m1 service constructs

8/9/2019 M1 Service Constructs

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A New Services MarketingParadigm

The scale of changes - Emergence of the service economy

The information society

Introduction of new services

Proliferation of smart devices

Mass to one-to-one marketing tocustomer relationship

management to CMR


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Value mobility

Shifting competitive advantage

Rising transaction costs

Customer analytics

Rising tele-computing power Front - office reengineering

A New Services MarketingParadigm

the Unfolding Reality


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VVVaaarrriiiaaabbbllleeesss TTThhheee PPPaaasssttt EEEmmmeeerrrgggiiinnnggg FFFuuutttuuurrreee

ValueCreatingCompetencies

Stable, stayedwith the firm

Mobile, may shift tocompetitors

Brand A marketingResource

A Strategic Asset

Perspective Functional &Domestic

Holistic & Global

Database Segment Focus Individual CustomerFocus

Approach toMarketing

Mass marketing One to one marketing,CRM

Services Marketing Paradigm


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The Service RevolutionUnfolded

The death of distance Computerized kiosks dispensing

boarding passes

Vending machines selling books Kodak-branded kiosks with bright

colored touch screens

Parking tickets at Malls Interactive voice response units


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Interfaces as the next frontier ofCompetitive Advantage

People dominant, Machinedominant & Hybrids

Why Service matters? In the economic context labour

flows to those tasks that deliverthe highest economic returns onhuman talent

Companies differentiate theirofferings not by whatthey sellbut by how they sell it

The Labour scarcity paradoxThe 80/20 rule


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Interfaces as the next frontier ofCompetitive Advantage

The rise of the (new) machines Roomba, the robotic vacuum cleaner Sonys AIBO robotic dog Fidelity Investments: Back office : Front

office :: Factory : Sales Cost as a driving force

9.50 $ for a telephone enquiry 9.00 $ live by e-mail 5.00 $ on-line text chat 2.50 $ through e-mail and automated

assists 1.10 $ for IVR 0.50 $ website

0.25 $ automated e-mail response

-e d E x $ 15 0 m i ll io n u p g r a d e o f h a n d h e l d b a r ch a v e s 1 0 s e c o n d s o f f e a c h p i c k u p s a v i n g $


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The Era of TotalCommoditization

- -The 3 6 1 world of competitive dynamics Accelerating service life cycles . .E g world of fashion industry

Speciality to commodity slide

L Extent of Competition H

Pricedifferentiation

Product / Image differentiation

Gross Margin

H

L

LH

L

H


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Growth Drivers - Services

Increasing affluence Focus on leisure time

Increased %age of women in the

labour force Greater life expectancy

Greater complexity of products

and services

Increasing complexity of life

Changing social & cultural values


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Kotler distinguishes fourcategories of offer made to

customers

A pure tangible good, such as

soap, toothpaste or salt. No

services accompany the product.

A tangible good with

accompanying services toenhance its appeal. e.g.

Computers

A major service with


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-The Service Product Continuum

Serviceswithenablers

Serviceswithproducts

Asset Rental Productswith valueaddingservices

Productswithsupportingservices

Movies /Music onDemand

Dominos AT&T Pizza Hut Videos andCDs

Kingfisher InvestmentBanking

Spice Jet CorporateBanking

Microsoft


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Characteristics of Services


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Tangibility Spectrum

TangibleDominant

IntangibleDominant

Salt

Soft Drinks

Detergents

Automobiles

Fast-foodOutlets

Fast-foodOutlets

AdvertisingAgencies

AirlinesInvestment

Management

Consulting


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Competing on the Intangibles

Core

Offering

Memory Intangible

Actions

Expectation

sDominos:deliveryservice

Fastdelivery

30-minutetime frame

Guaranteeof 30minutesToll free

call

Pizza Hut:pizzaproduct

delivery

Great taste greatlooking &tasting

pizza athomeproperly

boxed andhandled

Testimonials regardingtaste

Indigo: no-frills

transport

Fun andcheap trip

pay forextras

ticketpricing lowKingfisher Professional

transportation

full flight

servicelounges

Preflight

servicesetupHighquality


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Evolution of a Service Market

Stage 1:Invent Benefits Stage 2:Expand Value Stage 3:DifferentiateValue

Stage 4:Reinvent orDrift

Valueoffered

toMarketNiche

Shading in the novas shows the degree of commodityperception among customers


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Growth MapTypes of New Products / Services

Types of Markets

Types of Investments

Income

Reinvestment

-LowRisk

Capital

GrowthCapita

l

Venture

Capital

CoreOffering

MarketExtensions /Repositioning

New MarketingPrograms / MarketRestructuring

New MarketNiches / Channels /Buyers

New BroaderCategories /RedefinedBusinesses / New

Customer Types

Noncore BusinessDiversification

Line Extensions /Improvements /

Cost Reduction

New Platforms /New AncillaryServices /Strategic Partners

New-to-theCompanyServices /Acquisitions

New-to-the WorldServices

New Ventures


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The Nature of the Service Act


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The Nature of the Service Actxtent to Whicheople Areart of the Service

Experience

cilities and equipment are part of the ServiceExperience

H i g h L ow

L ow

H i g h

Retail Banking Department Store

College Education ( .)Airline Travel Econ

-4 Star Hotel

Good Restaurant

Haircut

Nursing Home Personal Tuition

Management Consulting

Telephone Banking Retail Banking

Dry Cleaning

Motel

Supermarket

Car Repair

Insurance

Postal Service

Electronic Banking Lawn Care

Fast Food

Movie Theater

Public Transit

Cable TV

Credit Card

: ( , . )Source LoveLock 1996 pg 38


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Concept of Tangibility

DDDeeegggrrreeeeeeooo


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Method of Service Delivery

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Single Site Multiple Sites

Customer goes to SOTheatre Barber shop

Bus service Fast food

chain

SO comes to customer Lawn care Pest control

Mail delivery

Customer & SO interactat arms length

Credit card Telephonecompany


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Customization & Judgement inService Delivery

Extent to whichcustomer contactpersonnel exerciseJudgement

Extent to which servicecharacteristics are Customised

High Low

High Surgery

Legal ServicesPreventive Health

Program

Education

Low TelephoneService

Good Restaurant

PublicTransportation

Movie Theatre


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Demand & Supply Dynamics

Extent to whichsupply isconstrained

Extent of demand fluctuationsover time

Wide Narrow

Peak demand metwithout a majordelay

Electricity

HospitalMaternity Unit

Banking

Legal Services

Peak demand

regularly exceedscapacity

Passengertransportation

Hotels Same as

above but withinsufficientcapacity forbase level of

business


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Relationship with Customers

Nature ofServiceDelivery

Membershiprelationship

No formalrelationship

Continuous

Delivery ofService

Telephone

subscriptionCollege

enrollment

Radio station

Police protection

DiscreteTransactions

Pre-paid longdistance calls

Toll Highway

Car rentalsMail services

Marketing Intangible Products &


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Marketing Intangible Products &Product Intangibles Serducts &

Prodices

Intangibility of all products

Buying promises

Importance of impressions The ties that bind

Goods are produced, services are

performed Customers usually dont know

what they are getting until they

dont get it


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The Marketing Mix for Services

Product Price

Place Promotion

People

Process

Physical

Evidence

m1 service constructs

Documents