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Pricing of services
Service Promotion Mix
‘Place’ factor in services marketing
‘People’ in services
Service ‘Process’
Capacity planning
Capacity scheduling
• Formulating marketing mix for services is as important as
for products.
Product
People (service)
Process
Place,
Place &
cyber- Customers Price
Price
Time
space & Customers
Customers
time
Promotion
Physical evidence
People
◦ All human actors who play a part in
service delivery and thus influence the
buyer’s perceptions: namely, the
firm’s personnel, the customer, and
other customers in the service
environment.
customer
service employees
other customers
Physical Evidence
◦ The environment in which the service is
delivered and where the firm and
customer interact, and any tangible
components that facilitate performance
or communication of the service.
•atmosphere
décor, music etc.
•equipment
•facilities
•uniforms
Process
◦ The actual procedures, mechanisms,
and flow of activities by which the
service is delivered—the service
delivery and operating systems.
Other tangibles
Product mix
Style changes
Service improvements
Process line extension
Supplementary services/new service
Product line extension.
major innovation
Steps in new service
development
* Idea generation – concept screening – testing
the concept—design service & assess market
potential – cost analysis – test marketing – final
launch
* Need identification – size of market – cost-
benefit analysis – introduction of new product
Culture Personality
Valuesthe
Values theBrand
Brand
(brandas
(brand asfriend)
friend)
Satisfied &&Switching
Satisfied Switching Cost
Cost
SatisfiedCustomer
Satisfied Customer
(no reason
(no reasontotochange)
change)
NoBrand
No Brand Loyalty
Loyalty
(customer will
(customer will change)
change)
Brand- Brand- Brand- Brand-
Branding Sponsor Name Strategy Repositioning
Decision Decision Decision Decision Decision
•Manu- brand •Line
facturer names extension
•Blanket
brand family •Brand •Reposi-
name extension tioning
•Brand •Distribu- •Separate
tor •Multi-
•No brand (private) family brands •No
brand names reposi-
•Company- •New tioning
•Licensed individual brands
•Individual
brand names •Cobrands
Product Category
Existing New
Brand Name
Existing
Line Brand
Extension Extension
New
Multibrands New
Brands
Lack Poor
Foreign
Distinctive
Language
Meanings
Easy to:
Suggest Suggest
Pronounce
Product Product
Recognize
Qualities Benefits
Remember
Pricing of services
• Research and expertise pertaining to the
pricing of services is found lacking
prestige/ image
Drawbacks :-
Competitors may not be the best parameter,
service standards/delivery processes may differ.
Franchises
• Approaches to empowerment:-
• Provide needed support
• Train the intermediary to deliver quality service
• Enable to develop customer driven service
processes
• Change to co-operative management structure
‘People’ in services
• Includes both, employees and consumers - moment of
truth is dependent on both
Servicescape
Atmospheri Exterior design
c Signage
Parking
Sight Landscape
Sound Surrounding env
Smell Interiors
Touch Equipments
Facilities
Layout , etc
dimensions
Designing of servicescape will depend upon whether
it is a elaborate or lean servicescape , elaborate
service scape communicates heavily through
physical evidence
Communication:-
Tangibilizing the service
Tangibilizing the message
Managing trust
Managing differentiation
Re-positioning
Improving productivity
Service process
Service design should essentially satisfy the
customers as well as be operationally efficient
. It involves series of activities, their
sequence, procedures that have to be
efficiently performed for delivery of service.
People’s decision
Operation structure
& benchmarks
blue print as a key tool in
service design
It is the visual depiction of the process of service delivery,
the roles of the employees & customers & the visible
elements of the service.
Support processes
Line of interaction
Line of visibility
Objective:-
Gives companies a standard to measure performance
It allows companies to identify best ways to get
competitive advantage
Allows companies to overcome problems or pursue
targets to confirm competitive advantage
• Publicity
• Personal selling
• Word of mouth
• Telemarketing
Services
Managing demand &
capacity
Fluctuating demand and perishable nature of services
poses a major challenge for service organizations
Product variation
Pricing strategies
Invent rising demand through queuing & reservation
Queuing system
Benchmarking
Capacity planning
Throws light on the quality and quantity of service needed
in future
• Fighting competition
• Enhancing profits
• Reduces wastages
Case
A passenger with a confirmed ticket on early morning flight from
Ahmedabad to Mumbai could reach Ahmedabad only by 3.30 pm because
the train by which he was traveling to Ahmedabad got marooned due to
floods at night. He reached Ahmedabad traveling by special buses arranged
by the railways.
The assistant then endorsed the morning ticket for either of the evening
flight (without any extra charges) and told him to go to the airport
immediately and enter his name among the wait-listed passengers. When
he reached the airport in about 30 minutes, he found that his name was
already among the wait-listed passengers. Apparently the assistant in the
office had called up and entered his name in the list