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SERVICE MARKETING

BY:-

PRAVEEN PARMAR

PROFESSOR(C.M.)

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What is service ?

SERVICE IS ANY ACT OR PERFORMANCE THAT ONE PARTY CAN OFFER TO ANOTHER THAT IS ESSENTIALLY INTANGIBLE AND DOES NOT RESULT IN ANY OWNERSHIP

-PHILIP KOTLER

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Characteristic of Service

Intangibility Inseparability Heterogeneity Perishability Ownership

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What is Marketing ?

• Definition –It is the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired product/service more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

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Continue..•Objective of Marketing –

•Sale

•Retain

•Refer - which is carried out by your own customers

•Marketing when - Supply more Demand

Supply less Demand

Supply equal Demand

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The main Steps of Marketing

R STP MM I C

R = Research STP = Segmentation, targeting and positioningMM = Marketing mixI = ImplementationC = Control

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77 P’sP’s OF SERVICE MARKETINGOF SERVICE MARKETING

1.1. PRICE

2. PLACE

3. PRODUCT

4. PROMOTION

5. PHYSICAL EVIDENCE

6. PROCESS

7. PEOPLE

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PRICEPRICE

Fixed Pricing Differential pricing Discount pricing Diversionary pricing Guaranteed pricing High price maintenance pricing Offset pricing

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JET AIRWAYS FARE RAILWAYS FARE

RAJADHANI

RAILWAY FARE

SUPERFAST

SECTOR CURRENT FARE

REDUCED FARE

AC I AC II AC I AC II

NDLS-ADI 4780 2462 3570 1835 2686 1421

NDLS-SBC 8710 5053 6485 3550 - 2378

NDLS-MAS 8960 3293 6065 3415 4353 2279

NDLS-GHY 6980 4110 5625 3255 - 2159

NDLS-HYB 7285 3278 3793 1991 4955 2920

NDLS-HWH 6925 2860 4540 2670 3583 1883

NDLS-TVC 11875 6685 8295 4315 - 2603

NDLS-BCT 6095 3920 4280 2485 3373 1775

NDLS-BRC 5520 2558 3610 1880 2813 1487

BCT-HWH 6855 3320 - - 4108 2153

BCT-HYB 4140 2443 - - 2286 1211

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PASS. FARE STRUCTURE(2001-2002)

Paise per PKM Number% Pass. Km% Revenue%

NON-SUBURBAN

AC-I

AC Sleeper

AC 3-Tier

Chair Car

237.54

103.6

73.2

62.4

0.81 5.75 21.5

Sleeper class M/E

Sleeper class Ord.

26.2

17.63.1

48.7027.8

IInd class M/E 21.6 6.6 22.7

IInd class Ord. 14.4 30.6 26.10 17.6

SUBURBAN(all) 12.4 58.9 19.45 10.4No. of Pass. Suburban – 3.0 Billion Non-Suburban 2.09 Billion

Pass. Kms. Suburban – 93 Billion Non-Suburban 400 Billion

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Ratio of Passenger Earning per PKm to Freight Earning per TKm

1.4 1.35 1.4

1.00.85

0.33

1.7

00.20.40.60.8

11.21.41.61.8

Kor

ea

France

Europea

n Rly.

China

Mala

ysia

India

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• SERVICE DELIVERY POINT• STATIONS, CITY BOOKING AGENCIES /

OUT AGENCIES / RESERVATION CENTERS ARE OUR SALES OFFICES·

PLACES SHOULD BE CUSTOMER FRIENDLY. PLACES SHOULD BE WELL MAINTAINED NETWORK SHOULD BE INCREASED

PLACE (DISTRIBUTION)PLACE (DISTRIBUTION)

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PRODUCTSPRODUCTS

PASSENGER SERVICE PRODUCTSPASSENGER SERVICE PRODUCTS

RAJDHANI / SHATABDI TRAINS

JANSHATABDI TRAINS

LONG DISTANCE MAIL & EXPRESS TRAINS

UNRESERVED PASSENGERS TRAINS

COMMUTER SUBURBAN TRAINS

MILLENNIUM PARCEL TRAINS

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FREIGHT SERVICE PRODUCTS

BLOCK RAKES (Varieties of wagons) MINI RAKES (Small Traders) CONRAJ (High speed) RO –RO Scheme FREIGHT FORWARDER (Collection of piece meal

traffic) TWO POINT BLOCK RAKES STATION TO STATION RATES (Concessions)

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PROMOTION

EACH PRODUCT FEATURES TO BE COMMUNICATED TO CUSTOMER IN THAT SEGMENT USING SUITABLE MEDIA (LOT OF WEAKNESS)

ADVERTISING PERSONAL SELLING PUBLICITY SALES PROMOTION

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PHYSICAL EVIDENCEPHYSICAL EVIDENCE

PERIFERAL EVIDENCE-

1.A RESERVED TICKET

2.CHEQUE BOOK

ESSENTIAL EVIDENCE

ACTUAL EXPERIENCE OF SERVICE

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PROCESS

PROCESS OF PRODUCTIN AND DELIVERY OF SERVICE. CUSTOMER INTERFACE PROCESSES SHOULD BE

COMPUTERISED, MECHANIZED, RATIONALISED AND SIMPLIFIED.

PROCESSES EXIST ARE COMPLEX ON RAILWAYS LIKE SOME PROCESSES ARE :

1. RESERVATION PROCESS/REFUND PROCESS/ CLAIM PROCESS.

2. COMMUNICATION PROCESS.3. ENTRAINING/DETRAINING PROCESS.

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PEOPLE

SERVICE PERSONNEL CUSTOMERS1. CAREFUL SELECTION AND TRAINING2. LAYING DOWN NORMS, RULES,

PROCEDURES FOR PERSISTENCE PERFORMANCE

3. CONSTITANCE APPEARANCE4. REDUCE INTERFACE – AUTOMATION-

COMPUTERISATION

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STATUS OF MARKET SHARE OF INDIAN RAILWAY AS PER RAILWAY BOARD’S STATUS PAPER

0%

20%

40%

60%

80%

100%

1950-51 1996-97

Shift of Traffic from Rail to RoadFreightRail

FreightRoad

PassengerRail

PassengerRoad

Year Freight Passenger

Rail Road Rail Road

1950-51 89% 11% 80% 20%

1996-97 40% 60% 20% 80%

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YEAR COAL I.ORE CEMENT F.GRAIN FERT. POL I&STEEL

91-92 63.9 66.1 57.0 16.4 66.6 52.9 71.9

92-93 66.2 70.6 56.2 15.2 67.8 51.1 70.81

93-94 67.9 65.3 56.1 14.5 71.7 50.7 69.38

94-95 64.98 63.66 49.52 10.79 71.56 43.67 63.71

95-96 64.97 65.15 47.45 13.76 69.15 40.16 58.30

96-97 65.95 66.68 46.42 14.85 70.23 37.47 45.38

97-98 66.37 69.72 44.93 13.51 74.58 37.52 44.04

98-99 63.99 65.63 41.80 13.38 75.77 37.66 40.90

99-00 65.67 66.97 43.42 14.78 78.6 35.96 39.70

00-01 67.67 72.93 43.10 13.57 74.17 37.49 34.44

PERCENTAGE OF TRAFFIC TRANSPORTED BY RAILWAYS

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STRENGTHS/OPPORTUNITIES STRENGTHS/OPPORTUNITIES FOR INDIAN RAILWAYSFOR INDIAN RAILWAYS

STRENGTHS/OPPORTUNITIES STRENGTHS/OPPORTUNITIES FOR INDIAN RAILWAYSFOR INDIAN RAILWAYS

A LARGE NETWORK OF 7000 STATIONS EXISTS IN THE COUNTRY.

A SUBSTANTIAL MARKET SHARE EXISTS, IN PASSENGER SEGMENT. FOR A COUNTRY OF 1000 MILLION PEOPLE WITH LOW PURCHASING POWER RAILWAY SYSTEM IS MORE SUITABLE.

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STRENGTHS/OPPORTUNITIES STRENGTHS/OPPORTUNITIES FOR INDIAN RAILWAYSFOR INDIAN RAILWAYS

FOR LONG DISTANCE AND BULK SECTOR RAILWAYS IS THE MOST ECONOMICAL COMPARATIVELY SAFER MODE OF TRANSPORT.

PETROLEUM PRODUCTS PROCURED THROUGH IMPORTS ARE VERY EXPENSIVE AND THUS ELECTRICITY BASED RAILWAY SYSTEM WILL ALWAYS HAVE AN EDGE ON PARAMERTERS OF POLLUTION, ENERGY COST, ENVIRONMENTAL FACTORS.

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WEAKNESSES / THREATS WEAKNESSES / THREATS FOR FOR INDIAN RAILWAYSINDIAN RAILWAYS

THE ORGANISATION IS PRODUCTION ORIENTED.

THERE IS OVER EMPHASIS ON MAXIMISING PKMS, NTKMS.

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WEAKNESSES / THREATS WEAKNESSES / THREATS FOR FOR INDIAN RAILWAYSINDIAN RAILWAYS

MARKETING IS PERIPHERAL ACTIVITY AND COMMERCIAL DEPARTMENT IS BASICALLY ENGAGED IN SELLING BUSINESS ONLY

CUSTOMER FOCUS IS MISSING AND CUSTOMER SATISFACTION IS NOT AN ORGANISATIONAL MISSION.

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WEAKNESSES / THREATS WEAKNESSES / THREATS FOR FOR INDIAN RAILWAYSINDIAN RAILWAYS

INDIAN RAILWAYS IS LOOSING ITS MARKET SHARE IN PASSENGER AND FREIGHT BUSINESS.

THERE IS CAPACITY CONSTRAINT - HOW TO BALANCE DEMAND AGAINST AVAILABLE CAPACITY.

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WHAT SHOULD BE THE MARKETING STRATEGY FOR INDIAN RAILWAYS ?

MARKETING KEY ISSUE (PRODUCTION LED ORGANISATION —

CUSTOMER LED ORGANISATION) CUSTOMER SATISFACTION SHOULD

BE MAIN ORGANISATIONAL MISSION. FOCUS ON SERVICE PRODUCTS

(BUSINESS PLAN FOR EACH PRODUCT).

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WHAT SHOULD BE THE MARKETING STRATEGY FOR INDIAN RAILWAYS ?

TQM IN ALL PROCESSES. COMPUTERISATION OF CUSTOMER

INTERFACE AREAS(TICKETING, INFORMATION SYSTEM, REFUND ETC.)

DYNAMIC RATING & MARKET RELATED PRICING.

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WHAT SHOULD BE THE MARKETING STRATEGY FOR INDIAN RAILWAYS ?

DEMAND MANAGEMENT / STAGGERING STRATEGY.(IN CAPACITY CONSTRAINT SITUATIONS)

TRAINING OF FRONTLINE STAFF IN CUSTOMER CARE / COURTESY.

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1. INTERNAL MARKETING - TRAIN AND MOTIVATE THE EMPLOYEES TO SERVE CUSTOMERS WELL

2. INTERACTIVE MARKETING - EMPLOYEE’S SKILL IN SERVING THE CLIENT

We Treat Our Employees The Way We Want Them to Treat We Treat Our Employees The Way We Want Them to Treat Our Guests”Our Guests”

““A Knowledgeable, Satisfied Employee Is Our Best Marketing A Knowledgeable, Satisfied Employee Is Our Best Marketing Agent”Agent”

SATISFYING BOTH EMPLOYEES AND CUSTOMERS

WHAT SHOULD BE THE MARKETING STRATEGY FOR INDIAN RAILWAYS ?

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WHAT SHOULD BE THE MARKETING STRATEGY FOR INDIAN RAILWAYS ?

FORWARD / BACKWARD / HORIZONTAL INTEGRATION.(STRATEGIC ALLIANCE WITH OTHER MODES)

DEVELOP DEMAND FORECASTING MODELS, LONG RANGE DECISION SUPPORT SYSTEMS, COSTING MODELS, SYSTEMS FOR GATHERING

COMMERCIAL INTELLIGENCE (OUTSMART COMPETITORS).

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LOBBY WITH GOVERNMENT / OPINION MAKERS/ PLANNING COMMISSION FOR EVEN PLAYING FIELD FOR INVESTMENT IN RAILWAY PROJECTS (SOCIAL COST BENEFIT ANALYSIS DATA SHOULD PROMOTE RAILWAY AS BETTER CHOICE FOR TRANSPORT INFRASTRUCTURE).

WHAT SHOULD BE THE MARKETING STRATEGY FOR INDIAN RAILWAYS ?

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SERVICE RECOVERY

IMPROVE THE AFTER SALE SERVICEIMPROVE THE AFTER SALE SERVICE ADMIT & APOLOGISEADMIT & APOLOGISE RECTIFYRECTIFY COMPENSATECOMPENSATE

MINOR PERFORMANCE LAPSES NEEDS MINOR PERFORMANCE LAPSES NEEDS MONITORINGMONITORING

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TO CONCLUDE :-

DESIGN, DEVELOP, DELIVER APPROPRIATE “SERVICE PRODUCT” QUICKLY AND MODIFY / EXTEND THE PRODUCTS AS PER NEEDS AND WANTS OF CUSTOMERS.

MARKETING STRATEGY MARKETING STRATEGY FOR INDIAN RAILWAYSFOR INDIAN RAILWAYS

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References

1. Services Marketing by Lovelock

2. The Essence of Services Marketing by Adrian Payne

3. The Marketing Management - An Asian Perspective by Philip Kotler

4. The Principles of Marketing by Philip Kotler

5. The marketing of services by Donal & Cowell