services marketing # 1

7/18/2019 Services Marketing # 1

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Services Marketing



The services sector has been growing at arate of 8% per annum in recent years

More than half of our GDP is accounted for

from the services sector This sector dominates with the best jobs,best talent and best incomes

The service sector



“There are no such thing asservice industries.There are

only industries whose service

components are greater or lessthan those of other industries.Everybody is in service.”

Theodore !evitt



What is services•"t is the part of the product or the fullproduct for which the customer is willing tosee value and pay for it#•

$ service is any act of performance thatone party can oer another that isessentially intangible and does not result inthe ownership of anything& its production

may or may not be tied to a physicalproduct#



"t is intangible# "t does not result in ownership# "t may or may not be attached with a

physical product

What is a service



'ealth (are◦ hospital, medical practice, dentistry, eye care

Professional )ervices◦ accounting, legal, architectural

*inancial )ervices◦ ban+ing, investment advising, insurance

'ospitality◦ restaurant, hotelmotel, bed - brea+fast◦ s+i resort, rafting

Travel◦ airline, travel agency, theme par+

.thers◦ hair styling, pest control, plumbing, lawn maintenance,

counseling services, health club, interior design

E!amples of Service"ndustries



erence e weenphysical goods and

servicesPhysical goods Services

tangible intangible

homogeneous heterogeneous

Production and distribution are

separated from consumption

Production, distribution and

consumption are simultaneous processes

A thing An activity or process

Core value processed in factory Core value produced in the buyer-sellerinteraction

Customers do not participate in the production process

Customers participate in production

Can be kept in stock Cannot be kept in stock

Transfer of ownership No transfer of ownership



%haracteristics of Services%ompared to &oods

"ntangibility

'erishabilitySimultaneous'roductionand%onsumptio

n

(eterogeneity



)ervices cannot be inventoried

)ervices cannot be easily patented

)ervices cannot be readily displayed orcommunicated

Pricing is di/cult

"mplications of"ntangibility



)ervice delivery and customer satisfactiondepend on employee and customer actions

)ervice 0uality depends on manyuncontrollable factors

There is no sure +nowledge that the service

delivered matches what was planned andpromoted

"mplications of(eterogeneity



(ustomers participate in and aect thetransaction

(ustomers aect each other

1mployees aect the service outcome

Decentrali2ation may be essential

Mass production is di/cult

"mplications of Simultaneous'roduction and %onsumption



"t is di/cult to synchroni2e supply anddemand with services

)ervices cannot be returned or resold

"mplications of'erishability



3%ustomer service is a series of activitiesdesigned to enhance the level of customersatisfaction 4 that is, the feeling that aproduct or service has met the customere5pectation#6

Service Marketing



People Processing )ervices 7alue addition services by ban+

ProductPossession Processing )ervices Pi22a delivery

Mental )timulus Processing 1ducation, 1ntertainment etc#

"nformation Processing )ervices $ccounting ,!egal, esearch, Medicine etc

%lassi)cation of Services



$ll elements within the control of the 9rmthat communicate the 9rm:s capabilities andimage to customers or that in;uencecustomer satisfaction with the 9rm:s productand services<◦ Product

◦ Price

◦ Place

◦ Promotion

Traditional Marketing Mi!



Product Price Place Promotion

'eople◦ $ll human actors who play a part in service delivery and thus

in;uence the buyer:s perceptions< namely, the 9rm:s personnel,the customer, and other customers in the service environment#

'hysical Evidence◦ The environment in which the service is delivered and where the

9rm and customer interact, and any tangible components that

facilitate performance or communication of the service# 'rocess

◦ The actual procedures, mechanisms, and ;ow of activities by whichthe service is delivered=the service delivery and operatingsystems#

E!panded Mi! for Services *The +'s



E!panded Marketing Mi! forServices



De9ning and improving 0uality 1nsuring the delivery of consistent 0uality Designing and testing new services (ommunicating and maintaining a consistent

image $ccommodating ;uctuating demand Motivating and sustaining employee commitment (oordinating mar+eting, operations, and human

resource eorts )etting prices *inding a balance between standardi2ation versus

customi2ation

%hallenges for Services



.ering *aster and better delivery "mage

#i$erentiation in services



$vailability >?@ hour $TMA (onvenience >)ite locationA Dependability >.ntime performanceA

Personali2ation >Bnow customer:s nameA Price >Cuality surrogateA Cuality >Perceptions importantA eputation >ordofmouthA

)afety >(ustomer wellbeingA )peed >$void e5cessive waitingA

%ustomer %riteria for Selecting a Service 'rovider

%ustomer %riteria for Selecting a Service 'rovider



%ustomer

relationshipmanagement ,%-M



(ustomer relationship management >(MAis a model for managing a company:sinteractions with current and futurecustomers# "t provides a EF degree view ofcustomer data# "t involves using technologyto organi2e, automate, and synchroni2esales, mar+eting, customer service, andtechnical support#

%-M



?E

%ustomer -elationshipManagement ,%-M

Traditional Marketing CRM

Goal: Expand customer base,increase market share bymass marketing

Goal: Establish a profitable,long-term, one-to-onerelationship with customers;

understanding their needs,preferences, expectations

roduct oriented !iew Customer oriented !iew

Mass marketing " massproduction

Mass customi#ation, one-to-onemarketing

$tandardi#ation of customerneeds

Customer-supplier relationship

Transactional relationship Relational approach



%hy CRM is a Customerand Competiti!e &ecessity

't typically costs (-)* times as much to ac+uire a new customeras it does to retain an existing one

$ome companies can boost profits by almost )**. byretaining /ust (. more of their customers0 1ar!ard 2usinessRe!iew 3Reicheld 4 $asser5

6 recent Mc7insey study showed that the a!erage newcustomer spends 89:(* at a gi!en web site in the first months as a shopper The a!erage repeat customer spends8(9(* e!ery months

Most companies lose (*. of their customers in ( years

31ar!ard <ni!ersity5 =*. of repeat purchases are made out of indifference to the

seller, &>T loyalty 3e?oyalty5 The web customer is @only ) click away from your competitionA



CRM $trategies

Customer 6c+uisition Bain the greatest number of new 2est0 customers as early in their

lifespan0 as possible

Customer Retention Retain and expand your business and relationships with your customers

through up-selling, cross-selling and ser!icing

Customer ?oyalty >ffer programs to ensure that your customers happily buy what you offer

only from you

Customer E!angelismEnable loyal customers to become a !olunteer sales force

Cost Reduction

Reduce costs related to marketing, sales, customer ser!ice and support'mpro!e roducti!ity

Enhance your e-business strategies



CRM eople

Customers0• $uspects, isitors, rospects, $ubscribers, atrons,

Members, Ticket 2uyers, <sers, Consumers, 's,olunteers, 6nnual " Ma/or Donors, 6d!isors, 6d!ocates,?egislators, $trategic artners, $ponsors

<sers• Management, Employees, isitors

$uppliers• $er!ices - Consultants CRM " Customer De!elopment Experts

• roducts - Technology $oftware, 1ardware, Connecti!ity



CRM rocesses " Mapping

Re-examine all of your customer managementbusiness processes

Re-"define where CRM pro!ides the greatest !alueto your best0 customers and your organi#ationDonAt repa!e the cow paths0

'ncrementally implement CRM to impro!e top targeted processesEx $ubscription Renewal processes



Phases and determinants of (M

$c0uire 1nhance etain

Trust 7alue



The customer 'yramid



%ustomer Satisfaction/0oyalty-elationship



eward based Honds )ocial Honds (ustomi2ation Honds

)tructural Honds

%reating bond withcustomers

services marketing # 1

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