INTRODUCTION_TO_SERVICES_MARKETING-HM

8/7/2019 INTRODUCTION_TO_SERVICES_MARKETING-HM

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Hitesh Manocha Introduction to services 1

INTRODUCTION TO SERVICES

MARKETING At the end of this module the learning

outcomes are

what is the concept of services ?

why do we need to understand servicesMarketing ?

What is the basic differences between

Goods and Services ? What is the concept and importance of

Services Marketing Triangle ?





MARKETINGSuggested Readings

1. Services Marketing by

Zeithmal & Bitner, Chapter 12. Services Marketing by

Christopher Lovelock, Chapter 1





MARKETING

What are services

Services are ± Deeds

± Processes

± Performances Predominantly Intangible





MARKETINGExample

Education

Interacting with students

Sit in a class room

Certain deeds, processes & performances

Provide books, reading material which aretangible .

The entire experience is predominantlyintangible. Books /reading materials aretangible.





MARKETINGCar ± Servicing

Car is a good

Car manufacturers offer warranties andrepair services .

Even a goods manufacturer offer

services





MARKETINGTangibility spectrum

Products are of two types1. Goods

Predominantly tangible

2. ServicesPredominantly intangible

Intangibility is the key determinant of

services. Intangibility is produced in all sectors of

the economy.




Tangibility Spectrum

Tangible

Dominant

Intangible

Dominant

Salt Soft Drinks

Detergents Automobiles

Cosmetics

Advertising Agencies

AirlinesInvestment

Management Consulting

Teaching

Fast-food Outlets

Fast-food Outlets





MARKETINGTrends in Services sector

Services

Dominant sector of the economy USA

By 2001, services contributed 80% of the GDP.

IndiaIt is 60% in 2006.





MARKETINGServices Sectors

Not all services have grown at same rate .

Phenomenal growth ± Information Technology

± Business process outsourcing

± Banking ± Telecom





MARKETINGWhy Services Marketing.

1. Services based economy.

2. Service as a business imperative inmanufacturing.

3. Deregulated industries and professional serviceneeds.

4. New technologies have created need for services

5. Services Marketing is different.





MARKETING1. Services based economy

Major contributor of GDP is services.

Increasing percentage of contribution

Employment oriented

Employment is a key concern in manycountries

Six out of Ten jobs are created by the servicessector.

Governments have realized the importance of creating and promoting services.





MARKETING2. Service as a Business Imperative in

Manufacturing Now manufacturing sector

Automobiles manufacturers Computers

Aircrafts

Industrial equipment

Customers expect superior services from

manufacturers. Manufacturers differentiate their offering based on the

services provided.





MARKETING1. Deregulated industries &

professional service needs

Most Services ± Regulated / controlled by government.

Recent years

± Trends of privatization Severe competition

Demand for new services.





MARKETING1. New Technologies have created need for

services.

Rapid technological changes Pagers

Cellular mobile

Internet

Entertainment

Educating customers How these can be used to our advantage?

Demand for service providers.





MARKETING1. . Services Marketing is Different

Can you handle services in the same

way as goods. No

How to handle a product which is

intangible ± Selling car vs airlines

Need for new skills.





MARKETINGGoods versus Services marketing

Four Major differences .1. Intangibility

2. Heterogeneity

3. Simultaneous production and consumption4. Perishability




Differences Between

Goods and Services

Intangibility

Perishability

SimultaneousProduction

andConsumption

Heterogeneity





MARKETINGIntangibility

Cannot be

± seen ± felt

± tasted

Difficult to grasp mentally.

Marketing implications.

How to sell something which cannot be seen, felt or tasted

Can be copied by competitors.







MARKETING

Simultaneous production and

consumption

Goods ± First Produced

± Then consumed

Services

Most services exhibit simultaneous

production and consumption





MARKETING


consumption

Beauty parlor

± Services will start

± When customer is seated

± Production is instant

± Consumption is instant.

INTRODUCTION TO SERVICES MARKETING





MARKETING


consumption

Marketing Implications Mass production difficult

Mistakes by employees visible

Employees need to be well trained Services need to be decentralized

± Convenient locations





MARKETING

Perishability

Services cannot be

± Saved ± Stored

± Resold

± Returned





MARKETING

Perishability

Examples

One empty seat in airlines. One empty room in hotel.

Can you return a bad haircut.





MARKETING

Marketing Implications

Perishability

Accurate demand forecasting Strong recovery strategies

When things go wrong?

How to regain customer goodwill ?







MARKETING

Services Marketing Triangle

For service marketers to succeed three

types of marketing need to be carriedout.

1. External Marketing

2. Internal Marketing

3. Interactive Marketing




The Services Marketing Triangle

InternalMarketing

Interactive Marketing

ExternalMarketing

Company(Management)

CustomersEmployees

enabling promises

keeping promises

setting promises





MARKETING

External Marketing

Between Company & Customers

What you communicate to customers? Create customer expectations

Traditional promotional techniques





MARKETING

Example

Public Sector Banks

Cheque withdrawl norms - 10 mts Draft preparation norms ± 2 Hrs.

Do you receive the same in the given

stipulated time?





MARKETINGInternal Marketing.

Enables employees to keep promises

Commitments to customers

How to ± Train

± Motivate

± Reward the employees

Employees have to deliver the promises madein external Marketing

Customer Satisfaction linked to employeesatisfaction





MARKETING

CitiBank

± Rewards best employees ± Free trips abroad

± Motivated employees keep customers happy

and satisfied.





MARKETING

Interactive Marketing

Actual delivery of service

Employee interact directly withcustomers.

Promise (as made in external marketing)

is delivered.





MARKETING

Interactive marketingState Bank of India

Cheque withdrawl.

External marketing promise to customers ± 10 minutes Who processes cheques - Employees

Actual delivery time ± 15 minutes

What are the reasons for failure

Demotivated employees Disappointed customers

INTRODUCTION_TO_SERVICES_MARKETING-HM

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