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Marketing of Services Part-1
Marketing of Services Part-1
MARKETING OF SERVICES
SERVICES
The sector of Explosive growth More than 50% of the average familys budget is spent on services Share of services in the countrys GDP is about 60% & likely to grow Service sector is expected to grow @7%
Salespeople
Goods - things you can touch - tangible 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;
a bundle of performance and symbolic attributes designed to produce consumer want satisfaction.
Most Goods
Easy to evaluate
Most Services
Difficult to evaluate
S.No.
1. 2. 3.
4. 5.
6.
7. 8.
Physical Goods Tangible Homogeneous Product and distribution separated from consumption A thing Core value produced in factory Customers do not participate in the production process Can be kept in stock Transfer of ownership
Services Intangible Heterogeneous Production, distribution and consumption re simultaneous process A activity Core value produced in buyer-seller interaction Customers participate in production Cannot be kept in stock No transfer of ownership
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
Services cannot be protected through patents - therefore a really great travel package and service can be copied a really great physical object can be patented, and NOT allowed to be copied
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
Characteristics of Services
5. Simultaneity 6. Ownership 7. Nature of Demand
8. Quality Measurement
Service Providers
service providers have product lines and product mixes as well examples Mastercard insurance telephone services cable services ISPs - internet service providers airlines, first class, economy class banks
workshops, marriages
MARKETING MIX Key concept in the modern marketing Considered to be core of marketing It is the set of tools that the firm uses to pursue its marketing objectives in the target market Decisions must be made for both the distribution channels and the final consumers
Marketing Lessons
OLD
Product
Price Place Promotion
New
Consumer
Cost Convenience Communication
Wining companies are those that can meet customer needs economically and conveniently and with effective communication Services Marketing Mix 7Ps
Product, Price, Place, Promotion, People, Physical evidence, Process
MARKETING MIX
Marketing tools in relation to products, known as the Marketing Mix, contains four elements : i) ii) iii) iv) Product Price Place Promotion Customer Solution Customer Cost Convenience Communication contd
People
Customers, Employees
Others
Processes
Customer involvement
People
Physical Evidence
The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.
Process
The actual procedures, mechanisms, and flow of activities by which the service is deliveredthe service delivery and operating systems.
People
customer service employees other customers
People
are the firm in the customers eye are a critical part of the product
can impact service encounters via their attitude, behavior, or degree of involvement
- Dwayne D. Gremler
Process
the actual procedures, mechanisms, and flow of activities by which the service is delivered.
- Dwayne D. Gremler
Process
service delivery systems
back stage front stage
procedures policies
Physical evidence
atmosphere
dcor, music etc.
Physical Evidence
includes: (1)
background characteristics (furnishings, noise, color) signs
(2) tangible cues/facilitating goods that facilitate performance or communication of the service
examples: bank statements, travel brochures, business cards
- Dwayne D. Gremler
PRODUCT
Physical good features Quality level Accessories Packaging Warranties Product lines Branding
PLACE
Channel type
PROMOTION PRICE
Promotion blend Salespeople Advertising Flexibility
Exposure Intermediaries
- Dwayne D. Gremler
PHYSICAL EVIDENCE
Facility design Equipment Signage Employee dress Other tangibles
PROCESS
Flow of activities Number of steps Level of customer involvement
- Dwayne D. Gremler
Price
Price
Pricing Strategy Importance of:
knowing the market elasticity keeping an eye on rivals
Image copyright: www.freeimages.co.uk
Product
Product
Methods used to improve/differentiate the product and increase sales or target sales more effectively to gain a competitive advantage e.g. Extension strategies Specialised versions New editions Improvements real or otherwise! Changed packaging Technology, etc.
Promotion
Promotion
Strategies to make the consumer aware of the existence of a product or service NOT just advertising
Place
Place
The means by which products and services get from producer to consumer and where they can be accessed by the consumer
The more places to buy the product and the easier it is made to buy it, the better for the business (and the consumer?)
People
People
People represent the business
The image they present can be important First contact often human what is the lasting image they provide to the customer? Extent of training and knowledge of the product/service concerned Mission statement how relevant? Do staff represent the desired culture of the business?
Process
Process
How do people consume services? What processes do they have to go through to acquire the services? Where do they find the availability of the service?
Contact Reminders Registration Subscription Form filling Degree of technology
Physical Environment
Physical Environment
The ambience, mood or physical presentation of the environment
Smart/shabby? Trendy/retro/modern/old fashioned? Light/dark/bright/subdued? Romantic/chic/loud? Clean/dirty/unkempt/neat? Music? Smell?
CHANNELS OF DISTRIBUTION
Distribution refers to Place, one of thePs in marketing mix. Channels of distribution should be thought of as means to increase the availability and/ or convenience of service that help in satisfying the need of the existing user or increase their use among the existing or new customers.
CHANNELS OF DISTRIBUTION
Branches have been the delivery system for Banking. Various characteristics of services also had a lot of say in restructuring the channels of distribution
CHANNELS OF DISTRIBUTION
However, the technological evolution has brought a great change and development of innovative channels of distribution. The types of Branches in operation include : - Full Service Branches - Limited Service Branches (SPOKES) linked to Main (HUB) branches - Specially Branches like Corporate Banking Branches, Housing Finance Branches, NRI Branches, SME Branches contd
CHANNELS OF DISTRIBUTION
a) b) c) d) e) Electronic Banking Services include :ATMs Intelligent Terminals Home Banking Telemarketing Internet Banking
Services are distinguished from products mainly because they are generally produced at the same time as they are consumed, and cannot be stored away or taken. An enhanced marketing mix needs to be deployed.
Its Not About Simply Reaching Out to Customers With the Right Service. But, Its Also About Creating That Right Desire to Possess The Service.
PRODUCT
PRICE
PLACE
PROMOTION
PEOPLE
PROCESS
PHYSICAL EVIDENCE
PRODUCT
Design. Quality. Range. Brand Name. Features.
PLACE
Distribution Channels.
PRICE
List Price. Discounts. Commissions.
PROMOTION
Advertising. Sales Promotion. Salesmanship.
Methods of Distribution.
Coverage. Location.
PRODUCT MIX
PRICE MIX
Premium Pricing
Low-Cost Pricing
APEX Fares
PLACE MIX
Consolidation.
Tour Operator/ Travel Agent.
PROMOTION MIX
Advertising
Airlines Advertisement Needs to Keep in Mind the Image of Country, The Scenic Beauty, Tourist Attractions, Rich Cultural Heritages or Which Would Attract Number of Tourists.
Publicity
Sales promotion
Word of mouth
PROMOTION MIX
Advertising
The PRO, Receptionist, Travel Agents, Media People Are Very Important People in Publicizing The Business.
Publicity
Sales promotion
Word of mouth
PROMOTION MIX
Advertising
Publicity
The Travel Agents, Tour Operators, Frontline Staffs Contribute a Lot to The Promotion of Airlines Business.
Sales promotion
Word of mouth
PROMOTION MIX
Advertising
Publicity
Sales promotion
Word of mouth
PEOPLE MIX
Competence. Reliability. caring Attitude. Responsiveness. Initiative. Problem Solving Ability. Goodwill.
PROCESS MIX
Reservation. Flight Information. Facilities at The Airport. Baggage Handling. Meal Service.
Flight Entertainment.
Deliver Quality Service.
PHYSICAL EVIDENCE
On the ground:
Booking offices or ticket counters. Paperwork.
In-flight:
Aircraft. Seating Configuration.
Good Inner-exteriors.
Cleanliness. Brand Logo. Uniforms. Ambience. Baggage. Labels or Tag.
Tickets.