Marketing MANAGING PRODUCT SUPPORT SERVICES

MARKETING IN 21ST CENTURY

MAJOR TRENDS IN CUSTOMER SERVICES

MARKETING STRATEGY IN SERVICES

Product Support ServicesManufacturers of equipment small appliances, office machines, tractors, airplanes, etc. - have to provide product support services.Companies that provide a good product but provide poor support services, are seriously disadvantaged. Firms that provide high-quality service outperform their less service-oriented competitors.Why?Product support services are essential, due to the following factors:Reliability & failure frequency.Downtime.Maintenance & repair.To provide the best support, a manufacturer must identify the services customers value most and their relative importance. In case of expensive equipment, such as medical equipment, manufacturers offer facilitating services such as installation, staff training, maintenance and repair services, and financing.

Post-sale Service StrategyEvery company must make provisions for presale and postsale services to its customers. This is handled by the customer service department.P&G prints a toll free number on every product and received nearly million calls a year include are calls requesting information on how to use a product or suggestion on how to improve a product or complaints about a defective product. P&G welcomes all of these calls, which provides a basis for constantly improving its operations. GE annually spend $10 million dollar to operate the GE answer center 24 hours a day, 365 days a year, it handles a 3 million calls year. At the heart of the system is a giant database that provides the centers customer representative (CRs) with instant access ti 7500000 answer concerning 8500 models in clearly stated an easy to act uponToday many companies promise general or complete satisfaction. Without being more specific thus, P&G advertises. if you are not satisfied for any reason, return fir replacement, exchange or refund.

Offering guarantees to promote sales: All sellers are legally responsible for fulfilling a buyers normal or reasonable expectations. Warranties are formal statements of expected product performance by the manufacturer. Products under warranty can be returned to the manufacturer or designated repair center for repair, replacement, or refund. Warranties, whether expressed or implied, are legally enforceable.For e.g.Dominos pizza which underwent phenomenal growth when it guaranteed 30 minutes delivery on all telephone order for its pizza. A late arriving pizza would be free (latter amended to $3 of the order). But the company had to cancel its guarantee when a ST Louis court awarded $78 million to a woman who had been struck by a speeding domino driven in 1989 .

How to offer Post-Sale Service?The manufacturer could provide these services through a customer service department.The manufacture could make arrangements with distributors and dealers to provide these services.The manufacture could leave it to independent service specialist firms to provide these services.The manufacture could leave it to customers to service their own equipments.

Manufacturers usually start out adopting the first alternative. They want to stay close to the equipment & know its problems, they also find it expensive to train others, & this takes time they also discover that they can make good money running the parts and service business. Over time, manufacturers switch more of the maintenance & repair of services to authorized distributors and dealer. These middleman are closer to the customer operate in more locations and can offer quicker if not better services. Manufactures still make a profit on selling the parts but leave the servicing profit to their middlemen.

Still later, independent service firms emerge; over 40 % of the auto-service work is now done outside the franchised automobile dealership by independent garages and chains such as midas mutter, sears & IC penneys . independent service organization have emerged to handle mainframe, telecommunications equipments, and a variety of other equipment lines. They typically offer a lower price & or faster services than the manufacture or authorized middleman. Ultimately same large customers take over responsibility for handling their own maintenance& repair services thus a company with several hundred personal computers, printer & related equipment might find it cheaper to have its own service personnel on site. these companies typically press the manufacture for an unbundled price, since they are providing their own services.

Marketing Challenges in the 21st Century

Major Trends in Customer Services Equipments manufacturers are building more reliable and more easily fixable equipment. One reason is the shift from electromechanical equipments to electronic equipment, which has fewer breakdowns and is more repairable. Companies are adding modularity & disposability to facilitate self servicing.

Customer are becoming more sophisticated about buying product-support service and are pressing for services unbundling. They want separate prices for each service element and the right to select the element they want .

Customer increasingly dislike having to deal with a multitude of service providers handling their different types of equipment. Some third party service organization now service a greater range of equipment.

Service contracts in which seller agrees to provide free maintenance and repair services for a specified period of time at a specified contract price, may diminish in importance. Some new car warranties now cover one lakh miles before servicing. The increase in disposable or never failed equipment, makes customer less inclined to pave from 2% to 10% of the purchase price every year for a service.

Customer service choices are increasing rapidly, and this is holding down price and profits on service as equipment manufactures have to find out how to make money on their equipment independent of service contracts.

Positioning: BCG Matrix

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