service companies_focus or falter (1)

8/10/2019 Service Companies_Focus or Falter (1)

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Marketing of Services

Reading on Competitive Strategy

Group 5Alpa Bhatt

Frincy Clement

Jithin C R

Manish Govindan

Manju Nair

Umesh KrishnaPravin P


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The success story of Shouldice

Hospital

1/1/2015

Marketing of Services | Service Companies: Focus

or Falter 2

Surgery patients stay 3.5 days instead of 5 days

Doctors perform many more operations than anywhere else

The patients care for themselves

They get to the operating room on their own

walk to the recovery room

Take their meals in a common room

Shouldice accepts only one type of patientpeople whose

single complaint is a hernia

Concentrating on hernias enables Shouldice to produce a

highly competitive core service


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The success story of Shouldice

Hospital

1/1/2015


or Falter 3

The tightly focused service strategy is the key to

Shouldices performance

Segmenting the market and concentrating on

one that is inexpensive to serve

Optimized its operations, fulfilled its mission and

enjoyed a handsome return


4/13

Market and Market Segments

Why develop a service strategy?

Develop an optimal mix and level of service for different

customer sets

Know your customerswho are they?

What are their expectations?

How expensive is it to service their needs?

What are the payoffs?

Measure service performance

Identify conflicts between corporate strategy and customer

service

1/1/2015


or Falter 4


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Market and Market Segments

Choosing the level of service

Too littleloose customers

Too highUnviable or too pricy

Why segment?

Isolate homogenous set of customers who can be served at a

profit

Find out how much different segments value different layers ofservice

Estimate costs and benefits

1/1/2015


or Falter 5


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Market and Market Segmentation

1/1/2015


or Falter 6

Marketsegmentation

whatcustomers

need

Servicesegmentation

what theyexpect

Well focused,comprehensivemarketingstrategies

market andservicesegments are

the same


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Segmentation - advantages

Improves productivity without affecting customer satisfaction

Substituting high touch with low touch

Handle demand fluctuations better

Overall pattern might appear random

Often made up of smaller, more predictable patterns

Easier to forecast

Identify undesirable demand and noncustomers

Firemen for cat rescue

Expand the role of customers

Co-producers

1/1/2015


or Falter 7


8/13

Segmentationsuccess stories

Segmentation savvy local banks v/s efficient regional

and money center banks

UNBT, California with single branch shows healthy growth

Offers slew of incentives and hands on service for the wealthy

Policies tailored to keep noncustomers out

Better customer satisfaction

East Lansing State Bankoffers virtually no service

Target segment : College students

Encourages ATM transactions

For teller services, extra charges to be paid

1/1/2015


or Falter 8


9/13

Classifying Customers

SolutionClassification can be done by examining a few key characteristics especiallyFinancials

Sales, repeat sales, cost of giving superior service to a different type

Perception of Quality depends on expectations

Eg: Discount Suits , High priced cars

Polite evasion might antagonize customers

Eg: General Motors

1/1/2015


or Falter 9

Why difficultManufacturers have no direct

contact since they sell viadistributors


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Identifying Target

Segments

Some customers are happy to self service

Costability and willingness to get service

Eg. Network Equipment TechnologiesStandard Equipments used by customers help service over phone

Nowwhich customers are better targets?

Influential customers ,loyal demanding, sophisticated

Ranking Customers by Value

Without assigning customers to Tiers company will have issues getting maximum out of its servicecapacity

Not all companies can add an extra segment

Airlinesbusiness+ vacation

1/1/2015


or Falter 10

Solution :

Pick segments that are similar as possible and keep priorities straight.


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What Do Customers

Expect?Research and analyze

~Neither assumptions nor industry norm or past practices can give the correctpicture

Good service has nothing to do with what providers believes it is, it has only to do withwhat customers believe

Good service results when the provider meets or exceeds customers expectation

Setting the expectation t right level is a tough job but it is expectation that decide the levelof service as bad, good or superior

1/1/2015


or Falter 11


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What Do Customers

Expect?

7 limits to any

company's ability setexpectations

Reality: what customer hasexperienced or perceive asfutile

Education. Values andexperience

Experience with othercompanies and their ads

Psychological state ofcustomer

Service Positioning

Givens: segments targeted, theirexpectations, strategy to exceedsthose expectations and positionsof competitors

Tactics to bring expectations inline to service level

Uniquely distinguish companyfrom the competitors

Make customers expect slightlyless

Since service is intangiblebenefits should be clear and real

3 Steps

Not all customers who bought thesame product or service have thesame need

Only Customers knew what theywant

Under promised and overdelivered

1/1/2015


or Falter 12


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Group 5

service companies_focus or falter (1)

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