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Service marketing1
This document provides an overview of key concepts in services marketing. It begins by discussing IBM's shift from manufacturing to services, with services now accounting for over half of IBM's revenues. The document then defines what services are and distinguishes between service industries, services as products, customer service, and derived services. It also discusses the tangibility spectrum and trends in the service sector. The rest of the document covers why services marketing is important given the rise of service economies and customers demanding solutions. It then discusses the differences between goods and services marketing and highlights characteristics of services like intangibility. Finally, it introduces the expanded services marketing mix framework which includes people, physical evidence, and processes in addition to the traditional 4Ps.
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Service marketing1
- 1. SERVICE MARKETING Recommended Book:-Zeithaml, Bitner & Gremlar
- 2. PGDM (IIM Raipur) BakhresaFMCG (South Africa) Relationship Manager (HDFC Bank) MD- Shyam Hospital Faculty(MBA)- GLA University, Mathura Swarit Yadav
- 3. Topics to becovered Introduction Difference between product and services marketing Augmented marketing mix Characteristics of services Classification of services
- 4. Introduction Many businessesthat were once viewed as a manufacturing giant are shifting their focus towards services IBM purchased PWc to gain broader strategic service consulting expertise IBM states that it is the largest service business in the world 200,000 service professionals around the world Many businesses outsourced their entire services function to IBM Service side of IBM brings approximately $60 billion dollars More than half of the revenues comes from services Switching from manufacturing focus company to service company is a challenge IBM is focusing on service science and service innovation Services are not limited to the service industry
- 5. What are services? Services are deeds, processes and performance provided or coproduced by one entity or person for another entity or person IBM do provide these services Repair and maintenance service for equipment Consulting services E-commerce applications Training services Web design and hosting Other services All economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced and provides added value in forms(Convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns of its first purchaser.
- 7. Service Industries v/sservice as a product v/s customer service and derived service Service industries and company Whose core product is service Taj mahal hotel Air india ICICI SBI Fortis healthcare
- 9. Service Industries v/sservice as a product v/s customer service and derived service Service as a product Wide range of intangible product offerings Sold by service companies and non service companies IBM and HP is now competing with Accenture for consulting services Customer service Service provided in support of a company’s core products Generally do not charge for customer service Should not be confused with services provided for sale by company Derived service All products and physical goods are valued for the services they provide Valued derived by the physical product is the service itself, not the good
- 10. Tangibility spectrum Intangibilityis a key determinant of whether and offering is a service Very few products are purely intangible or totally tangible Fast food industry Classified as service Tangible components as food, the packaging and so on Automobiles Classifies as manufacturing sector Also supply intangible as transportation and navigations services
- 12. Trends in theservice sector On next slide
- 14. Why service marketing? 1)Service based economies 1) On next slide
- 17. Why service marketing? 2)Service as a business imperative in goods-focused businesses 1) Manufacturing- GE, Caterpillar 2) Technology companies- Avent, Xerox, IBM 3) Retailers- Petsmart 4) Packaged goods- P&G 5) These companies discovered the potential of service-led growth 6) Xerox now provides a document management service 7) Petsmart started pet hotels, grooming and training 8) IBM purchased PWc 9) HP purchased EDS 10) Dell acquired Perot Systems 11) Commoditization of products has resulted in price and margin pressures 12) Customers are demanding services and solutions specially in B2B 13) Services have higher profit margins 14) Service can be differentiator in crowded market
- 18. Why service marketing? 3)Deregulated industries and professional service needs 1) Airlines, banking, telecommunications 2) Doctors, lawyers, architects etc 4) Service marketing is different 1) Service companies started hiring from other core marketing companies like P&G and others 2) Experience gained in marketing a manufactured product is not directly transferable here 5) Service equals profit 1) Value driven leadership 2) Commitment to investment in employee success 3) Trust based relationship
- 19. Is the marketingof services different? A historical perspective
- 20. Why service marketing? 6.But “service stinks” 1. Consumers perceive that overall quality of service is declining 2. With the tier system in companies according to the profitability, some customers are getting less service than before 3. Self service and technology interface reduces human interaction 4. Automated voice systems, internet based services, technology kiosks 5. Customer expectations is higher 6. Too lean and too understaffed to provide quality service 7. Less skilled people working in frontline service jobs 8. Talented workers soon got promoted
- 21.
- 22. Service and technology 1)New service offerings 1) Automated voice mails, IVRS, fax machines, ATMs 2) Amazon and ebay 3) WSJ offers interactive edition 4) Connected car’s example for cars which can be used for shopping, hotel reservations etc 2) New ways to deliver service 1) Providing existing services in more accessible, convenient, productive ways. 2) Bill paying, online order tracking 3) Moved from face-to-face to telephone-based service to IVRS to internet-based customer service 4) Now moved to wireless 5) Cisco offers all customer service and ordering virtually
- 23. Service and technology 3)Enabling both customer and employees 1) Online banking- customer can use their account and transact, check balances, apply for loans etc 2) Through social media now companies and customers can communicate 3) CRM software and sales support software aid the frontline staff 4) Extending the global reach of services 5) The internet is a service 1) Its just one big service 6) The paradoxes and dark side of technology and service 1) On next slide
- 25. The changing faceof customer service
- 26. The migration ofService Jobs
- 27. Characteristics of Services Services tend to be more heterogeneous, more intangible and more difficult to evaluate than goods On next slide
- 29. Search, experience andcredence qualities Framework for difference b/w goods and services Search qualities Attributes a customer can determine before purchasing a product Color, style, price, fit, feel, hardness and smell Automobiles, clothing, furniture and jwelery Experience qualities Taste, wear-ability and comfort Vacations and restaurant meals Credence qualities Consumer may find impossible to evaluate Appendix operation, brake relining or computer software updates etc Depends on expertise of the consumer Check next slide
- 31. Service marketing mix Traditional marketing mix Product Price Place Promotion Services are produced and consumed simultaneously service delivery people are involved in real-time promotion Expanded mix for services Customer are part of service production process Customer will be looking for tangible cues Hotel- design of interiors and behavior of employees People- all human actors who play a part in service delivery and thus the buyer’s perception: namely the firm’s personnel, the customer, and other customers in the service environment Physical evidence- the environment in which the service is delivered and where the firm and customer interact, as well as any tangible components that facilitate performance or communication of the service Process- the procedures, mechanisms, and flow of activities by which the service is delivered- the service delivery and operating systems Next slide
- 33. Southwest airlines: Aligningpeople, processes, and physical evidence