A Term paper on

Service

Marketing

Submitted to:
Dr. Razia Begum Professor, Department of Marketing University Of Dhaka

Submitted by:
Sakti Pada Biswas ID No. 41017043 17th Batch, EMBA Program Marketing Department University Of Dhaka

Course title: Service Marketing

Date of Submission: March 19, 2013

1. What are the importances of service marketing? Importance of Services Marketing Many forces have lea to the growth of service marketing and many industries, companies and individuals have defined the scope of the concepts, frameworks and strategies that defined the field. The fiels of service marketing has evolved as a result of these combined forces

Service based economy:

Service marketing concept and strategies have developed in response to tremendous growth of service industries resulting in their increased importance in world economics. Almost 80% of total employment and gross domestic product comes from service sector in USA. Trade in service also is growing world wide. The growth of service sector has drawn increasing attention to the challenges of service sector industries worldwide.

As a business imperative:

Because quick pace of developing technologies and increasing competition make it difficult to gain strategic competitive advantages through physical product alone. Plus, customers are demanding more. They expect not only excellent high quality goods and technology but also high level of customer service and total service solution along with them.

Deregulated industries and professional service:

In past several decades, many large service industries including airlines, banking, telecommunication have been deregulated by the government in many countries. Deregulation created the industries more customer based, competition-sensitive marketing. Professional service standard of physicians, lawyers, engineers have been modified to allow advertising. They are now seeking better ways to understand and segment their customer to ensure the delivery of quality service.

Service equals profits:

A dedication to quality service has been the foundation for success for many firms. Service Corporate strategy focused on customer satisfaction, revenue generation and service quality may actually be more profitable than strategy focused on cost cutting or strategy that attempts.

A key differentiator:

Due to the increasing homogeneity in product offerings, the attendant services provided are emerging as a key differentiator in the mind of the consumers. Eg: In case of two fast food chains serving a similar product (Pizza Hut and Dominos), more than the product it is the service quality that distinguishes the two brands from each other. Hence, marketers can leverage on the service offering to differentiate themselves from the competition and attract consumers.

Building relationships:

Relationships are a key factor when it comes to the marketing of services. Since the product is intangible, a large part of the customers buying decision will depend on the degree to which he trusts the seller. Hence, the need to listen to the needs of the customer and fulfill them through the appropriate service offering and build a long lasting relationship which would lead to repeat sales and positive word of mouth.

Customer Retention:

Given todays highly competitive scenario where multiple providers are vying for a limited pool of customers, retaining customers is even more important than attracting new ones. Since services are usually generated and consumed at the same time, they actually involve the customer in service delivery process by taking into consideration his requirements and feedback. Thus they offer greater scope for customization according to customer requirements thus offering increased satisfaction leading to higher customer retention.

2. What are the expectations and perceptions of the customer (people) to the marketer (Government)? Customer expectation is what the customer expects according to available resources and is influenced by cultural background, family lifestyle, personality, demographics, advertising, experience with similar products and information available online. Customer perception is totally subjective and is based on the customer's interaction with the product or service. Perception is derived from the customer's satisfaction of the specific product or service and the quality of service delivery. Security: People expect that they would have security service from the government. The Police Force in Bangladesh provides the people with internal security as well as acting to guard the nation's assets from terrorists and criminal elements. In recent times police force are failing to play a vital role in maintaining domestic peace, handling criminals, investigating crimes and so on. Education: People have the right to get education from the government. For increasing of people and literacy rate, the demand of higher education is increasing. The technical institution, Business education, health education create the demand to the people. Bangladesh is failing to ensure proper environment for education. Communication: People expect to get all types of communication facilities from the government. With the hope of great development, the government of people republic of Bangladesh introduced National Information and Communication Technology (ICT) Policy in October 2002. This policy document guides the development of a country-wide ICTinfrastructure for human resources development, governance, e-commerce, banking, public utility services and all sorts of on-line ICT-enabled services by 2006. Transport: Transportation is an important sub-sector of total service sector of government. Although Bangladesh's road network has been greatly expanded, many roads are in a poor condition. City streets are often congested and roadways quite narrow. Several bridges have also been built, providing easy access to various regions in the country. Financial: Financial service is another important part of total service sector in Bangladesh. It is a promising sub sector which consists of the Bangladesh Bank (the central bank), four nationalized commercial banks (NCBs), 5 stateowned specialized banks (SBs), more than 30 private sector commercial banks (PCBs) and more than 9 foreign commercial banks (PCBs). The rest of the financial sector consists of more than 29 non-bank financial institutions, the capital market, 3 general and 17 life insurance companies, the cooperative banks and the microfinance institutions.

Health: The people expect they would get proper treatment from government hospitals when they are sick. But health care service in Bangladesh is relatively low, although they have improved recently as poverty levels have decreased. Most Bangladeshis continue to live on subsistence farming in rural villages where healthcare service is not enough. The health seeking pattern of the villagers show that nearly 70% of the patients who consulted a healthcare provider for curative services, contacted a village doctor. Showing clearly that village doctors are major players in the healthcare system that are not qualified. 3. What are service marketing mix of NIPRO JMI Pharma Ltd.? The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 Ps as compared to the 4 Ps of a product marketing mix.

The product marketing mix consists of the 4 Ps which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix the 4 Ps. The extended service marketing mix places 3 further Ps which include People, Process and Physical evidence. Product: The product in service marketing mix is intangible in nature. Like physical products service products cannot be measured. Service products are heterogenous, perishable and cannot be owned. The service product thus has to be designed with care. In NIPRO JMI Pharma The product is medicines that are able to cure sick people. Pricing: Pricing in case of services is rather more difficult than in case of products. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark up you get your final service pricing.

Place: Place in case of services determine where is the service product going to be located. Because services are performances that cannot be stored, service businesses frequently find it difficult to synchronise supply and demand. Also, services cannot be inventoried for the same reason. Consequently the service firms must make simultaneous adjustments in demand and capacity to achieve a closer match between the two. Also, the firm could use multisite locations to make the service more accessible to the users. Promotion: Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. You will find a lot of pharmaceutical companies promoting themselves rigorously. It is because competition in this service sector is generally high and promotions is necessary to survive. People: Most services are highly labour intensive; the behaviour of the personnel providing the service and the customers involved in production (due to the inseparable nature of services), have an effect on providing efficient customer service. To achieve customer-oriented personnel, the organisation needs to recruit and select the right people, and offer an appropriate package of employment, in order to enhance their skills and encourage them. Because of the constant interaction between the employees involved in the service, and the customersthere is a mutual dependence between the two. Process: Service process is the way in which a service is delivered to the end customer. In the how of the service delivery is extremely important because the service and the seller are inseparable. The functional quality, or the how of service delivery is especially important to service industries, as it is difficult to differentiate the technical quality, or the what of service delivery. Previous experience with a service also influences the expectations of the customer. If the customer has had a bad experience with the service on any previous occasion, it will influence his or her future perceptions of the service. Physical Evidence: Physical evidence influences the customers expectations of the service. Since services cannot be readily displayed, firms should create a conducive environment that helps the customers to develop a positive perception of the service. For example, people would not like to wait for a medical service if the atmosphere of the place they are made to wait is unpleasant. Customers can be put off by a mere change in the layout of the service facility or even the absence of clear signboards.

4. What are the providers gaps of NIPRO JMI Pharma Ltd.? There are four provider gaps that represent a potential cause behind a pharmaceuticals failure to meet doctors expectations. The following four provider gaps are shown under the horizontal line in Figure 1. Gap 1: The listening gap Gap 2: The service design and standards gap Gap 3: The performance gap Gap 4: The communication gap Gap 1: The listening gap The difference between what doctors expected and what NIPRO JMI management perceived about the expectation of doctors. A primary cause in many firms for not meeting doctors expectations that is, the customer gap is that the pharmaceutical lacks accurate understanding of exactly what those expectations are. Many reasons exist for managers not being aware of what doctors expect: They may not interact directly with doctors, they may be unwilling to ask about expectations, or they may be unprepared to address them. Gap 2: The service design and standards gap The difference between NIPRO JMI managements perception of doctors expectation and the translation of this perception into service quality specification and design. Closing gap 1 through research and effective management of doctors relationships is necessary, but not sufficient, for achieving service excellence. Even when a pharmaceutical has a thorough and ongoing understanding of its doctors expectations, it is still very possible, in fact, quite easy, to fail to deliver quality service. Gap 3: The performance gap The difference between specifications or standards of service quality and the actual service delivered to doctors. Although a pharmaceutical may have closed both the listening gap and the service design and standards gap, it may still fall short of providing service that meets doctors expectations if it is unable to deliver service in the way the service was designed Gap 4: The communication gap The difference between the service delivered to doctors and the promise of NIPRO JMI to doctors about its service quality. Even when a pharmaceutical has done everything suggested by the other three gaps to ensure service quality, there can still be a failure to meet doctors expectations if communications about the service do not match with what is delivered.

5. How to minimise those type of gap? Strategies to minimize GAP 1: The first strategy is to listen to customers in multiple ways through customer research and employee upward communication. Such research includes the full range of traditional marketing research methods such as surveys, focus groups, and complaint handling. The second strategy is to focus on building relationships by understanding and meeting customer needs over time. In firms where customers and companies have interpersonal contact, this can involve many different strategies: learning customers names, their businesses, their industries, and their histories with the firm. The third strategy is to know and act on what customers expect when they experience a service failure. Firms that learn from their failures which often result from not fully understanding their customers expectations can reduce or eliminate the listening gap.

Strategies to minimize GAP 2: The first strategy is to employ well-defined new-service development and innovation practices for designing services. Some have referred to this as formalization of a services R&D practice. A second strategy is to understanding the total customer experience and designing all elements of that experience in ways that meet or exceed customer expectations. This involves considering everything that occurs from the moment the customer engages the service through the entire length of the service experience. A third strategy is to measure service operations via customer-defined standards. These are standards set to correspond to customer expectations rather than to firm-focused goals. The final strategy is to use of physical evidence in service design and in meeting customer expectations. This includes everything tangible in the service-delivery process, such as business cards, reports, signage, Internet presence, equipment, and facilities used to deliver the service.

Strategies to minimize GAP 3: The first strategy is to align the firms human resource strategies around delivering service excellence. In creating such, an organization must hire the right people, develop those people to deliver service quality, and retain the best people. The second strategy is to define customers roles and assist them in understanding and performing their roles effectively. The organization needs to clearly define and communicate what the customers role entails in essence, the customers job description. The third strategy is to integrate technology effectively and appropriately to aid service performance. For service workers (and customers) to be efficient and effective in performing their jobs, technology that facilitates their efforts is often required. The forth strategy is to motivate and incentirize intermediaries as retailers, franchisees, agents, brokers, subcontractors, and outsourcers to perform service according to firm standards. The final strategy is to synchronize demand and capacity. Most companies rely on operations strategies such as cross training or varying the size of the employee pool to synchronize supply and demand. Marketing strategies for managing

demand such as price changes, advertising, promotion, and alternative service offerings can supplement approaches for managing supply. Strategies to minimize GAP 4: The first strategy revolves around integrated services marketing communication that ensures that everything and everyone sending messages or signals about the service does so in a manner that is consistent with what customers expect and what is actually delivered. The second key strategy for closing the communication gap is to manage customer expectations effectively throughout the service experience. Communications to the customer must also evolve through time to ensure that expectations and service performance match. The third strategy for closing gap 4 is to develop mechanisms for internal communication so that the customer hears consistent messages before the sale and during service delivery. A common cause for the communications gap is overpromising on the part of customer-contact employees, salespeople, and marketing communications. The fourth strategy to close the communications gap is to create a strong brand image for the service. A brand image reinforced by brand characters, slogans, logos, and similar images serves to unify perceptions of the brand. The fifth strategy is to provide pricing of services appropriately. In packaged goods (and even in durable goods), customers possess enough price knowledge before purchase to be able to judge whether a price is fair or in line with competition.

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