Service Consumer Behaviour There are several information sources about consumer buyer behaviour when it comes to the

purchase of a physical product, but the unique characteristics of service products require a different strategy from marketers. The most important characteristic of a service product is its intangibility. Where physical (tangible) products are promoted, customers can be enticed to buying the product by giving out samples, or they can look at and try out the product - all of these play a role in the decision making process. However, with a service product, these options are not available. In certain cases, clients can be shown a picture to make the service more tangible, for instance when trying out a new hair cut, or they can form an impression of the service by looking at an architect's sketches when building a new house. The intangibility of a service product makes is more prone to subjectivity when consumers have to decide on a specific service provider, over another, and word-of-mouth plays an important role in the decision making process. Marketers of a service product need to make consumers aware of the availability of the service, and its provider. The range of features, advantages, and benefits that users will derive, and the convenience of the service are all types of information that a consumer would want to know before making the buying decision. As affluence increases, services become more affordable and leisure time becomes more valuable, and this causes consumers to purchase a service rather that performing a task themselves - washing your car at a car-wash is a good example of this. The perceived professionalism and competence of the firm are also important considerations for deciding which service product to use, because it is often difficult for a consumer to distinguish one service provider from another. Therefore, the image of a particular service firm might be the only factor that makes it preferable over another in the consumer's mind. Good service reputation and transparency are two powerful methods for service providers to differentiate themselves. Many consumers may perceive the risk of buying a service to be higher than for consumers purchasing physical goods. Because of the intangibility and subjectivity involved in making the buying decision, consumers cannot rely as heavily on gathering information than is the case for physical products. Consumers might also perceive the risk of buying a service greater, because services are not standardised and the outcome can be different every time the service is used (for example a haircut). Also, if you have purchased a service, and are not happy with the outcome, you can't simply return it as with physical products. The consequences of a badly performed service can be severe (for example if you had your car repaired and are unhappy with the outcome.) Price is an important type of information that service marketers can supply to consumers in the buying process. But it is important to keep in mind that price affects a prospective buyer's expectations of the service. Some consumers might be willing to pay more for a service because

they probably associate higher prices with higher quality, and thus they think they can reduce the risk involved in buying a service product. It has been found that companies which provide general service information provide price information and provides a service guarantee, significantly lowers the perceived risk in buying their products.

What is Internal Marketing? Internal marketing is the practice of informing employees of marketing activities and promoting it internally within the company. Internal marketing is also concern with marketing a company's product or services internally taking into consideration the internal customer.Internal customer here refers to the employees within the organization. Internal marketing (IM) is a process that occurs within a company or organization whereby the functional process aligns, motivates and empowers employees at all management levels to deliver a satisfying customer experience. Over recent years internal marketing has increasingly been integrated with employer branding, and employer brand management, which strives to build stronger links between the employee brand experience and customer brand experience. Relationship marketing As a practice, relationship marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages. With the growth of the internet and mobile platforms, relationship marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels. This includes tools for managing relationships with customers that goes beyond simple demographic and customer service data. Relationship marketing extends to include inbound marketing efforts, (a combination of search optimization and strategic content), PR, social media and application development. Relationship marketing is a broadly recognized, widelyimplemented strategy for managing and nurturing a companys interactions with clients and sales prospectsIt also involves using technology to organize, synchronize business processes, (principally sales and marketing activities), and most importantly, automate those marketing and communication activities on concrete marketing sequences that could run in autopilot, (also known as marketing sequences). The overall goals are to find, attract and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. [1] Once simply a label for a category of software tools, today, it generally denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology work in synergy to increase profitability, and reduce operational costs

Internal marketing Relationship marketing also stresses what it calls internal marketing, or using a marketing orientation within the organization itself. It is claimed that many of the relationship marketing attributes like collaboration, loyalty and trust determine what "internal customers" say and do. According to this theory, every employee, team, or department in the company is simultaneously a supplier and a customer of services and products. An employee obtains a service at a point in the value chain and then provides a service to another employee further along the value chain. If internal marketing is effective, every employee will both provide and receive exceptional service from and to other employees. It also helps employees understand the significance of their roles and how their roles relate to others'. If implemented well, it can also encourage every employee to see the process in terms of the customer's perception of value added, and the organization's strategic mission. Further it is claimed that an effective internal marketing program is a prerequisite for effective external marketing efforts.

Scope Relationship marketing has also been strongly influenced by reengineering. According to (process) reengineering theory, organizations should be structured according to complete tasks and processes rather than functions. That is, cross-functional teams should be responsible for a whole process, from beginning to end, rather than having the work go from one functional department to another. Traditional marketing is said to use the functional (or 'silo') department approach. The legacy of this can still be seen in the traditional four P's of the marketing mix. Pricing, product management, promotion, and placement. According to Gordon (1999), the marketing mix approach is too limited to provide a usable framework for assessing and developing customer relationships in many industries and should be replaced by the relationship marketing alternative model where the focus is on customers, relationships and interaction over time, rather than markets and products. In contrast, relationship marketing is cross-functional marketing. It is organized around processes that involve all aspects of the organization. In fact, some commentators prefer to call relationship marketing "relationship management" in recognition of the fact that it involves much more than that which is normally included in marketing. Martin Christopher, Adrian Payne, and David Ballantyne[3] at the Cranfield School of Management claim that relationship marketing has the potential to forge a new synthesis between quality management, customer service management, and marketing. They see marketing and customer service as inseparable. Relationship marketing involves the application of the marketing philosophy to all parts of the organization. Every employee is said to be a "part-time marketer". The way Regis McKenna (1991) puts it: "Marketing is not a function, it is a way of doing business . . . marketing has to be all pervasive, part of everyone's job description, from the receptionist to the board of directors.

SERVICE MARKETING MIX (Extended Marketing Mix) In the previous article we discussed the characteristics of a service. In this article we look at how the marketing mix for marketing a service is different to the marketing mix for products. Just like the marketing mix of a product the service marketing mix comprises of Product, Price, Place and Promotion. How ever as a service is not tangible the marketing mix for a service has three additional elements: People, Process and Physical Evidence.

People People are an essential ingredient in service provision; recruiting and training the right staff is required to create a competitive advantage. Customers make judgments about service provision and delivery based on the people representing your organisation. This is because people are one of the few elements of the service that customers can see and interact with. The praise received by the volunteers (games makers) for the London 2012 Olympics and Paralympics demonstrates the powerful effect people can create during service delivery. Staff require appropriate interpersonal skills, aptititude, and service knowledge in order to deliver a quality service. In the UK many organisations apply for the "Investors in People" Accreditation to demonstrate that they train their staff to prescribed standards and best practices. Process

This element of the marketing mix looks at the systems used to deliver the service. Imagine you walk into Burger King and order a Whopper Meal and you get it delivered within 2 minutes. What was the process that allowed you to obtain an efficient service delivery? Banks that send out Credit Cards automatically when their customers old one has expired again require an efficient process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company. All services need to be underpinned by clearly defined and efficient processes. This will avoid confusion and promote a consistent service. In other words processes mean that everybody knows what to do and how to do it. Physical Evidence (Physical Environment) Physical evidence is about where the service is being delivered from. It is particularly relevant to retailers operating out of shops. This element of the marketing mix will distinguish a company from its competitors. Physical evidence can be used to charge a premium price for a service and establish a positive experience. For example all hotels provide a bed to sleep on but one of the things affecting the price charged, is the condition of the room (physical evidence) holding the bed. Customers will make judgments about the organisation based on the physical evidence. For example if you walk into a restaurant you expect a clean and friendly environment, if the restaurant is smelly or dirty, customers are likely to walk out. This is before they have even received the service. Summary The Service Marketing Mix involves Product, Price, Place, Promotion, People, Process and Physical Evidence. Firms marketing a service need to get each of these elements correct. The marketing mix for a service has additional elements because the characteristics of a service are different to the characteristics of a product. The Characteristics of a service are: (1) Lack of ownership (2) Intangibility (3) Inseparability (4) Perishability (5) Heterogeneity. To certain extent managing services are more complicated then managing products, products can be standardised, to standardise a service is more difficult as there it can be affected by factors outside the service providers control. Product & Service Packaging When we refer to packaging we are not talking about the physical packaging of a product or how it is designed. We leave this to the designers. What we are talking about is the two very important and often neglected elements

The name of the Product or Service. Making a Service tangiblejust like a Product. Heres what you need to do

The name of the product or service should immediately convey what it does (the major benefit) rather than what it does. The name should be short and concise Dont try to be clever or cute The name should be distinctive and easy to remember Come up with a few ideas; dont settle on the first idea. Making a service tangible is important for service based industries; prospects find it difficult to see the real benefit of what the service can achieve for them and are therefore reluctant to pay more for it. So how do we package a service?

Identify the Unique Perceived Benefit for each service Build the service around the Unique Perceived Benefit Create a process work flow diagram for each service Choose a method to present the service(s) What you are doing here is building up a very accurate and comprehensive picture of the amount of work the business does for the customer. Start with from the moment that the prospect becomes a customer. Identify the steps carried out to service the customer, and how the service is delivered to ensure that the customer receives the results promised. You can now use this information to graphically lay out what you do and how you do it, making it very easy for you to explain the service. The prospect instantly appreciates what the business will do for them and how much work is carried out when delivering the service. Packaging the service highlights what the customer gets for their money in specific terms and what you will do for themdramatically increasing sales.

Pricing a Service How should you set fees or prices for your service business? Procedures depend upon the business, but the same three elements must be considered for every service business: 1. Labor and material costs

2. Overhead 3. Profit These factors must be considered not only during startup but also during growth. Labor and Materials Labor costs are wages and benefits you pay to employees and/or subcontractors who perform, supervise, or manage your service business. If you as the owner are involved in a job, then include the cost of your labor in the total labor charge. The cost of your labor will be quite significant during start-up, when most new business owners pour lots of time and energy into their businesses. Labor costs are usually expressed as an hourly rate. Check in your library's reference room for government publications giving national and state salary ranges for different occupations. The editors of trade publications also might have similar information. Current rates are often cited in classified newspaper ads or available from your local chamber of commerce. Labor can also be subcontracted--such workers are not on the payroll as employees. When labor is purchased for each job on a contract basis, the full cost is agreed upon in advance, which helps keep your costs fixed. The key is to carefully estimate the labor time it will take to accomplish each job on which you bid. Profit Profit is the amount of income earned after all costs for providing the service have been met. When calculating the price of a service, profit is applied in the same number as markup on the cost of a product. For instance, if your labor costs for a job are $210, and you plan to net 21 percent before taxes on your gross sales, you'll need to apply a profit factor of about 25 percent to your labor and overhead to achieve your goal. For example, say you have an operating costs' subtotal of $324 and you want a profit of $81, so you quote the customer a price of $405. If you compare the price of $405 with the cost of labor ($210) already estimated, you'll notice that one figure is more than double the other. Some contractors use this ratio as a basis for determining price: They estimate their labor costs and then double that figure to arrive at a bid price. Pricing can be time-consuming, especially if you don't have a knack for it. Some contractors seem to have a sixth sense when it comes to pricing and they "guesstimate" on what they need to quote to make a job profitable to them. If you're just starting out, you obviously won't have the skill of a seasoned pro. If your quote is too low, you'll either rob yourself of profits or be forced to lower the quality of your work to meet the price. If you estimate too high, you may lose a contract, especially if you're in a competitive bidding situation. Make it your business to learn how to estimate labor time accurately and how to calculate your overhead properly so that when you quote a price, you can be competitive, profitable, and successful as a service business.

Promotional mix There are five main aspects of a promotional mix.[1] These are:

Advertising - Presentation and promotion of ideas, goods, or services by an identified sponsor. Examples: Print ads, radio, television, billboard, direct mail, brochures and catalogs, signs, in-store displays, posters, motion pictures, Web pages, banner ads, and emails. Personal selling - A process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation. Examples: Sales presentations, sales meetings, sales training and incentive programs for intermediary salespeople, samples, and telemarketing. Can be face-to-face selling or via telephone. Sales promotion - Media and non-media marketing communication are employed for a predetermined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples: Coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions. Public relations - Paid intimate stimulation of supply for a product, service, or business unit by planting significant news about it or a favorable presentation of it in the media. Examples: Newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions, speeches, issue advertising, and seminars. Direct Marketing is a channel-agnostic form of advertising that allows businesses and nonprofits to communicate straight to the customer, with advertising techniques such as mobile messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional letters, and outdoor advertising.

Corporate image Corporate image may also be considered as the sixth aspect of promotion mix. The Image of an organization is a crucial point in marketing. If the reputation of a company is bad, consumers are less willing to buy a product from this company as they would have been, if the company had a good image. Sponsorship is sometimes added as an seventh aspect

Role Of People In Marketing Mix People are the most important element of any service or experience. Services tend to be produced and consumed at the same moment, and aspects of the customer experience are altered to meet the 'individual needs' of the person consuming it. Most of us can think of a situation where the personal service offered by individuals has made or tainted a tour, vacation or restaurant meal. Remember, people buy from people that they like, so the attitude, skills and appearance of all staff need to be first class. Here are some ways in which people add value to an experience, as part of the marketing mix - training, personal

selling and customer service.

Training. All customer facing personnel need to be trained and developed to maintain a high quality of personal service. Training should begin as soon as the individual starts working for an organization during an induction. The induction will involve the person in the organization's culture for the first time, as well as briefing him or her on day-to-day policies and procedures. At this very early stage the training needs of the individual are identified. A training and development plan is constructed for the individual which sets out personal goals that can be linked into future appraisals. In practice most training is either 'on-the-job' or 'off-the-job.' Onthe-job training involves training whilst the job is being performed e.g. training of bar staff. Offthe-job training sees learning taking place at a college, training centre or conference facility. Attention needs to be paid to Continuing Professional Development (CPD) where employees see their professional learning as a lifelong process of training and development. Personal Selling There are different kinds of salesperson. There is the product delivery salesperson. His or her main task is to deliver the product, and selling is of less importance e.g. fast food, or mail. The second type is the order taker, and these may be either 'internal' or 'external.' The internal sales person would take an order by telephone, e-mail or over a counter. The external sales person would be working in the field. In both cases little selling is done. The next sort of sales person is the missionary. Here, as with those missionaries that promote faith, the salesperson builds goodwill with customers with the longer-term aim of generating orders. Again, actually closing the sale is not of great importance at this early stage. The forth type is the technical salesperson, e.g. a technical sales engineer. Their in-depth knowledge supports them as they advise customers on the best purchase for their needs. Finally, there arecreative sellers. Creative sellers work to persuade buyers to give them an order. This is tough selling, and tends to o ffer the biggest incentives. The skill is identifying the needs of a customer and persuading them that they need to satisfy their previously unidentified need by giving an order. Customer Service Many products, services and experiences are supported by customer services teams. Customer services provided expertise (e.g. on the selection of financial services), technical support(e.g. offering advice on IT and software) and coordinate the customer interface (e.g. controlling service engineers, or communicating with a salesman). The disposition and attitude of such

people is vitally important to a company. The way in which a complaint is handled can mean the difference between retaining or losing a customer, or improving or ruining a company's reputation. Today, customer service can be face-to-face, over the telephone or using the Internet. People tend to buy from people that they like, and so effective customer service is vital. Customer services can add value by offering customers technical support and expertise and advice.

Service processes and their properties There are a number of crucial differences between service and business processes [21]. First, there are intense interactions with the customer: Service processes show long encounters, during which customers interact directly [2]. There may be duties of the customer that are critical for success or failure of the service process. For example, it may be necessary that the customer provides some information to allow the further proceding of the process. It is important to emphasize that a service process must describe the interaction between customer and service provider. A second important property is, that service processes differentiate two areas, front stage and back stage [2]. The front stage contains the activities of the customer and the service providers activities that are visible to the customer. The back stage contains the activities not visible to the customer. The third important property is, that service processes need to represent the handover of resources and information from the customer to the service provider and the restitution vice versa. Furthermore, service processes are often cross-organizational. A top-level service process that is responsible for providing the service to the customer coordinates a number of sub processes. Explain physical evidence in marketing Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. There are many examples of physical evidence, including some of the following: * Packaging. * Internet/web pages. * Paperwork (such as invoices, tickets and despatch notes). * Brochures. * Furnishings. * Signage (such as those on aircraft and vehicles). * Uniforms. * Business cards. * The building itself (such as prestigious offices or scenic headquarters). * Mailboxes and many others . . . . . .

Why Market Segmentation Is Important Marketing segmentation is a vital part of any marketing campaign as it helps you to gain a greater understanding of your customers needs. This is conducted by internet marketing agencies as part of an overall strategy in which the aim is to maximise leads and of course, sales. Adaptive conducts marketing segmentation as part of a marketing campaign. Find out more about this in our Strategy section. What is market segmentation? This is a process in which customers are divided or segmented into separate groups based on shared likes, dislikes and needs. Your business can then target its products or services to each particular group of customers in order to maximise sales. It is important to learn as much as you can about your customers in order to achieve the best match between their needs and your products or services. Use the 4 Ps price, product, place and promotion to help with this match. Purpose of marketing segmentation The aim is to avoid a scattergun approach to marketing by targeting your messages at specific groups of customers. This means different messages for different groups. Customers like to receive information that is relevant to them and their needs which is the reason for carrying out market segmentation. But it is also helps you to determine whether they are high, medium or low value customers. High value customers buy expensive items on a regular basis whereas low value customers make the odd purchase now and again. Medium value customers are in between these two. Understand how customers make a purchase Customers will use a variety of criteria before choosing which company to buy from. They will base their decisions on benefits, price, convenience and lifestyle. In other words, do your products or services give value for money? Dont assume that customers base their decisions on price only. Yes, price is important but the cheapest option is not always the best. Quality of products (or services), reliability, reputation, trust and customer service are equally as important. If a customer is presented with two similar products or services then they will choose the one which fits in with their values and needs. And this isnt necessarily the cheapest.

Criteria for segmentation How are customers placed into different groups? This is done using a set of criteria which are based on personal characteristics: Age Gender Occupation Location Interests/hobbies Income

Differentiate Your Product or Service By Blair Entenmann, President of MarketingHelp! There are two basic types of marketing strategies: market segmentation and marketing mix differentiation. Both of these strategies should be pursued to maximize your success. Market Segmentation is the process of isolating smaller and similar market segments within a larger market for the purpose of selecting one or more target markets and developing a unique marketing mix to satisfy the needs of each. This segmentation should be based on both demographic (age, income, location) and psychographic (needs, wants, life-style, image) factors. The ultimate goal of segmentation is the identification, development and exploitation of a profitable "niche" in the market where you can become the preferred brand or supplier to your target audience. Marketing Mix Differentiation is the process of making your marketing mix uniquely different from other products or services competing for the same target audience. This differentiation may be in any of The 5 P's of Marketing (product, place, price, promotion, people). Product / Service Differentiation may be offering greater performance benefits or better aesthetics than your competition. You can position your product/service as a low, medium or high-featured product/service that satisfies the needs or wants of a particular market segment. If you are competing with other similarly featured products, make relevant improvements/differences (i.e., product size, performance, delivery) in your offering to make exact price comparisons difficult. Place Differentiation may be making the product or service more readily available through multiple locations, longer hours of operation, or over the Internet. For some market segments, exclusive distribution

is preferred because the upscale target customer wants uniqueness or distinctiveness (a potential segmenting dimension) in the products or services they buy. Or they may prefer a full-service reseller instead of a self-service reseller. Price Differentiation is positioning your price at a level that your target segment is willing to pay for your product or service so that it offers them a good value. Depending on your competitive environment and market situation, you may want to follow a premium pricing policy or an everyday low price policy for that market segment. It could mean offering innovative ways to pay for the product or service, such as subsidized interest rates, no payments until January or bringing back layaways. Promotion Differentiation may be utilizing unique and breakthrough advertising to project the desired image of your company, product or service. It may be an off-the-wall promotion offer that will make you stand out in the mind of your target audience. It may be using a totally different advertising medium than your competitors that will better reach a specific market segment that you want to "own." People Differentiation may be putting better, more qualified people in contact with the customer than your competitors. If all your competitors do a feature benefit sell, maybe you can differentiate your company by using a consultive approach to selling. Offering better customer service, service after the sale, or making fewer mistakes than your competition can generate repeat business. It has been said that you "get the business on quality and price, you keep the business on service." Perhaps it's simply being more friendly in customer contacts. Doing business with nice people is a segmenting dimension for some customers. Differentiating your marketing mix is critical to the short- and long-term success of your company and brand. Do you offer a unique product/service at a profitable price or do you offer a "me-too" product/service at commodity prices. If you can't differentiate, you are doomed to compete on price!

Capacity Management

Demand Management The objective of Demand Management is to optimise and rationalise the use of IT resources.

Although Demand Management should be a part of the routine activities of Capacity Management, it takes on special importance when the IT infrastructure is suffering from capacity problems. The problems Demand Management has to solve in the short term include those arising from:

Degradation of service due to unexpected increases in demand. Partial interruptions to service due to hardware or software faults.

In these cases, Demand Management is responsible for redistributing capacity in order to ensure that critical services are not affected, or at least to minimise the impact on them. To perform this task efficiently it is essential that Capacity Management be aware of the customer's business priorities and be able to act accordingly. However, Demand Management over the medium to long term is no less important a task. An increase in capacity always entails costs, and often these are unnecessary. Monitoring capacity properly makes it possible to identify weak points or bottlenecks in the IT infrastructure and assess whether it is possible to redistribute the workload over the long term in order to offer a high quality service without increasing capacity. For example, an inappropriate distribution of tasks may mean that the broadband capacity the organisation has contracted is inadequate at peak times because thousands of e-mails are being sent by automatic processes, such as promotional marketing campaigns, customer performance reports, etc. In most cases these processes could be rescheduled away from peak times without degrading quality of service, thus saving the organisation the expense of increasing bandwidth. However, if the cost of increasing bandwidth is slight, it may be more efficient to do so than investing the precious (and costly) time of highly qualified specialist personnel in the task of optimising the system. Based on past experience and market trends, Capacity Management should assess when the "bigger and more powerful" solution is more cost effective (bearing in mind the indirect costs) than a detailed analysis of the situation.