It help to understood the Mix of Service Marketing... thank you...

1. Services Marketing Mix
Product, Price, Place, Promotion
Guided By:
Dr. Reena Ladiwala
Submitted to:
Department of business administration
M. K. Bhavnagar university,
Bhavnagar.
Service Marketing
Prepared By:
Kartik Gohel, Trishala Madhani,
Dhara Bhadiyarda, Rajnandiniba Gohil

2. P R E S E N T E D B Y : K A R T I K G O H E L
Product

3. Definition of ‘services’
“Services are intangible activities or benefits that
an organization provides to consumers (such as
airline trips, financial advice, or automobile repair)
in exchange for money or something else of value”
- Kerin et al

4. Definition of ‘Services’
“ A service is any activity or benefit that one
party can offer to another that is essentially
intangible and does not result in the ownership of
anything. Its production may or may not be tied to
a physical product”.
- Kotler and Armstrong

5. Characteristics of Services
 Intangibility
 There is no physical presence
 Inseparability
 The customer must be present for the service to take place
 Inconsistency
 The service provider cannot provide exactly the same service
every time
 Inventory
 A service cannot be stored.

6. Service Marketing Mix
The essence of every marketing strategy is the
marketing mix. For service marketing , due to special and
unique features the marketing mix is extended to include
physical evidence , process and people. Thus marketing
mix of service are…..
 Product
 Price
 Promotion
 Place
 People
 Process
 Physical Evidence

13. Example: Product of AXIS Bank:
 The main products of AXIS Bank are Saving
Account, Current Account and Demat Account. The
other products are Home loan, personal loan,
Insurance, Credit cards, etc.
 For better marketing of products, the products are
categorized under Axis Bank and Axis Sales.

15. P R E S E N T E D B Y : T R I S H A L A M A D H A N I
Price-Role of non-monetary
costs, pricing strategy pricing
and revenue Management, yield
management

16. Price
 Pricing is one of the most important elements of
the marketing mix, as it is the only element of the
marketing mix, which generates a turnover for the
organisation.
 Price must support the other elements of the
marketing mix. Pricing is difficult and must
reflect supply and demand relationship. Pricing
a product too high or too low could mean lost sales
for the organisation

17. Role of non-monetary Costs
 When a customer buys a product, he is not only
spending money, he is spending other things as
well. These things are called non-monetary costs
and they are spent in the form of time, convenience,
effort and psychology.
 Non-monetary costs represent other sources of
sacrifice perceived by consumers when buying and
using a service. Time costs, search costs, and
psychological costs often enter into the evaluation of
whether to buy or rebuy a service, and may at times
be more important concerns than monetary price.

18. Types of Non-monetary costs
Time costs
 Most services require direct participation of the
consumer and thus consume real time.
 Consider the investment you make to exercise, see a
physician, or get through the crowd to watch a concert
or baseball game. Not only are you paying money to
receive these services; you’re also expending time.
Time becomes a sacrifice made to receive service in
multiple ways. First, because service providers cannot
completely control the number of customers or the
length of time it will take for each customer to be
served, customers are likely to expend time waiting to
receive the service. Waiting time for a service is
virtually always longer and less predictable than
waiting time to buy goods.

19. Search costs
 When a consumer decides to buy a product/
service, he makes effort in searching for the best
one among all the choices. This effort is called
“search cost” and is a type of non-monetary costs

20. Convinience costs
 There are also convenience (or perhaps more
accurately inconvenience) costs of services. If
customers have to travel to a service, they incur a
cost, and the cost becomes greater when travel is
difficult, as it is for elderly persons. The
inconvenience a person undergoes to avail a
product/ service is called convenience cost, and it
is a type of non-monetary costs.

21. Psychological costs
 Often the most painful non-monetary costs are the
psychological costs incurred in receiving some
services. Fear of not understanding (insurance),
fear of rejection (bank loans), fear of uncertainty
(including fear of high cost)— all of these,
constitute psychological costs that customers
experience as sacrifices when purchasing and using
services

22. Pricing Strategy
 Pricing is one of the most important elements of the
marketing mix, as it is the only element of the
marketing mix, which generates a turnover for the
organisation.
 The table below explains different pricing methods
and price strategies with an example of each pricing
strategy

23. Pricing Strategy Definition Example
Penetration Pricing Here the organisation sets a
low price to increase sales
and market share. Once
market share has been
captured the firm may well
then increase their price.
A television satellite
company sets a low price to
get subscribers then
increases the price as their
customer base increases.
Skimming Pricing The organisation sets an initial
high price and then slowly
lowers the price to make the
product available to a wider
market. The objective is to
skim profits of the market layer
by layer.
games console company
reduces the price of their
console over 5 years,
charging a premium at
launch and lowest price near
the end of its life cycle.
Competition Pricing Setting a price in
comparison with
competitors. In reality a
firm has three options and
these are to price lower,
price the same or price
higher than competitors.
Some firms offer a price
matching service to match
what their competitors are
offering. Others will go
further and refund back to
the customer more money
than the difference between
their price and the
competitor's price.

24. Product Line Pricing Pricing different products
within the same product
range at different price
points.
An example would be a
DVD manufacturer offering
different DVD recorders
with different features at
different prices e.g. A HD
and non HD version.. The
greater the features and the
benefit obtained the greater
the consumer will pay. This
form of price
discrimination assists the
company in maximising
turnover and profits.
Bundle Pricing The organisation bundles a
group of products at a
reduced price. Common
methods are buy one and
get one free promotions or
BOGOFs as they are now
known. Within the UK
some firms are now moving
into the realms of buy one
get two free Etc
This strategy is very
popular with supermarkets
who often offer BOGOF
strategies.

25. Premium Pricing The price is set high to
indicate that the product
is "exclusive"
Examples of products and
services using this
strategy include Harrods,
first class airline services,
and Porsche.
Psychological Pricing The seller here will
consider the psychology
of price and the
positioning of price
within the market place.
The seller will charge 99p
instead £1 or $199
instead of $200. The
reason why this methods
work, is because buyers
will still say they
purchased their product
under £200 pounds or
dollars, even thought it
was a pound or dollar
away. My favourite
pricing strategy.

26. Cost Plus Pricing The price of the product is
production costs plus a set
amount ("mark up") based
on how much profit (return)
that the company wants to
make. Although this
method ensures the price
covers production costs it
does not take consumer
demand or competitive
pricing into account which
could place the company at
a competitive disadvantage.
For example a product may
cost £100 to produce and as
the firm has decided that
their profit will be twenty
percent they decide to sell
the product for £120
Cost Based Pricing This is similar to cost plus
pricing in that it takes costs
into account but it will
consider other factors such
as market conditions when
setting prices.
Cost based pricing can be
useful for firms that operate
in an industry where prices
change regularly but still
want to base their price on
costs.

27. Value Based Pricing This pricing strategy
considers the value of the
product to consumers
rather than the how much
it cost to produce it. Value
is based on the benefits it
provides to the consumer
e.g. convenience, well
being, reputation or joy.
Firms that produce
technology, medicines,
and beauty products are
likely to use this pricing
strategy.

28. Revenue Management
 Revenue Management is the application of
disciplined analytics that predict consumer
behaviour at the micro-market level and optimize
product availability and price to
maximize revenue growth. The primary aim of
Revenue Management is selling the right product
to the right customer at the right time for the right
price and with the right pack. The essence of this
discipline is in understanding customers'
perception of product value and accurately aligning
product prices, placement and availability with
each customer segment.

29. Yield management
 Yield management is a variable pricing strategy,
based on understanding, anticipating and
influencing consumer behavior in order to
maximize revenue or profits from a fixed,
perishable resource

31. PLACE
B H A D I Y A D R A D H R A V .
R O L L N O : 2 8

32.  Service distribution
 Role of customer in service delivery
 Delivery through intermediaries
 Franchising
 Electronic channels
 Self service technologies

33.  Since service delivery is concurrent with its production and cannot
be stored or transported, the location of the service product assumes
importance. Service providers have to give special thought as to
where the service is provided. A fine dining restaurant is better
located in a busy, upscale market as opposed to the outskirts of a
city. A holiday resort is better situated in the countryside away from
the rush and noise of a city.
 In the marketing mix, the process of moving products from the
producer to the intended user is called place. In other words, it is
how your product is bought and where it is bought. This movement
could be through a combination of intermediaries such as
distributors, wholesalers and retailers
 Place = hard to find & get

36.  In a services context, we often move nothing
 Experiences, performances and solutions are not
being physically shipped and stored
 More and more informational transactions are
conducted through electronic and not physical
channels
Distribution in a Services Context

37.  Customers visit service site
 Convenience of service factory locations and operational
schedules important when customer has to be physically
present
 Service providers go to customers
 Unavoidable when object of service is immovable
 Needed for remote areas
 Greater likelihood of visiting corporate customers than
individuals
 Service transaction is conducted at arm’s length
 Achieved with help of logistics and telecommunications
Distribution Options for Serving Customers

38. Another way to look at it: Can a service provider add or change the
service outlet structure to increase sales/add convenience?
Examples: Doctors on call / Food / Education
Six Options For Service Delivery

39.  Hire the Right People
Compete for the Best People
Hire for Service Competencies and Service
Inclination
Be the Preferred Employer
 Develop People to Deliver Service Quality
Train for Technical and Interactive Skills
Empower Employees
Promote Teamwork
Strategies for Delivering Service Quality through People

40.  Provide Needed support systems
 Measure Internal Service Quality
 Provide Supportive Technology and Equipment
 Develop Service-Oriented Internal Processes
 Retain the best People
 Include Employees in the Company’s Vision
 Treat Employees as Customers
 Measure and Reward Strong Service Performers

45. example

46.  Cost, productivity and access to labor are key
determinants to locating a service facility
 Locational constraints
 Operational requirements
- Airports
 Geographic factors
- Ski Resorts
 Need for economies of scale
- Hospitals
Places of Service Delivery

47.  Mini stores
 Creating many small service factories to maximize geographic
coverage
- Automated kiosks
 Separating front and back stages of operation
- Taco Bell
 Purchasing space from another provider in complementary field
 Dunkin Donuts with Burger King
 Locating in Multipurpose Facilities
 Proximity to where customers live or work
- Service Stations

48.  Five of the supplementary services are information-based
 These services can all be distributed electronically. They
are:
 Information
 Consultation
 Order-taking
 Billing
 Payment
Distribution of Supplementary Services in Cyberspace

49.  Technological Innovations
 Development of “smart” mobile telephones and PDAs,
and Wi-Fi high-speed Internet technology that links
users to Internet from almost anywhere
 Voice-recognition technology
 Web sites
 Smart cards
• detailed information about customer
• Store Act as electronic purse containing digital money
 Electronic channels can be offered together with physical
channels, or take the place of physical channels
Service Delivery Innovations Facilitated by Technology

50.  Popular way to expand delivery of effective service concept, without
a high level of monetary investments compared to rapid expansion
of company-owned and -managed sites
 Franchisor provides training, equipment and support marketing
activities. Franchisees invest time and finance, and follow copy and
media guidelines of franchisor
 Growth-oriented firms like franchising because franchisees are
motivated to ensure good customer service and high-quality service
operations
 Study shows significant attrition rate among franchisors in the early
years of a new franchise system
 One third of all systems fail within first four years
 Three fourths of all franchisors cease to exist after 12 years
Franchising

52.  Alternative: license another supplier to act on the
original supplier’s behalf to deliver core product,
e.g.
 Trucking companies
 Banks selling insurance products

54.  Distribution in services often involve moving nothing and
many information-based services can be distributed
electronically
 Options for service delivery include:
 Customers visit the service site
 Service providers go to their customers
 Service transaction is conducted remotely
 Channel preferences vary among customers
Summary of Distributing Services

55.  Place and time decisions include where services should be
delivered in bricks-and-mortar context, when it should be
delivered
 Delivery in cyberspace is facilitated by technology and e-
commerce allows 24-hour delivery, saving time and effort
 Intermediaries play roles in distributing services
 Franchising brings both advantages and disadvantages
to the firm
 Service processes affect international market entry
differently

56. P R E S E N T E D B Y : R A J N A N D I N I B A G O H I L
Promotion

57. What is promotion ?
 Promotion means advancement within an organisation.
 It is an upward movement of an employee from current
job to another that is higher in pay, responsibility, status
and organisational level.

58. Definitions
 “ A promotion is the transfer of an employee to a job that
pays more money or that enjoys some preferred status ”
 According to Scott and Spreigal
 “ A promotion involves a change from one job to another
that is better in term of status and responsibility “
 According to Edwin B. Flippo

60. Promotion -1
 Personal Selling: Face to face personal
communication- Eureka Forbes
 In person selling, tele-marketing
 Advertising- Mass communication efforts through
media
 Sales Promotion- Communication through contests,
OOH, trade shows, free samples, yellow pages, call
helplines

61. Promotion-2
 Publicity- Communicating with an audience by
personal or non-personal media that are not paid for
delivering the message
 Print media news, broadcast media news-UTI,PTI,
Reuters, annual reports, speeches by employees

62. Examples-Lux
Same theme over the years

63. Chips
 Competition

64. Celebrity endorsement
 Using famous people to attract target segment

65. ICICI Bank- Print Ad

66. TV Channels

67. Print Media
 Print- Newspapers & Magazines

68. Radio

69. Purposes of promotion.
• To put the employee in a position where he will be of
greater value to the company.
• To develop competitive spirit and zeal in the employees to
acquire the skill and knowledge etc. required by higher
level jobs.
• To promote employee self-development and make them
await their turn of promotions. It reduce labour turnover

70. Role of Marketing communications
 Position and differentiate the service
 Helps Customers to evaluate Service Offerings
 Promote the Contribution of the Service Personnel
 Add Value through Communication Content
 Facilitate Customer Involvement in Production
 Stimulate or Dampen Demand to match Capacity

71. Marketing Communication

72. Marketing Communication Tools
Advertising
Sales
Promotion
Direct
Marketing
Publicity/P
ublic
Relations
Internet
Marketing
Publicity
/Public
Relations

73. Deciding on Communications Mix
Personal Selling
Personal confrontation,
cultivation, response
Direct Marketing
Nonpublic, customized,
up-to-date, interactive

74. The Changing World of MC
Old World
“Talking At”
Consumers
Focus on Winning
New Customers
Marketers Relied
Primarily on
Advertising and
Promotions
New World
Two-way Dialogue
With Consumers
Focus on Building Long
Term
Relationships With
Consumers
Marketers Use and
Coordinate
Many Different Forms of
Communication With
Consumers

75. Deciding on Communications Mix
Advertising
Public, pervasive, expressive, impersonal
Sales promotion
Communication, incentive, invitation
Public relations and publicity
Credibility, surprise, dramatization

76. Role of Marketing communications
 Position and differentiate the service
 Helps Customers to evaluate Service Offerings
 Promote the Contribution of the Service Personnel
 Add Value through Communication Content
 Facilitate Customer Involvement in Production
 Stimulate or Dampen Demand to match Capacity

77. INTEGRATED MARKETING
COMMUNICATIONS

78. INTEGRATED MARKETING COMMUNICATIONS

79. Integrated Communication Approach
 Definition: A management concept that is designed
to make all aspects of marketing communication
such as advertising, sales promotion, public
relations, and direct marketing work together as a
unified force, rather than permitting each to work in
isolation.

80. Defining IMC
 IMC is a strategic business process used to plan, develop,
execute and evaluate coordinated, measurable, persuasive
brand communication programs with consumers,
customers, prospects employees and other relevant
external and internal audiences.

81. Traditional Approach to Marketing Communications
Point of
purchase
Publicity
Public
relations Direct
marketing Interactive
marketing
Special
events
Packaging
Sales
promotion
Direct
response
Media
Adver-
tising

82. Contemporary IMC Approach
Point of
purchase
Publicity
Interactive
marketing
Public
relations
Direct
marketing
Special
events
Packaging
Sales
promotion
Direct
response
Media
Adver-
tising

83. A Contemporary Perspective of IMC
Demand for accountability
Demand for accountability and
Measurement of Outcomes
Recognized as a business process
Importance of relevant audience
Recognized as a business process
Multiple relevant audiencesIMC

84. Direct Marketing is Part of IMC
Direct
Response
Advertising
Direct
Response
Advertising
Direct
Mail
Catalogs
Telemarketi
ng
Internet
Sales
Shopping
Channels
Direct
Mail
Telemarketi
ng
Catalogs
Shopping
Channels
Direct
Marketing

85. Sales Promotion Tools
• Consumer-
oriented
• [For end-users]
• Trade-
oriented
• [For resellers]
Events
Loyalty Programs
Bonus Packs
Refunds/Rebates
Contests/Sweepstakes
Premiums
Samples
Coupons
Coop
Advertising
Trade
Shows
Training
Programs
POP Displays
Trade
Allowances

86. Objectives
 Role of marketing communications in services
 Challenges of service communications
 Marketing communications planning
 Marketing communications mix
 Role of the internet, and other electronic media in
service marketing communications
 Role of corporate design
 Integrated marketing communications

87. Benefits of IMC
 IMC provides greater:
 Brand differentiation.
 Accountability within a firm.
 Trust among consumers.
 Levels of effectiveness in cutting through
 message clutter than single strategies.