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Unit I
Prof. Arun Mishra
arunjimishra@gmail.com
9893686820
Learning Objectives
What are Services?
Why Study Services?
Characteristics of Services
Marketing Implications for Strategic
decision
Goods Vs. Services Marketing
Marketing Mix Required for Services
Definition of Services
Services
are economic activities offered by one party to
another
most commonly employ time-based performances to
bring about desired results
Salt
Detergents
CD Player
Wine
Golf Clubs
New Car
Tailored clothing
Plumbing Repair
Fast-Food Restaurant
Health Club
Airline Flight
Landscape Maintenance
Consulting
Life Insurance
Internet Banking
Low
Intangible Elements
High
Demand
Supply
The competitive landscape
Customers choices, power, and decision making
Success hinges
on:
Changes in regulations
Privatization
New rules to protect customers,
employees, and the environment
New agreement on trade in services
Government
Policies
Government
Policies
Push to increase shareholder value
Emphasis on productivity and cost
savings
Manufacturers add value through
service and sell services
More strategic alliances and
outsourcing
Focus on quality and customer
satisfaction
Growth of franchising
Marketing emphasis by nonprofits
Government
Policies
Growth of Internet
Greater bandwidth
Compact mobile equipment
Wireless networking
Faster, more powerful software
Digitization of text, graphics, audio,
video
Government
Policies
More companies operating on
transnational basis
Increased international travel
International mergers and alliances
Off shoring of customer service
Foreign competitors invade domestic
markets
Characteristics of Services
Characteristics of Services
Intangibility:
Intangibility difficult to sample and to evaluate
Inseparability: difficult to separate services
from the service provider; mainly direct sales;
staff are essential to the delivery of quality
services
Heterogeneity:
Heterogeneity virtually every service is
different; very difficult to standardize quality
Perishability: those not sold can not be stored
Fluctuating demand: demand for some
services fluctuates by season, or even by time of
day.
Implication 1
No ownership
Customers obtain temporary rentals, hiring of personnel, or access
to facilities
Pricing often based on time
Customer choice criteria may differ for renting vs. purchase--may
include convenience, quality of personnel
Marketing a car rental service to a customer differs from that of
selling a car to a person.
Implication 2
Customers may be involved in production process
Think of customers in these settings as partial employees
Customer behavior and competence can help or hinder
productivity, so marketers need to educate/train customers
Changing the delivery process may affect role played by
customers
Design service facilities, equipment, and systems with
customers in mind: user-friendly, convenient
locations/schedules
Implication 3
Other people are often part of the service product
Sporting eventbehavior of fans on other spectators!
Achieve competitive edge through perceived quality of
employees
Recognize that appearance and behavior of other customers
can influence service experience positively or negatively
Avoid inappropriate mix of customer segments at same time.
Manage customer behavior (the customer is not always right!)
Implication 4
Often difficult for customers to evaluate services
Educate customers to help them make good choices, avoid risk
Tell customers what to expect, what to look for
Create trusted brand with reputation for considerate, ethical
behavior
Encourage positive word-of-mouth from satisfied customers
Product
Place
Price
Promotion