services session 1
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8/3/2019 Services Session 1
1/21
Introduction Nature ofServices, Services
Marketing Mix Decisions
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8/3/2019 Services Session 1
2/21
Introduction Nature of Services
An action of an individual or an organization leading to somekind of benefit and/or satisfaction to the customer
Services are intangible products
Services - Facts
Intangible, Nontransferable, Perishable, DistinctStandardization not possible, (Cannot be owned), SimultaneousConsumption, Difficult to measure Quality, Seasonality ofDemand
Services - Features
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8/3/2019 Services Session 1
3/21
Introduction Nature of Services
India is 15th in Services Output on world map
23% of total work force is employed in Service Sector only
second to agriculture (60%) and above manufacturing (17%)
It has largest share in GDP (55% - 2007) (15% - 1950)
Service Sector growth rate is close to 9%
IT, It enabled services and BPO form almost 1/3rd part of thesector
Organized retail services amount to only 4%
Some Economic Facts
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8/3/2019 Services Session 1
4/21
Introduction Nature of Services
End of Licence Raj
Privatization
Increased Customer Protection
Change in Lifestyle
Exposure of Consumer to world
Dependence on Automation
Internationalization
Reasons for Growth of the Sector
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8/3/2019 Services Session 1
5/21
Introduction Nature of Services
Types of Services
Directed at Human Body
Transport, Healthcare, Lodging,
Beauty Salons, Fitness centre,Restaurants, Barber
Directed at Possessions
Freight, Repairs, Warehousing,
Cleaning, Distribution, Laundry,Gardening
Directed at Human Mind
Advertising, PR, Broadcasting,Consulting, Education, Music,Religious services
Directed at IntangiblePossessions
Accounting, Banking, DataProcessing, Legal services,Research
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8/3/2019 Services Session 1
6/21
Introduction Nature of Services
It is necessarily Service Outlet and consolidated effect of
actual Service Delivery
Composed of factors that make Service Delivery not onlysatisfactory but in case of many services, Enjoyable
The criticality of Managing services It revolves mainly aroundthe ACTUAL Service Delivery or Operations aspect of Services
In short, its a Stage where Service delivery is Performed
Concept of Service Factory
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8/3/2019 Services Session 1
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Introduction Nature of Services
Biggest challenge in Services because Services cannot bestored
When supply is available Demand may not be available
When Demand is at peak Supply may not be possible
Challenge is to strike balance
E.g. Excess booking by Hotels, Excess admissions byInstitutes
Balance of Demand and Supply
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8/3/2019 Services Session 1
8/21
Introduction Nature of Services
7 Ps of Services Marketing
Process
Place
Price
Promotion
PhysicalEvidence
People
Product
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8/3/2019 Services Session 1
9/21
Introduction Nature of Services
Features of Service offered
Supplementary and Complimentary Services
Conditions attached (* and Fine prints)
Results / Effects of Services
Product
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8/3/2019 Services Session 1
10/21
Introduction Nature of Services
Physical facilities
Equipment
People Requirement Partnerships and Collaborations
Geographic and Demographic segment covered
Scheduling of service
List of specific tasks to be performed
Market knowledge 7 Ps
Supplementary services (if any)
Mental effort involved
Physical effort involved
Product Considerations in Creating Service
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8/3/2019 Services Session 1
11/21
Introduction Nature of Services
Core Product - Air Travel from point A to point B (TravelingService)
Augmented Product (Complimentary Services) Allied serviceswhich complement to actual travel
Tangible elementsAircraft, Food and Drinks served
Intangible elementsService frequency, Pre and Post flightServices, In flight Services, Actual transporting from point A topoint B
Product Example
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8/3/2019 Services Session 1
12/21
Introduction Nature of Services
Where the Service to be provided E.g. Dr.s Clinic OR Home visit
The time at which Service can be available E.g. an OnlineService is usually available 24/7 Orkut
Maximum availability and possibility for customer to availService at Place of convenience plays major role in success E.g.Cheque deposit and Cash withdrawal facility from home.
Place (and Time)
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8/3/2019 Services Session 1
13/21
Introduction Nature of Services
Cost to customer
Competitor prices
Relative cost / benefit e.g. Haircut under the tree and in Salon
In case of high end Services it need not be effective and
competitive pricing
Price
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8/3/2019 Services Session 1
14/21
Introduction Nature of Services
Cost based pricing
Value based pricing (1) Value is low price, (2) Value is utility,(3) Value is Quality for the price paid, (4) Value is what one getsfor what one gives (By Valarie Zeithaml, University of NorthCarolina)
Competition based pricing What airlines endured in past few
years
Price - Considerations
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8/3/2019 Services Session 1
15/21
Introduction Nature of Services
Very crucial Service provider needs to pay keen attention towhat is being promised
Value of services needs to be established through effectivecommunicationmode used is mostly Infotisement
In case of Tangible Product, manufacturer is rarely in direct
contact with customer; in case of Services Provider of services
and Customer are in direct contact
Mouth-to-mouth publicity (Recommendation) plays a major rolein success
Promotion
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8/3/2019 Services Session 1
16/21
Introduction Nature of Services
Intra organizational communication to imbibe Service Value toPeople involved
Motivation
Promotion Internal Communication
Highlight Capacity of organization, Past performancestatistics, Customer testimonials, Independent audit of services,
Provide experience of services Stimulate demand One ticket free on another, Happy hours,
Kid goes free with Parents
Dampen demand High ticket rates in Holidays, Entry charge,Parking charge etc.
Promotion Advertising Strategies
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8/3/2019 Services Session 1
17/21
Introduction Nature of Services
Messages originating from outside the organization are vitallysignificant
Word of Mouth
Media Attention
Promotion Advertising Strategies
Promotion Ethical Issues in Services Promotion
Unrealistic Service Promises
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8/3/2019 Services Session 1
18/21
Introduction Nature of Services
The location of outlet In Mumbai Town side is considered asup market location as compared to suburbs
The Building, Surroundings, Cleanliness, Parking facilities,Signage, Printed promotion material
Furnishing of outlet, equipment condition
In general, consolidated impact of Physical environment ofService outlet
Physical Evidence
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8/3/2019 Services Session 1
19/21
Introduction Nature of Services
Major determinant of Perception of a Customer about Service
Quality
Voice based Services Clear diction, Conversational Skills
Actual services (Hotel staff, Airline staff, Salon staff)Cleanliness, neatness, good looks, conversational skills
Technical Services Thorough know-how
Recruiting, training, motivation is of utmost importance
People
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8/3/2019 Services Session 1
20/21
Introduction Nature of Services
Creation and Delivery of Service
It is sequence of actions
It has to be well rehearsed to make it effective and avoid wasteof time E.g. Excessive delay in serving food will reduce numberof customers in a span of time
Front end staff suffers if operations staff goofs up in Process
Process
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8/3/2019 Services Session 1
21/21
Introduction Nature of Services
Creating a process chart (Service Blueprint)
Create a script for employees and customers
Act I - Prologue and Introductory scene Welcoming etc.
Act II Delivery of core product Service Delivery
Act III The drama concludes Billing etc.
Identifying Fail points
Setting service standard
Plan B Failure proofing the Service
Problem of Customer Misbehaviour Thief, Rulebreakers,Vandals, Violent, etc.
Process - Considerations
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