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Designing and Managing

Services

Chapter 13

Marketing ManagementBy Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha

SUMMARY by

Today as product companies find it harder and harder to distinguish their physical products,

they turn to service differentiation. Service providers find significant profitability in delivering

superior services.

How do we define and classify services and how do

they differ from goods• A service is any act or performance one party can offer to another that is

intangible and does not result in the ownership of anything .Its production may or may

not be tied to physical product Categories of services mix.

• Services can be equipment based or people based & they differ in their objectives and

ownership.

• Service companies can choose among different processes to deliver their service.

• Services needs client presence & may meet a personal or business need.

Pure Tangible Goods

Tangible Goods with

accompanying services

Hybrid

Major service with

accompanying minor

goods and services

Pure Service

Service

marketing is

different from goods

marketing as service

consumer relies on

word of mouth, they

rely heavily on price,

personnel & physical

cues to judge

quality. They are

highly loyal to

service providers

who satisfy them &

because switching

costs are high,

consumer inertia

can make it

challenging to entice

a customer away

from a competitor.

Designing and Managing

3

Marketing ManagementBy Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha

SUMMARY by

Today as product companies find it harder and harder to distinguish their physical products,

service differentiation. Service providers find significant profitability in delivering

superior services.

How do we define and classify services and how do

they differ from goods A service is any act or performance one party can offer to another that is

intangible and does not result in the ownership of anything .Its production may or may

not be tied to physical product Categories of services mix.

Services can be equipment based or people based & they differ in their objectives and

ownership.

Service companies can choose among different processes to deliver their service.

Services needs client presence & may meet a personal or business need.

Categories of services mix

• No services accompany the product. E.g

Soap,toothpastePure Tangible Goods

•The offering accompanied by one or more services E.g

Computers, Cell Phones & cars

Tangible Goods with

accompanying services

•The offering contains equal parts goods and services. E.g

restaurantsHybrid

•The offering consists of major service along with

additional services or supporting goods. E.g Airplane

travel alog with its services

Major service with

accompanying minor

goods and services

•The Offering consists of only a service.E.g psycotherapyPure Service

Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha

Today as product companies find it harder and harder to distinguish their physical products,

service differentiation. Service providers find significant profitability in delivering

How do we define and classify services and how do

A service is any act or performance one party can offer to another that is essentially

intangible and does not result in the ownership of anything .Its production may or may

not be tied to physical product Categories of services mix.

Services can be equipment based or people based & they differ in their objectives and

Service companies can choose among different processes to deliver their service.

Services needs client presence & may meet a personal or business need.

Categories of services mix

No services accompany the product. E.g

The offering accompanied by one or more services E.g

Computers, Cell Phones & cars

The offering contains equal parts goods and services. E.g

The offering consists of major service along with

additional services or supporting goods. E.g Airplane

The Offering consists of only a service.E.g psycotherapy

Chapter

External Marketing

•It describes the normal

work of

preparing,pricing,distribut

ion,and promoting the

service to customers.

Intangibility

Inseparability

Variability

Perishability

Distinctive Characteristics of Services

Developing Brand Strategies for services

Identify what is most valuable to customer and include repair & maintainence services

Create a brand hierarchy and brand portfolio that permits positioning, targeting of

desgin marketing communication, information programs and building brand personality

Chapter 13 - Designing and Managing Services

Holistic Marketing for Services

External Marketing

It describes the normal

preparing,pricing,distribut

ion,and promoting the

service to customers.

Internal Marketing

•It describes the training

and motivating

employees to serve the

customers well.Engage

every employee in the

organization to practise

marketing

• Services are intangible Service marketers must be able to transform

intangible services into concrete benefits.Intangibility

• Services are typically produced and consumed simultaneously .Thus

service providers must learn to work in larger groups to provide

services to customersInseparability

•Services are variable and buyers are aware of this variability and often

talk to others about quality before selecting a services.

•Invest In Good Hiring

•Standardize the service-performance process

•MonitorCustomer Satisfaction process

Variability

•Services cannot be stored hence there is always a mismatch between

demand & supply.Stratgies that marketers must use :

•Demand Side - Differential Pricing,Nonpeak Demand,Complementary

Services,Reservation Systems

•Supply Side - Part-Time employees ,Peak Time efficiency,Increased

consumer participation,shared services,Facilities for future expansion

Perishability

Distinctive Characteristics of Services

Developing Brand Strategies for services

Provide Post-Sales support

Identify what is most valuable to customer and include repair & maintainence services

Devising Branding Stratgey

Create a brand hierarchy and brand portfolio that permits positioning, targeting of

different market segments

Establishing Image Dimensions

desgin marketing communication, information programs and building brand personality

Chosing Brand Elements

Focus on logos,symbols,slogans to build brand awareness

Designing and Managing Services

Marketing for Services

Interactive Marketing

•It describes the employee

skills in serving the client

Services are intangible Service marketers must be able to transform

intangible services into concrete benefits.

Services are typically produced and consumed simultaneously .Thus

service providers must learn to work in larger groups to provide

Services are variable and buyers are aware of this variability and often

talk to others about quality before selecting a services.

performance process

Services cannot be stored hence there is always a mismatch between

demand & supply.Stratgies that marketers must use :

Differential Pricing,Nonpeak Demand,Complementary

Time employees ,Peak Time efficiency,Increased

consumer participation,shared services,Facilities for future expansion

Distinctive Characteristics of Services

Developing Brand Strategies for services

Sales support

Identify what is most valuable to customer and include repair & maintainence services

Devising Branding Stratgey

Create a brand hierarchy and brand portfolio that permits positioning, targeting of

Establishing Image Dimensions

desgin marketing communication, information programs and building brand personality

Focus on logos,symbols,slogans to build brand awareness

Best Practices of Service Quality Management

Chapter 13 - Designing and Managing Services

Trends

STRATEGIC

COMPONE

NT

•Top

companies

are

customer

obsessed

•They have

clear sense

of target

customer

and their

need

TOP

MANAGEM

ENT

COMMITME

NT

•Thorough

commitme

nt to

service e.g

Marriot,Xer

ox

•Both

financial &

service

performanc

e

monitored

by top

manageme

nt

HIGH

STANDARDS

•Setting

high

service

standards

•developing

reliable,resi

lient &

innovative

customer

Intefrace

systems

SELF-

SERVICE

TEHNOLOGI

ES

•replacing

person to

person

interaction

s with self

service

technologie

s e.g ATMs

•Helping

customers

to use

these

facilities

MONITORIN

G SYSTEMS

•Auditing

service

performanc

e of own &

competitor

s

SATISFYING

EMPLOYEES

&

CUSTOMERS

•Instilling a

possitive

attitude

about

customer

satisfaction

in

employees