Services Marketing MM – MK 201

 List of services you encountered today.

 Importance of service industry  Service providers within manufacturing outsourcing

 Service is any act or performance that one party offers another that is essentially intangible and does not result in ownership. It may be tied to a physical product.

Categories  Pure service – consultancy, baby sitting, massage  Major service with minor goods – airline ( meals, reading)  Hybrid – equal parts e.g restaurants  Tangible good with service – computers, cars – delivery, installation, customisation, repair  Tangible good- FMCG

 Equipment based or people based  Different processes. E.g difft types of restaurants, transportation,  Some require client’s presence  Personal or business  Ownership and objective of service providers – profit – non profit, pvt, govt

Characteristics of Services  Intangibility  Inseparability  Variability  Perishability

 Intangibility. Can not be seen, touched, tasted  Evidence of quality felt through Place (interior, layout), people (numbers, training), Equipment (latest), Commn (ad, brochure, response), Symbols, Price (delayed pizza

 Inseparability Produced and consumed simultaneously Impact on inventory, channels Speedier, pricing based on demand

 Variability Of quality with provider, place, time Good hiring and training Standardize performance Feedback on customer satisfaction

 Perishability Can not be stored Becomes an issue when demand fluctuates Overcome by differential pricing (holiday season), non peak demand (promote) Reservation, complementary service Partime employees, shifting ( customers self checkout) sharing ( tourist taxis), future expansion space. Client does not own and can not return

7 P’s of Service Industry  4 p’s of marketing  + 3more  Physical evidence  People  Process

Holistic Marketing  Every one in the co. practices marketing  External Marketing- producing pricing, promoting and distributing for customers  Internal Marketing – training and motivating to serve customers  Interactive Mkt – employee’s skill in servicing the client.

Managing Service quality  Gap bet consumer expectation and management perception  M perception and SQ specs  SQ specs and delivery  Gap bet delivery and ext commn.  Gap bet perceived service and expected service

Seven Service Quality Gaps Customer experience relative to expectations Advertising and sales promises Customer interpretation of communications 1. Knowledge Gap 2. Standards Gap 3. Delivery Gap 5. Perceptions Gap 7. Service Gap Customer needs and expectations Management definition of these needs Translation into design/delivery specs Execution of design/delivery specs Customer perceptions of product execution 6. Interpretation Gap 4. I.C.Gap MANAGEMENT CUSTOMER wompast

Prescriptions for Closing Service Quality Gaps  Knowledge: Learn what customers expect-- conduct research, dialogue, feedback  Standards: Specify SQ standards that reflect expectations  Delivery: Ensure service performance matches specs--consider roles of employees, equipment, customers  Internal communications: Ensure performance levels match marketing promises  Perceptions: Educate customers to see reality of service delivery  Interpretation: Pretest communications to make sure message is clear and unambiguous.

Product support services  Equipment, appliances, Product support services bundled Delivery, installation, customer training, maintenance and repair. Profit from spares and services.

Customer needs and worries  Failure frequency  Downtime – service dependability  Out of pocket costs Life-cycle costs. Purchase cost + disc cost of maintenance and repair + downtime cost, salvage value. Product warranties AMC – with spares and w/o

Hard and Soft Measures of Service Quality  Hard measures refer to standards and measures that can be counted, timed or measured through audits typically operational processes or outcomes e.g. how many trains arrived late?  Soft measures refer to standards and measures that cannot easily be observed and must be collected by talking to customers, employees or others e.g. SERVQUAL, surveys, and customer advisory panels.  Control charts are useful for displaying performance over time against specific quality standards.

Drivers of Service Switching Service Switching Service Encounter Failures Uncaring Impolite Unresponsive Unknowledgeable Response to Service Failure Negative Response No Response Reluctant Response Pricing High Price Price Increases Unfair Pricing Deceptive Pricing Inconvenience Location/Hours Wait for Appointment Wait for Service Competition Found Better Service Ethical Problems Cheat Hard Sell Involuntary Switching Customer Moved Provider Closed Value Proposition Others Service Failure / Recovery Core Service Failure Service Mistakes Billing Errors Service Catastrophe Unsafe Conflict of Interest