SERVICE MARKETING

SOLVED QUESTION PAPERS

1. What are Services? A:A service is any act or performance that one party can offer to another that is essentially intangible & does not result in the ownership of anything its production may or may not tied to a physical product. 2. Explain the types of Service Marketing? A: Service marketing involves 3 types of marketing: 1. EXTERNAL MARKETING 2. INTERNAL MARKETING 3. INTERACTIVE MARKETING 1. External Marketing: "Setting the Promise" Marketing to END-USERS. Involves pricing strategy, promotional activities, and all communication with customers. Performed to capture the attention of the market, and arouse interest in the service. 2. Internal Marketing: "Enabling the Promise" Marketing to EMPLOYEES. Involves training, motivational, and teamwork programs, and all communication with employees. Performed to enable employees to perform the service effectively, and keep up the promise made to the customer. 3. Interactive Marketing: (Moment of Truth, Service Encounter) this refers to the decisive moment of interaction between the front-office employees and customers, i.e. delivery of service. This step is of utmost importance, because if the employee falters at this level, all prior efforts made towards establishing a relationship with the customer, would be wasted.

3. Explain the process for setting customer defined service standards? Process for Setting Customer-Defined Standards 1. Identify existing or desired service encounter sequence 2. Translate customer expectations into behaviors/actions 3. Select behaviors/actions for standards 4. Set hard or soft standards 5. Develop feedback mechanisms Measure by audits or operating data Hard Soft Measure by transaction- based surveys 6. Establish measures and target levels 7. Track measures against standards 8. Provide feedback about performance to employees 9. Update target levels and measures 4. What are the Myths of Service Marketing? A: Myths about services: Myth is a popular belief which is over simplified that tends to explain only part of phenomena. The following are the myths commonly held about services. Myth1-A Service Economy produces services at the expense of other sector. The service sector is growing at very fast pace. Eventually advanced countries will produce only services and there will be no manufactured goods output at all. This belief is there because sector is growing so rapidly that other sectors cannot grow at the same pace. This fear is baseless. In fact both manufacturing and service sector have grown. In manufacturing sectors there are more workers than before, the manufacture sector itself needs services. Therefore service sectors support manufacturing sector and not growing at the expense of manufacturing. Secondly it is fact that need for services can be felt very easily modern day consumer spend more money on services than for manufacturing of goods. Thirdly some services in fact aid to improve and increase production and productivity.

Myth2-Service jobs are Low paying and Low level. Many people think service jobs are of fast food employees, hairdressers, stores, clerks etc, this is not true. There are service sectors like law, accounting, banking and medicine etc, which are not of low pay category, another misconception about this sector is that service business is small in size, though it may employ a large number of people and may dominate GDP. Myth3-Service production is labor intensive and low in productivity. It is a myth service labor intensive; production is sluggish, creating a drag on the economy. While hotel, travel agency may be less capital intensive, services like airlines,telecommunication,insurance etc, are quite capital intensive. Myth4-Service is necessary evil for manufacturing firms. Traditionally many manufacturers were of view that so called after sales service was only adding to cost and in no way it is profitable. The traditional view was that service was equated to repair, maintenance and handling of complaints. Many manufacturers view services as a profit centre and use it as a vehicle to differentiate their product from that of competitors. Myth5-Managing services is just like Managing manufacturing Business. This myth will lead us to study of service marketing Many felt that there was not much difference between product and services made out to be. It was only in 1980 that it was felt by marketers and top management personal that there is a substantial difference between the services and product marketing. 5. Explain the Role of Service Quality in Offensive and Defensive Marketing? Offensive Marketing: In this method, profit is obtained through sales, but the methodology adopted is sales increase through repetition and higher market share. In this method, the services are charges higher than that of competitive, Sales promotion and advertising are huge in this method. This method is possible only for those companies which have a good reputation. Defensive Marketing: In this method the emphasis is on customer retention. This is because; we know that lost customer must be replaced by a new customer when the replacement comes at the high cost because of high advertising and promotion expenses. New customers may not be profitable in the short term. Eg: In cell phone industry, capturing the customer from other company is very expensive. A greater degree of service improvement is necessary who make a customer switch from

competitor than to retain a current customer. In general, longer a customer remains with the company, it is both profitable and companies relationship with the customer will improve. If the customer is served properly he generates more profits every year and stay with the company. Longer the company keeps the customer, the more money it makes. The Money a company makes from retention comes from four sources: as shown in the above diagram *Cost *Volume *Price Premium *Word of Mouth 6. What is Market Testing? A: Market Testing of the development process that a tangible product might be test marketed in a limited number of trading areas to determine marketplace acceptance of the product as well as other marketing mix variables such as promotion, pricing, and distribution vehicles. Again, the standard approach for a new manufactured product is typically not possible for a new service due to its inherent characteristics.