlet. Eg Nano in West Bengal and Reliance Fresh in Ahemdabad.

2) Govt. regulatory agencies may impose price limits or product specifications contrary to company’s marketing plan.

3) Members of pressure groups can pose the image of a company in the minds of customers.

4) Employees - service providers where front line employees can make or break customer’s perceptions of service quality.

Shareholders – Financial stake in the company. Interested in maintaining steady growth and increasing sales and profit, thus companies pay them higher dividends.


QuestionWhat do you understand by

services? What are the important characteristics of services?


ServiceA service is any act or performance that one party can

offer to another that is essentially intangible and does not result in the ownership of any thing. Its production may or may not be tied to a physical product.

Depending on the service component, products can be divided into –

Pure tangible goods – No service. Eg. Soaps Tangible good with accompanying services – eg.

Automobile Hybrid – 50% product and 50% service. Eg.

Restaurants Major service with accompanying minor goods – eg.

Airline services Pure service – Baby Care , Massage centre.


Importance of ServicesAgriculture, Fishing & Forestry turned to Manufacturing

and Construction activities which finally leads to Service Industry(Contributes 52% of GDP).Administrative and Defense Services Insurance, banking &Finance Services Transport and CommunicationDistributive Traders

General Motors – Lexus CadillacProvides another car at their disposal when the owner’s car

is in service centre.GM put Onstar Navigation System in all models, which helps customers in emergency services dispatch, stolen vehicle location, roadside assistance, remote diagnostics and route support.


ReasonsTypes of Services

required

Increasing wealth

Interior Decoration, Laundry, Garden care

More Leisure Time

Recreation and Entertainment, Travel

Higher percentage of women in the

labor force

Creches, Baby sitting, household domestic help

Greater Life Expectancy

Nursing homes and Healthcare services

Greater complexity of

products

Maintenance for AC, PCs, Cars

Increasing complexity of life

Specialists in IT, legal affairs, marriage

counsellingSafety and

convenienceCredit card, Travellers

cheque


Characteristics of ServicesFollowing are the characteristics : Intangibility, Inseparability,

Variability, Perishability, Ownership.I ) Intangibility – Unlike physical products, services cannot be

seen,tasted, felt, heard or smelled before they are bought.A person getting cosmetic surgery cannot see the results before the purchase and the patient in the psychiatrist’s office cannot know the exact outcome of treatment. Service companies can try to demonstrate their service quality through physical evidence and presentation.A hotel will develop a look and a style of dealing with customers that realizes its intended customers-value proposition whether its cleanliness, speed or some other benefit.

For a private bank – Place – Air conditioned, neat, planned layout of the desks.People – Young, energetic personnel. Sufficient no of employees to

manage the workload.Equipment – Computers, copying machinesCommunication material – Printed material, text and photosSymbol – Name and logo, Punch line


Intangible characteristics – Service cannot be touched. Precise standardization is not possible. There is no ownership transfer. Cannot be patented. No inventories. Production and consumption are inseparable.Eg. Palace on Wheels by RTDC and Indian Railways. Rated as

one among the 10 best luxurious rail journeys in the world.Modern AC coaches. Panels, ceilings and chambers decorated in colored Rajasthani art. Facilities such as Channel Music, intercom, attached toilets, running hot and cold water and wall to wall carpeting. Personal attendant, Two restaurants serving chinese, continental, rajasthani cuisines. Bar and Library. Travels during nights and stops during day to allow the guests to visit palaces and forts.


2) Inseparability – Whereas physical goods are manufactured, put into inventory, distributed through multiple resellers and consumed later, services are typically produced and consumed simultaneously. A barber can’t give a haircut without being present. If a person renders the service, then the provider is part of the service. Because the client is also often present as the service is produced, provider – client interaction is a special feature of services marketing.

In the case of entertainment and professional services, buyers are interested in the specific provider of the service. A music concert is not the same if Ustad Zakir Husain is replaced by a local artist.When clients have strong provider preferences, the price is raisedboth to ration the preferred provider’s limited time and also to shield him from overexposure.


3) Variability – Because the quality of service depends on who provides them, when and where and to whom , services are highly variable. Some doctors are very proficient surgeons, others are less.Service buyers are aware of this variability and often talk to others before selecting a service provider.

Steps to increase service quality – Invest in good hiring and training – Recruiting the right

employees and providing excellent training to them. Six qualities can be developed through training :

1. Competence – Required skills and knowledge.2. Courtesy – Friendly, respectful and considerate.3. Credibility – Trustworthy4. Reliability – Perform consistently and accurately5. Responsiveness – Respond quickly to customer’s requests

and problems.6. Communication – Understand the customer and

communicate clearly.


Standardise the service performance process throughout the organisation –A service blueprint can simultaneously map out the service process, the points of customer contact and the evidence of service from the customer’s point of view. Eg. In Five star hotels, everything is standardised, how to greet the customer, when to serve the food, how to arrange the cutlery etc.

Monitor customer satisfaction – Employ suggestions and complaint systems, customer surveys and comparison shopping.

Citibank checks continuously on measures of ART (Accuracy, Responsiveness and Timeliness)

4) Perishability – Services cannot be stored so their perishability can be a problem when demand fluctuates. For eg. Public Transportation buses are overcrowded during peak hours and goes empty during non-peak hours.

Some doctors charge patients for missed appointments because the service value exists only at the time of appointment.


Strategies for producing a better match between demand and supply – Demand Side Differential Pricing – Shift demand from peak to off-peak hours. Eg movie

tickets are priced low in weekdays. Non Peak demand can be cultured. McDonald pushes breakfast service. Complementary services – Provide alternatives to waiting customers. Eg. ATM’s

in Banks Reservation Systems – Airlines, Hotels, Railways.

Supply Side Part time employees – Colleges hire part time employees when the session is

going on. Peak time efficiency – Allow employees to perform only essential tasks during

peak periods. Eg. Paramedics assist physicians. Increased Customer participation – Consumers fill out their own medical records

in hospitals. Shared services – Hospitals share expensive medical equipments.

5) Ownership – When you buy a product, you become its owner, be it a shoe, pencil or watch. In the case of service, you may pay for its use but you never own it.


Service MixProductAs it is intangible, important issue is understanding

what benefits and satisfaction the consumer is seeking from the service.Marketing of services is successful only if there is a match between service product from the customer’s viewpoint and the supplier’s viewpoint.

Customer benefit concept is very complex as customers can’t be able to express what benefit they are looking for.Benefits sought may keep changing over a period of time.

Customer Service Cell – In order to make the customers satisfied and address their complaints, it s very commonly used.


PriceDifferent terms used for different services.Tuition fee – Colleges, SchoolsFare – TransportCommission – Brokerage ServicesFee – Legal Service, Consultancy serviceInterest – Use of moneyPremium – InsuranceRent – Property usagePricing of services is difficult due to perishability. Hotels

and airlines offer lower rates in off-season and lower telephone charges for outstation calls after office hours.As it is an intangible component, price of expertise, experience and reputation has to be considered.


PromotionCustomer relies more on subjective impressions than convert

evidence.Customer is likely to judge the quality of service on the basis of the performer rather than the actual service.

Cinemas, Roadways , Airlines – Advertisement in newspaperDoctors, Lawyers- Word of Mouth publicity.Guidelines for promoting services – Use simple, clear messages. Emphasise the benefits of service. Promise only that which can be delivered and does not

exaggerate claims. Build on word of mouth communication by using testimony

of actual consumers. Provide tangible clues to services by using well-known

personalities or objects to help customers identify the service.


Distribution - Important decision is the issue of location of the service so as to attract the maximum no. of customers.

Importance of the location of the service to the consumers. - Fast food outlet(Convenient location) - Doctors and Beauty Parlours (Location not important as

decision is based on reputation.) Importance of complementary services to the location

decision. Eg. Garages and mechanic shops should be near petrol bunks.

Decision of selling through intermediaries or direct selling. –Hotels , Airlines, Life Insurance through agents. Beauty parlours, Massage centers, Doctors direct selling.

Franchising – An option to provide the services to maximum no. of people in the most cost-effective manner. Granting of right to another person to use the trade name, trade mark or product in return for lumpsum payment. Eg. McDonald, Pizza Hut.


People – First line of contact with the customers. Should be well informed and

provides the kind of service which wins customer approval.Organizations spend more time in training the visible personnel as waiters in restaurant.

Categories of service – High People contact (People based services) – Restaurants, Dental and

Medical care.Low people contact (Equipment based services) – Car washing, Cinema.

Professional- Legal servicesNon-Professional – House maid

Primary – Dentist (Service is actually carried out by the service provider.)Facilitating – Bank (Where employees facilitate the service transaction

and participate in it.)Ancillary – Travel agent (Where the employees help to create the service

exchange but then is not part of it.)


Process –System by which customers receive delivery of the

service.Its a process of adding value to system inputs to create outputs which are useful for the customers.

The performance process relates to the way in which service is created and delivered; It is concerned with the functional aspects of service delivery such as queuing systems, timeliness, cleanliness and quality and reliability of delivery.Important issues are –

Location of service deliveryService itselfHigh people contact or low people contact serviceDegree of standardization


Physical EvidenceIn its many forms, will help the potential customer to evaluate the service

offering.Their impression of quality will always be subjective and based on their individual perception of the physical evidence and other elements of the service offering.

For a fast food Restaurant, physical evidence could include- The food itself – taste, smell presentation. Packaging – style, color, environmental –friendly Seating – comfort, layout, availability Overall appearance – hygiene, cleanliness, décor, lighting, well maintained Accessibility – car parking, location of entrances, geographical location Facilities – toilets, children amusements, pay phones Staff – personal appearance, dress code, manner, efficiency. Corporate image – logo, advertising, brand loyalty Service delivery – prompt, slow, efficient Atmosphere – welcome, friendly, cold.

Atmospherics – Way in which marketers, notably in retailing can plan for and provide an atmosphere within stores designed to be conducive to customer spending.

Sight – size,layout, lighting, colorSmell – fresh, heavily scented Touch – temperature, comfort,

soft/hard seating

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marketingmanagementmod2-111108032047-phpapp02