Академический Документы
Профессиональный Документы
Культура Документы
M.K.Chakravorty
Basics
Activities or benefit that one party can offer to another
that are essentially intangible and do not result in
ownership of anything, may or may not involving a
physical product.
- Service doesn’t grow at expense of others—it helps other
sectors
-Service is equally capital intensive
-Productivity / ROCE etc. are equally important
-Not always service after product—it happens simultaneously
-With growing competition, intangibility is becoming the
differentiator
Reason for growth & impetus
-Affluence -Leisure time -Life expectancy
-Distribution -Education
-Environment -Finance
-Tourism -Recreation
--Transportation
Trends globally
--In USA service contributed 54% 0f GDP in 1948, 80% in 2000,84%
in2005 –74% of total employment
--In India,
-In 1960—agri(50%), service (17%)
-In 2000---agri(24%), service (53%)
-In 2005---agri(21%), service (57%)
-more & more services are being taxed in last few budgets
-As economy develops, role of agriculture in economy declines, that of
service rises
-Service today constitutes 20% global trade
-Issues related to global trade of services—”No detailed international
classification, no standardized method of valuing services’’
Where goods & services differ
Goods Services
1. Tangible 1. Intangible
2. Homogeneous 2. Heterogeneous
3. Production & Distribution 3. Production, distribution &
separated from consumption consumption are simultaneous
process
4. A thing 4. An activity or process
5. Core value produced in factory 5. Core value produced in buyer
or filled seller interaction
6. Consumer don’t participate in 6. Consumer participate in
production process production process
7. Can be kept in stock 7. Cannot be kept in stock
8. Transfer of ownership 8. No transfer of ownership
Characteristics of services
Intangibility Inseparability
Cant see/touch/feel Production/distribution /
consumption simultaneous
Heterogeneity Perishability
variation in quality/ time Cant be stored
consumed/extent of service
Therefore, challenges…
-Differential pricing-
-No shelf life demand side
-HR flexibility-supply
side
7P’s of service marketing
-Package of service (prod.) -Place
Five product levels -1 or 2 levels-agents /brokers –
-Core product franchisee
-Basic product -Promotion
-Expected product -Direct / PR / branding / corporate
-Augmented product advertising
-Potential product -People
-Internal marketing
-Pricing -Physical evidence
-Not always cost plus— -Tangible clues
demand driven—differential
pricing -Process management
-Analyze & optimize
Consumer Behaviour
-Initiator
-Person identifying a specific need and purpose to buy a particular
service
-Influencer
-Person or group-advising
-Gatekeeper
-Person / organization / material—acting as a filter for decision choice
net
-Decider
-Taking the buying decision—may or may not execute the purchase
-Buyer
-Makes actual purchase
-User--------Person actually consuming
Consumer Decision Making
Process Output
Need recognition Service encounter
| |
Information search Usage evaluation
| |
Evaluation Repeat
| |
Decision to buy Acts as W.O.M. to input to
process
Input to process is controlled by
Commercial marketing, Socio-
Cultural & W.O.M.
Influencing Factors
Socio-cultural characters Psychological Characters
-Culture– Set of belief, values -Perception—process by which
and customs that goes deep an individual buyers , organize
as a person grows select & interpret information
-Reference groups -Attitude—learned disposition
-Family to respond in a consistent
manner to stimulus
Situational characters
-Motivation—Driving force
-Time, -Stores’ atmosphere within one that compels him to
-Buyer’s perception of trust on action
service provider Personal Characters
-Marketing stimuli -Personality, life style,
demographic
Consumer Evaluation of Services
EMPLOYEE CUSTOMER
Personal need Personal need Life Path
Image
Image Word of mouth
Role conflict & Ambiguity Previous experiences
Internal Marketing
Engagement of every single individual in marketing a service
-Recruitment
-HR Policies
-Compensation structure & incentives
-Training
-Product knowledge -Product Handling
-Customer knowledge -Selling
-Motivation
-Empowerment
-Matrix Responsibility Structure
External Marketing
Core Product
a) What is the buyer really purchasing?
b) What business are we in?
Supplementary Services
These service elements augment the core product, both
facilitating its use and enhancing its value and appeal.
Pay TV Porter
Supplementary services
Meal
Facilitating & enhancing
Supplementary services
Information
Payment Consultation
Order
Billing Core
Taking
Exceptions Hospitality
Safe Keeping
Core Product vs. Supplementary
Services
Every core product may not have all the wings, but it helps to
identify which supplementary services must be offered.
Planning and Branding
ex. Hotel, Airlines, Restaurant, etc.
Level of new service categories
1. Major service innovation 2.Major process innovation
3. Product line extension 4. Process line extension
5. Supplementary service 6. Service improvements
Innovations
Success in new service development
-Market synergy -Organizational factors -Market research factors
Communication Mix for Services
External Communication
Communication efforts serve to not only attract new users but also
maintain contact with an organization’s existing customers and build
relationship with them.
e.g. Telephone, Fax, Website, Doctor’s check up reminders,
Insurance reminders, Bank’s small letters etc.
Internal communication
Target audiences
Prospects
Users
Employees
Word of Mouth
Recommendations from a user are more acceptable to buyer than
company’s claims. Higher the perceived risk and lesser the
knowledge of the customer, more important is WOM. Few methods
of creating favorable WOM:
--Reference list
--Create promotions so others talk
--Develop referral Incentive scheme
--Trial use
--Publicize testimonials for WOM
--Brochures may contain positive comments from
satisfied customers
The Marketing Communication Mix
---Personal communication
---Advertising
---Sales promotion
---Public relations
---Instructional materials
---Corporate design
Originating sources of messages
for a target audience
Frontline Staff
Full Cost
Cover Costs Cost less O.H.
Marginal Cost
b) Patronage and User base
Build Demand Maximize Demand (capacity
available)
Achieve Full Capacity Usage
(cinema, hotel, air lines etc.)
Pricing
Necessary follow up
After cost
Problem solving
Competition based pricing for
competing
WHERE
Bank outlet at
Fast connecting train Truck stop with ATM,
Customer’s retail stores
Pick up from airport Fax, Toilets, Motels,
convenience/cost Mobile phone bill drop
Medical cluster Restaurants, etc
At ATM
Decisions about place & time
WHEN
5 days a week, 8 hours with lunch 24/7 and 365 days also “E”
Break (or earlier) Commerce (now)
Role of Intermediaries
Many service organizations find it cost-effective to delegate certain
tasks, usually supplementary service elements.
Generally core products and some supplementary services are
delivered by originating source, and the rest of supplementary
services are delivered through intermediaries. However the
responsibility lies with the originator franchising.
Even the delivery of the core product can be outsourced to an
intermediarie. This is the essence of business format franchising.
Franchising has become a popular way to expand delivery of an
effective service concept embracing all 7 Ps to multiple sites without
the level of investment capital that would be needed for rapid
expansions of company owned and managed services. Franchisors
control not only output specification, but also the appearances of the
servicescape, employee performance and such elements as service
timetables.
Trucking companies use licensing routes to have
independent agents in different cities to deliver the whole
service .Universities allow education institutions to
deliver courses designed by them .
Financial services- Banks acting for M.F.S
Insurance companies (only selling)
Factors favoring adoption of
Transnational Strategies
Market Factors
This includes common customer needs across many countries.
Global customers demand consistent service from the supplier
round the world and the availability of international channels in form
of physical supply chains or electronic net work.
e.g. Same auditor, Advertiser, DHL, etc.
Competition
Firms may be obliged to follow their competitor to new market
in order to protect their positions elsewhere.
Cost Drivers
Economies of scale may be gained by operating internationally
or globally. Improved telecommunication, transportation, lower
operating costs in some countries facilitate the entry.
Technology
Significant economies may be gained by centralizing “information
hubs” on a certain wide or even global basis. Improvement in these
technologies create cheaper transportation improved performance, physical
design and shorten distances.
Ex- Call center jobs, Back room jobs.
Government Rules
Govt policies can serve to encourage or discourage development of a
transnationally integrated strategy. W.T.O has helped in this regard. But still
many remain purely local .
Ex- Plumbers, Electrician etc
How to start designing a Service
Process?
Best method is to draw up a chart of all key activities in creating and
delivering the service in question and mark the linkages between
them.
Bus travel, Motel stay, Hair cut, annual physical Marriage counsel,
Movie theater check up personal Training, Weight
reduction
(Business to business (Business to business (Business to business
services) services) services)
X X X X O
X X X X O
Dimensions of affect
Environmental Response Behavior
stimuli & cogn- Approach/Avoidance
tive process &Cognitive Process
Pleasure & Arousal
Arousing
Distressing Exciting
Unpleasant Pleasant
Boring Relaxing
Sleepy
The impact of Ambient Conditions
Ambient conditions are those characteristics of the environment
pertaining to our fine senses. Even when not consciously noted, they
may still effect people’s emotional well being, perception and even
attitudes and behaviors. Say
Music
People tend to adjust their pace, either voluntarily or involuntarily to
match the music. A survey conducted in a restaurant reveals higher sale
while playing music in slow beat, than fast beat.
Scent
An ambient smell is one that pervades an environment may or may not
be consciously perceived and is not related to any particular product. In
aroma therapy it is generally accepted that scent have distinct
characteristics and solicit certain emotional, psychological,
and behavioral responses. Research has shown that scents can
have significant impact on customers’ response.
Colour
Colour is stimulating, calming, expressive, disturbing, impress
ional, cultural, exuberant, and symbolic. It pervades every aspect of
our lives, shines the ordinary and gives beauty, drama to everyday
objects. Research in service environment has shown despite
differing colour preferences, people generally drawn to warm colour
environment. Red though belongs to warm category is perceived to
be negative.
Warm--- Orange, Yellow, Red
Cool----- Green, Blue, Indigo, Violet
Signs, Symbols, and Artifacts