Market Positioning, Market Mix Decisions CRM

8/7/2019 Market Positioning, Market Mix Decisions CRM

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MARKETING OF SERVICES

MARKETING MIXCRM


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Marketing Services V/S Goods

Philip Kotler has classified products into the following

five categories for establishing goods-service

relationship:

Pure tangible goods.

Tangible goods with accompanying service.

Hybrid. Service with accompanying goods.

Pure Service.


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Service Package

The package concept of service product suggest

that what you offer to the market is a bundle of

different services, tangible and intangible, but there

is a core service and around it are built the otherservices which are:

Facilitating services

Supporting services


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Developing New Service Offering

If a new service offer is to be developed, then the

following five steps should be systematically followed

in a sequence:

Consumer Benefit Concept.

Developing Service Concept.

Developing the Augmented Service Offer.

Service Delivery System.

Managing Image & Communication.


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Augmented Service Offering

Basic service package is not always equivalent to theservice product the customer perceives.

Therefore, basic service package has to be expanded to amore holistic model of augmented service offering.

Elements of Augmented Service Offer:

Accessibility of Service.

Interaction with service organization.

Customer Participation.


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8 Ps of Service Marketing

Product

Price

Place Promotion

People

Physical Evidence

Process

Productivity & Quality


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Additional Fraser Hay

Positioning

Packaging

Promotion Persuasion

Performance


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The Service Vision

Service DeliverySystem

People, Tech,Equipment,

layout, process Capacity Normal/Peak

Qualitystandards,differentiation,entry barriers

People, Tech,Equipment,

layout, process Capacity Normal/Peak

Qualitystandards,differentiation,entry barriers

OperatingStrategy

Operations,financing,

marketing, HR Investments

Quality measures,incentives,rewards

Comparison to

competitor quality, costs,productivity,morale, loyalty

Operations,financing,

marketing, HR Investments

Quality measures,incentives,rewards

Comparison to

competitor quality, costs,productivity,morale, loyalty

Service Concept

Most importantelement of

service in termsof resultsproduced forconsumers

Elementsperceived bymarket,

employees Special efforts

required indesign, delivery,marketing

Most importantelement of

service in termsof resultsproduced forconsumers

Elementsperceived bymarket,

employees Special efforts

required indesign, delivery,marketing

Target MarketSegments

Demographics

Psychographics

Importance ofvarioussegments

Needs

Serving theNeeds

Demographics

Psychographics

Importance ofvarioussegments

Needs

Serving theNeeds


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Competitive Environment

Entry Barriers

Economies of scale

Erratic sales

Advantage of size

Buyers Suppliers

Product substitution

Customer Loyalty Exit Barriers

Overall Cost Leadership

Low cost of operations

Cost conscious

customers Standardized service

Differentiation

Tangiblisation

Customization Personnel training

Focus


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Winning Customers

Qualifiers Winners

Losers


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Positioning the Service

Segmenting

Targeting

Positioning

Differentiation


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Positioning Maps


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27 Ps of Marketing

Product

Price

Promotion

Place

People Process

Physical evidence

Purpose

Purchaser

Push/pull

Personal relationships

Positioning

Packaging

Persuasion

Performance

Profitable

Proactive

Pull together

Perform

Permission

Pain

Pleasure

Periodic

Persistent

Partners Psychology

Perceptions


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Pricing Techniques

There are many pricing concepts and techniques which

organization may use in developing their pricing

policy, some of them are:

Penetration Pricing.

Price Skimming.

Competitor Pricing.Differential Pricing.

Marginal Pricing.


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Pricing of Services

Discuss three major ways that service pricesare perceived differently from goods prices by

customers

Articulate the key ways that pricing of servicesdiffers from pricing of goods from a companysperspective


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Overview (cont.)

Demonstrate what value means to customers

and the role that price plays in value

Describe strategies that companies use to

price services


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3 key differences

Customer knowledge of service prices: Service variability limits knowledge

Providers are unwilling to estimate prices

Individual customer needs vary

Collection of price information is overwhelming

Prices are not visible

Role of non-monetary costs:

Time costs

Search costs

Convenience costs

Psychological costs

Price as an indicator of service quality


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Three Basic Marketing Price Structures and

Challenges Associated withTheir Use for Services

P= DC+OC+ProfitChallenges:1. Costs difficult to trace.

2. Labor is more difficult to

price than materials.

3. Costs may not equal the value

that customers perceive the

services are worth.

Challenges:1. Small firms may charge too

little to be viable.

2. Heterogeneity of services

limits comparability.

3. Prices may not reflect

customer value.

Challenges:1. Monetary price must be adjusted to reflect

the value of non-monetary costs.

2. Information on service costs is less available to

customers; hence, price may not be a central factor.


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Value is low price.Value is everything

I want in a service.

Value is thequality I get for

the price I pay.

Value is all thatI get for all

that I give.

Four Customer Definitions of Value


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Value is low price.

Discounting

Odd pricing

Synchro-pricing

Penetration pricing

Pricing Strategies When the Customer Defines

Value as Low Price


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Value is everythingI want in a service.

Prestige pricing

Skimming pricing


Value as Everything Wanted in a Service


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Value is the quality I get

for the price I pay.

Value pricing

Market segmentation

pricing


Value as Quality for the Price Paid


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Value is all that I get for

all that I give.

Price framing

Price bundling Complementary pricing

Results-based pricing

Pricing Strategies When the Customer Defines Value

as All That Is Received for All That Is Given


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Value is low price. Value is everything

I want in a service.

Value is the quality

I get for the price I pay.

Value is all that I get

for all that I give.

Discounting

Odd pricing

Synchro-pricing

Penetration pricing

Prestige pricing

Skimming pricing

Value pricing

Market segmentation

pricing

Price framing

Price bundling

Complementary pricing

Results-based pricing

Summary of Service Pricing Strategies for

Four Customer Definitions of Value


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Winning Strategies through lowering price

Two firms that have won substantial market

shares by offering the lowest prices to their

customers are:

Southwest Airlines.

Wal-Mart (the worlds largest retailer)


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Place (Distribution)

Most services are distributed through direct sales.

For certain services, agents can be identified and deployed

with selling as a chief function to be performed by them.

Sometimes, services are generally not delivered to the buyer

and the creation of time and place utilities is a vital function in

the service marketing.


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Promotion

Various techniques used for promoting services are:

Advertising (Print, Internet and Direct Mail)

Sales Promotion (Coupons and Prize promotions)

Personal Communication (Selling, Customer service and Word

of mouth)

Corporate Design (Interior dcor, Uniforms and Stationery)


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The Three additional Ps of Service

Marketing

People.

All human actors who play a part in service delivery and thus

influence the buyers perceptions.

This fifth P is by far the most important determinant of

customer brand loyalty.

Two types of service employees which are commonly seen inservice industry are Support personnel and Customer Contact

Personnel.


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Marketing

Physical Evidence

It includes all the tangible representations of service such as

brochures, letterhead, business card etc.

In some cases it also includes the environment of the place

where the service is delivered (servicescape)

For restaurants, health clubs, hospitals and schools thephysical facility is critical in communicating the service and

making the entire customer experience positive.


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Marketing

Process

The mechanism by which the consumer consume the services

(customer management process) also gives customersevidence on which he judge the service.

Another characteristic of the process that can provide

evidence to the customer is whether the service follow aSTANDARDIZED APPROACH or whether the process is

CUSTOMIZED ONE.


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Southwest Airlines

Southwest Airlines occupies a solid position in the minds of U.S airtravelers as a reliable, convenient, fun, low fare, no frills airline.

It has maintained this position consistently for over 30 years while

making money every year. Success has come to the airline for number of reasons like it keeps

its costs down by not serving meals, having no pre assigned seatsand keeping employee turnover very low.

Airlines has the best customer service record in the airline industryand has won the industry Triple Crown award for best baggagehandling and best customer complaint statistics many years in therow.


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Tourism as a Service

Liberalization of the Indian economy has brought

about changes across various dimensions.

Tourism is also developing as an important service

industry in India.

The characteristic features of a service likeIntangibility, Variability and Inseparability apply to

the travel and tourism industry as well.


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TheTourism Marketing Mix

Product & Price.

Place.

Promotion.

People.

Process. Physical Evidence.


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Chapter 12

Services Marketing and

Customer Relationships

Copyright 2001 by McGraw-Hill Ryerson Limited

SommersSommers BarnesBarnesNinth Canadian EditionNinth Canadian Edition

Presentation byPresentation by

Karen A. BlotnickyKaren A. Blotnicky

Mount Saint Vincent University, Halifax, NSMount Saint Vincent University, Halifax, NS


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Chapter Goals

To gain an understanding of:

The nature and importance of services

Characteristics of services and their marketing

implications Issues related to the planning and marketing of

services

The four Rs of services marketing

The relationship marketing approach

The impact of technology in providing services


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The Nature of Services

regardless of the product, there is a servicescomponent to the offerings of all firms

in some cases, a service is the principal

purpose of the transaction, as in the rental ofa car, a haircut, or legal services -- we refer tothis as the core servicecore service

in others, service is performed in support of

the sale of a tangible product -- these arereferred to as supplementary servicessupplementary services


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Goods and Services

Continuum

There are two classes of services.

Services that are the main purpose of atransaction renting a truck to move.

Services that supplement the sale of a tangiblegood for example, an information hotline forcomputer software.

The focus here is primarily on identifiable, intangibleservices that are the main object of a transactiondesigned to provide want-satisfaction to customers;supplementary services growing in importance,however.


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Canned

foods

Ready-

madeclothes

Auto-

mobiles

Draperies,

Carpets

Rest-

aurantmeals

Repairs:

auto, house,landscaping

Air

travel

Insurance,

Consulting,Teaching

MOSTLY GOODS MOSTLY SERVICES

The Goods-Services

Continuum


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Importance of

Services

Three-fourths of the Canadian labourforce is employed in service industries.

Over 70% of the nations gross nationalproduct is produced by services.

From 1986 to 2000, virtually all new jobswill be in the service industries.

Huge growth in personal servicespersonal services as wellas business services.business services.

Copyright 1998 by The McGraw-Hill Companies, Inc.


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Characteristics of

Services intangibilityintangibility: difficult to sample and to evaluate inseparabilityinseparability:: difficult to separate services from

the service provider; mainly direct sales; staff areessential to the delivery of quality services

heterogeneityheterogeneity: virtually every service is different;very difficult to standardize quality

perishabilityperishability:: those not sold can not be stored

fluctuating demandfluctuating demand:: demand for some servicesfluctuates by season, or even by time of day


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Strategic Services

Management

intangibility generally makes the marketingof services a challenge

understanding how people buy services and

the segments that exist is just as important knowing more about the value of customer

segments is important -- some are morevaluable than others

knowing what they value so that servicelevels can be tailored is also important


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Strategic Product

Implications

service organizations have to plan theintroduction of new services and themanagement of the life cycle

the core service can be enhanced through theaddition of supplementary services, therebycreating added value

the life cycle of services has to be managed

the branding of a service can be difficult as thecustomer often has nothing tangible to show


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Managing Service Quality

Quality is hard to define, measure, control, andcommunicate

Quality is defined by the consumer

Its important to measure customer satisfaction with

an organizations service quality.

Customers see five important components:

Core serviceCore service must measure up.

Quality of service

Quality of service, meeting expectations.

TechnicalaspectsTechnicalaspects of delivery.

InteractionInteraction with people who deliver service.

Affective dimensionsAffective dimensions:: How customers feel.


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Pricing Services

The characteristics of perishability, inability to

store, and fluctuating demand for services

create pricing challenges.

Pricing Strategies include:

Discount strategies: Cheaper by the week.

A variable pricing strategy: Kids eat free,movies cheaper on Tuesdays.

Price competition.


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Distribution of Services

because most services are tied directly to aspecific service provider, most have beendistributed directly to customers

with advancing technology, many firms are nowdelivering services through machines

channels of distribution are necessarily short;some firms use one agent intermediary, such asinsurance, real estate, and travel agents

some firms use franchisesfranchises to distribute services


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Promotion of Services

customer contact personnel represent themain channel of customer communication

service providers must ensure that each

serv

ice

e

ncou

nter

serv

ice

e

ncou

nter

is a positive one ifcustomers are to develop a positive image

many professional service firms are nowpermitted to advertise

other elements of the promotional mix areused, including publicity and communityaffairs


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Four Rs of Service Marketing

Retention

Referrals

Relationships

Recovery


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The Changing Environment

for Services

The boom in the service economy, reduced regulationhas created an increase in competition.

Major focus on increased productivity, efficiency

Work on people aspects of business:

Education, training programs

Change technology:

Computer-based technologies used.

Restructure jobs. Bottom line: People are key to success!


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Other Considerations in

Marketing Services Impact ofTechnology:Impact ofTechnology:

Remember, not everyone likes impersonaltechnology

Performance Measurement:Performance Measurement:

Larger firms can use market share, etc.

Customer perceptions are essential.

Prospects for Growth:Prospects for Growth:

It is very likely that services will continue to take anincreasing share of the consumer dollar.

The use of marketing programs in all services isexpected to increase considerably.


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Future Service Profitability

Impacted by:

1. Focusing on the right priorities

2

. Increasing service quality3. Investing in problem solving

4. Being fair to customers

5. Investing in leadership development

Market Positioning, Market Mix Decisions CRM

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