1. Services
Marketing
1

2. Current Competitive Trends
• Customer Satisfaction and Customer Focus
• Value
• TQM and Service Quality
• Service as a key differentiator in Manufacturing
Firms
• New measurement systems linking C.S with
financial goals and operational measurements
• Emerging Technology
• Internationalisation of Services
2

3. Characteristics Of Services
• Intangibility • Ownership
• Inseparability • Experiential
• Heterogeneity • Perishability
Implication of these
characteristics ???
3

4. The Product Continuum
Goods Tangible
Salt dominant
Shoes
Products contain both
VCR tangible and intangible
Automobile components; predominantly
Fast Food tangible products are called
Cruise goods, and predominantly
Consulting intangible products are
Insurance considered services.
Education Intangible
Ideas / Services dominant
4

5. Mahatma Gandhi on Customer
Orientation
• A customer is the most important person in our premises
• A customer is not dependent on us , we are dependent on
him
• A customer is not an interruption in our work, he is the
purpose of it.
• We are not doing a favour by serving him, it is he who does
a favour by giving us the opportunity to do so.
• A customer is not someone to argue or match wits with.
Nobody ever won an argument with a customer
• A customer is a person who brings us his wants. It is our
job to handle them profitably to him and to ourselves.
5

6. Services Marketing Mix
• Product
• Price
• Promotion
• Place
• People
• Physical evidence
• Processes
6

7. Service Triangle
Management
g
Ex
t in
ter
rk e
Enabling the Selling the
na
Ma
promise promise
lM
l
ark
na
er
et
Int
ing
Interactive Marketing
Employee Customer
Delivering the
promise
7

8. Common Traps
• Regarding internal communications as less
important
• Playing “favorites” and the opposite, i.e.
automatically treating some people less well
• Forgetting the effect on the external customer
• Being more concerned with “the system” than the
end result
• Having a messy filing system
• Reacting quickest to those who “shout loudest ”
• Placing your own priority on the item
Internal paperwork nearly always affects the
external customer. Process it quickly and
efficiently
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9. Customer Satisfaction = f (x, y)
X = Your Performance
Y = Customer Expectations
Performance > Expectations Delight / Wow
Performance = Expectations Satisfaction
Performance < Expectations Dissatisfaction
9

10. Service Quality Gaps
Gap 1 : Not knowing what customers expect
Gap 2 : Not selecting the right service design standards
Gap 3 : Not delivering to Service Standards
Gap 4 : Not matching Performance to Promises
Gap 5 : Perceived Service and Expected Service
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11. GAP - 1
CUSTOMER EXPECTATIONS
Key Factors
Insufficient marketing research
Inadequate use of Marketing research
Lack of interaction between management and customers
Insufficient communication between contact employees
and managers
Too many layers between contact personnel and top
management
MANAGEMENT OF PERCEPTIONS OF
CUSTOMER EXPECTATIONS
11

12. GAP - 2
MANAGEMENT OF PERCEPTIONS OF
CUSTOMER EXPECTATIONS
Key Factors
Inadequate management commitment to service quality
Absence of formal process for setting service quality goals
Inadequate standardization of tasks
Perception of infeasibility – that customer expectations
cannot be met
Co-Driven Standards
SERVICE QUALITY SPECIFICATIONS
12

13. GAP - 3
SERVICE QUALITY SPECIFICATIONS
Key Factors
Lack of teamwork
Poor employee – job fit
Poor technology job fit
Lack of perceived control ( contact personnel)
Inappropriate evaluation / compensation system
Role conflict / ambiguity among contact employees
Failure to match demand and supply
Customers not fulfilling their roles and responsibilities
SERVICE DELIVERY
13

14. GAP - 4
SERVICE DELIVERY
Key Factors
Inadequate communication between salesperson &
operations
Inadequate communication between advertising & operations
Differences in policies and procedures across branches or
departments
Exaggeration in advertising
Exaggeration in personal selling
EXTERNAL COMMUNICATION TO CUSTOMERS
14

15. Why Study Consumers?
• The psychology of consumers: how • Information Search
they think, feel, reason, and select • Evaluation of
between different alternatives service alternatives
• Psychology of how the consumer is • Service Purchase
influenced by his or her environment and consumption
• The behavior of consumers while • Post-purchase
shopping evaluation
15

16. Segmentation Dynamics
First Level Segmentation - Demographics & Psychographics
Second Level Segmentation - Desired Benefits
Third level Segmentation - Behavior
Behavior refers to a consumer’s response (or
lack of response) to a given stimuli.
Switchers Vs. Loyals
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17. DIMENSIONS OF QUALITY
• Reliability
• Tangibles
• Responsiveness
• Assurance
• Empathy
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18. The Five Dimensions of Service
Service Dimension Definition
Reliability The ability to perform the promised
service dependably & accurately
Tangibles The appearance of physical facilities,
equipment, personnel & communication
materials
Responsiveness The willingness to help customers &
provide prompt service
Assurance The knowledge & courtesy of
employees and their ability to convey
trust & confidence
Empathy The caring, individualised attention
provided to the customer
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19. The flower of Service
Information
Payment Consultation
Billing Order
CORE Taking
Exceptions Hospitality
Caretaking
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20. Creating and Delivering New Services
CORPORATE OBJECTIVES
AND RESOURCES
Market Opportunity Analysis Resource Allocation Analysis
Market Positioning Statements Operating Assets Management
Service Marketing Concept Service Operations Concept
SERVICE DELIVERY
PROCESS
Performance Evaluation
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21. Service Blueprints
21

22. Gap Analysis Grid
SATISFACTION
I Low High
M Attributes that need Current
P High attention - area company
O where priorities strength
should be focused
R
T
A Unnecessary
N Low Low Priority strengths -
possible overkill
C
E
22

23. Key reasons for provider GAP 4
Service Delivery
Key Factors Related to Pricing:
Assuming that customers hold reference prices for services
G
Narrowly defining price as monetary cost
A
Signalling the wrong quality level with an inappropriate
price P
Not understanding customers’ value definitions 4
Not matching price strategy to customers’ value definitions
External communications to Customers
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24. Determinants Of Customer Added Value
Image Value
Total
Product Value
customer
Services Value
value
Customer
Monetary Price delivered value
Time cost Total
Energy cost customer
Psychic cost cost
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25. Customer definitions of value
“Value is low price”
“Value is everything I
• Discounting
want in a service”
• Odd Pricing
• Prestige pricing
• Syncro-pricing
• Penetration Pricing • Skimming Pricing
“Value is the quality I “Value is all that I get
get for the price I pay” for all that I give”
• Value Pricing •Price Framing
• Market Segmentation •Price Bunding
Pricing •Complementary pricing
25

26. Key reasons for provider GAP 3
Customer-Driven Service Designs and Standards
Key Factors Related to Demand and Capacity:
• Failure to smooth the peaks and valleys of demand G
• Overuse of capacity
A
• Attracting inappropriate customer segments to
P
build demand
3
• Relying too much on price to smooth demand
Service Delivery
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27. Strategies for shifting demand to match capacity
Demand too Demand too low
high Shift Demand
Use Signage to communicate Use Sales and advertising to
busy days and times increase business from current
market segments
Offer incentives to customers
for usage during nonpeak Modify the service offering to
times appeal to new market
segments
Take care of loyal or ‘regular’
customers first Offer discounts or price
reductions
Advertise peak usage times
and benefits of non peak use Modify hours of operation
Charge full price for the Bring the service to the
service - no discounts customer
27

28. Strategies for flexing capacity to match demand
Demand too Demand too low
high Flex Capacity
Stretch time, labor, facilities,
and equipment
Perform, maintenance,
Cross- train employees renovations
Hire part-time employees
Schedule vacations
Request overtime work from
employees Schedule employee training
Rent or share facilities Lay off employees
Rent or share equipment
Subcontract or outscore
activities
28

29. Elements of Physical Evidence
Servicescape
Facility Exterior
Exterior Design Other Tangibles
Signage Business cards
Parking Stationery
Landscape
Surrounding Environment Billing statements
Reports
Facility Interior
Interior Design Employee dress
Equipment Uniforms
Signage Brochures
Layout
Air quality / Temp.
29

30. Typology of the Service Organisations based
on variations in form and use of Servicescape.
Complexity of the Servicescape
Servicescape usage Elaborate Lean
Self-Service Essel World ATM
(Customer only) Golf course Vending machines
Remote Service Telephone company Telephone mail
(employee only) Insurance company -order desk
Utility Automated voice-
Professional services messaging based
services
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31. Typology of the Service Organisations based
on variations in form and use of Servicescape.
Complexity of the Servicescape
Servicescape usage Elaborate Lean
Interpersonal Hotels Dry cleaner
Services Restaurants Hair saloon
(both customer and Health clinic
employee) Hospital
Bank
Airline
School
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32. How Do Customers Form Expectations
Word of mouth
Price
Past experience
Brand image and your communications
Your competitors communications
Independent research agencies
Business Drivers / End Customers Expectations
32

33. ES THE SERVICE
OM
BE ION QUALITY
ER MP
OM HA ED
LADDER
ST C R E
CU SI IC
DE RV
SE F CE
O
E NA
ON LER CE
Z VI
TO S ER
TE
UA RY
EQ TO
LEVELS OF AD FAC
EXPECTATION IS
AT
U NS
33

34. Approaches for managing customer
expectations
Communicate realities in the service
industry
Delivery
Communicate criteria for service
> or =
effectiveness
Promise
Create tiered-value offerings
Offer choices
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