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Unit no 2.34 to end Unit no 2.34 to end 1 What are What are Services? Services? Chapter # 2 Chapter # 2 contd contd

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Page 1: Chap 2 second lecture(2.34 to end)

Unit no 2.34 to endUnit no 2.34 to end 11

What are What are Services?Services?Chapter # 2 Chapter # 2

contdcontd

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Marketing Marketing Approaches to Approaches to

Services:Services:Definition Of ServicesDefinition Of ServicesCharacteristics Of ServicesCharacteristics Of ServicesClassification Of ServicesClassification Of ServicesFunctional DifferencesFunctional DifferencesConceptual FrameworksConceptual Frameworks

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CClassification of lassification of

SServices:ervices:Different methods to classify Different methods to classify services:services:

Seller related methodSeller related methodBuyer related methodBuyer related methodService related methodService related method

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A. Seller related A. Seller related methodmethod

Services are to be sold by Services are to be sold by private or public sector private or public sector

or for commercial sector or for commercial sector or for non profit concern.or for non profit concern.

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Service IndustryCommunicationConsultingEducationFinancialHealth & Insurance

Income SourceFrom marketFrom donationsFrom tax

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B.. Buyer related B.. Buyer related method:method:

It is related with markets either It is related with markets either consumer or industrial. The consumer or industrial. The

way service is bought depends way service is bought depends upon the upon the

convenience,shopping,specialitconvenience,shopping,speciality or unsought service or for the y or unsought service or for the motive to make purchase only.motive to make purchase only.

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Market IndustryConsumerIndustrialGovtAgriculture

Type of service

Convenience serviceShopping serviceSpecialty serviceUnsought service

MotivesIntangible, mental and emotional depend upon

nature of service.

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We can also classify services on the basis of their functions and their source of income that from where they are earning from market

sources or from donations.

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C.. Service related C.. Service related method:method:

According to Swan and Pruden:According to Swan and Pruden:Service is a mean to an end or an Service is a mean to an end or an expressive form that is an end in expressive form that is an end in itself. These are human based or itself. These are human based or equipment based or may involve equipment based or may involve high levels of personal contact or high levels of personal contact or

low levels of personal contact.low levels of personal contact.

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Service Form

Uniform services

Bespoke service

Nature of Service

Humanly based

Machine based

Mode of service

High level of

personal contact

Low level of

personal contact

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SummarySummary of of above classificationabove classification::

a.a. Variation in customer behavior cannot Variation in customer behavior cannot determine the classification of service.determine the classification of service.

b.b. Rational and emotional motives can Rational and emotional motives can change the nature and status of service. change the nature and status of service. Like low urgency or high urgency.Like low urgency or high urgency.

c.c. Consumer attitude is different in Consumer attitude is different in measuring service either for general use measuring service either for general use or for organization’s use.or for organization’s use.

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1.1.FFunctional unctional AApproach pproach to redefine Servicesto redefine Services

2.2.CConceptual onceptual AApproachespproaches

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A. FunctionalA. Functional AApproach to redefine pproach to redefine

ServicesServicesThis approach depends upon the This approach depends upon the

relationship between the product relationship between the product marketing and service marketingmarketing and service marketing::

1.1. Services cannot be stockedServices cannot be stocked2.2. Lack of patents for services which Lack of patents for services which

reduces the size of distribution.reduces the size of distribution.3.3. No Precise standards.No Precise standards.4.4. Services lack use of package.Services lack use of package.

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CONTD..CONTD..5.5. Services lack use of package.Services lack use of package.6.6. Can’t be sampled.Can’t be sampled.7.7. Intangible nature can’t Intangible nature can’t

maintain balance between maintain balance between demand and supply.demand and supply.

8.8. No possession to the service No possession to the service usedused..

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Problem with this approach confines

the definition of services so once again economist

need to work on it further.

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B. B. CConceptualonceptual AApproach to redefine pproach to redefine

ServicesServicesFollowing Economists contributed Following Economists contributed

for understanding the above for understanding the above mentioned criteria:mentioned criteria:

Eiglier and LangeardEiglier and Langeard GronroosGronroos ShostackShostack

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1.1. Eiglier and Langeard:Eiglier and Langeard:They worked on They worked on THREE fundamentalTHREE fundamental

aspects of Characteristics of services:aspects of Characteristics of services:

IntangibilityIntangibilityDirect Organization----------Direct Organization----------

client/customer relationshipclient/customer relationshipConsumer participation in Consumer participation in

production process.production process.

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They further give their They further give their comments on the above comments on the above conditions depending upon the conditions depending upon the following factors:following factors:

1. Dependent upon 1. Dependent upon enterpriseenterprise

2. 2. Dependent upon clientDependent upon client

3. 3. From public feedbackFrom public feedback

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Have a Have a LOOK ONLOOK ON ExperimentalExperimental Analysis……. Analysis…….

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2. Gronroos:2. Gronroos:He also narrated services as a combination He also narrated services as a combination

ofof three fundamentalsthree fundamentals : :

IntangibilityIntangibility A service is a pure activity A service is a pure activity

rather than a thingrather than a thing Production and consumption Production and consumption

are to some extent are to some extent simultaneous activities.simultaneous activities...

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He defined services on the He defined services on the basis of their functions in the basis of their functions in the market. He further narrated market. He further narrated

that the that the service service organization has two organization has two marketing Functions:marketing Functions:

1.The traditional marketing function---------Buyer Seller Relationship2. The interactive marketing function----------Buyer middleman seller

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He worked on the He worked on the framework of Eiglier and framework of Eiglier and Langeard and developed Langeard and developed

a model which divides a model which divides service organization into service organization into

TWOTWO parts: parts:

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SERVICE ORGANIZATION

Visible Part Invisible Part

Internal Organization System

Physical EnvtContact with Personnel

All types of

interactive

services

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Invisible part to the customer is the internal envt of the firm which consist of physical strength and mangt support to the people working with customer.Visible part consists of THREE

main resources:• The physical envt where the services

is consumed• The contact personnel• Consumer who takes part in the

production process.

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Gronroos developed the Gronroos developed the above model and Suggest above model and Suggest FIVE variableFIVE variable which which ensures that interactive ensures that interactive marketing functions are marketing functions are

handled by customer handled by customer orientation.orientation.

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The variables The variables are:are:1.1. Service conceptService concept2.2. Auxiliary servicesAuxiliary services3.3. Accessibility of the Accessibility of the serviceservice4.4. Interactive Interactive personnel /customer personnel /customer communicationcommunication5.5. Consumer InfluenceConsumer Influence

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Conclusion:Conclusion:

Interactive marketing Interactive marketing and traditional and traditional

marketing function marketing function play a vital role in play a vital role in

purchasing and purchasing and consumption process.consumption process.

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3. Shostack: 3. Shostack: She worked on following aspects:She worked on following aspects: Intangibility as fundamental Intangibility as fundamental

characteristic of services.characteristic of services. Marketing is that an Marketing is that an

organization is offering to organization is offering to the marketplace which the marketplace which consists of goods, services consists of goods, services or both.or both.

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Four categoriesFour categoriesTo identify the status of services To identify the status of services more:more:

1. 1. A pure tangible can’t be a A pure tangible can’t be a service.service.An offer which consists of a An offer which consists of a good with no explicit service but good with no explicit service but the target is to sale good so the target is to sale good so services are minimized in this services are minimized in this situation.situation.2. A tangible good with 2. A tangible good with accompanying servicesaccompanying services..

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CONTD Four categoriesCONTD Four categories To identify the status of services To identify the status of services more:more:

3.3. A service with A service with accompanying goods and accompanying goods and services. The object of services. The object of sales is intangible.sales is intangible.44.. A pure service. A pure service.

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Conclusion:She suggests that marketing items are combination of discrete elements tangible and intangible and the above mentioned categories link the attributes of “pure service” with “pure product” in service economy.

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Limitations of Services:After discussing all the aspects of services we can make favors with Marshall Opinion that both manufacturers and traders produced utilities whether they were formed from tangible or intangible components.

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From Marketing POINT OF VIEW:

Both goods and services provide benefits and satisfaction which

summarize that goods and services are products.

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•Limited concept states that product is a set of tangible and intangible, physical and chemical attributes assembled in a particular form.

•Broader concept states that a product is a set of tangible and intangible attributes which buyer may accept as offering satisfaction of needs and wants.

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AS A RESULT: Every

product has

intangible elements

to it.

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Time FOR ANOTHER

ASSIGNMENT!!!