Marketing of Services

Reading on Competitive Strategy

Group 5
Alpa Bhatt
Frincy Clement
Jithin C R
Manish Govindan
Manju Nair
Umesh Krishna
Pravin P

The success story of Shouldice

Hospital
Surgery patients stay 3.5 days instead of 5 days
Doctors perform many more operations than anywhere else
The patients care for themselves
They get to the operating room on their own
walk to the recovery room
Take their meals in a common room

Shouldice accepts only one type of patient people whose

single complaint is a hernia

Concentrating on hernias enables Shouldice to produce a

highly competitive core service

1/1/2015

Marketing of Services | Service Companies: Focus

or Falter

The success story of Shouldice

Hospital
The tightly focused service strategy is the key to

Shouldices performance

Segmenting the market and concentrating on

one that is inexpensive to serve

Optimized its operations, fulfilled its mission and

enjoyed a handsome return

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Marketing of Services | Service Companies: Focus

or Falter

Market and Market Segments

Why develop a service strategy?

Develop an optimal mix and level of service for different

customer sets
Know your customers who are they?
What are their expectations?

How expensive is it to service their needs?

What are the payoffs?
Measure service performance
Identify conflicts between corporate strategy and customer

service

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Marketing of Services | Service Companies: Focus

or Falter

Market and Market Segments

Choosing the level of service

Too little loose customers
Too high Unviable or too pricy

Why segment?
Isolate homogenous set of customers who can be served at a

profit
Find out how much different segments value different layers of

service
Estimate costs and benefits

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Marketing of Services | Service Companies: Focus

or Falter

Market and Market Segmentation

1/1/2015

Market
segmentation

what
customers
need

Service
segmentation

what they
expect

Well focused,
comprehensive
marketing
strategies

market and
service
segments are
the same

Marketing of Services | Service Companies: Focus

or Falter

Segmentation - advantages

Improves productivity without affecting customer satisfaction

Substituting high touch with low touch

Handle demand fluctuations better

Overall pattern might appear random
Often made up of smaller, more predictable patterns
Easier to forecast

Identify undesirable demand and noncustomers

Firemen for cat rescue

Expand the role of customers

Co-producers

1/1/2015

Marketing of Services | Service Companies: Focus

or Falter

Segmentation success stories

Segmentation savvy local banks v/s efficient regional

and money center banks

UNBT, California with single branch shows healthy growth
Offers slew of incentives and hands on service for the wealthy
Policies tailored to keep noncustomers out
Better customer satisfaction
East Lansing State Bank offers virtually no service
Target segment : College students
Encourages ATM transactions
For teller services, extra charges to be paid

1/1/2015

Marketing of Services | Service Companies: Focus

or Falter

Classifying Customers
Manufacturers have no direct
contact since they sell via
distributors

Why difficult

Solution Classification can be done by examining a few key characteristics especially

Financials
Sales, repeat sales, cost of giving superior service to a different type

Perception of Quality depends on expectations

Eg: Discount Suits , High priced cars

Polite evasion might antagonize customers

Eg: General Motors

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Marketing of Services | Service Companies: Focus

or Falter

Identifying Target
Segments
Some customers are happy to self service
Cost ability and willingness to get service
Eg. Network Equipment Technologies Standard Equipments used by customers help service over phone

Now which customers are better targets?

Influential customers ,loyal demanding, sophisticated

Ranking Customers by Value

Without assigning customers to Tiers company will have issues getting maximum out of its service
capacity
Not all companies can add an extra segment
Airlines business+ vacation

Solution :
Pick segments that are similar as possible and keep priorities straight.
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Marketing of Services | Service Companies: Focus

or Falter

10

What Do Customers
Expect?
Research and analyze

~Neither assumptions nor industry norm or past

practices can give the correct

picture
Good service has nothing to do with what providers believes it is, it has only to do with
what customers believe

Good service results when the provider meets or exceeds customers expectation

Setting the expectation t right level is a tough job but it is expectation that decide the level
of service as bad, good or superior

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Marketing of Services | Service Companies: Focus

or Falter

11

What Do Customers
Expect?
7 limits to any

Service Positioning

3 Steps

company's ability set

Givens: segments targeted, their

expectations, strategy to exceeds
those expectations and positions
of competitors
Tactics to bring expectations in
line to service level
Uniquely distinguish company
from the competitors
Make customers expect slightly
less
Since service is intangible
benefits should be clear and real

Not all customers who bought the

same product or service have the
same need
Only Customers knew what they
want
Under promised and over
delivered

expectations
Reality: what customer has
experienced or perceive as
futile
Education. Values and
experience
Experience with other
companies and their ads
Psychological state of
customer

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Marketing of Services | Service Companies: Focus

or Falter

12

Group 5