Unit 2 Service Marketing and Customer Relationship Management

Structure

2.0 Introduction

Objectives

2.1 Differences between service and goods

8 common differences

2.2 Unique Characteristics of Services

2.3 Marketing Mix: How Many Ps in Marketing

7Ps of Marketing

2.4 Myths of Services Marketing

2.5 Summary

2.6 Terminal Question

2.7 Answers

2.0 INTRODUCTION:

Services dominate the expanding world of economy as never before, and nothing stands still. The interesting aspects of this unit are the unique characteristics of service from goods. Services treated differently during its operations and marketing. Services as a proposition have very unique characteristics when compared to goods. The characteristics that are different are intangibility, perishability, Heterogeneity/Non-Standardization/Variability and inseparability. The traditional 4ps of product, promotion, prices, and place remain but three additional variables – people, physical evidence and process are included to produce a 7ps framework. The need for extension is due to high degree of direct contact between the firm and customer, the highly visible nature of the service production process, and simultaneous production and consumption of services. The unique characteristics services make marketing and the process management extremely challenging. Let's dump the myths and focus on realities. The most successful service marketers have two things in common. First, they don't view marketing as part of the business. For them, marketing is the business. As author and marketing guru Regis McKenna says, “Marketing is everything.”And they're patient with their efforts.

Objectives:

After studying this unit, you should be able to:

Distinguish between service and goods

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Recall unique characteristics of services Discuss 7ps of service marketing mix Interpretate myths about problems encountered in service marketing

2.1 Difference between service and goods:

Difference Implications Market-Related TasksMost Service products cannot be inventoried

Intangible elements usually dominate value creation

Services are often difficult to visualize and understand

Customers may be involved in co-production

People may be part of the service experience

Customers may be turned away or have to wait

Customers can’t taste, smell, or touch these elements and I may not able to see or hear them

Harder to evaluate service and distinguish from competitors

Customers perceive greater risk and uncertainty

Customers interact with provider’s equipment, facilities and systems

Poor task execution by customers may hurt productivity, spoil service experience, curtail benefits

Appearance, attitude, and behavior of service personnel and other customers can shape the experience and affect satisfaction

Smooth demand through promotions, dynamic pricing, and reservations

Work with operations to adjust capacity

Make services tangible through emphasise on physical clues

Employ concrete metaphors and vivid images in advertising, branding

Educate customers to make good choices, explain what to look document performance, offer guarantees

Develop user-friendly equipment, facilities and systems

Train customers to perform effectively, provide customer support

Recruit, train and reward employees to reinforce the planned service concept

Target the right customers at the right times, shape their behavior

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Operational inputs and outputs tend to vary more widely

The time factor often assumes greater importance

Distribution may take place through nonphysical channels

Harder to maintain consistency, reliability, and service quality or to lower costs through higher productivity

Difficult to shield customers from results of service failures

Customers see time as a scarce resource to be spent widely; dislike wasting time waiting, want service at time that are convenient

Information-based services can be delivered through electronic channels such as the internet or voice telecommunications, but once products involve physical activities or products cannot

Set quality standards based on customer expectations; redesign products elements for simplicity and failure-proofing

Institute good service recovery procedures

Automotive customer – provider interactions, perform work while customers are absent

Find ways to compete on speed of delivery, minimize burden of waiting, offer extended service hours

Seek to create user-friendly, secure web sites and free access by telephone

Ensure that all information-based service elements can be downloaded from site

Table 2.1 Marketing Implication of 8 common differences between services and goods

Services pose Distinctive Market Challenges: Marketing management tasks in the service sector tend to differ from those in the manufacturing sector in several important respects. Table 2.1 list eight common differences between the services and goods, and highlights the key managerial implications that will form the basis for analysis and discussion. It is important to recognize that these differences, though they are useful generalizations, do not apply equally to all services.

Most Service Products Cannot Be Inventoried: Because services involve actions or performances, they are perishable, and so can’t usually be stocked as inventory following production. (Exceptions are found among those service activities that can be recorded for later use in electronic or printed form). Although facilities, equipment, and labor can be held in

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readiness to create the service, each represents productive capacity, not the product itself. If there is no demand, unused capacity is wasted and the firm loses the chance to create value from these assets. During periods when demand exceeds capacity, customers may be sent away disappointed or asked to wait until later. A key task for marketers, therefore, is to find ways of smoothing demand levels to match available capacity through promotions, reservations, and dynamic pricing strategies.

Intangible Elements Usually Dominate Value Creation: Many services include important physical elements, such as hotel beds, theater interiors, spare parts installed during repairs, and bank card and check books. However, often it is intangible elements—such as processes, Internet-based transactions, and expertise and attitudes of service personnel—that create the most value in service performances. Customers can’t taste, smell, or touch these elements, and they may not be able to see or hear them. That makes it more difficult to assess important service features in advance of use and to evaluate the quality of performance itself. Similarly, the lack of easy reference points can make it hard for customers to distinguish among competing suppliers.

A useful way to distinguish between good and services, is to question – Are custom tailors, plumbers, and fast-restaurants delivering goods or services? Whether a product should be regarded as a good or a service is whether more than half the value comes from intangible service elements. At full-service restaurants, for example, the cost of the food itself may account for as little as 20 to percent of the price of meal. Most of the value added comes from food preparation and cooking, table service, the restaurant environment and facilities as parking, toilets, and coatroom. When there are few physical elements, marketers often employ physical images and metaphors to highlight service benefits and demonstrate the firm’s competencies. Creating physical clues and strong brand associations helps to make services more “tangible”.

Services are often difficult to visualize and understand: Services are often described as “mentally intangible”. It is difficult for customers to visualize the service experience in advance of purchase. Mental intangibility is most likely to present a problem. (and perceived as risk). While first time customers lack prior exposure for particular type of service, frequent users have the advantage of past experience. An important point to remember is that any memorable experiences can build trust – or destroy it. Well-trained salespeople or customer representatives can help prospective customers by documenting performance, explaining specific service features both during and after delivery, offering guarantees and explain credentials and expertise. This will reduce customer anxiety.

Customers may be involved in Co-production: Some services require customers to participate actively in co-producing the service product. For instance, you’re expected to cooperate with service personnel in settings such as hair salons, hotels, and quick-service restaurants, and libraries, even doing some of the work yourself rather than being waited on. Increasingly, your involvement takes the form of self-service, often using the technology of smart machines, telecommunications, and the Internet. For example, withdrawing money from an ATM, using an automated kiosk to check yourself in for a flight at an airport, and reserving seats for the “Big Game” via a web site. Access to self-service technologies (SSTs) is important, too, for customers using B2B and professional services. In many service industries, you have choice. Banking through multiple channels, shop at retail store or order good online, attend classes in a lecture hall or watch a cable or satellite based transmission of that same class. In case of gym or health club, you can work out independently, or seek advice from your trainer. In order to boost firm’s productivity, lower its costs, and even enable it to reduce the price, service

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marketers should work with specialists from different departments to develop web sites, equipment, facilities, and systems that are friendly. They should ensure that customers get the training they need to use these options well, and they should ensure that operations personnel can offer real-time support.

People May Be Part of the Service Experience: Well-managed firms devote special care to select, train, and motivate people who will be responsible for serving customers directly. The important aspects of service supplier are to possess employees with interpersonal and technical skills and positive attitudes. When customers are encountered at a service facility, they too, can affect your satisfaction. How they are dressed, how many are present, who they are, and how they behave can all serve to reinforce or negate the image that a firm is trying to project and the experience it’s trying to create. Customer misbehavior presents marketing problem. In any event like circus or sports, audience fans due to excitement become rowdy and abusive. The marketing implications are clear. In addition to managing their own employees effectively to ensure good service delivery, firms must also manage and shape customer behavior. In a shared service setting, other customers should enhance the experience, not detract from its value. In some instances, service marketers need to think carefully about whether it’s good idea to mix several segments together in the same service facility at the same time.

Operational Inputs and Outputs tend to vary more widely: Unlike many services, manufactured goods can be produced at a distant factory, under controlled conditions, and checked for conformance with quality standards long before they reach customer. However, when a service is delivered directly and consumed as it is produced, final “assembly” must take place in real time. Service execution often differs among employees, between the same employee and different customers, and even one time of day to another. However, the best service firms have made significant progress in reducing variability by adopting standardized procedures, implementing rigorous management of service quality, training employees carefully, and automating tasks previously performed by human beings. They also make sure that employees are well trained in service recovery procedures in case things do go wrong.

The time factor often assumes great importance: Many services are delivered in real time while customers are physically present. Today’s customers’ are most time-sensitive, more in hurry and time conscious. Customers are willing to pay extra to save time. For example, paying extra to taxi even though buses are available. A customer needs service available when it suits them rather than when it suits supplier. Another concern of customers is how much time elapses between making a request for service and receiving finished output. Successful service marketers understand customer’s time constraints and priorities. They collaborate with operations managers to find new ways to complete on speed. They strive to minimize customer waiting times, and they seek to make waiting itself less burdensome.

Distributions may take place through nonphysical channels: Manufacturer require physical distribution channels to move their products from the factory to customers, either directly or through wholesale and retail intermediaries. Some service business are able to use electronic channels to deliver all (or at least some) of their service elements. Today’s’ banks offer customers a choice of distribution channels, including visiting s branch, using a new of ATMs, doing business by telephone (including text messages), or conducting banking transactions on the internet. Many information-based services can be delivered almost instantaneously to any location in the world that has internet access. The Internet and its key component, World Wide Web (WWW), is reshaping distribution strategy for a broad array of industries. However, we need to distinguish between the potential for delivering information-based core-products (those

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that respond to customer’s primary requirements) and simply providing supplementary services that facilitate purchase and use of physical goods. Examples of such core products include online educational programs offered by the universities. You can review any airline schedule/fares through internet. You can also indicate any special needs and can make payment through electronic ticket. However, delivery of core products itself must take place through physical channels. You will have to go to airport in person to board your flight. Much e-commerce activity concerns supplementary services that are based transfer of information and payments relating to the product, as opposed to downloading the core product itself.

Self Assessment Question

1. A key task for marketers is to find ways of smoothing ______________to match available

capacity

2. Intangible elements usually dominate _______________

3. It is difficult for customers to visualize the service experience in __________________

4. Successful service marketers understand customer’s_______________ and priorities

5. Many information-based services can be delivered almost instantaneously to any location in

the world that has _____________________

2.2 Unique Characteristics of Services:

1 Intangibility: Refers to that large component of the service, which cannot be presented in a concrete manner prior to purchase. Because services are intangible, it is impossible for prospective customers to sample—feel, see, hear, taste, or smell—a service before they buy it. Consequently, a company’s promotional program must be explicit about the benefits to be derived from the service, rather than emphasizing the service itself. Four promotional strategies may be used to suggest service benefits and reduce the effect if intangibility is:

Visualization: For example, Carnival Cruise Lines depicts the benefits of its cruises with ads that show happy people dancing, dinning, playing deck games, and exotic places.

e.g., a student taking photography classes can make an assessment of the class not only by attending it, but also by giving it a try after the class. In other words, he will not have full assessment of the quality of service till he goes through it fully.

Association: By connecting the service with a tangible good, person, object, or place, a particular image can be created.

Physical representation: American Express uses color –gold or platinum – for its credit card services to symbolize wealth and prestige. Enterprise, the auto rental firm, depicts a car wrapped as package in its TV ads to emphasize its unique delivery future. The united way depicts its role with helping hand and a rainbow, symbols of support and a bright future.

Documentation: There are two forms of documentation – past performance and future capability. A hospital can document its past performance, for example, by pointing out in its how many babies have born and cared for in its obstetrics department. Another hospital might choose to stress its capability by highlighting the specialized equipment it has available should an emergency arise during the delivery of baby.

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Website is a valuable tool in reducing the intangibility of a service. They make it possible for marketers to present extensive information, use animation and sound, and answer a site visitor’s specific questions via e-mail.

2. Inseparability: Service cannot be separated from the creator-seller of the service. Moreover, many services are created, dispensed and consumed simultaneously. For example, dentists create and dispense almost all their services at the same time, and they require the presence of consumer for the services to be performed. The same is true of a fast food drive-up window employee, a physical therapist, and even a automatic teller machine.A services’ inseparability means that service providers are involved concurrently in the production and marketing efforts. One physician can treat only so many medical patients in a day. This characteristic limits the scale of operation in a service firm. And the customers receive and sometimes consume the services at the production site – in the firm’s “factory”, so to speak. Consequently, Customer’s opinion regarding a service frequently formed through contacts with the production-sales personnel and impressions of the physical surroundings in the “factory”. In the case of education, this would be the teacher and class room.

From marketing standpoint, inseparability limits distribution. It frequently means that direct sale is the only possible channel of the distribution, and an individual seller’s services can be sold only where direct contact is possible.

There is an exception to the inseparability feature. Some services are sold by a person who is representing the creator-seller. A travel agent, insurance broker, or rental agent, for instance, promotes, and sells services that will be provided at a later time by the institutions producing them. In these situations, the customer’s opinion of the service can be influenced by the intermediary’s appearance and behavior. Thus services marketers should be particularly careful in selecting agents and brokers.

3. Heterogeneity: It is difficult if not impossible for a service firm, or even an individual seller of services, to standardize output. Each unit of the service is somewhat different from every other unit of the same service because of the human factor in production and delivery. Regardless of its efforts, Air India does not give the same quality of service on every flight, or even to each passenger on the same flight. All performances of the Great Orchestra, or all haircuts you get, are not of equal quality.

For the buyer this condition means it is difficult to forecast quality in advance of consumption. You pay a fixed amount to see the Indian Premier League cricket match without knowing whether it will be an exciting or dull game. To offset heterogeneity, services companies should pay special attention to the product-planning and implementation stages of their marketing programs.

4. Perishability: Services are highly perishable because the existing capacity cannot be stored or inventoried for future use. A cruise ship that sails with unoccupied staterooms, idle cinema theatre represents available supply that is lost forever. Perishability creates potential imbalances in supply and demand. Furthermore, the demand for many services fluctuates considerably by season, by day of the week, and by hour of the day. Golf courses unused in winter, UPS usage are peak in summer and the demand for city buses more in the day than night.

Perishability and the resulting difficulty of balancing supply with fluctuating demand poses promotion, product-planning, scheduling, and pricing challenges to service executives. Some

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organisations have developed new uses for idle capacity during off-seasons. Advertising and creating pricing used to stimulate demand during slack periods. During summer holidays the prices of resort and hotel in Goa will be higher, and it introduce package with discounts during monsoon.

Self Assessment QuestionState whether the following statement true or false

6. Intangibility refers to that large component of the service, which cannot be presented in a

concrete manner prior to purchase.

7. A services’ inseparability means that service providers are not involved concurrently in the

production and marketing efforts

8. Services are highly perishable because the existing capacity cannot be stored or inventoried

for future use

9. Perishability creates potential balances in supply and demand.

10 The demand for many services fluctuates considerably by season

2.3 Marketing Mix: How Many Ps in Marketing:

Marketing professionals and specialist use many tactics to attract and retain their customers. These activities comprise of different concepts, the most important one being the marketing mix. There are two concepts for marketing mix: 4P and 7P. It is essential to balance the 4Ps or the 7Ps of the marketing mix. The concept of 4Ps has been long used for the product industry while the latter has emerged as a successful proposition for the services industry.

The 7Ps of the marketing mix can be discussed as:

Product - It must provide value to a customer but does not have to be tangible at the same time. Basically, it involves introducing new products or improvising the existing products.

Price - Pricing must be competitive and must entail profit. The pricing strategy can comprise discounts, offers and the like.

Place - It refers to the place where the customers can buy the product and how the product reaches out to that place. This is done through different channels, like Internet, wholesalers and retailers.

Promotion - It includes the various ways of communicating to the customers of what the company has to offer. It is about communicating about the benefits of using a particular product or service rather than just talking about its features.

People - People refer to the customers, employees, management and everybody else involved in it. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands.

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Process - It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things.

Physical (evidence) - It refers to the experience of using a product or service. When a service goes out to the customer, it is essential that you help him see what he is buying or not. For example- brochures, pamphlets etc serve this purpose.

7ps implementation in continuing education:

The provision of the continuing education contains the element of the tangible and intangible. It usually provides a learning materials (physical good) and also numbers of the service activities (teaching processes, contact with customers, organisation of the courses, etc.). The distinction between physical and service offering can, therefore, be best understood as a matter of degree rather those in absolute terms. The continuing education is service –based since the value of this product is dependent on the design and delivery of the CE courses rather than the cost of the physical product (teaching materials, CDs, etc.).

The services marketing mix is an extension of the 4-Ps framework. The essential elements of product, promotion, price and place remain but three additional variables – people, physical evidence and process – are included to 7–Ps mix. The need for the extension is due to the high degree of direct contact between the CE providers and the customers, the highly visible nature of the service process, and the simultaneity of the production and consumption. While it is possible to discuss people, physical evidence and process within the original-Ps framework (for example people can be considered part of the product offering) the extension allows a more thorough analysis of the marketing ingredients necessary for successful services marketing.

People – because of the simultaneity of production and consumption in services the CE staff occupy the key position in influencing customer’s perceptions of product quality. In fact the service quality is inseparable from the quality of service provider. An important marketing task is to set standards to improve quality of services provided by employees and monitor their performance. Without training and control employees tend to be variable in their performance leading to variable service quality. Training is crucial so that employees understand the appropriate forms of behaviour and trainees adopt the best practices of the andragogy.

Physical evidence – this is the environment in which the service is delivered and any tangible goods that facilitate the performance and communication of the service. Customers look for clues to the likely quality of a service also by inspecting the tangible evidence. For example, prospective customers may look to the design of learning materials, the appearance of facilities, staff, etc.

Process – this means procedures, mechanism and flow of activities by which a service is acquired. Process decisions radically affect how a service is delivered to customers. The service in CE includes several processes e.g. first contact with customers, administrative procedure regarding course delivery, preparation, delivery and evaluation of the courses. The following guideline can be useful for successful CE management:

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ensure that marketing happens at all levels from the marketing department to where the service is provided

consider introducing flexibility in providing the service; when feasible customize the service to the needs of customers

recruit high quality staff treat them well and communicate clearly to them: their attitudes and behavior are the key to service quality and differentiations

attempt to market to existing customers to increase their use of the service, or to take up new service products

sep up a quick response facility to customer problems and complaints employ new technology to provide better services at lower costs use branding to clearly differentiate service offering from the competition in the minds of

target customers

Activity

Identify six most important marketing mix elements (people, psychical evidence

and process) for your selected market segments, and explain how this concept is

useful

Self Assessment Question

11. There are two concepts for marketing mix: ______________

12. Product provides _______________but does not have to be tangible

13. The pricing strategy can __________________offers and the like.

14. Physical evidence is the environment in which the service is delivered and any tangible

goods that facilitate the performance and ____________________________

15. Process decisions __________________how a service is delivered to customers.

2.4 Myths of Services Marketing

For decades, professional service providers, including consultants, accountants, lawyers, and others, rarely marketed their services. Instead, they thrived in a cozy world where personal relationships and word-of mouth generated enough new clients to grow a profitable business. Those days are long gone. With so many business advisors to choose from, clients can quickly tap the minds of an army of experts for help. To compete in this market, professional service providers must challenge the conventional wisdom on marketing and selling professional services. A good way to start is to dispel the following myths.

Myth 1: The key to market success is to exceed customers’ expectations, delighting them whenever possible.

Fact: Delight customers only when cost is reasonable and the cost and payoff are significant. Everyone wants to exceed customer expectations. While this is a nice general idea, all actions to produce delight do not cost the same and all delightful experiences do not produce the same increase in loyalty. The customer experience has found that many labor-intensive heroics will

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only result in a 12-14% increase in the percentage of customers who will definitely recommend a company, while other less labor-intensive actions (such as a friendly 90-second conversation between customers and call center agents or a hint regarding how to avoid problems) will result in two or three times more customers becoming advocates.

Lesson: measure the cost and impact of different types of delighters and only exceed expectations where it is cost effective.

Myth 2: Answer the phone really fast – any time on hold makes people mad.

Fact: What happens after you answer the phone is more important than how fast you answer.Survey shows that, in most environments, you can keep customers on hold or answer can be delayed for more than 30 seconds (and often up to a minute!) if, when you answer the phone, you completely handle the customer’s issue. If you can achieve first-call resolution – and resolve the contact to the customer’s satisfaction (see Myth 4) – there is no discernable impact on satisfaction due to the 30-second delay.

Lesson: Answer in less than a minute and then make sure you handle the call to completion on first contact.

Myth 3: Everyone wants to talk to a human; self-service is always less satisfactory.

Fact: Web and automated service are preferred in some cases and by some customer segments. For example, one investment company found a large segment of their wealthy clients never wanted to talk to a human being and always wanted to interact by Web and email. Likewise, customers are often happy to check an account balance online or a package delivery via IVR; however, if there is an unpleasant surprise during the self-service transaction, they will want to talk to a human. Whether companies damage customer relationships with self-service depends on who the customer is, what the customer is calling about or looking for, and the effectiveness of the tools and information you provide to use the automated systems.

Lesson: Ask customers about their preferred communication channel(s) for issue category and transactions. Provide a range of channels so they can choose. Provide good directions, like printing the IVR menu wherever you print the phone number.

Myth 4: The customer is always right – don’t ever say no.

Fact: The customer is not always right, and you can say no. It is alright to say no to the customer or give bad news as long as you give the customer a clear, reasonable explanation regarding why the request is not possible. For example, explaining that the flight will be delayed due to a leak in the hydraulic system will not make customers happy, but will keep them safe – and thankful to be on the ground.

Lesson: Train your staff that it is fine to say no, but arm them with clear, believable explanations regarding why the policy is in place or why the situation occurred. Be flexible to take special action for valuable customers.

Myth 5: If complaints are going down, things are getting better.

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Fact: Fewer complaints often mean fewer people are complaining because they’ve given up.In the last few years, it is observed a significant decline in complaint rates due to customers’ perceptions – or even experiences – that complaining will do no good.

Lesson: Monitor complaint rates at least every other year – go to a random sample of customers and ask what problems they’ve had and if they told you.

Myth 6: The best way to improve service is to get frontline employees to do what they are told and to have a better attitude.

Fact: A majority of customer dissatisfaction is caused by other factors that often prevent employees from providing effective service. More than 90% of employees come to work wanting to do a good job, but are stymied by product-related unpleasant surprises, incorrect marketing expectations, broken processes, and even confusing directions. These types of issues cause 40-60% of dissatisfaction. Also, customers cause 20% of their own dissatisfaction by failing to understand the product limitations, making errors or unwise actions (like attempting to whiten teeth with household bleach – true story!). The solution is to identify customers’ key points of pain and, for the major points of pain, determine if the cause is employee error or attitude, a product with built-in problem, a broken process, a marketing over promise, or a customer error or unrealistic expectation. Call monitoring is an excellent source of this diagnostic information.

Lesson: Execute a true root-cause analysis of dissatisfaction. In most cases, the process, product, or customer is at fault and needs to be fixed.

Myth 7: Service is nice but price wins customers – look at Wal-Mart!

Fact: Some customers will always prefer price, but most prefer great service and will pay for it.A majority of customers will pay more for higher quality. In fact, it has been found, in most markets, that sensitivity to price in retail banking; for example, price is strongly correlated with problem encounters. Fewer problems result in lower sensitivity to price in retail banking customers. Less sensitivity to price means that companies with better service can achieve higher margins. Customers may say, “You’re expensive but you’re worth it because I seldom have problems.

Lesson: Reduce problems to gain flexibility in pricing.

Myth 8: Once we’re at 90% satisfaction and loyalty, the law of diminishing returns kicks in and we should declare victory.

Fact: Easily fixed points of pain still exist and damage revenue even at top performance levels. Research who have worked with financial, catalog, and retail clients, and who have the very highest satisfaction and loyalty scores, but every company identified customer “points of pain” that were easily resolved, and, when fixed, resulted in even higher scores. For example, an East Coast power company asked customers “who provides better service than we do?” and gave its customers choices like Amazon and FedEx. This company learned how they could borrow service strategies from different industries to improve service beyond what people expected for “just a power company.”

Lesson: Don’t stop improving service when you rise to the top of your industry. 

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Myth 9: We have a 100% satisfaction guarantee, so we hear all the problems and all of our customers are satisfied. 

Fact: A majority of customers do not contact you about satisfaction guarantees. In most cases, even with very high visibility guarantee, only about 30% of customers will avail themselves of it because customers perceive that it will take too much effort to invoke the guarantee. Also, if the customer has encountered any limitations on the guarantee in the past, the rate drops to closer to 10%. In essence, a 100% guarantee does NOT guarantee that 100% of your customers will be satisfied.

Lesson: You must monitor both the actual complaint rate by type of problem as well as the success of employees in satisfying customers when they do complain. Further, you must understand that those who invoke the guarantee are only the tip of the iceberg compared to what is happening in the marketplace.

Source: RainToday.com

Self Assessment QuestionState whether following statement true or false

16. The key to market success is to exceed customers’ expectations, delighting them whenever possible. 17. Everyone wants to talk to a human; self-service is always satisfactory 18. The customer is not always right, and you can say no 19. Less sensitivity to price means that companies with better service can achieve lower margins. 20. Don’t stop improving service when you rise to the top of your industry

2.5 SummaryA useful way to distinguish between good and services, is to understand more than half the value comes from intangible elements. An attempt is made in this unit how the service is marketed, in spite of characteristics which warrants a thorough study. The traditional 4Ps remain but three additional variables-people; physical evidence and process are included to produce a 7Ps framework. This unit also explains service encounters/problems/myths from customer’s point of view. Some professionals believe that success is only about delivering outstanding results. The reasoning is that, if you do great work, a client will hire you when new needs arise, and will send you valuable referrals for new business. If you can't meet the promise of delivering outstanding results, you should consider pulling back from the business until you can.

2.6 Terminal Questions

1. Explain major difference between Service and goods

2. Describe Characteristics of Services with relevant examples

3. “Marketing professionals and specialist use many tactics to attract and retain their customers”

Discuss

4. What are the ways and means to dump the myths and focus on realities?

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2.7 Answers

1. Demand levels 2. Value creation 3. Advance of purchase 4. Time constraints 5. Internet access 6. True7. False 8. True9. False10 True11. 4P and 7P. 12. Value to a customer 13. Comprise discounts, 14. Communication of the service 15. Radically affect 16. True17, False18. True19. False20, True

Answers to Terminal Questions

1. Refer Part 2.1 2. Refer Part 2.2 3. Refer Part 2.3 4. Refer Part 2.4

References:

Marketing Concepts and cases – Michael J.Etzel, Brue J. Walker, William Stanton and Ajay Pandit

Marketing Management – Arun Kumar & N. Meenakshi

Services Marketing – Christopher Lovelock, Jochen Wirtz and Jayanta Chatterjee

Source for Difference between service and goods:

Source for 7ps implementation in continuing education:

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Reference pointsRecordReal timeCo-producingSupplementary servicesIntangibilityDocumentationInseparabilityPromotional programsPromotion4PTrue PriceAutomated servicesTrue

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