task.3. cimm lesson 5 - matketing mix in service sector

7/21/2019 Task.3. CIMM Lesson 5 - Matketing Mix in Service Sector

1/24

ContemporaryIssues in

Marketing

ManagementDiploma in Management Studies

Lesson 5 Marketing Mix inService Sector


2/24

What Is A Service

A service is any act o! per!ormance that oneparty can o"er another that is essentiallyintangi#le and does not result in the o$nership o!anything% its production may or may not #e tied

to a physical product&

'otler ( 'eller Marketing Management

A valua#le action) deed) or e"ort per!ormed to

satis!y a need or to !ul*l a demand&http+,,$$$usinessdictionary&com

Services are intangi#le)insepara#le) varia#le) and

perisha#le&
http://www.businessdictionary.com/http://www.businessdictionary.com/


3/24

Marketing o! Services

Marketing o! services !aces ne$ realities in the -.st Century due

to customer empo$erment) customer coproduction) and theneed to satis!y employees as $ell as customers&

Services are intangi#le there!ore) marketers must *nd $ays to

give tangi#ility to intangi#les% to increase the productivity o!service providers% to increase and standardi/e the 0uality o! theservice provided% and to match the supply o! services $ithmarket demand&

In the past) service industries lagged #ehind manu!acturing

*rms in adopting and using marketing concepts and tools) #utthis situation has no$ changed&

Achieving excellence in service marketing calls not only !orexternal marketing) #ut also !or internal marketing to motivate

employees) as $ell as interactive marketing to emphasi/e the

importance o! #oth 1high tech2 and 1high touch&2


4/24

Marketing o! Services

Success in marketing services involves+ a strategicconcept) commitment to 0uality) high standards)sel!3service technologies) systems !or monitoring

service per!ormance and customer complaints) andan emphasis on employee satis!action

Superior service delivery re0uires managingcustomer expectations and incorporating sel!3servicetechni0ues&

Customers4 expectations play a critical role in theirservice experiences and evaluations&

Companies must manage service 0uality #yunderstanding the e"ects o! each service encounter&


5/24

Characteristics o! Services

our distinctive characteristics that greatly a"ect thedesign o! marketing programs+ Intangibility

6nlike physical products) services cannot #e seen) tasted) !elt)

heard) or smelled #e!ore they are #ought& 7urchasing o! service is #ased on evidence o! 0uality& 8uyers

$ill dra$ in!erences a#out 0uality !rom the place) people)e0uipment) communication material) sym#ols) and price thatthey see& 9here!ore) the service provider4s task is to 1managethe evidence) to make tangi#le that $hich is intangi#le&

Inseparability Services are typically produced and consumed simultaneously&

8ecause the client is also present as the service is produced)provider3client interaction is a special !eature o! service

marketing&


6/24


our distinctive characteristics that greatlya"ect the design o! marketing programs+ Variability

Services are highly varia#le #ecause they are dependenton $ho provides the service) $hen and $here they areprovided) services are highly varia#le

Perishability

Services are used once and cannot #e stored& 7erisha#ility is not a pro#lem $hen demand is steady #ut

$hen demand :uctuates) service *rms have pro#lems&


7/24


According to Lovelock and Wirt/ ;-


8/24




9/24




10/24

9he MarketingMix

Seven 7s


11/24

9he Marketing mix

Marketing mix is the set o! controlla#letactical marketing tools that the *rm #lends toproduce the response it $ants in the target

market

9hese are the controlla#le marketing varia#lesand it is up to the marketing manager to mix

these varia#les in such a $ay and in such aproportion in order to achieve a speci*cmarketing o#?ective&

Mix elements $ill vary in importance

according to the marketing situation&


12/24

9he Marketing mix+ 9heour 7s

Productis the goods and services incom#ination that the company o"ers to the

target market Priceis the amount o! money customers

have to pay to o#tain the product

Placeis the company activities that makethe product availa#le to target customers

Promotionis the activities thatcommunicate the merits o! the product and

persuade target customers to #uy it


13/24

9he Marketing mix+ 9heour 7s

Kotler and Keller, Markrting Management, 2012 Pearson Education


14/24

9he Marketing mix+ 9he @ther7s

People+ All human actors $ho play a part inservice delivery) and thus in:uence the#uyer4s perception% namely the *rm4spersonnel) the customer) other customers inthe service environment

Process+ the actual procedures) mechanisms

and :o$ o! activities #y $hich the service isdelivered

Physical+ the environment in $hich theservice is delivered) colours) #randing)

e0uipment ; anything tangi#le>


15/24

Marketing Mix

Bxample


16/24

yanair Bxample

7roduct or Service& Lo$ cost) no !rills air travel to Buropean

destinations&

9here is no !ree !ood or drink on#oard& ood and

drink are income streams& Eou #uy them on#oard) oryou donFt 3 take your o$n !ood and drink i! you like&

9here are other income streams 3 or ancillaryrevenue& 9he company has deals $ith Gert/ car

rental) and a num#er o! hotel #usinesses& So yanairtakes a commission on Fup sellingF i&e& ancillaryrevenue& @ther examples include phone cards and#us tickets& A#out .H o! pro*t is made this $ay&

9his keeps costs lo$er&


17/24

yanair Bxample

7rice yanair has lo$ !ares&

J


18/24

yanair Bxample

7lace yanair does not use travel agents so it does not pay agency

commissions& It uses direct marketing techni0ues to recruit and retaincustomers) and to extend products and services to them ;i&e& Customerelationship Management>& 9his reduces costs&

Eou #ook online over the Internet& 9his saves them .5 on agency !ees& 9hey are #ased in Stanstead in Bssex 3 $hich is kno$n as a secondary

airport& It is ne$ and accessi#le& It is cheaper to :y !rom Stanstead thaneither Geathro$ or at$ick) and since it is less #usy yanair can turnaircra!t around more 0uickly&

Many o! yanairFs destination airports are secondary& or example i! you:y to Copenhagen ;Denmark> you arrive in Malmo ;S$eden> 3 although itis only a short coach trip over the #order& Secondary airports) $hich tendto #e smaller regional airports) depend upon this single carrier 3 some ;itis rumoured> paying up to .


19/24

yanair Bxample

7romotion 9hey spend as little as possi#le on advertising& 9hey do not employ an advertising agency& Instead all o! the

advertising is done in3house& In !act @FLeary himsel! overseesmuch o! the promotion o! yanair& 9hey use simple adverts thattell passengers that yanair has lo$ !ares&

yanair employs controversy to promote its #usiness& orexample in -


20/24

yanair Bxample

7eople 7ilots are recruited $hen they are young as pilot cadets& 9hey

$ork hard and take early promotions and then move on a!ter.


21/24

yanair Bxample

7rocess 9here is no check in& Eou simply sho$ your

passport and supply your re!erence num#er&

Eou cannot select a pre!erred seat& It is *rstcome) *rst served& 9his aids speed&

9here are no air #ridges ;the tunnel thatconnects to the side o! the aircra!t $hen to

#oard it>& Eou $alk or are #ussed to the aircra!t& 8aggage is deposited directly onto the terminal

3 itFs 0uick& Go$ever i! your #ag is #roken donFtexpect high levels o! customer service&


22/24

Qalue And 9he

Marketing Mix


23/24

Qalue And 9he MarketingMix

Reithaml ;.N> researched the conceptso! perceived price) perceived 0uality andperceived value and discovered that

customers thought o! value in !our $ays+ Qalue is lo$ price%

Qalue is $hatever I $ant in a product%

Qalue is the 0uality I get !or the price I pay%

Qalue is $hat I get !or $hat I give&

Tony Proctor, Public Sector Marketing, 1st edition


24/24

Creating Qalue

9he *rst stage involves discovering stakeholdervalues and this involves+ Identi!ying stakeholders Identi!ying $hat part o! a programme or process adds

value !or each stakeholder& Determining each stakeholder value Bsta#lishing $hat kinds o! exchanges are re0uired to

provide this value& Bsta#lishing stakeholder expectations and contri#utions&

9he second is a dynamic and interactive processre0uiring + 9he development o! a value proposition i&e&) an

approach to providing the re0uired values& 9he delivery o! the promised values&

task.3. cimm lesson 5 - matketing mix in service sector

Documents