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INTRODUCTION TO SERVICES MARKETING

WHAT ARE SERVICES??


Industrial and economic activities can be categorized as under:


  

Primary: Agriculture, fishing and forestry Secondary: Manufacturing and


construction Tertiary: Services and distribution

Gronroos describes services as “Objects of transaction offered by firms and


institutions that generally offer services or that considers themselves as service
organs.” According to Kotler, a 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 anything. In most simple terms, services are deeds, processes and
performances.


DISTINCT CHARACTERISTICS OF SERVICES
The following can be regarded as distinctive features of services:

Intangibility. Like when you visit a mall the kind of comfort you get in the form
of music that is being played, the AC which makes you feel cool is the intangible
factor. Inseparability. It is inseparable from the service provider.
Heterogeneity. Two services cannot be the same it depends on the situation.
Perishability. You cannot store the service. Ownership. You cannot own the service
you can use it and feel it.

 

 
Intangible
  

Services cannot be inventoried Cannot be patented Cannot be readily displayed or


communicated Pricing is difficult
Inseparability: Simultaneous production and consumption

 

Customer participate in and affect the transaction Customers affect each other
Employees affect the service outcome Decentralization is essential
Heterogeneous

Services delivery and customer satisfaction depend on employee actions Services


quality depends on many uncontrollable factors There are no sure knowledge that
the service delivered matches what was planned and promoted.
Perishable

It is difficult to synchronize supply and demand with services Services cannot be


stored, saved, returned or resold. Therefore required strong recovery strategies
CHALLENGES AND QUESTIONS FOR SERVICE MARKETERS

Because of the basic differences between goods and services, marketers of services
face some very real and distinctive challenges. Challenges revolve around
   

Understanding customer needs and expectations for service Tangibilizing the


service offering, Dealing with a myriad of people and Delivery issues Keeping
promises made to customers
CHALLENGES AND QUESTIONS FOR SERVICE MARKETERS

How can service quality be defined and improved when the product is intangible and
nonstandardized? How can new services be designed and tested effectively when the
service is essentially an intangible process? How can the firm be certain it is
communicating a consistent and relevant image when so many elements of the
marketing mix communicate to customers and some of these elements are the service
providers themselves?


CHALLENGES AND QUESTIONS FOR SERVICE MARKETERS

How does the firm accommodate fluctuating demand when capacity is fixed and the
service itself is perishable? How can the firm best motivate and select service
employees who, because the service is delivered in real time, become a critical
part of the product itself? How should prices be set when it is difficult to
determine actual cost of production and price may be related to the perceptions of
quality?


CHALLENGES AND QUESTIONS FOR SERVICE MARKETERS

How should the firm be organized so that good strategic and tactical decisions are
made when a decision in any of the functional areas of marketing, operations, and
human resources may have significant impact on the other two areas? How can the
balance between standardization and personalisation be determined to maximise both
the efficiency of the organisation and the satisfaction of its customers? How can
organisation ensure the delivery of consistent quality service when both
organisation’s employees and the customers themselves can affect the service
outcome?


ADDRESSING THE CHALLENGES

The basic frameworks/ models for addressing these questions, we will discuss
 Services

Marketing Triangle  Services Marketing Mix  Gaps model of service quality


THE SERVICES MARKETING TRIANGLE
COMPANY
INTERNAL MARKETING “ENABLING THE PROMISE” TECHNOLOGY EXTERNAL MARKETING “SETTING
THE PROMISE”

PROVIDER S

CUSTOMER S
INTERACTIVE MARKETING “DELIVERING THE PROMISE”
THE SERVICES MARKETING TRIANGLE

There are three types of marketing:


  

External marketing Internal marketing Interactive marketing

All these revolve around making and keeping promises to customers. For services,
all three types of marketing activities are essential for building and maintaining
relationships with customers.
External Marketing

 

A company makes promises to its customers regarding what they can expect and how
it will be delivered. Traditional marketing activities: advertising, sales,
special promotions etc. For services, some other factors like the service
employees, the design and décor of the facility, the service process etc. also
helps to set customer expectations. Tendency to overpromise also leads to shaky
beginning of the customer relationship
Interactive Marketing: Keeping Promises
   

Promises made must be kept The most critical from customer point of view Also
delivered through technology Interactive marketing occurs in the moment of truth
when the customer interacts with the organisation and the service is produced and
consumed. Reliability of services is tested every time the customer interacts with
the organisation.
Internal Marketing: Enabling Promises

In order to deliver the promises made, the providers or service systems must have
the skills, abilities, tools, and motivation to deliver. It also indicates that
employee satisfaction and customer satisfaction are closely interlinked.
THE SERVICES MARKETING TRIANGLE

All three sides are essential to complete the whole and are critical for the
success. Without one of the sides in place, the triangle, or the total marketing
efforts, cannot be optimally supported.


THE SERVICES MARKETING MIX

Another way to begin addressing the challenges of services marketing is to think


creatively about marketing mix – extended marketing mix for services. One of the
most basic concepts in marketing is marketing mix. Marketing Mix: The elements an
organization controls that can be used to satisfy or communicate with customers.


THE SERVICES MARKETING MIX

Traditional Marketing Mix : 4Ps


 Product  Place  Promotion  Price

The service marketing mix includes three more Ps


 People  Physical  Process

Evidence
People

All human actors who play a part in service delivery and thus influence the
buyer’s perceptions; The firm’s personnel, the customer and other customers in the
service environment


Physical Evidence

The environment in which the service is delivered and where the firm and customer
interact and any tangible components that facilitate performance or communication
of the service
Process

The actual procedures, mechanisms, and flow of activities by which the service is
delivered – the delivery and operating systems.