UNIT - MARKETING MANAGEMENT Services Marketing A service is any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything. Services are performances that bring customer obtain the rights to use a physical object or space; hire the labor and expertise of personnel and networks. Services are acts, déeds, performance or efforts Distinctive characteristics of services Intangibility-unlike physical products, services cannot be seen, tastedyfelt, héard/Or smelled before they are bought. It could make it tangible though any number of marketing tools: place) people. Equipment, communication material, symbols and price. Inseparability-services are typically produced and consumed sinfuitaneously. Variability-because the quality of services depends on who provides them, when ahd where, and to whom, services are highly variable. Here are three steps Service fitms cafijtaké to increase quality contro! 1. Invest in good hiring and training procedures 2, Standardize the service-performance process throughout the organization 3, Monitor customer satisfaction Perishability-services cannot be stored, so their P@rishabilitycan be a problem when demand fluctuates. Several strategies can producsalbetter match between service demand and supply. Characteristics of Services Marketing “IMost service products cannot betinventoried, ‘intangible elements usually déminatee value creations «Services often are difficult to visualize and understand ‘Customer may be involved in co ‘People may be part of the service experience) Operational inputs'and outputs tend to vary widely, Time factor often asstimes great importance. Distribution fay, take plate through non physical channels. ‘TALVIR SINGH - 95923-65456 (COMMERCE NET ACHIEVERS) Page 1‘Table 62: Services ~ Characteristics Tntangibility — ] Difficult to evaluate, Marketer sells a promise, Dificult to advertise, Difficult to justify prices, Goods augmented with intangible services Tnseparability | Activities of service production and consumption are simultaneous, Consumers ‘must participate in production. Constimer does not take physical posession of service, Role of service provider critical ‘Services cannot be stored. Very difficult to balance supply and demand, Unused capacity lost for ever, Considerable variation in demand. ‘Success depends on satisfied customers in the long-run, Customer relationship maintenance is critical. Retaining a group of satisfied customers essential, ‘Service providers’ commitment critical to delivery, High-level of employee training, and motivation essential to success, Service marketers try to change high-contact services into low-contact services without affecting customer satisfaction, © People People of a service organization involved in productionand delivery of services are a vital element of the marketing mix. Service people are an important Consideratiombecause they are the ones Who provide most services. Service employees sometimes, become almost a distinction for some businesses and they become the business. Parasuraman and Berry observe that a service firm eainibeOhily 25 Bood as its people. ‘+ Physical Evidence Physical evidence reduces the risk Perception by customers by offering tangible evidence of the promised service delivery. Tangible evidence of service quality can take a number of forms. At its simplest level, the evidence could\be a brochurSlthat gives pictorial evidence of infrastructure and physical facilities of a management school, of holiday brochure gives evidence of hotels and resorts. The appearance and smiles of airline staffiand stewardesses provides some indication of the nature of service © Process Process is of critical iNiportance to Consumers in high-contact services. Diners in a restaurant can be significantly affected by the manner in which staff serves them and the amount of waiting time involved in the service produietion process. Servicé blueprint is a Process afalysis methodology. The proposed blueprint allows for a quantitative desctiption of critical srvice’elements, such as time, logical sequences of actions and processes. ‘+ Problems in Marketing Services: 1) A service cannot be demonstrated. 2) Sale, production and consumption of services takes place simultaneously. 3) Aservice cannot be stored. It cannot be produced in anticipation of demand, 4) Services cannot be protected through patents. 5) Services cannot be separated from the service provider. 6) Services are not standardized and are inconsistent. 7) Service providers appointing franchisees may face problems of quality of services. 8) The customer perception of service quality is more directly linked to the morale, motivation and skill of the frontline staff of any service organiz ‘TALVIR SINGH - 95923-65456 (COMMERCE NET ACHIEVERS) Page 2‘+ Types of Services 1) Core Services: A service that is the primary purpose of the transaction. Eg: a haircut or the services of lawyer or teacher. 2) Supplementary Services: Services that are rendered as a corollary to the sale of a tangible product. Eg: Home delivery options offered by restaurants above a minimum bill value. Goods Services A physical commodity [A process or activity Tangible Intangible Homogenous Heterogeneous Production and distribution are separation from their | Production, distribution and consumption are consumption simultaneous processes Can be stored Cannot be stored Transfer of ownership is possible Transfer of ownership is not possible ‘The new services realities ‘+ Ashifting customer relationship Customer empowerment-customers are becoming more sophisti¢ated about buying product- support services and are pressing for “unbundled services.” The internetihas empowered customers by letting them vent their rage about bad service. Customer coproduction-the reality is that customers do not therely urchase and use a service; they play an active role in its delivery. The problem with thisiisttributfén ~customers often feel the firm is at fault or, even if not, that it is still responsible for righting anyjwrongs. Solution for these comes in all forms: 1. Redesign processes and redefine customer roles to simplify service encounters 2. Incorporate the right technology to.2id eimiployesiand customers 3. Create high-performance customersiby enhancing their role clarity, motivation, and ability 4, Encourage “customer,citizenship” so Gustomers help customers Satisfying employees as well as ‘customers-excellent servie@icompaniies know\that positive employee attitudes will promote stronger customer loyalty. ‘TALVIR SINGH - 95923-65456 (COMMERCE NET ACHIEVERS) Page 3