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Syllabus
Section A:
Introduction to Service Marketing : Understanding Service,The Nature of Servicemarketing.
Service Consumer Behavior: Understanding Consumer Behavior, Customer
expectation & perception, managing & exceeding customer exportation, strategy
for influencing customer perception.
Strategic issue in service marketing: Market segmentation & Targeting;
individualized service and mass customization, Differentiation & positioning of
services; steps in developing a positioning strategy ,developing & maintaining
demand & capacity.
The Marketing mix & service : The marketing mix elements, traditional marketing
mix-product, price, place, promotion,& communication services, & extended
marketing mix- people, process, physical evidence in services.
Challenges of service marketing: Developing & managing the customer service
functions, marketing planning for service; developing & maintain quality ill
services, relationship marketing.
Service marketing-specific Industries: Tourism, travel, Transportation service
marketing, financial services; Education & Professional services, Telecom &
Courier, Media Service.
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Introduction To Service Industry :
Meaning & Definition of Service: A service is the non material equivalent of a good. A
service provision is an economic activity that does not result in ownership, & this is what
differentiates it from providing physical good.
According to Philip kotler : a service is an act or performance that one party can offer to
another that is essentially intangible & does not result in the ownership of anything. Its
production may or may not be tied to physical product.
Elements of Service:
1: Lack of physical output or construction.
2: Benefit to the receiver from the service rather than the product offered.
3: The intangible nature of services.
4: The possible combination of services with the production of goods.
5: marketing of an idea or a concept.
Nature/Salient Features Of service:
1: Intangibility: Services are intangible. They cannot be seen, tasted, felt, heard or
smelled before they are bought.
2: Inseparability: it is marked by 2 kinds of inseparability.
a: Inseparability of production & consumption.
b: Inseparability of the service from the person who possesses the skill & performs the
service.
Services are typically produced and consumed simultaneously.
3: Variability: there are 3 reasons for this:
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A: the inseparability from the provider leads top some variability; the provider of the
service being inseparable from the service, variability automatically enters the picture,
depending on the person performing the service.
B: Services are highly people intensive and anything which is people intensive is bound
to be marked by variability. It can be divided in 3 parts- skilled & unskilled services,complete professional services.
C: in service, the effect varies dependent on when & where the service is provided. As
combined result of the 3 factors, services are marked by a high degree of variability,
individuality & heterogeneity.
4: Perish ability: Services cannot be stored. This is not a problem when demand is
steady. When demand fluctuates, service firms have problems For ex: Public-
transportation have to own much more equipment because of rush hour demand than if
demand were even throughout the day.
5: Ownership: The goods sold are transferred from one place to another, the ownership
is also transferred & this provides to the buyers an opportunity to resell. In the case of
service this doesnt happened The user have just an access to the service. As customer
can use personal care services, Medicare services etc
6: Service is a Performance: While product are produced, services are performed.
7: Simultaneity: Services cannot be delivered to customers. Services do not move
through channel of distribution. For availing the services, it is essential that the users
are brought to the providers or providers go to the user.
8: Quality Measurement: It is very difficult to rate or quantify the total purchases.We can
only determine the level of satisfaction.
9: Nature Of Demand: Services are found of fluctuating nature,particularly during the
peak season, we find an abnormal increase in demand. Ex : Tourist, Diwali,Festivals
etc.
10: Consumer, a part of the production process: the consumer has to be physically
present while service is produced (in major cases).Both producer & customer has to be
present for taking service. Service provider- customer interaction becomes a specialfeatures of service.
Classification Of Services:
1: By Market Segment: i: Final Consumer (Coaching, Taxi, car wash, Life Insurance)
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ii: Organizational Consumer (Management Consulting, Machinery repair, Accounting
Services, Legal Services)
2: By Degree Of Tangibility: i: Highly Tangible (Car Rental, vending Machine,
Telecommunications)
ii: Service Linked to Tangible Good( Domestic appliance repair, Car Service)
iii: Highly Intangible ( Psychotherapy, consultancy, Legal Services)
3: By Skills Of The Service providers: i: Professional (Medical Service, legal,
Accounting etc.)
ii: Non-Professional (Babysitting, Caretaking, Casual Labor, Taxi)
4: By Goals Of The Provider: i: Not For profit ( Scouts Association, Charities, Public
Sector leisure facilities)
ii: Commercial (Banks, airlines, Tour Operators, hotels & Catering Services.
5: By Degree Of Regulation: govt. exercises control over the services by enacting
regulation. Some services like Banking, Insurance are highly regulated.
i: Highly Regulated (Hospitals)
ii: Limited Regulated (Catering, Fast food)
iii: Non regulate (Computer time, house painting, leisure lawn care)
6: By Degree of Labor Intensiveness: Human labor is involved in service delivery.
The services differ according to the extent labor involved. For ex Computer assisted
banking v/s manual banking, car washing etc.
i: Equipment Based Service ( a: Automated b: Operated by relatively unskilled operators
(motion picture theatres, dry cleaning taxis) c: Operated by Skilled operators(exayting
airlines, computer time sharing.)
ii: People Based Service: a: Unskilled labor b: Skilled labor c: Professionals.
7:By Degree Of customer contact: i: High Contact (Universities, large appliancerepair, hotel, air travel)
ii: Low Contact (Lawn Care, Automated Car Wash, Janitorial Services)
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NATURE OF SERVICES MARKETING:
1: Intangibility: Consumer decides on basis of his understanding of service & marketer
promise of performance.
2: Low Price Sensivity: Consumers are willing to pay higher price as long as they feelassured that they get a better quality. Consumer decide on 2 parameters: price
sensitivity & performance expectation.
3: No inventory: there is no gap b/w production & consumption .Marketers have to
keep this aspect in mind while planning operations. They also need to balance demand
& supply.
4: Value Creation Process: Marketer can create value in service process through
people, procedure, proof of performance& the pace at which service is delivered. Most
marketer ignore these 4 P,s & concentrate on traditional P,s.
5: Providing Tangibility to the Intangibility: Ways by which intangibility can
overcome:
A: Visualization: marketer should find a way so that customer can visualize a
transaction process.
B: Association: This can be done by associating service with offer or inanimate object.
C: Physical Representation: The intangibility factor in a service offer forces a marketer
to go for tangible representation symbolizing the existence & character of service
industries. Some ways are: i: uniforms: it conveys uniformity, discipline & conformity &professionalism. They also improve visibility of organization.
ii: Colors: This is used in servicescapes like interiors,stationary, glow signs etc. The
corporate colors are part of their logos & other corporate communication tools.
iii: Logos & Mascots
6: Documentation: They cite facts & figures in their promotion to support the calm of
their performance in terms of their dependability, reliability & responsiveness.
7: Selling services: In practice, face to face selling tends to be more prevalent. This ismainly provided by professionals rather than salesperson so in this personal contact
can be seen.
8: Tangibilizing Services through benefit: The Citibank & The Times group are
revolutionizing the credit card industry by offering tangible benefits to the customer;
discounts on long distance telephone calls, frequent flyer programs.
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9: Tangibilizing through Positioning: Prior to purchase the service positioning must
rely on performance attributes which can be measured only after a purchase.
Component Task in service Marketing:
1: understanding the nature of service.
2: understanding the customer & his expectation of the services.
3: giving a shape to the service.
4: Organizing Delivery system & creating channels/intermediaries.
5: Pricing
6: Promotion
7: Harnessing the specila elements of service marketing (people, phusical evidence,
process)
8: achieving Diffrentiation.
9: measuring service quality.
10:monitoring customer satisfaction.
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SERVICE CONSUMER BEHAVIOUR
Meaning & Definition: Acc to Belch & belch CB is the process & activities people
engage in when searching for selecting, purchasing, using, evaluating * disposing of
product & services so as to satisfy their needs & desires.
Acc to Solomon CB is the process involved when individuals or group select, purchase,
use or dispose of products, services, ideas or experience to satisfy needs & wants
Characteristics of consumer behavior:
1: CB is the process by which individuals decide whether, what, when, from whom,
where & how much to buy.
2: CB comprises both mental & physical activities of a consumer.
3: It covers both visible & invisible activities of a buyer.
4: buyer behavior is very complex.\
5: BB is very dynamic.
6: An individual behavior is influenced by internal & external factors.
7: it is an integral part of human behavior.
8: It is sum total of the behavior of a no of a person.
9: It is influenced by a no of marketing stimuli offered by marketer.
10: It involves both psychological & social processes.
11: CB is social in nature.
12: Consumer act differently at different time
13: they learn & thereby change there attitude & behaviour.
14; Consumers are heterogeneous in nature & they are all different from each other in
certain respects.
15: They often act emotionally.
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CUSTOMER EXPECTATIONS
Customer expectation are beliefs about service delivery that function as standards or
reference points against which performance is judged. Because customers compare
their perceptions of performance with these reference points when evaluating service
quality, through knowledge about customer expectations is critical to servicesmarketers.
Measurement Of Customer Expectation: 5 dimensions are:
1: Assurance
2: Empathy: This refers service providers ability to show concern for customers.
3: Reliability: should accurately perform the promised services.
4: Responsiveness: prompt service.
5: Tangibles: It includes physical facilities, equipment of the service provider, dress &
appearance of the service personnel.
Type Of Service Expectation:
1: Ideal expectations or desires: High level expectations.( Grand Hayat)
2: Normative should expectations: :as expensive as this restaurant is, it ought to have
excellent food & service.
3: Experience Based norms:
4: Acceptable Expectations: I expect this restaurant to serve me in an adequate manner
5: Minimum tolerable expectations: I expect terrible service from this restaurant but
come because the price is low.
Factors that Influence Customer Expectation of Service:
1: Sources Of desired Service Expectations: a: Personal needs: are those states or
condition essential to the physical or psychological well-being of the customer, are
pivotal factors that shape what we desire in service.
b: Enduring Service Intensifiers: are individual, stable factors that lead the customer to
a heightened sensitivity to service. It occurs when customer expectation are driven by
another person or group of people.
2: Sources of adequate service Expectations: a:Transitory service Intensifiers: It consist
of temporary, usually short term, individual factors that makes a customer more aware
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of the need for service. Personal emergency situation in which service is required
urgently (such as accident)raise the level of expectation.
b: Perceived service alternative: If customers has multiple service providers to choose
from, their level of adequate service are higher than those customer who believe it is not
possible to get better service elsewhere .
c: Customers Self Perceived Service Role: It is the degree to which customer exert an
influence on the level of service they receive. Specification plays an important role.
Customer actively participate In this.
d: Situational Factors: It is defined as service performance conditions that customer
view as beyond the control of service provider.ex accidents, earthquakes
e: Predicted Service: It implies some objective calculation of the probability of
performance or estimate of anticipated service performance level.
3: Sources of Both Desired & Predicted Service Expectation: When consumer are
interested in purchasing services, they are likely to seek in information from several
sources.
a: Explicit Service Promises: The statements are personal when they are communicated
by salespeople or service or repair personnel; they are non personal when they come
for advertising, brochure & other written publication.
b: Implicit service Promises: It lead to inferences about what the service should & will
be like. The quality ques are determined by price& tangible associated with the service.
c: Word Of Mouth Communication.
d: Past experience.
MANAGING CONSUMER EXPECTATIONS
It is managed by during each phase of the purchase process.
1: During the Pre-Purchase phase: a: Learn what customer expect
b: Tell customer what they can expect
c: Consistently provide the service that customers expect.
This stage requires communication
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2: During the Service Encounter: a: Service personnel must communicate with the
customer during the service encounter.
b: service provider should modify the service to meet the customers expectation if
possible.
c: If service cannot be modified the service personal should explain why customer,s
expectation cannot be met.
3: During The Post-Purchase phase: a: Companies should communicate with
customers immediately after the service is completed to see if expectations were met.
b: firms can use follow up programs such as an evaluation survey sent to customer
through mail or phone.
c: Companies should have a procedure for dealing with dissatisfy customers that will
assist in managing future expectations.
Measures For Managing customer expectation:
1: Managing promises: Service companies should promise only what thaey are
confident of delivering rather than making a promises which are difficult for them to
fulfill.
2: Reliability: Getting it right the first time
3: Effective Communication: It can be initiated in 2 ways either from the company or
from the customer. A service organization can initiate proactive communication toinform about the latest developments that will serve customers better.
EXCEEDING CUSTOMER SERVICE EXPECTATION
It is possible only when companies make an effort to know their customers
expectations. Companies should know what their customer expects from them.
Customer Satisfaction or dissatisfaction largely depends on how the service is
delivered. In todays era companies must look for new ways to differentiate themselves,attract share & grow.
On other hand to gain edge on competititors, service companies should surpass their
dimension of service i.e assurance, empathy, responsiveness, & tangibles.
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Even firms with strong product & price value prepositions strengthen their position &
become harder to copy by adding process & service benefits to their customer value
portfolio.
Phenomenon of Exceeding Customer Service Expectation:
1: Companies were able to identify many customer needs.
2: All the customer needs were not of equal importance, nor do all have equal impact on
the business.
3: customers need could be placed into a hierarchy of three tiers(Attractors, Satisfiers,
Basic Expectations)
CUSTOMER PERCEPTION
Perception is the process through which the information from outside environment is
selected, received, organized & interpreted to make it meaningful to us.
It is the process by which individuals organize & interpret their sensory impressions in
order to give meaning to their environment.
Factors That Influence Customer Perceptions:
1: Service Encounter: A customer estimates the quality of service throughout theinteraction with service provider. Every incident in the service encounter sums up the
customers satisfaction & his intention to repeat business with the service provider.3
types of service encounter:
A: Remote encounters: It do not involve any direct human contact, Ex Atm Machine.
B: Phone Encounters: Companies have started telephonic services like customer
inquiry, registration of complaints, taking orders & reserving tickets.
C: Face To Face encounters: This occurs in places like hotels, restaurants, bank. It is
quite difficult to evaluate the quality of services in these encounter as it involves both
verbal and non verbal communication.
Factors Leading to Satisfaction or dissatisfaction in service encounters:
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1: Recovery: It is a situation when service failure occurs & include how well the
employees of the service provider respond to the situation. Customer too know that it is
not always possible to get perfect service.
2: Adaptability- Employee Responses to Customer Needs & Request: In these acses
customer judge service encounter quality in terms of the flexibilityof the employees &the system.
3: Spontaneity- Unprompted & Unsolicited Employee Actions: Even when there is no
system failure & no special request or need, customer can still remember service
encounters as being very satisfying or dissatisfying.
4: Coping-Employee Response to Problem Customers:
2: Service Evidence: Because services are intangible, customers are searching forevidence of service in every interaction they have with an organization.3 division:
A: People: It includes contact employees, Customer him/herself, Other customer. It is
important in defining the quality of a service encounter in the mind of the customers.
B: Process of Service Delivery: It Includes Operational flow of activities, steps in
process, flexibility v/s standards & technology v/s human.
C: Physical environment: It includes tangible communication, servicescapes,
guarantees, technologies, website.
Benefits Of Service Evidence:
A: Shaping the first impression of the Customer
B: Managing the trust of the customer.
C: Facilitating quality service
D: providing a sensory stimulation to customers: (fun attachments)
E: Changing the Image of Service Organization.
F: instilling the service philosophy in the employees of the service provider;
3: Organizational Image: Image of organization have a profound effect on perception
of consumers. Consumer perceives quality of service on basis of image of organization.
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4: Price: Perception is also ge5t affected by price of services. If a service company
prices a product low then consumer may perceive it of low quality & viceversa.
Strategies For Influencing Customer Perception:
1: Measure & Manage Customer satisfaction & Service Quality: Measurements are
needed to track trends, diagnose problems & to link to other customer focused
strategies. Co have linked their measurement of customer satisfaction to strategies
related to employee training, reward system, internal process metrics, organizational
structures & leadership goals.
2: Aim For Customer quality & Satisfaction in Every service Encounter: there should be
no defects or zero defects. There should be clear documentation of all the points of
contacts b/w organization & its customer.
3: Plan For Effective Recovery: If we fail than we have to plan that how we can
overcome with this.
4: Facilitate Adaptability & Flexibility: Everything should be clear to customer.
5: Encourage Spontaneity
6: Help Employees Cope With Problem customers:
7: Manage the dimensions of Quality at the Encounter level:
8: Reflect Evidence of service: Before making a purchase decision customers often try
to assess the service evidence with the help of tangible clues like the service
organizations personnel in terms of friendliness, knowledge of procedure & their
willingness to help customers.
9: Communicate & Create a Realistic Image:
10: Enhance Customer Perceptions of quality & Value through pricing.
Models Of consumer Expectation & Perception:
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Acc to the model, consumer expectations are prominently influenced by controllable as
well as uncontrollable factors, from the point of view of the service firms. The
Word of
mouth
communicat
ion
ExpectedService
Past
Experiences
Advertising
Contact
personnel
Perceived
Service
Perception
Technical service Quality
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controllable Factors are advertising & contact personnel whereas the uncontrollable
variables are past experience of the customer & word-of-mouth communication.
Perception are not driven merely by technical ability. Many things can interfere with the
perception. Advertising, Past experience & contact personnels performance also
influence the perception of customers.
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STRATEGIC ISSUE IN SERVICES
MARKETING
The term strategy derived from the Greek word strategos, which means generalship -
the actual direction of military force as distinct from the policy governing its
development.
Strategy is defined as the determination of the basic long-term objectives & goals of an
enterprise & the formulation of plans & the acquisitions, allocation& utilization of
resources necessary to accomplish the goals.
The strategic Issues in Service Marketing are:
1: Market segmentation
2: Market Targeting
3: Positioning
4: Differentiation
5: Managing demand & Supply.
Services Market segmentation:
Definition: It is the process of dividing the total market for goods or services intoseveral smaller groups, such that members of each group are similar with respect to the
factors that influence demand.
Acc to Philip kotler, Whenever a market for a product or service consists of two or
more buyers, the market is capable of being segmented, that is divided into meaningful
buyer groups. The purpose of segmentation is to determine differences among buyers
which may be consequential in choosing away then or marketing to them.
Market Segment: A market Segment is a group of potential or actual customers whohave similar needs, wants, preferences or buying behavior. The marketer does not
create the segments by himself but they pre-exist in the market.
Requirements For effective Segmentation:
1: Distinctiveness:Each segment should be internally homogeneous. It should have
some qualities that are common across all members of the segment.
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2: Measurable Segment
3: Substantial size of Segment: The segment must be large enough.
4: Accessibility
5: Actionable: A segmentation variable should help marketer develop effective
marketing programs to attract & serve potential customer effectively.
Advantages of Segmentation:
1: Services offered can be fine tuned to the needs of the customers, so that they derive
max satisfaction.
2: Customers have a choice of selecting a service & a corresponding price range that
suits their budget.
3: The most appropriate distribution channel, in terms of money & efficiency, can be
used.
4: By serving a particular segment or a niche, the investment in resources, marketing,
production facilities etc. can be minimized, thereby increasing the return on investment.
BASES OF SEGMENTATION:
1: Demographic & Socio-Economic Segmentation: It includes age, sex, family size,
income, education, social class & ethnic origins. Demographic variables are:
A: Age & life Cycle stage
B: Gender & sexual Orientation
C: Marital status
D: Income
E: Social Class
F: Family size
G: Occupation
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I: Educational Level
J: Religion
2: Psychographic Segmentation: It is a technique that classifies life styles by
investigating how people live, what interests them & what they like. Psychographics
segment is the process of dividing markets into segments on the basis of consumer life
styles, social class or personality profile. It includes:
A: Life Styles
B: Personality
C: Values
D: Beliefs
E: attitudes
3: Geographical Segmentation: it id divided on the basis of countries, regions, stages,
cities & town.
Based on Customer Responses:
1: Benefit Segmentation: Car buyer seek widely varying benefits, from fuel economy,
size & boot space, to performance, reliability, or prestige.
2: Usage Segmentation: a: Heavy usage
B: Medium usage
C: light usage
D: Non-Users
3: Loyalty Segmentation: i: Hard Core Loyal
ii: Soft Core Loyal
iii: Switchers
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PROCESS OF MARKET SEGMENTATION:
1 2 3 4 5
Segmentation Approaches
Customer
Characteristics
Customer
responses
Demogra
phic &
ocio-
economic
Psychogra
phics
Geograph
y
Benefits Usage Loyalty
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1: Identify Bases for segmenting the Market: Bases are Demographic, psychographic,
geographic & behavioral segmentation.
2: Develop profiles of Resulting Segments: In this stage clearly understand how &
whether the segment differs from each other in terms of their profiles. If they are not
different from each other , the benefits to be derived from segmentation, that is, frommore precisely identifying sets of customers , will not be realized.
3: Develop Measures of segment Attractiveness: the size & the purchasing power of the
segments must be measurable so that to company can determine if the segments are
worth the investment in marketing & r/s costs associated with the group. The chosen
segment also must be accessible, meaning that advertising or marketing vehicles must
exist to allow the co to reach the customers in the segments.
4: Select the Target Segments:
5: Ensure the Target segments are compatible:
MARKET TARGETING IN SERVICES:
It is the process of estimation & comparison of the previously identified segments for
selecting one or more segments that fetch the best results for the business.
BASIS OF TARGETING THE IDENTIFIED SEGMENTS:
1: Segment Size & Growth potential
2: Structural attractiveness: It involves analyzing the present & potential competitors,
substitutes of products or services available in the market & the relative power of
suppliers & buyers. A segment is said to be less attractive when the supplier power is
high. The supplier power is said to be high when there are few substitutes & when they
supply an important product or service to the segment.
Identify
bases for
segment
ation
process
Develop
profiles
of
resultingsegments
Develop
measure
of
segmentattractive
ness
Select
the
target
segments
Ensure
that
segments
are
compatib
le
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Segment attractiveness is also affected by the relative power of buyers, whose strong
bargaining power may control the prices. A strong presence of substitutes in a
particular segment will, therefore, obviously decrease its attractiveness.
3: Company Objectives & Resources: Evaluation of a segment alone, based on its size,
growth potential & structural attractiveness is insufficient while choosing the targetsegment. It is essential that the segment features must match the companies objective
& resources.
Targeting Strategies:
1: Single Segment Strategy: Only for one segment Ex: A software firms cater to only
logistic business.
2: Selective Specialization: It target more than 1 segment. The co prepares differenttype of marketing mixes for different segments which may or may not be related to
same product or services. Ex Bank Products
3: Product Specialization: This strategy offers a single product or service to various
segments. Ex Banquet Halls
4: Market specialization: This strategy aims to meet the various needs of a target
segment. The target segment for the group remains same & the company tries to cater
to the different needs of the segment by offering product or services across different
categories. Ex: Educational Institute with different type of courses.
5: Full-Market Coverage: This strategy aims to offer various products or services to the
entire market.
Individualized Service & Mass Customization
Individualized Service: Services are heterogeneous & , as such , no two individuals can
have the same service in the same way or can any customers have exactly the serviceon 2 occasions.
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Mass customization: It is all about meeting an individual customers needs by
manufacturing a product or offering a service in a cost-effective manner.
Approaches Of Mass Customization:
1: Customizing the service around a Standardized Core: A standard core service suchas airline transportation can be customized through additional services.
2: Creating Customizable Services: .
3: Offering Point-of Delivery Customer: The provider allows customer to communicate
what they need or want at point-of-service delivery. The service is customized in real
time by the employee to fit those needs.
4: Offering Standard Modules that can be Combined in Unique Ways: This is the
approach used by tour companies that offer the traveler different vacation
components(hotels, airline, destination, length of stay) that they can combine to design
their unique trip.
Factors That Companies need to Consider before Adopting Mass customization:
Service package 1
Service package 2
Service package 3
Service package n
Customer 1
Customer 2
Customer 3
Customer n
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1: Co should understand their Customers opinion about customization of the products
or services. If the customers are not keen on customization, then a co need to think
over its decision to customize its services.
2: Cos should assess their ability & the extent to which the existing processes &
technology can offer customization.
3: Cos should also analyze if they are the pioneers in the industry in adopting mass
customization & if that is the case , how much time their competitors will take to catch
up.
4: A co should assess its culture & internal resources to adapt to the changes brought in
by adopting mass customization. If there is a need for organizational change, then the
co should take the necessary initiatives in developing the employees through effective
leadership & change management.
DIFFRENTIATION OF SERVICES
A firm needs to differentiate its offer from that of competitors by providing something
unique that is valuable to the buyer. If this is successfully achieved then the firm can
command a premium price- it would sell more of its product in the long run & win greater
quality.
Differentiation, in fact grows out of the firms value chain. The value-chain desegregates
a firm into strategically relevant activities with corresponding cost implications. Value-chain categories are broadly categorized under 2 heads. First are the primary activities
like inbound logistics, marketing, sales & services. The second are the support activities
which include infrastructure, human resources, technology development & procurement.
Steps In Differentiation:
1: The first step is to determine who the real buyer is.
2: The second step is that the firm must identify the direct & indirect impact on itsbuyers value chain to determine the value the firm should create for its buyers.
3: The 3rd step is to rank the buyer purchasing criteria.. At times, such an analysis might
suggest purchase criteria. At times, such an analysis might suggest purchase criteria
that the buyer does not currently perceive. However, the same must be identified in a
manner that it can be operationalized & their list of buyer purchase criteria on a
continuous basis to sustain competitive advantage.
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4: The 4th step is that the firm must identify its existing sources of uniqueness in relation
to its competitors & also the potential new sources of uniqueness, because
differentiation stems from the uniqueness of firms value chain.
5: The 5th step is to study the cost implication of all the identified factors, both use
criteria & signaling criteria, which can lead to differentiation.
6: 6th step is to choose the configurations of value activities that create the most
valuable differentiation for the buyer.
7: 7th step is to check the sustainability factor of your chosen differentiation strategy.
Sustainability has to be checked again erosion or imitation.
8: last stage is that of the cost reduction in activities that do not affect the chosen forms
of differentiation. Such a strategy would not only improve profitability but also reduce
vulnerability to competitors because of price premium.
POSITIONING
Positioning means projecting the image of the product or service in such a way that
consumer perceives its value distinctively from that of competitive offers.
Objectives of Positioning:
1: To create a distinctive place of a product or service in the minds of potential
customers.
2: To provide a competitive edge to a product or service, an attempt to convey
attractiveness of the product or the service to the target market.
3: To place an intangible service within a more tangible frame of reference.
4: To help influence both service development & the redesign of existing services.
5: To follow consideration of competitors possible moves & responses so thatappropriate actions can be taken.
6: To give the target markets the reason of buying your services & than design the
whole strategy.
7: To provide guidelines for the development of marketing mix with each element being
consistent with the positioning.
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Positioning Services: The process of designing a service has an impact on the image of
the service in the mind of the customer. It is generally agreed that term image
represents the sum of beliefs, attitudes & impressions that a person or group has of an
object.
Type of Images:
1: Current Image: way that a co is seen by different groups.
2: Mirror Image: Way that a co thinks it is seen by different groups.
3: Wish Image: Way that a co would like to be seen by different groups.
Characteristics to satisfy needs of customers:
1: Importance
2: Distinctiveness
3: Communicability
4: Affordability
5: Profitability.
How to Position a Service Business:
1: Positioning by Features:
2: Positioning by Comparison
3: positioning by Benefit to Consumer
4: Positioning as an Expert
5: Positioning Through Guarantees
6: Positioning as a leader.
STEPS IN DEVELOPING A POSITIONING STRATEGY:
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1: Determining Level of Positioning: A co should first decide on the level at which they
would like to position their products or services. A single co can position itself at
different levels at different points of time.
2: Identification of attributes: After determining the level of positioning, companies
should identify the attributes that are considered by the target market segment whenmaking purchase decision.
i: Customers often base their decisions on the unique features offered by the product
class.
ii: Customers consider the specific uses fulfilled by the product/service offered by a
particular co.
iii: Customer also base their decision on the price of the service in comparison to the
perceived delievered value.
iv: A service,s ability to serve the needs of particular set of users also determine its
salability.
v: The attributes should also provide rational & emotional benefits to the customers.
3: Location of Attributes on Positioning Map: The attributes identified by the marketers
are categorized into certain dimension which reflect the preferences of the customers.
These services plotted on a 2-dimensional positioning map. These maps are used to
identify the competitors positions with regard to the attributes. Positioning maps can be
developed for each segment in the target market & these maps will show the position of
different players, as per the perceptions of the customers in these segment.
4: Evaluating Positioning Options: i: Strengthening Present Position against
Competitors.
ii: Identifying an Unoccupied Market Position.
iii: Repositioning the Competitors.
IMPLEMENTING THE POSITION:
1: Service
2: Price
3: Location
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4: Promotion
5: People
6: Processes.
Developing & Maintaining Demand & Capacity:
Concept Of Demand & Capacity (Supply): Law Of Demand
In economics, the law of demand is an economic law that states that consumers buymore of a good when its price decreases and less when its price increases (ceterisparibus).
The greater the amount to be sold, the smaller the price at which it is offered must be, in
order for it to find purchasers.
Law of demand states that the amount demanded of a commodity and its price areinversely related, other things remaining constant. That is, if the income of theconsumer, prices of the related goods, and tastes and preferences of the consumerremain unchanged, the consumers demand for the good will move opposite to themovement in the price of the good.
http://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Consumerhttp://en.wikipedia.org/wiki/Ceteris_paribushttp://en.wikipedia.org/wiki/Ceteris_paribushttp://en.wikipedia.org/wiki/Commodityhttp://en.wikipedia.org/wiki/Incomehttp://en.wikipedia.org/wiki/Goodshttp://en.wikipedia.org/wiki/Goodshttp://en.wikipedia.org/wiki/Incomehttp://en.wikipedia.org/wiki/Commodityhttp://en.wikipedia.org/wiki/Ceteris_paribushttp://en.wikipedia.org/wiki/Ceteris_paribushttp://en.wikipedia.org/wiki/Consumerhttp://en.wikipedia.org/wiki/Economics -
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Assumptions
Every law will have limitation or exceptions. While expressing the law of demand, theassumptions that other conditions of demand were unchanged. If remain constant, theinverse relation may not hold well. In other words, it is assumed that the income andtastes of consumers and the prices of other commodities are constant. This lawoperates when the commoditys price changes and all other prices and conditions donot change. The main assumptions are
Habits, tastes and fashions remain constant. Money, income of the consumer does not change. Prices of other goods remain constant. The commodity in question has no substitute or is not competed by other.
The commodity is a normal good and has no prestige or status value. People do not expect changes in the prices
LAW OF SUPPLY
The Law of Supply
Like the law of demand, the law of supply demonstrates the quantities that will be
sold at a certain price. But unlike the law of demand, the supply relationship
shows an upward slope. This means that the higher the price, the higher the
quantity supplied. Producers supply more at a higher price because selling a
higher quantity at a higher price increases revenue.
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A, B and C are points on the supply curve. Each point on the curve reflects a
direct correlation between quantity supplied (Q) and price (P). At point B, the
quantity supplied will be Q2 and the price will be P2, and so on. (To learn how
economic factors are used in currency trading, readForex Walkthrough:
Economics.)
Time and Supply
Unlike the demand relationship, however, the supply relationship is a factor of
time. Time is important to supply because suppliers must, but cannot always,
react quickly to a change in demand or price. So it is important to try anddetermine whether a price change that is caused by demand will be temporary or
permanent.
Let's say there's a sudden increase in the demand and price for umbrellas in an
unexpected rainy season; suppliers may simply accommodate demand by using
their production equipment more intensively. If, however, there is a climate
change, and the population will need umbrellas year-round, the change in
demand and price will be expected to be long term; suppliers will have to change
their equipment and production facilities in order to meet the long-term levels of
demand.
Variation in Demand Relative to Capacity:
1: Demand Exceeds Capacity
http://www.investopedia.com/walkthrough/forex/beginner/level3/economic-data.aspxhttp://www.investopedia.com/walkthrough/forex/beginner/level3/economic-data.aspxhttp://www.investopedia.com/walkthrough/forex/beginner/level3/economic-data.aspxhttp://www.investopedia.com/walkthrough/forex/beginner/level3/economic-data.aspxhttp://www.investopedia.com/walkthrough/forex/beginner/level3/economic-data.aspxhttp://www.investopedia.com/walkthrough/forex/beginner/level3/economic-data.aspx -
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2: Demand Exceeds Optimum Capacity
3: Demand & Supply are well balanced
4: Excess Capacity
Strategies for Managing Capacity to Match Demand:
1: Employment of Part-Time Employees.
2: Cross-Train Employees
3: Increase in Capacity through Customer Participation
4: Use of Sub-Contracting to Increase the Capacity
5: Sharing of Capacity.
6: Stretch existing Capacity: It include i: Stretch Time
ii: Stretch Labor
iii: Stretch Facilities
iv: Stretch Equipment.
7: Modify or Move Facilities & equipments
8: Schedule Down time during Periods of Low demand.
Strategies for Managing Demand To Match Capacity:
1: Communication
2: Advertising & sales Promotion
3: Service Variations
4: Modifying Timing & location of Service Delivery
5: By adjusting prices
6: Developing Complementary Services
7: Promoting Off-Peak Demand
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Strategies to Manage Demand & Capacity in Waiting Lines:
1: Employing Operational Logic
2: Reservation systems
3: Differentiate Waiting customers.
4: Make Waiting fun, or at Least Tolerable.
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THE MARKETING MIX AND SERVICES
MM means to collect & mix the resources of marketing in the manner that objects of the
enterprise may be achieved & maximum satisfaction may be provided to the
consumers.
MM Elements:
1: product
2: price
3: Promotion
4: Place
Extended ps for Service
5: People
6: Physical evidence
7: Process.
Levels of Service Product:
1: Core/ Benefit services
2: Expected services
3: Augmented Service
4: Potential service.
POTENTIAL SERVICE
AUGMENTED SERVICE
EXPECTEDCORE
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1: Service Product Mix: It consist of all the different product lines a company offers.3
dimensions of Service Product mix:
A: Width of the Service Product Mix: No of different product lines a co is offering.
B: Depth of the Service Product Mix: It is the no of product items within each productline.
C: Consistency in Service Product Mix: It is relationship amongst product lines in terms
of their sharing the end use, distribution outlets, consumer groups & price range.
BRANDING SERVICE PRODUCT:
Acc to AMA, a brand is a name, term, sign, symbol or design or a combination of
these, intended to identify the goods or services of one seller or a group of sellers & to
differentiate them from those of their competitors.
Brand Development for Service Products:
1: Brand Extensions
2: Multibranding
3: Cannibalization: when one brand eats into the current & potential market of another
of the same service firm.
4: Co-Branding
5:Private & Generic Brands.
Product Life Cycle Concept Of Services:
1: Introduction
2: Growth
3: Maturity
4: Decline
New Service Development process:
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2: Service Pricing: Characteristics of service Pricing:
1: Negotiations
2: Discounts
3: Quality
Cost associated with Services:
Generation Of idea
Screening
Concept testing
Business
analysis
& design
ofServic
Test Marketing
Service Launch
Infrastructure
Development
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1: Monetary Costs: Ex Doctors Consultation Fees, Cost of medication. It is cost which
can be calculated.
2: Non Monetary costs: i: Time Costs
ii: Search costs
iii: Convenience Costs: If customer have to travel to a service, they incur a cost & the
cost becomes greater when travel is difficult, as it is for elderly persons.
iv: Psychological costs: Fear of not understanding, Fear of uncertainity, Fear of rejevtion
etc.
Factors In Setting Pricing Objective:
1: Planned market Position:
2: stages of the Life Cycle
3: Competitive Situation
4: strategic Role
Pricing Objective:
1: Profit Maximization: a: To achieve a Targeted Return on investment
B: To maximize Profits.
2: To increase Sales Volume
3: Status-Quo Oriented Objectives: a: Competition Rendezvous
b: Price Stabilization.
4: Society Oriented objective
5: Survival
6: Maximize Market Share
7: Service Quality Leadership
8: OperationOriented Objective
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9: Patronage oriented objective: Price may be used effectively to develop loyalty &
relationship with customers. Many companies used this to profit maximization as a
future oriented strategic option.
Service Industry Pricing Strategies/ Methods:
1: Cost-Based Pricing: It includes Variable cost, fixed costs, Financial costs & profits.
2: Competition Based Pricing.
3: Demand Oriented Pricing: it includes by customer, By product or services & by
location, by time & by quantity.
4: Value Based Pricing: It includes Price Discounting, Odd Pricing, penetration Pricing
(initial price is low)
5: Bundled Pricing:
6: Prestige Pricing
7: Market segmentation Pricing
8: Loss Leadership Pricing
9: Bid Pricing
10: money-back Guarantees
Factors affecting Pricing Policy:
1: Cost of Producing the Service & Breakeven analysis.
2: Competitors Pricing
3: Demand Levels & elasticity
4: Regulatory Factors
5: Positioning
6: Marketing Mix
3: Promotion/ Communication of Promotion:
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Acc to Philip kotler, Promotion compasses all the tools in the MM whose major role is
persuasive communication.
Characteristics Of Promotion:
1: Customers are informed about the product or services of the co, either the time ofintroduction or any change made in existing product.
2: Customers are reminded of the products & services of the co.
3: Customers are requested or persuaded to purchases the products & services of the
co.
4: Promotion includes advertising, personal selling, & other sales promotion techniques.
5: Promotion activities are performed by the manufacturer.
Need For Promotion:
1: It creates Images such as prestige, Discount or Innovative- for the co & its goods &
services.
2: it creates Reputation that reduces perceived risk
3: It adds Direct Promotional Values
4: it Reassures
Communication Issues for Service Marketers:
1: Technology
2: Budgetary constraints
3: content
4: Delivery
Promotion mix:Acc to Philip Kotler , A companys total marketing communications mixalso called its promotion mix consist of specific blends of advertising, personal selling,
sales promotion, publicity & the direct marketing tools that the co use to pursue its
advertising & marketing goals.
1: advertising: a: Services are generally more difficult to evaluate than the products.
b: Creation of Credibility
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c: Value Description
d: Creation of assurance
e: Changing Customer perception
f: New Services
2: Sales promotion: a: Word-of-mouth publicity
b: Role of employees
c: Role of Personal selling
d: Sampling of the Services
e: Customers as New Customer Inductors
f: discount for Existing Customers
g: sign-on bonus
h: Prize Draw or Lucky Gifts.
3: Public Relations
a: Press Relations or press agency
b: Product Publicity
c: Public affairs
d: lobbying: building & maintain relations with govt officials
e: Investor Relations
f: Development
4: Direct Marketing
5: Event sponsorship/Institutional sponsorship
6: Flyers in Newspapers, at shopping centres
7: Cause-Related Marketing
8: Adventure Marketing
9: Personal Selling
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GUIDELINES FOR DEVELOPING SERVICE COMMUNICATION:
1: Word-of-mouth Network
2: Service should promise what is possible
3: Service should make Tangible the Intangible
4: Employees as a Target of Communication
5: Role of Personal Selling
6: Managing Expectation
7: Make the Service Comprehensible
8: Communications Continuity
4: Place: The place or distribution of services is discussed in light of:
1: Location
2: Accessibility & Availability
3: Channel of Distribution/ Direct distribution: a: Company resources
b: Type of Services
c: Geographic Spread of the Market
d: Legal & Political restriction on Foreign operation
e: Levels of technical skill or expertise required to deliver the service satisfactorily.
f: Customer preferences.
4: Service inventory storage
5: Managing Channels:
a: Intensive distribution
b: Selective distribution
c: Exclusive distribution.
Decision about Place:
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1: Nature of Service
2: Nature of interaction
3: Nature of customers Demand
4: Competitive positioning
5: Natural geographical Location
6: Technological advancements
7: Dependency on other services
8: Infrastructural Facilities
9: Target Market Decision.
Flexibility In Consumption:
1: Involvement of Purchases
2: Demographic Profile
3: Whom the services is directed to or Offered for
4: Kind of Service
Type of Intermediaries for Service Delivery:
1: Agents & brokers:
Agents: a: service Providers Agents
b: Selling Agents
2: franchise Operators
3: Electronic Channel
4: seller & buyer agents.
Extended Marketing Mix:
Reasons for Extended Marketing Mix:
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1: The intangible nature of services is overlooked in most analyses of the mix.
2: The promotion mix of the traditional 4ps fail to recognize the promotion of services
that takes place at the point of consumption by the production personnel, unlike the
situation with most physical goods, which are normally produced away from the
consumer so that production personnel have no direct investment in promotion to thefinal consumer.
3: The price element overlooks the fact that many services are produced by the public
sector with no price charged to the final consumer.
Product
Production Price
Customer
Services
Place People
Processes
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5: People: The services are pre-dominantly people based. The concept of internal
marketing suggest that the employer should apply market research, market
segmentation & traditional marketing activities like advertising in order to attract
employees & make them performed in desired way.
Nature of service Delivery:
1: inseparability of production & consumption:
2: difficulty in balancing demand & supply of Services
3: Lack of Standardization in services.
4: Recovery services.
Role of the employee in service marketing:
1: High Contact: People Based Services: Education, dental, medical services etc.
a: Professional
b: non professional : Baby sitting
2: Low-contact equipment based services.
Selection & Recruitment:
The recruitment of the frontline employees is one of the key success areas in service
marketing. Basic step for the process are:
1: Preliminary stage: a: Identification of vacancy
b: Develop job profile- review job description & person specification.
c: Consider internal sources
d: consider using specialist recruitment agency
e: advertise- internally & externally
f: process applications
g: Screen application for shortlist.
2: Selection stage;
a: Arranging Interviews; venue, timing, date
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b: Determine process for selection; formal/informal interviews, use of pre-selection test,
presentations.
c: Conducting interviews
d: offer/Acceptance
e: Formal appointment
3: Follow-Up Stage:
a: Induction
b: Training
c: Ongoing staff development & appraisal
Training & Development:
1: identification of training needs
2: Implementation of Training Programs
3: evaluation of Training Effectiveness
Training can be given to below mentioned areas:
1: Functional areas
2: Personal development
3: Organizational development
4: Appraisal systems
Empowerment
Suggestion Involvement
Job Involvement
High Involvement
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6: Process: It is the way of undertaking transaction, supplying information & providing
services on a way, which is acceptable to the consumer & effective to the organization.
Characteristics of the service Process:
1: Customer participation in the process
2: Location of service Delivery
3: service itself: is it process sependent.
4: High contact or low contact services
5: Degree of standardization
6: Complexity of the service
Service Delivery process/Blueprint:
Blueprinting is a graphical approach proposed by Shostack, designed to overcome
problems that occur where a new service is launched without adequate identification of
the necessary support functions. A customer blueprint has 3 main elements:
1: All of the principal functions required to make & distribute a service are identified,
along with the responsible co unit or personnel.
2: Timing & sequencing relationships among the functions are depicted graphically.
3: For each function, acceptable tolerances are identified in terms of the variation from
standard that can be tolerated without adversely affecting customers perception of the
quality.
The Purpose of setting down clear outlines are:
1: to ensure that the services is carried & in the fastest, most efficient & cost-effective
manner possible.
2: To enable service quality to be monitored & benchmarks to be put in place thus
allowing accurate measurement of both quality & productivity.
3: To facilitate staff training & enable individuals to carry responsibility for individual
stages of the service transactions & delivery.
4: To reduce the amount of divergence thus enabling accurate budgeting & human
resource planning etc to take place.
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Preparation of blueprint:
1: Representing a (Service) Product in the form of its Molecular structure
2: Breaking down the process into Logical steps
3: Recognizing the Variability in the process
4: Identifying the Back-stage elements in the process
Advantages of blue Printing:
1: provides an overview
2: Identifies Fall points
3: Improved service design
4: Rational service design
5: Continuous quality improvement
6: Provides integrated view of service
7: Identifies resources
8: Constitute a Rational basis for both external & internal marketing
9: Facilitates Top-down bottom-up approach to quality Improvement.
7: physical Evidence: It is defined as the environment in which the service is delivered
& where the firm & the customer interact; and any tangible commodities that facilitate
performance or communicate the service. It plays a role in enhancing customers
perception of the service quality.
The physical evidence of a service is a tangible clue, which creates an impression about
the service or the setting of a service or provides the proof of delivery.
Elements of physical evidence:
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Types of physical evidence:
1: essential evidence: the physical elements that are an integral part of the service offerbut are not passed on to the customer constitute essential evidence. In other way,
without these elements, service cannot delivered. Ex gym: No physical evidence while
going out.
2: Peripheral Evidence: the tangibles offered by service providers to customers, to
confirm the delivery of service or as a simple gift, constitute peripheral evidence. Ex: bill
received after having food in restaurant so only the confirmation of service had.
Guidelines for Physical evidence strategy:
1: Recognize the strategic impact of Physical Evidence
2: Map the Physical Evidence of Service
3: clarify the role of Servicescape.
4: Assess & identify Physical Evidence Opportunities.
Service escapes other tangibles
Facility exteriors
Exterior design Business Cards
Signage Stationary
Parking Billing statements
Landscape Reports
Surrounding environment Employee Dress.uniforms,Brochures
Facility interiors
Interior Design Web Pages
Equipment Virtual servicescape
Signage
Layout
Air quality/temperature
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5: Be prepared to update & modernize the events.
6: Work Cross-functionality.
Significance of physical Evidence:
1: increased productivity
2: creating good impressions
3: increased credibility
4: Differentiation from competitors
5: Service Quality Management
\6: Repositioning of Service
Service Scape:
1: Self-service
2: Interpersonal Services
3: Remote Service.
Objective of the Servicescape:
1: Focus on Customers
2: Focus on Employees
3: Focus on the Firm
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CHALLENGES OF SERVICE MARKETING
Developing & Managing the customer service Function: Acc to Turban, Customer
service is a series of activities designed to enhance the level of customer satisfaction,i.e, the feeling that a product or service has met the customer expectation.
Features of Customer service:
1: it is a strategic process for providing value-added services to the customers.
2: it always ensures a trade-off between cost & service.
3: it keeps the customer happy & loyal
4: it brings about a competitive advantage in the market place, increases sales &
improves profits.
5: it reflects the corporate vision.
6: It generally starts with an order entry & ends with the delivery of service to customers.
Improving Customer service:
1: Divide the basic Service into Service Separate Activities:
2: conduct periodic surveys.
3: provide necessary infrastructure & advanced technology.
4: Track changes in the external environment
CustomerService Management cycles:
Stage1: Understand the Customers: it include
a: Selecting the target, Defining the Service & the users of the service.
b: Determining the service characteristics.
c: Developing customer profile
d: Understanding customers perception of the service provider.
Stage 2: Set Customer Service standards:
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a: Provide direction to their employees to serve the customers better.
b: Handle employee expectations as the standards are predetermined.
c: Set the ground for recruiting the right people, training them & rewarding them
d: Bring in uniformity & consistency in the organization.
There are 2 major dimensions of customer service:
1: Standard in procedural Dimension of Customer Service: It involves the time taken for
service delivery, the flow of different service components in terms of their co-ordination
& the flexibility offered. It also involves anticipating customer needs, maintaining
effective communication with the customers, establishing customer feedback system &
effective supervision & organization.
2: Standard in personal dimension of Customer Service: It often involves customer
emotions & perception & is, therefore, unpredictable in nature. It involves the
appearance,& body language of the service personnel, their tone of voice, their tone of
voice, their tact of selling & also their attentiveness & involvement in helping the
customer making right choice.
Setting the Standards in stone:
1: The standards must be set in accordance with the organizations goals & objectives.
2: Before determining the standards, the management should discuss them with
employees & also with customers if possible & solicit their opinions & suggestion.
3: The standards should be communicated to all the employees at all levels in the
organization.
4: the standards should be revised from time to time to ensure that they are in tune with
the changes in the organization & the external environment.
Stage 3: Encourage Teamwork & Customer-Orientation among Employees:
Customer Focused personnel: customers patronize firms that provide good service &
take time to demonstrate they care about the customer.
1: Customer focused job descriptions
2: Customer Focused recruiting.
3: Customer focused orientation & training.
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Stage 4: Establishing Control Systems: Success of service management process
depends on proper control of employees & service processes. Control system could be
in form of feedback from employees & customers on a formal service audit system to
evaluate the performance of organization.
Customer service audit is also important for evaluation & control of service function. Acustomer service audit asks managers the following questions:
1: What are customer service objectives?
2: What service is provided?
3: How to Compare with competition?
4: What service customer wants?
5: What are customer service demand patterns?
6: What trade-off customers are prepared to make?
Step 5: Preventing Problems from Occurring
Marketing plan For Service: Acc to AMA, Marketing planning is the work of setting up
objectives for marketing activities & of determining & scheduling the steps necessary to
achieve such objectives.
Characteristics of Marketing planning:
1: It is a formal & systematic approach towards planning of all marketing activities-
product positioning, price setting , distribution channels etc.
2: It is a rational activity, requires thinking, imagination & foresight.
3: It is a forward looking & dynamic process designed to promote market oriented
business actions.
4: Planning is concerned with two things: a Avoiding incorrect actions & b: Reducing
frequency of failure to exploit opportunities
5: It is a process of deciding in advance what to do & how to do it. If the marketing
planner desires to achieve a target market at some future date .
6: It is basically a decision making process.
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7: it is done by the marketing department.
Importance of Marketing Planning:
1: To offset future uncertainties.
2: Help in management by Objectives.
3: Considerations of Opportunities & problems
4: profitable employment of resources
5: Economy in operation.
6: Helpful in co-ordination
7: Helpful in control
8: Customers want Satisfaction
9: Performance Standards
Problems in Marketing planning:
1: Diversity of alternatives
2: Vacillating Policy of the government.
3: Rapid changes in costs.
4: Time factor
5: Difficulty in Marketing research
6: Scientific Marketing planning not possible
7: No control over supply.
8: inadequate managerial ability
9: Corporate inflexibility
10: Lack of line management support
11: Cost of Planning
12: Rapidity of environmental Changes.
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Marketing Planning Process:
Developing & Maintaining Quality In Services:
Strategic Context
1: defining Organization Mission
2: Corporate goals & Objectives
Situation Review
1: Marketing Audit
2: Swot Analysis
3: Ke Assum tions
Marketing Strategy Formulation
1: Establishing Marketing objectives
2: Developing means to achieve marketing objectives
3: Forecasting the Outcome
4: Identify the alternatives
Resource Allocation & Monitoring
1: Marketing programs
2: Monitoring, control & review.
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Perspective on Service quality:
1: Transcendent Approach: a mark of uncompromising standards & high achievement
2: Product-Based approach: it sees quality as a precise & measurable variable.
Differences in quality, it argues, reflect differences in the amount of an ingredient orattribute processed by the product.
3: User-Based Approach: It start with the premise that quality lies in the eyes of the
beholder.
4: Manufacturing-Based approach: It is supply based & is concerned primarily with
engineering & manufacturing practices.
5: Value-Based Approach: It defines quality in terms of value & price
How Service Quality is Perceived:
Expected
quality
Experienced quality
1: Market communication
2: Image
3: Word-of-mouth
4: Customer Needs
Image
Technical quality:
What
Functional Quality:
How
Total Perceived quality
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1:Technical Quality: It gives basic service package
2: Functional Quality: Customer also influenced by how they receive the service & how
they experience.
3: Image: Firms image at the corporate as well as at the local level is of utmostimportance in quality perception.
4: Expected Quality versus Experienced Quality: 4 important factors:
a: Market Communication: Service firms communicate, through direct & indirect
channels, to the target market relating to the features specialties of the BSP.
b: Image
c: Word-Of-Mouth communication
d: Customer Needs
5: Total Perceived Quality: TPQ of customers can be calculated by comparing expected
quality with experienced quality.
Dimensions of quality:
1: Performance
2: Features
3: Reliability
4: Conformance
5: Durability
6: Serviceability
7: Aesthetics
8: Perceived
Extended Dimensions:
1: Reliability: Delivering on Promises
2: Assurance: Inspiring Trust & Confidence
3: Tangible: Representing the service Physically
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4: Empathy: Treating Customers as Individuals
5: Responsiveness being willing to Help
Gap Model Of Service Quality Delivery:
Gap 1: Not knowing What Customers Expect: Reasons are:
1: No direct interaction with customers.
2: Unwillingness to ask customers about expectations
3: Unpreparedness to address the expectation
4: Lack of Market segmentation to understand the needs of each segment.
Gap 2: Inability to set the right type of Standards:
1: Absence of Customer-driven standards of service Delivery
2: Absence of formal quality-control goals
3: Vague or undefined service design.
Gap 3: Not Delivering to Service Standards
1: Lack of right type of employees or their training in service delivery.
2: Lack of empowerment of the employees
3: Lack of training to the Franchisees staff
4: Failure to Predict/Match Supply & Demand fluctuations.
5: Insufficient Customer education.
Gap 4: Mismatch between Promises & Performance:
1: Unrealistic Communications to customers.
2: Overpromising through advertisement or personal selling
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3: Lack of internal communications.
Improving Service Quality:
1: Assess the effectiveness & impact of operating practices
2: teamwork & Management support
3: People drive service quality
4: Quality efforts should continuously improve
5: There is no substitute to Leadership in Service quality.
Maintaining Service Quality:
1: Customer Defined Standards
2: Benchmarking
3: Complaint Solicitation & analysis
4: Lost customer Analysis.
5: Critical Incident Study: it includes Recovery, Reconciliation with the customers,
RELATIONSHIP MARKETING
Acc to Morgan & Hunt , All marketing efforts directed towards establishing , developing
& maintaining successful relational exchanges.
Few of the key elements are:
1: Interaction between suppliers & customers is moving from a transaction one to a
relationship focused one.
2: The relationship marketing emphasizes on maximizing the life time value of customersegments & on enhancing customer satisfaction
3: It is concerned with working, developing & enhancing relationships with internal
markets within the organization & building substantial external relationships with
customers, suppliers, referral source, influence markets & recruitment markets.
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Goals of Relationship Marketing:
1: Building Relationships
2: Maintaining Relationships.
3: Enhancement of Relationships.
Importance of Relationship Marketing:
1: It builds goodwill in the market which in turn generates additional traffic to the outlet.
2: It is a highly effective technique to keep track of buying habits, intensions, self images
& spending patterns.
3: It leads to the development of loyalty & satisfaction which in turn increases
transactions with the same customers, again & again.
4: It can stop customers switching to another brand.
5: It results in positive image projection & enhanced brand equity on account of high
degree of customer relation & loyalty.
6: It calls for listening & caring for the customers which in turn develop a sense of
belongingness & a soft corner for the co itself in the mind of customers.
Challenges of Relationship Marketing:
1: Gaining access to the appropriate systems & executional capabilities.
2: Developing the right organizational structure.
3: Budgeting for lifetime customer value
4: Managing an integrated communication program.
5: Building alliances between manufacturers & retailers.
Four Rs of Rewarding Relationships::
1: Relationship
2: Realization
3: Response
4: Relevance & Respect
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1: Discount Coupons
2: Gifts
3: Membership benefits
1: Integrating systems
with customers.
2: Making joint
Investment on
technology
3: Sharing processes or
equipment
Continuous
Quality
Service To
Customers
1: Special attention.
2: Informing customers
about new services.
3: Wishing customers on
their anniversaries
1: Personalizing Sevice.
2: Offering a
combination of services
that suits customers
specific need.
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Strategies for Building Relationship:
1: people
2: Process
3: Product
4: Organization
5: Setting Satisfactory Service Standard.
6: Concentration on competitors
7: Customer Analysis
8: Cost Analysis
9: Concentration on the Paying Ability of Customers.
10: knowledge of Purchase behavior pattern.
11: Differentiation in prices & quality standards
12: Focus on reducing dissatisfaction.
13: Attention on changing requirements of Customers
14: Concentration on performance.
15: Training to supply chain employees
16: Empowerment to service providers.
17: Incentivizing service providers.
18: Augmenting Intangible benefits
19: Visit to the point of usage of the product
20: Develop partnership with customers
21: Organizing Customer Clubs
22: Relationship-based pricing schemes
23: Identifying with social events & concern for societal problems.
24: Effective customer communication system
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25: Customer complaint monitoring cell
26: Developing customer satisfaction index
27: Focus on preventive action
28: concentration on Customer Satisfaction research.
29: Focus on focus group
30: Building switching barriers.
Six Market Framework of Relationship Marketing:
Internal Markets
Referral Markets
Influence
Markets
Recruitment
Markets
Supplier &
Alliance market