service marketing 1
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Service Marketing and Product
Marketing - Differences Conceptually the same
Higher intangibility
You fly by planes( tangible)
Packaging for fast food (tangible)
Hotel staff’s uniform (tangible)
In all the above cases, services remain intangible. This element is very critical
Your car serviced has many intangibles connected with it Unable to stock for future use
Flight seats are perishable commodity
Cinema seats are also the same
Greater interaction between customer and service provider Phone connection
Bills payment
Restaurant food prepration
Unlikely that you will go to soap factory or car factory to buy
Greater service variability
Hotels staff service
Bill payment
Telephone calls for queries
Reason why Jet Airways or similar airline or McDonald’s or Subway are examples of standadisation
Greater variability among service customers expectations A 2 minute wait at a fast food counter can be ok with 1 customer bur may not with another
Check-in at the airport counter experiences can also vary from customer to customer
Customer waiting for a bank draft can behave differently.Piyoosh Bajoria
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Examples of Service
Businesses Airline
Hotels
Restaurant
Beauty saloon
Marketing research
Advertising
Consulting
Education
Legal services
Medical services
Retailing
IT services
Banking services
Investment advising
Accounting and tax services
Fastest Growing services
Cellular phone services 50%
Housing Finance
IT services
Advertising
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The service experiences
An experience comprising many
tangibles, intangibles, processes and
contacts Moments of truth – every contact made
with employee creates an impression
People and environment ( car showroom
or service centre)
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Service Product Concept
Core-benefitBasic Service
Expected Service
Augmented service
Potential service
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Airline/Hotel as an example
Core benefit What customer is really buying. The use or benefit or solution he/she is looking for.
Airline ticket you to go from one place to another
Basic service product Intangible service through which the core benefit is received. All those factors
which consumers assumes to be present in any offering. Airline will have an
aircraft and infrastructure to support Expected Service
Expect certain service quality or features when they purchase the services. In-flightfood to be good or courtesy or entertainment for long flights
Augmented service Measures taken to differentiate the service from the competitors. Customer delight
is the aim. Provide service quality beyond expectations. Providing free overnightstays or business centre or premium lounge.
Potential service Includes all augmentations and the futuristic product developments. Better Ways to
delight customers. Hotels can take residents for a sight seeing tours or arrange acultural show
Successful firms are constantly innovating
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Product Marketing versus
Service Marketing Marketer must select and analyze its target
markets
Then a marketing program must be builtaround the parts of the marketing mix -4Ps
Product/service
Price
Place( distribution) Promotional program
But we need more number of P’s for Service marketing
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7Ps
Let us look at the
conventional 4PsPLUS
3Ps which are servicerelated
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The Conventional 4 P’s
Product
Quality
Features Style
Packaging
Brand
Delivery/warranty
Product
Price
Place
Promotion
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The conventional 4 P’s
Planning Product Strategy
How competitive is the product
How to increase volumes Product Range
Does it cover all segments
Line enlargement
Cost reduction
Product
Price
Place
Promotion
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The conventional 4 P’s
Place
Channels
Coverage Outlet locations
Sales territories
Physical distribution/Inventory
Locations
Product
Price
Place
Promotion
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The conventional 4 P’s
Price
Value of the product
Expressed in monetary terms Pricing objectives
costs
Level of basic price
Discounts & allowances Delivery charges
Terms of payment
Product
Price
Place
Promotion
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The Conventional 4 P’s
Promotion
Methods and techniques used to
communicate with their existing andpotential customers and markets
Product
Price
Place
Promotion
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The 4 Ps + 3Ps for service
Process
Car servicing promised time
Food being served in a reasonable time
Telephone Connectivity within promised time
People
Services delivered by people even though they
may use technology
Lot of interaction- hence HR is an important issue
Physical evidence
Logos, uniforms, brochures,
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Select and analyze the
market
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What are the steps
Step 1 Probing
Research the market you are interested in.
You must know what the market is like, who is in it,
what they need and want
Example of producing a TV serial for next season
What type- suspense, horror, family soap, comedy,
action, game show, dance show, travel show, quiz,
music show
Timing
Producer
Market
Get advertisers
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Step 2
Segmentation
Customers are not homogeneous
They are heterogeneous
They cluster into groups
They want different things
It is not possible to satisfy them with one offer
Segmentation
Demographic
Psychographic
Behavioral
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Step 3
Prioritising
We do not have unlimited resources
We may not be able to serve every group and everyindividual
So we target
Target marketing
SEC grid
Socio-economic classification
Combines Customer’s occupation/education level
Classifies urban household starting from A1 (uppermost classleading to 8 classes)
The Indian IT market- how to segment
Travel industry- how to segment
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Step 4
Positioning
Key to strategy Strategy starts with customer satisfaction
Strategy is long term Strategy is competitive
Once for each market we are going to makeinto a target, we position ourselves
We decide on the message we want to create
about who we are for the target market
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Process of positioning
What is positioning?
Really the other half of branding issue
If a brand is essentially a customer perception, positioning is the process by
which a company offers its brands to the
customers
Deccan airways- common man’s airline
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Criteria for selection
Position must be salient to customers
Must be based upon real brand strengths
Reflect a competitive advantage
No use positioning on the same basis as a competitor If difference is not perceived, there will be a risk that all
products are seen as similar and purchase gets made onprice
Positioning must be communicable in a clear and
motivating way to the market
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Positioning
Positioning
Mental image or picture that a service provider would like to haveabout itself in the consumer’s mind
Deliberate attempt at building an identity of a certain kind for theservice
McDonald’s in US is a cheap American fast food but in India itis positioned with slightly up-market image
Cheap food like dosa, idli or batata wada ,samosa exists
Hamburgers are positioned to cater affluent , westernisedindividual
All this is established with the help of price, packaging,
communication and ambience which reinforces the positioningattempted by the company
Banks are another example for redefining positioning- ICICIBank, HDFC Bank etc.
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How to position a service
business By Feature
Spend 2000 rs and get free vouchers
Comparison
Highest number of students getting 1st division/ 90%
Benefits
Maximum number of flight connections to Delhi Expert
We understand your insurance needs best
Guarantees
100% Refund within 30 days-No questions asked
Leader
SBI no.1 in banking with highest number of branches
Smart tag lines ICICI “ Jeetay Raho”
Emotions
Hutch with dog and the kid
Raymonds with dogs
Tata Indicom –newly married couple
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Choosing a brand position
Successful if customers throughout the
market understand and can express
Deccan Airlines known for commonman’s airline
Barista- happy hang out joint
Disney is the expert at entertaining
children of all ages
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What is a brand name
Team from Mcinsey consulting firm defined it well in 1997in their company’s journal
“A name becomes a brand when consumers associate itwith a set of tangible or intangibles benefits that they
obtain from that product or service. As this associationgrows stronger, consumers loyalty and willingness to paya price premium increases”
To build a brand equity, a company needs to do 2 things Distinguish its product from others in the market
Align what it says about its brand in advertising and
marketing with what it actually delivers A relationship then develops between brand and
customer---- as the alignment grows stronger, so doesthe brand
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To build a strong brand
Company has to demonstrate how relevant the
particular strengths of its product are and how
different they are from others
Brands have become very important because
consumers and manufacturers are now meeting
one another so much more directly in a world
without wall or middlemen
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6 stereotypes of brands
Ritual Brands associated with particular occasions
Champagne- celebrations etc.
Symbol Added value because of its associations
Lacoste alligator, ITC Wills, Kingfisher
Heritage of good Usually the first brand of specific set of benefits which can then position itself as pioneer of this section
Coca-cola( real thing in soft drinks)
Aloof Snob Brands which help a person give signals that he or she is different.
Ferrari cars, Channel perfumes, Gold card, etc
The belonging Brands which make the consumer feel part of a larger group with which they want to identify
Levis jeans. Benetton cotton etc
The Legend Brands which have real history and have become mythical
Levis 501
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Intelligent Organization
To become a truly intelligentorganization, its got to become aBRAND.
To make it become a brand, you got todevelop a way of doing what you do thatdramatically differentiates your enterprise, your organization, your business from every other one.
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Building the brand
Takes several years
Positioning is the articulation of a brand-
building strategy for a service Shopper’s stop, Pantaloon, Westside,
NIIT, Taj, Zee TV, Barista
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Marketing strategy for services
7 Ps
Product
PricePlace
Promotion
Physical evidence
Process
People
Segmentation
Target market
selection
Positioning
Piyoosh Bajoria