Services Marketing

Dr. Arijit Bhattacharya

 Home Work 8.6.20.
• A middle-class person earns Rs 10,000 / month.
He is a family man. Wife + 2 kids.
• A middle-class person earns Rs 100,000 / month.
He is a family man. Wife + 2 kids
• Use Service Tangibiltiy spectrum, to find how
does he spend his salary?
– Product?
– Service?
– Product+Service?
• …if a person goes in a salon, where the service
and aura is really good, the customer is
greeted with a flower or so, the ambience is
soothing like there is good music, a little
fountain or something, other facility like juice
or something is given while a pedicure or
something else etc. that customer would
prefer that over a normal salon. Because of
the look and feel and the service provided
3-stage Model of Service Consumption
4 Broad Categories of Service
Basic Focus Strategies of Service
 What are Services?
“Services are deeds, processes, and performances
provided or coproduced by one entity or person
for another entity or person.” (Zeithmal)
 Types of Services
• Health care
• Professional services
– Accounting, legal, architectural
• Financial services
– Banking, investment advice, insurance
• Hospitality
– Restaurant, hotel, bed & breakfast, rafting
• Travel
– Airline, travel agency, theme park
• Others
– Beauty parlor, pest control, health club, interior design
 Tangibility Spectrum
Very few products are “pure services” or “pure
goods’
 Why Service Marketing?
• Physical product = Commodity
• Service = Differentiator
• Service contributes to
– 53% of India’s GDP
– 51% of FDI
– 28% of employment
• Largest private sector employer in India
CII and KPMG report, 2016
BrandZ Most Valuable Indian Brands 2018

1. HDFC bank
2. LIC
3. TCS
4. Airtel
5. SBI
6. Maruti Suzuki
7. Kotak Mahindra bank
8. Asian Paints
9. ICICI bank
10. Jio
 Difference
Goods Services
• Tangible • Intangible
• Standardized • Heterogeneous
• Production separate from • Simultaneous production
consumption and consumption
• Nonperishable • Perishable
 Question
Service Characteristics Marketing Implications/
1. Intangibility Challenges?
2. Heterogeneity
3. Simultaneous
Consumption and
Production
4. Perishability
 Intangibility
• A Goa holiday resort
– During the monsoon?
– During the new years eve?
• Services are
performances/actions rather
than objects.
• E.g. Healthcare
Marketing Implications
• Cannot be inventoried.
• Demand fluctuation?
• Copy by competitors.
• Quality assessment?
• Cost of “unit of service”?
• Price-quality relationship?
• Advertising and promotion?
 Heterogeneity
• A doctor sees patients
– In the morning?
– In the late evening?
– Patient type?
• Services = Performances
• No two performances same
– day to day, hour to hour
• No two customers are alike
• Coproduced and cocreated
with customers
Marketing Implications
• Consistent service quality is
a challenge
• Factors not under full
control of service provider
– Ability of customer to
articulate needs
– Willingness of personnel to
satisfy needs
– Presence of other customer s
– Level of service demand
Simultaneous Consumption and Production

Marketing Implications
• Students-professor class • Mass production difficult
interaction • Service quality, satisfaction
• Services sold first then depend on what happens in
produced and consumed “real time”
simultaneously. – Customized offerings
 Perishability
Marketing Implications
• A seat on an • Challenges
airplane/multiplex – Demand forecasting
• Cannot be saved, stored, – Planning for capacity
utilization
resold, returned
• Service recovery
strategies?
 Evaluating Services
Search, Experience and Credence Qualities
 Challenges for Service Marketers
• How to define and improve service quality?
• How to deliver consistent quality service?
• How to design and test new services?
• How to communicate a consistent and relevant
service image, quality, value?
• How to handle fluctuating demand?
• How to select and motivate service employees?
• How to set price for a service?
• How to a organize a service firm?
Service Marketing Mix
 Physical Evidence
The Oberoi hotel, Mumbai

• Environment in which the

company and the customer
interact and service is
delivered
• Tangible components to
facilitate performance or
service communication
 People
Customer greeted by valets
at the Taj, Munbai

• All human actors who play

a role in service delivery
and influence customer
perceptions
• Employees, the customer,
other customers
 Process
• The procedures,
mechanisms, and flow of
activities by which the
service is delivered .
• Service blueprint
Any Doubt?
 Activity
• In a group of 5, find from the Net the 7Ps of
service marketing mix for any service
company/ brand.

• Time for collaboration: 10 minutes

• After that, any member of any group will be
asked to share the group’s finding.
 Gaps Model of Service Quality
A. Customer gap B. Service Provider (company)
gaps

• Gap 1: Listening gap

• Gap 2: Service Design and

Standards Gap

• Gap 3: Service Performance gap

• Gap 4: Communications gap

 Gap 1: Listening Gap
Not knowing what
customers expect Reasons?
• Lack of …
1. Marketing research
2. Upward
communication
3. Relationship focus
4. Service recovery
 Gap 2: Service Design and Standards Gap

Not having the right Reasons?

service designs and 1. Poor service design
standards. 2. Absence of
customer-driven
standards
3. Inappropriate
physical evidence
and servicescape
 Gap 3: Service Performance Gap
Not delivering to service
Reasons?
standards.
1. Gap in HR policies
2. Gap in handling
supply and demand
3. Customers not
fulfilling roles
4. Problems with
service
intermediaries
 Gap 4: Communication Gap
Not matching Reasons?
performance to promises
1. Overpromising
2. Inappropriate pricing
3. Lack of customers’
expectation
management
4. Lack of ISMC
5. Inadequate horizontal
communications
6. Problems with service
intermediaries
Gaps Model of Service Quality
Service Switching
 Activity
In a group of 4-5, find out what following companies
have to reduce service provider gaps.

1. Disney/Imgaica
2. Filipkart/Amazon
3. Zomato/Swiggy
4. Uber/Ola
5. ICICI/HDFC bank
6. Taj/Ginger hotel
7. Urabanclap
8. Vistara/Indigo
9. IKEA/Pepperfry
 A Quick Recap
• An online pharmacy promises next day delivery
on its website. Customer gets it after 3 days.
• At a restaurant the waiter behaves rudely with
you.
• A telecom brand carries out a marketing
research to understand what customer wants.
• Long queue at the canteen of a busines school.