Creating Services, Communications Mix, Pricing and Distribution

7/29/2019 Creating Services, Communications Mix, Pricing and Distribution

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Designing Services,

Communications, Pricing and

Distribution

Dr Vikram Venkateswaran


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The 4 Ps of Marketing Who gave this

concept?

Product

Promotion

Price Place


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SERVICES PRODUCT

It does not matter how wonderful the service is, the question is will theybuy it?

Noel Peebles


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Planning & creating servicesCorporate Objectives and

resources

Operating assets statement Physical Facilities

Equipment

IT

HR

Services Marketing Concept

Benefits to customer

User Cost

Marketing Assets Statement Customer Portfolio

Market Knowledge

Product Line

Reputation of the brand

Resource allocation analysisMarket & Competitive

analysis

Services operations Concept Nature of processes

Geographic Scope

Scheduling

Facilities design

Partnerships

Service Delivery Process


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Example of services delivery process

creation- Indigo Airlines

IndigoAirlines(Aircraft)

Cabin Crew

InflightEntertainment

Pre and Postflight services

ServiceFrequency

Distribution


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Augmented Product- Dark Knight Rises

DarkKnightRises

Movie

PVRCinemaTickets

Pop Corn& drinks

ScreeningFrequency

Price

Distribution


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Core Product & Supplementary

services

The core product answers the question -which business is the firm in? for eg a Moviehouse is in the entertainment business

A supplementary service- enhances the valueof the core product and facilitates its use.

Eg The movie theater provides the ambience and thetechnology to enjoy the cinematic experience

Delivery Process-People, Possession, mentalStimuli and Information


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Facilitating & Enhancing services

Facilitating Services

Information

Order Taking

Billing

Payment

Enhancing

Consulting (Movie

Reviews)

Hospitality (Gold box)

Safe Keeping

Exceptions


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Flower of service

Core Product

Payment &Billing

Information

Safe Keeping

Consultation

Order Taking

Hospitality


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Branded customer experience

Random experience

with high variability

Branded customer

experience


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Development of new services

Service Innovation

Service ProcessInnovation

Product Line Extensions Process Line extensions

Supplementary service

innovations Service Improvements

Style Changes


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Sources for services innovation-

Product

Product Own the product Rent the product

Do work your self Drive the car Rent a Car

Hire someone to

do it

Hire a secretary Send document

to secretaryservices


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Service process reengineering

Fast Food- Walk into a

Dominos restaurant

Drive in- Place the order and

leave with the Pizza

Home Delivery- they deliver

it at home

Home Catering- they cater

to a birthday party


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Using research to design new services-

Home Health Security Services


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COMMUNICATION MIX

Electric communication will never be a substitute for the face of someone

who with their soul encourages another person to be brave and true

Charles Dickens


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Overcoming the Challenge of

Intangibility- Advertising

Type of service

differentiator

Physical representation Components of service

Objective Claims System Documentation Physical capacity

Performance

Documentation

Past Performance statistics

Subjective Claims Service performance

episode

Present a service delivery

incident

Non Searchability Consumption

documentation

Cite independently audited

performance

Abstractness Service consumption

episode

Display typical customers

benefitting from the

service

Impalpability Case History Case study


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Accenture- Case Study


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Accenture the transformation


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Services Marketing communication

Mix

Personal

Communication

Advertising

Sales promotion

Public relations

Instructional

materials

Corporate design


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How messages reach a target audience

Source

Messageswithin the Org

Operations &delivery

Marketing

Messagesoutside the org

Media & Wordof mouth


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PRICING

A cynic is someone who knows the cost of everything and the value of

nothing

Oscar Wilde


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Objectives of pricing

Revenue &profit objective

Profit

Recovercost

Patronage

BuildDemand

Build auser base


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Pricing Strategies

Cost Based

Value Based

Competition Based


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Cost Based Pricing

Fixed Cost + Variable Cost + Margin = Price


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Value Based Pricing

Reduce uncertainty Benefit driven pricing

Flat rate pricing

Relationship pricing

Low-cost leadership

Managing theperception of value


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Other costs

Time costs

Physical costs

Psychologicalcosts

Sensory costs


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Competition Based Pricing

When Pricing is the only differentiator

Personalization, Customization & Switchingcosts matter

Time & Location specify reduced costs


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Revenue Management

Reserving capacity for high

yield customers

Competitive pricing and its

effect on revenue

management


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Cost of price elasticity

Price Elasticity = percentage change in demand/

percentage change in price.

Demand

Price


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The fair price debate- is this pricing

fair?


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DISTRIBUTION OF SERVICES

Think Global, Act Local

John Naisbitt


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Method of service delivery

Nature of interaction Single Sites Multiple Sites

Customer goes to services

organization

Theater Bus Service

Services comes to you House Paining Mail Delivery

Technological interaction Credit cards Mobile services provider


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Channel Preferences vary


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The growth of Airport Malls


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Service Delivery: new channels

Smart phones

E-commerce

Voice recognition technology

Bio metrics

Smart cards


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Case study- Flipkart


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Globalization and delivery of services

People Processing

Possession processing

Information Based


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People Processing

Export the service- Multinational banks

Imports Customers- medical tourism to Cuba

Transport Customers- Luxury Cruises


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Possession processing

Aircraft maintenance Hub- RPOs

Shipping Sri Lanka

Nokia (Communicator) in 2000s


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Information based services

Export the service to a local area- Bollywood

movie shown in global theaters

Import Customers- Watching Shakespeare's

plays in Stratford-upon-Avon

Export Information- Blue prints sent for local

manufacturing


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Impact of globalization on servicesDrivers People processing Possession

processing

Information based

Competition Standard

management

systems eg Citibank

Globalization of

competitors with

technical edge eg

Singapore Airlines

Global domination

except in cases of

government

intervention eg BBC

Market Education eg self

service kiosk

Level of economic

development eg

owned vs service

Cultural issues

Technology Use of IT eg

Netbanking

Labor substitution eg

Lawn moving

Level of technology

adoption eg Smart

phones

Cost Labor rates impactspricing eg Taxi

services in

developed world.

Lower rates favorlow cost location eg

India

Centralized costelements eg Amazon

Government Social policies Tax , environment Education and

censorship policies


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Assignment

Look at a service

Look at the four elements

Submit a one pager describing the service

along these four angles.

Individual assignment

Graded at 10 marks. Enjoy your rest of the weekend.


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THANK YOU

Creating Services, Communications Mix, Pricing and Distribution

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