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Services Marketing
Services Marketing
There are no such thing as service industries. There are only industries whose service components are greater or less than those of other industries. Everybody is in service.
What is services?
It is the part of the product or the full product for which the customer is willing to see value and pay for it.
Characteristics of services
Intangibility Inseparability Perishability Variability
Services - things you cant touch - but you can see their effect intangible
services are not physical, they are intangible
Service
A Service is a type of a product. a deed performed by one party for another Discussions about the marketing of goods apply to services as well. Services have special characteristics that make them different than products.
Service
A product without physical characteristics;
Tangibility Spectrum
4 Characteristics of Services
1. Intangibility - u cant touch this 2. Production (or performing the service) and Consumption (using the service) happens at the same time
Characteristics of Services
1. Intangibility - u cant touch this
Services cannot be stored
Characteristics of Services 2. Inseparability of Production (or performing the service) and Consumption (using the service) - happens at the same time
Many people involved in delivering a service mass production of services is hard to do
Characteristics of Services 2. Inseparability of Production (or performing the service) and Consumption (using the service) - happens at the same time
Marketing Strategies Emphasize how much you train your people - so their ability to give you good service will be high Have many locations so customers can get to you ie. Insurance sales come to your home
Service Providers
service providers examples MasterCard insurance telephone services cable services ISPs - internet service providers airlines, first class, economy class banks
Moments of truth
It is the customer service encounter Every positive or negative experience of the consumer would have fall-out on the overall service experience
In services, the last experience remains uppermost in your mind. Therefore, it is not enough to be good, you have to be consistently good
Services Monitoring
Continuous auditing of competitor service levels versus own company Importance - performance analysis
Recovery
Dont Ignore customer Blame customer Leave customer to find for himself Downgrade Act as if nothing is wrong pass the buck Do Acknowledge problem Explain causes Apologise Compensate/upgrade Lay out options Take responsibility
Adaptability
Dont Promise and fail to keep them Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility Do Recognise the seriousness Acknowledge Anticipate Accommodate Adjust Explain rules/policies
Coping
Dont Take customers dissatisfaction personally Let customers dissatisfaction affect others Do Listen Try to accommodate Explain Let go of the customer
Customer complaints
It pays to resolve customer complaints On an average only 5 % dissatisfied customers complain. Others simply go over to the competitor A satisfied consumer speaks to an average of 3 people on his her experience A dissatisfied consumer gripes to on an average 11 persons about his/her unpleasant experience
b Accessible: The segments must be reachable through communication and distribution channels. c Sizeable; The segments should be sufficiently large to justify the resources required to target them. A very small segment may not serve commercial exploitation. d profitable: There is no use in locating segments that are sizeable but not profitable. e Unique needs : To justify separate offerings, the segments must respond differently to the different marketing mixes. f Durable: The segments should be relatively stable to minimize the cost of frequent changes.
Example of Ford: - Ford has gained useful insights through segmentation and adapted its offer to suit the Indian target market. For the Indian segment Ford made some changes in its cars in comparison to their European version. Modifications such as: a. Higher ground clearance to make the car ground clearance to make the car compatible to the rougher road compatible to the rougher road surface in India b. Stiffer rear springs to enable negotiating the ubiquitous potholes on Indian roads.
c. Changes in cooling requirement, with greater airflow to the rear. d. Higher resistance to dust. e. Compatibility of engine with the quality of fuel available in India. f. Location of horn buttons on the steering wheel. As Indian motorists use horn
4.Inspiring Innovation 5.Makes the marketing effort more efficient and economic 6.Benefits the customer as well
1.Geographic Segmentation.
a. Region: - Segmentation by continent / country / state / district / city b. Size: Segmentation on the basis of size of a metropolitan area as per its population size. c. Population density: - Segmentation on the basis of population density such as urban / sub-urban / rural etc. d. Climate:- Segmentation as per climatic condition or weather
2.Demographic Segmentation.
a. Age (dominant factor):-Segmentation is done on the basis of age of person. Example Titan has segmented its product according to different age group of person. Titans product segmentation on the bases of age:-Titan Fastrack( for the younger segment) Steel-1077SM01(for elder person and professional)
2.Demographic Segmentation.
b.Purchasing power (dominant factor):- Segmentation done on the basis of purchasing power of the customer. Examples of different car segment based on purchasing power are :-
2.Demographic Segmentation.
Premium car segment-
2.Demographic Segmentation.
c.Occupation d.Gender (dominant factor) :- Product can be segmented for male and female e.Family Size. f.Family life cycle. g.Nationality. h.Religion.
3)PsychographicSegmentation
a.Activities. b.Interests. c.Opinions. d.Attitudes. e.Values
4)Behaviouralistic Segmentation : - Markets can be segmented on the basis of buyer behaviour as well. Since all Segmentation is in a way related to buyer behavior, one might be tempted to ask why buyer behavior-based segmentation should be a separate method. It is because there is some distinction between buyers characteristics that are reflected by their geographic, demographic and psychographic profiles, and their buying behaviour. Marketers often find practical benefit in using buying behaviour as a separate segmentation base in addition to bases like geographic, demographics, and psychographics.
MARKET TARGETING
INTRODUCTION: - There was a time when finding the best customers was like throwing darts in the dark. Target marketing changed all that...Today's intelligent marketers know that finding their best prospects and customers hinges on well thought out targeted marketing strategies. Target market is a business term meaning the market segment to which a particular good or service is marketed. It is mainly defined by age, gender, geography, socio-economic grouping, or any other combination of demographics. It is generally studied and mapped by an organization through lists and reports containing demographic information that may have an effect on the marketing of key products or services.
DECISIONS INVOLVED IN TARGETING STRATEGY INCLUDE:1. which segments to targeting. 2. how many products to offer. 3. which products to offer in which segments.
Market maturity. Diversity of buyers' needs and preferences. Strength of the competition. The volume of sales required for profitability
Positioning strategy
Once the target markets are notified, the organizations are required to position their services keeping in mind choice of members of the target market. According to an expert To succeed in our over communicated society a company must create a position in the prospects mind, a position that takes into consideration not only a companys own strengths and weaknesses but those of its competitors as well.
Positioning strategy
In a highly competitive environment there is a risk that customers will perceive little real difference between competing alternatives and so make their choices based on price. Positioning strategy is concerned with creating and maintaining distinctive differences that will be noticed and valued by those customers with whom the firm would most like to develop a long term relationship.
Positioning strategy
Successful positioning requires managers to understand both their target customers preferences and the characteristics of there competitors offerings.
Positioning strategy
The objectives of positioning are: (1) To create a distinct place of a service in the minds of potential customers. (2) To provide a competitive edge to a service to convey attractiveness of the service to target market. (3) To place an intangible service within a more tangible frame of reference. (4) To help in service development and redesign of existing services.
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