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Services Marketing.pptx

  1. Services Marketing Unit I
  2. Services – The Concept • A service is an "(intangible) act or use for which a consumer, firm, or government is willing to pay.“ • Examples include work done by barbers, doctors, lawyers, mechanics, banks, insurance companies, and so on. Public services are those that society (nation state, fiscal union or region) as a whole pays for. • Marketing experts feel that the content of service as much more wider • “Services can be defined as an action of organization that maintains and improves the well being and functioning of people” • According to US Govt Standard Industrial certification, establishment primarily providing a wide variety of services for individual, businesses and Govt establishments and other organizations, hotels and other lodging places, establishment providing personal services, repairs and amusement services, educational institutions, membership organization and other miscellaneous services are included.
  3. Goods Vs Services Goods and services can be differentiated based on 1) Tangibility 2) Transferability 3) Existence 4) Heterogeneity(hardly standardised) 5) Reselling
  4. Features of Services • Intangibility • Perishability • Inseparability • Heterogeneity • Ownership • Simultaneity • Quality measurement • Nature of demand
  5. • The American Marketing Association defines services marketing as an organizational function and a set of processes for identifying or creating, communicating, and delivering value to customers and for managing customer relationship in a way that benefit the organization and stake-holders. • Services are (usually) intangible economic activities offered by one party to another. Often time-based, services performed bring about desired results to recipients, objects, or other assets for which purchasers have responsibility. In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities , networks, and systems; but they do not normally take ownership of any of the physical elements involved. Services Marketing
  6. • The application of marketing principles in services sector is the main thing in the services marketing. • Marketing of services is meant for marketing something intangible.
  7. Why Services Marketing • Upward trend in the disposable income • Increasing specialisation • Growing fashion • Professionalism in education • Information explosion • Sophistication in Market • Increasing governmental activities
  8. Significance of services marketing • Creation and expansion of job opportunities • An optimal utilisation of resources • Paving avenues for the formation of capital • Increasing the standard of living • Environmental friendly technology
  9. Types of Services • GATS identified 155 activities as services and classified them into 11 categories. These11 types of services are • Business services • Communication • Construction and engineering • Distribution • Environment • Finance • Tourism • Health • Recreation • Transportation
  10. Types of Services There are 4 types of services on the basis of ownership and business objective Government for profit – Public sector – e.g. post office, police, water, electricity Government not for profit –g. charities, foundations, old age homes, societies related to women, literacy, welfare etc. Non-government for profit– Business sector – e.g. banks, hotels, airlines, travel agencies, insurance, legal, medical and consultancy Professional services –g. security personnel, accountants, auditors, computeroperators etc In relation to goods there can be 7 types of services Pure tangibles –g. renting goods where no service or intangibles are associated Major tangible with minor intangibles – g. tangible good with accompanying services ( Refrigerator ,AC) Minor tangibles with major intangibles –g. major services accompanying a minor tangible good (Meals on Airlines) Pure services – Here the o er is only a service (telecom, health club) Rented goods – The service gives the right to possess and use a product Owned goods – It involves creation, repair or improvement of a product Non good services – Such a service has no product elements but is rather an experience
  11. Relationship marketing • Relationship marketing refers to those marketing activities that are aimed at developing and managing long-term relationships with the customers. The details about the customer, his buying patterns, contacts, etc. are maintained in a sales database and an account executive is assigned to fulfill the needs of the customers and maintain the relationships successfully. • Relationship marketing recognizes the value of a customer and the significance of keeping good relations with him. • Marketers attempt to build goodwill and confidence in the consumer’s mind by showing that they care. • Relationship marketing is a wide concept; it covers not just the customers, but also the other stakeholders who are vital to the company.
  12. Definition • Relationship Marketing is marketing with the conscious aim to develop and manage long term and/or trusting relationship with customers, distributors, suppliers, or other parties in the marketing environment”. Relationship management begins with clear understanding of: Who your customers are What are their values What they want to buy How they prefer to interact with you and How they expect you to serve them.
  13. The Characteristics of Relationship Marketing 1. Concern 2. Trust and Commitment 3. Service
  14. Goal of Relationship marketing • Enhancing • Retaining • Satisfying • Getting
  15. Strategies for Relationship Marketing (i) Core Service Strategy (ii) Relationship Customization (iii) Service Augmentation (iv) Relationship Pricing (v) Internal Marketing
  16. Service Marketing Mix • The traditional marketing mix is considered in the context of services. Since a different marketing mix is needed for services some have expanded the traditional four Ps. 1. Product 2. Pricing 3. Promotion 4. Place 5. People 6. Process 7. Physical evidence
  17. Service Marketing Mix
  18. Service Marketing Mix - Definition “The marketing mix concept is a well established tool used as a structure by marketers. It consists of the various elements of a marketing programme which need to be considered in order to successfully implement the marketing strategy and positioning in the company’s market. It is important internal elements or ingredients that make up an organisation’s marketing programme ”. – Adrian Payne
  19. Product (Service Product) According to Adrian Payne, a product is an overall concept of objects or processes which provide some values to customers. Goods and services are subcategories of product. The term produce is used in a broad sense to denote either a manufactured good or product and a service. Strictly speaking, customers are not buying goods or services but specific benefits and value from the total offering. This total offering to the customer is termed as “offer”. Total Product - Core Product - Expected product - Augumented product - Potential
  20. 1. The core or generic product The core product represents the basic services of a product. This product is at its basic level. For example, food served in a restaurant a bed in a hotel room for the night safety of deposits and loanable funds in a bank. 2. The expected product The expected product consists of the core product together with the minimal purchase conditions which need to be met. For example in a restaurant in addition to basic food served, aspects such as cleanliness, timely service polite and courteous service of bearer, availability of menu and background music are expected.
  21. 3. The augmented product Augmented product refers to offerings (product benefit or services in addition to hat customers expect). This concept enables a product to be differentiated from another. For example, though IBM has not got technologically advanced core product they are praised for excellent customer service. This adds value to their core product in terms of reliability and responsiveness. 4. The Potential product Potential product refers to doing everything potentially feasible to hold and attract the customers. The concept of potential product of a restaurant is viewed in terms of a pleasing flower arrangement, manager’s word of thanks, readiness to go out of the way to serve, etc.
  22. PRICE Price plays a significant role in the marketing mix by attracting revenue to the marketer. Pricing decisions are important for determining the value of the service as perceived by the customer and building of an image for the service. Price serves as a basis for perception of quality. The pricing strategy should be in tune with the marketing strategy. Pricing strategy should gain competitive advantage for the firm. PROMOTION Promotion is an important part of the marketing mix for many marketers. The promotion element of the service marketing mix communicates the positioning of the service to customers. Promotion adds tangibility and helps the customer evaluate the service offer. The promotion mix includes six elements, namely (a) Advertising (b) Personal Selling (c) Sales Promotion (d) Public Relations (e) Word of mouth and (f) Direct mail.
  23. PLACE Place mix of services marketing involves the location and channels which are the two key decision areas. The service provider should decide as to how to deliver the service to the customer and where this should take place. The service provider should ensure that the promised services reach the ultimate users without any distortion. With regard to location, a service firm decides where its operations and staff are situated. PEOPLE In all the organisations, people play a decisive role. Employees working in the service organisations are the contact people with the customers. Employees working in a bank, hotel, hair-cutting saloon etc., are all frontline people. They are in direct contact with the customers who visit their services. The role of these frontline people decides the success of the service organisation. A service organisation can be only as good as its people. The strength and success of the service organisation lies in the quality of the service personnel working in the organisation.
  24. PHYSICAL EVIDENCE Physical evidence is another important variable to be considered in the context of services marketing. Since a service is intangible, it is important for the client to search for evidences which enables him to evaluate the service. Physical evidences are those tangible clues which customers may receive during the process of receiving the service. The customers evaluate the worthiness of the service with the physical evidences they receive. PROCESSES The processes by which services are created and delivered to the customers are an important element of marketing mix. Customers perceive the delivery system as a part of the service itself. The decisions on process management are of great importance to the success of the marketing of the service. The processes involve the procedures, tasks, schedules, mechanisms, activities and routines by which a service is delivered to the customer.
  25. SERVICE MARKET SEGMENTATION Market segmentation is defined as the process of dividing a market into distinct sub-sets of consumers distinguished from one another, with common needs or characteristics & selecting one or more segments to target, with a distinct marketing mix 1) UNDIFFERENNTIATED MARKETING APPROACH 2) DIFFERENTIATED MARKETING APPROACH 3) CONCENTRATED MARKETING APPROACH
  26. BENEFITS OF MARKET SEGMENTATION Proper Choice Of Target Market  Helps Distinguish One Customer From The Other  Effective Tapping Of Market  Helps Crystalize The Need Of Target Audience  Becomes Productive And Profitable  Brings Benefits To Customer As Well  When Segmentation Attains High Sophistication, Customers And Companies Stay Together