services marketing services economy

8/7/2019 Services Marketing Services Economy

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Services and the

Economy

Services Marketing


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Services Economy

Economy dominated by the services sector/industry

The term Service Economy also known as Functional Economy is usedto refer to the relative significance of service attached to a productoffered by a company.

IBM is an unique example. In spite of being a manufacturing company ittends to call itself a services company. This has been the scenario since itrealized that the price elasticity of demand for business solutions is lesselastic than for hardware. The company now benefits from the revenue ofthe elongated contracts rather than receiving payment in a single mode.

The service sector accounts for a significant portion of GDP in mostcountries.

Highest levels of employment in 2009 has been in the FinancialServices, Healthcare, IT, real estate, hospitality.

The services sector is the largest and the fastest growing componentof most economies


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Service Sector & Economy

Makes direct and significant contribution to GDP & job creation

Helps stimulate the economy Growth & development of Nation The most evident example in India is the growth of the IT & IT

enabled services creating jobs, contributing to the GDP andoverall growth

Strong growth in Internet/ICT related service providers has

contributed to the rapid growth of an increasingly sophisticatedrange of innovative service products.

Services Economy technology has allowed service industries togain the operational leverage that manufacturing achieved 100years ago.

Companies like GE, IBM, HP are moving towards a more servicesoriented business when they were and are still known as productcompanies.


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4

Role of Services in the economy


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42%6433

31.4Germany

37%2611

632.1Bangladesh

19%2010

701.6Nigeria

45%6728

52.2Japan

64%6921

102.4Russia

61%6614

203.0Brazil

34%391

6

453.5Indonesia

23%7623

15.1U.S.

35%2317

6014.4India

142%2922

4925.7China

40yr ServiceGrowth

S%

G%

A%

Labor%

Nation

Worlds Large Labor ForcesA = Agriculture, G = Goods, S = Service

20092009

CIA Handbook, International Labor Organization

Note: Pakistan, Vietnam, and Mexico now larger LF than Germany

Shift to service jobs

(A) Agriculture:Value fromharvesting nature

(G) Goods:Value frommaking products

(S) Service:Value from enhancing thecapabilities of things and their ability

to interconnect and create value

Role of Services in the economy

% Wage andSalary

Employmentby Industry

Sector, 2006


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Economic Statistics

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India

India is the second fastest growing economy in the world. IndiasGDP has touched US$1.25 trillion or 2% of the world economy

Services are the major source of economic growth, accountingfor more than half of India's output with less than one third ofits labor force.

3.50%

5.40%

4.40%

6.40%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

19 60- '8 0 1 98 0- '9 0 199 0- '00 2 000- '09

Growth Rate

Growth of GDP

32%

20%17%

27% 26%29%

41%

54% 54%

0%

10%

20%

30%

40%

50%

60%

1990-'91 2005-'06 2007-'08

Agriculture Industry Service Sector

Contribution of Various Sectors


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Economic Statistics - Services

Trade

WW exports of services was US$ 102 billion in 08-09 a12.5% increase over last years

In 1980 the service sector accounted for 20% of WW GNPwhich now accounts for over 60%

India's large service industry accounts for 55% of thecountry's Gross Domestic Product (GDP) while the industrialand agricultural sector contribute 28% and 17% respectively

Employment

Growth of the IT services sector has created tremendousemployment opportunities,

The growing number of educational institutions,entertainment industry, Banks and financial institutions

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Evolution of Services Marketing

Marketing as corporate function was not used until the year 1958. Fromthen till now, marketing has evolved from to market into market to i.emanagement of customers and markets and is evolving into market withie. collaboration btw companies, customers, supply chain, and competitionto produce and sustain value.

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1950s 1960s 1970s 1980s

Consumer Goodscompanies wererecognized as themost sophisticatedmarketers

Industrial Markets andmarketing specific toindustries

Marketing in nonprofit organizationand areas of publicsector

The size and growthof services sectordemanded attention


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Stage1

Stage 2

Stage 3

Stage4

Stage5

Stage6

Stage7

Selling

Advertising & Communications

Product Development

Differentiation & Competitor Analysis

Customer Service

Service Quality

Integration & Relationship marketing

Not all service firms go through these steps

Competitive imitation as there is no patent protection

Advantages from product development is short lived

Capitalize on data-based marketing techniques


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Stage1 Stage 2 Stage 3 Stage4 Stage5 Stage6 Stage7


Components

Outcomes

Selling

SalesProgramme

Recruitnewcustomers

Focus onsales notprofits

Noemphasisoncustomersatisfaction

Increased

Ads

Ad agencies,PR etc

Promotionalenticements

Highcustomerexpectation

Outputs noteasilymeasurable

Competitive

Imitation

Introduction

of newServices

Emphasis ondevelopmentprocess

CompetitiveImitation

Establishmentof brands

Analysis

Positioning

MR

Marketingtraining

Improved

branding

Sophisticatedsegmentation

Low onprofitability

Notsupportedby process

Lack ofdifferentiati

on

CustomerServicetraining

Smilecampaign

Front officelayout

Quality gapidentification

Customercontribution

Customerresearch

Marketingplanning

Customerretention notemphasized

Regularcustomerresearch

Integratinmarketingplans

Balancedmarketingactivity

customerretention


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ServicesMission & Vision

is an opportunity to define a business at the most basic level Provides direction and definition to business, Ensures focusand consistency, Provides meaning to the work people do Simplifies decision making outlining what is acceptable &what is not should answer 3 fundamentals where, what and how of thebusiness

Mission

Vision

takes into account the current status of the organization, andserves to point the direction of where the organization wishes

to go Is not about what the company currently is, but what thecompany hopes to become.


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Developing a Services Mission

OrganizationalPhilosophy

Product MarketDomain (scope of

the org)

Critical SuccessFactors (in the

industry it operates)

OrganizationalKey Values (for the

employees)

We want to be themost preferredairline on earth

We are going tocompete in theluxury segment ofthe air travelmarket

We want ourpeople to be

dedicated andexceptionallycommitted to

customer service

We want to be

excellent inpersonalizationand in flightentertainment


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Examples Mission Statement

At IBM, we strive to lead in the invention, development and

manufacture of the industry's most advanced informationtechnologies, including computer systems, software, storagesystems and microelectronics.

We translate these advanced technologies into value for ourcustomers through our professional solutions, services andconsulting businesses worldwide.

McDonald's vision is to be the world's best quick servicerestaurant experience. Being the best means providingoutstanding quality, service, cleanliness, and value, so that we

make every customer in every restaurant smile.

FedEx Corporation will produce superior financial returns for itsshareowners by providing high value-added logistics,transportation and related information services through focusedoperating companies. Customer requirements will be met in the

highest quality manner appropriate to each market segmentserved.


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Assignment 1

Identify two service organizations with missionstatements and elaborate their mission with inthe context of the four areas we discussed today

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services marketing services economy

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