Master of Business Administration - MBA Semester 4

MK0015 Service Marketing & Customer Relationship Management - 4

Credits
Assignment Set- 1 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q.1 Mention the bases for segmentation of services with examples.

Answer : Over the last years we have been doing a tremendous amount of
customer segmentation work with the marketing departments in companies
across number of industries. We have experienced that there are many
misconceptions about what segmentation really is, why we do it, and what we
can expect to achieve from it. All too often marketing departments thinks that
database analysis is the first, last, and only step in segmenting the base of
existing customers. In fact, identifying clusters of common behaviours is only the
first activity you should undertake in creating a customer base segmentation.
Customer segmentation is not a piece of database work. It is a strategic or
tactical business activity with with hard monetary benefits. Yes, you do need todo some data mining, and how clever you are in doing that is important, but that
is not (or should not be) the primary activity. Assuming that you are doing
segmentation for the right reasons and you therefore know how tomeasureif you
are successful, then what are the steps you need to make it happen? We have
found the following list useful:
1.Database analysis

Behavioural clusters

2.Market survey

Behavioural segment descriptions

3.Market strategy

Brand and market positioning

4.Market research

Strategic segments

5.Needs-based segmentation

Development segments

This is not intended to suggest that you must always perform all the activities on
the list. Sometimes you may only need some of them to achieve your objectives.
But it is an ordered list so start at the top and work your way through until you
have achieved (and measured!) your goals.
Lets look at the steps in turn.

1. Database analysis to determine behavioural clusters

The first step is to take your customer data and analyze it to determine clusters
of similar behaviour. Much has been written on the subject elsewhere so I will not
go into technical details here. But from a business perspective it is essential that
you know why you are segmenting so you know which variables you want the
clusters to split. We discussed this in some detail in our previous article about
the 3 things we want from customer segmentation
. You want the segments to be different on the variables that are important for
your business. Otherwise the segments are not useful. All too often we see
marketing departments commissioning data mining without specifying clearly
how they want to use the resulting segments. Find us some clusters is not
project brief. The analysts will find you clusters without any problems, but they
will not be commercially significant or deliver the bottom-line benefits that you
need.

2. Survey your customers to obtain behavioural segment

descriptions
Sometimes the database clusters may be sufficient. Maybe you only want to
improve the targeting of some existing campaigns. But if you want to consider
developing new campaigns or new propositions then you need at least some
business understanding of these customers. Not just what they do(step 1) but
also who they are(step 2)
Usually you will to this by asking them. You take a small random sample and
interview them about who they are. This is classic market research and there is
plenty of available literature on the subject. You know what you need to do, just
realize that your organization is probably not very good at it unless it is

specialized agency and it has a large budget (which is rarely cost-justified). But it
doesnt have to be perfect, it has to be useful. You can (and should!) almost
always trial your campaigns first to see if they really deliver what you expect.

3. Determine your market strategy and your companys position

in the market
Youll want to understand your organizations desired position in the market so
you can develop the right segments with he right propositions. It is
thatvisionthingagain. You need to have a vision for your company and where it is
going. As marketing manager, it is your responsibility to translate this into
customer segments. Who are our customers. Who are our non-customers? Who
are our customers that are not using all of our services or products? How do we
target

them better and how do we articulate the value that we as a company can add
toothier lives. You need this when you want to develop new campaigns, new
marketing messages, and new propositions.
4. Determine your strategic segments

This is segmentation as a strategic business tool. Youll want to understand your

organizations desired position in the market so you can determine which

segments to develop. Depending on how strategic the marketing department is

considered with the company, and depending on the status and ambition of the
marketing manager, this may be a step too far. But if you want to play at the top
table this is what you do. One company we worked with commissioned additional
market research on their segments to measure them on two dimensions: lifetime
value (x-axis) and how well the segment was aligned with the organizations
strategic direction as expressed in its vision (y-axis). They then focused their
attention on the segments to the right of the dotted line. That does not mean
giving up on the others, but most of new campaigns and propositions target the
strategic focus segments. This picture proved to be an important tool in
communicating at the CXO level what the company was about, where it was
headed, what the challenges were, and where the opportunity lay. This is an
extremely powerful tool
.

5. Needs-based segmentation for proposition development

There may not be enough growth opportunity in your strategic segments from
the previous analysis. Or maybe you are responsible for developing new
propositions. In that case you want to develop an needs-based segmentation not
just of your customers but of the whole market. You can start with your
customers and understand their needs, especially the needs your company is not
currently fulfilling. In fact, you should start by analyzing and questioning your
customers since (a) it is much easier to sell to an existing customer and (2) you
(probably) know who they are so they are easy tocontact.Eventually you will
probably want to commission market research to identify unmet needs in the
general population of potential customers. But this inexpensive research and it is
hard to make sure you develop the right offers and very expensive to bring them
to market. So make sure you get the most of your existing customers.
Organizational alignment to make use of segments
We will talk more about this some other time. But as the marketing manager it is
your responsibility to clearly demonstrate the business value of the
segmentation that you are developing at each step in the process and to ensure
organizational buy-in to use them as the reference for communication and
activities. Segments are not just for marketing.

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Q.2 Explain service quality concept. Evaluate the growth of services

marketing.

Q.3 Briefly explain the five factors that influence the level of adequate
service.

Q.4 Discuss service quality measurement and service mapping.

Q.5
Explain hard and soft customer defined standards. Compare
flexible services and standard services.

Q.6
Define service sector in India and classify the major service
sectors.

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Master of Business Administration - MBA Semester 4

MK0015 Service Marketing & Customer Relationship Management - 4
Credits
Assignment Set- 2 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q. Explain the types of new service developments and its stages

Answer :

THE PERFECT BRIDE

OVERVIEW OF THE SERVICE

Perfect Bride is a service firm which helps the would-be brides or girls who
are about to get married to learn and train themselves to better adapt to the

change that they are about to witness in their lives. We conduct sessions where
in girls are trained in various aspects of married life like:

Inter personal relationship handling

Time management

Personal grooming

Fund management

Inter cultural training

House hold learning We also provide services of wedding planner which will take
care of althea activities of the wedding including decorations, various rituals
planning, guests handling, caterers, venue handling, wedding couture, bridal
make up, etc.One of the striking features of our service is that we give inter
cultural training to girls having inter caste marriages where in we train them in
various aspects of the new cultural that they are being married into like dress,
food type, rituals, language, etc.

STAGES OF NEW SERVICE DEVELOPMENT

IDEA GENERATION
The new service development process starts with the search for ideas. New
service ideas can come from customers, competitors, employees, interacting
with various groups or top management. There was a brain storming session
conducted by the company with the top management discussing about various
customer requirements. Various informal sessions were also conducted where
customers talked about their needs and wants. Thus various ideas were
generated.
IDEA SCREENING

The basic need for idea screening is to eliminate poor ideas as early as possible
because with each service development step, the cost of development rises. All
the ides were submitted to the idea manager which was then reviewed by the
idea committee. The ideas were then divided into groups of promising ideas,
marginal ideas and rejects. The idea in the group of promising ideas was then
researched by the committee. The committee reviewed the idea against set
criteria like: a)

a) Will the service meet a need)

b) Can the service be appropriately advertised)

c) Does the company have enough capital for the service?

CONCEPT DEVELOPMENT
In this stage the service had to be described in detail. The company needed to
develop a concept about the service to describe it to its customers
To develop a concept for this service the company had to think about many
questions like- who will use this service?? Teenage girls or would be brides.
Second, what benefit will it provide them? Better adjustment after marriage or
experience sharing about married life. Third, when will people use this service?
After being engaged, after graduation or after marriage. After considering various
questions for developing a concept for the service, our company finally formed
the concept of an opportunity for would be brides who want overall knowledge
and experience sharing about marriage life for leading happy married life.
CONCEPT TESTING
Concept testing involves presenting the service concept to appropriate target
customers and getting their reactions. The more the tested service resembles
the final service, the better it is. Concept testing involved elaborating the
customers upon the concept of the service and getting their reactions and
acceptability of the service. We elaborated on the concept as providing services
that will help girls who are about to get married to learn about the various
aspects of being married and leading a happy married life by training them on
handling relationships, time management, personal grooming, adapting to new
cultures in case of inter caste marriages, wedding planner and many more.
BUSINESS ANALYSIS

After the management developed the service concept and tested the feasibility
of the service, it prepared a sales, cost and profits projections to analyze the
entire service.
Estimating total sales: Sales in term of this service would mean as to how many
people avail this service and enrol for such programs. This is a repeated
purchase service i.e. people keep getting married and thus customers
demanding such a service will not go down torero. So sales are estimated to be
favourably good in this kind of a service. Estimating costs and profits: The initial
cost of this service would include the cost of advertising and marketing the
service, hiring teachers and experienced work staff to train the people whoenroll
and collaborating with various people who will be needed to ultimately plan the
wedding for their clients. Profits are expected to be fairly good because as in a
country like India where people spend lavishly for weddings, profits are expected
to be good over a period of some time.
MARKET TESTING
After the management was satisfied with the concept of the service and the
business aspect of it, they decided to go for market testing where the consumers
are offered the product and its acceptability can be checked. We went in for
alpha testing where we tested our service within our organization. We went to
few of our friends and one of our relative who were about to get married and
explained them about our concept. The customers we approached towered quite
excited about this service and wanted to enrol for it.
COMMERCIALISATION
Now is the time to finally launch the service in the market. Before the service is
launched in the market, several decisions are to be taken like:

WHEN: This involved deciding upon the market entry timing. As this is a very
new service concept which does not exists, we will surely enjoy the first mover
advantage by way of grabbing key distributors and customers.
Secondly, we have decided to come out with this service in the month of
September, as this is the time when the wedding season which is considered
auspicious in our country is about to start. Thus it will be a good time to start this
service.
WHOM: Our target customers will be upper middle class and upper class society
people who can afford to and will be willing to spend lavishly at weddings.
WHERE: During our initial launch, we will be starting up with our service in Delhi
and Mumbai which are big metropolitan cities and have population who might be
willing to avail such a service.
HOW: this decision basically includes how the service will be launched. It
requires deciding upon the marketing strategy and promotional techniques of

launching the service in the market. The marketing strategy has been explained
in terms of the following:
PRODUCT:
Our product is basically a service that provides would-be brides withal detailed
learning experience about the new life they are about to enter. It provides
services like relationship handling, fund management, time management,
personal grooming and wedding planner.
PLACE:
We have decided to start our service in metropolitan cities like Delhi and Mumbai
where the population will be willing to spend on wedding planning and learning
courses.
PRICE:
The price list for our services is as below: We have courses in:
Relationship handling: Rs. 6000 for 15 classes twice a week
Time management: Rs.4000 for 10 classes twice a week
Fund management: Rs. 4000 for 10 classes twice a week
Personal grooming: Rs.7000 for 15 classes twice a week
Wedding planner: as per requirement
Household learning: Rs.5000 for 10 classes twice a week
Cross cultural training: Rs.4000 for 19 classes twice a week
Entire package cost without wedding planner: Rs.25000 + taxes as applicable
Entire package cost with wedding planner: Rs.25000 + cost as per wedding
requirement+ taxes as applicable
PROMOTION:
The various promotion techniques that will be used for promoting the service
willbe:1)

1) Newspaper advertisement in matrimonial section of the newspaper2)

2) Online marketing on matrimonial sites like shaadi.com and vivaah.com3)

3) Promotion by setting up stalls at wedding exhibitions like Vivian,

bridalasia,bride and groom,etc4)

4) Printing ads in wedding magazines5)

5) Radio jingles6)

6) Printing brochures and pamphlets7)

7) Advertising at various popular beauty salons

PEOPLE:
Our services will be provided by people who have been specially trained to
provide relationship counselling, cross cultural training incise of inter caste
marriages, time and fund managers who will train clients, interior decorators and
planners for wedding planning.

PHYSICAL EVIDENCE:
All the members who enrol for our service will be given an automated icardwhich will serve as an identity proof for them and which can be used for
entering personal data on our website, any personal queries and will also be
used to track class records and take back up classes.
PROCESS
The entire course will be conducted by experienced trainers who would create
real life situations for clients and then teach them and help them deal
withsituations.Practical learning sessions will also be conducted for personal
grooming sessions which would include cooking classes, personal make up
sessions, etc.For the purpose of relationship handling, counselling sessions and
open discussions will be conducted where personal queries can also be taken.

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Q.2
What is service differentiation? Explain service differentiation
strategies
Q.3
What are the different stages in which organisations choose
innovative operational methods?
Q.4
What are the various levels of customer satisfaction? How
important is a plan or methodology to initiate customer responses?

Q.5
Categorise the marketing mix in insurance sector & airline
industry .

Q.6 Define the elements of strategic management. Mention the

technical options in the service marketing.

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