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7/29/2019 Service Marketing Basic
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Services Marketing
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Marketing
Is the task of creating,
promoting and deliveringgoods/services to consumer& businesses.
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What is a Product?
Anything that can be offered to amarket for attention, acquisition, use,or consumption and that might satisfy awant or need.
Includes: Goods, services,events, persons, places,
organizations, ideas, etc.
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What is a Service?A form of product that consists of activities, benefits, or
satisfactions offered for sale that are essentiallyintangible and do not result in the ownership ofanything.
A service is any act or performance that one can offer toanother that is essentially intangible & doesnt result inthe ownership of anything. Its production may or maynot tied to a physical product.
Services are deeds, processes, andperformances.
- Valarie Zeithaml & Mary Jo Bitner
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The Nature of A Service
A service firm, unlike amanufacturing firm
It does not manufacture but ratherperforms something for thecustomer.
It delivers an experience that isintangible, variable, inseparableand imperishable in nature
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Characteristics of Services
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s
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Intangibility:
Difficult to sample and to
evaluate
Cannot be seen ,tasted, smelled,
heard or felt
Cannot be seen ,tasted, smelled,
heard or felt
Difficult to sample and to
evaluate
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Implications of Intangibility
Services cannot be inventoried
Services cannot be patentedServices cannot be readilydisplayed or communicated
Pricing is difficult
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Variability
The quality of the servicedepends on who provides them
,when , where and how.
The quality of the servicedepends on who provides them
,when , where and how.
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Strategies for Variability
customer surveys and feedback
training in interpersonal and technicalskills
provide product knowledge
use standardisation strategiesfranchising, scripts
build quality into all processes
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Inseparable
simultaneous production andconsumption
the service provider is the product
the customer is involved(partial employee)
other customers may be present
the customer is involved(partial employee)
othercustomers may be present
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Strategies for inseparability
manage the service encounter scripts and roles
front-line staff need both technical andinterpersonal skills (recruit & train)
manage customer interactions
manage the physical evidence
develop customer service policies and servicerecovery procedures
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Perishable
services cannot be stored
need to manage supply and
demand
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Implications of Perishability
It is difficult to synchronizesupply and demand withservices
Services cannot be returned orresold
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How can demand bemanaged?
accurate demand forecasting
develop off-peak and on-peakstrategies
use reservation systems anddifferential pricing
employ part-time staffextend hours of operation
Provide self-service options (i.e.
ATMs, internet banking)
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Traditional Marketing Mix
All elements within the control of the firm thatcommunicate the firms capabilities and imageto customers or that influence customer
satisfaction with the firms product andservices:
Product
Price
Place Promotion
A d d k ti i f
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An expanded marketing mix forservices
Customers PricePlace &Time
Promotion
Product
(service)People Process
Physicalevidence
Customers
PriceCustomersPlace,
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Expanded Marketing Mix forServices
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People
All human actors who play a part in
service delivery and thus influencethe buyers perceptions: namely, thefirms personnel, the customer, andother customers in the serviceenvironment.
customer
service employeesother customers
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Physical Evidence
The environment in which the serviceis delivered and where the firm andcustomer interact, and any tangiblecomponents that facilitateperformance or communication of theservice.
atmospheredecor, music etc.
equipmentfacilities
uniforms
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Process
The actual procedures, mechanisms,and flow of activities by which theservice is deliveredthe servicedelivery and operating systems.
service delivery systemsback stagefront stage
procedurespolicies
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Challenges for Services
Defining and improving quality
Communicating and testing new services
Communicating and maintaining a consistentimage
Motivating and sustaining employeecommitment
Coordinating marketing, operations andhuman resource efforts
Setting prices
Standardization versus personalization
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Three Types Of Service
MarketingInternal Marketing
External Marketing
Interactive Marketing
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The Services MarketingTriangle
Internal
Marketing
Interactive Marketing
External
Marketing
Company(Management)
CustomersEmployees
enabling thepromise
delivering the promise
setting thepromise
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1. External Marketing :
"Setting the Promise" Marketing to END-USERS.
Involves pricing strategy, promotionalactivities, and all communication withcustomers. Performed to capture the attention of
the market, and arouse interest in theservice.
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2.Internal Marketing :
"Enabling the Promise" Marketing to EMPLOYEES.
Involves training, motivational, andteamwork programs, and allcommunication withemployees.
Performed to enable employees toperform the service effectively, andkeep up thepromise made to the customer.
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3.Interactive
Marketing : (Moment of Truth, Service Encounter)
This refers to the decisive moment ofinteraction between the front-office
employeesand customers, i.e. delivery of service. This step is of utmost importance, because ifthe employee falters at this level, all prior
efforts made towards establishing arelationship with the customer, would bewasted.
Ways to Use the
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Ways to Use theServices Marketing Triangle
Overall StrategicAssessment
How is the serviceorganization doing on
all three sides of thetriangle?
Where are theweaknesses?
What are thestrengths?
Specific ServiceImplementation
What is being promotedand by whom?
How will it be deliveredand by whom?
Are the supportingsystems in place to
deliver the promisedservice?
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Challenges for Services Industry
Defining and improving quality
Communicating and testing new services
Communicating and maintaining a consistentimage
Motivating and sustaining employeecommitment
Coordinating marketing, operations andhuman resource efforts
Setting prices Standardization versus personalization
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GAPs Model of Service Quality
Service Delivery
GAP 4
CUSTOMER
COMPANYExternal
Communications to
Customers
Customer-drivenservice designs and
standards
Company perceptions of
consumer expectations
Expected
Service
Perceived
Service
GAP 2
GAP 3
GAP 5
GAP 1
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Provider Gap 1: Not knowing what customers expect
Provider Gap 2: Not selecting the right service designs and standards
Provider Gap 3: Not delivering to service standards
Provider Gap 4: Not matching performance to promises
CustomerExpectations
CustomerPerceptions
Key Factors Leading to theCustomer Gap
CustomerGAP
Key Factors Leading to Provider
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Customer
Expectations
Company Perceptions ofCustomer Expectations
Inadequate Marketing Research OrientationInsufficient marketing researchResearch not focused on service qualityInadequate use of market research
Lack of Upward CommunicationLack of interaction between management and customersInsufficient communication between contact employeesand managersToo many layers between contact personnel and topmanagement
Insufficient Relationship Focus
Lack of market segmentationFocus on transactions rather than relationshipsFocus on new customers rather than relationshipcustomers
Inadequate Service Recovery
Key Factors Leading to ProviderGap 1
GAP
1
Key Factors Leading to Provider Gap 2
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Customer-Driven Service Designsand Standards
Management Perceptions ofCustomer Expectations
Poor Service DesignUnsystematic new service development processVague, undefined service designsFailure to connect service design to servicepositioning
Absence of Customer-Driven StandardsLack of customer-driven service standardsAbsence of process management to focus oncustomer requirementsAbsence of formal process for setting service
quality goals Inappropriate Physical Evidence and Servicescape
Key Factors Leading to Provider Gap 2
GAP
2
Failure to develop tangibles in line with customer
expectations
Key Factors Leading to Provi
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Service Delivery
Customer-Driven Service Designsand Standards
Deficiencies in Human Resource PoliciesIneffective recruitmentRole ambiguity and role conflictPoor employee-technology job fit
Inappropriate evaluation and compensation systemsLack of empowerment, perceived control and teamwork
Failure to Match Supply and DemandFailure to smooth peaks and valleys of demandInappropriate customer mixOver-reliance on price to smooth demand
Customers Not Fulfilling RolesCustomers lack knowledge of their roles and responsibilitiesCustomers negatively impact each other
Problems with Service IntermediariesChannel conflict over objectives and performanceChannel conflict over costs and rewardsDifficulty controlling quality and consistencyTension between empowerment and control
Key Factors Leading to ProviGAP 3
GAP
3
Key Factors Leading to Provi
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Service Delivery
Lack of Integrated Services Marketing CommunicationsTendency to view each external communication as
independentNot including interactive marketing in communications plAbsence of strong internal marketing program
Ineffective Management of Customer ExpectationsNot managing customer expectations through all forms ofcommunicationNot adequately educating customers
OverpromisingOverpromising in advertisingOverpromising in personal selling
Overpromising through physical evidence cues Inadequate Horizontal Communications
Insufficient communication between sales and operationsInsufficient communication between advertising and operDifferences in policies and procedures across branches o
External Communications toCustomers
Key Factors Leading to ProviGAP 4
GAP
4
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THANK YOU
Module 1. Ends