Services Marketing-2.ppt

7/29/2019 Services Marketing-2.ppt

1/61

Services Marketing

-Dr.O.M.AshtankarKITS, Ramtek


2/61

Goods - things you can touch - tangible

Services - things you cant touch - but youcan see their effect intangible services are not physical, they are

intangible


3/61

A Service is a type of a product.

a deed performed by one party for

another

Discussions about the marketing of goods

apply to services as well.

Services have special characteristics that make

them different than products.


4/61

A product without physical characteristics;

a bundle of performance and symbolic

attributes designed to produce consumer

want satisfaction.


5/61

4 Characteristics of Services

1. Intangibility - u cant touch this

2. Production (or performing the service) andConsumption (using the service) - happens at the same

time

3. Heterogeneity - services are not always delivered the

same way

4. Perishability - cannot be put in inventory or stored for

later use

ie. You cant buy 2 haircuts


6/61


Services cannot be stored

Services cannot be protected through patents

- therefore a really great travel package and

service can be copied

a really great physical object can be patented,

and NOT allowed to be copied


7/61


Hard to explain and display Services if youcant see them

Prices are difficult to set - depends on

customers expectations


8/61

2. Inseparability of Production (or

performing the service)and Consumption(using the service) - happens at the same

time

Many people involved in delivering a service

mass production of services is hard to do


9/61

3. Heterogeneity - services are not always

delivered the same way

It is very difficult to standardize services

eg. A machine can make ice cream cones a

standard size 100% of the time

A person filling an ice cream cone with a

scoop cannot do it the same amount each time,

unless you use a machine to dispense the icecream


10/61

3. Heterogeneity - services are not alwaysdelivered the same way

It is very difficult to standardize services

eg. A Taxi driver cannot drive you to the officein exactly the same time each day because the

traffic patterns change

eg. A travel agent can sell you a vacationpackage - but cannot guarantee you will like

the trip exactly the same way another tourist

did.


11/61

4. Perishability - cannot be put in inventoryor stored for later use

ie. You cant buy 2 haircuts

Demand fluctuates and changes, sometimes

depending on the season, or weather

eg. Taxi in the rain, vacation in summer


12/61

Tangible / Intangible Attributes Tangible

touch

see

taste

smell

Intangible

cant see

cant touch

cant smell

cant taste


13/61

Goods and Services: Scale of

Elemental Dominance

Not in the text


14/61

The service sector The services sector has been growing at a

rate of 8% per annum in recent years

More than half of our GDP is accounted for

from the services sector

This sector dominates with the best jobs,

best talent and best incomes


15/61

There are no such thing as

service industries.There are only

industries whose service

components are greater or less

than those of other industries.Everybody is in service.

-Theodore Levitt-


16/61

What is services?

It is the part of the product or the fullproduct for which the customer is

willing to see value and pay for it.


17/61

What is a service? It is intangible.

It does not result in ownership.

It may or may not be attached with a

physical product


18/61

Difference between physical

goods and servicesPhysical goods Services

tangible intangible

homogeneous heterogeneous

Production and distribution areseparated from consumption

Production, distribution andconsumption are simultaneous

processes

A thing An activity or process

Core value processed in factory Core value produced in the buyer-seller

interaction

Customers do not participate in the

production process

Customers participate in production

Can be kept in stock Cannot be kept in stock

Transfer of ownership No transfer of ownership


19/61

Most products have a service

componentThey could be

Equipment based

People basedvarying skill levels


20/61

Services could meet Personal needshaircuts, tution, massage

parlours

Business needscourier services, office

cleaning services, delivering fresh flowers


21/61

Characteristics of services Intangibility

Inseparability

Perishability

Variability


22/61

The three additional Ps of

Service Marketing People

Physical evidence

Process


23/61

Qualities of services Search qualities

Experience qualities

Credence qualities


24/61

Differentiation in services Offering

Faster and better delivery

Image


25/61

Managing Service quality Gap between management perceptions and

consumer expectations

Gap between management perceptions andservice quality specifications

Gap between service quality specifications andservice delivery

Gap between service delivery and externalcommunication

Gap between expected service and perceivedservice


26/61

Determinants of service quality Reliabilitydelivering on promises

Responsivenesswilling to help

Assuranceinspiring trust and confidence

Empathyindividualising customers

Tangibles- physical representation


27/61

Moments of truth It is the customerservice encounter

Every positive or negative experience of

the consumer would have fall-out on the

overall service experience


28/61

In services, the last experience

remains uppermost in your mind.

Therefore, it is not enough to begood, you have to be consistently

good


29/61

Services Monitoring Continuous auditing of competitor service

levels versus own company

Importance - performance analysis


30/61

ImportancePerformance

Analysis

Concentrate

here

Keep up the

good work

Low priority Possible overkill

I

M

P

O

R

T

A

CE

P E R F O R M A N C E


31/61

Service quality is directlyproportional to employee

satisfaction


32/61

When customers visit a service

establishmentTheir satisfaction will be influenced by

Encounters with service personnel

Appearance and features of service

facilitiesexterior and interior

Interactions with self service equipment

Characteristics and behaviour of other

customers


33/61

Customer Service Expectations Desired Servicethe wished for service

Adequate Servicethe service that would

be acceptable


34/61

Zone of Tolerance

Difference between the desired

service and the adequate service


35/61

Service Encounter Themes Recovery

Adaptability

Spontaneity

Coping


36/61

RecoveryDont

Ignore customer

Blame customer Leave customer to

fend for himself

Downgrade

Act as if nothing iswrong

pass the buck

Do

Acknowledge

problem

Explain causes

Apologise

Compensate/upgrade Lay out options

Take responsibility


37/61

AdaptabilityDont

Promise and fail to

keep them Show unwillingness

to try

Embarrass the

customer Laugh at the customer

Avoid responsibility

Do

Recognise the

seriousness

Acknowledge

Anticipate

Accommodate Adjust

Explain rules/policies


38/61

SpontaneityDont

Exhibit impatience

Yell/laugh/swear

Steal from customers

Discriminate

Ignore

Do

Take time

Be attentive

Anticipate needs

Listen

Provide information

Show empathy


39/61

CopingDont

Take customers

dissatisfactionpersonally

Let customers

dissatisfaction affect

others

Do

Listen

Try to accommodate

Explain

Let go of the

customer


40/61

Types of complainers Passives

Voicers

Irates

Activists


41/61

Customer complaints It pays to resolve customer complaints

On an average only 5 % dissatisfied customers

complain. Others simply go over to thecompetitor

A satisfied consumer speaks to an average of 3

people on his her experience

A dissatisfied consumer gripes to on an average

11 persons about his/her unpleasant experience


42/61

Companies that pay importance

to resolving customer complaints Pay attention to quality and training of manpower

recruited

Have clear benchmarks on service quality andcommunicate to employees

Take remedial steps to improve customersatisfaction and prevent repeats of customer

dissatisfaction Have a data base on customer complaints that is

periodically analysed and policies adjusted


43/61

Satisfied employees will produce

satisfied customers Morale

Motivation

Mood


44/61

Managing Service Productivity Giving quality service is an expensive business

Not every consumer is willing to pay extra for

service quality Service providers would have to find their

optimum service quality/cost ratios

Can technology substitute part of the labour

content? Can customers substitute part of the labour

content?

Making services obsolete by product innovations


45/61

UNIQUESERVICE CHARACTERISTICS & RESULTINGMARKEITNG PROBLEMS

Intangibility

1) Difficult for consumer to evaluate2) Marketer is forced to sell a promise

3) Difficult to advertise & display4) Prices are difficult to set & Justify


46/61

Inseparability of Production & Consumption:

1) Service provider are critical to delivery2) Consumers must participate in

production

3) Other consumers affect service outcomes

4) Consumer does not take physical

possession

5) Services are difficult to distribute


47/61

Perishability

1) Services cannot be inventoried

2) Very difficult to balance demand &

supply3) Unused capacity is lost forever

4) Demand is very time sensitive


48/61

Heteroginity Service quality is difficult to control

Difficult to standardize servicedelivery


49/61

Client based relationship1) Success depends on satisfying &

keeping customers in the long run2) Generating repeat business is

challenging

3) Relationship marketing becomes

critical


50/61

Customer Contact1) Service provider are critical to delivery

2) High levels of service employeetraining & motivation are required

3) Changing a High contact service into a

low contact service to achieve lower

costs without reducing customer

satisfaction


51/61

Service quality dimensions Vs. Evaluatio

criteria


52/61

Service Quality


53/61

Moments of Truth Each customer contact is called a moment

of truth.

You have the ability to either satisfy or

dissatisfy them when you contact them.

Aservice recovery is satisfying a

previously dissatisfied customer and

making them a loyal customer.


54/61

Dimensions of Service Quality Reliability: Perform promised service

dependably and accurately. Example:

receive mail at same time each day.

Responsiveness: Willingness to help

customers promptly. Example: avoid

keeping customers waiting for no apparentreason.


55/61

Dimensions of Service Quality Assurance: Ability to convey trust and

confidence. Example: being polite and

showing respect for customer.

Empathy: Ability to be approachable.

Example: being a good listener.

Tangibles: Physical facilities andfacilitating goods. Example: cleanliness.

DIMENSION PROBLEM POSSIBLE


56/61

RESPONSE

Intangibility Customer cannot see or

otherwise physicallysense the product

Associate service wit

tangible product; usemarketers reputatio

other clues to

communicate the

services worth

Perishability Product cannot be stored;opportunity to sell or buy

services is quickly lost

Use demand forecast

& management of

demand

DIMENSION PROBLEM POSSIBLE


57/61

RESPONSE

Inseparabilit

y

Buyer & seller must both be

present for exchange tooccur; service producer is

also a marketer

Because direct

distribution is nearlyinevitable, locate nea

purchasers; train serv

providers to deal wit

customers

Variability Quality of delivered servicecan vary widely

Standardize the servi

& its delivery to

minimize the variancCustomise the servic

best fit individual bu


58/61

Perceived Service QualityWord of

mouth

Personal

needs

Past

experience

Expected

service

Perceived

service

Service Quality

Dimensions

Reliability

Responsiveness

Assurance

Empathy

Tangibles

Service Quality Assessment

1. Expectations exceeded

ESPS (Unacceptable quality)

DIMENSION EVALUATION EXAMPLES


59/61

CRITERIA

TangiblesPhysical

evidence of the

service

Appearance of physical

facilitiesAppearance of Service

personnel

Tools or equipment used to

provide the service

A clean & profession

looking doctors offiQuality of food in

restaurant

Equipment used in

medical exam.

\

ReliabilityConsistency &

dependability in

performing the

service

Accuracy of billing or

record keeping

Performing services when

promised

An accurate Bank

statement

A confirmed hotelreservation

An Airline flight

departing & arriving

time

DIMENSION EVALUATION CRITERIA EXAMPLES


60/61

ResponsivenessWillingness of

employee

Returning customer phone calls

Providing prompt service

Handling urgent requests

Ambulance arri

min.

A waiter refillin

customers glass

without being as

Assurance

Konwledge/com

petence ofemployees &

ability to convey

trust &

confidence

Knowledge & Skills of

employees

Company name & reputation

Personnel characteristics ofemployee

A highly trained

financial advisor

A known & resp

service provider

A doctors bedsid

manners

DIMENSION EVALUATION EXAMPLES


61/61

CRITERIA

EmpathyCaring &

individual

attention

provided by

employees

Listening to customer needs

Caring about the customersinterests

Providing personalized

attention

A store employee

listening to and tryinunderstand a custom

complaint

A nurse counseling a

heart patient

Services Marketing-2.ppt

Documents

Transcript of Services Marketing-2.ppt