Professional Documents
Culture Documents
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1. Intangibility:
• Services are not physical objects, and cannot be touched or directly perceived by the
physical senses.
• While selling or promoting a service, one has to concentrate on the satisfaction and
benefit a customer can derive from the service.
2. Perishability:
• Services have a high degree of perishability.
• The element of time assumes a significant position. If a service is not successfully sold
today, the potential earnings from that are lost forever. It cannot be stored.
• Unutilised services are an economic waste. e.g. an unoccupied building, an unemployed
person, vacant seats in transport, etc.
3. Inseparability:
• Services are created and supplied simultaneously. There is no clear separation between
the creation and consumption of the service, and services and service providers are
closely associated.
• Donald Cowell states “Goods are produced, sold, and consumed, whereas services are
sold, and then produced and consumed.”
4. Heterogeneity:
• The quality of services cannot be standardised.
• Consumers rate the services in different ways. This is due to the difference in perception
and expectations of inviduals at the level of providers and users.
5. Ownership:
• The very nature of services precludes transfer of ownership, as in the case of goods.
• Users only gain access to services. They cannot own the services.
e.g a customer can use a hotel room or swimming pool, however the ownership
remains with the service providers.
6. Simultaneity:
• Services cannot move through channels of distribution and cannot be delivered to
potential customers. Either are brought to the services, or service providers go to the
users.
• Thus, the consumption and production of services happens at the same place
simultaneously.
7. Quality Measurement:
• It is very complicated to accurately quantify the value of services, in monetary terms.
• Quality measurement of services is subjective, and may vary with various factors like
expectations and perception of consumers, brand value of service provider, etc.
• e.g. We can easily quantify the food served in a restaurant, but it's difficult to do the
same to measure the performance of the restaurant staff.
8. Nature of Demand:
• Demand for many services is generally fluctuating.
• e.g. During holiday season, the demand for transport and tourism services increases
drastically.
Service Triangle:
1. EXTERNAL MARKETING
2. INTERNAL MARKETING
3. INTERACTIVE MARKETING
• The three types of service marketing can be depicted and explained by a 'Service Triangle'.
1. External Marketing: “Setting the Promise”
• Marketing to END-USERS.
• Involves pricing strategy, promotional activities, and all communication with customers.
• Performed to capture the attention of the market, and arouse interest in the service.
1. Technical Quality:
This refers to the technical competence and quality offered by the service
provider, in the form of production facilities, skill, etc. in the delivery of
service.
Since technical quality is easily quantifiable, customers tend to give more
weightage to this aspect. But customers are not interested only in what is
being delivered, but also in how it is delivered.
2. Functional Quality:
This refers to the behavior of employees and how the production facilities are
used. It includes the attitude and performance of personnel. For example, the
rude behavior of the receptionist can reverse the good impression formed by
the high technical quality, and cause loss of customers.
The customer can make judgements on technical and functional quality, during
decisive moments of interaction, called 'SERVICE ENCOUNTERS'. Service
encounters may be classified into:
1. Remote Encounter:
No human contact.
The tangible evidence of the service becomes the basis for judging quality, as
there is no human contact in service delivery.
e.g. ATM, vending machines, automated online services.
2. Phone Encounter:
Indirect human contact.
Here, the service quality can be judged on the basis of several factors like
promptness in answering the call, tone of voice, and efficiency in handling
issues.
e.g. Telemarketing.
3. Face-to-Face Encounter:
Direct human contact.
In this situation, there is direct, face-to-face contact between the customer and
the employee.
Determining service quality in such a situation is very complex, as it will be
influenced by the behaviour of the customer and employee in that moment.
• Thus, interactive marketing is the decisive stage where value is created and delivered to
the customer. At this stage, all efforts of internal and external marketing will be
reflected.
• A PRODUCT is anything that can be offered to the market, for attention, acquisition,
and consumption, in order to satisfy a want or a need.
• Product Levels:
2. Price:
• 6-Market Model:
1. Existing and prospective customers.
2. Existing customers who refer to other prospects.
3. Consumer groups, business press, media, govt.
4. For attracting right employees.
5. Suppliers of raw materials, their standards and quality.
6. Internal departments and staff.
SERVICE CHANNEL OF
DISTRIBUTION
Shares, Real Estate Service Brokers
Insurance, Travel, Shipping, Loan Service Agents
Telemarketing, E-Marketing, Mail-order Direct Marketing
Fast-food / Supermarket / Cyber-cafe chains Franchising
4. Promotion:
• Advertising.
• Sales promotion.
• Sampling of services.
• Using customers as customer-inductors.
• Offering discounts to existing customers.
• Developing customer-loyalty & rewards programs.
5. Physical Evidence:
6. Process:
• Process depends on 6 factors:
1. The service itself (i.e. if it is process-dependent).
2. Level of customer-participation.
3. Degree of customer contact.
4. Degree of divergence (degree of standardization).
5. Location of service.
6. Complexity of service.
• Process includes all of the value-creating activities involved in production and delivery
of the service.
7. People:
• The role of people is of utmost importance in a service organization.
• Role of People:
In order to have a result-oriented approach, the service firm must:
1. Hire the right person for the right job.
2. Train people to deliver quality services.
3. Delegate authority and responsibility.
4. Promote teamwork.
5. Provide a good support-system to employees.
6. Retain the best employees and implement techniques to prevent attrition.
8. Positioning:
• Positioning is deduced & planned by analysing positioning strategies.
• Positioning Strategies: 1. Boston Consulting Group Matrix
Cash Cow High market share. A business unit that has a large
Low growth rate. market share in a mature, slow
growing industry.
10. Planning:
• Clearly define the goal.
• Identify all the main issues to be addressed.
• Review past performance.
• Decide budgetary requirement.
• Focus on matters of strategic importance.
• What are the requirements and how will they be met?
• What will be the likely length of the plan and its structure?
• Identify shortcomings in the concept.
• Implement the plan.
• Review periodically.