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Services Marketing Session 1st
Dated: -07-03-2010BY: -Neeraj Gupta
Development Frameworks for Analyzing Services
Type of service Nature of relationship shared by the customer
with service organization Service delivery Type of demand and supply of services Extent to which service provider need to
customize services
Classification of Services
People processing : Institutes or education center
Possession processing: Bike service center etc.
Mental stimulus processing: Advertising agency, consultancy
Information Processing: Data processing, Lawyers/legal
consultants etc.
Based on degree of customer involvement:
Classification of services Degree of customer involvement
People processing – person present for dance training Health care centers Passengers transport services Beauty saloons Lodging & boarding Educational Fitness
Classification of services Degree of customer involvement
Possession processing – leaving car with mechanic for servicing, change oil, check the gears, brakes
Laundry & dry cleaning services Postal servicesCourier service Freight transportation
Classification of services Degree of customer involvement
Mental stimulus processing – career counseling from professional counselor
Advertising Entertainment Education Consultancy services
Information processing Market research Accounting Insurance Legal services Programming Data processing Data transmission
Classification Based on Service Tangibility
Highly tangible: Bicycle on rent Service linked to tangible products: Free after sales
services of Bikes Tangible goods linked to services: Facilities in
Rajdhani Express (Train) Highly intangible: Hair saloon etc.
Classification based on service Skills and expertise required:
Professional services: Doctors, lawyers Non-professional services: Baby sitting,
housekeeping etc.
Tangibility Spectrum
11
Differences Between Characteristics of Goods and Services Search Qualities:
(Qualities estimated before the purchase) Experiences Qualities:
(Qualities that can assessed after the use of products)
Credence qualities:
(Difficult to assess even after purchase and consumption)
12
Differences Between Characteristics of Goods and Services Search Qualities: Price, convenience,
mannerism, promptness Experiences Qualities: Courte owners of
the cabin crew, comfort & facilities, regular attention by nurses
Credence qualities: use of organically grown vegetables, intellectual capital- professional expertise
Continuum of Evaluation for Continuum of Evaluation for Different Types of Products Different Types of Products and Servicesand Services
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Jew
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Fur
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Aut
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Ha i
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Tel
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Leg
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Roo
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Med
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IntangibilityDifficult to evaluate
TangibilityEasy to evaluate
{High in search
qualitiesHigh in experience
qualitiesHigh in credence
qualities
{{Most
GoodsMost
Services
Classification Based on Business Orientation of Service Provider People based Services
High Contact Services-Medical Consultation, education etc.
Low Contact Services-Based on automated machines like ATM’s, automatic weighing machines, automatic vending machines etc..
Classification Based on Business Orientation of Service Provider
Not-for-profit organization Commercial organizations
Classification based on type of end user Customer services-Like hair dressing,
vacations etc. Business to business services- BPO’s,
consultancy’s Industrial services –Technical services
required mostly
Based on the business orientation of service provider
Non-profit organisations - govt schools & social service organisationsCommercial organisations - Airlines, Insurance firms & restaurants
Classification of services
Developing framework for analysing services
Classification of goods Convenience, shopping &
specialty goods Durable & non-durableConsumer & industrial goods
Developing framework for analysing services
5 Qs to determine the category of service
A. What is the type of service?1. Tangible activity- Indian Airlines flies from India
to Sri Lanka- FedEx delivers a parcel sent by a customer in
Delhi to a friend in Chennai
2. Intangible activity – Mgt guru visits a mgt institute & delivers lecture on KM - Insurance agent persuades a customer to purchase life insurance policy for himself & his family members
B. What is the nature of relationship b/w the customer & the service organisation?
Manufacturer offers after sale service Reliable supply of quality products Individual buys a life insurance policy Relationship with telephone companies,
banks & family doctors
C. How is the service delivered?
House-keeping firm visiting customer premises
Online retailing- retailer shipping the product to the customer
Service providers’ presence at multiple locations- No of branches & ATMs within a single city
D. What is the type of demand & supply for the service?
Demand for emergency surgeries varies from one day to another.
A cable operator has to restrict services to 500 households in a locality
E. To what extent is the service provider needed to customise service and exercise judgement?
More scope for customisation– Lawyer changing the way he prepares himself
Little scope for customisation -A movie screened in a theatre –screening, the movie & facilities are quite common
A beautician will adjust the hairstyle & make-up
Method used by technician for installing a machine at the client’s establishment
Myths about services
A. Not necessary evil but source of competitive advantage for manufacturing firm- GE, Motorola & Dell
Myths about servicesB. Service sector is labour intensive & less
productive
No comparison b/w service & manufacturing sector-
software, legal, consultancy & other knowledge-based services require employment of a large no of people, power, transportation & telecommunication services require advanced technology & equipment
Myths about services
C. Service sector earns less revenue than other sectors
Wal-Mart and Microsoft – Fortune 500 companies
Infosys top most outsourcing firm
Myths about services D. Growth in Service sector is linked to public
sector services – Pvt telecom players -Bharti & Reliance (growth in
communication, transportation & hotels-7.8%) Public sector- Insurance cos like LIC facing stiff
competition from ICICI-prudential, HDFC-Standard life, Tata-AIG, ING-Vysya (growth in insurance, real estate & financial services- 6.5%)
Myths about services
E. Marketing of a service is not different from a product
A manufacturer has to emphasize on its features, mileage, durability and the service outlet network
An Airline provider emphasises on the quality of in-flight service offered by its staff, pre & post-flight service, history of on-time departures & arrivals & so on
Myths about services
4Ps of product marketing- more attention
7Ps of services marketing – less attention
Myths about services
F. Growth in service sector eliminates jobs in manufacturing
Availability of low cost labour in developing countries- Decline in employment in the manufacturing sector in developed countries
Jobs in manufacturing sector decline, jobs in service sector increase, creating a balance
Economists attribute the loss of jobs in manufacturing to advances in technology & efforts to improve productivity by restructuring & reengineering
Service Marketing Environment General or External or Macro Environment
Socio-cultural factors Consumption pattern Beliefs and values Age composition Gender structure Family structures
Legal factors Economic factors
Business cycle-consisting of Recession, recovery,growth, decline Political factors Technological factors
Universal Product Code Credit cards technology Electronic Data Capture Data mining and data warehousing technologies Imaging technologies Cellular phone technologies
Service marketing Environment
Task or Internal or Micro Environment External customers/consumers Internal customers/channel partners/providers Competitors
Five Forces Model Rivalry amongst existing service firms Relative power of suppliers Threat of new entrants Threat of substitutes Relative power of customers
Suppliers Regulators
Environmental Scanning-Scenario Building Approach
This process is futuristic, and the decision-maker has to analyze his decisions in relation to his future. The following steps are involved in this technique: Stage 1: Analysis of the Decision(s) Stage 2: Identification of Key Decision Factors Stage 3: Identifying the Socio-cultural Factors Stage 4: Analysis of each of the Key Variables
Separately Stage 5: Selection of Scenario Logics
Any questio
ns