Service Marketing

Prepared by Rohan Wickremasinghe AIB (SL), Dip Mgt., MIM (SL), MITD (SL), MBA (SGU), Dip B.
(BPUSL)

Service Marketing - Is it an Art or a Science ?

What is a Product ?
Anything that can be offered to a market for attention, acquisition, use,
or consumption that might satisfy a want or need. ex: Soap, toothpaste
(Pure tangible products-no services accompany the product)

What is a Service ?
Any activity or benefit that one party can offer to another that is
essentially intangible and does not result in the ownership of anything.
ex: Financial services, CIMA exam (Pure services-no products
accompany the service)

What is an offer which consists of a tangible product with accompanying

services ?
These are a company’s offers which consist of a tangible product with
accompanying services.

ex: Ford offers more than just automobiles. Its offer also includes
repair and maintenance services, warranty fulfillment, showrooms and
waiting areas etc.

What is a hybrid offer ?

A hybrid offer consists of equal parts of goods and services. For
instance, people patronize restaurants both for their food and their
service. ex: Pizza Hut.

What is an offer which consists of a less tangible product with more

services ?
American Airlines passengers primarily use the service (transport) but
the trip also includes some tangibles such as food, drinks and airline
magazines etc.

Strategy: To make service more attractive (Transport it self)

What is an offer which consists of a more tangible product with less

services ?
For an example a mobile phone (only the phone),

What is an experience ?
To differentiate the products and services companies offer, they are
developing and delivering customer experiences.

Whereas products and services are external, experiences are

memorable.

Whereas products and services are external, experiences are personal

and take place in the minds of individual consumers.

They are rich with emotional, physical, intellectual or spiritual

sensations created within the consumer.

ex: Your relationship with a person.

In their book, The Experience Economy, Jospeh Pine and James Gilmore
argue that as products and services become less and less
differentiated, companies are moving to a new level in creating value
for customers. As the next step in differentiating their products and
delivering services, companies are staging, marketing and delivering
memorable experiences.

Consider the evolution of the birthday cake:

(1) Agrarian economy: Mothers made birthday cakes from scratch,

mixing farm commodities.

(2) Goods based industrial economy: Mothers paid a dollar to two to

buy ingredients.

(3) Service based economy: Busy mothers ordered caked from the
bakery, which cost more.

(4) Experience based economy: Now mothers don’t neither make the
birthday cake or nor even order it. Instead they spend Rs. 5000/- or
more to outsource the entire birthday event to outside companies.
These companies stages a memorable event for the kids and often
throws the cake for free. Welcome to the emerging experience based
economy...!

- Levels of product

Products:
(1) Tangible products
(2) Services
(3) Experiences
-Marketers have broad based the concept of a product to include other
“marketable entities” - namely organizations, persons, places, ideas .

- Organisations: IBM wants to establish itself as the

company to turn for “e-business solutions”.

- Persons: Politicians market themselves ex: Creating or

associating themselves with well-known personalities.

- Place: ex: Marketing a city ex: Colombo.

-Ideas : ex: Health campaigns on how to get rid of smoking.

Marketing Strategies for service firms:

In a service business, the customer and frontline service employees
interact to create the service. Thus service providers must interact
effectively with customers.

Successful service companies focus their attention on both their

customers and their employees.

Types of marketing in service companies:

(1) Internal Marketing

Internal Marketing means that the service firm must effectively train
and motivate its customer-contact employees.

(2) Interactive Marketing

Interactive Marketing means that service quality depends heavily on
the quality of the buyer-seller interactions during the service
encounter.

For an example American company Ritz selects only “people who care
about people” ** and instructs them carefully in the fine ART of
interacting with customers to satisfy their every need.

Service differentiation strategies:

ex: British Airlines offers: sleeping compartment, hot showers etc.

(1) Based on superior people.

(2) Based on superior physical evidence.

ex: superior physical environment.
 (3) Based on superior deliver processes.
ex: For example, banks offer their customers electronic home
banking.

Managing the customer relationship

(1) Relationship marketing
The main idea behind relationship marketing is to build strong
relationships with customers in order to retain them instead of
concentrating efforts on recruiting new ones.

(2) Ethical marketing

(3) Quality and customer care

Lloyds bank’s challenge to its customer service staff:

- Don’t let the phone ring more than 4 times before it is
answered.
- The person answering should introduce him/herself first.
- Ques should not have more than five people in them.
- Staff should have a good knowledge about all bank’s products.

Marketing Mix
(1) P - Product
(2) P - Price
(3) P - Place
(4) P - Promotion
(5) P - People
(6) P - Processes
(7) P - Physical Evidence

The basic functions of Marketing Communication

(1) D - Differentiate
(2) R - Remind
(3) I - Inform
(4) P - Persuade

Porter’s three generic strategies for competitive advantage:

1. Cost leadership
Means being the lowest cost producer in the industry as a whole.
2. Differentiation
Is having a product or service which the industry as a whole believes to
be unique.
3. Focus
Involves a restriction of activities to only part of the market.
 "...It is time for us to ask what we...should do for our country and
not....
what the country could do for us..."

- John F. Kennedy

“All great visions can be traced to humble beginnings. Where the

whispers of a dream reverberates persistently until its voice no longer
go unheeded. Coupled with the courage, believing in making a
difference, the dream eventually given life, will take flight and soar
to great heights under the nourishment
of sheer faith and hard work ”

Anonymous

Rohan Wickremasinghe
# 191, Veluwana Place, Colombo 09-00900, Sri Lanka.
Tel: Off: (Direct) 075-338174, 075-336571
Mobile: 0777-354966
Fax: (Sri Lanka) 075-336571
Fax: (USA) (419) 710 5699
E-Mail: rohan.wick@lanka.ccom.lk