SServices ervices MMarketingarketing

Pradeep GiriPradeep GiriSem -IIISem -III

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Growth or Services SectorGrowth or Services Sector• Reasons: An the physiological need of the people get fulfilled, there is a

demand for more satisfaction.

• The changing lifestyle, changing word, changing economies, technological advances modernization, liberalization, privatization & globalization polices are same of the factors for stimulating the dramatic growth in services.

Growth of services industry : Cause & effect.Growth of services industry : Cause & effect.

Cause Cause Effect Effect Illustrations Illustrations

Technological Advances

High complexity of products

Maintaince Services eg:AMC’s for computers, services center for cellular phones .

Globalization More business internationalization

International shipping & Couriers Company

De regulation police

Privatization of Govt. owned sectors

Telecom & internet services birth of Pvt. Airlines

More leisure time

Shift toward pleasure & entertainment

Resorts recreation clubs tour operators multipliers etc.

Greater life expectectancy

To live long special care facilities

Health club & Five Star hospital have flourished

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Service need product as consequenceService need product as consequence Service need Product as consequence

Age (old age Care) Senior citizen home, wheel Chairs

Eye –care Eye career glasses , eye testing machine

Hospital Medical equipment , medicines etc.

Photography Cameras, video, cameras films.

Education Aids likes OHP LCD projector etc.

Copyright service Fax machine, photo copies

Hair styling Hair coloring, shaping, fixing produce & hair dryer.

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Classification / Type of service :Classification / Type of service : Service can be classified broadly as follows-Transportation Service – railway, airline water, road.Communication Service – telephone, post, & courier tele & video

conferencing, radio, television.

1. Marketing related service – advertising sale promotion, products development & testing, market research etc.

2. Financial & insurance service –banking leasing, brokerage, life and health insurance.

3. Entertainment service – movies channel, cinema, game parlors. 4. Hospitability services – hotels & restaurants catering & home delivery. Scope of good and services:• Good is get tangible physical attribute assembled in an identifiable from

to provide want satisfaction to customers. • Services is an identifiable, intangible activity that is the main object of

transaction designed to provide that want satisfaction to customer.

Service profit –seeking organization

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Industries Classification Example

Medical & health care Diagnostic services, hospitalization nursing & all other medical related service.

Communication Telephone fax, e –mail, internet

Transportation Private state transport.

Recreation & entertainment Amusement parks, cinema halls, DJ service etc.

• Growth of service industries:-can be attributed to the changing life style, changing word, changing industrial economies, changing population & changing technology.

• There is drastic change in the industrial & business environment because of two vital components ie services a information technology.

• Open –market economy has integrated India with the world economy & currently the services sector of India accounts for over 40% its GDP.

• In India the service industries is highly employee oriented and heavily overstaffed & organization like bank insurance companies etc are dominated by procedures rather than services of customers.

Importance of service marketing• Most services marketing involves some good and there is explosive

growth in service industry an account of increased complexity specially and competitive nature of business.

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Growth & importance of servicesGrowth & importance of services

• Pest exert same pressure on service. As it does on products. Pest is useful tool for helping us to decide what the key factor in the marketing environment are for a particular organization whether their impact is opportunity or that.

Good-services continuum :Good-services continuum : • Today, no tangible goods are offered to a customer without same

associated service.• No services is marketed without same physical good’s associated with

product.

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Pest Impact

Political legal forces

Service & Marketing environment – Service & Marketing environment – the pest impactthe pest impact

Technology

Socio –cultural Forces

Economic Condition

• They study of goods – Services = Continuumstudy of goods – Services = Continuum facilitates marketers to know and plan their market offering.

• Restaurants for example are services oriented & provide tangible goods like DOSA, PIZZA or Mughlu Foods.

• In the same way computer manufacturing firm sell hardware but major part of the profit come from maintenance contracts or software solutions ( a services ) e.g.: IBM’s IBM’s Focus is providing “Solution to the Solution to the small Planetsmall Planet”.

• Exercise equipment as an example of goods –Service Continuum.• An exercise equipment say a stationary bicycle can be:-• A). When a user buy it and obtains its ownership it is called Pure

Goods.• B). If a customer procures it on rent he or she obtains the use of the

product temporarily.• C). If a hotel gust uses the same at hotels health club we call it the gym

facilities.• D). If a person uses it at a fitness club it is not only the bicycle, the

space of the club also the service of the instructor that are clubbed and there is how the continuum concept can be under staed.

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4 I’s Services –

• There are 4 distinctive Characteristic of service which create special marketing challenges and opportunities these 4 element are called as:-

1. Intangibility Intangibility 2. Inseparability Inseparability 3. Inconsistency Inconsistency 4. Inventory Inventory • Services marketers must cope up with the above

characteristic and devise marketing strategies So that the related marketing problems are overcome.

1. Intangibility :1. Intangibility :• Intangibility is a characteristic of service indicating that it is

has no physical attributes & as a result impossible for a customer to test, feel or smell before buying it thus in most cases services are bought on trust.

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• Services product are mostly intangibility, they have to be marketed with tangible evidence. This is referred to as tangiblizing the intangibles. This means that the services has been performed and delivered at particular level of quality

• Eg- 1) University degree is a tangible evidence of the education services and knowledge acquired by you.

• 2) certificate issued a pollution control agency is a tangible evidence of the required checks done on the vehicle prove that emission levels are under control.

2. Inconsistency2. Inconsistency • Inconsistency is characteristic of services that makes them less

standardized & uniform than goods inconsistency is called as variability

• The consistency occurs largely on account of –• Different services provides perform a given services at different

occasions.• The services performed by an individual provider may differ overtime.• Interaction b/n customer and provider may vary by customer,

companies which are highly equipment & system based & less people based on reduce insistency in services.

• Eg- 1) Bank ATM provides consistent services.

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• 2) Mc Donald’s have been able to achieve consistency in services delivery by adopting production line approach to services and standardizing every aspect of services operation down to the width of the smile that each customer should be greeted with.

3. Inseparability 3. Inseparability • Inseparability is characteristic of services. Including that it cannot be

separated from the creator – seller of the product • Many services are created delivered & consumed simultaneously

through interaction b/n customer and services product e.g.- dental care by a dentist.

• In most of the case the customer receives and consumes the services at the service producer premises, so called the services factory.

Type of services production:-• Co – production ( tutoring services both student & faculty are present.)• Isolated production (movie production / processing center)

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• Self services (customer use equipment & services provided by the seller without direct interaction e.g.–videogame machine and bank ATM )

4. Inventory4. Inventory• The inventory relates to perishability Characteristics in services

marketing . The services cannot be easily saved stored for the future use.

• e.g. –empty seat in a 10 am flight to Mumbai from Delhi cannot be carried over to provide more seating in next flight.

• The combination of perishability & Fluctuating demand present challenges for marketers engaged in product planning, pricing, promotion, distribution of services.

• A). Restaurants offer “Happy Hour” rates to invite customer for easily dinner hours.

• B). Mc Donald use part –time employee (contester person ) to mid the peak hour rush.

•

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• Goods VS Services: At A Glance

• Marketing Mix –• What is marketing mix?• Marketing mix describe the specific combination of marketing

elements used to achieve an organization / individuals objectives and satisfy the target market.

Characteristic Goods Services

Product Tangible Intangible

Ability to measure Objective Subjective

Custo perception Standardized Must be can summed to evaluate

Form Manufacturing Created

Self life Days to year Zero (perishable)

Delivery Consistent Variable

Product flexibility Limited Broad

Marketing Traditional / External Non traditional largely internal

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Marketing Mix –

• It is customary to accept that marketing mix is made up of 4 P’s – Product, Price, Promotion, Place (Distribution)

• Over a period of time the special need of services have led to the extension of the mix to 7 P’s . The additional 3 P’s listed below are known as augmented service mix.

1). People 2). Physical evidence 3). Process

Extended services marketing mix (augmented marketing mix)• The above additional 3P’s help services manager to deal with the 4I’s

of services.• Marketing a services is no different from marketing a product but the

4I’s make it more complex and difficult because• a). Customer perceive much higher risk while buying services • b). Customer is on your premises so customer care becomes the focus.

People

Physical evidence

Process

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• Inconsistency in quality

Restaurant

Intangibility Inseparability Inconsistency Inventory

Rating P/ Services Time/responsibility Seat

Cinema Hall

Intangibility Inseparability Inconsistency Inventory

Tkt/ People +P Tkt / Physical Evid. Sound-Pic clearity

/ Peo+ Process Physical Evid.

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Target MarketTarget Market • For certain succeful marketing mix strategy market must define the

target market very clearly.• The target market is of paramount importance and is the focus for all

marketing mix activity.

Benefit of targeting:-1. fuller knowledge and understaing of the unique characteristic and

need of the group to be satisfied. 2. Better knowledge and understaing of who your competitors are• 3. Better knowledge and understaning of change and development in

the wants and demands of the target market.

What do customer buy?• Customer by solution their problems. Customer have a set of need

and wants which will satisfy their need. Thus one can say customer are searching for benefits.

Segmentation

Age Gender Demographic income

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• Customer choose on the basis for value of money criteria and not price alone.• Customer services user and the clients are wall motivated to find offering which

give them the most benefit / value for the least out you.• The value for money is given by the following equation Value = Product / promotion / place / Process / Physical Evid Money Price

= Non- Price variable / Price

• 6 P’s add to the perceived value and the 7th P (Price) Brings the revenue.• The image of the services its availability functionality reliability customer care,

friendly services /delivery system contribute to the satisfaction of customer.

People:-• Organizational structure may be defined “ a set of assumption or ideologies

shared by the member of the organization.• People are these assumptions to identify what is important and how things works

in the company.• When these assumptions get formalization roles of behavior are established so

that people know how to act.

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Service EncounterService Encounter • For service marketers the core of the service elements is the interation

between providing services & the customer which is known as the service encounter.

• To deliver satisfactory service of the company employees have to play an important role and poises personal qualities & ability to understand & satisfy customer needs flexibility skill & knowledge.

• The management in order to deliver satisfactory service must develop job to satisfy the individual needs of the employees and address the following issues:-

• A) Employee:- employees are the impression managers becomes a customer perceives the quality of the service from the appearance inter personal behavior attitude of the contract personal.

• Like investing resoures in improving the product companies must invest in recruiting right people. Training them to deliver the satisfaction & motivate them to retain the customers.

• B). Recruitments:- for recruiting right type of people a criteria should be laid down to reflect the human dimensions of the job as well as technical requirement. E.g.- Pizza Hut, mission “ Enjoy having fun while delivering word wide standards of service & hospitality.

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• C). Training & Development :- Training is the process of providing the employee with specific skill in helping them correct deficiencies in their current performance.

• Development is the process of providing the employee with the experience and attitude needed for success E.g.-Radisson hotel which trains employee on 3 principles.

• 1) Show yes I can Attitude.• 2) Take personal responsibility• 3) Use teamwork.

• D) Motivation :- Motivation is a set of foreces that cause the employees to behave in certain ways. However it is important to know that really motivates peoples.

• Along with financial incentive phycholigical reward like price & recognition are often more powerful and long lasting reward than more money.

• Most service organizations use a combination approach to motivation Monetary awarded may be granted for an outstanding services and call for employee participation through inviting ideas to important.

• E) Empowerment :- In the past front live employee views and opinions were not recognized however now management have started giving employee more information & knowledge reward based on company performance and most important the power to take decisions.

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• Empowerment is a choice of 3 options based amount of knowledge information reward and power.

• 1) Suggestion involvement – employees are only empowerment to recommend and power.

• 2) Job involvement –This call for extensive job redesign so that employee use a variety of skills often in teams because in services organization like hospital and airline individual can not offer the whole services from beginning to end.

• 3) High Involvement –employee through job enrichment develop extensive skill in teamwork problem solving and business operations. There is profit shearing and the employees feel a sense of ownership.

• D) Process & Services Quality: -Process is the way of understanding transaction, supplying, information and providing service in the way which is acceptable to the customer and effective to the organization.

• Services are rendered and expericed simultaneously and the process through which consumers have interaction with the service provider is of paramount importance e.g.- the use to credit card, booking system for the transport and accommodation.

• The process design has to maintain a balance b/n functionality, security aesthetics and the case of use by the customer.

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Services QualityServices Quality• The dimension of quality.• To develop design produce or deliver a product or services we must look

into the dimension of quality.• Garvin process 8 dimension of quality for products.• 1) Performance – On the core product primary operating characteristic for

e.g.- sound, pasture, clarity in a television, cleaning abilities of a soap or detergent.

• 2) Feature – Secondary characteristic which augment the basic function. e.g. surround sound remote facility.

• 3) Reliability – Probability of product breaking down. e.g. refrigerator, washing machine.

• 4) Conformance – The degree to which a product’s design and operating characteristic mach standards e.g.- ISI Mark, or ISO standards.

• 5) Durability –How long a product continues to be useful lie life of a product.

• 6) Serviceability –The speed and come tence with which it can be repaired and the courtesy factor.

• 7) Aesthetics –How to product look, feel sound tastes smells ( appeal of a product to

• 8) Perceived – image reputation brand name are in direct measure which customer use when comparing product.

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The PZB ModelThe PZB Model (Parasuram, Ziethaml, Berry) The model identifies 5 gaps that can cause unsuccessful services delivery

• Gap 1 –Gap 1 – Gap between customer expectation and Management perception e.g.-newspaper in hotel room.

• Gap 2 –Gap 2 – Gap between management perception and services quality specification. Management lacks commitment or vision to adopt certain standard e.g.- a star hotel has to keep certain standard.

• Gap 3 –Gap 3 – Gap between services quality specification and services delivery this is essentially on account of ill trained employee.

• Gap 4 –Gap 4 – Unrealistic expectation gap between services delivery and external communication.

• Gap 5Gap 5 – Services gap this gap between perceived service and deliver services.

Product –• One of the basic difficulties in marketing particularly services

marketing is product formation ie deciding what service product actually is , and how it should be marked.

1) Service Product 2) Feature and benefits 3) Quality Level 4) Guarantees

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6) Range 7) Brand Name

Service Offer – The mix ingredients should be so planed that the customer has to believe that product / service offers added value in order for it to be successful.

Services Product –• The term “Product” is defined as bundle of attributes capable of exchange

or use usually a mix of tangible and intangible forms. It may be an idea, physical, entity on a service or combination of the 3.

• The service product is concerned with creating levels of service to be offered the following quotation need to be answered by the service providers.

• Q.1* How much of the services should the dient be expected to perform?• Q.2* How much should be provided by the staff ? e.g.-Self service of food

in restaurants offering buffer lunches is an acceptable practice.• E.g.- Carrying of hand luggage by the customer and managing clock in

baggage by airline staff is the practice.

Quality Levels – Deciding on quality standard and its implementation and performance level of the staff decide the quality level of the services. 5 Stares of quality.

1) Reliability 2) Assurance

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3) Tangible 4) Empathy

5) Responsiveness

• The ward RATER can be used to remember the core aspect of service quality.

• Range (variety) – The customer decision to buy a product is potentially influenced by 1) Range 2) Style , Presentation of product.

• Thus manufacturing and services organizations offer a variety of different products and service normally referred to as product line product Mix.

• Feature and Benefit – Marketer know that consumers buy a product for the benefits they delivers.

• It is imperative for the marketers to understand how customers organize information about service perceive the quality and value of the service.

• Value – added service are perceived by customers a increasing the benefit they are receiving. These benefit can take a number of different forms. e.g.-1).Hotel –Faster check in and check-out services. Free use of health club. 2).Restaurant –special menu for children, price discount for seniors citizens.

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• Brand – Service customers do not switch brand frequently as compared to while switching products.

• Services firms like hotels and airline aim to achieve zero defection by providing pro-active services.

• Brand Name –A brand name which is well know and associated with high satisfaction level adds value of the service product and makes customer less price sensitive. e.g.- Taj hotel, citi bank, LIC.

• Brand of service – Marketers goal should be creating a good brand image and the strategy to achieve the goal is to develop a theme in totality.

• The following tacts may be used in implementing the strategy.• Include a tangible goods as part of the brand image. E.g.- LIC lamp

between two hands, Welcome group - folded hands.

• Service Guarantee –Tool of value addition –• For the firm to become a value added business firm it must develop a

reputation of service guarantee. 1).Unconditional 2). Easy to understand and communication 3). Meaningful 4). Easy to invoke 5). Quick and easy to collect.

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Services development is different – why ?Services development is different – why ?

• New services development faces the following challenges.• Services are intangible experiences• Services customers want individual experiences.• Services are product and consumed at the same time.• Services quality is imperative yet highly invariable.

Physical Evidence –• Customer judge services quality thought the physical evidence.• The physical evidence is defined as the environment in which the

services is delivered and where the firm and customer in tract and any tangible commodities that facilitate performance or communicate the services.

• It plays a role a enhancing customer perception of the service quality.• How important is the physical evidence for essel world or Appu Ghar ”• He bright colorful neon sign displays, the music and fantastic rides,

reinforce the perception of the people about the fun and excitement, they expect from the visit to these park.

• They communicate the environment in which the services to being delivered.

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Physical evidence from customer point Physical evidence from customer point view –view –

• Summery • Marketers tangible the intangible of service by providing the physical

evidence.• The physical element for a hotel include exterior elevation of building.• Interior facilities like furniture décor ambience to attract customers

and give them physical evidence for communicating service quality attributes and build trust.

• Customer evaluate the service initially though physical evidence before purchase and the other tangible provide satisfaction during use the services.

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Services Physical facilities Other benefits tangible

Airline lounge & airplane interiors Ticket & Boarding

Theme Park Gate, Area rides lighting & Signage

Ticket & brochures

Insurance Policy document & Boucher

Speed Post Post Office Uniforms & rehides

Place ( Distribution)• The place or distribution of service refer to availability of a service ie

when & where it can be purchase (rail/w)• Service product are mostly those where no transfer of ownership take

place & the service is simply rented or consumed.• But it is essential that it must be available and accessible before it

consumption, hence this needs a distribution system. 1) Location 4) Distribution facility 2) Accessibility 5) Service inventory 3) Channel of distribution 6) Managing Channel

1) Location – location involving considering where to deliver the service of the customer and whether the service organization, should be single location

• L

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