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Section A: Introduction to Service Marketing : Understanding Service,The Nature of Service marketing. Service Consumer Behavior: Understanding Consumer Behavior, Customer expectation & perception, managing & exceeding customer exportation, strategy for influencing customer perception. Strategic issue in service marketing: Market segmentation & Targeting; individualized service and mass customization, Differentiation & positioning of services; steps in developing a positioning strategy ,developing & maintaining demand & capacity. The Marketing mix & service : The marketing mix elements, traditional marketing mix-product, price, place, promotion,& communication services, & extended marketing mix- people, process, physical evidence in services. Challenges of service marketing: Developing & managing the customer service functions, marketing planning for service; developing & maintain quality ill services, relationship marketing. Service marketing-specific Industries: Tourism, travel, Transportation service marketing, financial services; Education & Professional services, Telecom & Courier, Media Service.

Introduction To Service Industry :

Meaning & Definition of Service: A service is the non material equivalent of a good. A service provision is an economic activity that does not result in ownership, & this is what differentiates it from providing physical good. According to Philip kotler : a service is an 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 be tied to physical product.

Elements of Service: 1: Lack of physical output or construction. 2: Benefit to the receiver from the service rather than the product offered. 3: The intangible nature of services. 4: The possible combination of services with the production of goods. 5: marketing of an idea or a concept.

Nature/Salient Features Of service: 1: Intangibility: Services are intangible. They cannot be seen, tasted, felt, heard or smelled before they are bought. 2: Inseparability: it is marked by 2 kinds of inseparability. a: Inseparability of production & consumption. b: Inseparability of the service from the person who possesses the skill & performs the service. Services are typically produced and consumed simultaneously. 3: Variability: there are 3 reasons for this:


the inseparability from the provider leads top some variability; the provider of the service being inseparable from the service, variability automatically enters the picture, depending on the person performing the service. B: Services are highly people intensive and anything which is people intensive is bound to be marked by variability. It can be divided in 3 parts- skilled & unskilled services, complete professional services. C: in service, the effect varies dependent on when & where the service is provided. As combined result of the 3 factors, services are marked by a high degree of variability, individuality & heterogeneity. 4: Perish ability: Services cannot be stored. This is not a problem when demand is steady. When demand fluctuates, service firms have problems For ex: Publictransportation have to own much more equipment because of rush hour demand than if demand were even throughout the day. 5: Ownership: The goods sold are transferred from one place to another, the ownership is also transferred & this provides to the buyers an opportunity to resell. In the case of service this doesnt happened The user have just an access to the service. As customer can use personal care services, Medicare services etc 6: Service is a Performance: While product are produced, services are performed. 7: Simultaneity: Services cannot be delivered to customers. Services do not move through channel of distribution. For availing the services, it is essential that the users are brought to the providers or providers go to the user. 8: Quality Measurement: It is very difficult to rate or quantify the total purchases.We can only determine the level of satisfaction. 9: Nature Of Demand: Services are found of fluctuating nature,particularly during the peak season, we find an abnormal increase in demand. Ex : Tourist, Diwali,Festivals etc. 10: Consumer, a part of the production process: the consumer has to be physically present while service is produced (in major cases).Both producer & customer has to be present for taking service. Service provider- customer interaction becomes a special features of service.

Classification Of Services: 1: By Market Segment: i: Final Consumer (Coaching, Taxi, car wash, Life Insurance)

ii: Organizational Consumer (Management Consulting, Machinery repair, Accounting Services, Legal Services) 2: By Degree Of Tangibility: i: Highly Tangible (Car Rental, vending Machine, Telecommunications) ii: Service Linked to Tangible Good( Domestic appliance repair, Car Service) iii: Highly Intangible ( Psychotherapy, consultancy, Legal Services) 3: By Skills Of The Service providers: i: Professional (Medical Service, legal, Accounting etc.) ii: Non-Professional (Babysitting, Caretaking, Casual Labor, Taxi) 4: By Goals Of The Provider: i: Not For profit ( Scouts Association, Charities, Public Sector leisure facilities) ii: Commercial (Banks, airlines, Tour Operators, hotels & Catering Services. 5: By Degree Of Regulation: govt. exercises control over the services by enacting regulation. Some services like Banking, Insurance are highly regulated. i: Highly Regulated (Hospitals) ii: Limited Regulated (Catering, Fast food) iii: Non regulate (Computer time, house painting, leisure lawn care) 6: By Degree of Labor Intensiveness: Human labor is involved in service delivery. The services differ according to the extent labor involved. For ex Computer assisted banking v/s manual banking, car washing etc. i: Equipment Based Service ( a: Automated b: Operated by relatively unskilled operators (motion picture theatres, dry cleaning taxis) c: Operated by Skilled operators(exayting airlines, computer time sharing.) ii: People Based Service: a: Unskilled labor b: Skilled labor c: Professionals. 7: By Degree Of customer contact: i: High Contact (Universities, large appliance repair, hotel, air travel) ii: Low Contact (Lawn Care, Automated Car Wash, Janitorial Services)

NATURE OF SERVICES MARKETING: 1: Intangibility: Consumer decides on basis of his understanding of service & marketer promise of performance. 2: Low Price Sensivity: Consumers are willing to pay higher price as long as they feel assured that they get a better quality. Consumer decide on 2 parameters: price sensitivity & performance expectation. 3: No inventory: there is no gap b/w production & consumption .Marketers have to keep this aspect in mind while planning operations. They also need to balance demand & supply. 4: Value Creation Process: Marketer can create value in service process through people, procedure, proof of performance& the pace at which service is delivered. Most marketer ignore these 4 P,s & concentrate on traditional P,s. 5: Providing Tangibility to the Intangibility: Ways by which intangibility can overcome: A: Visualization: marketer should find a way so that customer can visualize a transaction process. B: Association: This can be done by associating service with offer or inanimate object. C: Physical Representation: The intangibility factor in a service offer forces a marketer to go for tangible representation symbolizing the existence & character of service industries. Some ways are: i: uniforms: it conveys uniformity, discipline & conformity & professionalism. They also improve visibility of organization. ii: Colors: This is used in servicescapes like interiors,stationary, glow signs etc. The corporate colors are part of their logos & other corporate communication tools. iii: Logos & Mascots 6: Documentation: They cite facts & figures in their promotion to support the calm of their performance in terms of their dependability, reliability & responsiveness. 7: Selling services: In practice, face to face selling tends to be more prevalent. This is mainly provided by professionals rather than salesperson so in this personal contact can be seen. 8: Tangibilizing Services through benefit: The Citibank & The Times group are revolutionizing the credit card industry by offering tangible benefits to the customer; discounts on long distance telephone calls, frequent flyer programs.

9: Tangibilizing through Positioning: Prior to purchase the service positioning must rely on performance attributes which can be measured only after a purchase.

Component Task in service Marketing: 1: understanding the nature of service. 2: understanding the customer & his expectation of the services. 3: giving a shape to the service. 4: Organizing Delivery system & creating channels/intermediaries. 5: Pricing 6: Promotion 7: Harnessing the specila elements of service marketing (people, phusical evidence, process) 8: achieving Diffrentiation. 9: measuring service quality. 10:monitoring customer satisfaction.

SERVICE CONSUMER BEHAVIOUR Meaning & Definition: Acc to Belch & belch CB is the process & activities people engage in when searching for selecting, purchasing, using, evaluating * disposing of product & services so as to satisfy their needs & desires. Acc to Solomon CB is the process involved when individuals or group select, purchase, use or dispose of products, services, ideas or experience to satisfy needs & wants Characteristics of consumer behavior: 1: CB is the process by which individuals decide whether, what, when, from whom, where & how much to buy. 2: CB comprises both mental & physical activities of a consumer. 3: It covers both visible & invisible activities of a buyer. 4: buyer behavior is very complex.\ 5: BB is very dynamic. 6: An individual behavior is influenced by internal & external factors. 7: it is an integral part of human behavior. 8: It is sum total of the behavior of a no of a person. 9: It is influenced by a no of marketing stimuli offered by marketer. 10: It involves both psychological & social processes. 11: CB is social in nature. 12: Consumer act differently at different time 13: they learn & thereby change there attitude & behaviour. 14; Consumers are heterogeneous in nature & they are all different from each other in certain respects. 15: They often act emotionally.

CUSTOMER EXPECTATIONS Customer expectation are beliefs about service delivery that function as standards or reference points against which performance is judged. Because customers compare their perceptions of performance with these reference points when evaluating service quality, through knowledge about customer expectations is critical to services marketers. Measurement Of Customer Expectation: 5 dimensions are: 1: Assurance 2: Empathy: This refers service providers ability to show concern for customers. 3: Reliability: should accurately perform the promised services. 4: Responsiveness: prompt service. 5: Tangibles: It includes physical facilities, equipment of the service provider, dress & appearance of the service personnel. Type Of Service Expectation: 1: Ideal expectations or desires: High level expectations.( Grand Hayat) 2: Normative should expectations: :as expensive as this restaurant is, it ought to have excellent food & service. 3: Experience Based norms: 4: Acceptable Expectations: I expect this restaurant to serve me in an adequate manner 5: Minimum tolerable expectations: I expect terrible service from this restaurant but come because the price is low. Factors that Influence Customer Expectation of Service: 1: Sources Of desired Service Expectations: a: Personal needs: are those states or condition essential to the physical or psychological well-being of the customer, are pivotal factors that shape what we desire in service. b: Enduring Service Intensifiers: are individual, stable factors that lead the customer to a heightened sensitivity to service. It occurs when customer expectation are driven by another person or group of people. 2: Sources of adequate service Expectations: a:Transitory service Intensifiers: It consist of temporary, usually short term, individual factors that makes a customer more aware

of the need for service. Personal emergency situation in which service is required urgently (such as accident)raise the level of expectation. b: Perceived service alternative: If customers has multiple service providers to choose from, their level of adequate service are higher than those customer who believe it is not possible to get better service elsewhere . c: Customers Self Perceived Service Role: It is the degree to which customer exert an influence on the level of service they receive. Specification plays an important role. Customer actively participate In this. d: Situational Factors: It is defined as service performance conditions that customer view as beyond the control of service provider.ex accidents, earthquakes e: Predicted Service: It implies some objective calculation of the probability of performance or estimate of anticipated service performance level. 3: Sources of Both Desired & Predicted Service Expectation: When consumer are interested in purchasing services, they are likely to seek in information from several sources. a: Explicit Service Promises: The statements are personal when they are communicated by salespeople or service or repair personnel; they are non personal when they come for advertising, brochure & other written publication. b: Implicit service Promises: It lead to inferences about what the service should & will be like. The quality ques are determined by price& tangible associated with the service. c: Word Of Mouth Communication. d: Past experience.

MANAGING CONSUMER EXPECTATIONS It is managed by during each phase of the purchase process. 1: During the Pre-Purchase phase: a: Learn what customer expect b: Tell customer what they can expect c: Consistently provide the service that customers expect. This stage requires communication

2: During the Service Encounter: a: Service personnel must communicate with the customer during the service encounter. b: service provider should modify the service to meet the customers expectation if possible. c: If service cannot be modified the service personal should explain why customer,s expectation cannot be met. 3: During The Post-Purchase phase: a: Companies should communicate with customers immediately after the service is completed to see if expectations were met. b: firms can use follow up programs such as an evaluation survey sent to customer through mail or phone. c: Companies should have a procedure for dealing with dissatisfy customers that will assist in managing future expectations. Measures For Managing customer expectation: 1: Managing promises: Service companies should promise only what thaey are confident of delivering rather than making a promises which are difficult for them to fulfill. 2: Reliability: Getting it right the first time 3: Effective Communication: It can be initiated in 2 ways either from the company or from the customer. A service organization can initiate proactive communication to inform about the latest developments that will serve customers better.

EXCEEDING CUSTOMER SERVICE EXPECTATION It is possible only when companies make an effort to know their customers expectations. Companies should know what their customer expects from them. Customer Satisfaction or dissatisfaction largely depends on how the service is delivered. In todays era companies must look for new ways to differentiate themselves, attract share & grow. On other hand to gain edge on competititors, service companies should surpass their dimension of service i.e assurance, empathy, responsiveness, & tangibles.

Even firms with strong product & price value prepositions strengthen their position & become harder to copy by adding process & service benefits to their customer value portfolio. Phenomenon of Exceeding Customer Service Expectation: 1: Companies were able to identify many customer needs. 2: All the customer needs were not of equal importance, nor do all have equal impact on the business. 3: customers need could be placed into a hierarchy of three tiers(Attractors, Satisfiers, Basic Expectations)

CUSTOMER PERCEPTION Perception is the process through which the information from outside environment is selected, received, organized & interpreted to make it meaningful to us. It is the process by which individuals organize & interpret their sensory impressions in order to give meaning to their environment. Factors That Influence Customer Perceptions: 1: Service Encounter: A customer estimates the quality of service throughout the interaction with service provider. Every incident in the service encounter sums up the customers satisfaction & his intention to repeat business with the service provider.3 types of service encounter: A: Remote encounters: It do not involve any direct human contact, Ex Atm Machine. B: Phone Encounters: Companies have started telephonic services like customer inquiry, registration of complaints, taking orders & reserving tickets. C: Face To Face encounters: This occurs in places like hotels, restaurants, bank. It is quite difficult to evaluate the quality of services in these encounter as it involves both verbal and non verbal communication. Factors Leading to Satisfaction or dissatisfaction in service encounters:

1: Recovery: It is a situation when service failure occurs & include how well the employees of the service provider respond to the situation. Customer too know that it is not always possible to get perfect service. 2: Adaptability- Employee Responses to Customer Needs & Request: In these acses customer judge service encounter quality in terms of the flexibilityof the employees & the system. 3: Spontaneity- Unprompted & Unsolicited Employee Actions: Even when there is no system failure & no special request or need, customer can still remember service encounters as being very satisfying or dissatisfying. 4: Coping-Employee Response to Problem Customers:

2: Service Evidence: Because services are intangible, customers are searching for evidence of service in every interaction they have with an organization.3 division: A: People: It includes contact employees, Customer him/herself, Other customer. It is important in defining the quality of a service encounter in the mind of the customers. B: Process of Service Delivery: It Includes Operational flow of activities, steps in process, flexibility v/s standards & technology v/s human. C: Physical environment: It includes tangible communication, servicescapes, guarantees, technologies, website. Benefits Of Service Evidence: A: Shaping the first impression of the Customer B: Managing the trust of the customer. C: Facilitating quality service D: providing a sensory stimulation to customers: (fun attachments) E: Changing the Image of Service Organization. F: instilling the service philosophy in the employees of the service provider;

3: Organizational Image: Image of organization have a profound effect on perception of consumers. Consumer perceives quality of service on basis of image of organization.

4: Price: Perception is also ge5t affected by price of services. If a service company prices a product low then consumer may perceive it of low quality & viceversa.

Strategies For Influencing Customer Perception: 1: Measure & Manage Customer satisfaction & Service Quality: Measurements are needed to track trends, diagnose problems & to link to other customer focused strategies. Co have linked their measurement of customer satisfaction to strategies related to employee training, reward system, internal process metrics, organizational structures & leadership goals. 2: Aim For Customer quality & Satisfaction in Every service Encounter: there should be no defects or zero defects. There should be clear documentation of all the points of contacts b/w organization & its customer. 3: Plan For Effective Recovery: If we fail than we have to plan that how we can overcome with this. 4: Facilitate Adaptability & Flexibility: Everything should be clear to customer. 5: Encourage Spontaneity 6: Help Employees Cope With Problem customers: 7: Manage the dimensions of Quality at the Encounter level: 8: Reflect Evidence of service: Before making a purchase decision customers often try to assess the service evidence with the help of tangible clues like the service organizations personnel in terms of friendliness, knowledge of procedure & their willingness to help customers. 9: Communicate & Create a Realistic Image: 10: Enhance Customer Perceptions of quality & Value through pricing.

Models Of consumer Expectation & Perception:

Word of mouth communicat ion

Expected Service

Perceived Service

Past Experiences



Contact personnel

Technical service Quality

Acc to the model, consumer expectations are prominently influenced by controllable as well as uncontrollable factors, from the point of view of the service firms. The

controllable Factors are advertising & contact personnel whereas the uncontrollable variables are past experience of the customer & word-of-mouth communication. Perception are not driven merely by technical ability. Many things can interfere with the perception. Advertising, Past experience & contact personnels performance also influence the perception of customers.


The term strategy derived from the Greek word strategos, which means generalshipthe actual direction of military force as distinct from the policy governing its development. Strategy is defined as the determination of the basic long-term objectives & goals of an enterprise & the formulation of plans & the acquisitions, allocation& utilization of resources necessary to accomplish the goals. The strategic Issues in Service Marketing are: 1: Market segmentation 2: Market Targeting 3: Positioning 4: Differentiation 5: Managing demand & Supply.

Services Market segmentation:

Definition: It is the process of dividing the total market for goods or services into
several smaller groups, such that members of each group are similar with respect to the factors that influence demand. Acc to Philip kotler, Whenever a market for a product or service consists of two or more buyers, the market is capable of being segmented, that is divided into meaningful buyer groups. The purpose of segmentation is to determine differences among buyers which may be consequential in choosing away then or marketing to them. Market Segment: A market Segment is a group of potential or actual customers who have similar needs, wants, preferences or buying behavior. The marketer does not create the segments by himself but they pre-exist in the market. Requirements For effective Segmentation: 1: Distinctiveness: Each segment should be internally homogeneous. It should have some qualities that are common across all members of the segment.

2: Measurable Segment 3: Substantial size of Segment: The segment must be large enough. 4: Accessibility 5: Actionable: A segmentation variable should help marketer develop effective marketing programs to attract & serve potential customer effectively.

Advantages of Segmentation: 1: Services offered can be fine tuned to the needs of the customers, so that they derive max satisfaction. 2: Customers have a choice of selecting a service & a corresponding price range that suits their budget. 3: The most appropriate distribution channel, in terms of money & efficiency, can be used. 4: By serving a particular segment or a niche, the investment in resources, marketing, production facilities etc. can be minimized, thereby increasing the return on investment.


1: Demographic & Socio-Economic Segmentation: It includes age, sex, family size, income, education, social class & ethnic origins. Demographic variables are: A: Age & life Cycle stage B: Gender & sexual Orientation C: Marital status D: Income E: Social Class F: Family size G: Occupation

I: Educational Level J: Religion

2: Psychographic Segmentation: It is a technique that classifies life styles by investigating how people live, what interests them & what they like. Psychographics segment is the process of dividing markets into segments on the basis of consumer life styles, social class or personality profile. It includes: A: Life Styles B: Personality C: Values D: Beliefs E: attitudes

3: Geographical Segmentation: it id divided on the basis of countries, regions, stages, cities & town.

Based on Customer Responses: 1: Benefit Segmentation: Car buyer seek widely varying benefits, from fuel economy, size & boot space, to performance, reliability, or prestige. 2: Usage Segmentation: a: Heavy usage B: Medium usage C: light usage D: Non-Users 3: Loyalty Segmentation: i: Hard Core Loyal ii: Soft Core Loyal iii: Switchers

Segmentation Approaches

Customer Characteristics

Customer responses

Demogra phic & socioeconomic \economi c

Psychogra phics

Geograph y





Identify bases for segment ation process

Develop profiles of resulting segments

Develop measure of segment attractive ness

Select the target segments

Ensure that segments are compatib le

1: Identify Bases for segmenting the Market: Bases are Demographic, psychographic, geographic & behavioral segmentation. 2: Develop profiles of Resulting Segments: In this stage clearly understand how & whether the segment differs from each other in terms of their profiles. If they are not different from each other , the benefits to be derived from segmentation, that is, from more precisely identifying sets of customers , will not be realized. 3: Develop Measures of segment Attractiveness: the size & the purchasing power of the segments must be measurable so that to company can determine if the segments are worth the investment in marketing & r/s costs associated with the group. The chosen segment also must be accessible, meaning that advertising or marketing vehicles must exist to allow the co to reach the customers in the segments. 4: Select the Target Segments: 5: Ensure the Target segments are compatible:

MARKET TARGETING IN SERVICES: It is the process of estimation & comparison of the previously identified segments for selecting one or more segments that fetch the best results for the business. BASIS OF TARGETING THE IDENTIFIED SEGMENTS: 1: Segment Size & Growth potential 2: Structural attractiveness: It involves analyzing the present & potential competitors, substitutes of products or services available in the market & the relative power of suppliers & buyers. A segment is said to be less attractive when the supplier power is high. The supplier power is said to be high when there are few substitutes & when they supply an important product or service to the segment.

Segment attractiveness is also affected by the relative power of buyers, whose strong bargaining power may control the prices. A strong presence of substitutes in a particular segment will, therefore, obviously decrease its attractiveness. 3: Company Objectives & Resources: Evaluation of a segment alone, based on its size, growth potential & structural attractiveness is insufficient while choosing the target segment. It is essential that the segment features must match the companies objective & resources.

Targeting Strategies: 1: Single Segment Strategy: Only for one segment Ex: A software firms cater to only logistic business. 2: Selective Specialization: It target more than 1 segment. The co prepares different type of marketing mixes for different segments which may or may not be related to same product or services. Ex Bank Products 3: Product Specialization: This strategy offers a single product or service to various segments. Ex Banquet Halls 4: Market specialization: This strategy aims to meet the various needs of a target segment. The target segment for the group remains same & the company tries to cater to the different needs of the segment by offering product or services across different categories. Ex: Educational Institute with different type of courses. 5: Full-Market Coverage: This strategy aims to offer various products or services to the entire market.

Individualized Service & Mass Customization

Individualized Service: Services are heterogeneous & , as such , no two individuals can have the same service in the same way or can any customers have exactly the service on 2 occasions.

Service package 1

Customer 1

Service package 2

Customer 2

Service package 3

Customer 3

Service package n

Customer n

Mass customization: It is all about meeting an individual customers needs by manufacturing a product or offering a service in a cost-effective manner. Approaches Of Mass Customization: 1: Customizing the service around a Standardized Core: A standard core service such as airline transportation can be customized through additional services. 2: Creating Customizable Services: . 3: Offering Point-of Delivery Customer: The provider allows customer to communicate what they need or want at point-of-service delivery. The service is customized in real time by the employee to fit those needs. 4: Offering Standard Modules that can be Combined in Unique Ways: This is the approach used by tour companies that offer the traveler different vacation components(hotels, airline, destination, length of stay) that they can combine to design their unique trip.

Factors That Companies need to Consider before Adopting Mass customization:

1: Co should understand their Customers opinion about customization of the products or services. If the customers are not keen on customization, then a co need to think over its decision to customize its services. 2: Cos should assess their ability & the extent to which the existing processes & technology can offer customization. 3: Cos should also analyze if they are the pioneers in the industry in adopting mass customization & if that is the case , how much time their competitors will take to catch up. 4: A co should assess its culture & internal resources to adapt to the changes brought in by adopting mass customization. If there is a need for organizational change, then the co should take the necessary initiatives in developing the employees through effective leadership & change management.

A firm needs to differentiate its offer from that of competitors by providing something unique that is valuable to the buyer. If this is successfully achieved then the firm can command a premium price- it would sell more of its product in the long run & win greater quality. Differentiation, in fact grows out of the firms value chain. The value-chain desegregates a firm into strategically relevant activities with corresponding cost implications. Valuechain categories are broadly categorized under 2 heads. First are the primary activities like inbound logistics, marketing, sales & services. The second are the support activities which include infrastructure, human resources, technology development & procurement.

Steps In Differentiation: 1: The first step is to determine who the real buyer is. 2: The second step is that the firm must identify the direct & indirect impact on its buyers value chain to determine the value the firm should create for its buyers. 3: The 3rd step is to rank the buyer purchasing criteria.. At times, such an analysis might suggest purchase criteria. At times, such an analysis might suggest purchase criteria that the buyer does not currently perceive. However, the same must be identified in a manner that it can be operationalized & their list of buyer purchase criteria on a continuous basis to sustain competitive advantage.

4: The 4th step is that the firm must identify its existing sources of uniqueness in relation to its competitors & also the potential new sources of uniqueness, because differentiation stems from the uniqueness of firms value chain. 5: The 5th step is to study the cost implication of all the identified factors, both use criteria & signaling criteria, which can lead to differentiation. 6: 6th step is to choose the configurations of value activities that create the most valuable differentiation for the buyer. 7: 7th step is to check the sustainability factor of your chosen differentiation strategy. Sustainability has to be checked again erosion or imitation. 8: last stage is that of the cost reduction in activities that do not affect the chosen forms of differentiation. Such a strategy would not only improve profitability but also reduce vulnerability to competitors because of price premium.

Positioning means projecting the image of the product or service in such a way that consumer perceives its value distinctively from that of competitive offers. Objectives of Positioning: 1: To create a distinctive place of a product or service in the minds of potential customers. 2: To provide a competitive edge to a product or service, an attempt to convey attractiveness of the product or the service to the target market. 3: To place an intangible service within a more tangible frame of reference. 4: To help influence both service development & the redesign of existing services. 5: To follow consideration of competitors possible moves & responses so that appropriate actions can be taken. 6: To give the target markets the reason of buying your services & than design the whole strategy. 7: To provide guidelines for the development of marketing mix with each element being consistent with the positioning.

Positioning Services: The process of designing a service has an impact on the image of the service in the mind of the customer. It is generally agreed that term image represents the sum of beliefs, attitudes & impressions that a person or group has of an object. Type of Images: 1: Current Image: way that a co is seen by different groups. 2: Mirror Image: Way that a co thinks it is seen by different groups. 3: Wish Image: Way that a co would like to be seen by different groups. Characteristics to satisfy needs of customers: 1: Importance 2: Distinctiveness 3: Communicability 4: Affordability 5: Profitability.

How to Position a Service Business: 1: Positioning by Features: 2: Positioning by Comparison 3: positioning by Benefit to Consumer 4: Positioning as an Expert 5: Positioning Through Guarantees 6: Positioning as a leader.


1: Determining Level of Positioning: A co should first decide on the level at which they would like to position their products or services. A single co can position itself at different levels at different points of time. 2: Identification of attributes: After determining the level of positioning, companies should identify the attributes that are considered by the target market segment when making purchase decision. i: Customers often base their decisions on the unique features offered by the product class. ii: Customers consider the specific uses fulfilled by the product/service offered by a particular co. iii: Customer also base their decision on the price of the service in comparison to the perceived delievered value. iv: A service,s ability to serve the needs of particular set of users also determine its salability. v: The attributes should also provide rational & emotional benefits to the customers. 3: Location of Attributes on Positioning Map: The attributes identified by the marketers are categorized into certain dimension which reflect the preferences of the customers. These services plotted on a 2-dimensional positioning map. These maps are used to identify the competitors positions with regard to the attributes. Positioning maps can be developed for each segment in the target market & these maps will show the position of different players, as per the perceptions of the customers in these segment. 4: Evaluating Positioning Options: i: Strengthening Present Position against Competitors. ii: Identifying an Unoccupied Market Position. iii: Repositioning the Competitors.

IMPLEMENTING THE POSITION: 1: Service 2: Price 3: Location

4: Promotion 5: People 6: Processes.

Developing & Maintaining Demand & Capacity:

Concept Of Demand & Capacity (Supply): Law

Of Demand

In economics, the law of demand is an economic law that states that consumers buy more of a good when its price decreases and less when its price increases (ceteris paribus). The greater the amount to be sold, the smaller the price at which it is offered must be, in order for it to find purchasers. Law of demand states that the amount demanded of a commodity and its price are inversely related, other things remaining constant. That is, if the income of the consumer, prices of the related goods, and tastes and preferences of the consumer remain unchanged, the consumers demand for the good will move opposite to the movement in the price of the good.

Assumptions Every law will have limitation or exceptions. While expressing the law of demand, the assumptions that other conditions of demand were unchanged. If remain constant, the inverse relation may not hold well. In other words, it is assumed that the income and tastes of consumers and the prices of other commodities are constant. This law operates when the commoditys price changes and all other prices and conditions do not change. The main assumptions are

Habits, tastes and fashions remain constant. Money, income of the consumer does not change. Prices of other goods remain constant. The commodity in question has no substitute or is not competed by other. The commodity is a normal good and has no prestige or status value. People do not expect changes in the prices

LAW OF SUPPLY The Law of Supply Like the law of demand, the law of supply demonstrates the quantities that will be sold at a certain price. But unlike the law of demand, the supply relationship shows an upward slope. This means that the higher the price, the higher the quantity supplied. Producers supply more at a higher price because selling a higher quantity at a higher price increases revenue.

A, B and C are points on the supply curve. Each point on the curve reflects a direct correlation between quantity supplied (Q) and price (P). At point B, the quantity supplied will be Q2 and the price will be P2, and so on. (To learn how economic factors are used in currency trading, read Forex Walkthrough: Economics.) Time and Supply Unlike the demand relationship, however, the supply relationship is a factor of time. Time is important to supply because suppliers must, but cannot always, react quickly to a change in demand or price. So it is important to try and determine whether a price change that is caused by demand will be temporary or permanent. Let's say there's a sudden increase in the demand and price for umbrellas in an unexpected rainy season; suppliers may simply accommodate demand by using their production equipment more intensively. If, however, there is a climate change, and the population will need umbrellas year-round, the change in demand and price will be expected to be long term; suppliers will have to change their equipment and production facilities in order to meet the long-term levels of demand.

Variation in Demand Relative to Capacity: 1: Demand Exceeds Capacity

2: Demand Exceeds Optimum Capacity 3: Demand & Supply are well balanced 4: Excess Capacity

Strategies for Managing Capacity to Match Demand: 1: Employment of Part-Time Employees. 2: Cross-Train Employees 3: Increase in Capacity through Customer Participation 4: Use of Sub-Contracting to Increase the Capacity 5: Sharing of Capacity. 6: Stretch existing Capacity: It include i: Stretch Time ii: Stretch Labor iii: Stretch Facilities iv: Stretch Equipment. 7: Modify or Move Facilities & equipments 8: Schedule Down time during Periods of Low demand.

Strategies for Managing Demand To Match Capacity: 1: Communication 2: Advertising & sales Promotion 3: Service Variations 4: Modifying Timing & location of Service Delivery 5: By adjusting prices 6: Developing Complementary Services 7: Promoting Off-Peak Demand

Strategies to Manage Demand & Capacity in Waiting Lines: 1: Employing Operational Logic 2: Reservation systems 3: Differentiate Waiting customers. 4: Make Waiting fun, or at Least Tolerable.


MM means to collect & mix the resources of marketing in the manner that objects of the enterprise may be achieved & maximum satisfaction may be provided to the consumers. MM Elements: 1: product 2: price 3: Promotion 4: Place Extended ps for Service 5: People 6: Physical evidence 7: Process.

Levels of Service Product: 1: Core/ Benefit services 2: Expected services 3: Augmented Service 4: Potential service.


1: Service Product Mix: It consist of all the different product lines a company offers.3 dimensions of Service Product mix: A: Width of the Service Product Mix: No of different product lines a co is offering. B: Depth of the Service Product Mix: It is the no of product items within each product line. C: Consistency in Service Product Mix: It is relationship amongst product lines in terms of their sharing the end use, distribution outlets, consumer groups & price range. BRANDING SERVICE PRODUCT: Acc to AMA, a brand is a name, term, sign, symbol or design or a combination of these, intended to identify the goods or services of one seller or a group of sellers & to differentiate them from those of their competitors. Brand Development for Service Products: 1: Brand Extensions 2: Multibranding 3: Cannibalization: when one brand eats into the current & potential market of another of the same service firm. 4: Co-Branding 5:Private & Generic Brands. Product Life Cycle Concept Of Services: 1: Introduction 2: Growth 3: Maturity 4: Decline New Service Development process:

Generation Of idea


Concept testing

Business analysis & design ofServic e

Test Marketing

Infrastructure Development

Service Launch

2: Service Pricing: Characteristics of service Pricing: 1: Negotiations 2: Discounts 3: Quality Cost associated with Services:

1: Monetary Costs: Ex Doctors Consultation Fees, Cost of medication. It is cost which can be calculated. 2: Non Monetary costs: i: Time Costs ii: Search costs iii: Convenience Costs: If customer have to travel to a service, they incur a cost & the cost becomes greater when travel is difficult, as it is for elderly persons. iv: Psychological costs: Fear of not understanding, Fear of uncertainity, Fear of rejevtion etc. Factors In Setting Pricing Objective: 1: Planned market Position: 2: stages of the Life Cycle 3: Competitive Situation 4: strategic Role

Pricing Objective: 1: Profit Maximization: a: To achieve a Targeted Return on investment B: To maximize Profits. 2: To increase Sales Volume 3: Status-Quo Oriented Objectives: a: Competition Rendezvous b: Price Stabilization. 4: Society Oriented objective 5: Survival 6: Maximize Market Share 7: Service Quality Leadership 8: Operation Oriented Objective

9: Patronage oriented objective: Price may be used effectively to develop loyalty & relationship with customers. Many companies used this to profit maximization as a future oriented strategic option.

Service Industry Pricing Strategies/ Methods: 1: Cost-Based Pricing: It includes Variable cost, fixed costs, Financial costs & profits. 2: Competition Based Pricing. 3: Demand Oriented Pricing: it includes by customer, By product or services & by location, by time & by quantity. 4: Value Based Pricing: It includes Price Discounting, Odd Pricing, penetration Pricing (initial price is low) 5: Bundled Pricing: 6: Prestige Pricing 7: Market segmentation Pricing 8: Loss Leadership Pricing 9: Bid Pricing 10: money-back Guarantees

Factors affecting Pricing Policy: 1: Cost of Producing the Service & Breakeven analysis. 2: Competitors Pricing 3: Demand Levels & elasticity 4: Regulatory Factors 5: Positioning 6: Marketing Mix

3: Promotion/ Communication of Promotion:

Acc to Philip kotler, Promotion compasses all the tools in the MM whose major role is persuasive communication. Characteristics Of Promotion: 1: Customers are informed about the product or services of the co, either the time of introduction or any change made in existing product. 2: Customers are reminded of the products & services of the co. 3: Customers are requested or persuaded to purchases the products & services of the co. 4: Promotion includes advertising, personal selling, & other sales promotion techniques. 5: Promotion activities are performed by the manufacturer. Need For Promotion: 1: It creates Images such as prestige, Discount or Innovative- for the co & its goods & services. 2: it creates Reputation that reduces perceived risk 3: It adds Direct Promotional Values 4: it Reassures

Communication Issues for Service Marketers: 1: Technology 2: Budgetary constraints 3: content 4: Delivery Promotion mix: Acc to Philip Kotler , A companys total marketing communications mix also called its promotion mix consist of specific blends of advertising, personal selling, sales promotion, publicity & the direct marketing tools that the co use to pursue its advertising & marketing goals. 1: advertising: a: Services are generally more difficult to evaluate than the products. b: Creation of Credibility

c: Value Description d: Creation of assurance e: Changing Customer perception f: New Services 2: Sales promotion: a: Word-of-mouth publicity b: Role of employees c: Role of Personal selling d: Sampling of the Services e: Customers as New Customer Inductors f: discount for Existing Customers g: sign-on bonus h: Prize Draw or Lucky Gifts. 3: Public Relations a: Press Relations or press agency b: Product Publicity c: Public affairs d: lobbying: building & maintain relations with govt officials e: Investor Relations f: Development 4: Direct Marketing 5: Event sponsorship/Institutional sponsorship 6: Flyers in Newspapers, at shopping centres 7: Cause-Related Marketing 8: Adventure Marketing 9: Personal Selling

GUIDELINES FOR DEVELOPING SERVICE COMMUNICATION: 1: Word-of-mouth Network 2: Service should promise what is possible 3: Service should make Tangible the Intangible 4: Employees as a Target of Communication 5: Role of Personal Selling 6: Managing Expectation 7: Make the Service Comprehensible 8: Communications Continuity

4: Place: The place or distribution of services is discussed in light of: 1: Location 2: Accessibility & Availability 3: Channel of Distribution/ Direct distribution: a: Company resources b: Type of Services c: Geographic Spread of the Market d: Legal & Political restriction on Foreign operation e: Levels of technical skill or expertise required to deliver the service satisfactorily. f: Customer preferences. 4: Service inventory storage 5: Managing Channels: a: Intensive distribution b: Selective distribution c: Exclusive distribution. Decision about Place:

1: Nature of Service 2: Nature of interaction 3: Nature of customers Demand 4: Competitive positioning 5: Natural geographical Location 6: Technological advancements 7: Dependency on other services 8: Infrastructural Facilities 9: Target Market Decision. Flexibility In Consumption: 1: Involvement of Purchases 2: Demographic Profile 3: Whom the services is directed to or Offered for 4: Kind of Service

Type of Intermediaries for Service Delivery: 1: Agents & brokers: Agents: a: service Providers Agents b: Selling Agents 2: franchise Operators 3: Electronic Channel 4: seller & buyer agents.

Extended Marketing Mix:

Reasons for Extended Marketing Mix:

1: The intangible nature of services is overlooked in most analyses of the mix. 2: The promotion mix of the traditional 4ps fail to recognize the promotion of services that takes place at the point of consumption by the production personnel, unlike the situation with most physical goods, which are normally produced away from the consumer so that production personnel have no direct investment in promotion to the final consumer. 3: The price element overlooks the fact that many services are produced by the public sector with no price charged to the final consumer.




Customer Services




5: People: The services are pre-dominantly people based. The concept of internal marketing suggest that the employer should apply market research, market segmentation & traditional marketing activities like advertising in order to attract employees & make them performed in desired way. Nature of service Delivery: 1: inseparability of production & consumption: 2: difficulty in balancing demand & supply of Services 3: Lack of Standardization in services. 4: Recovery services. Role of the employee in service marketing: 1: High Contact: People Based Services: Education, dental, medical services etc. a: Professional b: non professional : Baby sitting 2: Low-contact equipment based services.

Selection & Recruitment: The recruitment of the frontline employees is one of the key success areas in service marketing. Basic step for the process are: 1: Preliminary stage: a: Identification of vacancy b: Develop job profile- review job description & person specification. c: Consider internal sources d: consider using specialist recruitment agency e: advertise- internally & externally f: process applications g: Screen application for shortlist. 2: Selection stage; a: Arranging Interviews; venue, timing, date

b: Determine process for selection; formal/informal interviews, use of pre-selection test, presentations. c: Conducting interviews d: offer/Acceptance e: Formal appointment 3: Follow-Up Stage: a: Induction b: Training c: Ongoing staff development & appraisal

Training & Development: 1: identification of training needs 2: Implementation of Training Programs 3: evaluation of Training Effectiveness Training can be given to below mentioned areas: 1: Functional areas 2: Personal development 3: Organizational development 4: Appraisal systems

Empowerment Suggestion Involvement Job Involvement High Involvement

6: Process: It is the way of undertaking transaction, supplying information & providing services on a way, which is acceptable to the consumer & effective to the organization. Characteristics of the service Process: 1: Customer participation in the process 2: Location of service Delivery 3: service itself: is it process sependent. 4: High contact or low contact services 5: Degree of standardization 6: Complexity of the service

Service Delivery process/Blueprint: Blueprinting is a graphical approach proposed by Shostack, designed to overcome problems that occur where a new service is launched without adequate identification of the necessary support functions. A customer blueprint has 3 main elements: 1: All of the principal functions required to make & distribute a service are identified, along with the responsible co unit or personnel. 2: Timing & sequencing relationships among the functions are depicted graphically. 3: For each function, acceptable tolerances are identified in terms of the variation from standard that can be tolerated without adversely affecting customers perception of the quality. The Purpose of setting down clear outlines are: 1: to ensure that the services is carried & in the fastest, most efficient & cost-effective manner possible. 2: To enable service quality to be monitored & benchmarks to be put in place thus allowing accurate measurement of both quality & productivity. 3: To facilitate staff training & enable individuals to carry responsibility for individual stages of the service transactions & delivery. 4: To reduce the amount of divergence thus enabling accurate budgeting & human resource planning etc to take place.

Preparation of blueprint: 1: Representing a (Service) Product in the form of its Molecular structure 2: Breaking down the process into Logical steps 3: Recognizing the Variability in the process 4: Identifying the Back-stage elements in the process

Advantages of blue Printing: 1: provides an overview 2: Identifies Fall points 3: Improved service design 4: Rational service design 5: Continuous quality improvement 6: Provides integrated view of service 7: Identifies resources 8: Constitute a Rational basis for both external & internal marketing 9: Facilitates Top-down bottom-up approach to quality Improvement.

7: physical Evidence: It is defined as the environment in which the service is delivered & where the firm & the customer interact; and any tangible commodities that facilitate performance or communicate the service. It plays a role in enhancing customers perception of the service quality. The physical evidence of a service is a tangible clue, which creates an impression about the service or the setting of a service or provides the proof of delivery. Elements of physical evidence:

Service escapes Facility exteriors Exterior design Signage Parking Landscape Surrounding environment Facility interiors Interior Design Equipment Signage Layout Air quality/temperature

other tangibles

Business Cards Stationary Billing statements Reports Employee Dress.uniforms,Brochures

Web Pages Virtual servicescape

Types of physical evidence: 1: essential evidence: the physical elements that are an integral part of the service offer but are not passed on to the customer constitute essential evidence. In other way, without these elements, service cannot delivered. Ex gym: No physical evidence while going out. 2: Peripheral Evidence: the tangibles offered by service providers to customers, to confirm the delivery of service or as a simple gift, constitute peripheral evidence. Ex: bill received after having food in restaurant so only the confirmation of service had. Guidelines for Physical evidence strategy: 1: Recognize the strategic impact of Physical Evidence 2: Map the Physical Evidence of Service 3: clarify the role of Servicescape. 4: Assess & identify Physical Evidence Opportunities.

5: Be prepared to update & modernize the events. 6: Work Cross-functionality.

Significance of physical Evidence: 1: increased productivity 2: creating good impressions 3: increased credibility 4: Differentiation from competitors 5: Service Quality Management \6: Repositioning of Service

Service Scape: 1: Self-service 2: Interpersonal Services 3: Remote Service. Objective of the Servicescape: 1: Focus on Customers 2: Focus on Employees 3: Focus on the Firm


Developing & Managing the customer service Function: Acc to Turban, Customer service is a series of activities designed to enhance the level of customer satisfaction, i.e, the feeling that a product or service has met the customer expectation. Features of Customer service: 1: it is a strategic process for providing value-added services to the customers. 2: it always ensures a trade-off between cost & service. 3: it keeps the customer happy & loyal 4: it brings about a competitive advantage in the market place, increases sales & improves profits. 5: it reflects the corporate vision. 6: It generally starts with an order entry & ends with the delivery of service to customers. Improving Customer service: 1: Divide the basic Service into Service Separate Activities: 2: conduct periodic surveys. 3: provide necessary infrastructure & advanced technology. 4: Track changes in the external environment

Customer Service Management cycles: Stage1: Understand the Customers: it include a: Selecting the target, Defining the Service & the users of the service. b: Determining the service characteristics. c: Developing customer profile d: Understanding customers perception of the service provider. Stage 2: Set Customer Service standards:

a: Provide direction to their employees to serve the customers better. b: Handle employee expectations as the standards are predetermined. c: Set the ground for recruiting the right people, training them & rewarding them d: Bring in uniformity & consistency in the organization. There are 2 major dimensions of customer service: 1: Standard in procedural Dimension of Customer Service: It involves the time taken for service delivery, the flow of different service components in terms of their co-ordination & the flexibility offered. It also involves anticipating customer needs, maintaining effective communication with the customers, establishing customer feedback system & effective supervision & organization. 2: Standard in personal dimension of Customer Service: It often involves customer emotions & perception & is, therefore, unpredictable in nature. It involves the appearance,& body language of the service personnel, their tone of voice, their tone of voice, their tact of selling & also their attentiveness & involvement in helping the customer making right choice. Setting the Standards in stone: 1: The standards must be set in accordance with the organizations goals & objectives. 2: Before determining the standards, the management should discuss them with employees & also with customers if possible & solicit their opinions & suggestion. 3: The standards should be communicated to all the employees at all levels in the organization. 4: the standards should be revised from time to time to ensure that they are in tune with the changes in the organization & the external environment. Stage 3: Encourage Teamwork & Customer-Orientation among Employees: Customer Focused personnel: customers patronize firms that provide good service & take time to demonstrate they care about the customer. 1: Customer focused job descriptions 2: Customer Focused recruiting. 3: Customer focused orientation & training.

Stage 4: Establishing Control Systems: Success of service management process depends on proper control of employees & service processes. Control system could be in form of feedback from employees & customers on a formal service audit system to evaluate the performance of organization. Customer service audit is also important for evaluation & control of service function. A customer service audit asks managers the following questions: 1: What are customer service objectives? 2: What service is provided? 3: How to Compare with competition? 4: What service customer wants? 5: What are customer service demand patterns? 6: What trade-off customers are prepared to make?

Step 5: Preventing Problems from Occurring

Marketing plan For Service: Acc to AMA, Marketing planning is the work of setting up objectives for marketing activities & of determining & scheduling the steps necessary to achieve such objectives. Characteristics of Marketing planning: 1: It is a formal & systematic approach towards planning of all marketing activitiesproduct positioning, price setting , distribution channels etc. 2: It is a rational activity, requires thinking, imagination & foresight. 3: It is a forward looking & dynamic process designed to promote market oriented business actions. 4: Planning is concerned with two things: a Avoiding incorrect actions & b: Reducing frequency of failure to exploit opportunities 5: It is a process of deciding in advance what to do & how to do it. If the marketing planner desires to achieve a target market at some future date . 6: It is basically a decision making process.

7: it is done by the marketing department. Importance of Marketing Planning: 1: To offset future uncertainties. 2: Help in management by Objectives. 3: Considerations of Opportunities & problems 4: profitable employment of resources 5: Economy in operation. 6: Helpful in co-ordination 7: Helpful in control 8: Customers want Satisfaction 9: Performance Standards

Problems in Marketing planning: 1: Diversity of alternatives 2: Vacillating Policy of the government. 3: Rapid changes in costs. 4: Time factor 5: Difficulty in Marketing research 6: Scientific Marketing planning not possible 7: No control over supply. 8: inadequate managerial ability 9: Corporate inflexibility 10: Lack of line management support 11: Cost of Planning 12: Rapidity of environmental Changes.

Marketing Planning Process:

Strategic Context 1: defining Organization Mission 2: Corporate goals & Objectives

Situation Review 1: Marketing Audit 2: Swot Analysis 3: Key Assumptions

Marketing Strategy Formulation 1: Establishing Marketing objectives 2: Developing means to achieve marketing objectives 3: Forecasting the Outcome 4: Identify the alternatives

Resource Allocation & Monitoring 1: Marketing programs 2: Monitoring, control & review.

Developing & Maintaining Quality In Services:

Perspective on Service quality: 1: Transcendent Approach: a mark of uncompromising standards & high achievement 2: Product-Based approach: it sees quality as a precise & measurable variable. Differences in quality, it argues, reflect differences in the amount of an ingredient or attribute processed by the product. 3: User-Based Approach: It start with the premise that quality lies in the eyes of the beholder. 4: Manufacturing-Based approach: It is supply based & is concerned primarily with engineering & manufacturing practices. 5: Value-Based Approach: It defines quality in terms of value & price

How Service Quality is Perceived:

Expected quality

Experienced quality Total Perceived quality

1: Market communication 2: Image 3: Word-of-mouth 4: Customer Needs Technical quality: What


Functional Quality: How

1:Technical Quality: It gives basic service package 2: Functional Quality: Customer also influenced by how they receive the service & how they experience. 3: Image: Firms image at the corporate as well as at the local level is of utmost importance in quality perception. 4: Expected Quality versus Experienced Quality: 4 important factors: a: Market Communication: Service firms communicate, through direct & indirect channels, to the target market relating to the features specialties of the BSP. b: Image c: Word-Of-Mouth communication d: Customer Needs 5: Total Perceived Quality: TPQ of customers can be calculated by comparing expected quality with experienced quality.

Dimensions of quality: 1: Performance 2: Features 3: Reliability 4: Conformance 5: Durability 6: Serviceability 7: Aesthetics 8: Perceived Extended Dimensions: 1: Reliability: Delivering on Promises 2: Assurance: Inspiring Trust & Confidence 3: Tangible: Representing the service Physically

4: Empathy: Treating Customers as Individuals 5: Responsiveness being willing to Help

Gap Model Of Service Quality Delivery: Gap 1: Not knowing What Customers Expect: Reasons are: 1: No direct interaction with customers. 2: Unwillingness to ask customers about expectations 3: Unpreparedness to address the expectation 4: Lack of Market segmentation to understand the needs of each segment.

Gap 2: Inability to set the right type of Standards: 1: Absence of Customer-driven standards of service Delivery 2: Absence of formal quality-control goals 3: Vague or undefined service design.

Gap 3: Not Delivering to Service Standards 1: Lack of right type of employees or their training in service delivery. 2: Lack of empowerment of the employees 3: Lack of training to the Franchisees staff 4: Failure to Predict/Match Supply & Demand fluctuations. 5: Insufficient Customer education.

Gap 4: Mismatch between Promises & Performance: 1: Unrealistic Communications to customers. 2: Overpromising through advertisement or personal selling

3: Lack of internal communications.

Improving Service Quality: 1: Assess the effectiveness & impact of operating practices 2: teamwork & Management support 3: People drive service quality 4: Quality efforts should continuously improve 5: There is no substitute to Leadership in Service quality. Maintaining Service Quality: 1: Customer Defined Standards 2: Benchmarking 3: Complaint Solicitation & analysis 4: Lost customer Analysis. 5: Critical Incident Study: it includes Recovery, Reconciliation with the customers,

Acc to Morgan & Hunt , All marketing efforts directed towards establishing , developing & maintaining successful relational exchanges. Few of the key elements are: 1: Interaction between suppliers & customers is moving from a transaction one to a relationship focused one. 2: The relationship marketing emphasizes on maximizing the life time value of customer segments & on enhancing customer satisfaction 3: It is concerned with working, developing & enhancing relationships with internal markets within the organization & building substantial external relationships with customers, suppliers, referral source, influence markets & recruitment markets.

Goals of Relationship Marketing: 1: Building Relationships 2: Maintaining Relationships. 3: Enhancement of Relationships. Importance of Relationship Marketing: 1: It builds goodwill in the market which in turn generates additional traffic to the outlet. 2: It is a highly effective technique to keep track of buying habits, intensions, self images & spending patterns. 3: It leads to the development of loyalty & satisfaction which in turn increases transactions with the same customers, again & again. 4: It can stop customers switching to another brand. 5: It results in positive image projection & enhanced brand equity on account of high degree of customer relation & loyalty. 6: It calls for listening & caring for the customers which in turn develop a sense of belongingness & a soft corner for the co itself in the mind of customers.

Challenges of Relationship Marketing: 1: Gaining access to the appropriate systems & executional capabilities. 2: Developing the right organizational structure. 3: Budgeting for lifetime customer value 4: Managing an integrated communication program. 5: Building alliances between manufacturers & retailers. Four Rs of Rewarding Relationships:: 1: Relationship 2: Realization 3: Response 4: Relevance & Respect

1: Discount Coupons 2: Gifts 3: Membership benefits

1: Integrating systems with customers. 2: Making joint Investment on technology 3: Sharing processes or equipment

Continuous Quality Service To Customers

1: Special attention. 2: Informing customers about new services. 3: Wishing customers on their anniversaries

1: Personalizing Sevice. 2: Offering a combination of services that suits customers specific need.

Strategies for Building Relationship: 1: people 2: Process 3: Product 4: Organization 5: Setting Satisfactory Service Standard. 6: Concentration on competitors 7: Customer Analysis 8: Cost Analysis 9: Concentration on the Paying Ability of Customers. 10: knowledge of Purchase behavior pattern. 11: Differentiation in prices & quality standards 12: Focus on reducing dissatisfaction. 13: Attention on changing requirements of Customers 14: Concentration on performance. 15: Training to supply chain employees 16: Empowerment to service providers. 17: Incentivizing service providers. 18: Augmenting Intangible benefits 19: Visit to the point of usage of the product 20: Develop partnership with customers 21: Organizing Customer Clubs 22: Relationship-based pricing schemes 23: Identifying with social events & concern for societal problems. 24: Effective customer communication system

25: Customer complaint monitoring cell 26: Developing customer satisfaction index 27: Focus on preventive action 28: concentration on Customer Satisfaction research. 29: Focus on focus group 30: Building switching barriers.

Six Market Framework of Relationship Marketing:

Internal Markets

Supplier & Alliance market

Referral Markets

Recruitment Markets Influence Markets