SERVICES MARKETING

Services Industry…… India stands 15 th in services output among world nations per cent share in gross domestic product (GDP) growing by 10 per cent annually Contributing to about a quarter of total employment. Ex: Telecom sector to provide 1 crore jobs by 2012: Study **contributes nearly 2 per cent to the GDP

CARE Hospitals Priceline

Goods Goods - things you can touch - “tangible” Services Services - things you can’t touch, see - but you can experience their effect “intangible” “… services are not physical, they are intangible…”

Tangible –touch –see –taste –smell Intangible –can’t see –can’t touch –can’t taste –can’t smell Tangible / Intangible Attributes

1. Intangibility - “u can’t touch / see this” 2. Inseparability - Production (or performing the service) and Consumption (using the service) - happens at the same time 3. Variability / Heterogeneity - services are not always delivered the same way / consumer experiences vary 4. Perishability - cannot be put in inventory or stored for later use ie. You can’t buy 2 haircuts 4 Characteristics of Services

Intangibility Leads customers to: –Perceiving high levels of risk –Placing great emphasis on personal information sources –Using price as a basis for assessing quality –Having difficulty in evaluating competing services

Intangibility use personal information, sources, references use word-of-mouth Stressing tangible cues Reducing service complexity Management responds through:

Variability Implies that: For any particular service process, customers’ experiences vary Services are not always delivered the same way There is potential for customizing the service offer Standardization is too difficult

Variability Tightly specifying service processes Replace many personnel tasks with automation Exploiting opportunities for customization Having strategies to recover from service failure Management responds through :

Inseparability Production (or performing the service) and Consumption (using the service) - happens at the same time –Being co-producers of the service –Often being co-consumers –Often having to travel to the point of service production / online – ex: Doctor & Patient ………is it high contact??// do we have low contact???

Inseparability Management of consumer-producer interaction You can only Improve delivery systems —ATMs, Auto response, internet, Kiosks Management responds through

Perishability Impossibility of inventorying services Requirement to match time of supply and demand Deterioration of quality in peak periods and unused capacity in off-peak periods –Ex: Airlines—vacant seats remain unsold

Perishability Use of marketing mix to even out pattern of demand Development of demand-responsive production systems Use of lines and reservation systems Management responds through:

Yashoda Hosp

Expanded Marketing Mix Products Price Promotion Place People Physical evidence Process

Services Marketing Triangle Company (management) EmployeesCustomers External marketingInternal marketing Interactive marketing “Enabling the promise” “Delivering the promise” “Making the promise”

Services classification How can we classify??? Check what type of services we see around….. Healthcare Banking, Car Internet, Cinema etc.,

People/customer processing: Involves tangible actions to people’s physical body Customers need to be physically present through out the service delivery to receive the desired benefits Dental work; Hair dressing; Passenger Transportation; lodging; physical therapy; fitness center; Restaurant; Health care Nature of act is Tangible actions

Possessions processing: Includes tangible actions to physical possessions belonging to the customer Here object required for processing to be present, but not the customer Freight transportation; Repair and maintenance; Warehousing; storage; Retailing; gardening etc., Nature of act is Tangible action

Mental Stimulus processing: Refers to intangible actions directed at people’s minds Customers must be present mentally, but can be located anywhere. Entertainment; theatre performances; education; Advertising; Consulting; Information services; Training etc., Nature of act - Intangible

Information processing: Intangible actions directed at customers’ assets Little direct involvement is needed once service is initiated Accounting; Banking; Data processing; Data transmission; Insurance; Research; Securities investment

Service Encounter A service encounter is the period during which customers interact directly with a service provider(s) in various ways. Few are very brief, short… & Few are Impersonal

Now let us… List down the issues that come into your mind when you think of encounter (interactions) from a service provider List down the risks you perceive in taking a service

Medical services Amazon.com Insurance Movie in a Theater Manpower consultancy Banking services Airline services Restaurant services Car Service

Functional risks(unsatisfactory performance) Financial (monetary loss) Temporal (wasting time, delays) Physical (personal injury, damage to possessions) Psychological (personal fears and emotions) Social ( How others think and react) Sensory ( unwanted impacts on any of the five senses) RISKS

Service Encounter (Interaction) Service Personnel Physical service elements Both

High contact Personal visits by customers to service facility Customers actively involved during service delivery All people-processing services Hair-dressing, lodging, Medical services

Low contact Little contact between customers and service providers Arm’s length transactions… Telephone, Mail, Internet etc., Service providers try to transform High contact services into Low contact services.

Technical Core Interior Facilities Equipment Service People Other Customers Other Sales Market Mail, Phone Exposure to Encounters with service Word of Mouth Customer BackstageFront stage SERVICE MARKETING SYSTEM FOR HIGH CONTACT OPERATIONS DELIVERY SYSTEM CONTACT POINTS

Technical Core Mail Self-Service Equipment Website Other Customers Other Market Exposure to facilities service Word of Mouth Customer BackstageFront stage SERVICE MARKETING SYSTEM FOR LOW CONTACT OPERATIONS DELIVERY SYSTEM CONTACT POINTS