Service Marketing 1

7/28/2019 Service Marketing 1

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Service Marketing and Product

Marketing - Differences Conceptually the same

Higher intangibility

You fly by planes( tangible)

Packaging for fast food (tangible)

Hotel staff’s uniform (tangible)

In all the above cases, services remain intangible. This element is very critical

Your car serviced has many intangibles connected with it Unable to stock for future use

Flight seats are perishable commodity

Cinema seats are also the same

Greater interaction between customer and service provider Phone connection

Bills payment

Restaurant food prepration

Unlikely that you will go to soap factory or car factory to buy

Greater service variability

Hotels staff service

Bill payment

Telephone calls for queries

Reason why Jet Airways or similar airline or McDonald’s or Subway are examples of standadisation

Greater variability among service customers expectations A 2 minute wait at a fast food counter can be ok with 1 customer bur may not with another

Check-in at the airport counter experiences can also vary from customer to customer

Customer waiting for a bank draft can behave differently.Piyoosh Bajoria



Examples of Service

Businesses Airline

Hotels

Restaurant

Beauty saloon

Marketing research

Advertising

Consulting

Education

Legal services

Medical services

Retailing

IT services

Banking services

Investment advising

Accounting and tax services

Fastest Growing services

Cellular phone services 50%

Housing Finance

IT services

Advertising

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The service experiences

An experience comprising many

tangibles, intangibles, processes and

contacts Moments of truth – every contact made

with employee creates an impression

People and environment ( car showroom

or service centre)

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Service Product Concept

Core-benefitBasic Service

Expected Service

Augmented service

Potential service

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Airline/Hotel as an example

Core benefit What customer is really buying. The use or benefit or solution he/she is looking for.

Airline ticket you to go from one place to another

Basic service product Intangible service through which the core benefit is received. All those factors

which consumers assumes to be present in any offering. Airline will have an

aircraft and infrastructure to support Expected Service

Expect certain service quality or features when they purchase the services. In-flightfood to be good or courtesy or entertainment for long flights

Augmented service Measures taken to differentiate the service from the competitors. Customer delight

is the aim. Provide service quality beyond expectations. Providing free overnightstays or business centre or premium lounge.

Potential service Includes all augmentations and the futuristic product developments. Better Ways to

delight customers. Hotels can take residents for a sight seeing tours or arrange acultural show

Successful firms are constantly innovating

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Product Marketing versus

Service Marketing Marketer must select and analyze its target

markets

Then a marketing program must be builtaround the parts of the marketing mix -4Ps

Product/service

Price

Place( distribution) Promotional program

But we need more number of P’s for Service marketing

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7Ps

Let us look at the

conventional 4PsPLUS

3Ps which are servicerelated

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The Conventional 4 P’s

Product

Quality

Features Style

Packaging

Brand

Delivery/warranty

Product

Price

Place

Promotion

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The conventional 4 P’s

Planning Product Strategy

How competitive is the product

How to increase volumes Product Range

Does it cover all segments

Line enlargement

Cost reduction

Product

Price

Place

Promotion

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Place

Channels

Coverage Outlet locations

Sales territories

Physical distribution/Inventory

Locations

Product

Price

Place

Promotion

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Price

Value of the product

Expressed in monetary terms Pricing objectives

costs

Level of basic price

Discounts & allowances Delivery charges

Terms of payment

Product

Price

Place

Promotion

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The Conventional 4 P’s

Promotion

Methods and techniques used to

communicate with their existing andpotential customers and markets

Product

Price

Place

Promotion

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The 4 Ps + 3Ps for service

Process

Car servicing promised time

Food being served in a reasonable time

Telephone Connectivity within promised time

People

Services delivered by people even though they

may use technology

Lot of interaction- hence HR is an important issue

Physical evidence

Logos, uniforms, brochures,

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Select and analyze the

market

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What are the steps

Step 1 Probing

Research the market you are interested in.

You must know what the market is like, who is in it,

what they need and want

Example of producing a TV serial for next season

What type- suspense, horror, family soap, comedy,

action, game show, dance show, travel show, quiz,

music show

Timing

Producer

Market

Get advertisers

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Step 2

Segmentation

Customers are not homogeneous

They are heterogeneous

They cluster into groups

They want different things

It is not possible to satisfy them with one offer

Segmentation

Demographic

Psychographic

Behavioral

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Step 3

Prioritising

We do not have unlimited resources

We may not be able to serve every group and everyindividual

So we target

Target marketing

SEC grid

Socio-economic classification

Combines Customer’s occupation/education level

Classifies urban household starting from A1 (uppermost classleading to 8 classes)

The Indian IT market- how to segment

Travel industry- how to segment

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Step 4

Positioning

Key to strategy Strategy starts with customer satisfaction

Strategy is long term Strategy is competitive

Once for each market we are going to makeinto a target, we position ourselves

We decide on the message we want to create

about who we are for the target market

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Process of positioning

What is positioning?

Really the other half of branding issue

If a brand is essentially a customer perception, positioning is the process by

which a company offers its brands to the

customers

Deccan airways- common man’s airline

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Criteria for selection

Position must be salient to customers

Must be based upon real brand strengths

Reflect a competitive advantage

No use positioning on the same basis as a competitor If difference is not perceived, there will be a risk that all

products are seen as similar and purchase gets made onprice

Positioning must be communicable in a clear and

motivating way to the market

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Positioning

Positioning

Mental image or picture that a service provider would like to haveabout itself in the consumer’s mind

Deliberate attempt at building an identity of a certain kind for theservice

McDonald’s in US is a cheap American fast food but in India itis positioned with slightly up-market image

Cheap food like dosa, idli or batata wada ,samosa exists

Hamburgers are positioned to cater affluent , westernisedindividual

All this is established with the help of price, packaging,

communication and ambience which reinforces the positioningattempted by the company

Banks are another example for redefining positioning- ICICIBank, HDFC Bank etc.

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How to position a service

business By Feature

Spend 2000 rs and get free vouchers

Comparison

Highest number of students getting 1st division/ 90%

Benefits

Maximum number of flight connections to Delhi Expert

We understand your insurance needs best

Guarantees

100% Refund within 30 days-No questions asked

Leader

SBI no.1 in banking with highest number of branches

Smart tag lines ICICI “ Jeetay Raho”

Emotions

Hutch with dog and the kid

Raymonds with dogs

Tata Indicom –newly married couple

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Choosing a brand position

Successful if customers throughout the

market understand and can express

Deccan Airlines known for commonman’s airline

Barista- happy hang out joint

Disney is the expert at entertaining

children of all ages

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What is a brand name

Team from Mcinsey consulting firm defined it well in 1997in their company’s journal

“A name becomes a brand when consumers associate itwith a set of tangible or intangibles benefits that they

obtain from that product or service. As this associationgrows stronger, consumers loyalty and willingness to paya price premium increases”

To build a brand equity, a company needs to do 2 things Distinguish its product from others in the market

Align what it says about its brand in advertising and

marketing with what it actually delivers A relationship then develops between brand and

customer---- as the alignment grows stronger, so doesthe brand

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To build a strong brand

Company has to demonstrate how relevant the

particular strengths of its product are and how

different they are from others

Brands have become very important because

consumers and manufacturers are now meeting

one another so much more directly in a world

without wall or middlemen

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6 stereotypes of brands

Ritual Brands associated with particular occasions

Champagne- celebrations etc.

Symbol Added value because of its associations

Lacoste alligator, ITC Wills, Kingfisher

Heritage of good Usually the first brand of specific set of benefits which can then position itself as pioneer of this section

Coca-cola( real thing in soft drinks)

Aloof Snob Brands which help a person give signals that he or she is different.

Ferrari cars, Channel perfumes, Gold card, etc

The belonging Brands which make the consumer feel part of a larger group with which they want to identify

Levis jeans. Benetton cotton etc

The Legend Brands which have real history and have become mythical

Levis 501

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Intelligent Organization

To become a truly intelligentorganization, its got to become aBRAND.

To make it become a brand, you got todevelop a way of doing what you do thatdramatically differentiates your enterprise, your organization, your business from every other one.

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Building the brand

Takes several years

Positioning is the articulation of a brand-

building strategy for a service Shopper’s stop, Pantaloon, Westside,

NIIT, Taj, Zee TV, Barista

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Marketing strategy for services

7 Ps

Product

PricePlace

Promotion

Physical evidence

Process

People

Segmentation

Target market

selection

Positioning

Piyoosh Bajoria

Service Marketing 1

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