MAAP by Prof. Manoj Yadav 9029388692 What is service?

A type of economic activity that is intangible is not stored and does not result in ownership. A service is consumed at the point of sale. Services are one of the two key components of economics, the other being goods. Examples of services include the transfer of goods, such as the postal service delivering mail, and the use of expertise or experience, such as a person visiting a doctor. Service marketing
Services marketing is a sub field of marketing, which can be split into the two main areas of goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and durables) and services marketing. Services marketing typically refers to both business to consumer (B2C) and business to business (B2B) services, and includes marketing of services like telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional services. The range of approaches and expressions of a marketing idea developed with the hope that it be effective in conveying the ideas to the diverse population of people who receive it. Services are economic activities offered by one party to another. Often time-based, performances bring about desired results to recipients, objects, or other assets for which purchasers have responsibility. In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved. There has been a long academic debate on what makes services different from goods. The historical perspective in the late-eighteen and early-nineteenth centuries focused on creation and possession of wealth. Classical economists contended that goods were objects of value over which ownership rights could be established and exchanged. Ownership implied tangible possession of an object that had been acquired through purchase, barter or gift from the producer or previous owner and was legally identifiable as the property of the current owner. Adam Smiths famous book, The Wealth of Nations, published in Great Britain in 1776, distinguished between the outputs of what he termed productive and unproductive labor. The former, he stated, produced goods that could be stored after production and subsequently exchanged for money or other items of value. But unproductive labor, however honorable,...useful, or... necessary created services that perished at the time of production and therefore didnt contribute to wealth. Building on this theme, French economist Jean-Baptiste Say argued that production and consumption were inseparable in services, coining the term immaterial products to describe them.

Five Broad categories of service marketing

A recently proposed alternative view is that services involve a form of rental through which customers can obtain benefits.[2] What customers value and are willing to pay for are desired experiences and solutions. The term, rent, can be used as a general term to describe payment made for use of something or access to skills and expertise, facilities or networks (usually for a defined period of time), instead of buying it outright (which is not even possible in many instances). There are five broad categories within the non-ownership framework

MAAP by Prof. Manoj Yadav 9029388692

1. Rented goods services: These services enable customers to obtain the temporary right to use a physical good that they prefer not to own (e.g. boats, costumes) 2. Defined space and place rentals: These services obtain use of a defined portion of a larger space in a building, vehicle or other area which can be an end in its own right (e.g. storage container in a warehouse) or simply a means to an end (e.g. table in a restaurant, seat in an aircraft) 3. Labor and expertise rental: People are hired to perform work that customers either choose not to do for themselves (e.g. cleaning the house) or are unable to do due to the lack of expertise, tools and skills (e.g. car repairs, surgery) 4. Access to shared physical environments : These environments can be indoors or outdoors where customers rent the right to share the use of the environment (e.g. museums, theme parks, gyms, golf courses). 5. Access to and usage of systems and networks : Customers rent the right to participate in a specified network such as telecommunications, utilities, banking or insurance, with different fees for varying levels of access

Product V/S service

Products are the tangible entities which are offered in the market by Organization to fulfill the needs, wants and demands of the customers. Products are tangible products in the market which customers purchase from market to satisfy needs or wants. Customers always view the product in the form of bundle means the set of benefits customers get after purchasing the product. The product bundle include complementary elements like warranty, information and etc. Services are intangible entities which are offered in the marketing by Organization with product or separately. The objective of service remain similar to product fulfilling wants or demands of customers.

MAAP by Prof. Manoj Yadav 9029388692

Kotler definition of Service is Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of any thing According to American survey products failure rate is higher than service failure rate thats the reason we can see lots of services are being offered to customer in the market in 20th century. Telecommunication, education and banking are the most growing industries in services sector.

How Does a Service Really Differ? Formal marketing texts tell us that services are intangible, inseparable, perishable and variable. Of what use is this information in a practical business sense? These attributes are key for the development of strategies and tactics for corporate positioning, employment practices, customer service, business processes and quality control. Intangibility Services do not have physical dimensions or characteristics. Goods are tangible; you can see and touch them. However, with services, you can do neither. You can buy a can of tuna and take it home in a bag, you cannot do this with a service. Services cannot be examined prior to purchase, so buyers do not know exactly what they are buying from you. In effect, they are buying a promise, that you will perform a service as you have agreed. A service could be a promise to do someones tax return, develop your web site or provide them with a nice room in which to stay. Inseparability Services cannot be separated from their providers. In fact, in the sale of a service, the producer and consumer often interact. A hairdresser is the person who cuts your hair and a teacher teaches your class. You can not have these, and many other, services without the service provider being involved. Perishability A service cannot be produced in advance and stored until you need to use or sell it. It is produced at the time of consumption. If you are a doctor and do not fill your appointment calendar on Monday, then you have lost an opportunity for income, as you cannot store the time to use it on another day. Your product offer has perished, likewise if a room stands empty over the weekend. Variability Standardisation of service output is almost impossible. The exact type and level or service provided each time that the same service is supplied will differ. The first time a customer goes to a bank to deposit money into their account, will be different from the second time they go. The teller may be a man, not a woman, he may not smile as much, there may be fewer, or more, people waiting in the queue, and the teller may or may not have taken lunch.

MAAP by Prof. Manoj Yadav 9029388692

Service Marketing Triangle

Service marketing involves 3 types of marketing: 1. EXTERNAL MARKETING 2. INTERNAL MARKETING 3. INTERACTIVE MARKETING

1.

External Marketing : "Setting the Promise" Marketing to END-USERS. Involves pricing strategy, promotional activities, and all communication with customers. Performed to capture the attention of the market, and arouse interest in the service. 2. Internal Marketing : "Enabling the Promise" Marketing to EMPLOYEES. Involves training, motivational, and teamwork programs, and all communication with employees. Performed to enable employees to perform the service effectively, and keep up the promise made to the customer. 3. Interactive Marketing : (Moment of Truth, Service Encounter) This refers to the decisive moment of interaction between the front-office employees and customers, i.e. delivery of service. This step is of utmost importance, because if the employee falters at this level, all prior efforts made towards establishing a relationship with the customer, would be wasted.

Moment of Truth

Focus on the interactions that are important to customersand on the way frontline employees handle those interactions.

MAAP by Prof. Manoj Yadav 9029388692

Factor that influence Desired and Predicted service

Cycle of Failure

MAAP by Prof. Manoj Yadav 9029388692

Provide Gaps Model of Service Quality The gap model (also known as the "5 gaps model") of service quality is an important customer-satisfaction framework. In "A conceptual model of service quality and its implications for future research" (The Journal of Marketing, 1985), A. Parasuraman, VA Zeitham and LL Berry identify five major gaps that face organizations seeking to meet customer's expectations of the customer experience.

MAAP by Prof. Manoj Yadav 9029388692

The five gaps that organizations should measure, manage and minimize: Gap 1 is the distance between what customers expect and what managers think they expect Clearly survey research is a key way to narrow this gap. Gap 2 is between management perception and the actual specification of the customer experience - Managers need to make sure the organization is defining the level of service they believe is needed. Gap 3 is from the experience specification to the delivery of the experience - Managers need to audit the customer experience that their organization currently delivers in order to make sure it lives up to the spec.

MAAP by Prof. Manoj Yadav 9029388692 Gap 4 is the gap between the delivery of the customer experience and what is communicated to customers - All too often organizations exaggerate what will be provided to customers, or discuss the best case rather than the likely case, raising customer expectations and harming customer perceptions. Finally, Gap 5 is the gap between a customer's perception of the experience and the customer's expectation of the service - Customers' expectations have been shaped by word of mouth, their personal needs and their own past experiences. Routine transactional surveys after delivering the customer experience are important for an organization to measure customer perceptions of service.

Each gap in the customer experience can be closed through diligent attention from management. Survey software can be key to assisting management with this crucial task.