classification of services
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Services Vs Goods Services Goods Intangible Tangible Heterogeneous Homogenous Produced in Buyer Seller interaction Produced in factory Production, distribution & consumption takes place simultaneously All three are separate & independent Consumers participate in production Consumers don’t generally participate Cannot be stored Can be stored Transfer of ownership cannot take place Transfer of ownership does take place
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Transcript of classification of services
Services Vs Goods
Services GoodsIntangible Tangible
Heterogeneous Homogenous
Produced in Buyer Seller interaction Produced in factory
Production, distribution & consumption takes place simultaneously
All three are separate & independent
Consumers participate in production Consumers don’t generally participate
Cannot be stored Can be stored
Transfer of ownership cannot take place Transfer of ownership does take place
Classification of Services
It is required to design & apply marketing techniques to completely satisfy the customer & increase profits & identify new emerging services.
Classifications can be done on following basis:• Classification by Industry• Classification by Target Effect• Skill level of service provider (Professional/ Nonprofessional)• Labor intensiveness (People-based/Equipment-based)• Degree of customer contact (High / Low)• Goal of the service provider (Profit /Nonprofit)
Classification By Industry
a. Entertainment industry
b. Education
c. Telecommunications
d. Finance & Insurance
e. Transportation
f. Public utilities
g. Government services
h. Health
i. Hospitability Industry
j. Business services
k. Telecommunications
l. Trading
Classification By Target Effect
Based on Degree Of Customer Involvement:
1. People Processing: Services aimed at physical care e.g. Healthcare, clinics, restaurant, hospitals, hair stylists, fitness centers
2. Mental Stimulus Processing: Services aimed at mind of customer e.g. Education, information, entertainment, consulting, psychotherapy
3. Possession Processing: Services aimed at physical possession & tangible assets e.g. repair & maintenance, laundry, repair services, landscaping, house cleaning services
4. Information Processing : Services for intangible assets e.g. Banking, legal consultation, brokerage, financial services.
Skill level of service provider
•Teacher
•Doctor
•Engineer
•Accountant
Labor intensiveness
Mechanic Electrician
Labor
Plumber
Artisan
Degree of customer contact
High Degree (Every day) – TV channels, mobile etc.
Moderate Degree (Regular) – Teacher, Barber, washer man etc.
Low Degree ( Occasional ) – Priest, Doctors etc.
POSITIONING SERVICES
• Differentiate from competition on attributes that target customers highly value
• Entails two decisions: Choice of target market (where to
compete)Creation of differential advantage (how
to compete)
• Determine important choice criteria of customers carefully
• Most important decision of a service organization is selecting the factors on which it will compete
• Select a few factors and provide superlative performances in the chosen factors
• Target marketing
• Differential advantage
Positioning Services (Contd.)
Target marketing
Target marketing concentrates on• Identifying similarities between customers• Identifying differences between different
groups of customers• Identifying differences among members of
homogeneous groups of customers
Target Marketing
• Service offer 1 Market segment 1• Service offer 2 Market segment 2• Service offer 3 Market segment 3
• Target marketing recognizes that different groups of customers have different needs and might also desire different core benefits from the same service.
Process of Target marketing in services
• Marketing market Market Market marketing
information segmentation targeting positioning Mix
Market Segmentation
• It is defined as dividing the market into distinct group of buyers with different needs , characteristics or behavior who might require separate services.
• Each of these groups are known as segments and the process is known as segmentation
Bases for Market SegmentationDemographicGenderAgeFamily life cycleRace/Ethnic groupSocial classEducationIncomeOccupationFamily sizeReligionHome ownership
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PotentialMarkets
GeographicnCountryRegionUrban/Suburban/RuralPopulation densityCity sizeClimate
Psychographic Segmentation
Activities Interests Opinions, Attitudes & Values (AIO) surveys for measuring
lifestyle. Lifestyles Personality Self-image
Behaviouralactual behavior toward product itself. A good starting point for segmentation
Benefits sought Usage rate Brand loyalty User status: potential, 1st-time, regular
etc. Readiness to buy Occasions: holidays & events that
stimulate purchases
Geo-Demographic – Ethnic .. "birds of a feather flock together"
Bases for segmenting the service to the consumer
• Demographic(Age, gender , marital status, education , family size)
• Geographic(region-urban/rural , North , south , east , west)
• Socio-economic(Income , social class, occupation)
Examples• Age segmentation : for newly born baby-full-
time nurse maid)• Child market : play schools , day care centres ,
schools, child insurance plans• Teens market : sports , entertainment ,
discotheques , education loans• Middle age : hospitals , resorts , holiday
trips ,life insurance , health insurance• Seniors : pension funds, health care • Occasions : anniversary dinner at restaurant
Process of market positioning
• Identify key offer characteristics• Draw a perceptual map• Decide on a competitive strategy• Design service product features and
associated images• Sustain a competitive advantage
Positioning and differentiation of services• company’s perception • of itself
• •
company
Competitors perception of company
Customer’s perception of competitors
competitor
customer
Company’s perception of customers
Competitor’s perception of customers
Competitors perception of themselves
Customer perception of themselves
