1. services mktg

8/3/2019 1. Services Mktg

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Services Marketing


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An act or performance offered by one party to another.

(Performances are intangible, but may involve use of physical

products.)

An economic activity that does not result in ownership

A process that creates benefits by facilitating a desired changein customers themselves, physical possessions or intangible

assets

What is a Service? Defining the Essence


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Basic Differences between Goods and Services

Customers do not obtain ownership of services

Service products are intangible performances--not objects

Customers often actively involved in production process

Other people may form part of product experience More variability in operational inputs and outputs--harder to

improve productivity, control quality

Often difficult for customers to evaluate

Absence of inventories after production Time factor is more important--speed may be key

Delivery systems include electronic and physical channels


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Characteristics of Services

Intangibility

Perishability

Inseparability

Variability


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Customer

Skills(People)

Strategy System

Triangle of Service


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Are our delivery systems accessible and approachable

(designed to make us easy to do business with, or

simply for our own operational convenience)?

Are our people selected, trained, empowered and

rewarded for providing exceptional service to the

customer?

Finding answers to these questions is a challenge for any

organization trying to survive, let alone thrive, in todays

service oriented economy.


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Service Decision

Five specific operating principles that are common, in

varying degrees, to the service industry are:

1. Listen, understand, and respond -- often in unique and

creative ways -- to the evolving needs and constantly

shifting expectations of the customers.

2. Establish a clear vision of what superior services is,

3. Establish concrete standards of service quality and regularly

measure them against those standards.


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4. Hire good people, train them carefully and extensively so

that they have the knowledge and skills to achieve the

service standards,

5. Recognize and reward service accomplishments sometimes

individually, sometimes as a group effort.

These factors are fundamental tactics used to build and

manage extraordinary levels of customer satisfaction and

loyalty.


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Interdependence of Marketing, Operations and HumanResources

Customers

OperationsManagement

MarketingManagement

HumanResources Management


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Defining Three Functional Imperatives

Marketing: move from tactical to innovative and strategic

Target right customers and build relationships

Offer solutions that meet their needs

Define quality package with competitive advantage


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Operations imperative : move from reactive/cost oriented to

focused, innovative, well coordinated with marketing and HR Adhere to consistent quality standards.

Achieve productivity to ensure acceptable costs.

Seamless delivery organized around customer

Continuous improvement, understand concept of ROQ

Front-stage and backstage well integrated

Works with technology leaders to obtain first-mover advantages.


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Human Resources: move from tight control of low-cost

workers to quality of employees as strategic advantage

Firm recognized as outstanding place to work, strong

culture.

Employees are innovative, empowered, loyal,

committed.

Achieve both productivity and customer satisfaction.


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5/3/2012 14 Dr. HG

SERVICE CLASSIFICATION

Who / What is the direct recipient of the service

Information Processing

Software consultingBanking

Insurance

Research

Mental Stimulus

Processing

Education

Advertising

Management Consultancy

Music Concerts

Possession ProcessingRepair and Maintenance

Freight transportationCourier Service

Laundry Service

People ProcessingPassenger Freight

Health Care

Fitness Center

Restaurant / Hotel

People PossessionNature ofService

Tangible

Intangible


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5/3/2012 15 Dr. HG

Product elements

Place, cyberspace, and time

Process

Productivity and quality

People

Promotion and education

Physical evidence Price and other user costs

The 8Ps of Integrated Service Management


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5/3/2012 16 Dr. HG

8Ps: (1) Product Elements

All Aspects of Service Performance that Create Value

Core product features

Bundle of supplementary service elements

Performance levels relative to competition

Benefits delivered to customers

Guarantees


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8Ps: (2) Place, Cyberspace, and Time

Delivery Decisions regarding : Place, Time, Methods, Channels

Geographic locations served

Physical channels

Electronic channels

Customer control and convenience

Channel partners / intermediaries


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8Ps: (3) Process

Method and Sequence in Service Creation and Delivery

Design of activity flows

Number and sequence of actions for customers

Nature of customer involvement

Role of contact personnel

Role of technology, degree of automation


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5/3/2012 19 Dr. HG

8Ps: (4) Productivity and Quality

Synergy in Value Creation for Customers and the Firm

Achieve productive transformation of inputs to outputs

efficiency (cost control, avoidance of waste)

effectiveness (value added, including quality and timeliness)

Attain customer-defined quality standards

reliability

responsiveness

Competence / trust

human dimensions

tangibles


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5/3/2012 20 Dr. HG

8Ps: (5) People

The Human Side of the Enterprise

The right employees performing tasks well

job design

recruiting / selection

training

motivation

evaluation / rewards

empowerment

teamwork


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5/3/2012 21 Dr. HG

8Ps: (5) People

The right customers for the firms mission

fit well with product / processes / corporate goals

appreciate benefits and value offered

possess (or can be educated to have) necessary skills

firm is able to manage customer behaviour for

productivity, satisfaction of other customers, employee

protection


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5/3/2012 22 Dr. HG

8Ps: (6) Promotion and Education

Informing / Educating, Persuading, and Reminding Customers

Marketing communication tools

media elements (print, broadcast, outdoor, retail, Internet, etc.)

personal selling

sales promotion

publicity/PR

Branding

customer education / training


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5/3/2012 23 Dr. HG

8Ps: (7) Physical Evidence

Providing tangible evidence of service performances

Create and maintaining physical appearances

Buildings / landscaping

interior design / furnishings

Vehicles / equipment

staff grooming / clothing

other tangibles

Select tangible metaphors for use in marketing communications


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5/3/2012 24 Dr HG

8Ps: (8) Price and Other User Costs

Managing Customer Outlays Relative to Corporate Revenues

Price levels

Discount terms

time sensitive

user sensitive,

Volume Sensitive etc.

Price-setting mechanism

Strategies to minimize other user costs

out-of-pocket financial expenses (e.g., travel, phone)

time investments and mental/physical effort

negative sensory experiences

1. services mktg

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