8/3/2019 Services Session 1

1/21

Introduction Nature ofServices, Services

Marketing Mix Decisions

8/3/2019 Services Session 1

2/21

Introduction Nature of Services

An action of an individual or an organization leading to somekind of benefit and/or satisfaction to the customer

Services are intangible products

Services - Facts

Intangible, Nontransferable, Perishable, DistinctStandardization not possible, (Cannot be owned), SimultaneousConsumption, Difficult to measure Quality, Seasonality ofDemand

Services - Features

8/3/2019 Services Session 1

3/21

Introduction Nature of Services

India is 15th in Services Output on world map

23% of total work force is employed in Service Sector only

second to agriculture (60%) and above manufacturing (17%)

It has largest share in GDP (55% - 2007) (15% - 1950)

Service Sector growth rate is close to 9%

IT, It enabled services and BPO form almost 1/3rd part of thesector

Organized retail services amount to only 4%

Some Economic Facts

8/3/2019 Services Session 1

4/21

Introduction Nature of Services

End of Licence Raj

Privatization

Increased Customer Protection

Change in Lifestyle

Exposure of Consumer to world

Dependence on Automation

Internationalization

Reasons for Growth of the Sector

8/3/2019 Services Session 1

5/21

Introduction Nature of Services

Types of Services

Directed at Human Body

Transport, Healthcare, Lodging,

Beauty Salons, Fitness centre,Restaurants, Barber

Directed at Possessions

Freight, Repairs, Warehousing,

Cleaning, Distribution, Laundry,Gardening

Directed at Human Mind

Advertising, PR, Broadcasting,Consulting, Education, Music,Religious services

Directed at IntangiblePossessions

Accounting, Banking, DataProcessing, Legal services,Research

8/3/2019 Services Session 1

6/21

Introduction Nature of Services

It is necessarily Service Outlet and consolidated effect of

actual Service Delivery

Composed of factors that make Service Delivery not onlysatisfactory but in case of many services, Enjoyable

The criticality of Managing services It revolves mainly aroundthe ACTUAL Service Delivery or Operations aspect of Services

In short, its a Stage where Service delivery is Performed

Concept of Service Factory

8/3/2019 Services Session 1

7/21

Introduction Nature of Services

Biggest challenge in Services because Services cannot bestored

When supply is available Demand may not be available

When Demand is at peak Supply may not be possible

Challenge is to strike balance

E.g. Excess booking by Hotels, Excess admissions byInstitutes

Balance of Demand and Supply

8/3/2019 Services Session 1

8/21

Introduction Nature of Services

7 Ps of Services Marketing

Process

Place

Price

Promotion

PhysicalEvidence

People

Product

8/3/2019 Services Session 1

9/21

Introduction Nature of Services

Features of Service offered

Supplementary and Complimentary Services

Conditions attached (* and Fine prints)

Results / Effects of Services

Product

8/3/2019 Services Session 1

10/21

Introduction Nature of Services

Physical facilities

Equipment

People Requirement Partnerships and Collaborations

Geographic and Demographic segment covered

Scheduling of service

List of specific tasks to be performed

Market knowledge 7 Ps

Supplementary services (if any)

Mental effort involved

Physical effort involved

Product Considerations in Creating Service

8/3/2019 Services Session 1

11/21

Introduction Nature of Services

Core Product - Air Travel from point A to point B (TravelingService)

Augmented Product (Complimentary Services) Allied serviceswhich complement to actual travel

Tangible elementsAircraft, Food and Drinks served

Intangible elementsService frequency, Pre and Post flightServices, In flight Services, Actual transporting from point A topoint B

Product Example

8/3/2019 Services Session 1

12/21

Introduction Nature of Services

Where the Service to be provided E.g. Dr.s Clinic OR Home visit

The time at which Service can be available E.g. an OnlineService is usually available 24/7 Orkut

Maximum availability and possibility for customer to availService at Place of convenience plays major role in success E.g.Cheque deposit and Cash withdrawal facility from home.

Place (and Time)

8/3/2019 Services Session 1

13/21

Introduction Nature of Services

Cost to customer

Competitor prices

Relative cost / benefit e.g. Haircut under the tree and in Salon

In case of high end Services it need not be effective and

competitive pricing

Price

8/3/2019 Services Session 1

14/21

Introduction Nature of Services

Cost based pricing

Value based pricing (1) Value is low price, (2) Value is utility,(3) Value is Quality for the price paid, (4) Value is what one getsfor what one gives (By Valarie Zeithaml, University of NorthCarolina)

Competition based pricing What airlines endured in past few

years

Price - Considerations

8/3/2019 Services Session 1

15/21

Introduction Nature of Services

Very crucial Service provider needs to pay keen attention towhat is being promised

Value of services needs to be established through effectivecommunicationmode used is mostly Infotisement

In case of Tangible Product, manufacturer is rarely in direct

contact with customer; in case of Services Provider of services

and Customer are in direct contact

Mouth-to-mouth publicity (Recommendation) plays a major rolein success

Promotion

8/3/2019 Services Session 1

16/21

Introduction Nature of Services

Intra organizational communication to imbibe Service Value toPeople involved

Motivation

Promotion Internal Communication

Highlight Capacity of organization, Past performancestatistics, Customer testimonials, Independent audit of services,

Provide experience of services Stimulate demand One ticket free on another, Happy hours,

Kid goes free with Parents

Dampen demand High ticket rates in Holidays, Entry charge,Parking charge etc.

Promotion Advertising Strategies

8/3/2019 Services Session 1

17/21

Introduction Nature of Services

Messages originating from outside the organization are vitallysignificant

Word of Mouth

Media Attention

Promotion Advertising Strategies

Promotion Ethical Issues in Services Promotion

Unrealistic Service Promises

8/3/2019 Services Session 1

18/21

Introduction Nature of Services

The location of outlet In Mumbai Town side is considered asup market location as compared to suburbs

The Building, Surroundings, Cleanliness, Parking facilities,Signage, Printed promotion material

Furnishing of outlet, equipment condition

In general, consolidated impact of Physical environment ofService outlet

Physical Evidence

8/3/2019 Services Session 1

19/21

Introduction Nature of Services

Major determinant of Perception of a Customer about Service

Quality

Voice based Services Clear diction, Conversational Skills

Actual services (Hotel staff, Airline staff, Salon staff)Cleanliness, neatness, good looks, conversational skills

Technical Services Thorough know-how

Recruiting, training, motivation is of utmost importance

People

8/3/2019 Services Session 1

20/21

Introduction Nature of Services

Creation and Delivery of Service

It is sequence of actions

It has to be well rehearsed to make it effective and avoid wasteof time E.g. Excessive delay in serving food will reduce numberof customers in a span of time

Front end staff suffers if operations staff goofs up in Process

Process

8/3/2019 Services Session 1

21/21

Introduction Nature of Services

Creating a process chart (Service Blueprint)

Create a script for employees and customers

Act I - Prologue and Introductory scene Welcoming etc.

Act II Delivery of core product Service Delivery

Act III The drama concludes Billing etc.

Identifying Fail points

Setting service standard

Plan B Failure proofing the Service

Problem of Customer Misbehaviour Thief, Rulebreakers,Vandals, Violent, etc.

Process - Considerations