Services Marketing Session 1st Dated: -07-03-2010 BY: -Neeraj Gupta

Definition of Service “Service is an activity that has an element of intangibility associated with it and which involves the service provider’s interaction either with customers or with the property belonging to the customer”. - Adrian Payne

What are services –Philip kotler “Any activity of 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”.

Factors influencing growth of services as a Sector Demographic changes Social changes Economic changes Technological changes Political & legal changes Policy changes

Service Marketing Philosophy Three main points of this philosophy are as follows: - Create Customers Keep/retain Customers Profitable Customers

Evolution of service firms All Advertisements, brochures etc. of southwest Airlines refer to the customer with a capital ‘C’ which indicates the company’s focus on the customer. Differentiated services: Domino’s Pizza promises free Pizza if it is not offered at Customers’ door steps within 30 minutes

Definition – Services Marketing Services marketing is marketing based on relationship and value. It may be used to market a service or a product. Marketing a service-base business is different from marketing a product-base business.

The Services Marketing Triangle Company Internal Marketing External Marketing Front-Line Employees Customers Interactive Marketing

The services marketing triangle External marketing - interaction b/w co & customers delivers quality service to customers Information about products & services to external customers through communication-mix- Advertisements, sales promotion, personal selling, direct marketing and public relations

The services marketing triangle Internal marketing - interaction b/w co & front-line employees co enables its employees to deliver quality service to customers Communicating information about the co’s products & services to employees of the organisation.

Newsletters Video shows Staff forums Presentations Tools in internal marketing process Newsletters Video shows Staff forums Presentations

Interactive marketing – interaction b/w front-line employees & the customers determines customer retention by service firms physical or monetary exchange in the form of information Improves value delivered to the customers in the form of a product or service

Characteristics of services Intangibility These are the ways in which intangibility can be overcome: Visualization-Using visual aids Association-Using personalities like endorsements by celebrities Physical representation-Uniforms, Logos, mascots, colours etc Documentation, facts and figures- Perishability- Over-marketing Managing Demand Managing Supply Variability Inseparability

Characteristics of services Perishability- Managing Demand Rising Demand Falling Demand Zero Demand Full Demand Overfull Demand-Demand outstrips supply. Negative Demand Latent Demand Seasonal or Irregular Demand Unwholesome Demand-can be due to an unwanted change in the product or the service.

Characterstics of Services Variability Training of Internal Customers Recruitment and Selection of Internal Customers Training of External Customers Automation Inseparability Training of internal customers Adopting innovative methods of service-like group therapy etc. Video conferencing Robotics

Difference between physical goods and services tangible intangible homogeneous heterogeneous Production and distribution are separated from consumption Production, distribution and consumption are simultaneous processes A thing An activity or process Core value processed in factory Core value produced in the buyer-seller interaction Customers do not participate in the production process Customers participate in production Can be kept in stock Cannot be kept in stock Transfer of ownership No transfer of ownership

Generic Differences Between Goods & Services Nature of the product Problems in quality control Involvement of the customer in production and delivery Absence of inventory Structure and nature of distribution channels-Due to time gap difference in the production and distribution of products and services.

Generic Differences Between Goods & Services Importance of prompt services Difficulty in evaluating service quality

Generic differences b/w goods & Services Nature of the product Pure tangible good – pencil, cup or car battery Tangible good supplemented by some services – fax machine with after-sale services Services supplemented by a tangible good – books provided by DDE Pure service – hair-cutting

Generic differences b/w goods & Services Problems in quality control – perception Hotel serves tasty food Ambience is good Waiters serve customers with a smile *Fails to assist customer in finding a vacant table & *take orders quickly

Generic differences b/w goods & Services Involvement of the customer in production & delivery Customer walks into a coffee shop like coffee Day or Brista Ask for a customized drink with no sugar or with a chocolate flavor If in a bad mood can shout on service assistant

Generic differences b/w goods & Services Involvement of the customer in production & delivery Replacing people with machines Cashier replaced by ATMs Telephone banking

Generic differences b/w goods & Services Absence of inventories opportunity if lost ---lost forever Structure & nature of distribution channels Absence of distribution channels- direct marketing Importance of prompt service Transport service

Generic differences b/w goods & Services Difficulty in evaluating service quality WOM

Thank You