CHAPTER 1 INTRODUCTION TO SERVICE MARKETING.pdf

Introduction to Services Marketing

1. Introduction to Service
Marketing
CHAPTER 1
SMGT85

2. What are Services?
Services are economic activities performed by one party to another. Often
time-based, these performances bring about desired results to recipients,
objects, or other assets.
In exchange for money, time, and effort, service customers expect value from
access to labor, skills, expertise, goods, facilities, networks, and systems.
However, they do not normally take ownership of the physical elements
involved.
Services provide benefits without ownership

3. WHY STUDY SERVICES?
Contribution of services industries to GDP
globally

4. WHY STUDY SERVICES?
I. Services Dominate the Global Economy

5. WHY STUDY SERVICES?
2.Most New Jobs Are Generated by
Services
Beauty and cosmetics
Banking
Design
Fitness
Health care
Hospitality
Landscaping
•Consulting
•Advertising
•Staffing and Recruitment
•Call Center Representative
•Travel and Reservation

6. WHY STUDY SERVICES?
3.Understanding Services Offers Personal Competitive Advantage
Learning about the distinctive characteristics of services and how they affect
both customer behavior and marketing strategy will give you important
insights and perhaps create a competitive advantage for your own career.
The knowledge gained from studying service marketing books may even
encourage you to think about starting your own service business.

7. WHY STUDY SERVICES?
4.Powerful Forces are Transforming Service Markets
Government Policies
Social Changes
Business Trends
Advances in IT
Internationalization

9. Service Marketing

10. What is service marketing?
Servicesmarketingisaformofmarketingbusinessesthatprovideaservicetotheir
customerstoincreasebrandawarenessandsales.
Unlikeproductmarketing,servicesmarketingfocusesonadvertisingintangibletransactions
thatprovidevaluetocustomers.
Servicemarketingfocusesonbringingintangiblebenefitstocustomers,orbenefitsthat
theycan'tsee,touchorfeel.Professionalsuseservicemarketingtobuildloyaltyand
maintainlong-termrelationshipswithcustomers.
Servicemarketingdiffersfromproductmarketingbecauseitallowscustomersto
personalizeservicesbasedontheirneedsandreceivethembymeetingtheservice
providerinperson.Typically,thecustomercanbeginusingtheserviceimmediatelyupon
purchase.Servicemarketersoftenpersuadetheirtargetaudiencesandincreasesalesby
usingaframeworkcalledthesevenPsofservicemarketing,asetofbestpracticesthat
buildsuponthefourPsofproductmarketing.

11. Difference between product and
services marketing
Product Marketing Service Marketing
Focuses on marketing tangible, physical
products
Focuses on marketing intangible, non-
physical services
Involves promoting and selling a specific
product to consumers
Involves promoting and selling a specific
service to consumers
Emphasizes the features, functionality, and
benefits of the product
Emphasizes the value, quality, and customer
experience of the service
Tangible products can be seen, touched, and
evaluated before purchase
Intangible services are experienced and
evaluated during delivery
Often involves packaging, branding, and
physical product attributes
Often involves customer interactions,
service delivery, and customization
Product marketing may include warranties,
guarantees, or product return policies
Service marketing may focus on service
guarantees, customer satisfaction, or
service level agreements

12. Principal Industries of the Service Sector
Government services
Real estate services
Business and professional services
Wholesale and retail trade
Transport, utilities, and communications services
Finance and insurance
Healthcare services
Accommodation and food services
Arts, entertainment, and recreation services

13. CATEGORIES OF
SERVICES

14. Categories of Services

15. 1.People Processing
Inthistypeofserviceprocessing,thecustomermustbephysicallypresentfor
theservicetobedelivered.
Someofthemostcommontypesofserviceprocessinginvolvepeople.
Healthcare
Lodging
Passengertransportation
Fitnesscenters
Haircuttingsalons

16. 2.Possession Processing
Whenthecustomerisnotrequiredtobepresentwhilegivingthenecessary
service,thenitisatypeofserviceprocessinvolvingobjects.
Theseareprocedureswheretheinputisfromthecustomer,butthe
processingdoesnotrequirethecustomer’spresenceatall.
Repairandmaintenancework
Warehousing
Recyclingofwaste
Laundryordrycleaning

17. 3.Mental Stimulus
Thecustomerisnotrequiredtobepresentatallandnotevenanobjectofthecustomerisrequired.Hejust
needstounderstandwhatishappening.Thephysicalexchangeofobjectsorpeopleisnotnecessary.
Theseservicestouchpeople’smindsandhavethepowertoshapeattitudesandinfluencebehavior
Inthistypeofserviceprocessing,thereisonlymentalworkinvolved.Asthisisverydifficulttomeasure,itis
classifiedasintangible.
Advertising
Movies
ReligiousActivities
Theatreperformance
Education
News
ProfessionalAdvice

18. 4.Information Processing
Informationprocessingdescribesintangibleactionsdirectedatacustomer's
assets.
Inthiscategory,littledirectinvolvementwiththecustomermaybeneeded
oncetheservicerequesthasbeeninitiated.
Examplesofinformation-processingservicesinclude
Insurance
Bankingandconsulting.

19. Marketing Mix in the
Service Industry

20. UNDERSTANDING MARKETING MIX
Themarketingmixisasignificanttoolfor
creatingtherightmarketingstrategyandits
implementationthrougheffectivetactics.
Theassessmentoftherolesofyourproduct,
promotion,price,andplaceplaysavitalpartin
yourmarketingapproach.

21. WHAT ARE THE 7P’S OF SERVICE
MARKETING
The7psofservicemarketingisavariationofthefourp’sofproductmarketingand
focusesonlyoncustomerserviceindustrieslikehotels,insurancecompanies,salons,
aviation,etc.
The7psoftheservicemarketingmixareProduct,Price,Place,Promotion,People,
Process,andPhysicalevidence.
7psofservicemarketingisamodelthatfocusesoncreatinganemotionalconnection
withyourcustomers.Thisisdonebyprovidingthemwithhigh-quality,valuable
customerexperiencestoachievecustomersatisfaction.Additionally,thisapproach
helpstobuildloyaltyandencouragerepeatbusiness.

22. 7P’s OF Service Marketing
1.PRODUCT
Theproductistheactualthingyouaresellingtothecustomer.
Inahotel,thiscouldbearoomwithabedoranairlineticketthatcantakeyouanywhereintheworld.
Therearedifferenttypesofproductsdependingontheindustryyouareinandthetargetmarket.For
example,ahotelmighthavedifferentproductsdependingonifitisa3-staror5-starhotel.
Serviceproductsconsistofacoreproductthatmeetsthecustomers’primaryneedandavarietyof
supplementaryserviceelementsthataremutuallyreinforcing,andaddvaluetohelpcustomerstouse
thecoreproductmoreeffectively.Supplementaryserviceelementsincludeprovidinginformation,
consultation,ordertaking,hospitality,handlingexceptions,etc.
The building where the service happens
Additional products customers can buy during the service, such as hairspray in a hair salon
Explicit services that offer an obvious benefit, like pain relief from a massage
Implicit services that provide a psychological benefit, like feeling more confident after a haircut

23. 7P’s OF Service Marketing
2.PRICE
Pricingstrategiesaffecthowcustomersreacttoprices,recurringfeesand
discounts.Customersoftenusepricetopredictthequalityofaservice.Soif
abusinessprovidesahigh-qualityservice,they'remorelikelytoattract
customersiftheyhavehigherprices.Companiesalsoconsiderthesefactors
whenthinkingaboutprice:
Overheadcostslikeadvertising,rentandinsurance
Costoflaborandmaterials
Thepriceofcompetitors'services
Pricepackets,whicheducatecustomersaboutalltheservicesacompany
provides

24. 7P’s OF Service Marketing
3.PLACE
Servicedistributionmaytakeplacethroughphysicalorelectronicchannels(orboth),dependingonthe
natureoftheservice.Forexample,today’sbanksoffercustomersawiderangeofdistributionchannels,
includingvisitingabankbranch,usinganetworkofATMs,doingbusinessbytelephone,onlinebankingon
adesktop,andusingappsonasmartphone
Businessesthatsellservicesoftenrequirethecustomertocometothem,locationisimportant.
Customersoftenpurchaseservicesnearwheretheylive,whichmeansabusinessismorelikelytomakea
saleifitchoosesalocationclosertoitstargetaudience.
Placealsoreferstowhereandwhenabusinessplacesitsads.Someotherlocation-basedfactorsthat
businessesconsiderinclude:
Whattheircustomers'typicalschedulesare
Whethercustomerscanaccessthebusinessbywalkingordriving
Wherethebusinessadvertisesonline
Wherecompetitorslocatetheirbusinesses

25. 7P’s OF Service Marketing
4. PROMOTION
Promotionfocusesonmakingpotentialcustomersawareofabrandand
helpingthemdeterminethequalityofthatbrand'sservices.Businessesoften
offerservicesthatlooksimilartotheircompetitors'services,sousing
promotionalmaterialcanhelpabusinessdistinguishitself.Businessesdothis
byadvertisingfrequentlyandtargetingtheiradvertisementstoaddressthe
wantsandneedsoftheirtargetaudiences.Thetypesofadvertisementsoften
include:
Contests
Livestreams
Endorsements from influential figures
Social media advertising

26. 7P’s OF Service Marketing
5.PEOPLE
Thisreferstothepeoplewhoworkforacompanyincustomer-facingroles.Thesepeoplecan
affectacustomer'slevelofsatisfactionasmuchastheservicetheyprovidebecausecustomers
associateserviceswiththepeoplewhodeliverthem.Effectivecustomerservicecanmotivate
customerstoreturntothebusinessforadditionalservicesasrepeatbuyersandalsorefertheir
peerstothebusiness.Businessesapplyseveralmethodstostrengthenthecustomerserviceof
theirstaff,including:
Trainingstaffonhowtogreetcustomers,answerquestionsabouttheservicestheyprovideand
resolvecustomerchallenges
Creatingaservicescriptsothatstaffcancreateaunified,consistentcustomerexperience
Establishingaprotocolforupsellingsocustomersfeelcomfortablewhenastaffmember
suggestspurchasingadditionalproductsandservices
Instructingstafftorememberimportantdetailsaboutrepeatcustomers,suchastheircareer
pathandinterests.

27. 7P’s OF Service Marketing
6.PROCESS
Businesses train their staff members to perform a service using a set process. These
processes ensure that the employee delivers a service efficiently and that customers can
expect a consistent standard of quality. Many companies use process mapping to teach their
staff what actions to perform when delivering a service. Process mapping usually consists of
the following:
Symbols that visualize each step of the process, which can make it easier for employees to
follow
Details about when and where the action happens
Flowcharts showing how each step transitions into another
A regular revision process to strengthen existing steps and add new ones

28. 7P’s OF Service Marketing
7.PHYSICAL EVIDENCE
Physicalevidencereferstoeverythingyourcustomersseewheninteractingwithyourbusiness.
Thisincludes:
The physical environment where you provide theproduct or service.
The layout or interior design
Your packaging –Packaging relates to how your product looks–from its design down to the use
of recyclable materials if possible–and also any instructions needed by consumers before using
it correctly such as dosage amountsor warnings about potential side effects.
Your branding –Small things like the receipt you provide and the logo also contribute to your
brand awareness and recall.
Physical evidence can also refer to your staff and how they dress

29. Why an understanding of the 7 P’s of services
is important?
Inservicesmarketing,knowingtheseelementsplayacrucialroletocreatea
customer-centricmarketingplanforyouasaserviceprovider.
Byunderstandingyourcustomers(whoyouareserving),howyou
communicatewiththem(yourprocess),whatproductsandcustomerservice
youprovide(productsandservices),andhowmuchtheyshouldpay(prices)–
youcandesignefficientmarketingstrategiesthatwillachieveyourbusiness
objectives.

30. THANK YOU