B2B Marketing Managing Services PGDM–B2B–RS–13

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B2B Marketing Managing Services PGDM–B2B–RS–13. Amarnath Krishnaswamy. Plan for this Session. Managing Innovation Management of Innovation Innovation & Technology Innovation & the Development of New Products Quality Function Deployment Managing Business Services Role & Importance - PowerPoint PPT Presentation

Transcript of B2B Marketing Managing Services PGDM–B2B–RS–13

10-03-02 PGDM-B2B-RS-13 (Ch 12 - Managing Services)Quality Function Deployment
Managing Business Services
b) Strategic Innovation – Induced / Autonomous, Characteristics
2. Innovation & Technology
c) Relating Innovation to Technology – Common platform for products
d) Commercialization – Time to Market / Spread / Number of Products / Breadth of Technology
3. Innovation & New Products
d) Choice of Team for Situations
XIME / PGDM-B2B –RS–13
Establish link between these attributes and the product design
Process involves understanding, and then marrying:
The Voice of the Customer
The Voice of the Engineer
Planning approach for QFD termed House of Quality!
XIME / PGDM-B2B –RS–13
Necessary to identify, and focus, on the main ones
Relatively easy to do if the market is homogenous
Weight each attribute: enables QFD to balance it with cost
XIME / PGDM-B2B –RS–13
Translate customer needs into product design
Put onto a matrix against what the customer wants, and compared with competition
XIME / PGDM-B2B –RS–13
Success
Obsolete in terms of what’s available
Customers satisfied with existing product
XIME / PGDM-B2B –RS–13
Wood’s First Law Of Procrastination
NOW is the time to do things later!
Wood’s Second Law Of Procrastination
Procrastinate today! (Tomorrow may be too late.)
Wood’s Third Law Of Procrastination
*
1. Water purifier
What is common to all of them?
XIME / PGDM-B2B –RS–13
1990-91 44% of GDP
2000-01 53% of GDP
2007-08 63% of GDP
Employment
“Services” 34%, second only to “Agriculture” (52%)
Growth in other sectors (Manufacturing, Agriculture, etc) will spur growth in “Services”
New “Services”
Financial services – efficient transformation of savings into investment
– deployment of resources to yield highest returns
Telecommunications – overall economy
Education & Health
Distribution & Delivery
Pure Services
Economic reasons
Technological reasons (Not as competent as the service provider e.g. Security services)
Less hassles
Faster (Takes “time” to learn to do the service well)
XIME / PGDM-B2B –RS–13
Services
Products
Intangible
Tangible
1.
2.
1. Tangible vs. Intangible
Have said that “Services” are intangible. However, there are very few pure “Service”; would require some “tangibles” too.
E.g. Grease: Tangible product, used for Maintenance (Intangible).
Conferences: Intangible, but products like food etc used.
Holidays: Would require “tangibles” like swimming pools, etc
Classification would depend on the way the customer looks at it. Kicks in because most offerings are a mix of products and services.
2. Production & Consumption
Even when the “Service” is a combination of Tangibles (Produced earlier) and Intangibles (Produced at the time of delivery), “satisfaction” comes to the customer on the delivery of the Intangible.
3. Storage
Services can’t be stored. If not delivered when wanted, the opportunity / revenue is lost.
Reconcile this with the situation of the customer willing to wait till the service provider can deliver! Is this “storage”?
What do you call the “capacity” to service? Is it “service inventory”? Do you maintain slack in capacity to ensure no loss of business”
Demand for services fluctuates, and is difficult to estimate.
4. Variable vs. Standardized
Mentioned “variable”. What about uniformity of services across hotel chains?
This is a “grey” area; but the classification is clear in most cases.
5. Ownership
Service providers are the owners of the ‘service’ rendered. Not so if it is a product; though with “lease financing” this has also become a grey area. In this case “leasing” can be looked at as the product, not the equipment.
XIME / PGDM-B2B –RS–13
Important for the service provider to look at:
Attributes that are important to the buying segment
Variance of these attributes amongst buyers in the segment
How all service providers rate on these attributes
XIME / PGDM-B2B –RS–13
Attributes can broadly be classified as:
People related
Equipment related
Examples of industries and the attributes they look for are:
Importance of people related attributes
Can compensate for inferior technical quality (product). The frontline salesman must bond with the customer in terms of appearance, communication etc etc.
XIME / PGDM-B2B –RS–13
Services – Importance of Attributes
Extent To Which Equipment (Facility)-Related Attributes Form Part Of The Service Package
Extent To Which People-Related Attributes Form Part Of The Service Package
High
Medium
Low
High
Airline, Car rentals
Selection can be looked at on:
Determinant Attributes
Minimizing Risk
Differences in attributes enough, so customer minimizes risk (Market reputation etc)
XIME / PGDM-B2B –RS–13
Can be measured
Weights decided by the customer
XIME / PGDM-B2B –RS–13
Focus on what buyers expect vs. what they need
Development of the Service Package
Defining customer benefits
Articulating the benefits
1. Identifying segments
In making “segments”, more gainful to the seller to group “expectations” and develop a common package for them. The buyer will be rating the seller on these attributes; not so much on the his “needs”.
In the case they coincide, so much the better.
2. Service Package
a) Customer benefits
What the customer wants
b) Articulating the benefits
What the seller can give against the benefits wanted by the buyer
c) Service specifications
d) Employee Roles / Skills
The kind of people that would be involved – their skill levels
XIME / PGDM-B2B –RS–13
At time of “delivery”, make sure “physical evidence is available!
Translated into
Level 1
Buyer Benefit
Delivery to Buyer
Service + Processes + People
2) Benefit customer states is often not the ‘real’ one.
a) ‘C’ class item (Fumed Silica - Pharmaceuticals). Price is what the purchaser would battle over; convenience of a local mfr (vs. imports) glossed over
Tangible (Product) vs. Intangible Service (Take the hassles of imports away for a “low” value item)
b) Quality aspects vs. the real reason of credit. (Wood working adhesives)
3. Hutt & Speh – Conferences in hotels. Good rooms, food et al!
B) Benefits offered by seller
1. Translates buyer’s real needs into USPs
2. Ask class to do this for the examples above
C) What the seller will deliver
1. Elements – tangible and intangible (Use “Rocket Singh”!)
2. Service levels – quality etc
Physical evidence – support for the ‘quality’ of the service. E.g. – warranty / check-backs etc.
XIME / PGDM-B2B –RS–13
Pricing depends on many factors”
Demand:
What does one do with “idle” capacity?
Bundling
Pure
Mixed
New Business
Cross selling
A) Demand
1. As it is difficult to forecast, can end up with capacity shortfalls or excesses. Shortfall – loss of revenue.
Does on guard against it by creating excess capacity? What does one do with the excess?
Pricing adjustments – off/on season rates, special offers etc are one way out.
B) Bundling
Pure:
Components not available individually – buy a package! E.g. IE bundling with Windows. Is considered a restrictive trade practice.
Mixed:
Where the whole would be less expensive than the sum of the individual components.
C) New Business
Cross Selling – New service to existing customer or existing services to new customers. Bundling could be used here too, with appropriate pricing
Bundling must:
1. The package is worth more than the sum of its parts
2. The bundle brings order and simplicity to a set of confusing or tedious choices
3. The bundle solves a problem for the consumer
4. The bundle is focused and lean in an effort to avoid carrying options the consumer has no use for
5. The bundle generates interest or even controversy.
Examples of ‘Bundling’ of services
1. Holidays – Travel, Hotels, Airport transfers, Sight seeing
2. Home utility services – bill payments, repairs (of all sorts)
XIME / PGDM-B2B –RS–13
Wrong segmentation
Defining buyer benefits and matching it with the “service”
Wrong segmentation – the segment must want the ‘service’ being offered. If one were to sell short term health insurance to students in college …
Marketing Mix
Bag Of Snakes
*
Subject: Managing Channels