MK0015 Set 1

Q.1 Mention the bases for segmentation of services with examples. Ans: Yes, service segmentation is especially important for services in the current competitive marketplace.Service industries are suffering from increasing competition both in the number of competitors and in the proliferation of service offerings. Market segmentation helps prevent the waste of valuable resources bydirecting effort into those areas that will help achieve success. Service products are frequently not clearly differentiated. Market segmentation offers the opportunity of gaining competitive advantage, in a highly contested market, through differentiation. The marketsegmentation approach involves identification of the benefits which different homogeneous groups seek,allowing relevant features and requirements to be determined and used as a source of servicedifferentiation. Different customers have different needs. A hotel, which aims to satisfy the prestige executive market,needs to consider the specific requirements of this segment. These might include full secretarial and officefacilities, conference amenities, twentyfour hour catering, a fitness facility and late check out options.Successful marketing identifies specific needs and preferences for services, and then develops strategies tosatisfy these preferences.A single service or product cannot meet the needs of all customers, but it can meet the needs of a specificgroup of customers. A service business should be positioned to serve particular segments of the attractive parts of the market, so that it can serve them effectively and produce the greatest profit.The segmentation process, shown in the figure is concerned to divide a heterogeneous process and followsfour broad steps:

i) The definition of the market to be addressed. ii) The identification of alternative bases for segmentation. iii) An examination of these based and the choice of the best base or base for segmentation. iv) The identification of individual market segments, an assessment of their attractiveness and the selectionof specific target market.Once the market segment has been selected, the process of target marketing involves developing a positioning for the target segments selected and then developing a marketing mix for each target market.

Q.2 Explain service quality concept. Evaluate the growth of services marketing. Answer: Service marketing is applied in various ways by the marketing experts in various organisations. The concepts of services marketing include service quality, servicescape, internal marketing and augmented service offering. Service quality This is the most important concept of services marketing and is regarded as vague and difficult to measure. It can be referred to as external quality and is a client-oriented concept. It indicates the customer satisfaction, which is again associated with success, productivity, and efficiency of the organisation. Thus, providing service quality is regarded as an important tool. As per studies conducted by experts like Gronroos, there is technical quality and functional quality. Technical quality is the result of an interaction within an organisation. For example, it can be the result of having a meal. Functional quality includes characteristics such as accessibility, reliability, empathy and responsiveness. It is based on the achievement or excellence of the service processes. Service quality also includes perceived service

quality, which is not only based on the actual experiences, but also as one that makes an impact on the perception of quality. Growth in Services Marketing In services marketing, services are described by features such as intangibility, heterogeneity and inseparability. It is impossible to separate it from the production and consumption and stock it for future usage. Though critics of services marketing have argued that marketing of goods and services are not different, people who do research on services marketing have defended its existence with its argument regarding the uniqueness of services. Services marketing have also carved a place for itself as sub field of marketing. It is also said that services marketing has played a prominent role in the development of marketing and have left some concepts that can be implemented in the conventional marketing. The differences between the goods and services are getting vanished and the perspective of services is becoming dominant. As a result, services are becoming the main focus of mainstream marketing. The focus on services introduces a new viewpoint that changes the fundamental rules of marketing. The process nature of services is the most important characteristics in services marketing. They are developed in a process where the consumers cooperate with the production resources of the service firm. As the basis for the production and consumption of the physical products are changing rapidly, the fundamental rules for services marketing is also changing. The entire

production process is done in the presence of the customers with the advent of mass customisation and modular production. The consumption process changes into process consumption and the focal area of marketing becomes balancing the gap between consumption and production process. The significance of services marketing has gone far beyond the traditional service sector or service industries. The relationship marketing has also developed emphasising the role of services, manufacturers and service firms alike.

Q.3 Briefly explain the five factors that influence the level of adequate service. Ans: There are five factors that influence adequate service. They are: Temporary service intensifiers. Perceived service alternatives. Customer self perceived service role. Situational factors. Predicted service. Temporary service intensifiers are individual factors that create awareness in the customer regarding the need for service. Emergency situations in which there is an urgent need for serviceraise the adequate level of expectation. For example, a mail order company that depends more ontoll-free lines to receive the customer orders will be more demanding during the peak periods of the month and the year. Perceived services alternatives are providers from whom the customers obtain the service. If theclients have multiple customers to choose from or are capable of providing services to themselves,their adequate

service level will be higher than those customers who have lesser options. The third factor that influences the level of adequate service is the selfperceived service role of the customer. To an extent, this can be described as customer perceptions, to which clients exercisean influence on the service which they receive. Here, the customer too has a responsibility tospecify the service level, which he expects. The active participation of the customer plays animportant role in delivering the service successfully. If the customer realises that they havespecified their role well, but the services personal are not playing their part, level of adequateservice will get heightened and narrows the zone of tolerance. Level of adequate service is also influenced by situational factors . They are conditions, whichthe customer view the performance or service quality as beyond the control of the service provider. Another factor that influences the level of adequate service is the predicted service. This is the prediction made by the customers about the things that are likely to happen during a transaction or

a service. If the customers predict good service, their level of adequate service will be higher thanwhen they predict bad service.

Q.4 Discuss service quality measurement and service mapping. Answer: Service marketing is applied in various ways by the marketing experts in various organisations. The concepts of services marketing include service quality, servicescape, internal marketing and augmented service offering. Service quality

This is the most important concept of services marketing and is regarded as vague and difficult to measure. It can be referred to as external quality and is a client-oriented concept. It indicates the customer satisfaction, which is again associated with success, productivity, and efficiency of the organisation. Thus, providing service quality is regarded as an important tool. As per studies conducted by experts like Gronroos, there is technical quality and functional quality. Technical quality is the result of an interaction within an organisation. For example, it can be the result of having a meal. Functional quality includes characteristics such as accessibility, reliability, empathy and responsiveness. It is based on the achievement or excellence of the service processes. Service quality also includes perceived service quality, which is not only based on the actual experiences, but also as one that makes an impact on the perception of quality. Growth in Services Marketing In services marketing, services are described by features such as intangibility, heterogeneity and inseparability. It is impossible to separate it from the production and consumption and stock it for future usage. Though critics of services marketing have argued that marketing of goods and services are not different, people who do research on services marketing have defended its existence with its argument regarding the uniqueness of services. Services marketing have also carved a place for itself as sub field of marketing. It is also said that services marketing has played a prominent role in the development of marketing and have left some concepts that can be implemented in the conventional marketing. The differences between the goods and services are getting vanished and the perspective of services is becoming

dominant. As a result, services are becoming the main focus of mainstream marketing. The focus on services introduces a new viewpoint that changes the fundamental rules of marketing. The process nature of services is the most important characteristics in services marketing. They are developed in a process where the consumers cooperate with the production resources of the service firm. As the basis for the production and consumption of the physical products are changing rapidly, the fundamental rules for services marketing is also changing. The entire production process is done in the presence of the customers with the advent of mass customisation and modular production. The consumption process changes into process consumption and the focal area of marketing becomes balancing the gap between consumption and production process.

Q.5 Explain hard and soft customer defined standards. Compare flexible services and standard services . Ans: A. Customer Defined Service Standards Hard and Soft: Standards of service are shortened to form service standards. Service standards are not only concerned with service delivery and waiting times. It is also associated with customer expectations of service, cost of service, and remedial action when the service is not up to the mark. Hard customer defined standard The services that can be counted, timed or observed through audits are known as hard customer defined standards. Customers emphasise on reliability and fulfilment of promises.

In order to provide reliable service, the firms adopt the policy of do it right the first time and honour your promises. An example for do it right the first time would be that a customer receives exactly what he ordered for without any damage. Right on time would refer to a delivery that would take place on time. Hard customer defined standards need to be adapted according to the different countries. This is because what is considered a prompt service in one country may not be the same in another country.

For hard customer defined standards, let us consider the example of a service station for vehicles. The following can be considered as hard customer defined services: Appointment for servicing available within a single day of customer placing request. Within a minute of inquiry service status is provided. The vehicle is serviced at the first visit. The serviced vehicle is delivered exactly on the mentioned delivery date. Soft customer defined standard Opinion based measures that cannot be observed and must be collected by talking to customer. This is purely based on the input obtained from customers. Soft customer defined standards are known as second category of customer defined standards. These standards are opinion based and cannot be measured. Soft standards are established by talking to customer, employees and so on. Direction guidance and feedback are obtained by soft customer defined standards. Customer perceptions and beliefs are measured in defining soft standards. Soft standards are important for person to person selling of processes. For soft customer defined standards let us consider the example of a service station for vehicles. The following can be considered as soft customer defined services.

 Customers are asked about the service requirements and they are recorded on a repair form. Explaining clearly to customers about the work done and the costs involved. Service Flexibility Versus Standards As we have seen how we can meet the customer defined service standards in the previous section,now we shall understand the difference between service flexibility and service standards. Services need to be flexible to meet the needs of a heterogeneous market. Service providing firmscannot have a standard service process or procedures for all customers as the requirements of customers are varied. Heterogeneous markets are the ones which have different market maturitylevels, demand patterns, local skills available, and differences in human attitudes. In simple terms we can say that one size does not fit all and this can be applied in the context of services also. A standard model for delivering services is not practical. Firms prefer to have someform of standardisation in order to achieve some form of consistency and profitability. Highlyindividualised services are not cost effective for the service companies to provideFlexibility and standardisation needs to be maintained at optimum levels. The level of flexibility of service must be determined by the firm that provides the services. For example, consider the caseof a beauty salon; here, it is important for the service provider to provide unique and individualisedattention to each of the customers.

Q.6 Define service sector in India and classify the major service sectors. Ans: Service Sector in India The economy of a country can be divided into three sectors namely primary sector, secondary sector, and tertiary sector. It is also known as the three sector hypothesis that was developed by Colin Clark and Jean Fourasti. Agriculture, fishing, and mining come under primary sector, manufacturing of goods, machinery, equipments and so on falls under the secondary sector and service or service industry forms the tertiary sector of the economy. Service sector involves activities where people share their knowledge and dedicate their time for improving the productivity, performance, potential, and sustainability. The first two (primary and secondary) sectors of the economy are the wealth producing sectors, where as the tertiary sector is the wealth consuming sector. This is because the primary characteristic of the service sector is that individuals and businesses produce services to customers. Here people interact with other people to provide services instead of end products or goods. The soft part of the economy such as tourism, education, retail industry, banking and so on together form the service sector. Service sector covers a major area of finance, insurance, transportation, public utilities, health care, trade, personal services and so on. Following are the service sectors of Indian economy that have grown faster than the economy: Information Technology is the most leading service sectors in Indian economy. The software services marked a 33% increase in the services sector. IT-enabled services (ITeS). This marked a 27 percent growth in the services sector in the year 2010. Telecommunications sector marked a 21 percent growth in the service sector in the year 2010.

 Hotels and Restaurants The hotel industry is witnessing a growth of 15 percent per year. Financial services sector witnessed a growth of 9.7 percent in the year 2009-10. Community Services It marked a growth of 5.6 percent in the year 2009-10.