classification of services
TRANSCRIPT
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Services Vs Goods
Services GoodsIntangible Tangible
Heterogeneous Homogenous
Produced in Buyer Seller interaction Produced in factory
Production, distribution & consumption takes place simultaneously
All three are separate & independent
Consumers participate in production Consumers don’t generally participate
Cannot be stored Can be stored
Transfer of ownership cannot take place Transfer of ownership does take place
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Classification of Services
It is required to design & apply marketing techniques to completely satisfy the customer & increase profits & identify new emerging services.
Classifications can be done on following basis:• Classification by Industry• Classification by Target Effect• Skill level of service provider (Professional/ Nonprofessional)• Labor intensiveness (People-based/Equipment-based)• Degree of customer contact (High / Low)• Goal of the service provider (Profit /Nonprofit)
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Classification By Industry
a. Entertainment industry
b. Education
c. Telecommunications
d. Finance & Insurance
e. Transportation
f. Public utilities
g. Government services
h. Health
i. Hospitability Industry
j. Business services
k. Telecommunications
l. Trading
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Classification By Target Effect
Based on Degree Of Customer Involvement:
1. People Processing: Services aimed at physical care e.g. Healthcare, clinics, restaurant, hospitals, hair stylists, fitness centers
2. Mental Stimulus Processing: Services aimed at mind of customer e.g. Education, information, entertainment, consulting, psychotherapy
3. Possession Processing: Services aimed at physical possession & tangible assets e.g. repair & maintenance, laundry, repair services, landscaping, house cleaning services
4. Information Processing : Services for intangible assets e.g. Banking, legal consultation, brokerage, financial services.
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Skill level of service provider
•Teacher
•Doctor
•Engineer
•Accountant
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Labor intensiveness
Mechanic Electrician
Labor
Plumber
Artisan
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Degree of customer contact
High Degree (Every day) – TV channels, mobile etc.
Moderate Degree (Regular) – Teacher, Barber, washer man etc.
Low Degree ( Occasional ) – Priest, Doctors etc.
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POSITIONING SERVICES
• Differentiate from competition on attributes that target customers highly value
• Entails two decisions: Choice of target market (where to
compete)Creation of differential advantage (how
to compete)
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• Determine important choice criteria of customers carefully
• Most important decision of a service organization is selecting the factors on which it will compete
• Select a few factors and provide superlative performances in the chosen factors
• Target marketing
• Differential advantage
Positioning Services (Contd.)
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Target marketing
Target marketing concentrates on• Identifying similarities between customers• Identifying differences between different
groups of customers• Identifying differences among members of
homogeneous groups of customers
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Target Marketing
• Service offer 1 Market segment 1• Service offer 2 Market segment 2• Service offer 3 Market segment 3
• Target marketing recognizes that different groups of customers have different needs and might also desire different core benefits from the same service.
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Process of Target marketing in services
• Marketing market Market Market marketing
information segmentation targeting positioning Mix
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Market Segmentation
• It is defined as dividing the market into distinct group of buyers with different needs , characteristics or behavior who might require separate services.
• Each of these groups are known as segments and the process is known as segmentation
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Bases for Market SegmentationDemographicGenderAgeFamily life cycleRace/Ethnic groupSocial classEducationIncomeOccupationFamily sizeReligionHome ownership
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PotentialMarkets
GeographicnCountryRegionUrban/Suburban/RuralPopulation densityCity sizeClimate
Psychographic Segmentation
Activities Interests Opinions, Attitudes & Values (AIO) surveys for measuring
lifestyle. Lifestyles Personality Self-image
Behaviouralactual behavior toward product itself. A good starting point for segmentation
Benefits sought Usage rate Brand loyalty User status: potential, 1st-time, regular
etc. Readiness to buy Occasions: holidays & events that
stimulate purchases
Geo-Demographic – Ethnic .. "birds of a feather flock together"
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Bases for segmenting the service to the consumer
• Demographic(Age, gender , marital status, education , family size)
• Geographic(region-urban/rural , North , south , east , west)
• Socio-economic(Income , social class, occupation)
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Examples• Age segmentation : for newly born baby-full-
time nurse maid)• Child market : play schools , day care centres ,
schools, child insurance plans• Teens market : sports , entertainment ,
discotheques , education loans• Middle age : hospitals , resorts , holiday
trips ,life insurance , health insurance• Seniors : pension funds, health care • Occasions : anniversary dinner at restaurant
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Process of market positioning
• Identify key offer characteristics• Draw a perceptual map• Decide on a competitive strategy• Design service product features and
associated images• Sustain a competitive advantage
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Positioning and differentiation of services• company’s perception • of itself
• •
company
Competitors perception of company
Customer’s perception of competitors
competitor
customer
Company’s perception of customers
Competitor’s perception of customers
Competitors perception of themselves
Customer perception of themselves