Services Marketing

SOME TERMS
WHAT IS A SERVICE / SERVICE PRODUCT

AN ACTIVITY / PERFORMANCE GIVEN BY A SERVICE PROVIDER TO A SERVICE USER TO SOLVE HIS PROBLEM AND GIVE SATISFACTION AND AT THE SAME TIME HELP THE COMPANY TO ACHIEVE ITS COMMERCIAL AND FINANCIAL OBJECTIVES. A SERVICE PRODUCT IS MOSTLY INTANGIBLE IN NATUTRE AND THE PURCHASE OF A SERVICE PRODUCT DOES NOT RESULT IN OWNERSHIP BY THE USER. A SERVICE IS NOT A THING E.G: RENTING A ROOM TRANSPORTATION BY ANY MODE SEEING A MOVIE GETTING ADVICE FROM A DOCTOR / LAWYER EDUCATION BANKING SERVICES BUYING INSURANCE HIRING A TAXI PERFORMANCE BY AN ACTOR / ARTIST
MAJOR BUSINESS OBJECTIVES ( VIA CS/CD )
COMMERCIAL
FINANCIAL
SALES (VOLUME, VALUE) PROFIT MARKET SHARE RETURN ON GROWTH RATE INVESTMENT (ROI) RANKING RETAINING EXISTING AND DEVELOPING NEW CUSTOMERS
ECONOMIC ACTIVITIES, SERVICE ECONOMY
ECONOMIC ACTIVITIES
WHAT? NATIONAL WEALTH (GDP) CREATING ACTIVITIES CLASSIFICATION OF EAs a. PRIMARY EAs AGRICULTURE, FORESTRY, MINING& FISHING b. SECONDARY EAs MANUFACTURING & CONSTRUCTION c. TERTIARY EAs
SERVICES
ECONOMIC ACTIVITIES
SECTORS OF ECONOMY
a) b)
c)
AGRICULTURE SECTOR, TREND MANUFACTURING AND CONSTRUCTION SECTOR, TREND SERVICES SECTOR, TREND
UNO CLASSIFICATION OF COUNTRIES

1. 2. 3. THREE BASES MORE DEVELOPED COUNTRIES (MDCs) LESS DEVELOPED COUNTRIES (LDCs) LESS LESS DEVELOPED COUNTRIES (LLDCs) TREND TOWARDS SERVICE ECONOMY IN MDCs.
CHANGING TREND IN MDCs

SINCE THE WW II, SERVICES SECTOR OF ECONOMY (ALL TYPES OF SERVICES) HAS GROWN FAST IN MDCs, EG: USA, WE AND JP.
PAKISTAN:
a. b. c. AGRICULTUR SECTOR 40%, MANUFACTURING + CONSTRUTION SECTOR 35%, SERVICES SECTOR 25%.
FAST GROTH RATE 8%, BEST JOBS, HIGH INCOME, BEST TALENT FUTURE OF SERVICES SECTOR IS BRIGHT.
PROBLEMS IN ASSESSING THE SIZE OF SERVICES SECTOR
THREE PROBLEMS
1. DIFFERENT DEFINITION OF A SERVICE PRODUCT. WHAT IS INCLUDED / NOT INCLUDED IN SERVICES SECTOR. DIFFERENT BASES OF MEASURING THE SIZE OF SERVICES SECTOR.
a) b) c) d) EMPLOYMENT BASIS OUTPUT BASIS EXPENDITURE ON SERVICES ROLE IN EXPORT
2.
3.
POOR QUALITY OF OFFICIAL / SECONDARY DATA
FEATURES OF EMPLOYMENT IN SERVICES SECTOR MORE EMPLOYMENT GENDER COMPOSITION OF WORKFORCE IN SERVICES SECTOR IS CHANGING. MORE WOMEN WORK IN SERVICS ORGANIZATIONS BETTER PAID JOBS,TALENT, AND CAREERS (BA, IT) MORE PART-TIME WORKERS
SERVICE ECONOMY
AN ECONOMY IN WHICH:
a) A GREATER PORTION OF THE NATIONAL WEALTH(GDP) IS CREATED BY THE SERVICES SECTOR OF ECONOMY (T.EAs), MOST PEOPLE ARE EMPLOYED IN SERVICES MOST EXPENDITURE IS ON SERVICES AND EXPORT OF SERVICES PLAYS AN IMPORTANT ROLE.
b) c) d)
CRITERIA USED TO JUDGE THE IMPORTANCE OF SERVICES IN THE ECONOMY
1. 2. 3. 4.
OUTPUT OF WEALTH EMPLOYMENT CONSUMER EXPENDITURE ROLE OF SERVICES IN EXPORT TRADE
REASONS FOR THE GROWTH OF SERVICES
REASONS FOR THE GROWTH OF SERVICES IN ECONOMY

1) EIGHT MAJOR REASONS LOW LABOUR PRODUCTIVITY IN SERVICES WHICH HAS LED TO SHIFT IN EMPLOYMENT. LABOUR PRODUCTIVITY=OUTPUT PER EMPLOYEE WHY LOW PRODUCTIVITY IN SERVICS?
a) DECLINE IN HOURS WORKED PER PERSON b) LESS/POORLY TRAINED MANPOWER IN SERVICES SECTOR c) LESS/ SLOW USE OF TECHNOLOGY IN SERVICES. HAS NOT BENEFITED FROM EOS.

2) OVERALL GROWTH OF DEMAND FOR SERVICES FROM COMPANIES
FINANCIAL, INSURANCE, LEGAL, RESEARCH, ADVERTISING, TRAINING SERVICES etc.
3)
OUTSOURCING OF BUSINESS SERVICES BUSINESS SERVICES PREVIOUSLY CARRIED-OUT BY THE COs THEMSELVES, ARE BEING OUTSOURCED TODAY. COs CAN NOW HIRE MANY TYPES OF SERVICES WITHOUT OWNING THEM AT LESS COST. THUS, SERVICES COs HAVE BEEN SET-UP. EG: MRAs, ADAs, ENGINEERING MAINTENANCE COs, TRAINING INSTITUTIONS, TRANSPORT & FOOD PROVIDERS, JANITORIALS SERVICES COs etc.

4) DEREGULATION AND PRIVATIZATION OF SERVICES BUSINESS (BIA, COM etc) 5) GROWTH OF DEMAND FOR SERVICES FROM CONSUMERS. WHY? a) SOCIETY IS GETTING WEALTHIER, THUS, THE LIFESTYLE IS CHANGING
- TRANSFER OF CERTAIN KINDS OF HOUSEHOLD JOBS TO OTHERS - PEOPLE HAVE TURNED TO SERVICES EXPENDITURE
b) LIFE EXPECTANCY IS INCREASING c) LIFE IS BECOMING COMPLEX d) MORE COMPLEX PRODUCTS

6) 7) 8) GROWTH OF DEMAND FROM CERTAIN PROFESSIONS GLOBALIZATION OF BUSINESS GROWTH OF GOVERNMENT SIZE
REASONS FOR INCREASE IN SERVICES EXPENDITURE AND NEEDED SERVICES

REASONS
WANT MORE LEISURE TIME MORE WORKING WOMEN INCREASED LIFE EXPECTANCY
SERVICES NEEDED
TRAVEL, HOTELS, DAY-CARE NURSERIES, FEMALE SERVANTS HEALTH-CARE SERVICES, OLD-AGE HOSTELS SKILLED LABOUR / MECHANICS FOR MAINTENANCE AND REPAIR PROFESSIONAL / CONSULTANTS & ADVISERS, ADULT EDUCATIONAL CENTERS NEED FOR NEW SERVICES
COMPLEXITY OF PRODUCTS
COMPLEXITY OF LIFE INCREASE IN NEW PRODUCTS / TECHNOLOGIES EG: COMPUTERS, TVs, FAX, INTERNET ETC.
GLOBALIZATION OF BUSINESSES
INCREASED DEMAND FOR :
1) 2) 3) 4) 5) COMMUNICATION SERVICES TRAVEL SERVICES INFORMATION SERVICES LEGAL SERVICES HOSPITALITY SERVICES
SERVICES DEVELOPED DURING THE LAST 30 YEARS

(A) CONSUMER SERVICES
1) 2) 3) 4) 5) 6) 7) 8) 9) 10) DAY-CARE NURSERIES MOBILE PHONE SERVICES, ATM SERVICES TV/COMPUTER/FAX EQUIPMENT REPAIR SERVICES. PROFESSIONALS/ CONSULTANTS AND ADVISERS CAR RENTAL SERVICES TRAVEL AGENCIES ADULT EDUCATION CENTERS CREDIT CARD SERVICES PHYSICAL FITNESS CENTERS BEAUTY PARLOURS
11) CONSUMER LEASING COs.
SERVICES DEVELOPED DURING THE LAST 30 YEARS
(B) BUSINESS SERVICES

1) 2) 3) 4) 5) 6) 7) 8) CONTRACT MAINTENANCE CONSULTANT FIRMS WAREHOUSING MRAs, ADAs, CONTRACT R AND D SERVICES, FRANCHISING SERVICES JANITORIAL SERVICES OFFICE TRANSPORT AND FOOD SERVICES
HISTORICAL CHANGES IN UNDERSTANDING A SERVICE PRODUCT
HOW HAS THE DEFINITION OF THE TERM SERVICECHANGED OVER YEARS?

EARLIER DAYS:
ADAM SMITH SERVICES ARE BARREN AND UNPRODUCTIVE ACTIVITES WHICH PERISH INSTANTLY. DO NOT ADD WEALTH TO A NATION.
i.
LATER ON: J.B. SAY

REJECTED ADAM SMITHS VIEWS. ACCEPTED THAT SERVICES ARE USEFUL ACTIVITIES, WHICH SATISFY CUSTOMERS NEEDS. ARE PRODUCTIVE AND ADD WEALTH TO A NATION.
ii.
ALFRED MARSHAL
USEFUL AND NEED SATISFYING ACTIVITIES WHICH GET DESTROYED AT THE MOMENT OF THEIR CREATION.
iii.
DIFFERENT RESEARCHERS BUSINESS ACTIVITIES WHICH DO NOT CHANGE THE

PHYSICAL FORM OF A GOOD BUT WHICH ARE NEEDED IN MOVING PRODUCTS FROM THE MANUFACTURER TO THE END USERS. EG. WHLs, RETs, ect
TODAY
WHAT IS A SERVICE / SERVICE PRODUCT

AN ACTIVITY / PERFORMANCE GIVEN BY A SERVICE PROVIDER TO A SERVICE USER TO SOLVE HIS PROBLEM AND GIVE SATISFACTION AND AT THE SAME TIME HELP THE COMPANY TO ACHIEVE ITS COMMERCIAL AND FINANCIAL OBJECTIVES. A SERVICE PRODUCT IS MOSTLY INTANGIBLE IN NATUTRE AND THE PURCHASE OF A SERVICE PRODUCT DOES NOT RESULT IN OWNERSHIP BY THE USER. A SERVICE IS NOT A THING E.G: RENTING A ROOM TRANSPORTATION BY ANY MODE SEEING A MOVIE GETTING ADVICE FROM A DOCTOR / LAWYER EDUCATION BANKING SERVICES BUYING INSURANCE HIRING A TAXI PERFORMANCE BY AN ACTOR / ARTIST
CHARACTERISTICS OF SERVICES
CHARACTERISTICS OF SERVICES
1) 2) 3) 4) 5) INTANGIBILITY PERISHABILITY INSEPARABILITY HETROGENEITY / VARIABILITY / INCONSISTANCY NO OWNERSHIP BY THE USER DISTINGUISH THEM FROM GOODS THESE CHARACTERISTICS CREATE BOTH CHALLENGES AND OPPORTUNITIES IN THE MARKETING OF SERVICES AND AFFECT THEIR M-MIX
INTANGIBILITY
FIVE SENSES WHAT? CANNOT BE SEEN, ------------- BEFORE PURCHASE. THEREFORE, DIFFICULT TO JUDGE THEIR QUALITY BEFORE HAND. HOWEVER, OPINION ABOUT THEIR QUALITY CAN BE OBTAINED FROM OTHERS. BUYERS HAVE FAITH IN THE S. PROVIDER
INTANGIBILITY
PROBLEMS CREATED:
CANNOT BE PACKAGED, DISPLAYED, DEMONSTRATED, SAMPLED, PATENTED, MAKES CHOICE DIFFICULT etc.
HOW PEOPLE JUDGE QUALITY OF A SERVICE PRODUCT

1) 2) 3) 4) 5) 6) REPUTATION OF THE SERVICE PROVIDER. RELIABILITY PRESENT CUSTOMERS PHYSICAL ENVIROMENT FACILITATING EQUIPMENT PRICE PROCESSES METHODS USED IN CREATING AND DELIVERING SERVICES
STRATEGIES TO OVERCOME PROBLEMS CREATED BY INTANGIBILITY

a) SHOW VISUALS OF THE BENEFITS OF A SERVICE PRODUCT IN PROMOTIONAL CAMPAIGNS SO THAT CUSTOMERS CAN SEE AND JUDGE QUALITY BEFORE PURCHASE. E.G. AIRLINES: SHOW A TRAVELER ENJOYING LEGROOM EDUCATIONAL INSTITUTIONAL: SHOW LEARNING ENVIRONMENT IN A CLASS ROOM HOTEL: SHOW A DECORATED HOTEL ROOM, A RESTAURANT. PLASTIC SURGERY: MAKE DRAWINGS AFTER THE SERVICE HAS BEEN APPLIED
STRATEGIES TO OVERCOME PROBLEMS CREATED BY INTANGIBILITY

b) c) d) e) f) CREATE A STRONG ORGANIZATION IMAGE. PROVIDE TANGIBLE CLUESWHICH ENABLE HIM TO JUDGE QUALITY. STIMULATE WOM COMMUNICATIONTO OVERCOME DISPLAY PROBLEM USE BRAND NAMES TO OVERCOME PATENT PROBLEM. ADOPT POSTPURCHASE COMMUNICATION
HOW RELEVANT IN TANGIBILITY IN SERVICES?

ALTHOUGH INTANGIBILITY IS A KEY CHARACTERISTIC OF SERVICES BUT VERY FEW SERVICES ARE PURELY INTANGIBLE
EG: TEACHING, NURSING etc.
MOST SERVICES ALSO CONSIST OF SOME TANGIBLE ELEMENTS

EG: AIR TRAVEL, BANKING, TELECOMMUNICATION ETC.
THUS, TANGIBILITY IS RELEVANT TO MANY SERVICES
PERISHABILITY
WHAT ?
PRODUCED,DELIVERED AND CONSUMED AT THE SAME TIME. CANNOT BE STORED. CANNOT BE PRODUCED BEFORE HAND. THEREFORE, IF NOT USED AT THE TIME A SERVICE IS PRODUCED, IT GETS DESTROYED FOR EVER. LOSS OF REVENUE
PERISHABILITY
PROBLEMS CREATED
SINCE SERVICES CANNOT BE STORED, CANNOT BE PRODUCED BEFORE HAND AND SINCE THEIR DEMAND FLUCTUATES TOO OFTEN, THEREFORE, PLANNING THEIR DEMAND AND SUPPLY IS RELATIVELY DIFFICULT.
E.G.
1)
2) 3)
PUBLIC TRANSPORT HOTEL ROOMS (HOLIDAY PLACES) TELEPHONE SERVICE
STRATEGIES TO OVERCOME PROBLEMS CREATED BY PERISHABILITY

a) DEMAND SIDE OFFER FLEXIBLE / DIFFERENTIAL PRICING STRATEGY AT DIFFERENT TIMES OF THE YEAR, DAYS OF THE WEEK, DAY / NIGHT* INTERMITTENT PROMOTION, NOT CONTINUOUS OFFER GROUP DISCOUNT* ORGANIZE SPECIAL SHOWS,INTRODUCE A NEW PRODUCT DURING IDLE TIME INTRODUEC RESERVATION SYSTEM *SHORT TERM STEPS. HABITUAL b) SUPPLY SIDE USE PART-TIME EMPLOYEES TEMPORARY INCREASE IN EQUIPMENT INTRODUCE SELF-SERVICE IN STORES.
INSEPARABILITY
WHAT? CANNOT BE SEPARATED FROM SERVICE PROVIDER OR THE SOURCE AND OFTEN FROM THE SERVICE USER
INSEPARABILITY
PROBLEMS CREATED
1) REQUIRES THE PRESENCE OF THE SERVICE PROVIDER AND THE SERVICE USER MOSTLY PRODUCED,DELIVERED AND CONSUMED AT THE SAME TIME. LOT OF INTERACTION AND CUSTOMERS PARTICIPATION. ENCOUNTER POINTS. 2) LIMITS THE SCALE OF OPERATION. MASS PRODUCTION NOT POSSIBLE 3) AFFECTS QUALITY. PROFESSIONAL AND ENTERTAINMENT SERVICES ARE NEEDED FROM A SPECIFIC SERVICE PROVIDER. QUALITY DEPENDS ON BOTH SERVICE PROVIDER AND SERVICE USER. 4) DIRECT SALES IS THE MAIN CHANNEL OF DISTRIBUTION (EXCEPT TAs, EAs). THIS IS AN OPPORTUNITY.SOME SERVICES CAN BE DELIVERED ELECTRONICALLY.
STRATEGIES TO OVERCOME PROBLEMS CREATED BY INSEPARABILITY
1) 2) 3) 4) 5)
WORK IN LARGE GROUPS WORK FAST TRAIN MORE SERVICE PROVIDERS USE AUTOMATED MACHINES USE MULTISITE LOCATIONS
HETROGENEITY / VARIABILITY / INCONSISTANCY

WHAT? EACH UNIT OF SERVICE MAY DIFFER IN QUALITY. CUSTOMERS ARE AWARE OF IT. EXAMPLES
DOCTORS (WHO, WHEN, WHERE) PIA (DIFFERENT FLIGHTS) FRANCHISE OPERATIONS BANK BRANCHES SERVICE PROVIDER CUSTOMER(S) WHEN PROVIDED WHERE PROVIDED FACILITATING EQUIPMENT PROCESS OF CREATING AND DELIVERING A SERVIC PRODUCT
QUALITY DEPENDS UPON:

a) b) c) d) e) f)
HETROGENEITY / VARIABILITY / INCONSISTANCY PROBLEMS CREATED

1) 2) VARIATION IN QUALITY DIFFICULT TO STANDARDIZE QUALITY
STRATEGIES TO OVERCOME PROBLEMS CREATED BY HETROGENEITY

DIFFICULT TO STANDARDIZE EACH UNIT OF SERVICE.
1) STANDARDIZE SERVICE CREATION, PRODUCTION AND DELIVERY PROCESSES 2) STANDARDIZE PHYSICAL ENVIRONMENT / TIMING 3) CONSTANT TRAINING OF S. PROVIDERS 4) MECHINIZE SERVICES 5) MONITOR CS PERIODICALLY 6) STANDARDIZE CUSTOMERS SPECIFICATIONS
NO OWNERSHIP
DOES NOT BECOME OWNER, CAN USE THE SERVICE / FACILITY. NO TRANSFER OF OWNERSHIP TITLE. PAYMENT IS MADE FOR USING THE SERVICE / FACILITY.
NO OWNERSHIP
PROBLEM CREATED
SOME TIME NO EVIDENCE OF PURCHASE AND USE
NO OWNERSHIP
STRATEGY TO OVER COME PROBLEM
PROVIDE A PHYSICAL CLUE
MARKETING DIFFICULTIES / CHALLENGES WHICH ARISE DUE TO CHARACTERISTICS OF SERVICES
CHARACTERISTIC INTANGIBILITY
DIFFICULTIES / CHALLENGES CANNOT SAMPLE, DEMONSTRATE, DISPLAY & PACKAGE CANNOT JUDGE QUALITY BEFORE HAND MAKES PRICING DIFFICULT CANNOT BE PATENTED. EASILY COPIED
PERISHABILITY
CANNOT STORE MAKES PLANNING OF SUPPLY AND DEMAND DIFFICULT
INSEPARABILITY
REQUIRES THE PRESENCE OF S. PROVIDER & ALSO OFTEN OF THE CUSTOMER(S) MOSTLY SOLD DIRECTLY LIMITED SCALE OF OPERATION EACH UNIT OF SERVICE MAY DIFFER. DIFFICULT TO STANDARDIZE QUALITY
HETROGENITY
NO OWNERSHIP
NO EVIDENCE OF PURCHASE AND USE
FRAMEWORKS
FRAMEWORKS TO HELP UNDERSTAND SERVICES AND PHYSICAL PRODUCTS

PSS, SSP FEW PRODUCTS ARE EITHER PURE TANGIBLE OR INTANGIBLE MOST PRODUCTS ARE COMBINATION OF BOTH TANGIBLE AND INTANGIBLE ELEMENTS. CUSTOMER SATISFACTION COMES FROM BOTH TANGIBLE AND INTANGIBLE ELEMENTS OF A PRODUCT. EG: RESTAURANTS:
CS COMES FROM BOTH FOOD AND THE SERVICES GIVEN. COURTESY, SPEED, ENVIRONMENT, CONVENIENCE etc.
GOODS-SERVICES CONTINUUM MODEL

GOODS-SERVICES CONTINUUM MODEL A MODEL, WHICH BASED ON TANGIBLE AND INTANGIBLE ELEMENTS, SHOWS THE RANGE OF PRODUCTS OFFERED FROM PURE TANGIBLES TO PURE INTANGIBLES, FOR CS, IN THE MARKET.
GOODS-SERVICES CONTINUUM MODEL
DEG OF INTANG. Es
RESTAURANT
AIR TRAIVAL
TEACHING
DEG OF TANG. Es
BALANCE BETWEEN TANGIBLE AND INTANGIBLE ELEMENTS
CAR TOOTHPASTE
FIVE CATEGORIES OF PRUDUCTS BASED ON G-S CONTINUUM
PURE TANGIBLE PRODUCTS NO PSS / ACCOMPANYING SERVICES TANGIBLE PRODUCTS + PSS PURE INTANGIBLE SERVICE PRODUCTS SERVICE PRODUCT + SSP ACCOMPANYING MINOR TANGIBLE PRODUCTS TANGIBLE PRODUCT + SERVICE PRODUCT, IN THE SAME RATIO. HYBRID
SHOSTACKS MOLECULAR MODEL OF A PRODUCT

THIS MODEL SUGGESTS TO THINK OF A PRODUCT AS A MOLECULE ,HAVING TANGIBLE AND INTANGIBLE ELEMENTS. BASED ON WHETHER THE DOMINANT ELEMENTS ARE TANGIBLE OR INTANGIBLE, THIS MODEL HELPS TO VISUALIZE BOTH A SERVICE PRODUCT AND A TANGIBLE PRODUCT.

A. SERVICE PRODUCT
THE MOLECULE, INCLUDING THE NUCLEUS OF A S.PRODUCT, IS DOMINATED BY INTANGIBLE ELEMENTS, NO OWNERSHIP OF THE SOURCE WHICH PRODUCES THE SERVICE. B. TANGIBLE / PHYSICAL PRODUCT THE MOLECULE, INCLUDING THE NUCLEUS, IS DOMINATED BY TANGIBLE ELEMENTS. OWNERSHIP OF THE PHYSICAL PRODUCT.
AIR TRAVEL
CAR
KEY ELEMENTS OF A PRODUCT = TANGIBLE ELEMENTS = INTANGIBLE ELEMENTS
FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICES

SERVICES 1) CANNOT BE FELT BEFORE PURCHASE. 2) SHOW LACK OF USE OF PACKAGING 3) DIFFICULT TO SAMPLE / DEMONSTRATE / DISPLAY 4) PATENT NOT POSSIBLE 5) DIFFICULT TO JUDGE PRICE & QUALITY BEFORE HAND 6) REQURES PRESENCE OF SERVICE PROVIDER PHYSICAL PRODUCTS CAN BE.. MOSTLY IN A PACKAGE CAN BE EASILY SAMPLED / DISPLAYED PATIENT IS POSSIBLE CAN JUDGE NOT NECESSARILY

7) SIMULTANEOUS PRODUCTION & CONSUMPTION 8) DIRECT SALE, RARELY MIDDLEMAN IS NEEDED. SHORT D. CHANNEL IF AT ALL NEEDED. 9) LIMITED SCALE OF OPERATION. ABSENCE OF MASS PRODUCTION 10)PRECISE STANDARDIZATION OF QUALITY IS DIFFICULT (WHO, WHEN & WHERE PROVIDED) AT DIFFERENT TIMES MOSTLY SOLD VIA M. MEN
MASS PRODUCTION POSSIBLE

11) CANNOTBE STORED, INVENTORY NOT POSSIBLE, CANNOT PRODUCE BEFORE HAND 12) DEMAND FLUCTUATION IS OFTEN & DIFFICULT TO EVEN-OUT 13) CANNOT BE OWNED 14) AN ACTIVITY CAN BE STORED. CAN PRODUCED BEFORE HAND
LESS OFTEN. EASY TO MATCH
CAN BE OWNED A THING
CLASSIFICATION OF SERVICES, SECTORS OF SERVICE PORVIDERS
CLASSIFICATION OF SERVICES
NO STRICT BASES OF CLASSIFICATION. DIFFERENT AUTHORS HAVE USED DIFFERENT BASES BASIC SOURCE OF SERVICE
1) PEOPLE-BASED SERVICES
i. RENDERED BY PROFESSIONALS / CONSULTANTS ii. RENDERED BY SKILLED LABOUR iii. RENDERED BY UNSKILLED LABOUR EQUIPMENT- BASED SERVICES i. AUTOMATED EQUIPMENT ii. EQUIPMENT OPERATED BY PROFESSIONALS OR SKILLED PEOPLE iii. EQUIPMENT OPERATED BY UNSKILLED PEOPLE
A.
2.
B. BUYER RELATED BASES
i. ii.
iii.
CURTOMERS PRESENCE NECESSARY OR NOT BUYERS PURCHASE MOTIVE

CONSUMER SERVICES OR BUSINESS / INDUSTRIAL SERVICES
SHOPPING HABIT
HOW A BUYER PURCHASES A SERVICE IN TERMS OF EFFORTS, TIME SPENT AND FREQUENCY
a) b) c) d) CONSUMER CONVENIENCE SERVICES FREQUENTLY USED, LOW PRICE, WIDELY AVAILABLE CONSUMER SHOPPING SERVICES QUALITY - PRICE COMPARISION CONSUMER SPECIALITY SERVICES STRONG LIKING FOR A S. PROVIDER CONSUMER UNSOUGHT SERVICES
CHARACTERISTICS OF VARIOUS TYPES OF CONSUMER SERVICES

CHARACTERISTICS C. CONVENIENCE SERVICES (TAXI) VERY LITTLE C. SHOPPING SERVICES (AIR TRAVEL) SOMEWHAT C. SPECIALITY SERVICES (MEDICAL ADVICE) CONSIDERABLE
TIME & EFFORTS SPENT S. PROVIDERS PREFERENCE PRIOR PLANNING FOR PURCHASE PRICE LEVEL
NO / LITTLE
STRONG
VERY STRONG
NO / LITTLE
YES
YES
LOW
HIGH
HIGH
PRICE QUALITY COMPARISON PURCHASE FREQUENCY
NO
YES
NO
FREQUENTLY
INFREQUENTLY
INFREQUENTLY
C. SELLER RELATED BASES i. S. PROVIDERS MOTIVE
PROFIT (BUSINESS SERVICES) NOT-PROFIT (CHARITY SERVICES) SECTOR WHICH PROVIDES THE SERVICE GOVT SECTOR SERVICES FEDERAL, PROVINCIAL AND LOCAL GOVERNMENT BUSINESS SECTOR SERVICES PRIVATE NON PROFIT SECTOR SERVICES COMMUNICATION, TRANSPORTATION, EDUCATIONAL, FINANCIAL, HEALTH SERVICES etc.
ii.
D.
FUNCTION PERFORMED BY SERVICES
SERVICE PRODUCT CATEGORIES

1. TRANSPORTATION AND COMMUNICATION SERVICES. 2. UTILITY SERVICES SERVICES NEEDED FOR HOUSEHOLD OPERATIONS 3. BANKING AND INSURANCE SERVICES 4. RENTAL AND HOUSING, HOTELS & ESTATE AGENTS SERVICES 5. PERSONAL/HEALTH-CARE SERVICES 6. RECREATION AND LEISURE SERVICES 7. PROFESSIONAL AND CONSULTANT SERVICES 8. DISTRIBUTION SERVICES 9. PUBLIC ADMINISTRATION AND DEFENCE SERVICES 10. EDUCATIONAL SERVICES 11. CONSTRUCTION AND ENGINEERING SERVICES 12. ECOLOGY SERVICES 13. TOURISM
SECTORS OF SERVICE PROVIDERS

(1) GOVERNMENT SECTOR SERVICE PROVIDERS. COURTS, HOSPITALS, EDUCATIONAL INSTITUTIONS, SECURITY AGENCIES, PAKISTAN RAILWAY, POST OFFICE, PTCL,
(2) BUSINESS SECTOR SERVICE PROVIDERS BANKS, INSURANCE COMPANY, TRANSPORTATION COMPANIES, EDUCATIONAL INSTITUTIONS, HOSPITALS, MOTION PICTURES , REAL ESTATE AGENTS. (3) PRIVATE NON-PROFIT SECTOR SERVICE PROVIDERS CHARITY ORGANIZATIONS, HOSPITALS, EDUCATIONAL INSTITUTIONS.
MARKETING AND TYPES OF MARKETING IN A SERVICE COMPANY
MARKETING OF SERVICES INTRODUCTION

ORDER OF ADOPTION OF MARKETING MARKETING IS LESS DEVELOPED IN SERVICES BUSINESSES. IT STARTED IN 1975 WHEN:
a) MARKETING PEOPLE MOVED FROM MANUFACTURING COMPANIES TO SERVICES COMPANIES b) DEVELOPMENT OF SERVICES MARKETING LITERATURE c) TEACHING OF SERVICES MARKETING PAKISTAN 1995
BASICALLY SERVICES ARE MARKETED IN THE SAME MANNER AS THE GOODS. PRINCIPLES, CONCEPTS, PROCESSES etc ARE SAME.
ORDER OF ADOPTION OF MARKETING

A. IN THE BUSINESS SECTOR
1) CONSUMER NONDURABLE GOODS MANUFACTURING COMPANIES 2) CONSUMER DURABLE GOODS MANUFACTURING COMPANIES 3) INDUSTRIAL EQUIPMENT AND RMs MANUFACTURING COMPANIES 4) CONSUMER SERVICES COMPANIES (BIA, HOTELS).
B. CHARITY ORGANIZATIONS
MARKETING OF SERVICES INTRODUCTION

HOWEVER, DUE TO SOME CHARACTERISTICS OF SERVICES, MARKETING OF SERVICES IS SOMEWHAT DIFFERENTAND DIFFICULT. FOR EXAMPLE
i. SERVICES MARKETING MIX CONSISTS OF 7 VARIABLE ELEMENTS AND NOT 4 ii. MUCH MORE CUSTOMER / EMPLOYEE INTERACTION iii. PATENT PROTECTION IS IMPOSSIBLE DUE TO INTANGIBILITY. THUS, PRODUCT DIFFERENTIATION IS
SHORT LIVED.
DIFFERENCE BETWEEN THE MARKETING CONCEPT AND MARKETING MANAGEMENT

TWO VIEWS ABOUT MARKETING
a) MARKETING CONCEPT
EVERYBODY IS CUSTOMER FOCUSED. DECISIONS IN ALL DEPARTMENTS ARE CUSTOMER FOCUSED. COORDINATED FUNCTION
DIFFERENCE BETWEEN THE MARKETING CONCEPT AND MARKETING MANAGEMENT

b) MARKETING MANAGEMENT NOT SO IN MARKETING MANAGEMENT. CS THE IS RESPONSIBILITY OF THE MARKETING DEPARTMENT ONLY. ISOLATED FUNCTION.
PURPOSE OF BUSINESS
TO CONTINUOUSLY CREATE, WIN AND RETAIN SUFFICIENT NUMBER OF SATISFIED CUSTOMERS, PROFITABLY. TO ACHIEVE IT, A COMPANY NEEDS TO USE THE MARKETING CONCEPT.
CRITERIA TO ASSESS HOW CUSTOMER ORIENTED A COMPANY IS ?

1) 2) ATTITUDE AND BEHAVIOUR OF EVERYBODY TOWARDS THE CUSTOMERS. COORDINATION AT TWO LEVELS:
a) b) WITHIN THE MARKETING DEPARTMENT BETWEEN MARKETING AND ALL OTHER DEPARTMENTS.
3) 4) 5) 6) 7)
WHETHER OR NOT KEY MANAGERS ARE IN CONTACT WITH CUSTOMERS. HOW ACCURATELY THE NEEDS OF TM CUSTOMERS HAVE BEEN IDENTIFIED EXTERNAL MARKETING. CS LEVEL (H, M, L). SHOULD KEEP INCREASING INTERNAL MARKETING INTERACTIVE MARKETING
EXAMPLES OF MARKET-ORIENTED OR NOT MARKET-ORIENTED SERVICE ORGANIZATIONS.

A. MARKET- ORIENTED COMPANIES. 1) DHL 2) CITIBANK 3) MARRIOTT HOTELS 4) SINGAPORE AIRLINE COMPLY WITH CRITERIA OF A MARKET-ORIENTED COMPANY.
EXAMPLES OF MARKET-ORIENTED OR NOT MARKET-ORIENTED SERVICE ORGANIZATIONS.
NOT MARKET- ORIENTED COMPANIES 1) PTCL 2) KESC 3) NBP DO NOT COMPLY WITH CRITERIA OF A MARKETORIENTED COMPANY.
STEPS NEEDED TO IMPLEMENT THE MARKETING CONCEPT

A. ROLE OF TOP MANAGEMENT
1) BE FIRST TO CHANGE TO CUSTOMER FOCUSED ATTITUDE AND BEHAVIOUR. ROLE MODEL. IF THEY DONT DO SO, OTHERS WILL NOT DO SO. 2) SET OBJECTIVES AND INCENTIVES WHICH ARE CUSTOMER-FOCUSED. 3) PROMOTE MARKET-ORIENTED EXECUTIVES IN ALL DEPARTMENTS.
STEPS NEEDED TO IMPLEMENT THE MARKETING CONCEPT

B. TRAINING IN CUSTOMER-ORIENTATION AND BASIC MARKETING TO CREATE CUSTOMER FOCUSED ATTITUDE AND BEHAVIOUR IN EVERYBODY. CUSTOMER-ORIENTED CULTURE. STATING IN EVERYBODYS JOB DESCRIPTION HOW HIS / HER JOB AFFECTS CS.
C.
WHEN MARKET-ORIENTATION MAY BE INAPPROPRIATE

PREVENTION BY LAW PROFESSIONALLY MARKETING IS CONSIDERED UNETHICAL IN TIMES OF SCARCITY
STATUS OF MARKETING IN SERVICES COMPANIES

a) TWO CONFLICTING VIEWS MARKETING IS LESS USED / DEVELOPED IN SERVICES REASONS
1) PROBLEMS CREATED DUE TO SPECIFIC CHARACTERISTICS OF SERVICES. 2) OPPOSITION TO MARKETING FROM SOME PROFESSIONS 3) MANY SERVICES ORGANIZATIONS ARE SMALL AND IN DIRECT CONTACT WITH CUSTOMERS, THEREFORE, SUCH BUSINESSES DO NOT NEED MARKETING

4) DEMAND IS GREATER THAN SUPPLY. 5) SOME SERVICES COs HAVE MONOPOLY OR NO / LITTLE COMPETITION. 5) PREVENTED BY LAW. 6) POOR QUALITY OF MANAGEMENT PERSONNEL IN SOME SERVICES COs. THEY ARE NOT TRAINED IN MARKETING. 7) OVERALL LACK OF AVAILABILITY OF MARKETING KNOW-HOW ABOUT SERVICES MARKETING.

SERVICES COMPANIES USE / HAVE DEVELOPED MARKETING REASONS
1. POSITIVE CHANGE IN ATTITUDE TOWARDS MARKETING IN SERVICES COs DURING THE LAST 30 YEARS. EG: BIA, HOTELS,CAR RENTAL COs etc.. 2) ARE SUCCESSFULLY FIGHTING COMPETITION. 3) HAVE SUCCESSFULLY INTRODUCED NEW S. PRODUCTS EG: CREDIT CARDS, CONSUMER FINANCING SCHEMES, NEW INSURANCE POLICIES, DIFFERENT EDUCATIONAL COURSES etc.

4. REMOVAL OF LEGAL / PROFESSIONAL BARRIERS. 5. MOVEMENT OF MARKETING PERSONNEL FROM MANUFACTURING BUSINESSES TO SERVICES COs. 6) DEVELOPMENT OF SERVICES MARKETING KNOW-HOW AND TEACHING SERVICES MARKETING IN BUSINESS SCHOOLS

CONCLUSION USE OF MARKETING IN SERVICES COs IS SLOW, LESS SPREAD AND POORLY STRUCTURED BUT IT IS DEVELOPING.
THREE TYPES OF MARKETING IN A SERVICE COMPANY

1) 2) EXTERNAL MARKETING FIND NEEDS OF TM AND MAKE AN APPROPRIATE M-MIX TO SERVE / SATISFY THE CUSTOMERS.WIN AND RETAIN THEM INTERNAL MARKETING SELECT, TRAIN, COACH, DEVELOP, MOTIVATE AND COMPENSATE EMPLOYEES TO SERVE CUSTOMERS WELL. CREATE ABILITY, WILLINGNESS AND JOB MATCHING PERSONALITY INTERACTIVE MARKETING TEACH CUSTOMERS SERVING SKILLS (TOUCH SKILLS) SUCH AS COURTEOUSY, CONCERN, GRACEFULNESS etc. ACTUAL DELIVERY OF SERVICE TAKES PLASE DURING INTERACTIVE MARKETING
3)
THREE TYPES OF MARKETING IN A SERVICE COMPANY

COMPANY
INTERNAL MARKETING
EXTERNAL MARKETING
EMPLOYEES
INTERACTIVE MARKETING
CUSTOMERS
MARKETING-MIX IN SERVICES AND MARKETING STRATEGIES
MARKETING-MIX IN SERVICES BUSINESS

WHAT MARKETING-MIX MEANS A COMBINATION OF SEVEN VARIABLE AND CONTROLLABLE ELEMENTS OF MARKETING, DETERMINED BY KEEPING IN MIND THE MARKETING ENVIRONMENT AND THE TM, TO ACHIEVE COMPANYS COMMERCIAL AND FINANCIAL OBJECTIVES, IN THE MOST EFFICIENT WAY, VIA CUSTOMER SATISFACTION
DIFFERENT COMPANIES CHOOSE DIFFERENT MARKETING- MIX, ACCORDING TO THEIR TM. CHANGING ONE ELEMENT OF MARKETING MIX, AFFECTS THE OTHER ELEMENTS.
EXTERNAL UNCONTROLLABLE FACTORS WHICH MAKE THE MARKETING ENIRONMENT

a) b) POLITICAL/LEGAL FACTORS ECONOMIC FACTORS CULTURAL/SOCIAL FACTORS DEMOGRAPHIC FACTORS GEOGRAPHIC FACTORS TECHNOLOGICAL FACTORS COMPETITIVE FACTORS INFLUENCE CB, M-MIX, ALL COMPANIES NOT KNOWING THE M E IS LIKE A BIRD WITHOUT FEATHERS(SAADI) c) IT IS USELESS TO TELL A RIVER TO STOP RUNNING. BEST IS TO LEARN SWIMING IN THE DIRECTION IT IS FLOWING (CHINESE PROVERB)
MARKETING-MIX IN SERVICES BUSINESS

SEVEN ELEMENTS 4 TRADITIONAL + 3 NEW ONES IGNORING ANY OF THEM CAN LEAD TO FAILURE. CUSTOMERS HEAVILY RELY ON PRICE, PEOPLE AND PHYSICAL ENVIRONMENT/ EVIDENCE TO JUDGE THE QUALITY OF A SERVICE PRODUCT.
REASONS FOR EXPANDING M-MIX FOR SERVICES

1. 2. 3. TRADITIONAL M-MIX NOT SUFFICIENT TO MAKE CUSTUMERS BUY AND SATISFY THEM HETROGENEITY CHARACTERISTIC NECESSITATES INCLUSION OF PROCESSES INSEPARABILITY CHARACTERISTIC NECESSITATES INCLUSION OF PEOPLE.
a)
b)
PEOPLE WHO CREATE AND DELIVER THE SERVICE. SERVICE PROVIDER PEOPLE WHO RECEIVE THE SERVICE.THE CUSTOMER, OTHER CUSTOMERS
4.
NEED FOR QUALITY SERVICE ALSO NECESSITATES INCLUSION OF PHYSICAL ENVIRONMENT AND PHYSICAL EVIDENCE
WHY MARKETING STRATEGIES FORMULATION IS DIFFICULT IN SERVICES

a) UNIQUE CHARACTERISTICS OF SERVICES :
UNLIKE GOODS, INTANGIBILITY CHARATERISTIC OF SERVICES MAKES CONSUMERS CHOICE OF DIFFERENT COMPETING PRODUCTS DIFFICULT. OPINION CAN BE OBTAINED FROM OTHERS. INSEPARABILITY MAKES MARKETING STRATEGY OF SERVICES LOCALIZED. RELATIVELY DIFFICULT TO SELL SERVICES ON NATIONWIDE BASIS. PERISHABILITY MAKES STORAGE OF SERVICES IMPOSSIBLE, THUS, PLANNING SUPPLY AND DEMAND OF SERVICES IS DIFFICULT HETROGENEITY MAKES ENSURING OF UNIFORM QUALITY DIFFICULT.
CUSTOMER SATISFACTION (CS)
CUSTOMER SATISFACTION (CS)

WHAT IS CS? A FEELING OF PLEASURE CREATED IN THE MIND OF A CUSTOMER, WHEN THE ACTUAL PRODUCT OR BRAND PERFORMANCE MATCHES WITH THE BUYERS EXPECTED PRODUCT PERFORMANCE, ON USE, AND WHICH MAKES A CUSTOMER REPURCHASE THE PRODUCT. SATISFIED CUSTOMERS ARE AN APPRECIATING ASSET. THEY SHOULD BE THE GOAL OF MARKETING AND ALSO THEY SHOULD BE USED AS A TOOL IN PROMOTION.
SALES AND PROFIT

IS NOT THE OBJECTIVE OF MARKETING,
IT IS THE BYPRODUCT AND REWARD OF CUSTOMER SATISFACTION.
LEVEL OR DEGREE OF CS
1) JUST SATISFIED CUSTOMERS APP = EPP SHOW LOYALTY TOWARDS THE PRODUCT OR BRAND AND THEY MAY REPEAT PURCHASE. HIGHLY SATISIFIED OR DELIGHTED CUSTOMERS APP > THAN EPP SHOW HIGH LOYALTY TOWARDS THE PRODUCT OR BRAND DUE TO BOTH EMOTIONAL AND RATIONAL AFFINITY. THEY WILL REPEAT PURCHASE. DIS-SATISFIED CUSTOMERS APP IS <THAN EPP CUSTOMER SWITCHES TO ANOTHER PRODUCT OR BRAND
2)
3)
BENEFITS OF CS
A SATISFIED CUSTOMER BUYS AGAIN TALKS FAVOURABLY TO OTHERS. PAYS LESS ATTENTION TO COMPETING BRANDS AND TO THEIR PROMOTION. BUYS OTHER PRODUCTS OF THE SAME COMPANY. MAKES EASY TO INCREASE PRICE BY A REASONABLE MARGIN.
CHAIN OF EVENTS RESULTING FROM CV AND CS

CV FIRST TIME PURCHASE
APP MATCHES / EXCEEDS EPP

BRAND LOYALTY
REPEATS PURCHASE
INCREASE IN SALES AND MS (COMMERCIAL OBJECTIVES) EOS (TOTAL UNIT COST REDUCES) INCREASE IN PROFIT, ROI, DIVIDEND (FINANCIAL OBJECTIVES)
METHODS OF TRACKING CS
TRACK BOTH OWN AND MAJOR COMPETITORS CS LEVEL FOUR METHODS: 1) COMPLAINT AND SUGGESTION SYSTEM - THROUGH A FORM, TOLL-FREE TELEPHONE NUMBER, FAX, E-MAIL ETC., THE COMPANY MOTIVATES CUSTOMERS TO GIVE FEEDBACK (LIKES / DISLIKES), ON USING THE PRODUCT. - OFTEN USED BY RESTAURANTS, HOTELS, AIRLINES, PETROL STATIONS, HOSPITALS ETC - LESS THAN 5% CUSTOMERS COMPLAIN / GIVE SUGGESTIONS. THINK WONT DO ANY GOOD - SWITCH IF NOT SATISFIED. - NOT A GOOD METHOD.
2) CUSTOMER SATISIFACTION SURVEY - PERIODICALLY. - THE COMPANY INTERVIEWS CUSTOMERS IN PERSON, OVER TELEPHONE OR MAILS A QUESTIONNAIRE TO A RANDOM SAMPLE OF TM CUSTOMERS, TO GET FEEDBACK ON THEIR LEVEL OF CS, BOTH ON OWN AND COMPETITORS BRANDS.
3) GHOST OR MYSTERY SHOPPING - A GHOST SHOPPER IS A HIRED CUSTOMER. - SHOPPING BY A GHOST SHOPPER, BOTH OF COMPANYS AND COMPETITORS PRODUCTS. HIS REPORT, CONTAINING FINDINGS, FORMS BASIS OF CS LEVEL. LOST CUSTOMER ANALYSIS AND INTERVIEW WITH EX-CUSTOMERS A) THE COMPANY MONITORS TREND IN CUSTOMER LOSS RATE AND B) INTERVIEWS EX-CUSTOMERS
4)
SERVICE PRODUCT
SERVICE PRODUCT
a) b) c) d) e) f) PRODUCT MIX AND PRODUCT MIX DIMENSIONS QUALITY QUANTITY BRANDING RELIABILITY WARRANTY
THE SERVICE PRODUCT

THE FIRST AND THE MOST IMPORTANT ELEMENT OF THE M-MIX IN SERVICES. NO AMOUNT OF PROMOTION OR PRICE ADVANTAGE WILL BE HELPFUL IF THE S.PRODUCT IS BAD AND DOES NOT CONFORM TO THE CUSTOMERS REQUIREMENTS.
S.PRODUCT MAY BE
a) CONSUMER SERVICE PRODUCT b) BUSINESS SERVICE PRODUCT c) PEOPLE- BASED d) EQUIPMENT-BASED
TO ANALYZE AND PLAN A SERVICE PRODUCT IN DETAILS,IT IS BETTER TO DIVIDE IT INTO 5 LEVELS. EACH LEVEL ADDS BOTH:
a) CUSTOMER VALUE(BENEFITS) AND b) COST
FIVE LEVELS OF A SERVICE PRODUCT

CONSUMER BENEFIT CONCEPT OR CORE PRODUCT LEVEL
CR
DEL
COMP
BRN PRIMARY AND ADDITIONAL BENEFIT(S) SOUGHT

SERVICE CONCEPT OR BASIC EXPECTED PRODUCT LEVEL
XS
CO
QLTY Fs
SERVICE OFFER OR AUGMENTED PRODUCT LEVEL
SERVICE DELIVERY SYSTEM
F. EQUIPMENT
POTENTIAL PRODUCT LEVEL
CONSUMER BENEFIT CONCEPT CORE PRODUCT LEVEL

THIS LEVEL SHOWS PRIMARY AND ADDITIONAL BENEFITS WHICH TM CUSTOMERS WANT. FOR EXAMPLE: A HOTEL GUEST WANTS: 1. REST,COMFORT 2. SLEEP 3. FACILITIES FOR PERSONAL PREPARATION 4. ROOM SERVICE 5. AVAILABILITY OF SNACKS 6. PLEASANT VIEW etc. AS BENEFITS, WHEN HE RENTS A HOTEL ROOM. THUS, BENEFITS SHOULD BE CENTRAL OR THE MAIN FOCUS IN DESIGNING A HOTEL ROOM OR ANY S.PRODUCT. MAIN AND ADDITIONAL REASONS FOR PURCHASE
CONSUMER BENEFIT CONCEPT CORE PRODUCT LEVAL

PRIMARY AND ADDITIONAL BENEFITS MAY CHANGE OVERTIME, THUS, NEED FOR UPDATING A S.PRODUCT PERIODICALLY. BENEFITS MAY BE: A) RATIONAL B) EMOTIONAL
SERVICE CONCEPT BASIC EXPECTED PRODUCT LEVEL

MEANS THE BASIC SERVICE PRODUCT EXPECTED
BY THE CUSTOMER, BASED ON PRIMARY AND ADDITIONAL BENEFITS SOUGHT. IT INCLUDES COMPOSITION/ COMPONENTS, BRAND NAME, COMPANY NAME, FEATURES, QUALITY etc. FOR EXAMPLE REST, SLEEP AND FACILITIES FOR PERSONAL PREPARATION WOULD MEAN A HOTEL ROOM HAVING: - COMFORTABLE BED, BEDSHEETS etc. - SUITABLE FURNITURE - ALMIRAH - BATHROOM WITH NECESSARY FACILITIES - QUIET ENVIRONMENT GIVE CS
SERVICE OFFER THE AUGMENTED PRODUCT LEVAL

THE SERVICE PRODUCT OFFERED BY THE COMPANY OR THE ACTUAL S.PRODUCT WHICH THE CUSTOMER GETS. SERVICE OFFER IS MADE UP OF:
A) SERVICE CONCEPT / THE BASIC EXPECTED PRODUCT PLUS B) EXTRA UNEXPECTED SERVICES OFFERED BY THE COMPANY AND C) SSP
- USED AS CAs/DAs FOR PRODUCT POSITIONING AND FOR
CUSTOMERS DELIGHT. EXAMPLES: A) HOTEL ROOM FREE STAY OF CHILDREN, COMPLIMENTARY BREAKFAST, LATE CHECK-OUT, TV, FRESH FLOWERS, AIR PORT PICK-UP AND DROP, IN HOUSE MOVIES, CREDIT FACILITIES B) FLIGHT MOVIES, MUSIC, DUTY FREE MERCHANDIZE SELLING, AIR TO GROUND TELEPHONE FACILITIES, ANNIVERSARY CELEBRATIONS etc.
TWO ASPECTS OF SERVICE OFFER AUGMENTED PRODUCT LEVEL

1. SERVICE ELEMENTS 2. SERVICE QUALITY AND QUANTITY
ELEMENTS OF SERVICE OFFER AGUMENTED PRODUCT LEVEL

TWO TYPES OF ELEMENTS A) INTANGIBLE ELEMENTS FOR EXAMPLE: IN AIR TRAVEL, THE INTANGIBLE ELEMENTS ARE: PUNCTUAL,FREQUENTS & CONVENIENT FLIGHTS, PRE-FLIGHT SERVICES, IN-FLIGHT SERVICES.
B) TANGIBLE ELEMENTS (IN AIR TRAVEL) COMFORTABLE SEAT, GOOD FOOD / DRINKS, MAGAZINES,NEWS PAPERS, DUTY-FREE MERCHANDIZE etc.
ATTENTION MUST BE PAID TO BOTH TYPES OF ELEMENTS. BOTH MUST BE CONTROLLED. TANGIBLE ELEMENTS ARE EASY TO MANAGE / CONTROL.
ELEMENTS OF SERVICE OFFER AGUMENTED PRODUCT LEVEL

NOT ALL THE ELEMENTS ARE PROVIDED BY THE COMPANY. SOME ELEMENTS ARE PROVIDED BY THE CUSTOMERS THEMSELVES. THESE ARE DIFFICULT TO CONTROL, eg OTHER GUESTS / PASSENGERS BEHAVIOUR IN A RESTAURANT OR ON A FLIGHT.
AFFECT QUALITY OF SERVICE PRODUCT AND REPUTATION OF THE COMPANY.
SERVICE QUALITY AND QUANTITY

IT MEANS QUALITY AND QUANTITY OF BENEFITS AS JUDGED BY THE
CUSTOMER. QUALITY OF SERVICE - DEGREE OR LEVEL OF PRIMARY AND ADDITIONAL BENEFITS OF THE SERVICE OFFER. - PROBLEM TO STANDARDIZE AND MAINTAIN QUALITY IN PEOPLE-BASED SERVICES. QUALITY AFFECTS SIZE OF DEMAND AND PRODUCT POSITIONING. QUANTITY OF SERVICE - AMOUNT OF SERVICE BENEFITS GIVEN, FOR EXAMPLE: AMOUNT OF ATTENTION GIVEN TO A GUEST IN A RESTAURANT.
POTENTIAL PRODUCT LEVEL

MEANS ALL THE POSSIBLE FEATURES/ BENEFITES WHICH CAN BE ADDED IN THE CURRENT PRODUCT, IN FUTURE
THE SERVICE DELIVERY SYSTEM

HOW A S.PRODUCT IS DELIVERED TO THE CUSTOMER? THE SYSTEM USED TO DELIVER THE S.PRODUCT TO THE CUSTOMER. IMPORTANT AND INTEGRAL COMPONENT OF A SERVICE PRODUCT. THE TWO (SP AND SDS) ARE INSEPARABLE. AFFECTS QUALITY AND CS.
THE SERVICE DELIVERY SYSTEM

ELEMENT OF SERVICE DELIVERY SYSTEM
1) 2) COMPANYS OWN STAFF
CUSTOMER CONTACT STAFF CUSTOMER NON-CONTACT STAFF THE CUSTOMER OTHER CUSTOMERS PLACE WHERE SERVICE IS DELIVERED BUILDING, INTERIOR LAY-OUT, DCOR etc
A) PEOPLE INVOLVED
CUSTOMERS (THEIR BEHAVIOUR, APPEARANCE)
B) PHYSICAL EVIDENCE (ENVIRONMENT / SETTING) C) FACILITATING EQUIPMENT D) PROCESS USED
FACTORS WHICH INFLUENCE A SERVICE COMPANAYS PRODUCT LEVELS
1.PRIMARY AND ADDITIONAL BENEFITS SOUGHT BY THE CUSTOMERS 2. COMPOSITION OF INTANGIBLE AND TANGIBLE ELEMENTS OF A SERVICE PRODUCT 3. QUALITY OF SP ELEMENTS 4. QUANTITY OF SP ELEMENTS 5. COST OF S.PRODUCT 6. SERVCE DELIVERY SYSTEM
DIFFICULTIES ARISING IN TRANSLATING SERVICE CONCEPT INTO SERVICE OFFER 1) WHICH EXTRA INTANGIBLE AND TANGIBLE ELEMENTS TO PROVIDE
2) DIFFICULTIES IN CONTROLLING VARIOUS ELEMENTS, PARTICULARLY THOSE PROVIDED BY THE CUSTOMER (S). 3) COST KEEPING RISING WITH EACH EXTRA SERVICE / SSP
DIMENSIONS OF PRODUCT MIX
PRODUCT-MIX AND PRODUCT-LINE

FEW COMPANIES RELY ON A SINGLE PRODUCT, MOST SELL MANY PRODUCTS. PRODUCT-MIX:A COMPANYS ASSORTMENT OF PRODUCTS, NEW AND OLD, OFFERED TO TM CUSTOMERS FOR CS / CD AND TO ACHIEVE COMPANYS OBJECTIVES. PRODUCT-LINE:A GROUP OF CLOSELY RELATED PRODUCTS WHICH HAVE SIMILAR USES / FUNCTIONS, TM CUSTOMERS, PRICES AND WHICH ARE DISTRIBUTED THROUGH THE SAME CHANNEL. EACH PRODUCT-LINE IS USUALLY HANDLED BY A SEPARATE TEAM OF EXECUTIVES (GROUP PM, PMs/BMs)
DIMENSIONS OF PRODUCT-MIX
THREE DIMENSIONS OF PRODUCT-MIX 1) PRODUCT-MIX BREADTH / WIDTH THIS MEANS NUMBER OF PRODUCT - LINES CARRIED BY A COMPANY. TAKES A LONG TIME TO DEVELOP AND ADD A PRODUCT-LINE. MIX EXTENSION. COSTS LOT OF MONEY. RISKY DECISION AT HIGHEST LEVEL.
SERVICE PRODUCT-MIX OF A HOTEL

PRODUCT-MIX WIDTH OR BREADTH
AUTO CURRENCY MEETING GUEST RESTAURENTAL OUT-DOOR SPORTS EXCHANGE ROOMS RANTS ROOMS SERVICES CATERING
PRODUCTLINE LENGTH AND DEPTH
NORMAL PAKISTANI SEMINAR HALL ROOMS CHINESE TRANING ROOMS FOOD SINGLE CONTINENTAL ARRANGEMENTS DOUBLE THAI PERSONNEL EXECUTIVE JAPANESE SINGLE DOUBLE CARS SUITES COACHES e-ROOMS HONEYMOON ROOMS
TENINIS SQUASH SWIMMING INDOOR GAMES GOLF
TCs CNs
2) PRODUCT-LINE LENGTH THIS MEANS NUMBER OF DIFFERENT BRANDS IN A PRODUCT LINE PRODUCT LINE DEPTH VARIANTS OF BRANDS WITHIN A PRODUCT-LINE. BOTH NUMBER 2) AND 3) ARE LINE-EXTENSIONS. TAKE LESS TIME AND INVESTMENT. LESS RISKY. DECISIONS AT MM / GPM LEVEL
3)
A COMPANY CAN EXPAND ITS PRODUCT-MIX AND GROW BY ADDING NEW PRODUCT-LINES OR BY INCREASING PRODUCT-LINE LENGTH OR DEPTH. A COMPANY CAN ALSO PRUNE / CONTRACT ITS PRODUCT-MIX BY ELEMINATING A PRODUCT-LINE OR A PRODUCT / BRAND / VARIANT
FACTORS TO CONSIDER WHEN EXPANDING THE PRODUCT-MIX

1) 2) SIZE AND GROWTH RATE OF SEGMENT / MARKET MATCH WITH COMPANYS
OBJECTIVES RESOURCES MANAGEMENT KNOW-HOW
3) 4)
5) 6) 7)
WILL THE NSP COMPLEMENT THE EXISTING S.PRODUCTS WILL IT GIVE OPTIMUM PRODUCT-MIX RANGE. WIDTH, LENGTH AND DEPTH. LITMUS TEST : INCRESE IN PROFITABILITY WILL IT HAVE DISTINCT POSITIONING LESS PRICE SENSITIVITY, BARGAINING POWER LESS AVAILABILITY OF SUBSTITUTES
FACTORS TO CONSIDER WHEN PRUNING THE PRODUCT-MIX

GIVE NO IMPORTANCE TO SENTIMENTS.
1) 2) 3) 4) CAN WE REVITALIZE IT CAN WE SELL IT ABROAD WILL IT IMPROVE PROFITABILITY RESOURCES SAVED CAN BE ALLOCATED TO MORE SUCCESSFUL PRODUCTS 5) NO DISRUPTIVE EFFECT ON OVERALL OPERATION
NEW SERVICE PRODUCT
A NEW SERVICE PRODUCT

SEVERAL WAYS TO DEFINE A NSP
1) 2) ME-TOO PRODUCT NEW TO THE COMPANY BUT ALREADY AVAILABLE FROM ANOTHER COMPANY. ADAPATED PRODUCT ALREADY AVAILABLE BUT ADAPTED FOR A NEW MARKET SEGMENT. EG: TELEPHONE BOOTHS INNOVATION NSPs SHOWING SUBSTANTIAL IMPROVEMENT OVER THE EXISTING SP TO BETTER SATISFY NEEDS. EG: MOBILE TELECOMMUNICATION INVENTION A TOTALLY NEW SERVICE PRODUCT, NOT PREVIOUSLY AVAILABLE AND WHICH MEETS AN UNSATISFIED NEED. CREATES A NEW PRODUCT CLASS EG: SATELLITE TV COMMUNICATION. AN EXISTING SERVICE BUT DELIVERED THROUGH A NEW SDS. EG: BANKING SERVICES THROUGH ATMs.
3)
4)
5)
SOURCES OF NEW SERVICE PRODUCTS

ACQUISITION THROUGH NEW PRODUCT DEPELOPMENT PROCESS
WHY SERVICES COMPANIES NEED TO DEVELOP NEW SERVICE PRODUCTS

1) 2) CANNOT CONTINUE TO RELY ON EXISTING S. PRODUCTS FOR SUCCESS. TO INCREASE SALES, MS, PROFIT AND THE NEED TO REMAIN COMPETITIVE BY MEETING CHANGING REQUIREMENTS OF CUSTOMERS. TO REPLACE OUTDATED S. PRODUCTS. TO UTILIZE UNUSED CAPACITY / FACILITIES EXAMPLES:
UNUSED SPACE / FACILITIES IN A SPORTS CENTRE.
3) 4)
WHY SERVICES COMPANIES NEED TO DEVELOP NEW SERVICE PRODUCTS

5) TO SMOOTH-OUT SEASONAL DEMAND EXAMPLES:
MARRIAGE HALLS FOR MEETINGS / EXAMINATION CENTRE DURING OFF-SEASON.
6)
7)
8)
TO REDUCE DEPENDENCY ON TOO-FEW PRODUCTS BANKS HAVE MANY SERVICE PRODUCTS TO EXPLOIT OPPORTUNITIES WHEN A COMPETITOR MAY DROP-OUT OR NEW NEEDS OF CUSTOMERS MAY COMEUP. TO MAINTAIN REPUTATION OF BEING LEADERS IN R AND D
WHY LACK OF NSPs IN SERVICE COMPANIES

MOST SERVICES COMPANIES, EXCEPT BIA DO NOT HAVE A PRODUCT DEVELOPMENT DEPARTMENT. REASONS:
MANY SERVICES COMPANIES ARE IN THE PUBLIC SECTOR, WITH LITTLE COMPETITION / MONOPLY. LACK OF MOTIVATION TO INNOVATE. LACK OF RESOURCES FINANCIAL, MNGT. etc. MOSTLY SMALL COMPANIES. CANNOT BE PATENTED LESS INCENTIVE TO DEVELOP A NSP. FOCUS ON ME-TOO PRODUCTS . CONCEPT TESTING IS DIFFICULT HOME-USE TESTS ARE ALSO DIFFICULT HIGH COST OF NEW SERVICE PRODUCT DEVELOPMENT HIGH FAILURE RATE OF NSPs
FAILURE OF NEW SERVICE PRODUCTS

70-80% FAILURE RATE
1) 2) 3) 4) 5) 6) 7) THE BASIC SERVICE PRODUCT EXPECTED BY THE CUSTOMER, IS NOT WELL DESIGNED. NOT BASED ON THE BENEFITS SOUGHT BY THE TM CUSTOMERS. LACK OF COMPANY-CLIENT INTERFACE DURING THE DEVELOPMENT PROCESS OF A NSP. WRONG CRITERIA USED IN MARKET SEGMENTATION AND PRODUCT POSITIONING. THESE ARE NOT CUSTOMER WANTED CRITERIA. GOOD NSP BUT MARKET POTENTIAL HAS BEEN OVERESTIMATED. FAULTY PRICING, PROMOTION, DISTRIBUTION OR SDS INACCURATE / UNHEALTHY SPREAD OF IMAGE OF A NSP BY CUSTOMERS COMPETTITORS FIGHT HARDER THAN EXPECTED
REASONS.
STAGES IN NEW SERVICE PRODUCT DEVELOPMENT PROCESS

1. IDEAS GENERATION STARTING POINT, CREATE AS MANY NEW IDEAS AS POSSIBLE IDEAS MAY COME EITHER FROM INSIDE OR OUTSIDE THE COMPANY, VIA :a) b) c) d) BRAINSTORMING SESSION SUGGESTION BOX MARKETING RESEARCH FOCUS GROUP, INDIVIDUAL INTERVIEWS VISIT TO OTHER COUNTRIES.
MOST IDEAS USUALLY COME FROM CUSTOMERS.

2. IDEAS SCREENING BY A MANAGEMENT TEAM SEPARATE WORKABLE IDEAS FROM NON-WORKABLE IDEAS BY A MANAGEMENT TEAM, ON THE FOLLOWING CRITERIA, TO JUSTIFY USE OF RESOURCES
ADDITIONAL MANPOWER, SPACE, MACHINES REQUIRED. COMMERCIAL ASPECTS. DEVELOPMENT TIME. SURVIVED IDEA(S).

3. CONCEPT DEVELOPMENT AND CONCEPT TESTING.
a) CONCEPT DEVELOPMENT
DEVELOP A MEANINGFUL VERBAL AND PICTORIAL DESCRIPTION OF THE SURVIVED BUSINESS PROPOSAL TEST THE PRODUCT CONCEPT WITH A SUITABLE NUMBER OF TM CUSTOMERS, USING VERBAL AND PICTORIAL DESCRIPTION, TO JUDGE THEIR UNDERSTANDING AND LIKING / DISLIKING.
b)
CONCEPT TESTING
NEW SERVICE PRODUCT CONCEPT TESTING

USUALLY, CONCEPT TESTING IS IGNORED IN SERVICES. PROBLEMS IN CONCEPT TESTING :
1) 2) CONCEPT TESTING IS DIFFICULT OF A SERVICE PRODUCT BECAUSE DESCRIBING SOMETHING WHICH IS MOSTLY INTANGIBLE, IS VERY DIFFICULT. RESULTS VARY TOO-MUCH, WHICH DEPEND ON :
SERVICE PROVIDER PHYSICAL ENVIRONMENT THE CUSTOMER
3)
HOME-USE TESTS ARE NOT POSSIBLE. OPPORTUNITY TO EVALUATE A S. PRODUCT BEFORE ITS CREATION AND INTRODUCTION. OPPORTUNITY TO GET INPUT ON THE SPECIFICATIONS (INTANGIBLE AND TANGIBLE ELEMENTS) OF A NEW S. PRODUCT, FROM THE USERS.
BENEFITS OF CONCEPT TESTING :

1)
2)

4. DETAILED BUSINESS ANALYSIS OF THE PRODUCT BASED ON THE SELECTED IDEA
a) b) c) ESTIMATED SALES, COSTS AND PROFIT FOR THREE CONSECUTIVE YEARS PROBABILITY OF SUCCESS OR FAILURE OF NSP. POSSIBILE RESPONSE / REACTION OF COMPETITORS.

5. DEVELOPMENT OF THE NEW S. PRODUCT FOR TRIAL
TRANSLATE THE NSP IDEA / PROPOSAL, AS PASSED BY THE TM CUSTOMERS, INTO THE NEW SERVICE PRODUCT THIS MEANS :i. ii. iii. iv. INVESTMENT HIRING AND TRAINING OF STAFF CONSTRUCTION OF OPERATIONAL FACILITY DESIGNING SDS.

6. 7. 8. MANAGEMENTS FINAL DECISION GO / NO GO TEST MARKETING COMMERCIALIZATION OF NSP
a) b) c) WHEN WHERE HOW
STAGE 1,2,3 AND 4 DO NOT INVOLVE MUCH COSTS. MANY S. PRODUCTS FAIL AT THESE STAGES. OTHER STAGES INVOLVE LOT OF COSTS.
DIFFICULTIES FACED IN INNOVATING SERVICE PRODUCTS

RESEARCH AND DEVELOPMENT IS NOT WELL DEVELOPED IN SERVICES COMPANIES AS COMPARED TO IN MANUFACTURING COMPANIES. REASONS:
1) DEVELOPING THE DESIRED SPECIFCATIONS OF A NEW S. PRODUCT IS DIFFICULT, PARTICULARLY OF PEOPLEBASED SERVICES. 2) TESTING OF NEW SERVICES IS DIFFICULT. 3) GREAT RISK OF BEING QUICULY COPIED. CANNOT BE PATENTED. EXAMPLES
a) AIRLINES (FILMS, DUTY FREE ITEMS) b) BANKS (VARIOUS KINDS OF ACCOUNTS)
4) LACK OF NEW IDEAS IN SERVICE INNOVATION
QUALITY IN SERVICES COMPANIES
QUALITY IN SERVICES COMAPANIES

TWO TYPES OF QUALITY
1) QUALITY OF THE SERVICE PRODUCT 2) QUALITY OF THE SERVICE DELIVERY SYSTEM, PARTICULARLY THE APPEARANCE AND BEHAVIOUR OF CUSTOMER CONTACT STAFF, QUALITY OF CUSTOMERS AND QUALITY OF PHYSICAL ENVIRONMENT.
SIGNS OF QUALITY SERVICE

1) PEOPLE A.OWN
CUSTOMERS CONTACT STAFF CUSTOMERS NON-CONTACT STAFF
B.CUSTOMERS
THE CUSTOMER OTHER CUSTOMERS
2) 3) 4) 5)
PHYSICAL ENVIRONMENT AND EVIDENCE FACILITATING EQUIPMENT PROCESSES PRICE
SERVICE QUALITY MODEL

FIVE GAPS THAT CAUSE QUALITY PROBLEMS AND, THUS, THESE MUST BE CLOSED.
1) GAP BETWEEN CONSUMER EXPECTATIONS AND MANAGEMENTS UNDERSTANDING 2) GAP BETWEEN MANAGEMENTS UNDERSTANDING AND SERVICE-QUALITY STANDARDS. 3) GAP BETWEEN SERVICE-QUALITY STANDARDS AND THE ACTUAL SERVICE DELIVERY 4) GAP BETWEEN THE ACTUAL SERVICES DELIVERY AND THE PROMOTIONAL CLAIMS 5) GAP BETWEEN THE ACTUAL SERVICE AND THE EXPECTED SERVICE
SERVICE QUALITY MODEL

EXPECTED SERVICE
5 ACTUAL SERVICE DELIVERED 1 3 MANAGEMENTS SERVICE QUALITY STANDARDS
PROMOTIONAL CLAIMS 4
2
MANAGEMENTS UNDERSTANDING OF CONSUMERS EXPECTIONS
HOW TO MAINTAIN QUALITY IN A SERVICE BUSINESS

1)
2)
BE CUSTOMER FOCUSED. KNOW TM CUSTOMERS AND THEIR NEEDS TOP MANAGEMENTS COMMITMENT TO QUALITY THEY MUST ACT AS A ROLE MODEL OF QUALITY MANAGEMENT CAN SHOW ITS COMMITMENT TO QUALITY BY:
a) b) c) BY SETTING OBJECTIVES AND INCENTIVES BASED ON QUALITY JOB DONE AND NOT ON QUANTITY JOB PROMOTE QUALITY ORIENTED PEOPLE IN ALL DEPARTMENTS PROVIDE TQM TRAINING TO EVERYBODY
3)
SET HIGH QUALITY STANDARDS EG:

i. ii. iii. SWISSAIR- 96% CS CITIBANK PHONE CALL ANSWERED WITHIN 10 SECONDS CUSTOMERS LETTER ANSWERED WITHIN TWO DAYS
HOW TO MAINTAIN QUALITY IN A SERVICE BUSINESS

4) HAVE A SYSTEM FOR MONITORING SERVICE PERFORMANCE
i. ii. OWN MAJOR COMPETITORS VIA GHOST SHOPPING, CUSTOMER SURVEYS, SUGGESTIONS AND COMPLAINT FORM / TOLL FREE TELEPHONE NUMBER
5) 6) 7)
HAVE A SYSTEM TO RESOLVE COMPLAINTS QUICKLY SATISFY BOTH EMPLOYEES AND CUSTOMERS STATE IN EVERYBODYS JOB DESCRIPTION HOW HIS JOB AFFECTS CUSTOMER SATISFACTION
HOW TO DEFEND MARKET POSITION?
HOW TO DEFEND MARKET POSITION

CREATE DIFFERENTIATION TO DEFEND WHAT IS DIFFERENTIATION ? DESIGNING AND BUILDING MEANINGFUL, BELIEVABLE, AFFORDABLE AND SUSTAINABLE DIFFERENCES IN THE M-MIX ELEMENTS, APPLICABLE TO MOST CUSTOMERS, FOR COMPETITIVE ADVANTAGE,POSITIONING AND FOR CUSTOMER SATISFACTION

EIGHT WAYS TO CREATE DIFFERENTIATION :
1) OFFER EXTRA SERVICES AND SSPs. EXTRA SERVICES / SSPs CAN BE EASILY COPIED. 2) HAVE BETTER SERVICE DELIVERY SYSTEM BETTER TRAINED, MOTIVATED AND MORE EXPERIENCED PEOPLE, P. ENVIRONMENT/ EVIDENCE, FACILITATING EQUIPMENT AND PROCESSES. MAKE PROCESSES AUTOMATED / MECHANIZED FOR UNIFORMITY IN QUALITY 3) EXTENSIVELY USE A SYMBOL OR A LOGO OR A BRAND NAME TO FIX THE IMAGE OF THE COMPANY. EG HOTELS.

4) MAKE EASY FOR THE CUSTOMER TO ORDER / GET THE SERVICE. 5) OFFER SERVICE WARRANTY 6) ADD FEATURES 7) PERSONAL INVOLVEMENT BY HIGHER MANAGEMENT. FREQUENT FOLLOW-UP CONTACTS BY CUSTOMER CONTACT STAFF 8) ON-TIME COMPLETION OF WORK
MANAGING PRODUCTIVTIY IN SERVICES
MANAGING PRODUCTIVITY IN SERVICES

VARIOUS COSTS ARE GOING-UP AND AN INCREASE IN PRICE IS LIMITED BY COMPETITION AND GOVT. REGULATIONS. THUS, NEED FOR PRODUCTIVITY TO KEEP THE COSTS DOWN. FOUR METHODS TO IMPROVE PRODUCTIVITY
1) HIRE AND DEVELOP MORE SKILLFUL WORKERS. 2) S. PROVIDER TO WORK WITH A BIG GROUP EXAMPLES: A DOCTOR HANDLING MORE PATIENTS, EACH GETTING LESS TIME. QUALITY MAY SUFFER TO SOME EXTENT.
MANAGING PRODUCTIVITY IN SERVICES

3) USE AUTOMATED EQUIPMENT AND STANDARDIZED PROCESSES. EXAMPLE: SOUTH - WEST AIRLINE USES AUTOMATED EQUIPMENT FOR TICKET PURCHASING AND BOARDING PASSES. INTRODUCE SELF-SERVICE TO REPLACE SERVICE FROM THE COs STAFF. EXAMPLE: KFC-SALAD BAR
4)
BRANDING, WARRANTY AND AFTER SALE SERVICES
BRANDING
SERVICE PRODUCT BRANDING BRANDING MEANS GIVING A NAME, SYMBOL AND A NUMBER TO A PRODUCT IN ORDER TO DIFFERENTIATE ONE PRODUCT FROM ANOTHER. IN THE PAST, BRANDING WAS MAINLY USED IN CONSUMER GOODS. TODAY IT IS ALSO BECOMING POPULAR IN SERVICES. BRAND, BRAND NAME ,TRADEMARK EXAMPLEX MOAVAN ACCOUNT (FAYSAL BANK) IZAFA TERM CERTIFICATES (FAISAL BANK) INDIGO (MOBILINK) DJUICE (TELE NOR) JAZZ (MOBILINK) SMART (TELENOR) BAHBOOD SAVING CERTIFICATES (NATIONAL SAVINGS)
SERVICE PRODUCT WARRANTY

AN UNDERTAKING BY A SELLER THAT THE SERVICE SOLD IS FIT FOR USE OR WILL PERFORM AS SPECIFIED. IMPORTANT IN CERTAIN SERVICES. FOR EXAMPLE
MUTUAL FUNDS TERMS CERTIFICATAES ISSUED BY BANKS GOVERNMENT SECURITIES
BUILDS CONFIDENCE IN THE SP / CO.
AFTER SALE SERVICES

GIVING SOME EXTRA SERVICE AFTER HAVING USED THE MAIN SERVICE. POPULAR IN SOME SERVICES FOR EXAMPLE,
AIRLINES HELPING PASSENGERS IN HIRING TRANSPORT / BOOKING HOTEL ACCOMMODATION.
PRICE
MARKETING-MIX IN SERVICES
PRICE DEFINING PRICE IMPORTANTACE OF PRICE FOR THE COMPANY AND THE CUSTOMER PRICING OBJECTIVES FACTORS WHICH AFFECT PRICE DETERMINATION PRICING METHODS PRICING STRATEGIES PRICE LEVELS DISCOUNTS PAYMENT MODES AND TERMS (MOP, TOP)
PRICING
DEFINITION:A) AMOUNT OF MONEY NEEDED BY A CUSTOMER TO OBTAIN A PRODUCT. IT GENERALLY INCLUDES THE PRICE OF PSS OR SSP OFFERED BY THE COMPANY. B) WORTH OR VALUE OF BENEFITS OF A PRODUCT IN THE MIND A CUSTOMER, MEASURED IN SOME MONETARY UNITS.
PRICE UNDER VARIOUS NAMES IN SERVICES MARKETING

TUITION FEE INTEREST RATE RENT FARE FEE PREMIUM SALARY WAGE BRIBE INCOME TAX TOLL TAX HONORARIUM
CHARACTERITCS OF PRICE
1) AN ELEMENT OF M-MIX. IT MUST BE CUSOMTER-ORIENTED
2)
3)
UNLIKE OTHER Ps OF M-MIX, PRICE GENERATES REVENUE, OTHER ELEMENTS INCUR COSTS.
UNLIKE OTHER Ps OF M-MIX, PRICE CAN BE CHANGED QUICKLY. IT IS THE MOST FLEXIBLE ELEMENT OF M-MIX SETTING PRICE AND FIGHTING PRICE COMPETITION IS NUMBER ONE PROBLEM FACING THE MARKETING EXECUTIVES.
4)
PRICING OBJECTIVES
1. 2. 3. 4. 5. MAXIMIZATION OF CURRENT PROFIT HIGH CURRENT SALES VOLUME AND MS TO REFLECT PRODUCT QUALITY LEADERSHIP TO BE ENSURE SURVIVAL OF THE COMPANY. SHORT TERM OBJECTIVE. TO MAINTAIN STATUS QUO OF THE CURRENT PRICE LEVEL IN THE MARKET AND TO AVOID A PRICE WAR MANAGEMENT MUST DECIDE PRICING OBJECTIVES BEFORE SETTING THE PRICE
THE CLEARER A FIRM IS ABOUT ITS PRICING OBJECTIVES, THE EASIER IT IS TO SET THE PRICE.
FACTORS WHICH INFLUENCE PRICE DETERMINATION

A) INTERNAL FACTORS:1. 2. 3. 4. 5. PRICING OBJECTIVES. PRODUCT POSITIONING AND M-MIX STRATEGIES. PLC PRODUCTION CAPACITY TOTAL PRODUCT COST. A COMPANY SHOULD TRY TO BE A LOW-COST PRODUCER IT SETS THE FLOOR PRICE OF THE PRODUCT.

AT A CERTAIN LEVEL OF PRODUCTION, THE TOTAL COST OF A PRODUCT IS MADE-UP OF: 1. VARIBLE PRODUCT COSTS (VPC) THEIR TOTAL VARIES WITH THE QUANTITY PRODUCED OR SOLD. EG: CONSUMABLES, RMs, PMs ETC. 2. FIXED COSTS OR OVERHEADS (FC) THEIR TOTAL DOES NOT VARY WITH LEVEL OF PRODUCTION OR SALES. EG: SALARIES OF EXECUTIVES, RENT, DEPRECIATION ETC. TOTAL COST IS THE SUM TOTAL OF FIXED AND VARIABLE COSTS FOR A CERTAIN LEVEL OF PRODUCTION.

B) EXTERNAL FACTORS:1) CUSTOMERS PERCEIVED VALUE (CPV). IT SETS THE CEILING PRICE OF A PRODUCT CPV INDICATES:A) PRODUCTS WORTH OR VALUE IN THE MIND OF TM CUSTOMERS. B) PAYING CAPACITY OF TM CUSTOMERS. CPV IS DETERMINED VIA MARKET RESEARCH ON A REPRESENTATIVE SAMPLE OF TMCs,
EFFECTS OF CUSTOMER PERCEIVED VALUE (CPV):

1) PRODUCT PRICE > CPV 2) PRODUCT PRICE < CPV 2) PRODUCT PRICE = CPV CUSTOMER DOES NOT BUY CUSTOMER BUYS BUYS OR BARGAINS.

2) 3) 4) 5) ESTIMATED VOLUME DEMAND AT DIFFERENT PRICES. ELASTIC OR INELASTIC DEMAND. MAJOR COMPETITORS PRICES AND THEIR EXPECTED REACTION. STAGE IN THE ECONOMY CYCLE AND THE PREVAILING ECONOMIC CONDITIONS (INFLATION, INTEREST RATE, EXCHANGE RATE) POSSIBILITY TO CHANGE THE PRICE IN FUTURE. POSSIBILITY OF GOVT. INTERVENTION. FAIR PROFIT TO RESELLERS TO GAIN THEIR SUPPORT.
6) 7) 8)
MAJOR METHODS OF SETTING PRCIE

1) 2) 3) 4) 5) 6) COST-PLUS, MARK-UP OR COST-BASED PRICING METHOD. BREAK-EVEN ANALYSIS OR TARGET RETURN PRICING METHOD. COMPETITION-BASED PRICING METHOD OR GOING RATE PRICING METHOD. CUSTOMER PERCEIVED VALUE PRICING METHOD. VALUE PRICING METHOD SEALED-BID PRICING METHOD.
MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCT

1. COST - PLUS OR MARK-UP PRICING METHOD
ADDING A CERTAIN MARK-UP TO THE TOTAL COST OF PRODUCING , MARKETING AND DELIVRING A SERVICE PRODUCT TO CUSTOMERS. IT HAS THREE STEPS
1) CALCULATE TOTAL VARIABLE AND FIXED COST PER UNIT 2) DECIED MARK-UP AND 3) ADD MARK-UP TO THE TOTAL UNIT COST, USING THE FOLLOWING FORMULA
PRICE = TOTAL UNIT COST 1.0 - % MARK-UP

COST- PLUS PRICING METHOD IS FURTHUR DIVIDED INTO:
a) PROFIT-ORIENTED COST-PLUS PRICING b) GOVERNMENT CONTROLLED COST-PLUS PRICING

2. MARKET- BASED OR COMPETITION-BASED PRICING MEATHOD FIXING THE PRICE OF A SERVICE KEEPING IN MIND THE PRICE OF STRATEGIC COMPETITORS POPULAR, WHY? SIMPLE, COLLECTIVE WISDOM

SERVICE PROVIDERS PRICE MAY BE:
a) SAME AS THAT OF MAJOR COMPETITORS. NO PRODUCT DIFFERENCES. COST NOT CONSIDERED. b) BELOW THAT OF MAJOR COMPETITORS. TWO DRAWBACKS:
PRICE WAR SERVICE USER PERCEIVES LOW QUALITY OF SP.
c) ABOVE THAT OF MAJOR COMPETITORS

DISTINCT BENEFITS, DISTINCT OR EXTRA SERVICES AND SSPs S.PROVIDER HAS HIGH IMAGE/ PRESTIGE/ SDS

3) CUSTOMER PERCEIVED VALUE PRICING METHOD
SET PRICE CLOSE TO THE WORTH OF SP AS PERCEIVED BY TM CUSTOMERS. FIND VIA MR. COST IS CONSIDERED.
IT HAS FOUR STEPS :

FIND TOTAL PER UNIT COST FIND OUT CPV VIA MARKETING RESEARCH KNOW STRATEGIC COMPETITORS PRICE FIX PRICE OF THE SERVICE PRODUCT CLOSE TO THE CPV, KEEPING THE MIND THE PRICE OF STRATEGIC COMPETITORS.
PRICING STRATEGIES
1. DIFFERENTIAL / FLEXIBLE DISCRIMINATORY PRICING STRATEGY
TWO OR MORE PRICES OF THE SAME SERVICE TO ACCOMMODATE DIFFRENCES IN CUSTOMERS, LOCATIONS AND TIMINGS, etc
PRICING STRATEGIES
THREE SUCH PRICING STRATEGIES, EACH FOR A DIFFERENT PURPOSE.
a) CUSTOMER- SEGMENT FLEXBLE PRICING STRATEGY b) LOCTION FLEXIBLE PRICING STRATEGY c) TIME FLEXIBLE PRICING STRATEGY
MAJOR DISADVANTAGE: CUSTOMERS GET HABITUAL, DELAY PURCHASES
PRICING STRATEGIES
2. DISCRETE PRICING STRATEGY
QUOTING A PRICE WITHIN THE FINANCIAL AUTHORITY OF A DECISION MAKER WHO HAS SYMPATHTIC ATTITUDE TOWARDS A SERVICE PROVIDER.
3. DIVERSIONARY PRICING STRATEGY

OFFERING A LOW PRICE OF ONE OF THE MANY SERVICE PRODUCTS IN ORDER TO DEVELOP AN IMAGE OF A LOW PRICE COMPANY AND TO INCREASE CUSTOMERS TRAFFIC.
4. GUARANTEED PRICING STRATEGY

PAYMENT IS MADE BY A CUSTOMER ONLY IF CERTAIN RESULTS ARE GUARANTEED OR DELIVERED BY THE SERVICE PROVIDER
PRICING STRATEGIES
5. FIRST LOSS-ORDER PRICING STRATEGY
REDUCING PRICE FOR THE FIRST ORDER WITH THE HOPE OF GETTING FUTURE BUSINESS AT A BETTER PRICE
6. OFFEST PRICING STRATEGY

THE PRICE OF THE BASIC SP IS LOW BUT EXTRA SERVICES OR SSP CARRY HIGHER CHARGES
7. BUNDLE PRICING STRATEGY

OFFRING ONE PRICE OF A BUNDLE OF SERVICES WHICH IS LOWER THAN THE SUM TOTAL OF INDIVIDUAL PRICES
8. TWO-PARTS PRICING STRATEGY

a) FIXED PART b) VARIABL PART
PRICE VS NON-PRICE COMPETITION

(A) PRICE COMPETITION PRICE IS THE PRIMARY BASIS FOR FIGHTING COMPETITION. IT IS USED WHEN PRODUCTS ARE SIMILAR. PRICE IS SET AS LOW AS POSSIBLE TO GAIN VOLUME SALES AND MS. MINIMUM PSS ARE OFFERED. POSSIBILITY OF PRICE WAR. MOST COMPANIES WANT TO AVOID IT AND, INSTEAD, PROMOTE THEIR PRODUCT ON THE BASIS OF BETTER AVAILABILITY AND SPTs. CONSUMERS BENEFIT ON SHORT TERM BASIS. THEY BUY AS LONG AS A BRANDS PRICE IS LOWEST.
PRICE VS NON-PRICE COMPETITION

(B) NON-PRICE COMPETITION PRICE IS NOT THE PRIMARY BASIS OF FIGHTING COMPETITION. THE SELLER HAS A GOOD PRICE AND INCREASES VOLUME SALES AND MS BY EMPHASIZING ON THE OTHER Ps OF M-MIX
ADDITIONAL CLASSFIFCATION BASIS OF SERVICES FOR PRICING PURPOSE

BASIS: WHO REGULATES / CONTROLS THEIR PRICE THREE CATEGORIES OF SERVICES FOR PRICING PURPOSE:
1) SERVICES SUBJECT TO GOVERNMENT PRICE CONTROL 2) SERVICES SUBJECT TO FORMAL PRICE REGULATION BY TRADE BODIES 3) SERVICES SUBJECT TO PRICE REGULATED BY MARKET FORCES
DISCOUNTS
DISCOUNTS
PERCENTAGE REDUCTION IN THE LIST PRICE OF A PRODUCT. TYPES OF DISCOUNTS. 1. TRADE DISCOUNT: FOR PERFORMING CERTAIN DISTRIBUTION FUNCTIONS. 2. CASH DISCOUNT:FOR PAYING BILL WITHIN A SPECIFIED PERIOD. E.G 2 \ 10 , NET / 30.
DISCOUNTS
3. QUANTITY DISCOUNTS TO ENCOURAGE CUSTOMERS TO BUY LARGE QUANTITIES / AMOUNT. CAN BE ON:(a). NONCUMULATIVE BASIS DISCOUNT BASED ON THE SIZE OF EACH INDIVIDUAL ORDER. ENCOURAGES LARGE ORDERS. (b) CUMULATIVE BASIS DISCOUNT BASED ON TOTAL VALUE OR VOLUME PURCHASED IN A CERTAIN PERIOD. CUSTOMER IS TIED UP WITH THE SELLER. E.G FFPs, FGPs
DISCOUNTS
4. SEASONAL DISCOUNT: SLACK / OFF-SEASON TO EVEN-OUT DEMAND AND SUPPLY, TO AVOID INVENTORY COST. 5. PROMOTIONAL ALLOWANCE FOR PROMOTIONAL SERVICES PERFORMED BY THE MM. EG: DISPLAYS, RETAILERS AD SHOWING SELLERS PRODUCT.
PLACE
PLACE LOCATION. ACCESSIBILITY VIA PHYSICAL AND COMMUNICATION MEANS DISTRIBUTION CHANNELS DISTRIBUTION COVERAGE
PLACE DISTRIBUTION
TWO ASPECTS/ DECISIONS A. LOCATION OF SERVICES PROVIDER SINGLE OR MILTI-SITE LOCATIONS FACTORS TO BE CONSIDERED IN LOCATION
1) DOES THE CUSTOMER GO TO THE SERVICE PROVIDER OR DOES THE SERVICE PROVIDER GO TO THE CUSTOMER 2) ACCESSABLE VIA PHYSICAL AND COMMUNICATION MEANS
PLACE DISTRIBUTION
B. DISTRIBUTION CHANNEL STRUCTURE AND EXTENT OF COVERAGE.
1. DIRECT DISTRIBUTION CHANNAL IS USED MOST OFTEN 2. INDIRECT DISTRIBUTION CHANNEL. USED LESS 3. EXTENSIVE, SELECTIVE OR EXCLUSIVE DISTRIBUTION COVERAGE
PROMOTION
MARKETING-MIX
PRODUCT
PRICE
PLACE
PROMOTION
PERSONAL SELLING
ADVERTISING
SALES PROMOTION TOOLS
PUBLIC RELATIONS
PUBLICITY
MARKETING TOOLS FOR CS.4,5 OR 7 INTEGRATED / COORDINATED FOR IMC
PROMOTION TO INFORM, CONVINCE OR REMIND
STRESS ON AVAILABILITY, CONSISTENT SERVICE QUALITY, PEOPLE, AND PHYSICAL ENVIRONMENT / EVIDENCE AND LOCATION
PROMOTIONAL-MIX:
1) 2) 3) 4) 5) PERSONAL SELLING ADVERTISING SALES PROMOTION TECHNIQUES P. RELATIONS AND PUBLICITY MAILING
PROMOTION DEFINITION
PURPOSE TO COMMUNICATE WITH (TO INFORM, PURSUADE OR REMIND) AND TO INFLUENCE TM CUSTOMERS TO USE COMPANY`S PRODUCT(S).
DEFINITION PROMOTION IS TO INFORM, PERSUADE OR REMIND TARGET MARKET CUSTOMERS OF A PRODUCT OR A COMPANY, THROUGH VARIOUS METHODS OF PROMOTION, IN ORDER TO ACHIEVE MARKETING OBJECTIVES.
PROMOTIONAL METHODS
FIVE MTHODS, EACH WITH DIFFERENT FEATURES AND SUITABLE IN DIFFERENT PROMOTIONAL SITUATIONS.
1) 2) 3) 4) 5) PERSONAL SELLING (PS)* ADVERTISING (AD)* SALES PROMOTION TOOLS OR TECHNIQUES (SPTs) PUBLIC RELATIONS (PR) PUBLICITY (PB)
*PRIMARY METHOD .
IMC
METHODS MUST BE COORDINATED FOR GREATEST IMPACT
a) b) SEQUENSE SAME MESSAGE
PROMOTIONAL METHODS
1)
PERSONAL SELLING
DIRECT PRESENTATION OF A PRODUCT TO A CUSTOMER OR A GROUP OF CUSTOMERS, THROUGH A REPRESENTATIVE, EITHER IN A FACE TO FACE SITUATION OR OVER PHONE (TELEMARKETING) DIRECTED AT INFLUENCERS, END-CUSTOMERS OR ON MIDDLEMEN. MAJOR PROMOTIONAL METHOD FOR COMPLEX PRODUCTS, BUYER IS A PROFESSIONAL.
WORD OF MOUTH COMMUNICATION
PERSUADE SATISFIED CUSTOMERS TO TALK TO OTHER CUSTOMERS

ENCOURAGE POTENTIAL CUSTOMERS TO TALK TO SATISFIED CUSTOMERS
PROMOTIONAL METHODS
2) ADVERTISING:
NON-PERSONAL, MASS PROMOTION OF A PRODUCT OR A

COMPANY, THROUGH FIVE ADVERTISING MEDIA. PAID PRINT, BROADCAST & FILM, ELECTRONIC, DISPLAY AND TRANSIT MEDIA MAJOR PROMOTIONAL METHOD FOR SIMPLE PRODUCTS
PROMOTIONAL METHODS
3) SALES PROMOTION TOOLS OR TECHNIQUES
TEMPORARY AND SHORT TERM INCENTIVES, GIVEN TO SALES REPRESENTATIVES, INFLUENCERS, MIDDLEMEN OR TO CONSUMERS, IN ORDER TO ENCOURAGE QUICKER AND BIGGER SALE OR PURCHASE OF A PRODUCT, DURING A SPECIFIED PERIOD. COMPARE SALE BEFORE, DURING AND AFTER A SALES PROMOTION TOOL HAS BEEN USED, TO JUDGE EFFECETIVENESS OF SPTs
SUPPORTIVE PROMOTIONAL METHOD TO PERSONAL SELLING OR ADVERTISING.
PROMOTIONAL METHODS
THREE KINDS OF SALES PROMOTION TOOLS:
a) SALES FORCE INCENTIVES
b) TRADE INCENTIVES
c) CONSUMER INCENTIVES
CHARACTERISTICS OF SALES PROMOTION TOOLS

1)
2) 3)
YIELD FAST RESULTS

WORK BEST WITH A SUPERIOR PRODUCT. BECOMING VERY POPULAR. WHY?
a) b) c) CUSTOMERS AND MM ARE BECOMING INCENTIVE / DEAL ORIENTED COMPETITORS PRESSURE MANAGEMENTS PRESSURE ON PM & SALES EXECUTIVES
PROMOTIONAL METHODS
4) PUBLIC RELATIONS
A VARIETY OF COMMUNICATION EFFORTS, MADE BY A COMPANY, TO CREATE A FAVOURABLE ATTITUDE / OPINION OF VARIOUS PUBLICS * TOWARDS THE COMPANY OR ITS PRODUCTS SO THAT SELLING BECOMES EASY. BUILDS RELATIONS. USUALLY, NO SPECIFIC PRODUCT PROMOTIONAL MESSAGE IS COMMUNICATED IN PUBLIC RELATION EFFORTS. PR MODES / TOOLS:
NEWSLETTERS, LOBBYING (INFLUENCING VIA PERSONAL CONTACTS),

SPONSORING EVENTS (LITERARY, CHARITY, SPORTS, SCIENTIFIC), HOUSE MAGAZINE,RELEASING NEWS ABOUT COMPANY, PEOPLE OR PRODUCTS ETC. USED AS A SUPPORTIVE PROMOTIONAL METHOD TO MAJOR METHODS OF PROMOTION. *PUBLICS : STOCKHOLDERS, EMPLOYEES, CUSTOMERS, SUPPLIERS, PRESSURE GROUPS, SOCIETY, GOVERNMENT, MEDIA PEOPLE, POLITICIANS ETC.
PROMOTIONAL METHODS
5) PUBLICITY
A SPECIAL FORM OF PUBLIC RELATIONS. INVOLVES RELEASING NEWS, ARTICLES, PHOTOGRAPHS, HOLDING PRESS CONFERENCES ETC., ABOUT A PRODUCT OR THE COMPANY, TO THE MASS MEDIA, FOR PUBLICATION / BROADCASTING AS A NEWS ITEM. IT IS NON-PAID HAS HIGH CREDIBILITY USED AS A SUPPORTIVE PROMOTIONAL METHOD TO MAJOR METHODS OF PROMOTION
PROMOTIONAL MIX
AN APPROPRIATE COMBINATION OF PERSONAL SELLING, ADVERTISING, SALES PROMOTION TECHNIQUES, PUBLIC RELATIONS AND PUBLICITY, IN ORDER TO ACHIEVE PROMOTIONAL AND MARKETING OBJECTIVES. PROMOTIONAL OBJECTIVES AWARENESS, KNOWLEDGE, LIKING, PREFERENCE, BUY,
LOYALTY AND TO HAVE BRAND NAME ON THE TOP OF MIND.

MARKETING OBJECTIVES: SALES, MS, GR, RANKING,RETAINING EXISTING AND DEVELOPING NEW CUSTOMERS AND PROFIT.
WHAT TO EMPHASIZE IN PROMOTION?

a) UNIFORM HIGH QUALITY SERVICE PRODUCT b) CONVENIENT LOCATION c) CONFORTABLE AND CLEAN PHYSICAL ENVIRONMENT d) QUALITY OF SERVICE PERSONNEL COURTESY AND ATTENTIVENESS e) PERSONAL ATTENTION f) EXTRA SERVICES g) SSP h) EASE OF PURCHASE i) WHAT SATISFIED CUSTOMERS SAY j) HIGH REPUTATION OF THE SERVICE COMPANY
PEOPLE
PEOPLE PLAY A CENTRAL ROLE IN BUILDING CS BY CREATING AND DELIVERING THE SERVICE, PARTICULARLY THE CUSTOMERS CONTACT STAFF TWO CATEGORIES OF PEOPLE COS STAFF
CUSTOMERS CONTACT STAFF CUSTOMERS NON-CONTACT STAFF THE CUSTOMER OTHER CUSTOMERS
a) b)
CUSTOMERS
i. ii.
THEIR APPEARANCE AND BEHAVIOUR INVOLVE THEM IN SERVICE PRODUCTION AND DELIVERY PROCESS
TYPES OF STAFF
CUSTOMER-CONTACT STAFF
CONNECTS CO TO CUSTOMER CONNECTS CUSTOMER TO THE COMPANY. THEREFORE, HE IS THE COMPANY BACKBONE OF CO, CRITICAL FACTOR. WHY?
CUSTOMER - NONCONTACT STAFF

PROVIDES MANAGEMENT SUPPORT AND VARIOUS RESOURCES
CUSTOMER CONTACT STAFF DIFFERENTIATORS

HIRE, TRAIN, COACH,DEVELOP,MOTIVATE, SELL THE JOB AND COMPENSATE BETTER CUSTOMER CONTACT STAFF THAN THAT OF MAJOR COMPETITORS. STAFF DIFFERENTIATORS
1. GRACEFULL AND COURTEOUS 2. GOOD COMMUNICATION 3. COMPETENT / SKILLFUL 4. RESPONSIVE/ CUSTOMER FOCUSED 5. EMPOWERED 6. MOTIVATED 7. TRUSTWORTHY
PHYSICAL ENVIRONMENT AND EVIDENCE
TWO ASPECTS OF PHYSICAL ENVIRONMENT AND EVIDENCE

A. PHYSICAL ENVIRNMENT
A PLACE WHERE THE SERVICE IS CREATED OR DELIVERED OR WHERE THE INTERACTION BETWEEN THE SERVICE PROVIDER AND THE SERVICES USER TAKES PLACE.
PAY ATTENTION TO:

1) LAYOUT OF BUILDING 2) NOISE LEVEL 3) COLOURS USED, DECOR, FURNITURE, TEMPERATURE etc. 4) FACILITATING EQUIPMENT

B. TANGIBAL CLUE
A DOCUMENT WHICH SUPPORTS THAT THE CUSTOMER HAS PURCHASED AND USED THE SERVICE. IT ALSO REFLECTS THE IMAGE OF THE SERVICE PROVIDER

BANKS, HOTELS , RESTAURANTS, AIRLINES etc, SPEND LOT OF MONEY ON PHYSICAL ENVIRONMENT AND THE TANGIBLE CLUE. THESE ITEMS SHOULD MATCH WITH THE PRODUCT POSITIONING POOR PHYSICAL ENVIRONMENT AND TANGIBAL CLUE CAN HURT A SERVICE COMPANY AND CONVEY A NEGATIVE MASSAGE AND IMAGE
PROCESSES
PROCESSES
WHAT INDIVIDUAL SMALL,SEQUENTIAL, SPECIFIC AND VALUE ADDING STEPS CARRIED OUT TO PRODUCE AND DELIVER A SERVICE OR COMPLETE A TASK.
WRITTEN MECHANIZE CUSTOMERS INVOLVEMENT
KINDS:
PRODUCTION AND DELIVERY PROCESSES
EXAMPLES: RESERVATION / APPOINTMENT SYSTEM, SELF SERVICE IN STORES, RESTAURANTS etc.
PROCESS
WHAT SMALL, SEQUENTIAL, SPECIFIC AND VALUE ADDING STEPS TO COMPLETE A TASK EXAMPLE FROM McDONALDS STEPS:
1) GREETING BY THE COUNTER ATTENDANT. GOOD AFTERNOON 2) ASK THE CUSTOMER TO GIVE HIS ORDER MAY I TAKE YOUR ORDER 3) REPEAT BACK THE ORDER TO AVOID MISTAKES 4) ASK IF THERE IS SOMETHING ELSE THE CUSTOMER WOULD LIKE WOULD YOU LIKE TO ORDER FRENCH FRIES 5) ASK FOR PAYMENT 6) ANNOUNCE, ASSEMBLE THE ORDER AND PRESENT IT WITH COURTESY. THANK AND ASK THE CUSTOMER TO COME AGAIN.
SPECIALITY TO COMMODITY CONTINUUM MODEL
SPECIALITY TO COMMODITY CONTINUUM MODEL

SPECIALITY, A COMMODITY PRODUCT,TOP, MOP, PLC AS A SPECIALITY PRODUCT MOVES THROUGH ITS PLC, IT BECOMES A COMMODITY PRODUCT. THIS SPECIALITY TO COMMODITY SLIDE RESULTS IN:A) LOW PRODUCT IMAGE B) LOW PRICE C) INCREASED COMPETITION D) LOW PROFIT COMPETITION OF A SPECIALITY PRODUCT IS FOUGHT ON PERFORMANCE QUALITY, FEATURES, BENEFITS, OPTIONS, DURABILITY, OUTLOOK, REPAIRABILITY, PACKAGE, PSS ETC COMPETITION OF A COMMODITY PRODUCT IS PRIMARILY BASED ON PRICE AND MODE / TERMS OF PAYMENT.
SPECIALITY TO COMMODITY CONTINUUM

LOW HIGH COMPETITION SPECIALITY PRODUCT HIGH
HIGH
PRICE
PROFIT
COMMODITY PRODUCT LOW HIGH PRODUCT IMAGE LOW
LOW
MARKRT SHARE GROWTH STRATEGIES
MARKET SHARE
IT MEANS PERCENTAGE OF A MARKET OR OF A
PRODUCT CLASS CONTROLLED BY A COMPANY OR BY A PRODUCT / BRAND
CURRENT USER STATUS
USERS
COMPETITORS` USERS . SHIFT / SWITCH, OM
NON-BELIEVERS OF PRODUCT CLASS FORGET
INFREQUENT, FREQUENT LOYAL , RETAIN USE MORE OFTEN, OM INTRODUCE NEW USES RM
NON-USERS OF PRODUCT CLASS CONVERT THEM TO USERS, OM
MARKET SHARE GROWTH STRATEGY PRODUCTMARKET EXPANSION MATRIX ANSOFFS MATRIX

CURRENT PRODUCTS NEW PRODUCTS
CURRENT MARKET
1. MARKET PENETRATION STRATEGY
3. PRODUCT DEVELOPMENT STRATEGY
NEW MARKET
2. MARKET DEVELOPMENT STRATEGY
4. DIVERSIFICATION STRATEGY
MARKET PENETRATION STRATEGY

THIS STRATEGY CONSISTS OF INCREASING SALES AND MS OF A CURRENT PRODUCT IN THE CURRENT MARKET THROUGH DIFFERENT AND MORE AGGRESSIVE MARKETING-MIX STRATEGIES AND TACTICS
MARKET PENETRATION STRATEGY

THREE MARKETING TACTICS TO INCRESE MARKET SHARE
1. ENCOURAGE CURRENT USERS TO REMAIN LOYAL AND USE MORE FREQUENTLY, IF THEY ARE INFREQUENT USERS.
DO SOMETHING DIFFERENT AND INNOVATIVE, E.G.
OFFER INCENTIVES, DO ENTERTAINMENT, ORGANIZE EVENTS etc.
2.
SHIFT COMPETITORS USERS.

MAKES SENSE IF THERE ARE MAJOR WEAKNESSES IN
COMPETITORS PRODUCTS, PRICING, DISTRIBUTION, PROMOTION OR THEY LACK FUNDS.
3.
CONVINCE NON-USERS OF THE PRODUCT-CLASS, IF STILL UNDECIDED.
MARKET DEVELOPMENT STRATEGY

CONSISTS OF INCRESING SALES AND MARKET SHARE OF A CURRENT PRODUCT BY ENTERING INTO A NEW GEOGRAPHIC OR DEMOGRAPHIC MARKET OR A NEW USE-AREA. TACTICS A) URBAN TO RURAL, OTHER COUNTRIES B) ADULT TO CHILDREN C) GENDER SHIFT
PRODUCT DEVELOPMENT STRATEGY

THIS STRATEGY CONSISTS OF INCREASING SALES AND MARKET SHARE OF A PRODUCT BY DEVELOPING EITHER A NEW PRODUCT OR IMPROVED VARIANTS, FOR THE CURRENT MARKET
TACTICS a) DEVELOP A NEW PRODUCT b) OFFER BENEFITS VIA NEW PRODUCT FEATURES.
DIVERSIFICATION STRATEGY
ENTER A NEW MARKET WITH A COMPLETELY NEW PRODUCT, BOTH UNRELATED WITH THE CURRENT BUSINESS. Eg
PIA : HOTEL BUSINESS, SPEEDEX SAS: HOTEL BUSINESS, AUTO RENTAL SERVICES ALFALAH : WARID
THIS STRATEGY IS ADOPTED WHEN GROWTH IS NOT POSSIBLE FROM THE OTHER THREE STRATEGIES.
RISKY, COSTLY AND LONG-TERM STRATEGY. TOP EXECUTIVES MAKE THIS DECISION.
PROFITABILITY
PROFIT = = REVENUE COSTS (UNITS X PRICE) (VPCs + FCs)
FOUR WAYS TO INCREASE PROFITABILITY 1) INCREASE VOLUME (UNITS) 2) INCREASE PRICE 3) REDUCE VPCs VIA BETTER PURCHASE OF INPUTS. 4) REDUCE FCs VIA EFFECTIVENESS AND EFFICIENCY OF PEOPLE THROUGH TRAINING AND UPTO DATE USE OF TECHNOLOGY IN OPERATION.
LONG-TERM PROFITABILITY
PRODUCT OR BRAND
INCREASE VOLUME
INCREASE PRODUCTIVITY
PRODUCT DEVELOPMENT
MARKET DEVELOPMENT
MARKET PENETRATION
COST * REDUCTION
IMPROVE FF AND LABOUR EFFECTIVENESS & EFFICIENCY
ENTER NEW USE-AREAS
ENTER NEW GEO. OR DEMO. SEGMENTS
OPERATION
MARKETING
INCREASE USAGE RATE & QUANTITY
WIN COMPETITORS CUSTOMERS
WIN NON-USERS OF P-CLASS
* VPCs AND FCs
WHY DO COMPANIES NEED VOLUME GROWTH?

1. 2. 3. TO INCREASE LONG-TERM PROFITABILITY TO COMPENSATE INCREASING COSTS VS PRICE INCREASE. TO OFFER A CHALLENGE TO PEOPLE.
4.
TO IMPROVE COMPANYS MARKET RANKING.
GROWTH STRATEGIES
NINE WAYS TO GROW :
1. 2. 3. 4. 5. 6. INCREASE PRODUCT-LINES (INCREASE P-MIX WIDTH) INCREASE PRODUCT-LINE LENGTH AND DEPTH. MARKET PENETRATION STRATEGY (MORE USAGE) MARKET DEVELOPMENT STRATEGY(MORE USERS) PRODUCT DEVELOPMENT STRATEGY (BANKS: CREDIT CARDS). PRODUCT DIVERSIFICATION STRATEGY EG: AIRLINES HAVING OWN HOTELS
GROWTH STRATEGIES
7) FORWARD INTEGRATION
GOING INTO A NEW BUSINESS IN WHICH THE OUTPUT OF THE CURRENT BUSINESS CAN BE GAINFULLY USED AS AN INPUT TO PRODUCE AN OTHER PRODUCT EG : DRYCLEANING EQUIPMENT MANUFACTURING COMPANIES GOING INTO DRYCLEANING BUSINESS.
8)
BACKWARD INTEGRATION
GOING INTO A NEW BUSINESS IN WHICH THE OUTPUT OF THE NEW BUSINESS CAN BE GAINFULLY USED AS AN INPUT FOR THE CURRENT BUSINESS EG : DRYCLEANING COMPANIES ACQUIRING EQUIPMENT MANUFACTURING COMPANIES.
9)
HORIZONTAL INTERRATION
ACQUIRING / MERGIING WITH A SIMILER COMPANY
DIVISIONS OF A SERVICE ORGANIZATION
DIVISONS OF A SERVICE ORGANAIZATION

A) INVISIBLE PART - CONSISTS OF: 1. INTERNAL AREAS 2. INTERNAL STAFF
PROVIDES RESOURCES AND MANAGEMENT SUPPORT TO THE CUSTOMER CONTACT STAFF
3. INTERNAL PROCESSES B) VISIBLE PART - CONSISTS OF : 1. CUSTOMER CONTACT STAFF 2. THE CUSTOMER 3. OTHER CUSTOMERS 4. PHYSICAL SETTING 5. FACILITATING EQUIPMENT 6. DELIVERY PROCESS
DIVISIONS OF A SERVICE ORGANIZATION

SERVICE ORGANIZATION INVISIBLE PART
THE CUSTOMER A
VISIBLE PART
INTERNAL AREAS INTERNAL STAFF (NON-CUSTOMER CONTACT STAFF) INTERNAL PROCESSES
CUSTOMER CONTACT STAFF PHYSICALSETTING FACILITATING EQUIPMENT PROCRSS TO DELIVER

OTHER CUSTOMERS B,C,D.
MIS AND MARKETING RESERACH
NEED FOR INFORMATION FOR DECISION MAKING DURING VARIOUS STAGES OF MANAGEMENT
CHARACTERISTICS OF INFORMATION
1) 2) 3) 4) 5) RELEVANT ADEQUATE TRUE / ACCURATE UPDATED ON TIME
INFORMATION IS AVAILABLE BOTH FROM INSIDE AND OUTSIDE A COMPANY, THROUGH MR. UNLESS INFORMATION IS USED, IT IS WORTHLESS.
MARKETING INFORMATION SYSTEM

MIS
ANALYSIS PLANNING ORGANISING IMPLEMENATION MONITOR/ CONTROL ACTIONS MARKET & CUSTOMERS ME COs PERFORMANCE REACTIONS TO M-MIX
ICR
MKT. I S
2
MDSS
MR
DATA / INFO ABOUT

MIS BEGINS AND ENDS WITH MARKETING MNGT. ASSESS INFO NEEDS THROUGH INTERVIEWS DEVELOP NEEDED INFO USING SUITABLE COMPONENT OF MIS DISTRIBUTE INFO TO RIGHT MANAGERS FOR GOOD DECISION MAKING.
WHAT IS MARKETING RESEARCH ?

IT IS A SYSTEMATIC PROCESS OF DESIGNING, GATHERING, ANALYSING AND REPORTING RELEVANT, ADEQUATE, TRUE, UPDATED AND TIMELY INFORMATION ON A SPECIFIC MARKETING TASK, FOR DECISION MAKING, TO THE RELEVANT MARKETING PEOPLE. OVERALL OBJECTIVES OF MARKETING RESEARCH
i.
ii.
TO REDUCE UNCERTAINTIES IN DECISION MAKING.

TO MONITOR / CONTROL PERFORMANCE OF MARKETING ACTIVITIES.
STATUS OF USE OF MR IN SERVICES BUSINESS

OFTEN USED IN AIRLINES, BANKS, INSURANCE COs. FIVE STAR HOTELS, FAST FOOD RESTAURANTS etc. IN SUCH COs, MARKETING RESEARCH IS A COMPONENT OF MIS. IN MANY SERVICE BUSINESSES, IT IS NOT USED DUE TO VARIOUS REASONS. RECOMMENDED SPENDING : 1-2% OF SALES SMALL COs. CAN ENGAGE STUDENTS FOR MR.
THE MARKETING RESEARCH PROCESS

MR PROCESS IS MUCH THE SAME IN ORGANIZATIONS MARKETING A PHYSICAL OR A SERVICE PRODUCT. EIGHT STEPS OF MR PROCESS:
1. DEFINE THE MARKETING TASK/ PROBLEM
BE SPECIFIC EG : COPY TESTING PRICE RESPONSIVENESS CUSTOMER SATISFACTION LEVEL CONCEPT TESTING.

2.
i.
DECIDE DATA / INFO SOURCE :

PRIMARY DATA NEW DATA GATHERED INTERNALLY OR EXTERNALLY. EXPENSIVE AND TIME CONSUMING. SECONDARY DATA ALREADY AVAILABLE INSIDE OR OUTSIDE. INEXPENSIVE SOURCES : COS INTERNAL RECORDS OR REPORTS FROM OUTSIDE SOURCES
GOVT. PUBLICATIONS TRADE / PROFESSIONAL BODIES MR FIRMS INSTITUTIONS
ii.

3. DECIDE RESEARCH APPROACH FOR GATHERING P. DATA
i. ii. iii. SURVEY METHOD OBSERVATION METHOD EXPERIMENTAL METHOD
CHOICE OF METHOD DEPENDS UPON THE NATURE OF TASK, TIME AVAILABLE AND THE COST.
HOW TO GATHER PRIMARY DATA

PRIMARY DATA GATHERING METHODS
SURVEY METHOD GATHERING DATA/ INFO BY ASKING Qs
OBSERVATION METHOD PEOPLES ACTIONS, BEHAVIOUR, HEARING WHAT THEY SAY
EXPERIMENTAL METHOD SEEING RESULTS BY CHANGING ONE VARIABLE
INTERVIEW TELEPHONE PERSON(S)
POSTAL
PERSONAL OBS
ELECTRONIC OBS
INDIVIDUAL
FOCUS GROUPS

4. PREPARE A QUESTIONNAIRE TO RECORD RESPONSES / OBSERVATIONS, TO QUESTIONS. DECIDE SAMPLE PLAN FOR P. DATA
i. ii. iii. WHICH TM TO SURVEY ? HOW MANY? WHICH ONES ?
5.
6.
i. ii.
COLLECT DATA
OWN OR OUTSIDE STAFF ACTIVE PHASE, EXPENSIVE PHASE, PRONE TO ERROR
7.
i. ii.
ANALYSE DATA AND MAKE A REPORT

TABULATE THE DATA, AVOID PRESENTING LOT OF DATA EXTRACT FINDINGS FROM THE DATA USING VARIOUS STATISTICAL TECHNIQUES.
8.
PRESENT FINDINGS IN WRITING TO THE MANAGEMENT.
QUESTIONNAIRE
IS A SET OF APPROPRIATE QUESTIONS, PRESENTED TO A RESPONDENT FOR RECORDING ANSWERS, RESPONSES OR OBSERVATIONS.
USED COMMONLY
QUESTIONNAIRE
CHARACTERISITCS OF A GOOD QUESTIONNAIRE A) SIMPLE WORDS B) SHORT AND SIMPLE QUESTIONS C) SEQUENTAL QUESTIONS. D) PERSONAL QUESTIONS TOWARDS THE END. E) ONE SPECIFIC IDEA PER QUESTION. F) NOT TOO MANY QUESTIONS. 10 12 QUESTIONS ARE SUFFICIENT.
QUESTIONNAIRE
G) INCLUDE BOTH OEQs AND CEQs 1) OEQs (DICHOTOMOUS, MULTIPLE CHOICE, SCALING, DIRECT AND INDIRECT). - GENERALLY, MAKE THE RESPONDENT THINK - ANSWERED IN RESPONDENTS OWN WORDS - REVEAL MORE INFO. 2) CEOs (DICHOTOMOUS, MULTIPLE CHOICE, SCALING, DIRECT AND INDIRECT). - GENERALLY, DO NOT MAKE THE RESPONDENT THINK - RESPONDENT MAKES HIS CHOICE OF ANSWER FROM THE PRE-SPECIFIED ANSWERS. TEST THE QUESTIONNAIRE BEFORE ITS USE ON A LARGE SCALE.
SUB-CLASSIFICATION OF OEQs AND CEQs

1) 2) 3) DICHOTOMOUS QUESTION GIVES CHOICE BETWEEN TWO ANSWERS MULTIPLE CHOICE QUESTION GIVES CHOICE BETWEEN MORE THAN TWO ANSWERS SCALLING QUESTION GIVES CHOICE OF ANSWER ON A NUMERICAL SCALE (MINIMUM TO MAXIMUM) DIRECT QUESTION A QUESTION WHICH CONTAINS THE WORD YOU OR YOUR TO MAKE IT A PERSONALIZED QUESTION INDIRECT QUESTION A QUESTION WHICH CONTAINS THE WORDS OTHER PEOPLE IN ORDER NOT TO MAKE IT A PERSONALIZED QUESTION
4)
5)
PROBLEMS IN MR IN SERVICES ORGANIZATIONS

THREE PROBLEMS
1. RELUCTANT ATTITUDE TOWARDS MR IN SERVICE ORGANIZATIONS. ALTHOUGH THE USE OF MR HAS GROWN IN SERVICES BUSINESS, YET THERE IS RESISTANCE TO ITS VALUE IN SOME QUARTERS. REASONS ARE :a) b) c) REGARD MR UNETHICAL EG: PROFESSIONAL SERVICES. SMALL COMPANY SIZE AND BEING LOCAL IN OPERATION DOES NOT JUSTIFY EXPENDITURE ON MR. EG: REPAIR WORKSHOPS, BEAUTY PARLOURS. MONOPOLY IN BUSINESS. DEMAND IS MUCH GREATER THAN SUPPLY.

d) e) LACK OF MANAGERIAL KNOW-HOW IN MR AND ITS AWARENESS IN S. COMPANIES. CLAIM THAT THE STAFF IS CLOSE AND IN DIRECT CONTACT WITH CUSTOMERS. THUS, NO NEED TO SPEND ON AN EXTERNAL MR AGENCY. DRAWBACKS OF SUCH CONTACTS
i. ii. TOO UNPLANNED TOO INFORMAL
THUS, THE RESULTS ARE OFTEN WRONG.
2.
POOR QUALITY AND QUANTITY OF SECONDARY DATA.

3. PROBLEMS RESULTING FROM THE CHARACTERISTICS OF A SERVICE PRODUCT
CHARACTERISTIC
1) INTANGIBILTY THUS, DIFFICULT TO OBTAIN PATENT AND RISK OF BEING COPIED QUICKLY 2) INSEPARABILITY THE PRESENCE OF SERVICE PROVIDER IS NECESSARY . 3) QUALITY STANDARDIZATION IS DIFFICULT. QUALITY DEPENDS UPON THE S. PROVIDER, P.EVIDENCE, THE CUSTOMER AND OTHER CUSTOMERS PRESENT.
EFFECTS ON MR
REDUCES INCENTIVE FOR R&D (INNOVATION) THUS, FUCUS ON ME-TOO SERVICES HOME-USE TESTS ARE NOT POSSIBLE. CREATES PROBLEMS IN CONCEPT TESTING MR RESULTS MAY BE VERY WRONG OR DIFFERENT.
MARKETING RESEARCH PUBLIC SECTOR OBJECTIONS

MR IS MUCH LESS DEVELOPED IN THE PUBLIC SECTOR THAN IN THE PRIVATE SECTOR. REASONS :
1) 2) 3) MONOPOLY IN MANY SERVICE CATEGORIES. MARKETING AND MR IS REGARDED UNNECESSARY PUBLIC SECTOR SERVICES ARE FOR THE WHOLE COMMUNITY, NOT FOR A PARTICULAR SEGMENT OF SOCIETY. GENERALLY, NO DISCRIMINATION. THIS IS UNLIKE IN THE PRIVATE SECTOR WHERE DISCRIMINATION IS DONE VIA MARKET SEGMENTATION. UNLIKE THE PROFIT CRITERION USED IN THE PRIVATE SECTOR SERVICES, NON-PROFIT EVALUATION CRITERIA ARE USED IN JUDGING A PROPOSAL IN THE PUBLIC SECTOR SERVICES.
4)
MARKET AND ENVIRONMANTAL ANALYSIS

WHAT IS MARKET AND ENVIRONMANTAL ANALYSIS ?
GATHERING AND ANALYSING DATA / INFO ABOUT THE MARKET AND THE MARKETING ENVIRONMENT (ME), MAKING CONCLUSIONS (IDENTIFYING Os and Ts) AND THEIR IMPACT ON THE M-MIX. MARKET AND ENVIRONMANTAL ANALYSIS IS DONE VIA MARKETING RESEARCH AND MARKETING INTELLIGENCE SYSTEM (FOR ME). MARKET AND ENVIRONMANTAL ANALYSIS A IS THE SAME BOTH FOR PRODUCTS AND SERVICES

MAJOR QUESTIONS WHICH MUST BE ANSWERED IN A
1. DO NEEDS / WANTS FOR A PARTICULAR SERVICE EXIST ? 2. TO WHAT EXTENT THESE HAVE BEEN SATISFIED OR ARE UNSATISFIED? FIND VIA MR. 3. SIZE OF DEMAND / MARKET.

4. 5. 6. 7. 8. PRICE WHICH THE CUSTOMER IS READY TO PAY. COST OF PRODUCING AND DELIVERING THE SERVICE BY THE COMPANY. PROFITABILITY. STRATEGIC COMPETITORS THEIR NUMBER, SIZE, AGGRESSIVENESS, THEIR M-MIX AND THE TYPE OF COMPETITION. MAJOR CHANGES IN THE EXTERNAL UNCONTROLLABLES
STEPS OF MARKETING PLANNING PROCESS
THE MANAGEMENT PROCESS

FIVE PHASES OF MANAGEMENT
1) SITUATION ANALYSIS GATHERING, STUDYING AND ANALYSING FACTS ABOUT PAST & PRESENT PERIODS. MAKING CONCLUSIONS AND PREDICTING THEIR EFFECTS ON FUTURE
2)

PLANNING
SETTING OBJECTIVES, MAKING STRATEGIES / TACTICS DETERMING RESOURCES DECIDING MONITORING MECHANISM AND ITS TIMING
5) TAKING ACTIONS
3) ORGANIZING AND IMPLEMENTING
4) LEADING, DIRECTING, MONITORING,EVALUATING CONTROLLING, MOTIVATING
ORGANIZATION STRUCTURE, STAFFING, GIVING RESPONSIBILITIES, EMPOWRING,TRAINING; COACHING COMMUNICATING AND EXECUTING THE PLAN
KEY PLANNING TERMS / CONCEPTS

DEFINITIONS
CONCEPT
COMPANY MISSION OBJECTIVE
DEFINITION AND CHARACTERISTICS

THE PURPOSE FOR WHICH A COMPANY IS ESTABLISHED, EXPRESSED IN TERMS OF CUSTOMERS NEED, PRODUCTS AND TARGET MARKET. WHAT BUSINESS THE COMPANY IS IN?
WHAT A PERSON OR A COMPANY WANTS TO ACHIEVE . END RESULTS SELECTED AFTER EVALUATING ALTERNATES. QUANTITATIVE AND QUALITATVE. MUST BE :-
1) WRITTEN 4) MUTUALLY AGREED 5) MATCH WITH COMPANYS OBJECTIVES STRATEGY
2) SMART
3) PURE
6) PRIORITIZED
HOW A PERSON OR A COMPANY INTENDS TO ACHIEVE THE OBJECTIVE (S). OVERALL AND NON-SPECIFIC ACTION, METHOD OR A GAME PLAN. GENERATE AND EVALUATE ALTERNATE STRATEGIES BEFORE SELECTING THE FINAL STRATEGY INVITE PARTICIPATION LOOK FOR CREATIVITY LONG-TERM DETAILED AND SPECIFIC ACTIONS WHICH WILL BE TAKEN TO IMPLEMENT THE CHOSEN STRATEGY IN ORDER TO ACHIEVE THE OBJECTIVE (S).
TACTICS
INVITE PARTICIPATION
LOOK FOR CREATIVITY
SHORT TERM
WHAT IS PLANNING?
ONE OF THE STAGES OF MANAGEMENT PROCESS DURING WHICH:A MANAGER AFTER HARD THINKING AND INTENSIVE CONSULTATION:1) SETS OBJECTIVES / GOALS 2) ESTABLISHES STRATEGY
a) b) c) TM SCAs IN THE MARKETING-MIX PRODUCT POSITIONING
3) DEVELOPS A DETAILED PLAN OF SPECIFIC ACTIONS / TACTICS 4) DETERMINES NEEDED RESOURCES 5) DECIDES A MONITORING OR CONTROLLING MECHANISM AND ITS TIMING NEEDED IN ALL COMPANIES, IN ALL BUSINESS FUNCTIONS AND AT ALL LEVELS. A PLAN IS THE RESULTANT DOCUMENT PRODUCED AT THE END OF THE PLANNING STAGE A PLAN GIVES A CLEAR ROAD MAP TO FOLLOW. IT IS A WORKING DOCUMENT
STEPS IN PLANNING PROCESS

SITUATIONAL ANALYSIS
SET GOALS FROM ALTERNATIVES
DECIDE TM
DECIDE SCAs FOR TM
DECIDE PRODUCT POSITIONING
ESTABLISH MARKETING MIX STRATEGIES AND TACTICS FROM ALTERNATIVES
DECIDE RESOURCES
DECIDE MONITORING MECHANISM AND ITS TIMING

1. SITUATION ANALYSIS
a) STUDY COMPANYS, COMPETITORS AND MARKETS PERFORMANCE FOR THREE YEARS (CURRENT, -1YEAR AND -2 YEARS).
THIS WILLSHOW COMPANYS TREND IN PERFORMANCE COMPARED TO THE COMPERTITORS AND MARKET PERFORMANCE. KNOW REASONS FOR GOOD / BAD RESULTS. b) GATHER, STUDY AND ANALYSE INFO ON THE ME AND MARKET FOR THE BUDGET YEAR.
c)
IDENTIFY MAJOR Ss AND Ws IN THE M-MIX, PARTICULARLY IN PRODUCT(s) AS WELL AS IN THE COMPANY AND Os AND Ts IN THE ME AND MARKET.
SWOT ANALYSIS.
MARKETING ENVIRONMENT (ME)

ACTORS AND FORCES, OUTSIDE THE MARKETING DEPARTMENT, WHICH AFFECT MARKETING ACTIVITIES OR DECISIONS ABOUT MARKETING-MIX OR MARKETING PERFORMANCE. DIVIDED INTO MACRO AND MICRO EXTERNAL UNCONTROLABLE FORCES / ACTORS
MACRO EXTERNAL UNCONTROLLABLE FORCES

1. 2. 3. 4. 5. 6. 7. POLITICAL AND LEGAL FORCES ECONOMIC FORCES CULTURAL AND SOCIAL FORCES GEOGRAPHIC AND NATURAL FORCES DEMOGRAPHIC FORCES TECHNOLOGICAL FORCES COMPETITIVE FORCES
LOCATION OF STRENGTHS AND WEAKNESSES (OWN AND COMPETITORS)
VARIOUS Ps OF M-MIX PRODUCT SUPPORT SERVICES COMPANY PERFORMANCE A) SALES B) MS, GR, RANKING
HUMAN RESOURCE AND THEIR SKILLS (QUANTITY & QUALITY) NON-HUMAN RESOURCES (QUANTITY & QUALITY) COMPANY IMAGE
QUALITATIVE SWOT ANALYSIS

STRENGTHS ----------------------------- ----------------------------------------------------------- -----------------------------OPPORTUNITIES ---------------------------- --------------------------------------------------------- -----------------------------WEAKNESSES ----------------------------- ----------------------------------------------------------- -----------------------------THREATS ----------------------------- ----------------------------------------------------------- ------------------------------
BASIC PRINCIPLE FOR SUCCESS

MUST HAVE A SUSTAINABLE COMPETITIVE ADVANTAGE (s) (SCA) WHAT IS A SCA? SOMETHING BETTER IN ANY OF THE ELEMENTS OF MARKETINGMIX, NECESSARY FOR LONG -TERM ABOVE AVERAGE SUCCESS OF A COMPANY. CHARACTERISTICS OF A SCA
(a) MEANINGFUL/ IMPORTANT
(b) BELIEVABLE (c) AFFORDABLE (d) DIFFERENT (e) SUSTAINABLE
IF YOU DO NOT HAVE A SCA, DO NOT COMPETE

2. FORMULATE CRITICAL ASSUMPTIONS MADE FOR THE ACHIEVEMENT OF THE PLAN. EG: PRICING ASSUMPTIONS, LAW AND ORDER SITUATION. OBJECTIVES SETTING
a) b) KNOW COMPANY OBJECTIVES SET OBJECTIVES KEEP a,b AND c UNDER STEP 1 AND a) UNDER STEP 3 IN MIND i. QUANTITATIVE (WRITTEN, SMART). SALES, PROFIT etc. ii. QUALITATIVE (PURE)
3.

4. ESTABLISH STRATEGIES AND TACTICS :
i. SELECT TM VIA SEGMENTATION ii. CREATE SDAs iii. DEVELOP DISTINCT PRODUCT POSITIONING iv. DEVELOP AN APPROPRIATE M-MIX TO ACHIEVE CS v. DECIDE RESOURCES vi. DECIDE MONITORING MECHANISM AND ITS TIMING

5. IMPLEMENT THE PLAN :
i. ii. CREATE AN APPROPRIATE ORGANIZATION. RECRUIT STAFF WITH ABILITY / TALENT, WILLINGNESS / MOTIVATION AND SUITABLE PERSONALITY. EXECUTE THE PLANNED STRATEGIES AND TACTICS.
iii.

6. MONITOR / EVALUATE / CHECK
ACTUAL RESULTS VS PLANNED RESULTS
7.
TAKE NEEDED ACTIONS :

i. RECOGNIZE, APPRECIATE / REWARD. ii. HELP, REPRIMAND, GIVE WARNING, REPLACE iii. CHANGE OBJECTIVES / STRATEGIES / TACTICS VERY OFTEN THE MISTAKE LIES IN THE EXECUTION OF STRATEGIES AND TACTICS
REPRIMAND
SERVERE VERBAL DISAPPROVAL OF A BIG WRONG ACT OF AN EXPERIENCED SUBORDINATE, BY HIS SENIOR
BENEFITS OF PLANNING
GIVES DIRECTION VIA GOALS SETS YARDSTICK OR STANDARDS REDUCES / AVOIDS UNCERTAINTY OR HAZARDS BY LOOKING AHEAD, ANTICIPATING CHANGE AND ITS IMPACT; AND RESPONDING TO CHANGE IMPROVES EFFECTIVENESS AND EFFICIENCY DUE TO WELL THOUGHT SPECIFIC ACTIONS MAKES OTHER STAGES OF MANAGENENT RUN EASY AND SMOOTH ENSURES COORDINATION BETWEEN VARIOUS PEOPLE AND DEPARTMENTS
WHAT PLANNING WILL AND WILL NOT DO

A) WILL DO
a) b) c) d) e) f) g) PLANNING FORCES PEOPLE TO THINK. PLANNING ENHANCES CREATIVITY. GUIDES EFFORTS GIVES A YARDSTICK PLANNING MINIMISES UNCERTAINTY AND SURPRISE. MAKES OTHER MANAGEMENT PHASES / TASKS EASY. IMPROVES EFFECTIVENESS AND EFFICIENCY DUE TO WELL THOUGHT SPECIFIC ACTIONS
B) WILL NOT DO
PLANNING WILL NOT GIVE A PERFECT CRYSTAL BALL. IT WILL NOT PREDICT FUTURE WITH 100% ACCURACY
PLANNING PROCESS
WHERE ARE WE NOW ?
HOW WILL WE KNOW IF WE HAVE ARRIVED OR NOT ?
WHERE DO WE WANT TO Go TO ?
HOW WILL WE GET THERE ?
WHAT IS A MARKETING PLAN ?

A PLAN IS THE RESULTANT DOCUMENT OF THE PLANNING PHASE OF MANAGEMENT PROCESS . IT CONTAINS:
1) EXECUTIVE SUMMARY, 2) SA, 3) OBJECTIVES, 4) STRATEGY AND TACTICS, 5) NEEDED RESOURCES 6) MONITORING MECHANISM AND ITS TIMING 7) PROFIT / LOSS 8) KEY SUCCESS FACTORS / ASSUMPTIONS
FOR THE BUDGET / PLANNING YEAR, TO GUIDE MANAGERS DURING THE REMAINING PHASES OF MANAGEMENT . IT IS A WORKING DOCUMENT
PERIOD OF PLANNING
A) STRATEGIC PLANNING / PLAN
1) LONG-TERM MORE THAN 5 YEARS TOP MANAGERS 2) MEDIUM-TERM 2-5 YEARS
B) OPERATIONAL OR TACTICAL PLANNING / PLAN

SHORT-TERM, USUALLY 1 YEAR DERIVED FROM THE STRATEGIC PLAN MOSTLY ALL MANAGERS
MANY COMPANIES OPERATE WITHOUT FORMAL PLANS. NOT GOOD, NOT DO WELL.
WHY MARKETING STRATEGIES FORMULATION IS DIFFICULT IN SERVICES

a) UNIQUE CHARACTERISTICS OF SERVICES :
UNLIKE GOODS, INTANGIBILITY CHARATERISTIC OF SERVICES MAKES CONSUMERS CHOICE DIFFICULT. OPINION CAN BE OBTAINED FROM OTHERS. INSEPARABILITY MAKES MARKETING STRATEGY OF SERVICES LOCALIZED. RELATIVELY DIFFICULT TO SELL SERVICES ON NATIONWIDE BASIS. PERISHABILITY MAKES STORAGE OF SERVICES IMPOSSIBLE, THUS, PLANNING SUPPLY AND DEMAND OF SERVICES IS DIFFICULT HETROGENEITY MAKES ENSURING OF UNIFORM QUALITY DIFFICULT.
SITUATION ANALYSIS AND PLANNING PHASE

SITUATION ANALYSIS AND PLANNING PHASE IS HOMEWORK FOR A MANAGER. THE BETTER IS THE HOMEWORK DONE, THE MORE EASY IT BECOMES TO CARRY-OUT THE REMAINING PHASES OF MANAGEMENT
WHO DOES PLANNING IN A COMPANY?

STRATEGIC PLANNING
TOP MANAGERS
TOP MANAGERS
MIDDLE LEVEL MANAGERS
OPERATIONAL PLANNING
FIRST LEVEL MANAGERS

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SOME TERMS

WHAT IS A SERVICE / SERVICE PRODUCT

MAJOR BUSINESS OBJECTIVES ( VIA CS/CD )

ECONOMIC ACTIVITIES, SERVICE ECONOMY

UNO CLASSIFICATION OF COUNTRIES

CHANGING TREND IN MDCs

PROBLEMS IN ASSESSING THE SIZE OF SERVICES SECTOR

POOR QUALITY OF OFFICIAL / SECONDARY DATA

CRITERIA USED TO JUDGE THE IMPORTANCE OF SERVICES IN THE ECONOMY

OUTPUT OF WEALTH EMPLOYMENT CONSUMER EXPENDITURE ROLE OF SERVICES IN EXPORT TRADE

REASONS FOR THE GROWTH OF SERVICES

REASONS FOR THE GROWTH OF SERVICES IN ECONOMY

REASONS FOR THE GROWTH OF SERVICES IN ECONOMY

REASONS FOR THE GROWTH OF SERVICES IN ECONOMY

b) LIFE EXPECTANCY IS INCREASING c) LIFE IS BECOMING COMPLEX d) MORE COMPLEX PRODUCTS

REASONS FOR THE GROWTH OF SERVICES IN ECONOMY

REASONS FOR INCREASE IN SERVICES EXPENDITURE AND NEEDED SERVICES

SERVICES DEVELOPED DURING THE LAST 30 YEARS

11) CONSUMER LEASING COs.

SERVICES DEVELOPED DURING THE LAST 30 YEARS

(B) BUSINESS SERVICES

HISTORICAL CHANGES IN UNDERSTANDING A SERVICE PRODUCT

HOW HAS THE DEFINITION OF THE TERM SERVICECHANGED OVER YEARS?

LATER ON: J.B. SAY

DIFFERENT RESEARCHERS BUSINESS ACTIVITIES WHICH DO NOT CHANGE THE

WHAT IS A SERVICE / SERVICE PRODUCT

HOW PEOPLE JUDGE QUALITY OF A SERVICE PRODUCT

STRATEGIES TO OVERCOME PROBLEMS CREATED BY INTANGIBILITY

STRATEGIES TO OVERCOME PROBLEMS CREATED BY INTANGIBILITY

HOW RELEVANT IN TANGIBILITY IN SERVICES?

MOST SERVICES ALSO CONSIST OF SOME TANGIBLE ELEMENTS

THUS, TANGIBILITY IS RELEVANT TO MANY SERVICES

PUBLIC TRANSPORT HOTEL ROOMS (HOLIDAY PLACES) TELEPHONE SERVICE

STRATEGIES TO OVERCOME PROBLEMS CREATED BY PERISHABILITY

STRATEGIES TO OVERCOME PROBLEMS CREATED BY INSEPARABILITY

HETROGENEITY / VARIABILITY / INCONSISTANCY

QUALITY DEPENDS UPON:

HETROGENEITY / VARIABILITY / INCONSISTANCY PROBLEMS CREATED

STRATEGIES TO OVERCOME PROBLEMS CREATED BY HETROGENEITY

MARKETING DIFFICULTIES / CHALLENGES WHICH ARISE DUE TO CHARACTERISTICS OF SERVICES

CANNOT STORE MAKES PLANNING OF SUPPLY AND DEMAND DIFFICULT

NO EVIDENCE OF PURCHASE AND USE

FRAMEWORKS TO HELP UNDERSTAND SERVICES AND PHYSICAL PRODUCTS

GOODS-SERVICES CONTINUUM MODEL

GOODS-SERVICES CONTINUUM MODEL

BALANCE BETWEEN TANGIBLE AND INTANGIBLE ELEMENTS

FIVE CATEGORIES OF PRUDUCTS BASED ON G-S CONTINUUM

SHOSTACKS MOLECULAR MODEL OF A PRODUCT

SHOSTACKS MOLECULAR MODEL OF A PRODUCT

SHOSTACKS MOLECULAR MODEL OF A PRODUCT

KEY ELEMENTS OF A PRODUCT = TANGIBLE ELEMENTS = INTANGIBLE ELEMENTS

FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICES

FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICES

FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICES

MASS PRODUCTION POSSIBLE

FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICES

LESS OFTEN. EASY TO MATCH

CAN BE OWNED A THING

CLASSIFICATION OF SERVICES, SECTORS OF SERVICE PORVIDERS

CURTOMERS PRESENCE NECESSARY OR NOT BUYERS PURCHASE MOTIVE

CHARACTERISTICS OF VARIOUS TYPES OF CONSUMER SERVICES

PRICE QUALITY COMPARISON PURCHASE FREQUENCY

FUNCTION PERFORMED BY SERVICES