current and future challenges in service marketing

CURRENT AND FUTURE CHALLENGES IN SERVICES

Services Marketing

SHWETA CHAUDHARY 14150

SWATHESH SHETTY 14168

TONY SEBASTIAN 14171

VARKALESH J 14173

VISHAL GUPTA 14178

VISHWANATH NAYANAR V 14180

Submitted by: Group 8Submitted to: Prof. R Sugant

on 29-06-2015

INSEPERABILITY

MARKETING CHALLENGES

Physical connection of the service provider to the service

Involvement of the customer in the production process

Involvement of other customers in the production process

POSSIBLE MARKETING SOLUTIONS

Emphasis on selecting and training public contact personnel

Consumer Management

Use of multisite locations

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HETEROGENEITY

MARKETING CHALLENGES

Lack of ability to control service quality before it reaches the consumer.

Most errors are one-time events and cannot be foreseen nor correctedahead of time

Consistency of service varies from firm to firm, among employees of the firmand also while interacting with the same service provider on day-to-daybasis

Service standardization and quality control are difficult to achieve andmaintain since each employee is a different personality

POSSIBLE MARKETING SOLUTIONS

Customization

Standardization

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INTANGIBILITY• Means that cannot be seen

• Service cannot be touched

• There is no precise standardisation method for services

• Services cannot be patented

• There are no inventories in services

• The consumer is part of the service process because he consumes the service.

• This causes increase in the uncertainty level

• To reduce this factor, customers look for signals of service quality.

• Bowen (1990) argued that intangibility has been over emphasized and it is difficult to

understand.

• ‘Intangibility can be reduced by using strong messages in advertising and publicity in

order to support a clear position’ (Davies, 1998).

EXAMPLES

• In case of online ticket booking

• In case of restaurants

• The ability of a teacher to teach

• Airline passengers have no guarantee for a good flying experience or safe arrival of their baggage before the journey.

• A cosmetic surgery where the result of the surgery can’t be seen by the consumer before the surgery.

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CHALLENGES

• Standardization

• Pricing the service

• Buying a promise

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NON OWNERSHIP• You cannot own or store a service like you can a product

• Services are used or hired for a period of time

• Customer pays only to secure access to or use of the service

EXAMPLES

• Aeroplane ticket

• Hotel room

• Banking services

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TRANSUMERS & TRANSUMPTION

• Transient + Consumer = Transumer

• Individuals that engage in renting and non - ownership consumption are called Transumers

• Example – Zipcar & Zoomcar

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CHALLENGES

• Non ownership can sometimesmake it difficult for a customer toassess and appreciate theadvantages of purchasing theservice.

• The marketer therefore needs topay particular attention inemphasizing benefits of non-ownership

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PERISHABILITY

• Once a service has occurred it cannot be repeated in exactly the same way

• You cannot put service in the warehouse, or store in your inventory

EXAMPLES

• Restaurants

• Doctors treatment

• A movie or airline ticket

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CHALLENGES

• Perishability can affect company performance as balancing supply and demand is very difficult

EXCEPTIONS

• Services are stored in systems, buildings, machines, knowledge and people. The emergency clinic is a store of skilled people, equipment and procedures. The hotel is a store of rooms

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• No proper mechanism to manage the misbehaviour of customers towards the frontlineemployees.

• 70% of female retail workers are subjected to sexual harassment by consumers at work.

Negative outcomes for frontlineworkers includes increased intentionto quit, loss of interest in their work,withdrawal from customerinteractions, and reduced jobperformance.

CUSTOMER MISBEHAVIOUR

PRODUCTIVITY IN SERVICE SECTOR

• Difficult to define productivity in service sector.

• To different people, productivity means differentthings.

• Hard to standardize the inputs and outputs whichare highly heterogeneous.

• Trade-off between quality and quantity.

• Low or negative productivity growth in someservice industries is connected to measurementproblems.

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PROBLEMS IN MEASURING PRODUCTIVITY

• Difficult to measure the outputs. (Insurance, gambling, banking, options trading)

• The output includes quality, which is intangible and difficult to quantify.

• The inputs also include both intangible and tangible elements

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CUSTOMER EXPECTATIONS• Customer expectations are always evolving.

• Different customers have different expectations from the samecustomer.

• Types of Expectations:• Fuzzy Expectations

• Implicit expectations

• Explicit expectations

• Unrealistic expectations

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DEFINING AND MEASURING QUALITY

Garvin identifies five perspectives

• Transcendent view: Innate excellence, a mark of uncompromising standards and high achievement.

• Product based approach: Quality as a precise and measurable variable

• User based definition: Quality lies in the eyes of the beholder

• Manufacturing based approach: Conformance to internal specifications driven by productivity and cost containment.

• Value based definition: Defines quality in terms of value and price

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DESIGNING AN EFFECTIVE SERVICE CUSTOMER ORGANIZATION

Presence or absence of intermediaries

• Cut down on cost v/s service quality of interaction

High contact v/s low contact

• More involvement of the customer with the service(moment of truth), There are greater risk of mistakes of poor service, Complex to manage

• Usually through mail or telecommunication contact, less complex, management control can be tighter.

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Duration of service delivery process:

• More duration – more value has to be generated and cost will be high due to internal monitoring and communicating those values to customers.

Level of complexity:

• High complexity – assist the user every stage – high cost –train the personnel, risk of going wrong is high.

Degree of risk:

Service managers should identify the consequences of the service failure for their customers.

Failure may range from personal inconvenience to monetary loss.

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STRATEGIC CHALLENGES IN SERVICES MARKETING

Positioning a service in marketplace

Competitive advantage

• Value for money

• People are the key

• Convenience

• Quality and speed

• Differentiation in meaningful ways

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TO SELECT THE TARGET MARKET• Identifying the market segments with better opportunities

• Relating firm’s ability to match competing offerings rather than looking only for sales and profit potential.

• To judge the current and prospective customers how do they see value generated by the provider.

• Redesigning the existing services: Easy or complex?

• Believing in expert definition of expert’s perception to reality and customers perception to reality is way to different.

• Concept of copy positioning. : E.g. Marlboro man

• Coping up with changes of the perception and expectation of the target market. E.g. Nokia

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HIT LIST

Competitive Pricing -- Indigo Airlines

Communication – Internal and External

Using Social Media – Lens kart

Technology – Ola (security)

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Quality Control – BPO (cut calls), KFC mouse incident

Efficient Automation ( No Human interaction). E.g. Health care.

Security Issues E.g. banking sector.

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REFERENCES• Harris, S. B. (2004). Services Marketing. PALGRAVE.

• JHA, S. (1994). Services Marketing. HIMALAYA PUBLISHING HOUSE.

• LOVELOCK, C. H. (1996). SERVICES MARKETING. Prentice Hall, Inc.

• Cengagebrain. (n.d.). Retrieved from

http://www.cengagebrain.com.au/content/hoffman35209_0170135209_02.01_chapter01.pdf

• Services Marketing. (n.d.). Retrieved from http://areas.kenan-

flagler.unc.edu/Marketing/FacultyStaff/zeithaml/Selected%20Publications/Problems%20an

d%20Strategies%20in%20Services%20Marketing.pdf

• Economic Times. (n.d.). Retrieved from http://articles.economictimes.indiatimes.com/2013-12-

22/news/45475783_1_aditya-ghosh-indi-go-interglobe-aviation

• Ibnlive. (n.d.). Retrieved from http://www.ibnlive.com/news/india/amazon-india-launches-one-

day-delivery-service-in-select-cities-at-rs-99-654358.html

• Medianama. (n.d.). Retrieved from http://www.medianama.com/2014/07/223-future-group-e-

commerce/

• NDTV. (n.d.). Retrieved from http://www.ndtv.com/india-news/lenskarts-offensive-campaign-

uses-earthquake-is-slammed-758163

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