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Marketing Management-II

Prof. Ravi Shekhar Kumar

XLRI - Xavier School of Business, Jamshedpur
ravishekhar@xlri.ac.in

How has Economy progressed?

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Service Marketing: Introduction

What is Service
A service is any act of performance that one party
can offer another that is essentially intangible & does
not result in the ownership of anything; its production
may or may not be tied to a physical product.

Why Service Marketing?

Services are Everywhere
Services dominate economy/GDP
Service as a business imperative in goods-focused
businesses
Professional service needs
Service marketing is different
Service leads to profits

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Tangibility Spectrum

Goods vs Service Continuum

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What are key Service Characteristics?

Intangibility

Inseparability

Services cannot
be seen, tasted,
felt, heard, or
smelled before
purchase

Services cannot
be separated
from their
providers

Services
Variability

Perishability

Quality of
services depends
on who provides
them and when,
where, and how

Services cannot
be stored for
later sale or use

Overcoming Service Challenges

Inseparability

Intangibility

Increase
productivity of
providers

Use cues to
make it tangible

Services

Variability

Perishability

Standardize service
production & delivery

Match supply
and demand

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Few terms associated with Service Marketing

Service Products
Expanded Service Marketing Mix
People; Physical Evidence; Process

Service Blueprinting
A tool for simultaneously depicting service process, customer
contact points, & evidence of service from customers point of
view.

Technology Facilitated Service

Service Products
A service product comprises of all elements of service performance, both
tangible & intangible, that create value for customers.
Service products consist of:
Core Product central component that supplies principal, problemsolving benefits customers seek
Supplementary Services augments core product, facilitating its use
& enhancing its value & appeal
Delivery Processes used to deliver both the core product & each of
supplementary services

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Flower of Customer Service

Information
Payment
Billing

Consultation
Core

Exceptions

Order-Taking

Hospitality
Safekeeping

KEY:

Facilitating elements
Enhancing elements

Expanded Service Marketing Mix

People:
All human actors who play a part in service delivery and thus
influence the buyers perceptions: namely, the firms 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 deliveredthe service delivery and operating
systems.

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Service Blueprint Components

Blueprint: Overnight Hotel Stay Service

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Evolution of Service Management

Service
Quality/Satisfaction

Relationship
Marketing

Experience
Management

Service Quality Parameter

Tangibles

Appearance of physical facilities, equipment,

personnel, & communication materials.

Reliability

Ability to perform the promised service

dependably & accurately.

Responsiveness

Willingness to help customers and provide

prompt service.

Assurance

Knowledge and courtesy of employees and

their ability to convey trust & confidence.

Empathy

Caring, individualized attention the firm

provides its customers.

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The Customer Gap

Expected
Service
GAP

Perceived
Service

Parasuraman, et al., 1985

Provider Gap 1
CUSTOMER

Customer
expectations
Perceived
Service

COMPANY

Gap 1:
Listening Gap

Company
perceptions of
customer
expectations

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Provider Gap 2
CUSTOMER

COMPANY

Gap 2:
Service Design &
Standards Gap

Customer-driven
service designs &
standards
Company
perceptions of
customer
expectations

Provider Gap 3
CUSTOMER

COMPANY

Gap 3:
Service
Performance Gap

Service delivery
Customer-driven
service designs &
standards

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Provider Gap 4
CUSTOMER

Gap 4: Communication Gap

External
Service delivery
communications
to customers

COMPANY

The GAP Model

Causes of Gaps
Promoted
Expectation

G4

Communication

Inflated Expectation
Real Expectation

Service
Quality

Managements
Perceived
Customer
Expectation

G1

Marketing

G2

Design

G3

Conformance

Service
Design Spec.
Service
Delivered

Service Providers
Assessment

Service Received

Customers
Assessment

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Service-Quality Model

Parasuraman, et al., 1985

Satisfaction/Dissatisfaction Judgments
Satisfaction can be defined as an attitude-like judgment
following a service purchase (or series of service
interactions).
Disconfirmation Paradigm
Expectations: beliefs we have before usage
Performance: evaluation of what happened
Disconfirmation: occurs when these two are not equal
positive leads to satisfaction
negative leads to dissatisfaction

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Root Causes of Service Failure

Service Recovery Paradox

A good recovery can turn angry, frustrated customers into

loyal ones. ..can, in fact, create more goodwill than if things
had gone smoothly in the first place. (Hart et al. 1990)

HOWEVER,
Only a small percent of customers complain
Service recovery must be SUPERLATIVE
Service recovery is expensive

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Relationship Marketing

Relationship Marketing

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Relationship Marketing
Discrete transactions vs relational exchange
Attracting, maintaining & enhancing customer relationships
Goal is to earn the position of preferred supplier by
developing trust in key accounts over a period of time.
All marketing activities directed towards establishing,
developing & maintaining successful relational exchanges.

Customer Goals of Relationship Marketing

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CRM

Its about

how you collect and use intelligence

to unify points of contact.

Its about how you

engage

transact
fulfill
service

The Bucket Theory of Marketing

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What is Customer Experience?

Internal & subjective response that customers have
to any direct or indirect contact with a firm,
covering every aspect of firms offering

How Experience is formed in human being?

Experience.
With ever greater commoditization of companys
offerings, the experience of customer with the firm
matters most.

The interest of the present-day marketers has

shifted from the notion of simply designing
consistent service encounters to the staging of
memorable personal experiences, as experience
is unforgettable.

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CRM vs CEM
CRM

CEM

Captures & distributes what

a company knows about a
customer

Captures & distributes what

a customer thinks about a
company

Firms value to customer

Customers Value to firm

Evolution to Customer Value Enhancement

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BusinessAnalysis
3CAnalysis

Product:
Objectives&Strategies

M
K
I
S

Marketing Objectives: Generic

Marketing Strategies (STPD)

Price:
Objectives&Strategies

Place:
Objectives&Strategies

Promotion
(IntegratedMarketingCommunications):
Objectives&Strategies
IntegratedMarketingMix
THEINTEGRATEDMARKETINGPLAN

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