Marketing of services

Unit.1 Introduction to service Marketing-Understanding Service, The Nature of Service Marketing, Classification of Service.
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Understanding Services
Factor Influencing the Growth of the Service

Sector. Service Defined. Tangibility Spectrum. Characteristics of Services. Generic Difference between Goods & Services. Classification of Services Developing Frameworks for Analyzing Services Myths about Services. Made by:- Miss Kiran
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Factor Influencing the Growth of the Service Sector.

Demographic Changes. Social Changes Economics Changes. Technological Changes. Political & Legal Changes. Policy Changes

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Service Defined:-Services are those Activities which satisfy wants.

Tangibility Spectrum:- The Major factor that differentiates a service to its Product from its Intangibility. A pure Tangible Good:- wheat, sugar, A tangible good with accompanying services:cars, computers ( after-sales services) A major accompanying minor goods & services:-(child-care centers provide food to the babies under their care). A pure service:-teaching
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Characteristics of Services
Intangibility:- which can not be

touched. Heterogeneity:- not in uniform. Inseparability:- delivery & consumption of a service are inseparable. Perishability:-can not be inventoried or stored.
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Classification of Services
Classification based on Degree of Involvement of the

Customer:-

People Processing:- The customer is highly involved in the services

process & needs to be physically present in order to experience the service. Ex. School or training centers. has to submit his property to the service provider. Ex car

Possession Processing:-the customer doesn't require to be present but

Mental Stimulus Processing:-the attention of the customer must be

directed on the service in order to experience the service. Ex advertising

Information Processing this type of service requires services personnel

to collect information, analyze it, interpret & appropriate advice to the client. Ex. market research
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Classification based on the Service Tangibility

Highly Tangible:- the customer obtains a tangible

Product in hand. As cell phone on rent. Service Linked to tangible goods:- some organization offer on warranty period to customer who purchase products from them. As photocopying machine. Tangible goods linked to Services:- some service offer a tangible product along with the service requested by the customer. As Airlines services offer food & magazines to passengers. Highly intangible:- the services which do not provide customers with any tangible product. As massage parlor
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Classification based on Skills & Expertise Required

Professional Services:- the service

provider to be formally trained to deliver the service. Ex Doctor, Pilot. Non Professional services:- these Service do not require the service provider to undergo any training to deliver the service.

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Classification based on Business Orientation of Service Provider

Not-for-profit organization:- the main

objectives of the service providers is to serve society & not to make profits. Ex. Government schools, Social service organizations. Commercial organization:- the main objectives of the service provider is to earn revenues & make profits. Ex Airlines Insurance firms.
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Classification based on Type of End-User

Consumer services:- purchased by

individuals customer for their own consumption. Ex Beauty Care, Hair Cutting. Business to Business:- These service are purchased by the organization. Ex Market research, Advertising. Industrial services:- Based on a contract between organization & service providers. Ex Machine installation, plant maintances.
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The Nature of Service Marketing

Evolution of Service Firms. A Different Approach for Marketing

Services. The Service Marketing Triangle. The Services Marketing Mix Key Marketing Issues Before a Service Organization. New Avenues in Service Marketing.
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Evolution of Service Firms

While Service firms in the earlier days gave very

little importance to : Segmentation Customer satisfaction New Product Development Service Quality & some others. Todays firms stress on these aspect to enhance customer satisfaction.
Develop Business.
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Further, Service firms did not pay due attention to service quality Earlier. However, today they emphasize on service quality by assuring the customer of their commitment to address Instances of less than perfect service quality. The assurance of best quality service by firms is in the form of guarantees or refund of money compensation in the event that the customer is dissatisfied. For ex Dominos Pizza promises that it will offer its pizza free if it is not delivered at the customers doorsteps with in 30 minutes of the order being placed.
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A Different Approach for Marketing Services

Narrow definition of marketing by service

providers. Lack of Appreciation for marketing skills in service organization. Difference in organizational structure of service firms. Problem in determining costs for pricing of services. Constraints & opportunities for not-for-profit service organization.
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1.Narrow definition of marketing by service providers

Earlier, service marketers had very narrow

definition for marketing & consider it function that consisted only of advertising, sales promotion & public relations. Very few extended this definition to include sales & market research as well. Other marketing such as segmentation, positioning, customer service, services diffraction, new product development, emphasize service quality etc. were not paid adequate attention Miss Kiran soni by service marketers. Made by:15

2.Lack of Appreciation for marketing skills in service organization:There is less emphasize on sales training & sales activities in service firms, unlike in manufacturing companies. 3.Difference in organizational structure of Service firms:- In such organization structures, the top management frames strategies, which are then implemented by personnel at the lower levels.
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4.Problem in determining Costs for prices.

The heterogeneous and intangible

nature of services makes it difficult to deterring pricing of a service using the cost-based strategy. the usual pricing method available to marketers do not suggest any techniques to set for a price for the skill, expertise & value that are involved in service.
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5.Constraints & opportunities for not-forprofit service organization

The major constraints faced by not-for-profit

service organization are funding & lack of adequate & appropriate infrastructural facilities. Constraints such as these make it difficult for these organization to improve their operation & functioning. this is turn has an adverse impact on the effectiveness of these organization to deliver quality service.
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Other Challenges
Being intangible in nature, service can

not be touched, smelt, seen or tested. This make it difficult to market a service due it difficulty in making the customers conceptualize the service. Another challenges that arises due to heterogeneity of service is the difficulty in standardizing the service & ensuring quality control.
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The service marketing Triangles

COMPANY

(ii) Internal marketing

(i)
External marketing

FRONT-LINE EMPLOYEES Interactive Marketing (iii)

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CUSTOMER

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The service marketing triangle Consist of three components of the service delivery process, namely the company, the front-line employees & the customers. In the service marketing triangles , the company, front lines employees & the customer make up three corners of the triangles. (i) Company & customer External marketing) The company communicates information about its products & service to the external customers by means of marketing communication mix comprising advertisement, sales promotion, personal selling, direct marketing & public relations.
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front-lines employees constitute internal marketing by means of which the company enables its employees to deliver quality service to customer. The internal marketing process makes use of tools such as newsletters, video shows etc. (iii) Front-Lines Employees & Customer (Interactive Marketing) this is the most important one that finally determines customer retention by service firms by interactive marketing All three-internal, external & Interactive marketing-play an important role in service marketing neglecting any of these will result in the failure of a service organization in achieving its marketing goals.
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The Services Marketing Mix

The marketing mix for service is considered

to consists of 7Ps which are: Product Price place promotion People Physical evidence Process.
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Key Marketing Issues Before a Service Organization

Managing Differentiation among

services. Managing Productivity. Managing services quality.

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Managing Differentiation among services

i. ii. iii. iv. v. vi. vii.

The intangible nature of service marketing it difficult for service providers to differentiate themselves from their competitors on aspect other than plan. the following tangible elements may be used to differentiate service businesses. Service premises. Packaging Service personnel. Tools & equipment used. Customers. Convenience. Name of the service establishment.

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Managing Productivity
Managing productivity in service organization

is difficult task due to the multifunctional nature of service jobs. For ex. In a fast food outlet, the service personal perform various task which include preparing the food (production), delivering the food to the customers (retail service), ensuring that the customer have an enjoyable eating experience (customer service), & accepting payment & tendering the change (transaction processing).
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Managing services quality

The intangibility, heterogeneity, &

inseparability characteristics of service make it difficult to control the service quality since the service cannot be tested, measured & verified accuracy before it delivering it to the customer. managing quality in service firms require an understanding & identification of the service characteristics that make it difficult to control service quality.
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New Avenues in Service Marketing

Service provider are looking for new

ways to attract new customers by promising them a pleasant service experience. trade shows & trade fairs serve as avenues for companies to attract customers & generate new leads.
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THANKS
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