Marketing of Services

Unit-1
Definition of Services
Intangible products such as accounting, banking, cleaning, consultancy, education, insurance, expertise, medical treatment, or transportation Sometimes services are difficult to identify because they are closely associated with a good; such as the combination of a diagnosis with the administration of a medicine. No transfer of possession or ownership takes place when services are sold, and they ( ! "annot be stored or transported, (#! are instantly perishable, and ($! "ome into existence at the time they are bought and consumed.

Difference between Product & Services Marketing

. %hen you are marketing a service, you are really marketing relationship and value. &his relationship and value needs to be marketed differently than if you are marketing actual products. #. 'nother ma(or difference between marketing services and marketing products is that when a buyer purchases a service, the buyer is purchasing something that is intangible, instead of a tangible product, like a computer or a sprinkler system or a web page. $. "onsumers) concept of a service is often times based on (ust the reputation of only one single person. Instead of building a reputation based on the *uality of a number of different products, a service is built on how well a particular person delivers on a service, such as how well a stock advisor does with your stock portfolio. +. It is pretty easy to compare the *uality of different products. It)s easy for you to see if one computer works more *uickly than another computer, or if one &, has a better picture than another picture, or if your child can break a toy more easily than another toy. -owever, it is much more difficult to compare the *uality of similar services that are provided. .. /roducts are returnable. -owever, services are not returnable. -ow to market services 0enerally speaking, marketing a product re*uires what are known as the 1+ /)s12 /roduct, /rice, /lace, and /romotion. 3arketing a service adds three more 1/)s1 to the traditional 1+ /)s12 /eople, /hysical evidence, and /rocess. Service marketing also includes marketing what is known as the services cape, which is the aesthetics of your business place2 the outside of your business building, the inside of your business building, and the way that the employees look.

Difference between Product & Services Marketing

&rust

&ime

4elivery

%ants 5 Needs

6elationships

Trust
7ntrepreneur maga8ine says in a service9based business, 1you are the product.1 In other words, you have to sell confidence and trust in yourself, and your ability to perform the services as described. %hen marketing a service, you need to instill trust and confidence in your abilities because instead of receiving a tangible product in exchange for money, the customer receives a promised result.

Time
Selling a service also means you)re selling your time. %hen you sell a product, there is time invested to create or ac*uire the product and then it is sold again and again without further time invested. Services by their very nature are time9intensive activities because there is no way to continue providing a service without continuing to invest time performing the service. &ime is an important part of marketing a service because if you promise results within a given time frame, you must be certain you)re able to deliver while still managing and providing services for others. :ou must be able to effectively estimate and manage the time needed for providing services to clients.

Deliverability
%hen you)re marketing products, you can give customers a delivery date estimate if they)re ordering online or through the mail, and they can walk out the door with the product in hand if they buy it in your brick and mortar store. Services must be created after they)re ordered, and delivery times will vary. &he challenge with marketing services is being able to convince customers that you can and will deliver *uality results within a given period of time. ;sually service marketing materials have testimonials and case studies from other satisfied clients that work to prove you)re able to deliver on the promises in your marketing materials.

Wants And Needs

3any products can be marketed in ways that trigger impulse buying. If someone sees a pair of shoes, she can suddenly decide to buy them whether they)re needed or not. She may (ustify the purchase by claiming they needed dress shoes for a special occasion, but in reality she gave in to a want instead. Services are rarely impulse buys, but the marketing materials can help buyers (ustify the want or need by explaining the benefits the customer will receive from buying the service. ' lawn care service for example, can include convenience and free time as part of their marketing materials, to persuade buyers to sign up.

Relationships
3arketing a service9based business relies more on building a relationship than marketing products does. Some relationship building is done with product marketing99particularly branding and name recognition99 but it)s not as important a part of the overall marketing process for service9based businesses. %hen services build up trust and reliability with clients, they gain relationships that can continue earning them money for years to come.

Characteristics of Services
&here are several characteristics which differentiate a service from a product. &hese are Perishability, Heterogeneity, Intangibility and ownership. -ere we discuss further < characteristics which are critical and help you understand a service product better. 1) Services are sold e cl!sively on the basis of benefits they offer = %hy is it that 'ccenture has such high brand e*uity> &his is because of one single thing which they have commanded over time = &rust. &hus this is one benefit to the service of 'ccenture which other companies can hardly give. &herefore, word of mouth publicity and a good reputation are some benefits which are critical to make a service brand over time. &he first restaurant you try, is one recommended by your friend. ") Services cannot be #ade available in advance = If you were running a restaurant, can you make all the dishes one day in advance and then serve the customer when he comes> No you can?t. 'll you can do is make the ingredients. 7ven fast food restaurants take care that the food is replenished every single day. &he simple reason behind this is that services cannot be stored. &hey cannot be given in advance. &hey can be given only when a purchase of the services has been made. $) %i#e !tility is critical = If you were a doctor, and you gave half an hour to each patient, talking idle talks (ust to make him comfortable, you will probably lose the @ customers sitting in your lobby. In services, you charge by the amount of time a person consumes. &hus the way you utilise your time is critical to the profitability of your business. ' restaurant which does not have any customers today will have lost a lot of money in keeping the restaurant open, in labour charges etc. &) Services cannot be transferred = Autsourcing is the best example of non9transference of services. If you wanted to outsource your calls, can you bring the call centre to your country> :ou can?t. Because again the costing will go high. &hat is why call centres are in cheaper countries. :ou cannot separate the process from the source. :ou will have to keep the call centre services in one place and provide these services in another. ') Services perish = &he point is similar to perishability of services marketing. &he concept is simple = if you do not watch the movie now, you won?t get a refund of the ticket. If you do not board your plane or your train, you cannot ask back for the charges of the ticket. ' service once order, perishes, if it is left unused () ) service once cons!#ed cannot be ret!rned = :ou pay a doctor for consultation and medicines. But your illness does not get cured or he is unable to find the source. "an you ask your money back> :ou cannot. -e gave you the service which you asked for. -e might not ask for money anymore or you can

return the medicines and receive the money for the medicines. 3edicines are not a service. &hey are a product. &he bottom line = you cannot return a service once it has been consumed. In restaurants, you can return the dish if you don?t like it, and ask for another same one. But you cannot walk out of the restaurant without paying for the services. *) +ontrolling the ,!ality of services is diffic!lt = 3y local auto service "entre has one rule for loyal customers = 4o not give your bikes on weekends. &he reason is *uite simple. -e has a heavy workload on weekends as a result of which the *uality of service is low. &his is human factor and the owner can hardly do anything. 7ven in a restaurant, the *uality of food served or the service given will vary during peak hours. Curthermore, as services are intangible, it is not possible to measure the *uality of service given. &hus controlling the *uality of services over time is very difficult as long as the human element is involved.

Unit-"
&he 'merican 3arketing 'ssociation defines services as 9 D'ctivities, benefits and satisfactions which are offered for sale or are provided in connection with the sale of goods.E &he defining characteristics of a service are2 Intangibility- Services are intangible and do not have a physical existence. -ence services cannot be touched, held, tasted or smelt. &his is most defining feature of a service and that which primarily differentiates it from a product. 'lso, it poses a uni*ue challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering. . Heterogeneity./ariability- 0iven the very nature of services, each service offering is uni*ue and cannot be exactly repeated even by the same service provider. %hile products can be mass produced and be homogenous the same is not true of services. eg2 'll burgers of a particular flavor at 3c4onalds are almost identical. -owever, the same is not true of the service rendered by the same counter staff consecutively to two customers. #. Perishability- Services cannot be stored, saved, returned or resold once they have been used. Ance rendered to a customer the service is completely consumed and cannot be delivered to another customer. eg2 ' customer dissatisfied with the services of a barber cannot return the service of the haircut that was rendered to him. 't the most he may decide not to visit that particular barber in the future. $. Inseparability.Si#!ltaneity of prod!ction and cons!#ption- &his refers to the fact that services are generated and consumed within the same time frame. 7g2 a haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which the customer may consume even after a few hours of purchase. 3oreover, it is very difficult to separate a service from the service provider. 7g2 the barber is necessarily a part of the service of a haircut that he is delivering to his customer. Types of Services . +ore Services- ' service that is the primary purpose of the transaction. 7g2 a haircut or the services of lawyer or teacher.

#. S!pple#entary Services- Services that are rendered as a corollary to the sale of a tangible product. 7g2 -ome delivery options offered by restaurants above a minimum bill value.

Difference between Goods and Services

0iven below are the fundamental differences between physical goods and services2 0oods ' physical commodity &angible -omogenous /roduction and distribution are separation from their consumption "an be stored &ransfer of ownership is possible Services ' process or activity Intangible -eterogeneous /roduction, distribution and consumption are simultaneous processes "annot be stored &ransfer of ownership is not possible

Service Quality
'fter having attained the desired service level, the next great challenge faced by service providers is to maintain service standards at levels of excellence. &his is as important, and as tough, as establishing service standards and attaining to them in the first place. &here are basically two approaches that any organi8ation can have towards maintaining service standards = a proactive approach or a reactive approach. Proactive- ' proactive approach entails actively reaching out to customers and trying to gather their feedback on service *uality and suggested areas of improvement. &his can be done by way of

Surveys and administering *uestionnaires 0ap 'nalysis, and Staff training

S!rveys and ,!estionnaires- Such an approach helps a brand to anticipate customer demands and expectations and align its service offering accordingly. 'lso, the findings of such surveys can help to identify common issues and demands of customers hence helping a company to customi8e its service offering. a. 0ap )nalysis- 'nother approach that is adopted for analy8ing service *uality is that of the gap analysis. &he company has an ideal service standard that it would like to offer to its customers. &his

is contrasted with the current level of service being offered. &he gap thus identified serves both as a measure and as a basis for planning a future course of action to improve the service offering. b. Staff %raining- 'nother crucial aspect of the proactive approach is staff training. "ompanies nowadays spend generously on training their personnel to ade*uately handle customer *ueries andFor complaints. &his is particularly true if a company is changing its service offering or going in for a price hike of its existing services. Cor example, when a fast food chain increases the price of its existing products, the staff has to handle multiple customer *ueries regarding the hike. Gack of a satisfactory explanation would signify poor service standards and lead to customer dissatisfaction. 1eactive- ' reactive approach basically consists of resorting to a predetermined service recovery mechanism once a customer complains about poor service *uality. It usually starts with apologi8ing to the customer and then taking steps to redeem the situation. &he fundamental flaw with this approach is that, here the customer has already had a bad experience of the brand?s service. Measuring Service Quality 'nother crucial element to be kept in mind while seeking to maintain service *uality is to have in place a metric for Hmeasuring? *uality. &he particular parameters selected would depend on the type of business, service model and the customer expectations. Cor example2 at a customer service call center of a telecom provider, the metric for measuring service *uality could be the average time taken for handling a call or rectifying a complaint. Cor a fast food outlet, the metrics for measuring service *uality of the sales staff could be the number of bills generated as a percentage of total customer footfalls or the increase in sales month on month. Ance a system is put in place for measuring *uality, a standard can then be mandated for the service standard the organi8ation is seeking to maintain.

Understanding Services Custo ers !"pectations

"ustomer needs comprise the basic reason or re*uirement that prompts a customer to approach a service provider. Cor instance, a person visits a restaurant primarily for the food it serves. &hat is the customer?s need. -owever, the customer expects polite staff, attentive yet non9intrusive service and a pleasant ambience. If these expectations are not properly met the guest would leave the restaurant dissatisfied even if his basic re*uirement of a meal being served has been met. &hus knowing and understanding guest expectations is important for any service provider. +!sto#er Satisfaction, 2issatisfaction and 2elight Based on the *uality of the service experience a customer will either be satisfied, dissatisfied or delighted. Inowing a customer?s expectation is instrumental in developing a strategy for meeting and exceeding customer expectations.

+!sto#er 2issatisfaction- &his is a situation when the service delivery fails to match up to the customer?s expectations. &he customer does not perceive any value for money. It?s a moment of misery for the customer. +!sto#er Satisfaction- In this case, the service provider is able to match the customer?s expectations and deliver a satisfactory experience. -owever, such a customer is not strongly attached to the bran and may easily shift to a competing brand for considerations of price or discounts and freebies. +!sto#er 2elight- &his is an ideal situation where the service provider is able to exceed the customer?s expectations creating a 3oment of 3agic for the customer. Such customers bond with the brand, are regular and loyal and will not easily shift to other brands.