Late Smt.

Shardaben Ghanshyambhai Patel Institute of Management Studies, Dharmaj

Subject: Service and Relationship Marketing (Sem IV) Module: I Faculty: Ms. Priyanka Patel Year: 2011-12

1. Define Services. What differentiates Goods and Services? Services are economic activities offered by one party to another, most commonly employing timebased performances to bring about desired results in recipients themselves or in objects or other assets for which purchasers have responsibility. In exchange for their money, time, and effort, service customers expect to obtain value from access to goods, labor, facilities, environments, professional skills, networks, and systems; But they do not normally take ownership of any of the physical elements involved.

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Compiled By: Ms. Priyanka Patel, SGPIMS-Dharmaj

2. Explain the marketing mix for services. 1. Product Elements: Planning marketing mix begins with creating a service concept that will offer value to target customers and satisfy their needs better than competing alternatives. Service product consist of a core product that responds to customers primary need and an array of supplementary service elements that help customer use core product effectively as well as adding value through useful enhancements 2. Place and Time: Delivering product elements involves the decisions on Where and When to deliver, How to deliver, Physical or electronic channels, customer control, speed and convenience to delivery etc. 3. Price and Other User Outlays : Marketers must recognize that customer outlays involve more than price paid to seller. 1. Traditional pricing tasks: 1. Selling price, discounts, premiums, 2. Margins for intermediaries (if any) and 3. Credit terms. 2. Identify and minimize other costs incurred by users: 1. Additional monetary costs associated with service usage (e.g., travel to service location, parking, phone, babysitting, etc.) 2. Time expenditures, especially waiting 3. Unwanted mental and physical effort 4. Negative sensory experiences 4. Promotion and Education: Promotion has three vital roles; providing needed Information and advice, persuading target customers, and encouraging them to take action at specific times. Marketing communication tools used are Media elements (print, broadcast, outdoor, retail, the Internet, etc.), Personal selling and customer service, Sales promotion, and Publicity/PR. 5. Process: In Services, How firm does things is often as important as what it does. Customers often actively involved in processes, especially when they act as co-producers of service delivery. Badly designed processes waste time, create poor experiences, and disappoint customers. 6. Physical Environment: Service firms need to manage physical cues carefully, because it can have deep impact on customers impressions. Service firms should create and maintain physical

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appearances: Buildings/landscaping, Interior design/furnishings, Vehicles/equipment, Staff grooming/clothing, Sounds and smells, and other tangibles. 7. People: Interactions between customers and contact personnel strongly influence customer perceptions of service quality. Service firms devote significant effort in Job designing, Recruiting, Training and Motivating employees. 8. Productivity and Quality: Improving productivity is essential to reduce costs. Improving and maintaining quality is essential for building customer satisfaction and loyalty. Ideally, strategies should be sought to improve both productivity and quality simultaneously. 3. Explain the types of processes that affect the nature of services. (Categories of Services)

People Processing Customers must: - Physically enter the service factory - Co-operate actively with the service operation Managers should think about process and output from customers perspective To identify benefits created and non-financial costs: Time, mental, physical effort Mental Stimulus Processing Ethical standards required when customers who depend on such services can potentially be manipulated by suppliers Physical presence of recipients not required Core content of services is information-based. Can be inventoried

Possession Processing Customers are less physically involved compared to people processing services Involvement is limited Production and consumption are separable

Information Processing Information is the most intangible form of service output But may be transformed into enduring forms of service output Line between information processing and mental stimulus processing may be blurred.

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4. Explain the purchasing process for services in detail. 1. Prepurchase Stage 1. Customers seek solutions to aroused needs 2. Evaluating a service may be difficult 3. Uncertainty about outcomes increases perceived risk 4. What risk reduction strategies can service suppliers develop? 5. Understanding customers service expectations 6. Components of customer expectations 7. Making a service purchase decision 2. Service Encounter Stage 1. Service encounters as Moments of Truth 2. Service encounters range from high- to low-contact 3. Understanding the servuction system 4. Service marketing systems: high-contact and low-contact 5. Role and script theories 6. Theater as a metaphor for service delivery: An integrative perspective 7. Implications for customer participation in service creation and delivery 3. Post-Encounter Stage 1. Evaluation of service performance 2. Future intentions 5. Explain the paradoxes and dark side of technology and services. 1. 2. 3. 4. 5. 6. 7. 8. Control/Chaos Freedom/enslavement New/Obsolete Competence/Incompetence Efficiency/Inefficiency Fulfills/Creates needs Assimilation/Isolation Engaging/disengaging

6. Explain the types of risks involved in purchasing and using services. 1. 2. 3. 4. 5. 6. 7. Functional- Unsatisfactory performance outcomes Financial- Monetary loss, unexpected costs Temporal- Wasting time, consequences of delays Physical- Personal injury or damage to possessions Psychological- Personal fears and emotions Social- how others think and react Sensory- unwanted effects on any of the five senses
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7. What are the factors Influencing Customer Expectations of Service?

Desired Service Level: Wished-for level of service quality that customer believes can and should be delivered

Adequate Service Level: Minimum acceptable level of service Predicted Service Level: Service level that customer believes firm will actually deliver Zone of Tolerance: Range within which customers are willing to accept variations in service delivery

8. It is difficult for customers to evaluate services even after consumption Elaborate

Search attributes help customers evaluate a product before purchase- Style, color, texture, taste, sound Experience attributes cannot be evaluated before purchasemust experience product to know itVacations, sporting events, medical procedures Credence attributes are product characteristics that customers find impossible to evaluate confidently even after purchase and consumption- Quality of repair and maintenance work.
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9. Draw a flowchart for delivery of services for People Processing service Stay at a Hotel

10. Draw the sequence or time dimension of the Augmented product.

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11. Explain the flower of services.

Facilitating services Information - how to obtain and use a product or service - Information should be timely and accurate - Eg. Schedule/service hours, Conditions of sale, Usage instructions Enhancing services Consultation - consultation tailored to each customers needs and situation add value - Keeping customers records can help to improve consultation - Eg. Customized advice, Personal counseling Hospitality - Customers treated as welcome guest - Eg. Greeting, Waiting facilities and amenities, Food and beverages - Quality plays an important role Safekeeping - Customers prefer not to worry about looking after the personal possessions that they bring with them to a service site. - May be offered free or with charges - Eg. Child Care, valet parking, Safe deposit boxes Exceptions - Customers appreciate some flexibility when they make special requests and expect responsiveness when things dont go according to plan. - Special requests in advance- Dietary requirement, Religious observations Complaints or compliments Problem solving- Warranties, guarantees, medical emergency etc Restitution- Refunds, Compensation, Free repair

Order Taking - availability and securing commitment to delivery - Order taking should be polite, fast and accurate - Eg. Order entry, Reservations and check-in Billing - Bills should be clear, informative, itemized accurate and intelligible - Eg. Periodic statements of account activity, Machine display of amount due Payment - make transactions simple and convenient - good maintenance and rapid response troubleshooting if any equipment faces breakdown - Self service payment, Payment to whom (Payee or intermediary)

12. The Three Success Factors in New Service Development 1. Market synergy Good fit between new product and firms image/resources Advantage versus competition in meeting customers needs Strong support from firm during/after launch Firm understands customer purchase decision behavior 2. Organizational factors Strong inter-functional cooperation and coordination Internal marketing to educate staff on new product and its competition Employees understand importance of new services to firm 3. Market research factors Scientific studies conducted early in development process Product concept well defined before undertaking field studies

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13. The competition is high and the customer expectations are increasing day by day, In such a situation how can you develop new services? 1. Major service innovations New core products for previously undefined markets, Eg Fedex 2. Major process innovations Using new processes to deliver existing products with added benefits, Eg University of Phoenix 3. Product-line extensions Additions to current product lines, Eg Online Banking 4. Process-line extensions Alternative delivery procedures, Eg Amazon.com 5. Supplementary service innovations Addition of new or improved facilitating or enhancing elements, Eg Theme restaurant, Credit cards accepted etc 6. Service improvements Modest changes in the performance of current products 7. Style changes Visible changes in service design or scripts

14. Explain physical goods as a source of new service ideas

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