SOME TERMS

WHAT IS A SERVICE / SERVICE PRODUCTAN ACTIVITY / PERFORMANCE GIVEN BY A SERVICE PROVIDER TO A SERVICEUSER TO SOLVE HIS PROBLEM AND GIVE SATISFACTION AND AT THE SAMETIME HELP THE COMPANY TO ACHIEVE ITS COMMERCIAL AND FINANCIAL OBJECTIVES. A SERVICE PRODUCT IS MOSTLY INTANGIBLE IN NATUTRE AND THE PURCHASEOF A SERVICE PRODUCT DOES NOT RESULT IN OWNERSHIP BY THE USER. A SERVICE IS NOT A THINGE.G: RENTING A ROOMTRANSPORTATION BY ANY MODESEEING A MOVIEGETTING ADVICE FROM A DOCTOR / LAWYEREDUCATIONBANKING SERVICESBUYING INSURANCEHIRING A TAXIPERFORMANCE BY AN ACTOR / ARTIST

MAJOR BUSINESS OBJECTIVES( VIA CS/CD )COMMERCIALFINANCIALSALES (VOLUME, VALUE)MARKET SHAREGROWTH RATERANKINGRETAINING EXISTING AND DEVELOPING NEW CUSTOMERSPROFITRETURN ON INVESTMENT (ROI)

ECONOMIC ACTIVITIES, SERVICE ECONOMY

ECONOMIC ACTIVITIESWHAT? NATIONAL WEALTH (GDP) CREATING ACTIVITIESCLASSIFICATION OF EAsa. PRIMARY EAsAGRICULTURE, FORESTRY, MINING& FISHINGb. SECONDARY EAsMANUFACTURING & CONSTRUCTIONc. TERTIARY EAsSERVICES

ECONOMIC ACTIVITIESSECTORS OF ECONOMYAGRICULTURE SECTOR, TRENDMANUFACTURING AND CONSTRUCTION SECTOR, TRENDSERVICES SECTOR, TREND

SERVICE ECONOMYAN ECONOMY IN WHICH:A GREATER PORTION OF THE NATIONAL WEALTH(GDP) IS CREATED BY THE SERVICES SECTOR OF ECONOMY (T.EAs),MOST PEOPLE ARE EMPLOYED IN SERVICES MOST EXPENDITURE IS ON SERVICES AND EXPORT OF SERVICES PLAYS AN IMPORTANT ROLE.

ROLE OF SERVICES IN ECONOMY

CRITERIA USED TO JUDGE THE IMPORTANCE OF SERVICES IN THE ECONOMY.OUTPUT OF WEALTHEMPLOYMENTCONSUMER EXPENDITUREROLE OF SERVICES IN EXPORT TRADE

PROBLEMS IN ASSESSING THE SIZE OF SERVICES SECTORTHREE PROBLEMS

VARYING DEFINITION OF A SERVICE PRODUCT. WHAT IS INCLUDED / NOT INCLUDED IN SERVICES SECTOR.DIFFERENT BASES OF MEASURING THE SIZE OF SERVICES SECTOR.EMPLOYMENT BASISOUTPUT BASISEXPENDITURE ON SERVICESROLE IN EXPORTPOOR QUALITY OF OFFICIAL / SECONDARY DATA

UNO CLASSIFICATION OF COUNTRIESMORE DEVELOPED COUNTRIES (MDCs)LESS DEVELOPED COUNTRIES (LDCs)LESS LESS DEVELOPED COUNTRIES (LLDCs)

TREND TOWARDS SERVICE ECONOMY IN MDCs.

CHANGING TREND IN MDCsSINCE THE WW II, SERVICES SECTOR OF ECONOMY (ALL TYPES OF SERVICES) HAS GROWN FAST IN MDCs, EG: USA, WE AND JP.PAKISTAN: AGRICULTUR SECTOR 40%,MANUFACTURING + CONSTRUTION SECTOR 35%, SERVICES SECTOR 25%. FAST GROTH RATE 8%, BEST JOBS, HIGH INCOME, BEST TALENT FUTURE OF SERVICES SECTOR IS BRIGHT.

FEATURES OF EMPLOYMENT IN SERVICES SECTORMORE EMPLOYMENTCOMPOSITION OF WORKFORCE IN SERVICES SECTOR IS CHANGING. MORE WOMEN WORK IN SERVICS ORGANIZATIONSBETTER PAID JOBS,TALENT, AND CAREERS (BA, IT)MORE PART-TIME WORKERS

REASONS FOR THE GROWTH OF SERVICES

REASONS FOR THE GROWTH OF SERVICES IN ECONOMYEIGHT MAJOR REASONSLOW LABOUR PRODUCTIVITY IN SERVICES WHICH HAS LED TO SHIFT IN EMPLOYMENT.LABOUR PRODUCTIVITY=OUTPUT PER EMPLOYEEWHY LOW PRODUCTIVITY IN SERVICS? DECLINE IN HOURS WORKED PER PERSONLESS/POORLY TRAINED MANPOWER IN SERVICES SECTORLESS/ SLOW USE OF TECHNOLOGY IN SERVICES. HAS NOT BENEFITED FROM EOS.

REASONS FOR THE GROWTH OF SERVICES IN ECONOMY

OVERALL GROWTH OF DEMAND FOR SERVICES FROM COMPANIESFINANCIAL, INSURANCE, LEGAL, RESEARCH, ADVERTISING, TRAINING SERVICES etc.OUTSOURCING OF BUSINESS SERVICES BUSINESS SERVICES PREVIOUSLY CARRIED-OUT BY THE COs THEMSELVES, ARE BEING OUTSOURCED TODAY. COs CAN NOW HIRE MANY TYPES OF SERVICES WITHOUT OWNING THEM AT LESS COST.THUS, SERVICES COs HAVE BEEN SET-UP.EG: MRAs, ADAs, ENGINEERING MAINTENANCE COs, TRAINING INSTITUTIONS, TRANSPORT & FOOD PROVIDERS, JANITORIALS SERVICES COs etc.

REASONS FOR THE GROWTH OF SERVICES IN ECONOMYDEREGULATION AND PRIVATIZATION OF SERVICES BUSINESS (BIA, COM etc)GROWTH OF DEMAND FOR SERVICES FROM CONSUMERS. WHY?SOCIETY IS GETTING WEALTHIER, THUS, THE LIFESTYLE IS CHANGING-TRANSFER OF CERTAIN KINDS OF HOUSEHOLD JOBS TO OTHERS - PEOPLE HAVE TURNED TO SERVICES EXPENDITURELIFE EXPECTANCY IS INCREASINGLIFE IS BECOMING COMPLEX MORE COMPLEX PRODUCTS

REASONS FOR THE GROWTH OF SERVICES IN ECONOMY

GROWTH OF DEMAND FROM CERTAIN PROFESSIONSGLOBALIZATION OF BUSINESS GROWTH OF GOVERNMENT SIZE

REASONS FOR INCREASE IN SERVICES EXPENDITURE AND NEEDED SERVICESREASONSWANT MORE LEISURE TIMEMORE WORKING WOMEN

INCREASED LIFE EXPECTANCY

COMPLEXITY OF PRODUCTS

COMPLEXITY OF LIFE

INCREASE IN NEW PRODUCTS / TECHNOLOGIESEG: COMPUTERS, TVs, FAX, INTERNET ETC.SERVICES NEEDEDTRAVEL, HOTELS, DAY-CARE NURSERIES, FEMALE SERVANTS

HEALTH-CARE SERVICES, OLD-AGE HOSTELS

SKILLED LABOUR / MECHANICS FOR MAINTENANCE AND REPAIR

PROFESSIONAL / CONSULTANTS & ADVISERS, ADULT EDUCATIONAL CENTERS

NEED FOR NEW SERVICES

GLOBALIZATION OF BUSINESSESINCREASED DEMAND FOR :COMMUNICATION SERVICESTRAVEL SERVICESINFORMATION SERVICESLEGAL SERVICESHOSPITALITY SERVICES

SERVICES DEVELOPED DURING THE LAST 30 YEARS(A) CONSUMER SERVICESDAY-CARE NURSERIESMOBILE PHONE SERVICES, ATM SERVICESTV/COMPUTER/FAX EQUIPMENT REPAIR SERVICES.PROFESSIONALS/ CONSULTANTS AND ADVISERSCAR RENTAL SERVICESTRAVEL AGENCIESADULT EDUCATION CENTERSCREDIT CARD SERVICESPHYSICAL FITNESS CENTERSBEAUTY PARLOURSCONSUMER LEASING COs.

SERVICES DEVELOPED DURING THE LAST 30 YEARS(B) BUSINESS SERVICES

CONTRACT MAINTENANCE CONSULTANT FIRMS WAREHOUSING MRAs, ADAs, CONTRACT R AND D SERVICES, FRANCHISING SERVICES JANITORIAL SERVICES OFFICE TRANSPORT AND FOOD SERVICES

HISTORICAL CHANGES IN UNDERSTANDING A SERVICE PRODUCT

HOW HAS THE DEFINITION OF THE TERM SERVICECHANGED OVER YEARS?EARLIER DAYS:ADAM SMITH SERVICES ARE BARREN AND UNPRODUCTIVE ACTIVITES WHICH PERISH INSTANTLY. DO NOT ADD WEALTH TO A NATION.LATER ON:J.B. SAYREJECTED ADAM SMITHS VIEWS.ACCEPTED THAT SERVICES ARE USEFUL ACTIVITIES, WHICH SATISFY CUSTOMERS NEEDS. ARE PRODUCTIVE AND ADD WEALTH TO A NATION.ALFRED MARSHALUSEFUL AND NEED SATISFYING ACTIVITIES WHICH GET DESTROYED AT THE MOMENT OF THEIR CREATION.DIFFERENT RESEARCHERSACTIVITIES WHICH DO NOT CHANGE THE PHYSICAL FORM OF A GOOD EG. WHLs, RETs, ectTODAY

WHAT IS A SERVICE / SERVICE PRODUCTAN ACTIVITY / PERFORMANCE GIVEN BY A SERVICE PROVIDER TO A SERVICEUSER TO SOLVE HIS PROBLEM AND GIVE SATISFACTION AND AT THE SAMETIME HELP THE COMPANY TO ACHIEVE ITS COMMERCIAL AND FINANCIAL OBJECTIVES. A SERVICE PRODUCT IS MOSTLY INTANGIBLE IN NATUTRE AND THE PURCHASEOF A SERVICE PRODUCT DOES NOT RESULT IN OWNERSHIP BY THE USER. A SERVICE IS NOT A THINGE.G: RENTING A ROOMTRANSPORTATION BY ANY MODESEEING A MOVIEGETTING ADVICE FROM A DOCTOR / LAWYEREDUCATIONBANKING SERVICESBUYING INSURANCEHIRING A TAXIPERFORMANCE BY AN ACTOR / ARTIST

CHARACTERISTICS OF SERVICES

CHARACTERISTICS OF SERVICESINTANGIBILITYPERISHABILITYINSEPARABILITYHETROGENEITY / VARIABILITY / INCONSISTANCYNO OWNERSHIP BY THE USERDISTINGUISH THEM FROM GOODSTHESE CHARACTERISTICS CREATE BOTH CHALLENGES AND OPPORTUNITIES IN THE MARKETING OF SERVICES AND AFFECT THEIR M-MIX

INTANGIBILITYFIVE SENSESWHAT? CANNOT BE SEEN, ------------- BEFORE PURCHASE.THEREFORE, DIFFICULT TO JUDGE THEIR QUALITY BEFORE HAND. HOWEVER, OPINION ABOUT THEIR QUALITY CAN BE OBTAINED FROM OTHERS.BUYERS HAVE FAITH IN THE S. PROVIDER

INTANGIBILITYPROBLEMS CREATED: CANNOT BE PACKAGED, DISPLAYED, DEMONSTRATED, SAMPLED, PATENTED, MAKES CHOICE DIFFICULT etc.

HOW PEOPLE JUDGE QUALITY OF A SERVICE PRODUCTREPUTATION OF THE SERVICE PROVIDER. RELIABILITYPRESENT CUSTOMERS PHYSICAL ENVIROMENT FACILITATING EQUIPMENTPRICEPROCESSES METHODS USED IN CREATING AND DELIVERING SERVICES

STRATEGIES TO OVERCOME PROBLEMS CREATED BY INTANGIBILITY SHOW VISUALS OF THE BENEFITS OF A SERVICE PRODUCT IN PROMOTIONAL CAMPAIGNS SO THAT CUSTOMERS CAN SEE AND JUDGE QUALITY BEFORE PURCHASE.

E.G. AIRLINES: SHOW A TRAVELER ENJOYING LEGROOMEDUCATIONAL INSTITUTIONAL:SHOW LEARNING ENVIRONMENT IN A CLASS ROOMHOTEL:SHOW A DECORATED HOTEL ROOM, A RESTAURANT.PLASTIC SURGERY:MAKE DRAWINGS AFTER THE SERVICE HAS BEEN APPLIED

STRATEGIES TO OVERCOME PROBLEMS CREATED BY INTANGIBILITYCREATE A STRONG ORGANIZATION IMAGE.

PROVIDE TANGIBLE CLUESWHICH ENABLE HIM TO JUDGE QUALITY.STIMULATE WOM COMMUNICATIONTO OVERCOME DISPLAY PROBLEMUSE BRAND NAMES TO OVERCOME PATENT PROBLEM.ADOPT POSTPURCHASE COMMUNICATION.

HOW RELEVANT IN TANGIBILITY IN SERVICES?ALTHOUGH INTANGIBILITY IS A KEY CHARACTERISTIC OF SERVICES BUT VERY FEW SERVICES ARE PURELY INTANGIBLE EG: TEACHING, NURSING etc.MOST SERVICES ALSO CONSIST OF SOME TANGIBLE ELEMENTS EG: AIR TRAVEL, BANKING, TELECOMMUNICATION ETC.THUS, TANGIBILITY IS RELEVANT TO MANY SERVICES

PERISHABILITYWHAT ? PRODUCED,DELIVERED AND CONSUMED AT THE SAME TIME. CANNOT BE STORED. CANNOT BE PRODUCED BEFORE HAND. THEREFORE, IF NOT USED AT THE TIME A SERVICE IS PRODUCED, IT GETS DESTROYED FOR EVER.LOSS OF REVENUE

PERISHABILITYPROBLEMS CREATED SINCE SERVICES CANNOT BE STORED, CANNOT BE PRODUCED BEFORE HAND AND SINCE THEIR DEMAND FLUCTUATES TOO OFTEN, THEREFORE, PLANNING THEIR DEMAND AND SUPPLY IS RELATIVELY DIFFICULT.

E.G.PUBLIC TRANSPORTHOTEL ROOMS (HOLIDAY PLACES)TELEPHONE SERVICE

STRATEGIES TO OVERCOME PROBLEMS CREATED BY PERISHABILITYDEMAND SIDEOFFER FLEXIBLE / DIFFERENTIAL PRICING STRATEGY AT DIFFERENT TIMES OF THE YEAR, DAYS OF THE WEEK, DAY / NIGHT*INTERMITTENT PROMOTION, NOT CONTINUOUSOFFER GROUP DISCOUNT*ORGANIZE SPECIAL SHOWS,INTRODUCE A NEW PRODUCT DURING IDLE TIMEINTRODUE RESERVATION SYSTEM*SHORT TERM STEPS. HABITUAL

SUPPLY SIDEUSE PART-TIME EMPLOYEESTEMPORARY INCREASE IN EQUIPMENTINTRODUCE SELF-SERVICE IN STORES.

INSEPARABILITYWHAT? CANNOT BE SEPARATED FROM SERVICE PROVIDER OR THE SOURCE AND OFTEN FROM THE SERVICE USER

INSEPARABILITY

PROBLEMS CREATEDREQUIRES THE PRESENCE OF THE SERVICE PROVIDER AND THE SERVICE USER MOSTLY PRODUCED,DELIVERED AND CONSUMED AT THE SAME TIME.LOT OF INTERACTION AND CUSTOMERS PARTICIPATION. ENCOUNTER POINTS.LIMITS THE SCALE OF OPERATION. MASS PRODUCTION NOT POSSIBLEAFFECTS QUALITY. PROFESSIONAL AND ENTERTAINMENT SERVICES ARE NEEDED FROM A SPECIFIC SERVICE PROVIDER. QUALITY DEPENDS ON BOTH SERVICE PROVIDER AND SERVICE USER.

DIRECT SALES IS THE MAIN CHANNEL OF DISTRIBUTION (EXCEPT TAs, EAs). THIS IS AN OPPORTUNITY.SOME SERVICES CAN BE DELIVERED ELECTRONICALLY.

STRATEGIES TO OVERCOME PROBLEMS CREATED BY INSEPARABILITY

WORK IN LARGE GROUPSWORK FASTTRAIN MORE SERVICE PROVIDERS USE AUTOMATED MACHINESUSE MULTISITE LOCATIONS

HETROGENEITY / VARIABILITY / INCONSISTANCYWHAT? EACH UNIT OF SERVICE MAY DIFFER IN QUALITY. CUSTOMERS ARE AWARE OF IT.EXAMPLESDOCTORS (WHO, WHEN, WHERE)PIA (DIFFERENT FLIGHTS)FRANCHISE OPERATIONSBANK BRANCHES QUALITY DEPENDS UPON:SERVICE PROVIDERCUSTOMER(S)WHEN PROVIDEDWHERE PROVIDEDFACILITATING EQUIPMENTPROCESS OF CREATING AND DELIVERING A SERVIC PRODUCT

HETROGENEITY / VARIABILITY / INCONSISTANCYPROBLEMS CREATEDVARIATION IN QUALITYDIFFICULT TO STANDARDIZE QUALITY

STRATEGIES TO OVERCOME PROBLEMS CREATED BY HETROGENEITY DIFFICULT TO STANDARDIZE EACH UNIT OF SERVICE.

STANDARDIZE SERVICE CREATION, PRODUCTION AND DELIVERY PROCESSES STANDARDIZE PHYSICAL ENVIRONMENT / TIMING CONSTANT TRAINING OF S. PROVIDERSMECHINIZE SERVICESMONITOR CS PERIODICALLYSTANDARDIZE CUSTOMERS SPECIFICATIONS

NO OWNERSHIP

DOES NOT BECOME OWNER, CAN USE THE SERVICE / FACILITY. NO TRANSFER OF OWNERSHIP TITLE. PAYMENT IS MADE FOR USING THE SERVICE / FACILITY.

NO OWNERSHIPPROBLEM CREATEDSOME TIME NO EVIDENCE OF PURCHASE AND USE

NO OWNERSHIPSTRATEGY TO OVER COME PROBLEMPROVIDE A PHYSICAL CLUE

MARKETING DIFFICULTIES / CHALLENGES WHICH ARISE DUE TO CHARACTERISTICS OF SERVICESNO OWNERSHIPNO EVIDENCE OF PURCHASE AND USE

Sheet1

CHARACTERISTICDIFFICULTIES / CHALLENGES

INTANGIBILITYCANNOT SAMPLE, DEMONSTRATE, DISPLAY & PACKAGE

CANNOT JUDGE QUALITY BEFORE HAND

MAKES PRICING DIFFICULT

CANNOT BE PATENTED. EASILY COPIED

PERISHABILITYCANNOT STORE

MAKES PLANNING OF SUPPLY AND DEMAND DIFFICULT

INSEPARABILITYREQUIRES THE PRESENCE OF S. PROVIDER & ALSO OFTEN OF THE CUSTOMER(S)

MOSTLY SOLD DIRECTLY

LIMITED SCALE OF OPERATION

HETROGENITYEACH UNIT OF SERVICE MAY DIFFER.

DIFFICULT TO STANDARDIZE QUALITY

FRAMEWORKS

FRAMEWORKS TO HELP UNDERSTAND SERVICES AND PHYSICAL PRODUCTSPSS, SSPFEW PRODUCTS ARE EITHER PURE TANGIBLE OR INTANGIBLEMOST PRODUCTS ARE COMBINATION OF BOTH TANGIBLE AND INTANGIBLE ELEMENTS.CUSTOMER SATISFACTION COMES FROM BOTH TANGIBLE AND INTANGIBLE ELEMENTS OF A PRODUCT. EG: RESTAURANTS: CS COMES FROM BOTH FOOD AND THE SERVICES GIVEN.COURTESY, SPEED, ENVIRONMENT, CONVENIENCE etc.

GOODS-SERVICES CONTINUUM MODELGOODS-SERVICES CONTINUUM MODELA MODEL, WHICH BASED ON TANGIBLE AND INTANGIBLE ELEMENTS, SHOWS THE RANGE OF PRODUCTS OFFERED FROM PURE TANGIBLES TO PURE INTANGIBLES, FOR CS, IN THE MARKET.

GOODS-SERVICES CONTINUUM MODELTOOTHPASTECARRESTAURANTAIR TRAIVALTEACHINGBALANCE BETWEEN TANGIBLE AND INTANGIBLE ELEMENTSDEG OF INTANG. EsDEG OF TANG. Es

FIVE CATEGORIES OF PRUDUCTS BASED ON G-S CONTINUUMPURE TANGIBLE PRODUCTS NO PSS / ACCOMPANYING SERVICESTANGIBLE PRODUCTS + PSSPURE INTANGIBLE SERVICE PRODUCTSSERVICE PRODUCT + SSP ACCOMPANYING MINOR TANGIBLE PRODUCTSTANGIBLE PRODUCT + SERVICE PRODUCT, IN THE SAME RATIO. HYBRID

SHOSTACKS MOLECULAR MODEL OF A PRODUCTTHIS MODEL SUGGESTS TO THINK OF A PRODUCT AS A MOLECULE ,HAVING TANGIBLE AND INTANGIBLE ELEMENTS. BASED ON WHETHER THE DOMINANT ELEMENTS ARE TANGIBLE OR INTANGIBLE, THIS MODEL HELPS TO VISUALIZE BOTH A SERVICE PRODUCT AND A TANGIBLE PRODUCT.

SHOSTACKS MOLECULAR MODEL OF A PRODUCTA. SERVICE PRODUCTTHE MOLECULE, INCLUDING THE NUCLEUS OF A S.PRODUCT, IS DOMINATED BY INTANGIBLE ELEMENTS, NO OWNERSHIP OF THE SOURCE WHICH PRODUCES THE SERVICE. B. TANGIBLE / PHYSICAL PRODUCTTHE MOLECULE, INCLUDING THE NUCLEUS, IS DOMINATED BY TANGIBLE ELEMENTS. OWNERSHIP OF THE PHYSICAL PRODUCT.

SHOSTACKS MOLECULAR MODEL OF A PRODUCTAIR TRAVELCARKEYELEMENTS OF A PRODUCT= TANGIBLE ELEMENTS= INTANGIBLE ELEMENTS

FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICES

FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICESSERVICESCANNOT BE FELT BEFORE PURCHASE.SHOW LACK OF USE OF PACKAGINGDIFFICULT TO SAMPLE / DEMONSTRATE / DISPLAY PATENT NOT POSSIBLEDIFFICULT TO JUDGE PRICE & QUALITY BEFORE HANDREQURES PRESENCE OF SERVICE PROVIDERPHYSICAL PRODUCTSCAN BE..

MOSTLY IN A PACKAGE

CAN BE EASILY SAMPLED / DISPLAYED

PATIENT IS POSSIBLE

CAN JUDGE

NOT NECESSARILY

FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICESSIMULTANEOUS PRODUCTION & CONSUMPTIONDIRECT SALE, RARELY MIDDLEMAN IS NEEDED. SHORT D. CHANNEL IF AT ALL NEEDED.LIMITED SCALE OF OPERATION. ABSENCE OF MASS PRODUCTIONPRECISE STANDARDIZATION OF QUALITY IS DIFFICULT (WHO, WHEN & WHERE PROVIDED)

AT DIFFERENT TIMES

MOSTLY SOLD VIA M. MEN

MASS PRODUCTION

POSSIBLE

FUNCTIONAL DIFFERENCES BETWEEN PHYSICAL PRODUCTS AND SERVICESCANNOTBE STORED, INVENTORY NOT POSSIBLE, CANNOT PRODUCE BEFORE HAND

DEMAND FLUCTUATION IS OFTEN & DIFFICULT TO EVEN-OUT

CANNOT BE OWNED

AN ACTIVITY

CAN BE STORED. CAN PRODUCED BEFORE HAND

LESS OFTEN. EASY TO MATCH

CAN BE OWNED

A THING

CLASSIFICATION OF SERVICES, SECTORS OF SERVICE PORVIDERS

CLASSIFICATION OF SERVICES NO STRICT BASES OF CLASSIFICATION. DIFFERENT AUTHORS HAVE USED DIFFERENT BASES BASIC SOURCE OF SERVICEPEOPLE-BASED SERVICESRENDERED BY PROFESSIONALS / CONSULTANTSRENDERED BY SKILLED LABOURRENDERED BY UNSKILLED LABOUR EQUIPMENT- BASED SERVICESAUTOMATED EQUIPMENTEQUIPMENT OPERATED BY PROFESSIONALS OR SKILLED PEOPLEEQUIPMENT OPERATED BY UNSKILLED PEOPLE

CLASSIFICATION OF SERVICESBUYER RELATED BASESCURTOMERS PRESENCE NECESSARY OR NOTBUYERS PURCHASE MOTIVECONSUMER SERVICES OR BUSINESS / INDUSTRIAL SERVICESSHOPPING HABIT HOW A BUYER PURCHASES A SERVICE IN TERMS OF EFFORTS, TIME SPENT AND FREQUENCYCONSUMER CONVENIENCE SERVICES FREQUENTLY USED, LOW PRICE, WIDELY AVAILABLECONSUMER SHOPPING SERVICES QUALITY - PRICE COMPARISIONCONSUMER SPECIALITY SERVICES STRONG LIKING FOR A S. PROVIDERCONSUMER UNSOUGHT SERVICES

CHARACTERISTICS OF VARIOUS TYPES OF CONSUMER SERVICES

CLASSIFICATION OF SERVICESSELLER RELATED BASES S. PROVIDERS MOTIVEPROFIT (BUSINESS SERVICES)NOT-PROFIT (CHARITY SERVICES)SECTOR WHICH PROVIDES THE SERVICEGOVT SECTOR SERVICESFEDERAL, PROVINCIAL AND LOCAL GOVERNMENTBUSINESS SECTOR SERVICESPRIVATE NON PROFIT SECTOR SERVICESFUNCTION PERFORMED BY SERVICESCOMMUNICATION, TRANSPORTATION, EDUCATIONAL, FINANCIAL, HEALTH SERVICES etc.

SERVICE PRODUCT CATEGORIES1. TRANSPORTATION AND COMMUNICATION SERVICES.2. UTILITY SERVICES SERVICES NEEDED FOR HOUSEHOLD OPERATIONS3. BANKING AND INSURANCE SERVICES4. RENTAL AND HOUSING, HOTELS & ESTATE AGENTS SERVICES5. PERSONAL/HEALTH-CARE SERVICES6. RECREATION AND LEISURE SERVICES7. PROFESSIONAL AND CONSULTANT SERVICES8. DISTRIBUTION SERVICES9. PUBLIC ADMINISTRATION AND DEFENCE SERVICES10. EDUCATIONAL SERVICES11. CONSTRUCTION AND ENGINEERING SERVICES12. ECOLOGY SERVICES13. TOURISM

SECTORS OF SERVICE PROVIDERS GOVERNMENT SECTOR SERVICE PROVIDERS. COURTS, HOSPITALS, EDUCATIONAL INSTITUTIONS, SECURITY AGENCIES, PAKISTAN RAILWAY, POST OFFICE, PTCL,

(2) BUSINESS SECTOR SERVICE PROVIDERSBANKS, INSURANCE COMPANY, TRANSPORTATION COMPANIES, EDUCATIONAL INSTITUTIONS, HOSPITALS, MOTION PICTURES , REAL ESTATE AGENTS.

(3) PRIVATE NON-PROFIT SECTOR SERVICE PROVIDERSCHARITY ORGANIZATIONS, HOSPITALS, EDUCATIONAL INSTITUTIONS.

MARKETING AND TYPES OF MARKETING IN A SERVICE COMPANY

MARKETING OF SERVICES INTRODUCTION

ORDER OF ADOPTION OF MARKETINGMARKETING IS LESS DEVELOPED IN SERVICES BUSINESSES. IT STARTED IN 1975 WHEN:MARKETING PEOPLE MOVED FROM MANUFACTURING COMPANIES TO SERVICES COMPANIESDEVELOPMENT OF SERVICES MARKETING LITERATURE TEACHING OF SERVICES MARKETING PAKISTAN 1995BASICALLY SERVICES ARE MARKETED IN THE SAME MANNER AS THE GOODS. PRINCIPLES, CONCEPTS, PROCESSES etc ARE SAME.

ORDER OF ADOPTION OF MARKETING IN THE BUSINESS SECTORCONSUMER NONDURABLE GOODS MANUFACTURING COMPANIESCONSUMER DURABLE GOODS MANUFACTURING COMPANIESINDUSTRIAL EQUIPMENT AND RMs MANUFACTURING COMPANIES CONSUMER SERVICES COMPANIES (BIA, HOTELS).CHARITY ORGANIZATIONS

MARKETING OF SERVICES INTRODUCTIONHOWEVER, DUE TO SOME CHARACTERISTICS OF SERVICES, MARKETING OF SERVICES IS SOMEWHAT DIFFERENTAND DIFFICULT.FOR EXAMPLE SERVICES MARKETING MIX CONSISTS OF 7 VARIABLE ELEMENTS AND NOT 4 MUCH MORE CUSTOMER / EMPLOYEE INTERACTION PATENT PROTECTION IS IMPOSSIBLE DUE TO INTANGIBILITY. THUS, PRODUCT DIFFERENTIATION IS SHORT LIVED.

DIFFERENCE BETWEEN THE MARKETING CONCEPT AND MARKETING MANAGEMENTTWO VIEWS ABOUT MARKETING

MARKETING CONCEPT EVERYBODY IS CUSTOMER FOCUSED.

DECISIONS IN ALL DEPARTMENTS ARE CUSTOMER FOCUSED.COORDINATED FUNCTION

DIFFERENCE BETWEEN THE MARKETING CONCEPT AND MARKETING MANAGEMENTMARKETING MANAGEMENTNOT SO IN MARKETING MANAGEMENT. CS THE IS RESPONSIBILITY OF THE MARKETING DEPARTMENT ONLY. ISOLATED FUNCTION.

PURPOSE OF BUSINESS

TO CONTINUOUSLY CREATE, WIN AND RETAIN SUFFICIENT NUMBER OF SATISFIED CUSTOMERS, PROFITABLY.TO ACHIEVE IT, A COMPANY NEEDS TO USE THE MARKETING CONCEPT.

CRITERIA TO ASSESS HOW CUSTOMER ORIENTED A COMPANY IS ?ATTITUDE AND BEHAVIOUR OF EVERYBODY TOWARDS THE CUSTOMERS. COORDINATION AT TWO LEVELS:WITHIN THE MARKETING DEPARTMENTBETWEEN MARKETING AND ALL OTHER DEPARTMENTS.WHETHER OR NOT KEY MANAGERS ARE IN CONTACT WITH CUSTOMERS.HOW ACCURATELY THE NEEDS OF TM CUSTOMERS HAVE BEEN IDENTIFIEDEXTERNAL MARKETING. CS LEVEL (H, M, L). SHOULD KEEP INCREASING INTERNAL MARKETINGINTERACTIVE MARKETING

EXAMPLES OF MARKET-ORIENTED OR NOT MARKET-ORIENTED SERVICE ORGANIZATIONS.MARKET- ORIENTED COMPANIES.DHLCITIBANKMARRIOTT HOTELSSINGAPORE AIRLINECOMPLY WITH CRITERIA OF A MARKET-ORIENTED COMPANY.

EXAMPLES OF MARKET-ORIENTED OR NOT MARKET-ORIENTED SERVICE ORGANIZATIONS. NOT MARKET- ORIENTED COMPANIESPTCLKESCNBPDO NOT COMPLY WITH CRITERIA OF A MARKET-ORIENTED COMPANY.

STEPS NEEDED TO IMPLEMENT THE MARKETING CONCEPTROLE OF TOP MANAGEMENTBE FIRST TO CHANGE TO CUSTOMER FOCUSED ATTITUDE AND BEHAVIOUR. ROLE MODEL. IF THEY DONT DO SO, OTHERS WILL NOT DO SO.SET OBJECTIVES AND INCENTIVES WHICH ARE CUSTOMER-FOCUSED.PROMOTE MARKET-ORIENTED EXECUTIVES IN ALL DEPARTMENTS.

STEPS NEEDED TO IMPLEMENT THE MARKETING CONCEPTTRAINING IN CUSTOMER-ORIENTATION AND BASIC MARKETING TO CREATE CUSTOMER FOCUSED ATTITUDE AND BEHAVIOUR IN EVERYBODY. CUSTOMER-ORIENTED CULTURE.STATING IN EVERYBODYS JOB DESCRIPTION HOW HIS / HER JOB AFFECTS CS.

WHEN MARKET-ORIENTATION MAY BE INAPPROPRIATE

PREVENTION BY LAWPROFESSIONALLY MARKETING IS CONSIDERED UNETHICALIN TIMES OF SCARCITY

STATUS OF MARKETING IN SERVICES COMPANIESTWO CONFLICTING VIEWSMARKETING IS LESS USED / DEVELOPED IN SERVICES REASONS PROBLEMS CREATED DUE TO SPECIFIC CHARACTERISTICS OF SERVICES.OPPOSITION TO MARKETING FROM SOME PROFESSIONSMANY SERVICES ORGANIZATIONS ARE SMALL AND IN DIRECT CONTACT WITH CUSTOMERS, THEREFORE, SUCH BUSINESSES DO NOT NEED MARKETING

STATUS OF MARKETING IN SERVICES COMPANIES

DEMAND IS GREATER THAN SUPPLY.SOME SERVICES COs HAVE MONOPOLY OR NO / LITTLE COMPETITION.PREVENTED BY LAW.POOR QUALITY OF MANAGEMENT PERSONNEL IN SOME SERVICES COs. THEY ARE NOT TRAINED IN MARKETING. OVERALL LACK OF AVAILABILITY OF MARKETING KNOW-HOW ABOUT SERVICES MARKETING.

STATUS OF MARKETING IN SERVICES COMPANIESSERVICES COMPANIES USE / HAVE DEVELOPED MARKETING REASONS POSITIVE CHANGE IN ATTITUDE TOWARDS MARKETING IN SERVICES COs DURING THE LAST 30 YEARS. EG: BIA, HOTELS,CAR RENTAL COs etc..ARE SUCCESSFULLY FIGHTING COMPETITION.HAVE SUCCESSFULLY INTRODUCED NEW S. PRODUCTSEG: CREDIT CARDS, CONSUMER FINANCING SCHEMES, NEW INSURANCE POLICIES, DIFFERENT EDUCATIONAL COURSES etc.

STATUS OF MARKETING IN SERVICES COMPANIESREMOVAL OF LEGAL / PROFESSIONAL BARRIERS.MOVEMENT OF MARKETING PERSONNEL FROM MANUFACTURING BUSINESSES TO SERVICES COs.DEVELOPMENT OF SERVICES MARKETING KNOW-HOW AND TEACHING SERVICES MARKETING IN BUSINESS SCHOOLS

STATUS OF MARKETING IN SERVICES COMPANIESCONCLUSION USE OF MARKETING IN SERVICES COs IS SLOW, LESS SPREAD AND POORLY STRUCTURED BUT IT IS DEVELOPING.

THREE TYPES OF MARKETING IN A SERVICE COMPANYEXTERNAL MARKETINGFIND NEEDS OF TM AND MAKE AN APPROPRIATE M-MIX TO SERVE / SATISFY THE CUSTOMERS.WIN AND RETAIN THEMINTERNAL MARKETINGSELECT, TRAIN, COACH, DEVELOP, MOTIVATE AND COMPENSATE EMPLOYEES TO SERVE CUSTOMERS WELL.CREATE ABILITY, WILLINGNESS AND JOB MATCHING PERSONALITYINTERACTIVE MARKETINGTEACH CUSTOMERS SERVING SKILLS (TOUCH SKILLS) SUCH AS COURTEOUSY, CONCERN, GRACEFULNESS etc. ACTUAL DELIVERY OF SERVICE TAKES PLASE DURING INTERACTIVE MARKETING

THREE TYPES OF MARKETING IN A SERVICE COMPANYINTERACTIVE MARKETINGEXTERNAL MARKETINGCOMPANYINTERNAL MARKETINGEMPLOYEESCUSTOMERS

MARKETING-MIX IN SERVICES AND MARKETING STRATEGIES

MARKETING-MIX IN SERVICES BUSINESSWHATMARKETING-MIX MEANS A COMBINATION OF SEVEN VARIABLE AND CONTROLLABLE ELEMENTS OF MARKETING, DETERMINED BY KEEPING IN MIND THE MARKETING ENVIRONMENT AND THE TM, TO ACHIEVE COMPANYS COMMERCIAL AND FINANCIAL OBJECTIVES, IN THE MOST EFFICIENT WAY, VIA CUSTOMER SATISFACTIONDIFFERENT COMPANIES CHOOSE DIFFERENT MARKETING- MIX, ACCORDING TO THEIR TM.CHANGING ONE ELEMENT OF MARKETING MIX, AFFECTS THE OTHER ELEMENTS.

EXTERNAL UNCONTROLLABLE FACTORS WHICH MAKE THE MARKETING ENIRONMENTPOLITICAL/LEGAL FACTORSECONOMIC FACTORS CULTURAL/SOCIAL FACTORSDEMOGRAPHIC FACTORSGEOGRAPHIC FACTORSTECHNOLOGICAL FACTORSCOMPETITIVE FACTORSINFLUENCE CB, M-MIX, ALL COMPANIESNOT KNOWING THE M E IS LIKE A BIRD WITHOUT FEATHERS(SAADI)IT IS USELESS TO TELL A RIVER TO STOP RUNNING.BEST IS TO LEARN SWIMING IN THE DIRECTION IT IS FLOWING (CHINESE PROVERB)

MARKETING-MIX IN SERVICES BUSINESSSEVEN ELEMENTS4 TRADITIONAL + 3 NEW ONES IGNORING ANY OF THEM CAN LEAD TO FAILURE.CUSTOMERS HEAVILY RELY ON PRICE, PEOPLE AND PHYSICAL ENVIRONMENT/ EVIDENCE TO JUDGE THE QUALITY OF A SERVICE PRODUCT.

REASONS FOR EXPANDING M-MIX FOR SERVICES

TRADITIONAL M-MIX NOT SUFFICIENT TO MAKE CUSTUMERS BUY AND SATISFY THEM HETROGENEITY CHARACTERISTIC NECESSITATES INCLUSION OF PROCESSES INSEPARABILITY CHARACTERISTIC NECESSITATES INCLUSION OF PEOPLE.PEOPLE WHO CREATE AND DELIVER THE SERVICE. SERVICE PROVIDERPEOPLE WHO RECEIVE THE SERVICE.THE CUSTOMER, OTHER CUSTOMERS

NEED FOR QUALITY SERVICE ALSO NECESSITATES INCLUSION OF PHYSICAL ENVIRONMENT AND PHYSICAL EVIDENCE

WHY MARKETING STRATEGIES FORMULATION IS DIFFICULT IN SERVICES UNIQUE CHARACTERISTICS OF SERVICES :UNLIKE GOODS, INTANGIBILITY CHARATERISTIC OF SERVICES MAKES CONSUMERS CHOICE OF DIFFERENT COMPETING PRODUCTS DIFFICULT. OPINION CAN BE OBTAINED FROM OTHERS. INSEPARABILITY MAKES MARKETING STRATEGY OF SERVICES LOCALIZED. RELATIVELY DIFFICULT TO SELL SERVICES ON NATIONWIDE BASIS.PERISHABILITY MAKES STORAGE OF SERVICES IMPOSSIBLE, THUS, PLANNING SUPPLY AND DEMAND OF SERVICES IS DIFFICULT HETROGENEITY MAKES ENSURING OF UNIFORM QUALITY DIFFICULT.

CUSTOMER SATISFACTION (CS)

CUSTOMER SATISFACTION (CS)WHAT IS CS? A FEELING OF PLEASURE CREATED IN THE MIND OF A CUSTOMER, WHEN THE ACTUAL PRODUCT OR BRAND PERFORMANCE MATCHES WITH THE BUYERS EXPECTED PRODUCT PERFORMANCE, ON USE, AND WHICH MAKES A CUSTOMER RE-PURCHASE THE PRODUCT.SATISFIED CUSTOMERS ARE AN APPRECIATING ASSET. THEY SHOULD BE THE GOAL OF MARKETING AND ALSO THEY SHOULD BE USED AS A TOOL IN PROMOTION.

SALES AND PROFITIS NOT THE OBJECTIVE OF MARKETING,

IT IS THE BYPRODUCT AND REWARD OF CUSTOMER SATISFACTION.

LEVEL OR DEGREE OF CSJUST SATISFIED CUSTOMERSAPP = EPPSHOW LOYALTY TOWARDS THE PRODUCT OR BRAND AND THEY MAY REPEAT PURCHASE.HIGHLY SATISIFIED OR DELIGHTED CUSTOMERSAPP > THAN EPPSHOW HIGH LOYALTY TOWARDS THE PRODUCT OR BRAND DUE TO BOTH EMOTIONAL AND RATIONAL AFFINITY. THEY WILL REPEAT PURCHASE.DIS-SATISFIED CUSTOMERSAPP IS

BENEFITS OF CSA SATISFIED CUSTOMERBUYS AGAINTALKS FAVOURABLY TO OTHERS.PAYS LESS ATTENTION TO COMPETING BRANDS AND TO THEIR PROMOTION.BUYS OTHER PRODUCTS OF THE SAME COMPANY.MAKES EASY TO INCREASE PRICE BY A REASONABLE MARGIN.

CHAIN OF EVENTS RESULTING FROM CV AND CSCV

FIRST TIME PURCHASE

APPMATCHES / EXCEEDS EPP

BRAND LOYALTY

REPEATS PURCHASE

INCREASE IN SALES AND MS(COMMERCIAL OBJECTIVES)

EOS(TOTAL UNIT COST REDUCES)

INCREASE IN PROFIT, ROI, DIVIDEND (FINANCIAL OBJECTIVES)

METHODS OF TRACKING CSTRACK BOTH OWN AND MAJOR COMPETITORS CS LEVELFOUR METHODS:1)COMPLAINT AND SUGGESTION SYSTEM- THROUGH A FORM, TOLL-FREE TELEPHONE NUMBER, FAX, E-MAIL ETC., THE COMPANY MOTIVATES CUSTOMERS TO GIVE FEEDBACK (LIKES / DISLIKES), ON USING THE PRODUCT.- OFTEN USED BY RESTAURANTS, HOTELS, AIRLINES, PETROL STATIONS, HOSPITALS ETC- LESS THAN 5% CUSTOMERS COMPLAIN / GIVE SUGGESTIONS. THINK WONT DO ANY GOOD - SWITCH IF NOT SATISFIED.- NOT A GOOD METHOD.

METHODS OF TRACKING CSCUSTOMER SATISIFACTION SURVEY- PERIODICALLY.- THE COMPANY INTERVIEWS CUSTOMERS IN PERSON, OVER TELEPHONE OR MAILS A QUESTIONNAIRE TO A RANDOM SAMPLE OF TM CUSTOMERS, TO GET FEEDBACK ON THEIR LEVEL OF CS, BOTH ON OWN AND COMPETITORS BRANDS.

METHODS OF TRACKING CSGHOST OR MYSTERY SHOPPING - A GHOST SHOPPER IS A HIRED CUSTOMER. - SHOPPING BY A GHOST SHOPPER, BOTH OF COMPANYS AND COMPETITORS PRODUCTS. HIS REPORT, CONTAINING FINDINGS, FORMS BASIS OF CS LEVEL.

LOST CUSTOMER ANALYSIS AND INTERVIEW WITH EX-CUSTOMERSA) THE COMPANY MONITORS TREND IN CUSTOMER LOSS RATE ANDB) INTERVIEWS EX-CUSTOMERS

SERVICE PRODUCT

SERVICE PRODUCT PRODUCT MIX AND PRODUCT MIX DIMENSIONS QUALITY QUANTITYBRANDINGRELIABILITYWARRANTY

THE SERVICE PRODUCTTHE FIRST AND THE MOST IMPORTANT ELEMENT OF THE M-MIX IN SERVICES. NO AMOUNT OF PROMOTION OR PRICE ADVANTAGE WILL BE HELPFUL IF THE S.PRODUCT IS BAD AND DOES NOT CONFORM TO THE CUSTOMERS REQUIREMENTS.S.PRODUCT MAY BECONSUMER SERVICE PRODUCTBUSINESS SERVICE PRODUCTPEOPLE- BASED EQUIPMENT-BASED

TO ANALYZE AND PLAN A SERVICE PRODUCT IN DETAILS,IT IS BETTER TO DIVIDE IT INTO 5 LEVELS.EACH LEVEL ADDS BOTH:CUSTOMER VALUE(BENEFITS) ANDCOST

FIVE LEVELS OF A SERVICE PRODUCTPRIMARY AND ADDITIONAL BENEFIT(S)SOUGHTCOMPBRNCOQLTYCRDELWARRANTYCONSUMER BENEFIT CONCEPTOR CORE PRODUCT LEVELSERVICEOFFER OR AUGMENTED PRODUCTLEVELSERVICE DELIVERY SYSTEM

SERVICE CONCEPT OR BASIC EXPECTED PRODUCTLEVELXSPOTENTIAL PRODUCT LEVELFsPEOPLEP. ENVIRONMENTF. EQUIPMENTPROCESS

CONSUMER BENEFIT CONCEPT CORE PRODUCT LEVEL THIS LEVEL SHOWS PRIMARY AND ADDITIONAL BENEFITS WHICH TM CUSTOMERS WANT.FOR EXAMPLE: A HOTEL GUEST WANTS:REST,COMFORTSLEEPFACILITIES FOR PERSONAL PREPARATIONROOM SERVICEAVAILABILITY OF SNACKSPLEASANT VIEW etc. AS BENEFITS, WHEN HE RENTS A HOTEL ROOM.THUS, BENEFITS SHOULD BE CENTRAL OR THE MAIN FOCUS IN DESIGNING A HOTEL ROOM OR ANY S.PRODUCT.MAIN AND ADDITIONAL REASONS FOR PURCHASE

CONSUMER BENEFIT CONCEPT CORE PRODUCT LEVAL PRIMARY AND ADDITIONAL BENEFITS MAY CHANGE OVERTIME, THUS, NEED FOR UPDATING A S.PRODUCT PERIODICALLY.BENEFITS MAY BE:A) RATIONALB) EMOTIONAL

SERVICE CONCEPTBASIC EXPECTED PRODUCT LEVEL MEANS THE BASIC SERVICE PRODUCT EXPECTED BY THE CUSTOMER, BASED ON PRIMARY AND ADDITIONAL BENEFITS SOUGHT. IT INCLUDES COMPOSITION/ COMPONENTS, BRAND NAME, COMPANY NAME, FEATURES, QUALITY etc. FOR EXAMPLE REST, SLEEP AND FACILITIES FOR PERSONAL PREPARATION WOULD MEAN A HOTEL ROOM HAVING:- COMFORTABLE BED, BEDSHEETS etc.- SUITABLE FURNITURE- ALMIRAH- BATHROOM WITH NECESSARY FACILITIES- QUIET ENVIRONMENT GIVE CS

SERVICE OFFER THE AUGMENTED PRODUCT LEVAL THE SERVICE PRODUCT OFFERED BY THE COMPANY OR THE ACTUAL S.PRODUCT WHICH THE CUSTOMER GETS. SERVICE OFFER IS MADE UP OF:A) SERVICE CONCEPT / THE BASIC EXPECTED PRODUCT PLUSB) EXTRA UNEXPECTED SERVICES OFFERED BY THE COMPANY ANDC) SSP - USED AS CAs/DAs FOR PRODUCT POSITIONING AND FOR CUSTOMERS DELIGHT. EXAMPLES:A) HOTEL ROOMFREE STAY OF CHILDREN, COMPLIMENTARYBREAKFAST, LATE CHECK-OUT, TV, FRESH FLOWERS, AIRPORT PICK-UP AND DROP, IN HOUSE MOVIES, CREDITFACILITIESB) FLIGHTMOVIES, MUSIC, DUTY FREE MERCHANDIZE SELLING,AIR TO GROUND TELEPHONE FACILITIES, ANNIVERSARYCELEBRATIONS etc.

TWO ASPECTS OF SERVICE OFFERAUGMENTED PRODUCT LEVEL

. SERVICE ELEMENTS. SERVICE QUALITY AND QUANTITY

ELEMENTS OF SERVICE OFFER AGUMENTED PRODUCT LEVELTWO TYPES OF ELEMENTSA) INTANGIBLE ELEMENTSFOR EXAMPLE:IN AIR TRAVEL, THE INTANGIBLE ELEMENTS ARE:PUNCTUAL,FREQUENTS & CONVENIENT FLIGHTS,PRE-FLIGHT SERVICES, IN-FLIGHT SERVICES.B) TANGIBLE ELEMENTS (IN AIR TRAVEL)COMFORTABLE SEAT, GOOD FOOD / DRINKS,MAGAZINES,NEWS PAPERS, DUTY-FREE MERCHANDIZE etc.

ATTENTION MUST BE PAID TO BOTH TYPES OF ELEMENTS. BOTH MUST BE CONTROLLED. TANGIBLE ELEMENTS ARE EASY TO MANAGE / CONTROL.

ELEMENTS OF SERVICE OFFER AGUMENTED PRODUCT LEVEL NOT ALL THE ELEMENTS ARE PROVIDED BY THE COMPANY. SOME ELEMENTS ARE PROVIDED BY THE CUSTOMERS THEMSELVES. THESE ARE DIFFICULT TO CONTROL, eg OTHER GUESTS / PASSENGERS BEHAVIOUR IN A RESTAURANT OR ON A FLIGHT.

AFFECT QUALITY OF SERVICE PRODUCT AND REPUTATION OF THE COMPANY.

SERVICE QUALITY AND QUANTITY IT MEANS QUALITY AND QUANTITY OF BENEFITS AS JUDGED BY THE CUSTOMER. QUALITY OF SERVICE- DEGREE OR LEVEL OF PRIMARY AND ADDITIONAL BENEFITS OF THE SERVICE OFFER.- PROBLEM TO STANDARDIZE AND MAINTAIN QUALITY IN PEOPLE-BASED SERVICES. QUALITY AFFECTS SIZE OF DEMAND AND PRODUCT POSITIONING. QUANTITY OF SERVICE- AMOUNT OF SERVICE BENEFITS GIVEN, FOR EXAMPLE:AMOUNT OF ATTENTION GIVEN TO A GUEST IN A RESTAURANT.

POTENTIAL PRODUCT LEVELMEANS ALL THE POSSIBLE FEATURES/ BENEFITES WHICH CAN BE ADDED IN THE CURRENT PRODUCT, IN FUTURE

THE SERVICE DELIVERY SYSTEM HOW A S.PRODUCT IS DELIVERED TO THE CUSTOMER?THE SYSTEM USED TO DELIVER THE S.PRODUCT TO THE CUSTOMER.IMPORTANT AND INTEGRAL COMPONENT OF A SERVICE PRODUCT. THE TWO (SP AND SDS) ARE INSEPARABLE. AFFECTS QUALITY AND CS.

THE SERVICE DELIVERY SYSTEM ELEMENT OF SERVICE DELIVERY SYSTEMA) PEOPLE INVOLVED COMPANYS OWN STAFFCUSTOMER CONTACT STAFFCUSTOMER NON-CONTACT STAFFCUSTOMERS (THEIR BEHAVIOUR, APPEARANCE)THE CUSTOMER OTHER CUSTOMERS B) PHYSICAL EVIDENCE (ENVIRONMENT / SETTING)PLACE WHERE SERVICE IS DELIVEREDBUILDING, INTERIOR LAY-OUT, DCOR etcC) FACILITATING EQUIPMENTD) PROCESS USED

FACTORS WHICH INFLUENCE A SERVICE COMPANAYS PRODUCT LEVELS

1.PRIMARY AND ADDITIONAL BENEFITS SOUGHT BY THE CUSTOMERS 2. COMPOSITION OF INTANGIBLE AND TANGIBLE ELEMENTS OF A SERVICE PRODUCT3. QUALITY OF SP ELEMENTS4. QUANTITY OF SP ELEMENTS5. COST OF S.PRODUCT6. SERVCE DELIVERY SYSTEM

DIFFICULTIES ARISING IN TRANSLATING SERVICE CONCEPT INTO SERVICE OFFERWHICH EXTRA INTANGIBLE AND TANGIBLE ELEMENTS TO PROVIDE

DIFFICULTIES IN CONTROLLING VARIOUS ELEMENTS, PARTICULARLY THOSE PROVIDED BY THE CUSTOMER (S).

COST KEEPING RISING WITH EACH EXTRA SERVICE / SSP

DIMENSIONS OF PRODUCT MIX

PRODUCT-MIX AND PRODUCT-LINE

FEW COMPANIES RELY ON A SINGLE PRODUCT, MOST SELL MANY PRODUCTS.

PRODUCT-MIX:-A COMPANYS ASSORTMENT OF PRODUCTS, NEW AND OLD, OFFERED TO TM CUSTOMERS FOR CS / CD AND TO ACHIEVE COMPANYS OBJECTIVES.

PRODUCT-LINE:-A GROUP OF CLOSELY RELATED PRODUCTS WHICH HAVE SIMILAR USES / FUNCTIONS, TM CUSTOMERS, PRICES AND WHICH ARE DISTRIBUTED THROUGH THE SAME CHANNEL.

EACH PRODUCT-LINE IS USUALLY HANDLED BY A SEPARATE TEAM OF EXECUTIVES (GROUP PM, PMs/BMs)

DIMENSIONS OF PRODUCT-MIX

THREE DIMENSIONS OF PRODUCT-MIX1) PRODUCT-MIX BREADTH / WIDTHTHIS MEANS NUMBER OF PRODUCT - LINES CARRIED BY A COMPANY.TAKES A LONG TIME TO DEVELOP AND ADD A PRODUCT-LINE. MIX EXTENSION.COSTS LOT OF MONEY. RISKYDECISION AT HIGHEST LEVEL.

SERVICE PRODUCT-MIX OF A HOTELPRODUCT-MIX WIDTH OR BREADTHPRODUCT-LINE LENGTH AND DEPTHGUESTROOMSRESTAU-RANTSAUTO RENTAL SERVICESOUT-DOOR CATERINGSPORTSCURRENCYEXCHANGE NORMAL ROOMS SINGLE DOUBLEEXECUTIVE SINGLE DOUBLE SUITES e-ROOMS HONEYMOON ROOMS PAKISTANI CHINESE CONTINENTAL THAI JAPANESESEMINAR HALLTRANING ROOMSCARSCOACHESFOODARRANGEMENTSPERSONNELTENINISSQUASHSWIMMINGINDOOR GAMESGOLFTCsCNsMEETING ROOMS

DIMENSIONS OF PRODUCT-MIX

2)PRODUCT-LINE LENGTH THIS MEANS NUMBER OF DIFFERENT BRANDS IN APRODUCT LINE PRODUCT LINE DEPTH VARIANTS OF BRANDS WITHIN A PRODUCT-LINE.

BOTH NUMBER 2) AND 3) ARE LINE-EXTENSIONS.

TAKE LESS TIME AND INVESTMENT. LESS RISKY. DECISIONS AT MM / GPM LEVEL

DIMENSIONS OF PRODUCT-MIX

A COMPANY CAN EXPAND ITS PRODUCT-MIX AND GROW BY ADDING NEW PRODUCT-LINES OR BY INCREASING PRODUCT-LINE LENGTH OR DEPTH.

A COMPANY CAN ALSO PRUNE / CONTRACT ITS PRODUCT-MIX BY ELEMINATING A PRODUCT-LINE OR A PRODUCT / BRAND / VARIANT

FACTORS TO CONSIDERWHEN EXPANDING THE PRODUCT-MIX SIZE AND GROWTH RATE OF SEGMENT / MARKETMATCH WITH COMPANYSOBJECTIVESRESOURCESMANAGEMENT KNOW-HOWWILL THE NSP COMPLEMENT THE EXISTING S.PRODUCTSWILL IT GIVE OPTIMUM PRODUCT-MIX RANGE. WIDTH, LENGTH AND DEPTH. LITMUS TEST : INCRESE IN PROFITABILITYWILL IT HAVE DISTINCT POSITIONINGLESS PRICE SENSITIVITY, BARGAINING POWERLESS AVAILABILITY OF SUBSTITUTES

FACTORS TO CONSIDER WHEN PRUNING THE PRODUCT-MIX GIVE NO IMPORTANCE TO SENTIMENTS.CAN WE REVITALIZE ITCAN WE SELL IT ABROADWILL IT IMPROVE PROFITABILITYRESOURCES SAVED CAN BE ALLOCATED TO MORE SUCCESSFUL PRODUCTSNO DISRUPTIVE EFFECT ON OVERALL OPERATION

NEW SERVICE PRODUCT

A NEW SERVICE PRODUCT

SEVERAL WAYS TO DEFINE A NSP ME-TOO PRODUCT NEW TO THE COMPANY BUT ALREADY AVAILABLE FROM ANOTHER COMPANY.ADAPATED PRODUCT ALREADY AVAILABLE BUT ADAPTED FOR A NEW MARKET SEGMENT. EG: TELEPHONE BOOTHSINNOVATION NSPs SHOWING SUBSTANTIAL IMPROVEMENT OVER THE EXISTING SP TO BETTER SATISFY NEEDS. EG: MOBILE TELECOMMUNICATIONINVENTION A TOTALLY NEW SERVICE PRODUCT, NOT PREVIOUSLY AVAILABLE AND WHICH MEETS AN UNSATISFIED NEED. CREATES A NEW PRODUCT CLASS EG: SATELLITE TV COMMUNICATION.AN EXISTING SERVICE BUT DELIVERED THROUGH A NEW SDS. EG: BANKING SERVICES THROUGH ATMs.

SOURCES OF NEW SERVICE PRODUCTS

ACQUISITIONTHROUGH NEW PRODUCT DEPELOPMENT PROCESS

WHY SERVICES COMPANIES NEED TO DEVELOP NEW SERVICE PRODUCTSCANNOT CONTINUE TO RELY ON EXISTING S. PRODUCTS FOR SUCCESS.TO INCREASE SALES, MS, PROFIT AND THE NEED TO REMAIN COMPETITIVE BY MEETING CHANGING REQUIREMENTS OF CUSTOMERS.TO REPLACE OUTDATED S. PRODUCTS.TO UTILIZE UNUSED CAPACITY / FACILITIES EXAMPLES: UNUSED SPACE / FACILITIES IN A SPORTS CENTRE.

WHY SERVICES COMPANIES NEED TO DEVELOP NEW SERVICE PRODUCTSTO SMOOTH-OUT SEASONAL DEMAND EXAMPLES: MARRIAGE HALLS FOR MEETINGS / EXAMINATION CENTRE DURING OFF-SEASON.TO REDUCE DEPENDENCY ON TOO-FEW PRODUCTS BANKS HAVE MANY SERVICE PRODUCTSTO EXPLOIT OPPORTUNITIES WHEN A COMPETITOR MAY DROP-OUT OR NEW NEEDS OF CUSTOMERS MAY COME-UP. TO MAINTAIN REPUTATION OF BEING LEADERS IN R AND D

WHY LACK OF NSPs IN SERVICE COMPANIESMOST SERVICES COMPANIES, EXCEPT BIA DO NOT HAVE A PRODUCT DEVELOPMENT DEPARTMENT.REASONS:MANY SERVICES COMPANIES ARE IN THE PUBLIC SECTOR, WITH LITTLE COMPETITION / MONOPLY. LACK OF MOTIVATION TO INNOVATE.

LACK OF RESOURCES FINANCIAL, MNGT. etc. MOSTLY SMALL COMPANIES.

CANNOT BE PATENTED LESS INCENTIVE TO DEVELOP A NSP. FOCUS ON ME-TOO PRODUCTS .

CONCEPT TESTING IS DIFFICULT HOME-USE TESTS ARE ALSO DIFFICULT

HIGH COST OF NEW SERVICE PRODUCT DEVELOPMENT

HIGH FAILURE RATE OF NSPs

FAILURE OF NEW SERVICE PRODUCTS

70-80% FAILURE RATE REASONS.

THE BASIC SERVICE PRODUCT EXPECTED BY THE CUSTOMER, IS NOT WELL DESIGNED. NOT BASED ON THE BENEFITS SOUGHT BY THE TM CUSTOMERS.LACK OF COMPANY-CLIENT INTERFACE DURING THE DEVELOPMENT PROCESS OF A NSP.WRONG CRITERIA USED IN MARKET SEGMENTATION AND PRODUCT POSITIONING. THESE ARE NOT CUSTOMER WANTED CRITERIA.GOOD NSP BUT MARKET POTENTIAL HAS BEEN OVERESTIMATED.FAULTY PRICING, PROMOTION, DISTRIBUTION OR SDSINACCURATE / UNHEALTHY SPREAD OF IMAGE OF A NSP BY CUSTOMERSCOMPETTITORS FIGHT HARDER THAN EXPECTED

STAGES IN NEW SERVICE PRODUCT DEVELOPMENT PROCESSIDEAS GENERATIONSTARTING POINT, CREATE AS MANY NEW IDEAS AS POSSIBLEIDEAS MAY COME EITHER FROM INSIDE OR OUTSIDE THE COMPANY, VIA :-BRAINSTORMING SESSION SUGGESTION BOXMARKETING RESEARCH FOCUS GROUP, INDIVIDUAL INTERVIEWSVISIT TO OTHER COUNTRIES.

MOST IDEAS USUALLY COME FROM CUSTOMERS.

STAGES IN NEW SERVICE PRODUCT DEVELOPMENT PROCESSIDEAS SCREENING BY A MANAGEMENT TEAM SEPARATE WORKABLE IDEAS FROM NON-WORKABLE IDEAS BY A MANAGEMENT TEAM, ON THE FOLLOWING CRITERIA, TO JUSTIFY USE OF RESOURCES

ADDITIONAL MANPOWER, SPACE, MACHINES REQUIRED.COMMERCIAL ASPECTS.DEVELOPMENT TIME. SURVIVED IDEA(S).

STAGES IN NEW SERVICE PRODUCT DEVELOPMENT PROCESSCONCEPT DEVELOPMENT AND CONCEPT TESTING.CONCEPT DEVELOPMENT DEVELOP A MEANINGFUL VERBAL AND PICTORIAL DESCRIPTION OF THE SURVIVED BUSINESS PROPOSAL CONCEPT TESTINGTEST THE PRODUCT CONCEPT WITH A SUITABLE NUMBER OF TM CUSTOMERS, USING VERBAL AND PICTORIAL DESCRIPTION, TO JUDGE THEIR UNDERSTANDING AND LIKING / DISLIKING.

NEW SERVICE PRODUCT CONCEPT TESTINGUSUALLY, CONCEPT TESTING IS IGNORED IN SERVICES.PROBLEMS IN CONCEPT TESTING :CONCEPT TESTING IS DIFFICULT OF A SERVICE PRODUCT BECAUSE DESCRIBING SOMETHING WHICH IS MOSTLY INTANGIBLE, IS VERY DIFFICULT.RESULTS VARY TOO-MUCH, WHICH DEPEND ON :SERVICE PROVIDERPHYSICAL ENVIRONMENTTHE CUSTOMERHOME-USE TESTS ARE NOT POSSIBLE.BENEFITS OF CONCEPT TESTING :OPPORTUNITY TO EVALUATE A S. PRODUCT BEFORE ITS CREATION AND INTRODUCTION.OPPORTUNITY TO GET INPUT ON THE SPECIFICATIONS (INTANGIBLE AND TANGIBLE ELEMENTS) OF A NEW S. PRODUCT, FROM THE USERS.

STAGES IN NEW SERVICE PRODUCT DEVELOPMENT PROCESSDETAILED BUSINESS ANALYSIS OF THE PRODUCT BASED ON THE SELECTED IDEA ESTIMATED SALES, COSTS AND PROFIT FOR THREE CONSECUTIVE YEARS PROBABILITY OF SUCCESS OR FAILURE OF NSP.POSSIBILE RESPONSE / REACTION OF COMPETITORS.

STAGES IN NEW SERVICE PRODUCT DEVELOPMENT PROCESSDEVELOPMENT OF THE NEW S. PRODUCT FOR TRIAL

TRANSLATE THE NSP IDEA / PROPOSAL, AS PASSED BY THE TM CUSTOMERS, INTO THE NEW SERVICE PRODUCT THIS MEANS :-INVESTMENTHIRING AND TRAINING OF STAFFCONSTRUCTION OF OPERATIONAL FACILITYDESIGNING SDS.

STAGES IN NEW SERVICE PRODUCT DEVELOPMENT PROCESSMANAGEMENTS FINAL DECISION GO / NO GOTEST MARKETING COMMERCIALIZATION OF NSPWHEN WHERE HOW STAGE 1,2,3 AND 4 DO NOT INVOLVE MUCH COSTS. MANY S. PRODUCTS FAIL AT THESE STAGES. OTHER STAGES INVOLVE LOT OF COSTS.

DIFFICULTIES FACED IN INNOVATING SERVICE PRODUCTSRESEARCH AND DEVELOPMENT IS NOT WELL DEVELOPED IN SERVICES COMPANIES AS COMPARED TO IN MANUFACTURING COMPANIES. REASONS:DEVELOPING THE DESIRED SPECIFCATIONS OF A NEW S. PRODUCT IS DIFFICULT, PARTICULARLY OF PEOPLE- BASED SERVICES.TESTING OF NEW SERVICES IS DIFFICULT.GREAT RISK OF BEING QUICULY COPIED. CANNOT BE PATENTED. EXAMPLESAIRLINES (FILMS, DUTY FREE ITEMS) BANKS (VARIOUS KINDS OF ACCOUNTS)LACK OF NEW IDEAS IN SERVICE INNOVATION

QUALITY IN SERVICES COMPANIES

QUALITY IN SERVICES COMAPANIESTWO TYPES OF QUALITYQUALITY OF THE SERVICE PRODUCTQUALITY OF THE SERVICE DELIVERY SYSTEM, PARTICULARLY THE APPEARANCE AND BEHAVIOUR OF CUSTOMER CONTACT STAFF, QUALITY OF CUSTOMERS AND QUALITY OF PHYSICAL ENVIRONMENT.

SIGNS OF QUALITY SERVICEPEOPLEA.OWNCUSTOMERS CONTACT STAFFCUSTOMERS NON-CONTACT STAFFB.CUSTOMERSTHE CUSTOMEROTHER CUSTOMERSPHYSICAL ENVIRONMENT AND EVIDENCEFACILITATING EQUIPMENT PROCESSESPRICE

SERVICE QUALITY MODELFIVE GAPS THAT CAUSE QUALITY PROBLEMS AND, THUS, THESE MUST BE CLOSED.GAP BETWEEN CONSUMER EXPECTATIONS AND MANAGEMENTS UNDERSTANDINGGAP BETWEEN MANAGEMENTS UNDERSTANDING AND SERVICE-QUALITY STANDARDS.GAP BETWEEN SERVICE-QUALITY STANDARDS AND THE ACTUAL SERVICE DELIVERYGAP BETWEEN THE ACTUAL SERVICES DELIVERY AND THE PROMOTIONAL CLAIMSGAP BETWEEN THE ACTUAL SERVICE AND THE EXPECTED SERVICE

SERVICE QUALITY MODELEXPECTED SERVICEACTUAL SERVICEDELIVEREDMANAGEMENTS SERVICE QUALITYSTANDARDSMANAGEMENTS UNDERSTANDING OF CONSUMERS EXPECTIONSPROMOTIONALCLAIMS12453

HOW TO MAINTAIN QUALITY IN A SERVICE BUSINESSBE CUSTOMER FOCUSED. KNOW TM CUSTOMERS AND THEIR NEEDS TOP MANAGEMENTS COMMITMENT TO QUALITYTHEY MUST ACT AS A ROLE MODEL OF QUALITY MANAGEMENT CAN SHOW ITS COMMITMENT TO QUALITY BY:BY SETTING OBJECTIVES AND INCENTIVES BASED ON QUALITY JOB DONE AND NOT ON QUANTITY JOB PROMOTE QUALITY ORIENTED PEOPLE IN ALL DEPARTMENTSPROVIDE TQM TRAINING TO EVERYBODYSET HIGH QUALITY STANDARDSEG: SWISSAIR- 96% CSCITIBANK PHONE CALL ANSWERED WITHIN 10 SECONDSCUSTOMERS LETTER ANSWERED WITHIN TWO DAYS

HOW TO MAINTAIN QUALITY IN A SERVICE BUSINESSHAVE A SYSTEM FOR MONITORING SERVICE PERFORMANCEOWNMAJOR COMPETITORSVIA GHOST SHOPPING, CUSTOMER SURVEYS, SUGGESTIONS AND COMPLAINT FORM / TOLL FREE TELEPHONE NUMBERHAVE A SYSTEM TO RESOLVE COMPLAINTS QUICKLYSATISFY BOTH EMPLOYEES AND CUSTOMERSSTATE IN EVERYBODYS JOB DESCRIPTION HOW HIS JOB AFFECTS CUSTOMER SATISFACTION

HOW TO DEFEND MARKET POSITION?

HOW TO DEFEND MARKET POSITIONCREATE DIFFERENTIATION TO DEFENDWHAT IS DIFFERENTIATION ?DESIGNING AND BUILDING MEANINGFUL, BELIEVABLE, AFFORDABLE AND SUSTAINABLE DIFFERENCES IN THE M-MIX ELEMENTS, APPLICABLE TO MOST CUSTOMERS, FOR COMPETITIVE ADVANTAGE,POSITIONING AND FOR CUSTOMER SATISFACTION

HOW TO DEFEND MARKET POSITIONEIGHT WAYS TO CREATE DIFFERENTIATION :OFFER EXTRA SERVICES AND SSPs. EXTRA SERVICES / SSPs CAN BE EASILY COPIED.HAVE BETTER SERVICE DELIVERY SYSTEM BETTER TRAINED, MOTIVATED AND MORE EXPERIENCED PEOPLE, P. ENVIRONMENT/ EVIDENCE, FACILITATING EQUIPMENT AND PROCESSES. MAKE PROCESSES AUTOMATED / MECHANIZED FOR UNIFORMITY IN QUALITY EXTENSIVELY USE A SYMBOL OR A LOGO OR A BRAND NAME TO FIX THE IMAGE OF THE COMPANY. EG HOTELS.

HOW TO DEFEND MARKET POSITIONMAKE EASY FOR THE CUSTOMER TO ORDER / GET THE SERVICE.OFFER SERVICE WARRANTYADD FEATURESPERSONAL INVOLVEMENT BY HIGHER MANAGEMENT. FREQUENT FOLLOW-UP CONTACTS BY CUSTOMER CONTACT STAFFON-TIME COMPLETION OF WORK

MANAGING PRODUCTIVTIY IN SERVICES

MANAGING PRODUCTIVITY IN SERVICESVARIOUS COSTS ARE GOING-UP AND AN INCREASE IN PRICE IS LIMITED BY COMPETITION AND GOVT. REGULATIONS. THUS, NEED FOR PRODUCTIVITY TO KEEP THE COSTS DOWN.FOUR METHODS TO IMPROVE PRODUCTIVITY HIRE AND DEVELOP MORE SKILLFUL WORKERS.S. PROVIDER TO WORK WITH A BIG GROUP EXAMPLES: A DOCTOR HANDLING MORE PATIENTS, EACH GETTING LESS TIME. QUALITY MAY SUFFER TO SOME EXTENT.

MANAGING PRODUCTIVITY IN SERVICESUSE AUTOMATED EQUIPMENT AND STANDARDIZED PROCESSES. EXAMPLE:SOUTH - WEST AIRLINE USES AUTOMATED EQUIPMENT FOR TICKET PURCHASING AND BOARDING PASSES.INTRODUCE SELF-SERVICE TO REPLACE SERVICE FROM THE COs STAFF.EXAMPLE:KFC-SALAD BAR

BRANDING, WARRANTY AND AFTER SALE SERVICES

BRANDING

SERVICE PRODUCT BRANDING BRANDING MEANS GIVING A NAME, SYMBOL AND A NUMBER TO A PRODUCT IN ORDER TO DIFFERENTIATE ONE PRODUCT FROM ANOTHER. IN THE PAST, BRANDING WAS MAINLY USED IN CONSUMER GOODS. TODAY IT IS ALSO BECOMING POPULAR IN SERVICES. BRAND, BRAND NAME ,TRADEMARK EXAMPLEXMOAVAN ACCOUNT (FAYSAL BANK)IZAFA TERM CERTIFICATES (FAISAL BANK)INDIGO (MOBILINK)DJUICE (TELE NOR)JAZZ (MOBILINK)SMART (TELENOR)BAHBOOD SAVING CERTIFICATES (NATIONAL SAVINGS)

SERVICE PRODUCT WARRANTY

AN UNDERTAKING BY A SELLER THAT THE SERVICE SOLD IS FIT FOR USE OR WILL PERFORM AS SPECIFIED. IMPORTANT IN CERTAIN SERVICES. FOR EXAMPLE MUTUAL FUNDS TERMS CERTIFICATAES ISSUED BY BANKS GOVERNMENT SECURITIES BUILDS CONFIDENCE IN THE SP / CO.

AFTER SALE SERVICESGIVING SOME EXTRA SERVICE AFTER HAVING USED THE MAIN SERVICE.POPULAR IN SOME SERVICESFOR EXAMPLE, AIRLINES HELPING PASSENGERS IN HIRING TRANSPORT / BOOKING HOTEL ACCOMMODATION.

PRICE

MARKETING-MIX IN SERVICESPRICEDEFINING PRICEIMPORTANTACE OF PRICE FOR THE COMPANY AND THE CUSTOMER PRICING OBJECTIVES FACTORS WHICH AFFECT PRICE DETERMINATION PRICING METHODSPRICING STRATEGIESPRICE LEVELS DISCOUNTS PAYMENT MODES AND TERMS (MOP, TOP)

PRICINGDEFINITION:-

A) AMOUNT OF MONEY NEEDED BY A CUSTOMER TO OBTAIN A PRODUCT. IT GENERALLY INCLUDES THE PRICE OF PSS OR SSP OFFERED BY THE COMPANY. B) WORTH OR VALUE OF BENEFITS OF A PRODUCT IN THE MIND A CUSTOMER, MEASURED IN SOME MONETARY UNITS.

PRICE UNDER VARIOUS NAMES IN SERVICES MARKETING

TUITION FEEINTEREST RATERENTFAREFEE PREMIUMSALARYWAGE BRIBEINCOME TAXTOLL TAXHONORARIUM

CHARACTERITCS OF PRICEAN ELEMENT OF M-MIX. IT MUST BE CUSOMTER-ORIENTED

UNLIKE OTHER Ps OF M-MIX, PRICE GENERATES REVENUE, OTHER ELEMENTS INCUR COSTS.

3)UNLIKE OTHER Ps OF M-MIX, PRICE CAN BE CHANGED QUICKLY. IT IS THE MOST FLEXIBLE ELEMENT OF M-MIX

4)SETTING PRICE AND FIGHTING PRICE COMPETITION IS NUMBER ONE PROBLEM FACING THE MARKETING EXECUTIVES.

PRICING OBJECTIVESMAXIMIZATION OF CURRENT PROFITHIGH CURRENT SALES VOLUME AND MSTO REFLECT PRODUCT QUALITY LEADERSHIPTO BE ENSURE SURVIVAL OF THE COMPANY. SHORT TERM OBJECTIVE.TO MAINTAIN STATUS QUO OF THE CURRENT PRICE LEVEL IN THE MARKET AND TO AVOID A PRICE WAR

MANAGEMENT MUST DECIDE PRICING OBJECTIVES BEFORE SETTING THE PRICE

THE CLEARER A FIRM IS ABOUT ITS PRICING OBJECTIVES, THE EASIER IT IS TO SET THE PRICE.

FACTORS WHICH INFLUENCE PRICE DETERMINATIONA) INTERNAL FACTORS:-PRICING OBJECTIVES.PRODUCT POSITIONING AND M-MIX STRATEGIES.PLCPRODUCTION CAPACITYTOTAL PRODUCT COST. A COMPANY SHOULD TRY TO BE A LOW-COST PRODUCERIT SETS THE FLOOR PRICE OF THE PRODUCT.

FACTORS WHICH INFLUENCE PRICE DETERMINATIONAT A CERTAIN LEVEL OF PRODUCTION, THE TOTALCOST OF A PRODUCT IS MADE-UP OF:VARIBLE PRODUCT COSTS (VPC) THEIR TOTAL VARIES WITH THE QUANTITY PRODUCED OR SOLD. EG: CONSUMABLES, RMs, PMs ETC.2.FIXED COSTS OR OVERHEADS (FC)THEIR TOTAL DOES NOT VARY WITH LEVEL OF PRODUCTION OR SALES. EG: SALARIES OF EXECUTIVES, RENT, DEPRECIATION ETC.

TOTAL COST IS THE SUM TOTAL OF FIXED AND VARIABLE COSTS FOR A CERTAIN LEVEL OF PRODUCTION.

FACTORS WHICH INFLUENCE PRICE DETERMINATIONB) EXTERNAL FACTORS:-1)CUSTOMERS PERCEIVED VALUE (CPV). IT SETS THE CEILING PRICE OF A PRODUCT CPV INDICATES:- A) PRODUCTS WORTH OR VALUE IN THE MIND OF TM CUSTOMERS. B) PAYING CAPACITY OF TM CUSTOMERS. CPV IS DETERMINED VIA MARKET RESEARCH ON A REPRESENTATIVE SAMPLE OF TMCs, EFFECTS OF CUSTOMER PERCEIVED VALUE (CPV):1) PRODUCT PRICE > CPV CUSTOMER DOES NOT BUY 2) PRODUCT PRICE < CPV CUSTOMER BUYS 2) PRODUCT PRICE = CPV BUYS OR BARGAINS.

FACTORS WHICH INFLUENCE PRICE DETERMINATION

ESTIMATED VOLUME DEMAND AT DIFFERENT PRICES.ELASTIC OR INELASTIC DEMAND.MAJOR COMPETITORS PRICES AND THEIR EXPECTED REACTION.STAGE IN THE ECONOMY CYCLE AND THE PREVAILING ECONOMIC CONDITIONS (INFLATION, INTEREST RATE, EXCHANGE RATE) POSSIBILITY TO CHANGE THE PRICE IN FUTURE.POSSIBILITY OF GOVT. INTERVENTION.FAIR PROFIT TO RESELLERS TO GAIN THEIR SUPPORT.

MAJOR METHODS OF SETTING PRCIECOST-PLUS, MARK-UP OR COST-BASED PRICING METHOD.BREAK-EVEN ANALYSIS OR TARGET RETURN PRICING METHOD.COMPETITION-BASED PRICING METHOD OR GOING RATE PRICING METHOD.CUSTOMER PERCEIVED VALUE PRICING METHOD.VALUE PRICING METHODSEALED-BID PRICING METHOD.

MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCTCOST - PLUS OR MARK-UP PRICING METHODADDING A CERTAIN MARK-UP TO THE TOTAL COST OF PRODUCING , MARKETING AND DELIVRING A SERVICE PRODUCT TO CUSTOMERS. IT HAS THREE STEPS CALCULATE TOTAL VARIABLE AND FIXED COST PER UNIT DECIED MARK-UP AND ADD MARK-UP TO THE TOTAL UNIT COST, USING THE FOLLOWING FORMULA PRICE = TOTAL UNIT COST 1.0 - % MARK-UP

MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCTCOST- PLUS PRICING METHOD IS FURTHUR DIVIDED INTO:PROFIT-ORIENTED COST-PLUS PRICING GOVERNMENT CONTROLLED COST-PLUS PRICING

MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCTMARKET- BASED OR COMPETITION-BASED PRICING MEATHOD FIXING THE PRICE OF A SERVICE KEEPING IN MIND THE PRICE OF STRATEGIC COMPETITORS POPULAR, WHY? SIMPLE, COLLECTIVE WISDOM

MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCTSERVICE PROVIDERS PRICE MAY BE:SAME AS THAT OF MAJOR COMPETITORS. NO PRODUCT DIFFERENCES. COST NOT CONSIDERED.BELOW THAT OF MAJOR COMPETITORS. TWO DRAWBACKS:PRICE WARSERVICE USER PERCEIVES LOW QUALITY OF SP.ABOVE THAT OF MAJOR COMPETITORS DISTINCT BENEFITS, DISTINCT OR EXTRA SERVICES AND SSPsS.PROVIDER HAS HIGH IMAGE/ PRESTIGE/ SDS

MAJOR METHODS OF SETTING PRICE OF A SERVICE PRODUCTCUSTOMER PERCEIVED VALUE PRICING METHODSET PRICE CLOSE TO THE WORTH OF SP AS PERCEIVED BY TM CUSTOMERS. FIND VIA MR.COST IS CONSIDERED. IT HAS FOUR STEPS :FIND TOTAL PER UNIT COST FIND OUT CPV VIA MARKETING RESEARCHKNOW STRATEGIC COMPETITORS PRICE FIX PRICE OF THE SERVICE PRODUCT CLOSE TO THE CPV, KEEPING THE MIND THE PRICE OF STRATEGIC COMPETITORS.

PRICING STRATEGIESDIFFERENTIAL / FLEXIBLE DISCRIMINATORY PRICING STRATEGYTWO OR MORE PRICES OF THE SAME SERVICE TO ACCOMMODATE DIFFRENCES IN CUSTOMERS, LOCATIONS AND TIMINGS, etc

PRICING STRATEGIESTHREE SUCH PRICING STRATEGIES, EACH FOR A DIFFERENT PURPOSE.CUSTOMER- SEGMENT FLEXBLE PRICING STRATEGYLOCTION FLEXIBLE PRICING STRATEGYTIME FLEXIBLE PRICING STRATEGYMAJOR DISADVANTAGE: CUSTOMERS GET HABITUAL, DELAY PURCHASES

PRICING STRATEGIESDISCRETE PRICING STRATEGYQUOTING A PRICE WITHIN THE FINANCIAL AUTHORITY OF A DECISION MAKER WHO HAS SYMPATHTIC ATTITUDE TOWARDS A SERVICE PROVIDER.DIVERSIONARY PRICING STRATEGYOFFERING A LOW PRICE OF ONE OF THE MANY SERVICE PRODUCTS IN ORDER TO DEVELOP AN IMAGE OF A LOW PRICE COMPANY AND TO INCREASE CUSTOMERS TRAFFIC.GUARANTEED PRICING STRATEGY PAYMENT IS MADE BY A CUSTOMER ONLY IF CERTAIN RESULTS ARE GUARANTEED OR DELIVERED BY THE SERVICE PROVIDER

PRICING STRATEGIESFIRST LOSS-ORDER PRICING STRATEGY REDUCING PRICE FOR THE FIRST ORDER WITH THE HOPE OF GETTING FUTURE BUSINESS AT A BETTER PRICEOFFEST PRICING STRATEGY THE PRICE OF THE BASIC SP IS LOW BUT EXTRA SERVICES OR SSP CARRY HIGHER CHARGESBUNDLE PRICING STRATEGY OFFRING ONE PRICE OF A BUNDLE OF SERVICES WHICH IS LOWER THAN THE SUM TOTAL OF INDIVIDUAL PRICES TWO-PARTS PRICING STRATEGY FIXED PART VARIABL PART

PRICE VS NON-PRICE COMPETITIONPRICE COMPETITIONPRICE IS THE PRIMARY BASIS FOR FIGHTING COMPETITION. IT IS USED WHEN PRODUCTS ARE SIMILAR. PRICE IS SET AS LOW AS POSSIBLE TO GAIN VOLUME SALES AND MS. MINIMUM PSS ARE OFFERED. POSSIBILITY OF PRICE WAR. MOST COMPANIES WANT TO AVOID IT AND, INSTEAD, PROMOTE THEIR PRODUCT ON THE BASIS OF BETTER AVAILABILITY AND SPTs.CONSUMERS BENEFIT ON SHORT TERM BASIS. THEY BUY AS LONG AS A BRANDS PRICE IS LOWEST.

PRICE VS NON-PRICE COMPETITION(B) NON-PRICE COMPETITIONPRICE IS NOT THE PRIMARY BASIS OF FIGHTING COMPETITION.

THE SELLER HAS A GOOD PRICE AND INCREASES VOLUME SALES AND MS BY EMPHASIZING ON THE OTHER Ps OF M-MIX

ADDITIONAL CLASSFIFCATION BASIS OF SERVICES FOR PRICING PURPOSEBASIS: WHO REGULATES / CONTROLS THEIR PRICETHREE CATEGORIES OF SERVICES FOR PRICING PURPOSE:SERVICES SUBJECT TO GOVERNMENT PRICE CONTROLSERVICES SUBJECT TO FORMAL PRICE REGULATION BY TRADE BODIESSERVICES SUBJECT TO PRICE REGULATED BY MARKET FORCES

DISCOUNTS

DISCOUNTSPERCENTAGE REDUCTION IN THE LIST PRICE OF A PRODUCT.

TYPES OF DISCOUNTS. 1. TRADE DISCOUNT: FOR PERFORMING CERTAIN DISTRIBUTION FUNCTIONS. 2. CASH DISCOUNT:- FOR PAYING BILL WITHIN A SPECIFIED PERIOD. E.G 2 \ 10 , NET / 30.

DISCOUNTS3. QUANTITY DISCOUNTS TO ENCOURAGE CUSTOMERS TO BUY LARGE QUANTITIES / AMOUNT. CAN BE ON:- (a). NONCUMULATIVE BASIS DISCOUNT BASED ON THE SIZE OF EACH INDIVIDUAL ORDER. ENCOURAGES LARGE ORDERS. (b) CUMULATIVE BASIS DISCOUNT BASED ON TOTAL VALUE OR VOLUME PURCHASED IN A CERTAIN PERIOD. CUSTOMER IS TIED UP WITH THE SELLER. E.G FFPs, FGPs

DISCOUNTS 4. SEASONAL DISCOUNT: SLACK / OFF-SEASON TO EVEN-OUT DEMAND AND SUPPLY, TO AVOID INVENTORY COST. 5. PROMOTIONAL ALLOWANCE FOR PROMOTIONAL SERVICES PERFORMED BY THE MM. EG: DISPLAYS, RETAILERS AD SHOWING SELLERS PRODUCT.

PLACE

MARKETING-MIX IN SERVICESPLACELOCATION. ACCESSIBILITY VIA PHYSICAL AND COMMUNICATION MEANSDISTRIBUTION CHANNELS DISTRIBUTION COVERAGE

PLACEDISTRIBUTIONTWO ASPECTS/ DECISIONSLOCATION OF SERVICES PROVIDERSINGLE OR MILTI-SITE LOCATIONSFACTORS TO BE CONSIDERED IN LOCATION DOES THE CUSTOMER GO TO THE SERVICE PROVIDER OR DOES THE SERVICE PROVIDER GO TO THE CUSTOMERACCESSABLE VIA PHYSICAL AND COMMUNICATION MEANS

PLACEDISTRIBUTIONDISTRIBUTION CHANNEL STRUCTURE AND EXTENT OF COVERAGE.DIRECT DISTRIBUTION CHANNAL IS USED MOST OFTEN INDIRECT DISTRIBUTION CHANNEL. USED LESSEXTENSIVE, SELECTIVE OR EXCLUSIVE DISTRIBUTION COVERAGE

PROMOTION

MARKETING-MIXPRODUCTPRICEPLACEPROMOTIONPERSONALSELLINGADVERTISINGSALESPROMOTIONTOOLSPUBLIC RELATIONSPUBLICITYMARKETING TOOLS FOR CS.4,5 OR 7INTEGRATED / COORDINATED FOR IMC

MARKETING-MIX IN SERVICESPROMOTION TO INFORM, CONVINCE OR REMINDSTRESS ON AVAILABILITY, CONSISTENT SERVICE QUALITY, PEOPLE, AND PHYSICAL ENVIRONMENT / EVIDENCE AND LOCATIONPROMOTIONAL-MIX:PERSONAL SELLINGADVERTISINGSALES PROMOTION TECHNIQUESP. RELATIONS AND PUBLICITYMAILING

PROMOTIONDEFINITION PURPOSE TO COMMUNICATE WITH (TO INFORM, PURSUADE OR REMIND) AND TO INFLUENCE TM CUSTOMERS TO USE COMPANY`S PRODUCT(S).

DEFINITIONPROMOTION IS TO INFORM, PERSUADE OR REMIND TARGET MARKET CUSTOMERS OF A PRODUCT OR A COMPANY, THROUGH VARIOUS METHODS OF PROMOTION, IN ORDER TO ACHIEVE MARKETING OBJECTIVES.

PROMOTIONAL METHODSFIVE MTHODS, EACH WITH DIFFERENT FEATURES AND SUITABLE IN DIFFERENT PROMOTIONAL SITUATIONS.PERSONAL SELLING (PS)*ADVERTISING (AD)*SALES PROMOTION TOOLS OR TECHNIQUES (SPTs)PUBLIC RELATIONS (PR)PUBLICITY (PB)*PRIMARY METHOD .IMCMETHODS MUST BE COORDINATED FOR GREATEST IMPACTSEQUENSESAME MESSAGE

PROMOTIONAL METHODS1) PERSONAL SELLINGDIRECT PRESENTATION OF A PRODUCT TO A CUSTOMER OR A GROUP OF CUSTOMERS, THROUGH A REPRESENTATIVE, EITHER IN A FACE TO FACE SITUATION OR OVER PHONE (TELEMARKETING)DIRECTED AT INFLUENCERS, END-CUSTOMERS OR ON MIDDLEMEN.MAJOR PROMOTIONAL METHOD FOR COMPLEX PRODUCTS, BUYER IS A PROFESSIONAL.

PROMOTIONAL METHODS2)ADVERTISING:NON-PERSONAL, MASS PROMOTION OF A PRODUCT OR A COMPANY, THROUGH FIVE ADVERTISING MEDIA. PAIDPRINT, BROADCAST & FILM, ELECTRONIC, DISPLAY AND TRANSIT MEDIAMAJOR PROMOTIONAL METHOD FOR SIMPLE PRODUCTS

PROMOTIONAL METHODS3) SALES PROMOTION TOOLS OR TECHNIQUESTEMPORARY AND SHORT TERM INCENTIVES, GIVEN TO SALES REPRESENTATIVES, INFLUENCERS, MIDDLEMEN OR TO CONSUMERS, IN ORDER TO ENCOURAGE QUICKER AND BIGGER SALE OR PURCHASE OF A PRODUCT, DURING A SPECIFIED PERIOD. COMPARE SALE BEFORE, DURING AND AFTER A SALES PROMOTION TOOL HAS BEEN USED, TO JUDGE EFFECETIVENESS OF SPTsSUPPORTIVE PROMOTIONAL METHOD TO PERSONAL SELLING OR ADVERTISING.

PROMOTIONAL METHODSTHREE KINDS OF SALES PROMOTION TOOLS:SALES FORCE INCENTIVESTRADE INCENTIVESCONSUMER INCENTIVESCHARACTERISTICS OF SALES PROMOTION TOOLSYIELD FAST RESULTSWORK BEST WITH A SUPERIOR PRODUCT.BECOMING VERY POPULAR. WHY?CUSTOMERS AND MM ARE BECOMING INCENTIVE / DEAL ORIENTED COMPETITORS PRESSUREMANAGEMENTS PRESSURE ON PM & SALES EXECUTIVES

PROMOTIONAL METHODS4) PUBLIC RELATIONSA VARIETY OF COMMUNICATION EFFORTS, MADE BY A COMPANY, TO CREATE A FAVOURABLE ATTITUDE / OPINION OF VARIOUS PUBLICS * TOWARDS THE COMPANY OR ITS PRODUCTS SO THAT SELLING BECOMES EASY. BUILDS RELATIONS.USUALLY, NO SPECIFIC PRODUCT PROMOTIONAL MESSAGE IS COMMUNICATED IN PUBLIC RELATION EFFORTS.PR MODES / TOOLS: NEWSLETTERS, LOBBYING (INFLUENCING VIA PERSONAL CONTACTS), SPONSORING EVENTS (LITERARY, CHARITY, SPORTS, SCIENTIFIC), HOUSE MAGAZINE,RELEASING NEWS ABOUT COMPANY, PEOPLE OR PRODUCTS ETC.USED AS A SUPPORTIVE PROMOTIONAL METHOD TO MAJOR METHODS OF PROMOTION.*PUBLICS : STOCKHOLDERS, EMPLOYEES, CUSTOMERS, SUPPLIERS, PRESSURE GROUPS, SOCIETY, GOVERNMENT, MEDIA PEOPLE, POLITICIANS ETC.

PROMOTIONAL METHODS5)PUBLICITYA SPECIAL FORM OF PUBLIC RELATIONS. INVOLVES RELEASING NEWS, ARTICLES, PHOTOGRAPHS, HOLDING PRESS CONFERENCES ETC., ABOUT A PRODUCT OR THE COMPANY, TO THE MASS MEDIA, FOR PUBLICATION / BROADCASTING AS A NEWS ITEM. IT IS NON-PAIDHAS HIGH CREDIBILITYUSED AS A SUPPORTIVE PROMOTIONAL METHOD TO MAJOR METHODS OF PROMOTION

PROMOTIONAL MIXAN APPROPRIATE COMBINATION OF PERSONAL SELLING, ADVERTISING, SALES PROMOTION TECHNIQUES, PUBLIC RELATIONS AND PUBLICITY, IN ORDER TO ACHIEVE PROMOTIONAL AND MARKETING OBJECTIVES.PROMOTIONAL OBJECTIVESAWARENESS, KNOWLEDGE, LIKING, PREFERENCE, BUY, LOYALTY AND TO HAVE BRAND NAME ON THE TOP OF MIND.MARKETING OBJECTIVES:SALES, MS, GR, RANKING,RETAINING EXISTING AND DEVELOPING NEW CUSTOMERS AND PROFIT.

PEOPLE

MARKETING-MIX IN SERVICESPEOPLEPLAY A CENTRAL ROLE IN BUILDING CS BY CREATING AND DELIVERING THE SERVICE, PARTICULARLY THE CUSTOMERS CONTACT STAFFTWO CATEGORIES OF PEOPLE COS STAFFCUSTOMERS CONTACT STAFFCUSTOMERS NON-CONTACT STAFFCUSTOMERSTHE CUSTOMEROTHER CUSTOMERSTHEIR APPEARANCE AND BEHAVIOUR

TYPES OF STAFFCUSTOMER-CONTACTSTAFFCUSTOMER - NONCONTACTSTAFF CONNECTS CO TO CUSTOMER CONNECTS CUSTOMER TO THE COMPANY. THEREFORE, HE IS THE COMPANY BACKBONE OF CO, CRITICAL FACTOR. WHY? PROVIDES MANAGEMENT SUPPORT AND VARIOUS RESOURCES

CUSTOMER CONTACT STAFF DIFFERENTIATORSHIRE, TRAIN, COACH,DEVELOP,MOTIVATE AND COMPENSATE BETTER CUSTOMER CONTACT STAFF THAN THAT OF MAJOR COMPETITORS.

STAFF DIFFERENTIATORS 1. GRACEFULL AND COURTEOUS2. GOOD COMMUNICATION3. COMPETENT / SKILLFUL 4. RESPONSIVE/ CUSTOMER FOCUSED 5. EMPOWERED6. MOTIVATED7. TRUSTWORTHY

PHYSICAL ENVIRONMENT AND EVIDENCE

TWO ASPECTS OF PHYSICAL ENVIRONMENT AND EVIDENCEPHYSICAL ENVIRNMENTA PLACE WHERE THE SERVICE IS CREATED OR DELIVERED OR WHERE THE INTERACTION BETWEEN THE SERVICE PROVIDER AND THE SERVICES USER TAKES PLACE. PAY ATTENTION TO:LAYOUT OF BUILDING NOISE LEVEL COLOURS USED, DECOR, FURNITURE, TEMPERATURE etc.FACILITATING EQUIPMENT

TWO ASPECTS OF PHYSICAL ENVIRONMENT AND EVIDENCETANGIBAL CLUE A DOCUMENT WHICH SUPPORTS THAT THE CUSTOMER HAS PURCHASED AND USED THE SERVICE. IT ALSO REFLECTS THE IMAGE OF THE SERVICE PROVIDER

TWO ASPECTS OF PHYSICAL ENVIRONMENT AND EVIDENCEBANKS, HOTELS , RESTAURANTS, AIRLINES etc, SPEND LOT OF MONEY ON PHYSICAL ENVIRONMENT AND THE TANGIBLE CLUE. THESE ITEMS SHOULD MATCH WITH THE PRODUCT POSITIONING POOR PHYSICAL ENVIRONMENT AND TANGIBAL CLUE CAN HURT A SERVICE COMPANY AND CONVEY A NEGATIVE MASSAGE AND IMAGE

PROCESSES

MARKETING-MIX IN SERVICESPROCESSESWHATINDIVIDUAL SMALL,SEQUENTIAL, SPECIFIC AND VALUE ADDING STEPS CARRIED OUT TO PRODUCE AND DELIVER A SERVICE OR COMPLETE A TASK.WRITTENMECHANIZECUSTOMERS INVOLVEMENT

KINDS: PRODUCTION AND DELIVERY PROCESSES EXAMPLES: RESERVATION / APPOINTMENT SYSTEM, SELF SERVICE IN STORES, RESTAURANTS etc.

PROCESSWHATSMALL, SEQUENTIAL, SPECIFIC AND VALUE ADDING STEPS TO COMPLETE A TASKEXAMPLE FROM McDONALDSSTEPS:1) GREETING BY THE COUNTER ATTENDANT. GOOD AFTERNOON2) ASK THE CUSTOMER TO GIVE HIS ORDER MAY I TAKE YOUR ORDER3) REPEAT BACK THE ORDER TO AVOID MISTAKES4) ASK IF THERE IS SOMETHING ELSE THE CUSTOMER WOULD LIKE WOULD YOU LIKE TO ORDER FRENCH FRIES5) ASK FOR PAYMENT6) ANNOUNCE, ASSEMBLE THE ORDER AND PRESENT IT WITH COURTESY. THANK AND ASK THE CUSTOMER TO COME AGAIN.

SPECIALITY TO COMMODITY CONTINUUM MODEL

SPECIALITY TO COMMODITY CONTINUUM MODELSPECIALITY, A COMMODITY PRODUCT,TOP, MOP, PLCAS A SPECIALITY PRODUCT MOVES THROUGH ITS PLC, IT BECOMES A COMMODITY PRODUCT. THIS SPECIALITY TO COMMODITY SLIDE RESULTS IN:-A) LOW PRODUCT IMAGEB) LOW PRICEC) INCREASED COMPETITIOND) LOW PROFIT

COMPETITION OF A SPECIALITY PRODUCT IS FOUGHT ON PERFORMANCE QUALITY, FEATURES, BENEFITS, OPTIONS, DURABILITY, OUTLOOK, REPAIRABILITY, PACKAGE, PSS ETCCOMPETITION OF A COMMODITY PRODUCT IS PRIMARILY BASED ON PRICE AND MODE / TERMS OF PAYMENT.

SPECIALITY TO COMMODITY CONTINUUMCOMPETITIONLOWHIGHPRICELOWHIGHPRODUCT IMAGELOWLOWHIGHHIGHSPECIALITY PRODUCTCOMMODITY PRODUCTPROFIT

MARKRT SHARE GROWTH STRATEGIES

MARKET SHAREIT MEANS PERCENTAGE OF A MARKET OR OF A PRODUCT CLASS CONTROLLED BY A COMPANY OR BY A PRODUCT / BRAND

CURRENT USER STATUS INFREQUENT, FREQUENT LOYAL , RETAIN

USE MORE OFTEN, OM

INTRODUCE NEW USES

RMUSERSCOMPETITORS` USERSNON-BELIEVERS OF PRODUCT CLASS. SHIFT / SWITCH, OM FORGETNON-USERS OF PRODUCT CLASS CONVERT THEM TO USERS, OM

MARKET SHARE GROWTH STRATEGYPRODUCTMARKET EXPANSION MATRIXANSOFFS MATRIXCURRENT PRODUCTSNEW PRODUCTSCURRENT MARKETNEW MARKET2. MARKET DEVELOPMENT STRATEGY3. PRODUCT DEVELOPMENT STRATEGY4. DIVERSIFICATION STRATEGY1. MARKET PENETRATION STRATEGY

MARKET PENETRATION STRATEGY THIS STRATEGY CONSISTS OF INCREASING SALES AND MS OF A CURRENT PRODUCT IN THE CURRENT MARKET THROUGH DIFFERENT AND MORE AGGRESSIVE MARKETING-MIX STRATEGIES AND TACTICS

MARKET PENETRATION STRATEGY THREE MARKETING TACTICS TO INCRESE MARKET SHARE

ENCOURAGE CURRENT USERS TO REMAIN LOYAL AND USE MORE FREQUENTLY, IF THEY ARE INFREQUENT USERS. DO SOMETHING DIFFERENT AND INNOVATIVE, E.G.OFFER INCENTIVES, DO ENTERTAINMENT, ORGANIZEEVENTS etc. SHIFT COMPETITORS USERS.MAKES SENSE IF THERE ARE MAJOR WEAKNESSES INCOMPETITORS PRODUCTS, PRICING, DISTRIBUTION, PROMOTIONOR THEY LACK FUNDS.3.CONVINCE NON-USERS OF THE PRODUCT-CLASS, IF STILL UNDECIDED.

MARKET DEVELOPMENT STRATEGYCONSISTS OF INCRESING SALES AND MARKET SHARE OF A CURRENT PRODUCT BY ENTERING INTO A NEW GEOGRAPHIC OR DEMOGRAPHIC MARKET OR A NEW USE-AREA.

TACTICSA) URBAN TO RURAL, OTHER COUNTRIESB) ADULT TO CHILDRENC) GENDER SHIFT

PRODUCT DEVELOPMENT STRATEGYTHIS STRATEGY CONSISTS OF INCREASING SALES AND MARKET SHARE OF A PRODUCT BY DEVELOPING EITHER A NEW PRODUCT OR IMPROVED VARIANTS, FOR THE CURRENT MARKET

TACTICSDEVELOP A NEW PRODUCTOFFER BENEFITS VIA NEW PRODUCT FEATURES.

DIVERSIFICATION STRATEGYENTER A NEW MARKET WITH A COMPLETELY NEWPRODUCT, BOTH UNRELATED WITH THE CURRENT BUSINESS. Eg PIA : HOTEL BUSINESS, SPEEDEX SAS: HOTEL BUSINESS, AUTO RENTAL SERVICES ALFALAH : WARID THIS STRATEGY IS ADOPTED WHEN GROWTH IS NOT POSSIBLE FROM THE OTHER THREE STRATEGIES.

RISKY, COSTLY AND LONG-TERM STRATEGY. TOP EXECUTIVES MAKE THIS DECISION.

PROFITABILITYPROFIT = REVENUE COSTS= (UNITS X PRICE) (VPCs + FCs)

FOUR WAYS TO INCREASE PROFITABILITY 1) INCREASE VOLUME (UNITS) 2) INCREASE PRICE 3) REDUCE VPCs VIA BETTER PURCHASE OF INPUTS. 4) REDUCE FCs VIA EFFECTIVENESS AND EFFICIENCY OF PEOPLE THROUGH TRAINING AND UPTO DATE USE OF TECHNOLOGY IN OPERATION.

LONG-TERM PROFITABILITYPRODUCT OR BRANDINCREASEVOLUMEINCREASEPRODUCTIVITYPRODUCTDEVELOPMENTMARKETDEVELOPMENTMARKETPENETRATIONCOST *REDUCTIONIMPROVE FFAND LABOUREFFECTIVENESS& EFFICIENCYENTER NEWGEO. OR DEMO.SEGMENTSENTER NEWUSE-AREASOPERATIONMARKETINGINCREASEUSAGE RATE & QUANTITYWINCOMPETITORSCUSTOMERS

WINNON-USERS OF P-CLASS* VPCs AND FCs

WHY DO COMPANIES NEED VOLUME GROWTH?TO INCREASE LONG-TERM PROFITABILITY

TO COMPENSATE INCREASING COSTS VS PRICE INCREASE.

TO OFFER A CHALLENGE TO PEOPLE.

TO IMPROVE COMPANYS MARKET RANKING.

GROWTH STRATEGIES

NINE WAYS TO GROW :INCREASE PRODUCT-LINES (INCREASE P-MIX WIDTH)INCREASE PRODUCT-LINE LENGTH AND DEPTH.MARKET PENETRATION STRATEGY (MORE USAGE)MARKET DEVELOPMENT STRATEGY(MORE USERS)PRODUCT DEVELOPMENT STRATEGY (BANKS: CREDIT CARDS).PRODUCT DIVERSIFICATION STRATEGYEG: AIRLINES HAVING OWN HOTELS

GROWTH STRATEGIES

FORWARD INTEGRATION GOING INTO A NEW BUSINESS IN WHICH THE OUTPUT OF THE CURRENT BUSINESS CAN BE GAINFULLY USED AS AN INPUT TO PRODUCE AN OTHER PRODUCT EG : DRYCLEANING EQUIPMENT MANUFACTURING COMPANIES GOING INTO DRYCLEANING BUSINESS.BACKWARD INTEGRATION GOING INTO A NEW BUSINESS IN WHICH THE OUTPUT OF THE NEW BUSINESS CAN BE GAINFULLY USED AS AN INPUT FOR THE CURRENT BUSINESS EG : DRYCLEANING COMPANIES ACQUIRING EQUIPMENT MANUFACTURING COMPANIES.HORIZONTAL INTERRATION ACQUIRING / MERGIING WITH A SIMILER COMPANY

DIVISIONS OF A SERVICE ORGANIZATION

DIVISONS OF A SERVICE ORGANAIZATIONA) INVISIBLE PART- CONSISTS OF:1. INTERNAL AREAS2. INTERNAL STAFF PROVIDES RESOURCES AND MANAGEMENT SUPPORT TO THE CUSTOMER CONTACT STAFF3. INTERNAL PROCESSESB) VISIBLE PART - CONSISTS OF : CUSTOMER CONTACT STAFF THE CUSTOMER OTHER CUSTOMERSPHYSICAL SETTING FACILITATING EQUIPMENT DELIVERY PROCESS

DIVISIONS OF A SERVICE ORGANIZATIONSERVICE ORGANIZATIONINVISIBLE PARTVISIBLE PART

INTERNAL AREAS INTERNAL STAFF(NON-CUSTOMER CONTACT STAFF) INTERNAL PROCESSESTHECUSTOMERAOTHERCUSTOMERSB,C,D. CUSTOMER CONTACT STAFF

PHYSICALSETTING

FACILITATING EQUIPMENT

PROCRSS TO DELIVER

MIS AND MARKETING RESERACH

NEED FOR INFORMATION FOR DECISION MAKING DURING VARIOUS STAGES OF MANAGEMENT

CHARACTERISTICS OF INFORMATIONRELEVANTADEQUATETRUE / ACCURATEUPDATEDON TIMEINFORMATION IS AVAILABLE BOTH FROM INSIDE AND OUTSIDE A COMPANY, THROUGH MR.UNLESS INFORMATION IS USED, IT IS WORTHLESS.

MARKETING INFORMATION SYSTEMDATA / INFO ABOUTMIS BEGINS AND ENDS WITH MARKETING MNGT.ASSESS INFO NEEDS THROUGH INTERVIEWSDEVELOP NEEDED INFO USING SUITABLE COMPONENT OF MISDISTRIBUTE INFO TO RIGHT MANAGERS FOR GOOD DECISION MAKING.MISMKT. I SMRICRMDSS MARKET & CUSTOMERS MECOs PER- FORMANCE REACTIONS TO M-MIX2ANALYSISPLANNINGORGANIS- INGIMPLEMEN- ATIONMONITOR/ CONTROLACTIONS31Marketing Management Tasks

WHAT IS MARKETING RESEARCH ?

IT IS A SYSTEMATIC PROCESS OF DESIGNING, GATHERING, ANALYSING AND REPORTING RELEVANT, ADEQUATE, TRUE, UPDATED AND TIMELY INFORMATION ON A SPECIFIC MARKETING TASK, FOR DECISION MAKING, TO THE RELEVANT MARKETING PEOPLE.

OVERALL OBJECTIVES OF MARKETING RESEARCH

TO REDUCE UNCERTAINTIES IN DECISION MAKING.

TO MONITOR / CONTROL PERFORMANCE OF MARKETING ACTIVITIES.

STATUS OF USE OF MR IN SERVICES BUSINESS

OFTEN USED IN AIRLINES, BANKS, INSURANCE COs. FIVE STAR HOTELS, FAST FOOD RESTAURANTS etc. IN SUCH COs, MARKETING RESEARCH IS A COMPONENT OF MIS.

IN MANY SERVICE BUSINESSES, IT IS NOT USED DUE TO VARIOUS REASONS.

RECOMMENDED SPENDING : 1-2% OF SALES

SMALL COs. CAN ENGAGE STUDENTS FOR MR.

THE MARKETING RESEARCH PROCESS

MR PROCESS IS MUCH THE SAME IN ORGANIZATIONS MARKETING A PHYSICAL OR A SERVICE PRODUCT.EIGHT STEPS OF MR PROCESS:DEFINE THE MARKETING TASK/ PROBLEMBE SPECIFIC EG :-COPY TESTINGPRICE RESPONSIVENESS CUSTOMER SATISFACTION LEVELCONCEPT TESTING.

THE MARKETING RESEARCH PROCESS

DECIDE DATA / INFO SOURCE :PRIMARY DATA NEW DATA GATHERED INTERNALLY OR EXTERNALLY. EXPENSIVE AND TIME CONSUMING.SECONDARY DATAALREADY AVAILABLE INSIDE OR OUTSIDE.INEXPENSIVE SOURCES :COS INTERNAL RECORDS OR REPORTS FROM OUTSIDE SOURCESGOVT. PUBLICATIONSTRADE / PROFESSIONAL BODIESMR FIRMSINSTITUTIONS

THE MARKETING RESEARCH PROCESSDECIDE RESEARCH APPROACH FOR GATHERING P. DATASURVEY METHODOBSERVATION METHODEXPERIMENTAL METHODCHOICE OF METHOD DEPENDS UPON THE NATURE OF TASK, TIME AVAILABLE AND THE COST.

HOW TO GATHER PRIMARY DATAPRIMARY DATA GATHERING METHODSSURVEY METHODGATHERING DATA/INFO BY ASKING QsOBSERVATION METHODPEOPLES ACTIONS, BEHAVIOUR, HEARINGWHAT THEY SAYEXPERIMENTAL METHODSEEING RESULTSBY CHANGING ONEVARIABLEINTERVIEWPERSON(S)TELEPHONEPOSTALPERSONAL OBSELECTRONIC OBSINDIVIDUALFOCUS GROUPS

THE MARKETING RESEARCH PROCESSPREPARE A QUESTIONNAIRE TO RECORD RESPONSES / OBSERVATIONS, TO QUESTIONS.DECIDE SAMPLE PLAN FOR P. DATAWHICH TM TO SURVEY ?HOW MANY?WHICH ONES ?COLLECT DATAOWN OR OUTSIDE STAFFACTIVE PHASE, EXPENSIVE PHASE, PRONE TO ERRORANALYSE DATA AND MAKE A REPORTTABULATE THE DATA, AVOID PRESENTING LOT OF DATAEXTRACT FINDINGS FROM THE DATA USING VARIOUS STATISTICAL TECHNIQUES.PRESENT FINDINGS IN WRITING TO THE MANAGEMENT.

QUESTIONNAIREIS A SET OF APPROPRIATE QUESTIONS, PRESENTED TO A RESPONDENT FOR RECORDING ANSWERS, RESPONSES OR OBSERVATIONS.

USED COMMONLY

QUESTIONNAIRECHARACTERISITCS OF A GOOD QUESTIONNAIREA)SIMPLE WORDSB)SHORT AND SIMPLE QUESTIONSC)SEQUENTAL QUESTIONS.D)PERSONAL QUESTIONS TOWARDS THEEND.E)ONE SPECIFIC IDEA PER QUESTION.F)NOT TOO MANY QUESTIONS. 10 12 QUESTIONS ARE SUFFICIENT.

QUESTIONNAIREG)INCLUDE BOTH OEQs AND CEQs1) OEQs (DICHOTOMOUS, MULTIPLE CHOICE, SCALING, DIRECT AND INDIRECT). - GENERALLY, MAKE THE RESPONDENT THINK - ANSWERED IN RESPONDENTS OWN WORDS - REVEAL MORE INFO.2) CEOs (DICHOTOMOUS, MULTIPLE CHOICE, SCALING, DIRECT AND INDIRECT). - GENERALLY, DO NOT MAKE THE RESPONDENT THINK - RESPONDENT MAKES HIS CHOICE OF ANSWER FROM THE PRE-SPECIFIED ANSWERS.TEST THE QUESTIONNAIRE BEFORE ITS USE ON A LARGE SCALE.

SUB-CLASSIFICATION OF OEQs AND CEQsDICHOTOMOUS QUESTIONGIVES CHOICE BETWEEN TWO ANSWERSMULTIPLE CHOICE QUESTIONGIVES CHOICE BETWEEN MORE THAN TWO ANSWERSSCALLING QUESTIONGIVES CHOICE OF ANSWER ON A NUMERICAL SCALE (MINIMUM TO MAXIMUM)DIRECT QUESTIONA QUESTION WHICH CONTAINS THE WORD YOU OR YOUR TO MAKE IT A PERSONALIZED QUESTIONINDIRECT QUESTION A QUESTION WHICH CONTAINS THE WORDS OTHER PEOPLE IN ORDER NOT TO MAKE IT A PERSONALIZED QUESTION

PROBLEMS IN MR IN SERVICES ORGANIZATIONSTHREE PROBLEMSRELUCTANT ATTITUDE TOWARDS MR IN SERVICE ORGANIZATIONS.ALTHOUGH THE USE OF MR HAS GROWN IN SERVICES BUSINESS, YET THERE IS RESISTANCE TO ITS VALUE IN SOME QUARTERS. REASONS ARE :-REGARD MR UNETHICAL EG: PROFESSIONAL SERVICES.SMALL COMPANY SIZE AND BEING LOCAL IN OPERATION DOES NOT JUSTIFY EXPENDITURE ON MR. EG: REPAIR WORKSHOPS, BEAUTY PARLOURS.MONOPOLY IN BUSINESS. DEMAND IS MUCH GREATER THAN SUPPLY.

PROBLEMS IN MR IN SERVICES ORGANIZATIONSLACK OF MANAGERIAL KNOW-HOW IN MR AND ITS AWARENESS IN S. COMPANIES.CLAIM THAT THE STAFF IS CLOSE AND IN DIRECT CONTACT WITH CUSTOMERS. THUS, NO NEED TO SPEND ON AN EXTERNAL MR AGENCY. DRAWBACKS OF SUCH CONTACTS TOO UNPLANNEDTOO INFORMAL THUS, THE RESULTS ARE OFTEN WRONG.2.POOR QUALITY AND QUANTITY OF SECONDARY DATA.

PROBLEMS IN MR IN SERVICES ORGANIZATIONS CHARACTERISTICINTANGIBILTY THUS, DIFFICULT TO OBTAIN PATENT AND RISK OF BEING COPIED QUICKLY 2) INSEPARABILITY THE PRESENCE OF SERVICE PROVIDER IS NECESSARY.QUALITY STANDARDIZATION IS DIFFICULT. QUALITY DEPENDS UPON THE S. PROVIDER, P.EVIDENCE, THE CUSTOMER AND OTHER CUSTOMERS PRESENT.

EFFECTS ON MR

REDUCES INCENTIVE FOR R&D (INNOVATION) THUS, FUCUS ON ME-TOO SERVICES

HOME-USE TESTS ARE NOT POSSIBLE.CREATES PROBLEMS IN CONCEPT TESTING

MR RESULTS MAY BE VERY WRONG OR DIFFERENT.

3. PROBLEMS RESULTING FROM THE CHARACTERISTICS OF A SERVICE PRODUCT

MARKETING RESEARCH PUBLIC SECTOR OBJECTIONS

MR IS MUCH LESS DEVELOPED IN THE PUBLIC SECTOR THAN IN THE PRIVATE SECTOR. REASONS :MONOPOLY IN MANY SERVICE CATEGORIES.

MARKETING AND MR IS REGARDED UNNECESSARY

PUBLIC SECTOR SERVICES ARE FOR THE WHOLE COMMUNITY, NOT FOR A PARTICULAR SEGMENT OF SOCIETY. GENERALLY, NO DISCRIMINATION.THIS IS UNLIKE IN THE PRIVATE SECTOR WHERE DISCRIMINATION IS DONE VIA MARKET SEGMENTATION.

UNLIKE THE PROFIT CRITERION USED IN THE PRIVATE SECTOR SERVICES, NON-PROFIT EVALUATION CRITERIA ARE USED IN JUDGING A PROPOSAL IN THE PUBLIC SECTOR SERVICES.

MARKET AND ENVIRONMANTAL ANALYSIS

WHAT IS MARKET AND ENVIRONMANTAL ANALYSIS ?GATHERING AND ANALYSING DATA / INFO ABOUT THE MARKET AND THE MARKETING ENVIRONMENT (ME), MAKING CONCLUSIONS (IDENTIFYING Os and Ts) AND THEIR IMPACT ON THE M-MIX. MARKET AND ENVIRONMANTAL ANALYSIS IS DONE VIA MARKETING RESEARCH AND MARKETING INTELLIGENCE SYSTEM (FOR ME). MARKET AND ENVIRONMANTAL ANALYSIS A IS THE SAME BOTH FOR PRODUCTS AND SERVICES

MARKET AND ENVIRONMANTAL ANALYSIS

MAJOR QUESTIONS WHICH MUST BE ANSWERED IN AMARKET AND ENVIRONMANTAL ANALYSIS DO NEEDS / WANTS FOR A PARTICULAR SERVICE EXIST ?TO WHAT EXTENT THESE HAVE BEEN SATISFIED OR ARE UNSATISFIED?FIND VIA MR.SIZE OF DEMAND / MARKET.

MARKET AND ENVIRONMANTAL ANALYSIS

PRICE WHICH THE CUSTOMER IS READY TO PAY.COST OF PRODUCING AND DELIVERING THE SERVICE BY THE COMPANY.PROFITABILITY.STRATEGIC COMPETITORS THEIR NUMBER, SIZE, AGGRESSIVENESS, THEIR M-MIX AND THE TYPE OF COMPETITION.MAJOR CHANGES IN THE EXTERNAL UNCONTROLLABLES

STEPS OF MARKETING PLANNING PROCESS

THE MANAGEMENT PROCESSFIVE PHASES OF MANAGEMENT1) SITUATION ANALYSIS GATHERING, STUDYING AND ANALYSING FACTS ABOUT PAST & PRESENT PERIODS. MAKING CONCLUSIONS AND PREDICTING THEIR EFFECTS ON FUTUREPLANNING SETTING OBJECTIVES, MAKING STRATEGIES / TACTICS DETERMING RESOURCESDECIDING MONITORING MECHANISM AND ITS TIMING 3) ORGANIZING AND IMPLEMENTINGORGANIZATION STRUCTURE, STAFFING, GIVING RESPONSIBILITIES, EMPOWRING,TRAINING; COACHING COMMUNICATING AND EXECUTING THE PLAN4) LEADING, DIRECTING, MONITORING,EVALUATING CONTROLLING, MOTIVATING 5) TAKING ACTIONS

DEFINITIONSCONCEPTDEFINITION AND CHARACTERISTICSOBJECTIVE6) PRIORITIZED4) MUTUALLY AGREED5) MATCH WITH COMPANYS OBJECTIVES1) WRITTEN2) SMARTSTRATEGYTACTICSHOW A PERSON OR A COMPANY INTENDS TO ACHIEVE THE OBJECTIVE (S). OVERALL AND NON-SPECIFIC ACTION, METHOD OR A GAME PLAN.GENERATE AND EVALUATE ALTERNATE STRATEGIES BEFORE SELECTING THE FINAL STRATEGYINVITE PARTICIPATIONLOOK FOR CREATIVITYLONG-TERMDETAILED AND SPECIFIC ACTIONS WHICH WILL BE TAKEN TO IMPLEMENTTHE CHOSEN STRATEGY IN ORDER TO ACHIEVE THE OBJECTIVE (S). LOOK FOR CREATIVITY INVITE PARTICIPATIONWHAT A PERSON OR A COMPANY WANTS TO ACHIEVE . END RESULTS SELECTED AFTER EVALUATING ALTERNATES. QUANTITATIVE AND QUALITATVE. MUST BE :-COMPANY MISSIONTHE PURPOSE FOR WHICH A COMPANY IS ESTABLISHED, EXPRESSED IN TERMS OF CUSTOMERS NEED, PRODUCTS AND TARGET MARKET. WHAT BUSINESS THE COMPANYIS IN?3) PURE SHORT TERMKEY PLANNING TERMS / CONCEPTS

WHAT IS PLANNING?ONE OF THE STAGES OF MANAGEMENT PROCESS DURING WHICH:-

A MANAGER AFTER HARD THINKING AND INTENSIVE CONSULTATION:-SETS OBJECTIVES / GOALSESTABLISHES STRATEGYTM SCAs IN THE MARKETING-MIXPRODUCT POSITIONINGDEVELOPS A DETAILED PLAN OF SPECIFIC ACTIONS / TACTICSDETERMINES NEEDED RESOURCESDECIDES A MONITORING OR CONTROLLING MECHANISM AND ITS TIMINGNEEDED IN ALL COMPANIES, IN ALL BUSINESS FUNCTIONS AND AT ALL LEVELS.

A PLAN IS THE RESULTANT DOCUMENT PRODUCED AT THE END OF THE PLANNING STAGE

A PLAN GIVES A CLEAR ROAD MAP TO FOLLOW.

IT IS A WORKING DOCUMENT

STEPS IN PLANNING PROCESSSITUATIONAL ANALYSISSET GOALS FROM ALTERNATIVES

DECIDE MONITORING MECHANISM AND ITS TIMING DECIDE TMDECIDE SCAs FOR TMDECIDE PRODUCT POSITIONINGESTABLISH MARKETING MIX STRATEGIESAND TACTICS FROM ALTERNATIVESDECIDE RESOURCES

STEPS OF MARKETING PLANNING PROCESSSITUATION ANALYSIS STUDY COMPANYS, COMPETITORS AND MARKETS PERFORMANCE FOR THREE YEARS (CURRENT, -1YEAR AND -2 YEARS).

THIS WILLSHOW COMPANYS TREND IN PERFORMANCE COMPARED TO THE COMPERTITORS AND MARKET PERFORMANCE.

KNOW REASONS FOR GOOD / BAD RESULTS.

GATHER, STUDY AND ANALYSE INFO ON THE ME AND MARKET FOR THE BUDGET YEAR.

IDENTIFY MAJOR Ss AND Ws IN THE M-MIX, PARTICULARLY IN PRODUCT(s) AS WELL AS IN THE COMPANY AND Os AND Ts IN THE ME AND MARKET.

SWOT ANALYSIS.

MARKETING ENVIRONMENT (ME)ACTORS AND FORCES, OUTSIDE THE MARKETING DEPARTMENT, WHICH AFFECT MARKETING ACTIVITIES OR DECISIONS ABOUT MARKETING-MIX OR MARKETING PERFORMANCE.DIVIDED INTO MACRO AND MICRO EXTERNAL UNCONTROLABLE FORCES / ACTORS

MACRO EXTERNAL UNCONTROLLABLE FORCESPOLITICAL AND LEGAL FORCESECONOMIC FORCESCULTURAL AND SOCIAL FORCESGEOGRAPHIC AND NATURAL FORCESDEMOGRAPHIC FORCESTECHNOLOGICAL FORCESCOMPETITIVE FORCES

LOCATIONOF STRENGTHS AND WEAKNESSES(OWN AND COMPETITORS)VARIOUS Ps OF M-MIXPRODUCT SUPPORT SERVICES COMPANY PERFORMANCESALESMS, GR, RANKING HUMAN RESOURCE AND THEIR SKILLS (QUANTITY & QUALITY) NON-HUMAN RESOURCES (QUANTITY & QUALITY) COMPANY IMAGE

QUALITATIVE SWOT ANALYSIS

BASIC PRINCIPLE FOR SUCCESSMUST HAVE A SUSTAINABLE COMPETITIVE ADVANTAGE (s) (SCA) WHAT IS A SCA?SOMETHING BETTER IN ANY OF THE ELEMENTS OF MARKETING-MIX, NECESSARY FOR LONG -TERM ABOVE AVERAGE SUCCESS OF A COMPANY.CHARACTERISTICS OF A SCA MEANINGFUL/ IMPORTANTBELIEVABLEAFFORDABLEDIFFERENTSUSTAINABLEIF YOU DO NOT HAVE A SCA, DO NOT COMPETE

STEPS OF MARKETING PLANNING PROCESSFORMULATE CRITICAL ASSUMPTIONS MADE FOR THE ACHIEVEMENT OF THE PLAN. EG: PRICING ASSUMPTIONS, LAW AND ORDER SITUATION.OBJECTIVES SETTINGKNOW COMPANY OBJECTIVESSET OBJECTIVES KEEP a,b AND c UNDER STEP 1 AND a) UNDER STEP 3 IN MINDQUANTITATIVE (WRITTEN, SMART). SALES, PROFIT etc.QUALITATIVE (PURE)

STEPS OF MARKETING PLANNING PROCESSESTABLISH STRATEGIES AND TACTICS :SELECT TM VIA SEGMENTATIONCREATE SDAsDEVELOP DISTINCT PRODUCT POSITIONINGDEVELOP AN APPROPRIATE M-MIX TO ACHIEVE CSDECIDE RESOURCES DECIDE MONITORING MECHANISM AND ITS TIMING

STEPS OF MARKETING PLANNING PROCESSIMPLEMENT THE PLAN :CREATE AN APPROPRIATE ORGANIZATION.RECRUIT STAFF WITH ABILITY / TALENT, WILLINGNESS / MOTIVATION AND SUITABLE PERSONALITY.EXECUTE THE PLANNED STRATEGIES AND TACTICS.

STEPS OF MARKETING PLANNING PROCESSMONITOR / EVALUATE / CHECKACTUAL RESULTS VS PLANNED RESULTS TAKE NEEDED ACTIONS :RECOGNIZE, APPRECIATE / REWARD.HELP, REPRIMAND, GIVE WARNING, REPLACECHANGE OBJECTIVES / STRATEGIES / TACTICS VERY OFTEN THE MISTAKE LIES IN THE EXECUTION OF STRATEGIES AND TACTICS

REPRIMANDSERVERE VERBAL DISAPPROVAL OF A BIG WRONG ACT OF AN EXPERIENCED SUBORDINATE, BY HIS SENIOR

BENEFITS OF PLANNING GIVES DIRECTION VIA GOALS SETS YARDSTICK OR STANDARDS REDUCES / AVOIDS UNCERTAINTY OR HAZARDS BY LOOKING AHEAD, ANTICIPATING CHANGE AND ITS IMPACT; AND RESPONDING TO CHANGEIMPROVES EFFECTIVENESS AND EFFICIENCY DUE TO WELL THOUGHT SPECIFIC ACTIONSMAKES OTHER STAGES OF MANAGENENT RUN EASY AND SMOOTHENSURES COORDINATION BETWEEN VARIOUS PEOPLE AND DEPARTMENTS

WHAT PLANNING WILL AND WILL NOT DOA)WILL DOPLANNING FORCES PEOPLE TO THINK.PLANNING ENHANCES CREATIVITY.GUIDES EFFORTSGIVES A YARDSTICKPLANNING MINIMISES UNCERTAINTY AND SURPRISE.MAKES OTHER MANAGEMENT PHASES / TASKS EASY.IMPROVES EFFECTIVENESS AND EFFICIENCY DUE TO WELL THOUGHT SPECIFIC ACTIONS

WILL NOT DOPLANNING WILL NOT GIVE A PERFECT CRYSTAL BALL. IT WILL NOT PREDICT FUTURE WITH 100% ACCURACY

PLANNING PROCESSWHERE ARE WE NOW ?WHERE DO WE WANT TO Go TO ?HOW WILL WE GET THERE ?HOW WILL WE KNOWIF WE HAVE ARRIVEDOR NOT ?

WHAT IS A MARKETING PLAN ?A PLAN IS THE RESULTANT DOCUMENT OF THE PLANNING PHASE OF MANAGEMENT PROCESS . IT CONTAINS:1) EXECUTIVE SUMMARY, 2) SA,3) OBJECTIVES, 4) STRATEGY AND TACTICS, 5) NEEDED RESOURCES 6) MONITORING MECHANISM AND ITS TIMING7) PROFIT / LOSS8) KEY SUCCESS FACTORS / ASSUMPTIONS FOR THE BUDGET / PLANNING YEAR, TO GUIDE MANAGERS DURING THE REMAINING PHASES OF MANAGEMENT . IT IS A WORKING DOCUMENT

PERIOD OF PLANNINGSTRATEGIC PLANNING / PLAN 1)LONG-TERM MORE THAN 5 YEARS TOP MANAGERS2) MEDIUM-TERM 2-5 YEARS B)OPERATIONAL OR TACTICAL PLANNING / PLAN SHORT-TERM, USUALLY 1 YEAR DERIVED FROM THE STRATEGIC PLAN MOSTLY ALL MANAGERSMANY COMPANIES OPERATE WITHOUT FORMAL PLANS. NOT GOOD, NOT DO WELL.

WHY MARKETING STRATEGIES FORMULATION IS DIFFICULT IN SERVICES UNIQUE CHARACTERISTICS OF SERVICES :UNLIKE GOODS, INTANGIBILITY CHARATERISTIC OF SERVICES MAKES CONSUMERS CHOICE DIFFICULT. OPINION CAN BE OBTAINED FROM OTHERS. INSEPARABILITY MAKES MARKETING STRATEGY OF SERVICES LOCALIZED. RELATIVELY DIFFICULT TO SELL SERVICES ON NATIONWIDE BASIS.PERISHABILITY MAKES STORAGE OF SERVICES IMPOSSIBLE, THUS, PLANNING SUPPLY AND DEMAND OF SERVICES IS DIFFICULT HETROGENEITY MAKES ENSURING OF UNIFORM QUALITY DIFFICULT.

SITUATION ANALYSIS AND PLANNING PHASESITUATION ANALYSIS AND PLANNING PHASE IS HOMEWORK FOR A MANAGER.

THE BETTER IS THE HOMEWORK DONE, THE MORE EASY IT BECOMES TO CARRY-OUT THE REMAINING PHASES OF MANAGEMENT

WHO DOES PLANNING IN A COMPANY? STRATEGIC PLANNINGOPERATIONALPLANNINGTOPMANAGERSMIDDLE LEVELMANAGERS FIRST LEVEL MANAGERS TOPMANAGERS