Services-Marketing in management world.pptx

ppt on dervice marketing

1. Services Marketing Understanding the unique world of intangible offerings and customer experiences

2. What Are Services? "A service is an act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything." - Philip Kotler "Services are activities, benefits or satisfaction, which are offered for sale or provided in connection with the sale of goods." - American Marketing Association

3. Types & Classification of Services Services can be categorized in numerous ways, reflecting their diverse nature and impact on both providers and consumers. By Market Segment Services designed to meet the specific needs of distinct customer groups, such as business clients or individual consumers. Degree of Customer Contact Ranges from high-contact services (e.g., healthcare, education) requiring direct interaction, to low-contact services (e.g., online streaming, utilities). Degree of Tangibility While services are intangible, some include tangible elements like food in a restaurant or physical reports from a consultancy. Skills of the Service Provider Refers to the level of expertise and training required, distinguishing between professional services (e.g., legal, medical) and unskilled labor. By Business Orientation Classifies services based on their primary purpose, such as profit-oriented businesses or non-profit organizations serving social needs. By Degree of Regulation Some services are heavily regulated (e.g., financial, aviation) due to safety or public interest, while others operate with less oversight. Degree of Labor Intensiveness Differentiates services based on the proportion of human labor versus equipment, from highly personalized services to automated processes.

4. Difference between Product and Services Marketing Tangibility Tangible; can be touched, seen, and bought. Goods can be patented. Intangible; cannot be touched or cut. Services cannot be patented. Transfer of Ownership Ownership is transferred to the buyer upon purchase. Provide temporary access or performance; ownership is not transferred. Perishability Can be stored as inventory. Highly perishable; cannot be saved or stored. Customer Involvement Typically involves low customer engagement. Requires high customer participation. Production & Consumption Produced, stored, and then consumed. Produced and consumed simultaneously. Variability Standardized; consistent quality across units. Highly variable; quality depends on provider, time, and context. Quality Evaluation Easier to evaluate objectively (e.g., features, performance metrics) before purchase. More subjective; evaluated during and after consumption, based on experience. Resale Can be resold by the buyer to another party. Cannot be resold; the experience is unique to the original consumer.

5. The Four Pillars of Service Characteristics Intangibility Cannot be physically touched Services are experiential; they cannot be physically perceived or tested before consumption, making pre-purchase evaluation difficult. Customers often rely on tangible cues like facilities and staff professionalism to gauge quality. Marketing focuses on transforming abstract benefits into perceived value, emphasizing branding, testimonials, and strong service environments to build trust. Inseparability Produced and consumed simultaneously The creation and delivery of a service happen concurrently, often requiring the presence and involvement of both the provider and the customer, who acts as a "co-producer." The quality of interaction significantly influences overall perceived service quality. Providers must effectively manage personnel and customer experience, as the service cannot be separated from the provider. Variability Quality can differ greatly Service quality is inconsistent, depending on the provider, timing, and specific circumstances, posing a challenge for uniform delivery due to the human element. To mitigate this, organizations implement strategies such as extensive employee training, standardization of service processes, and robust quality control measures to ensure a reliable and predictable experience. Perishability Cannot be stored or saved Unlike physical goods, services cannot be inventoried. Unsold capacity (e.g., empty hotel rooms) represents lost revenue that cannot be recovered, making demand forecasting and capacity management critical. Businesses employ strategies like dynamic pricing, reservation systems, and cross-training staff to adjust to fluctuating demand, balancing supply and demand to maximize utilization and prevent wasted capacity.

6. Three Types of Service Quality Evaluation Customers assess service quality differently depending on the nature of the offering, influencing marketing strategies and consumer decision-making. Search Quality Can be evaluated prior to purchase , focusing on tangible attributes that can be inspected before commitment. Shoes, Jeans, Refrigerators Lawn mowers, Food, Raw materials Component parts, Office supplies Tools, Janitorial services Experience Quality Evaluated only during or after consumption , based on the customer's direct interaction and subjective perception. Catering services, Entertainment Cosmetic surgery Lawn services, Delivery services Repair services Credence Quality Difficult to evaluate even after consumption due to lack of expertise, long-term effects, or inherent complexity. Accountant, Funeral services Education services, Veterinarian Consulting services, Financial services Advertising, Insurance

7. Customer Expectations & Zone of Tolerance Key Customer Expectations Speed and efficiency of service High quality at competitive prices Friendly, helpful service staff Prompt replies and sufficient stock Easy navigation (store and website) The Zone of Tolerance represents the range between minimum acceptable service and desired service levels.

8. Targeting Strategies in Services 01 Undifferentiated Marketing Mass marketing approach appealing to the entire market with a single strategy for broad appeal. 02 Differentiated Marketing Multiple-segmentation strategy targeting two or more segments with tailored marketing approaches. 03 Concentrated Marketing Focused approach targeting one well-defined market segment with a customized marketing strategy.

9. Positioning Strategies in Services Highlights unique features and their value, making the service stand out in terms of functionality or emotional appeal. Based on pricing strategy, either premium quality at a higher price or exceptional value at a lower cost. Associates the service with specific situations or uses where it offers the most benefit, targeting niche markets. Tailors the service's appeal to specific customer groups like professionals, students, or luxury consumers. Places the service within a broader category to help customers understand its role and comparison to alternatives. Directly compares the service to competitors, emphasizing superior features or unique advantages. Leverages credible sources like experts, celebrities, or testimonials to build trust and influence perceptions. Focuses on attributes like reliability, durability, or excellence in service delivery for high standards. Uses tangible cues (facilities, staff appearance) to reassure customers about intangible service quality.

10. The Extended 7Ps Marketing Mix Product Service features and benefits Price Cost and value perception Place Distribution channels Promotion Communication strategies People Staff and customer interactions Process Service delivery procedures Physical Evidence Tangible service environment

11. Service Pricing Strategies Cost-Based Pricing Prices based on production costs, like petrol prices following international oil markets. Competitor-Based Pricing Pricing aligned with competitors offering similar or substitute services in the market. Demand-Oriented Pricing Prices set after researching consumer desires and acceptable price ranges. Value-Based Pricing Pricing based on perceived benefits versus total acquisition costs for customers.

12. Financial Services: The Future of Service Marketing Key Financial Service Areas Banking and insurance services Mutual funds and portfolio management Leasing and factoring services Financial intermediary services Technology's Role CRM and digital marketing Mobile and internet marketing SMS, MMS, and Bluetooth marketing Enhanced customer communication Financial services combine traditional service characteristics with unique features, requiring specialized marketing approaches for effective customer engagement.