SERVICES MARKETING

INTRODUCTION

CHAPTER OBJECTIVES

Importance of service sector in our economy Difference between services and physical goods and its implication for marketing services Important distinctions among various types of services and how do these differences impact the way we market them Elements of service marketing mix Importance of integration of marketing, operations and human resource functions in service business Major changes occurring in service business and how these changes affect the nature of service competition

SERVICES DOMINATE MODERN ECONOMY

STRUCTURE OF THE SERVICE SECTOR

Remarkably diverse Represents almost half of the GDP Likely to have service dominated economy as per capita income rises Knowledge based services- most dynamic

WHY IS SERVICE SECTOR GROWING?

Increased productivity Automation in agriculture and industry Growing demand for both new and traditional services Organisations are increasingly choosing specialist subcontractor for outsourcing internal services Government policies, social changes, business trends, advances in IT

IMPLICATION OF CHANGES
Increased demand for services More intense competition Service innovation stimulated by new and improved technology Increased focus on services marketing and management

TECHNOLOGY- KEY DRIVER OF SERVICE INNOVATION

Technology of:
Power and energy Materials Physical designs Methods of working Information technology

SERVICES POSE DISTINCTIVE MARKETING CHALLENGES

Basic differences between goods and service: Customers do not obtain ownership of services Service products are ephemeral and cannot be inventoried Intangible elements dominate value creation Customers may be involved in the production process Other people may be a part of the product Greater variability in operational inputs and outputs Difficult to evaluate Time factor assumes great importance Distribution channel takes different forms

IMPORTANT DIFFERENCES EXIST AMONG SERVICES

CATEGORISING SERVICE PROCESSES

What is the nature Of the service act Who or What is the direct recipient of the Service? Possessions People

Tangible actions

Intangible actions

People Processing (services directed at peoples bodies) Mental Stimulus Processing (services directed at peoples mind)

Possession Processing (services directed at physical possessions) Information Processing (services directed at intangible assets)

PEOPLE PROCESSING
To receive these services, customers physically enter the service system Passenger transportation, health care, lodging, beauty salons, physical therapy, fitness centers, restaurants, bars, barbers, funeral services

POSSESSION PROCESSING
Customers are less physically involved Treatment to physical possession Freight transportation, repair and maintenance, warehousing and storage, office cleaning services, retail distribution, laundry and dry cleaning, refueling, landscaping and gardening, disposal and recycling

MENTAL STIMULUS PROCESSING

Services that interact with peoples mind Has the power to shape attitudes and influence behavior This category is information based Advertising, PR, arts and entertainment, education, information services, music concerts, psychotherapy, religion, management consulting

INFORMATION PROCESSING
Services directed at intangible assets Accounting, banking, data processing, data transmission, insurance, legal services, programming, research, securities investment, software consulting

USING ALTERNATIVE CHANNELS FOR SERVICE DELIVERY

MAKING THE MOST OF INFORMATION TECHNOLOGY

Plays an important role in mental stimulus and information processing services

BALANCING SUPPLY AND DEMAND

People and possession processing

Mental stimulus and information processing

WHEN PEOPLE BECOME PART OF THE PRODUCT

People processing services In buses, restaurants, hairdressing salon

THE SERVICES MARKETING MIX

7Ps of services marketing

Product elements Place and time Promotion and education Price and other user outlays Physical environment Process People

LINKING MARKETING, OPERATIONS AND HUMAN RESOURCE FUNCTIONS

MARKETING SERVICES VERSUS MARKETING GOODS THROUGH SERVICE

SERVICE SUCCESS REQUIRES A FOCUS ON BOTH CUSTOMERS AND COMPETITIVE MARKETS

Transaction oriented versus relationship oriented