SERVICE MARKETING
You can consult the table 1.2 on page 7 to understand the
penetration of service sector in the whole world economies.
FACTS
- In India services shares the 48% of total GDP as shown in
the figure but the recent stats of 2007 shows it to nearly 53%
of Indian GDP.
- Second growing economy in the world
- Indian economy is the twelfth largest in the world.
- Evolution of new sectors as ICE and ITES services along
with service outsourcing organizations.
FORCES BEHIND SERVICE
TRANSFORMATION
• Government policies
• Social changes.
• business trends.
• Advances in information technology.
• Globalization.
At the end you have to understand that services offers the
personal competitive advantage over the basic product that is
offered to the consumer.
Note-consult fig 1.4 page-10
SERVICES
• A service is any act or performance that one party can offer to
another that is essentially intangible and doesn’t result in an
ownership of anything . Its production may or may not be tied
to a physical product.
The management of services refers to as services management.
There are various differences between the services and the
goods. They can be understood by looking at figure 1.1 on
page 16.
• A fresh perspectives- services can further be understood by
considering it as benefits without ownership; rented goods
services, defined space and place rentals, labor and expertise
rentals, shared physical environ., shared systems and
networks.
PRODUCT VS SERVICES
A Comparison with major
differences
MAJOR DIFFERENCES
1-Most service product cannot be inventoried.
2-Intangible elements usually dominates value creation(fig-
1.5).
3-They are often difficult to visualize and understand.
4-Customers may be involved in the co-production.
5-People may be a part of service experience.
6-Operational inputs and outputs tend to vary most widely.
7-The time factor often assumes great importance.
8-Distribution may take place through nonphysical
channel(much E-commerce is centered to transfer of
information and payments relating services).
STRATEGIES WITH
ILLUSTRATION
1- Proper demand supply management-Fed ex, J.W Marriot
hotel etc.
2- Include more tangibility and effective branding through
advertising- Mc Donald's, fed ex boxes etc
3- Educate customer to your environment- IKEA, Subhiksha
and Wal-Mart etc
4- Create user friendly equipments-ATM facilities, Face book
initiative of language translation, online company Intuit for
development on user friendly financial and tax Software.
5- Train service employees, Target right customer at right time-
reservation counters at cshivaji railway station Mumbai, Starbucks
coffee, Taj and Marriot hotel.
6- Set quality standards based on customer expectation, employ
good service recovery procedures-Mc Donald's, L.L Bean timely
delivering corporation, using online permission marketing tools as
standards to assist customer and get service recovery.
7- Faster service delivery, offer extended service hours-Most banks
24 hrs services like Hdfc, timely delivery by L.L bean and fed ex.
8- Create user friendly, secure and free access via mobile phones,
every information downloadable from [Link],
[Link]
EXPANDED MARKETING MIX
OF SERVICES
There are typically eight P’s of marketing mix in the service sector.
They can be broadly classified as
[Link] element.
[Link] and time.
[Link] and other user outlays (other user outlay includes time and
efforts and also exposure to negative sensory experiences).
[Link] and education .
[Link].
[Link] environment.
[Link].
[Link] and quality(Efficiency and Effectiveness).
MARKETING AND OTHER
FUNCTIONS
A proper analysis shows that the marketing should always
collaborate with other functions also to become more effective
in the competitive world.
The other functions include operations management and the
human resource management(fig-1.8 page 24).
In the same line of discussions the company should develop
effective marketing strategies. It can be understood with the
help of fig 1.9 page [Link] the case of Tata Nano and
Marriot hotels.
FRAMEWORK FOR SERVICE
MARKETING STRATEGY
The basic framework includes the following important
steps(fig-1.9).
• Understanding the customer.
• Building the service model.
• Managing the customer interface.
• Implementing the service strategies.
CONTINUE
1. Understanding the customer’s needs- Explore the needs
and also the decision making and behavior of customers in
service encounters.
2. Building the service model- It includes the following
- Develop service concepts(core and supplementary
elements)
- Select physical and electronic channels for delivery.
- Set prices with references to cost, competition, and value.
- Educate customer and promote the value proposition.
- Position the value proposition against competing
alternatives.
CONTINUE
3. Managing the customer interface-it include the following
steps
- Design and manage service processes.
- balance demand against productive capacity.
- Plan the service environment.
- Manage service employees for competitive advantage.
4. Implementing profitable service strategies- it includes the
following steps
- Create customer relation ship and loyalty.
Plan for service recovery and create customer feedback
system.
CONTINUE
- Continuously improve the service quality and
productivity.
- Organize for change management and service leadership.
