The First P: Service Product or Service Package:

A service is a bundle of features and benefits. However these benefits have relevance to a specific target market. Hence while developing a service package it is important that the package of benefits in the service offer must have a customer perspective. Gronroos constructed that the services are product offers consists of 3 levels. The first level is that of basic service package which includes core service, facilitating services and supporting services. The 2nd level is that of an augmented service offering where accessibility interaction and customer participation is given equal importance in delivering the service product . the third level is that of the market communication of the service offering as in its absence the augmentation service package doesn’t have any relevance to the customer.

The service package:The package concept of service product suggests that what you offer to the market is a bundle of different services, tangible and intangible, but there is a main or substantive or core service and around it are built the auxiliary or peripheral or facilitator services. It is important to note that facilitating services are mandatory and if these were left out, the entire service would collapse. In the service package there are yet other type of services called supporting services. The basic difference between the 2 is that supporting services don’t facilitate the consumption of core services but are used to increase the value and thus differentiate it from competitione.g. in a 500 room hotel the core service is lodging and room service, bellboy services are facilitating services and health club , car rental are support services. However it may not always be possible to draw a line of distinction between facilitating and support services. For e.g. in a typical city hotel business center might be the support service but in a business and convention hotel the same service would be facilitating service

The augmented service offering:The basic service package is not equivalent to the service product the customer perceives, which is infact based on customer experience and evaluation. Therefor there is a need to involve the customer in the production of service offering and thereby reinforcing that the basic service package has to be expanded to a more holistic model of augmented service offering. The issues related to the accessibility of the service interaction with the service organisation and consumer participation are also integral elements of the service product.

Market communication of the service offering:A favorable image enhances the service experience and a bad image may even destroy it. In such a scenario the issue of management of image through communication becomes a integral part of developing the service product but the important point to note here is that apart from the conventional methods of promotion corporate image and word of mouth are, if not more, equally important. A negative comment from a fellow customer is more than adequate to neutralize the effect of your efforts of mass media advertising, media blitz and direct promotion.

Developing a service offering:The first step in developing a new service offering is to assess the customer benefits, which is done through market research and available appropriate information.

In the second step, these consumer benefits have to be translated into core, facilitating and support services, with a view to defining what general benefits these service organizations would offer to its customers. The third stage is that of developing the augmented service offer.A careful planning at the fourth stage is essential because of the right service in the right form and in the right quality and quantity is not delivered, the entire customer oriented plan would collapse.

Finally the appropriate market communication strategy should be prepared and its implementation plan should be defined not only to inform and persuade the customers but also to enhance the desired image.

The 2nd P: PricingA particular product or service is acceptable to the customer at a particular price and if the price ids increased it is likely that the same product or service might become less acceptable to the customer. Another issue related to pricing is that of perceptions about quality. Generally to most customers high price means high quality.

Service pricing follows the principles and practices of pricing of goods and therefore they are either cost based or market based. Following aspects should be taken into consideration while pricing services:

1. Demand fluctuations should be successfully handled2. Service prices should be based on costs so as to take into account the tangible

clues3. Service pricing should be such as to provide value addition and quality indication4. The pricing strategy should cope up with the degree of competition.

Pricing objectives:The pricing of services is greatly influenced by the basic service characteristics. However in setting price objectives several factors in relation to the overall marketing strategy of the corporation should be considered

Planned market position for the service product: Gitlow suggested that price not only influences the market position but also affect the customers perceptual positioning. It is therefore important to keep market or customer position while deciding on pricing strategyProduct life cycle: the stage of life cycle of the service product is of utmost importance. For instance, At the introductory stage if there is no competition and the demand is high you may opt for high price, to make maximum gains in the short term (skimming policy). In a similar situation but with a low demand you may opt for low prices to penetrate into the market. Also you have to consider the elasticity of demand i.e. whether the demand is sensitive to the change in price or not.Competition: competition should be studied both from the point of interbrand and also from the viewpoint of the brand that provides the same need satisfaction. For e.g. a private airline is facing competition from the national and other private airlines but also from the railways faster trains on the same routes during convenient timingsStrategic role of pricing: Lastly it is important to understand the strategic role of pricing in your overall marketing strategy. For e.g. a hotel chain might offer a package of low price or discount with a view to making people try out their services. It is likely that in the short run it might be a loosing proposition but in the long run, it may give more customer satisfaction and thereby better utilization of services

The 3rd P: Place:

Because of intangibility of services they cannot be stored, transported and inventoried. Also because of inseparability, they must be created and sold at the same time. These 2 characteristics make the channel very short and direct. Most service is distributed through direct sales at best one direct agent and middleman can be added to it. For e.g.: an insurance agent, courier service. Keeping in view the characteristics and potential management problems, there are distinct channel configurations that can be noticed:

The dominant channel configuration in the service sector is where agents and brokers play an imp role. The major function of these agents and brokers is to bring together the producer and consumer of service. These agents can be classified as broker or sales agents. E.g.: travel agents

The agents may be trained in the creation and production of service and then franchised to sell it. E.g.: Shehnaz Hussain beauty parlours.In some cases actual product is not transferable & therefore tangible representations are created and transferred. This kind of tangible is used for marketing insurance services where a contact document exists as a physical & tangible representation of the service.

Delivery of service involves creating time and place utilities, thus, factor of location keeping in mind the potential markets is significant in channel selection decision. The problem of standardisation and uniformity restrains the use of middlemen & the geographical area that can be catered. Thus, it is impt to select a good location to attain maximum coverage of the market place.

The 4th P: Promotion

There are clear differences in information usage between goods and services. First, the difference is that the consumers of services are less likely to purchase without information, than those of goods. Second, the consumer of services will prefer personal sources to impersonal sources of information. And third, the basic characteristics of services have implications for communication strategies. The above three differences influence the decisions regarding theCommunications objectivesTarget audiencesPlanning of each of the sub elements in the promotion mix

Promotion objectives: the basic objective of promotion would be to develop public relations and create a brand image. The promotion mix should use indirect selling techniques, packaging and customization.

Target audiences: In service sector there should be a direct contact between the customers and there service providers. Therefore some promotion should be directed towards the employees so as to motivate them to serve the customers better. The target audience also includes buyers, influencer and the decider or user of the buying cycle.

Planning the Promotion mix: a customer is buying the performance of the service personnel and therefore the advertising in service industry shouldn’t only restrict itself to encouraging consumption, but also it should encourage employees to perform well. Effective advertising programs should be such that they have a positive effect on contact personnel, capitalize on word of mouth, provide tangible clues, make offer easily understandable and contribute continuity.

Planning for promotion mix: planning the promotiom mix calls for the right advertising strategies, consumer promotions, efficient selling methodologies and good public relations for the right kind of publicity.

Advertising of services: Consumer promotions in service marketing: in execution of any kind of promotion scheme, the service marketer should carefully consider six basic elements, namely, product scope, market scope, value, timing, identification of the beneficiary & protection against competition. To give an element of intangibility, premiums can be frequently used. Price/quantity promotion can help generating long term commitment from consumers eg. Group rates for hotels. Prize promotions can be used frequently and add excitement and involvement.

Selling services: since services are intangible in nature, it is of utmost importance to sell them in a manner, that will convince your target customer.

The sales person must develop a personal relationship with the client. Quite often it is the personal relationship rather than the service itself that results in satisfaction or dissatisfaction of the service.

The seller must adopt a professional orientation and make a strong impression of competency, honesty and sincerity.He can use indirect selling techniques by creating a derived demand or playing the role of a buying consultant. Eg most hotels first sell the location and then the hotel to the customer. They have to build and maintain a favourable image as public opinion and word of mouth publicity plays an important role in the marketing of services.A service seller deals with a host of services rather than one. Their thoroughness on each and ability to package them to suit each customer's need would determine the success. Therefore the ability of the seller to customize the service offering is very important.

Public relations and publicity: Promotional activities like community relations, event management, media blitz, corporate identity programmes have relevance and should be used effectively by marketers. Eg: a medical doctor specialising in eye care running his own clinic cum nursing home and organizing free eye camps in competence. all over the region. This community service will not only spread his name but also prove his

Communication strategy:The service marketer should attempt to reflect a consistent & attractive personality in all manifestations of the organizations that reach the public. Also one must aim for a recognizable human personality to endorse the service. Stress on specialization, rather than all things for all people. This will help in creating a unique positioning.

The 5th P: PeopleIt is the employees of an organisation which represent the organisation to its customers.

In a service organization, employees are essentially the contact personnel with customer. Therefore, an employee plays an important role in the marketing operations of a service organisation.

To realize its potential in services marketing, a firm must realize its potential in internal marketing - the attraction, development, motivation and retention of qualified employee-customers through need meeting job-products. Internal marketing paves way for external marketing of services. In internal marketing a variety of activities are used internally in an active, marketing like manner and in a coordinated way.

The starting point in internal marketing is that the employees are the first internal market for the organization.

The basic objective of internal marketing is to develop motivated and customer conscious employees.

A service company can be only as good as its people. A service is a performance and it is usually difficult to separate the performance from the people. If the people don’t meet customers' expectations, then neither does the service. Therefore, investing in people quality in service business means investing in product quality.

BANKING

1. PRODUCT MIX

The banks primarily deal in services and therefore, the formulation of product mix is required to be in the face of changing business environment conditions. Of course the public sector commercial banks have launched a number of policies and programs for the development of backward regions and welfare of the weaker sections of the society but at the same time it is also right to mention that their development-oriented welfare programs are not optimal to the national socio-economic requirements. A proportional contraction in the number of customers is found affecting the business of public sector commercial banks. The changing psychology, the increasing expectation, the rising income, the changing lifestyles, the increasing domination of foreign bans and the changing needs and requirements of the customers at large make it essential that they innovate their service mix and make them of worked class. The development of new generic product, especially when the business environment is regulated is found a difficult task. However, it is pertinent that banks formulate a package in tune with the changing business conditions. Against this background, we find it significant that the banking organizations minify, magnify, combine and modify their service mix.In the formulation of service mix, the banks can follow two guidelines, first is related to the processing of product to market needs and the second is concerned with the processing of market needs to product. In the first process, the needs to the target market are anticipated and visualized and therefore, we expect the prices likely to be productive. In the second process, the banks react to the expressed needs and therefore we consider it reactive. It is essential that every product is measured up to the accepted technical standards. This is because no consumer would buy a product, which contains technical faults. Technical perfection in service is meant prompt delivery, quick disposal, and presentation of right data, right filing, proper documentation or so. If computers start disobeying, the command and the customers get wrong facts, the use of technology would be a minus point, and you don’t have any excuse for your faults.Marketing aims not only offering but also at creating\innovating the services\schemes found new to the competitors vis-a vis- to the customers. The enhanced customer patronage would be a reward to the bank. The additional attractions, the product attractiveness would be a plus point of your mix, which would help you in many ways. This makes it essential that the banking organizations are sincere to the innovations process and try to enrich their peripheral services much earlier than the competitors. We also find the product portfolio of the banks. While formulating the services mix, it is also pertinent that the bank professionals make possible affair synchronization of core and peripheral services. To be more specific, the peripheral services need an intensive care since the core services are found by and large the same. Innovating the peripheral services thus appears to be an important functional responsibility of marketing professionals. We can’t deny the fact that if the foreign banks have been getting a positive response; the credibility goes to their innovative peripheral services. Thus, the formulation of product mix is found to be a difficult task that requires world-class professionalism.

2. PROMOTIONAL MIX:Promotion mix includes advertising, publicity, sales promotion, word – of – mouth promotion, personal selling and telemarketing. Each of these services needs to be applied

in different degree. These components can be useful in the banking business in the following ways:

AdvertisingAdvertising is paid form of communication. Banking organizations use this component of the promotion mix with motto of informing, sensing and persuading the customers. While advertising it is essential to be aware of key decision making areas so that instrumentally helps banks at micro and macro levels.

Finalizing the budget:This is related to the formulation of the budget for advertisement. The bank professionals, senior executives and even the policy planners are found to be involved in the process. The business of a bank determines the scale of the advertisement budget. In addition, the intensity of competition also plays a decisive role since in the majority of cases; we find a increase in the budget due to a change in the competitor’s strategy.

Selecting a suitable vehicle:There are a number of devices to advertise, such as broad cast media, telecast media and print media. In the face of the budgetary provisions, it is necessary to select a suitable vehicle. For promoting the banking business, the print media is found to be economic as well as effective.

Making possible creative:The advertising professionals bear the responsibility of making the appeals, slogans and messages more creative. Here, creative means making the advertisement programs distinct to the competitive organizations, which are active in influencing the impulse of the customers and successful in informing and sensing the customers. This requires an in-depth knowledge of the receiving capacity of the target market for which the advertisements are designed.

Testing the effectiveness:It bears an analogous significance that our advertisements are effective in influencing the impulse of customers by energizing persuasion. For making the process effective, it is essential to test the effectiveness before launching of the commercial advertisements.

Instrumentality of branch managers:At micro level, a branch manager bears the responsibility of advertising locally so that the messages reach the target audience.

Characters and themes:At apex level it is also important that while advertising the senior executives watch the process minutely and select events, characters having a regional orientation. The popular characters and sensational moments are likely to be impact generating. The theme for appeals and messages also needs due attention. Of course, they have a legitimate right of advertising but it is not meant that like the goods manufacturing organizations, the

service generating organizations also start making invasion on culture. It is necessary to regulate a bias to gender, profession, region or so.

Public relations:In the banking services the effectiveness of public Relations is found in high magnitude. It is in this context that difference is found in designing of the mix for promoting the banking services.

Telemarketing:The telemarketing is a process of promoting the business with the help of sophisticated communication network. Telemarketing is found instrumental in advertising the banking services and the banking organizations can use this tool of the promotion mix both for advertising and selling. This minimizes the dependence of banking organizations on sales people and just a counter or center as listed in the call numbers may service multi- dimensional services.Telemarketing is likely to play an incremental role in marketing the banking services. The leading foreign banks and even some of the private sector commercial banks have been found promoting telemarketing and they have been getting positive results for their efforts.

Word-Of- Mouth:Much communication about the banking services actually takes place by word- of- mouth information, which is also known as word- of- mouth promotion. The oral publicity plays an important role in eliminating the negative comments and improving the services. This also helps the banker to know the feedback, which may simplify the task of improving the quality of services. This component of promotion mix is not to influence budget adversely or generate additional financial burden. By improving the quality of services and by offering small gifts to the word- of- mouth promoters, bankers can get more business command in their area.The above facts make it clear that such kind of promotion is influenced by a number of factors. The most dominating factor is the quality of services offered. The bank professionals, the frontline staff and the senior executives should realize that degeneration in quality would make this tool effective.

3. PRICE MIX:In the formulation of marketing mix, the pricing decisions occupy a place of outstanding significance. The pricing decisions include the decisions related to interest and fee or commission charged by banks. Pricing decisions are found instrumental in motivating or influencing the target market. The RBI regulates the rate of interest and the Indian Banks’ Association controls other charges. In our country, the price mix is more important because the banking organizations are also supposed to sub serve the interests of the weaker sections and the backward regions. Also in making the pricing decisions, the Government Of India instrumentalists or commands everything as a shadow policy maker. This also complicates the price mix for banking sector.Pricing policy of a bank is considered important for raising the number of customers vis-à-vis the accretion of deposits. Also the quality of service provided has direct relationship

with the fees charged. Thus while deciding the price mix customer services rank the top position. Banks also have to take the value satisfaction variable in to consideration. The value and satisfaction cannot be quantified in terms of money since it differs from person to person. Keeping in view the level of satisfaction of a particular segment, the banks have to frame the pricing strategies.The banking organizations are required to frame two- fold strategies. First, the strategy is concerned with interest and fee charged and the second strategy is related to the interest paid. Since both the strategies throw a vice- versa impact, it is important that banks attempt to establish a correlation between two. It is essential that both the buyers as well as the sellers have feeling of winning.

4. THE PEOPLESophisticated technologies no doubt, inject life and strength to our efficiency but the instrumentality of sophisticated technologies start turning sour id the human resources are not managed in a right fashion. We can’t deny the fact that if foreign banks are performing fantastically; it is not only due to the sophisticated information technologies they use but the result of a fair synchronization of new information technologies and a team of personally committed employees. The moment they witness lack of productive human resources even the new generation of information technologies would hardly produce the desired results. In addition to the professional excellence, the employees working in the foreign banks are generally value- based. Thus we accept the fact that generation of efficiency is substantially influenced by the quality of human resources. The quality for banking sector is an aggregation of all the properties, which are found essential for generating the efficiency and projecting a fair image. Even efficiency essentially is supported by ethical dimension, humanity and humanism.The development of human resources makes the ways for the formation of human capital. Human resources can be developed through education, training and by psychological tests. Even incentives can inject efficiency and can motivate people for productive and qualitative work.

5. THE PROCESSFlow of activities: all the major activities of banks follow RBI guidelines. There has to be adherence to certain rules and principles in the banking operations. The activities have been segregated into various departments accordingly.Standardization: banks have got standardized procedures got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some standardization in them. This is because of the rules they are subject to. Besides this, each of the banks has its standard forms, documentations etc. Standardization saves a lot of time behind individual transaction.Customization: There are specialty counters at each branch to deal with customers of a particular scheme. Besides this the customers can select their deposit period among the available alternatives.Number of stores: numbers of steps are usually specified and a specific pattern is followed to minimize time taken.Simplicity: in banks various functions are segregated. Separate counters exist with clear indication. Thus a customer wanting to deposit money goes to ‘deposits’ counter and

does not mingle elsewhere. This makes procedures not only simple but consume less time. Besides instruction boards in national boards in national and regional language help the customers further.Customer involvement: ATM does not involve any bank employees. Besides, during usual bank transactions, there is definite customer involvement at some or the other place because of the money matters and signature requires.

6. THE PHYSICAL EVIDENCEThe physical evidences include signage, reports, punch lines, other tangibles, employee’s dress code etc. The company’s financial reports are issued to the customers to emphasis or credibility. Even some of the banks follow a dress code for their internal customers. This helps the customers to feel the ease and comfortSignage: each and every bank has its logo by which a person can identify the company. Thus such signages are significant for creating visualization and corporate identity.Tangibles: banks give pens, writing pads to the internal customers. Even the passbooks, chequebooks, etc reduce the inherent intangibility of services.Punch lines: punch lines or the corporate statement depict the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers.

Banking marketing consists of identifying the most profitable markets now and in future, assessing the present and future needs of customers, setting business development goals, making plans-all in the context of changing environment.

8 P’s of TRAVEL INDUSTRY

PRODUCT ELEMENTS

BENEFIT MEANING WITH RESPECT TO THE TRAVEL AND TOURISM

INDUSTRY

1. CORE BENEFIT

The fundamental benefit or service that the customer is buying

Traveling

2 BASIC PRODUCT

Basic, functional attributes Ticketing, hotel reservation

3 EXPECTED PRODUCT

Set of attributes/conditions the buyer normally expects

Customer friendliness, good food

4 AUGMENTED PRODUCT

That meets the customers desires beyond expectations

Prompt services, comfortable and convenient trip, spectacular sights, music

5 POTENTIAL PRODUCT

The possible evolution to distinguish the offer

Totally customized tour packages, A grade service at every stage

The services a product offers consist of three levels. The first level is that of the basic service package which includes core service, facilitating services and supporting services. In the case of the travel and tourism industry, the core services would include traveling, ticketing, hotel reservations, food services etc.The second level is that of an augmented service offering where accessibility, interaction and customer participation is given equal importance in delivering the service product.

Accessibility of Service

- N umber and skills of personnel- Working hours and time used in performing various tasks- Location of service outlet- Exterior and interior of service outlet- Infrastructure, hardware, documentation- The number and knowledge of consumers simultaneously involved in the process

Interaction with service organization

- Interactive communication between employees and customers- Interactions with the physical and technical resources of the organization needed in

the service production process- Interaction with other customers involved in the process.

Customer Participation

- How well is the customer aware about the process of service delivery and his or her role

- How well is the customer prepared to share information- How well is the customer willing to share information or use the service equipment

The third level is that of the market communication of the service offering as in its absence the augmentation service package does not have any relevance to the customer.

PLACE Because of intangibility (from production to sales) of services, they cannot be stored, transported and inventoried. Hence traditional distribution channels available for product marketing like wholesalers and other intermediaries cannot be used. Even the retailing cannot be an independent activity. Similarly, because of the inseparability, i.e., in case of services production cannot be separated from selling, services must be created and sold at the same time.These two characteristics make the channel very short and direct. Most services are distributed through direct sales. At best one agent or middleman can be added to it, like in the case of insurance, travel agency, courier service, etc.So we see that there is a little controversy regarding the distribution of services. There is one school, which says that since the service cannot be separated from the producer of the service, direct selling sales channel are the only method of distribution available for services. The advantage of direct selling is that the service can be offered to the customer at a lower cost. The other school partially disagrees with this theory and suggests that it is possible to have intermediaries but the channel of distribution would be rather short and simple as compared to tangible goods.

PROCESS The importance of process management is that it assures service availability and consistent quality. Without sound process management, balancing service demand with service supply is extremely difficult. Service cannot be inventoried; therefore, it becomes essential to find out ways and means to handle peak load to optimize different customer needs with varied expertise levels within the service organization.In marketing management, operations management has been recognized as an integral function. In manufacturing sector, for example, logistics in distribution are vital to satisfy customer needs. Similarly, in services sector, where there is no tangible product, the operations management is vital to deliver satisfaction because here the operations management would decide how the process of service delivery would function, or in other words, the interactive experience that would deliver the service benefits to the consumers.Shostack gave a much-simplified version and described the 'process' in three stages. First, a process can be broken down in logical steps to facilitate analysis and control. Second, there are more than one available options of processes in which output may differ. Finally, each system includes the concept of deviation or tolerance standards in recognition that the processes are 'real time' phenomena that do not conform perfectly to any model or description, but function within a norm.One can observe how changes in complexity and divergence influence their market position. For managers in service industries, taking a structural approach can help increase their control over some of the critical elements of the service system management. Therefore, for marketers in service industries, process design may be a tool that can substantially increase their impact and role in marketing their services.

PRODUCTIVITIY /QUALITY Productivity in services refers to how you transform the inputs into outputs, which are valued by the customer. Quality refers to the degree to which the service satisfies the customer by meeting their wants and expectations. Productivity and quality need to be omnipresent for the industry to complete its service obligations aptly. Only if your firm is productive and the quality meets the requirements of the customers can your performance be graded as excellent.Here are five key things to consider when developing the performance strategy for your business.Have you found a way to fit marketing into your schedule?Do you keep track of both your long and short-term projects (including marketing projects), and review that list daily?Do you have a way of combating procrastination and delay?Do you maintain the highest standards of integrity and excellence?Are you continually working to improve your skills in all areas of your business?In a service organization, employees are essentially the contact personnel with the customer. Therefore an employee plays an important role in the marketing operations of a service organization.According to him, "the internal marketing concept states that the internal market of employees is best motivated for service-mindedness and customer-oriented performance by an active marketing like approach where a variety of activities are used internally in an active, marketing like and coordinated way." The starting point in internal marketing is that the employees are the first internal market for the organization.To realize its potential in services marketing, a firm must realize its potential in internal marketing - the attraction, development, motivation and retention of qualified employee-customer through need-meeting job-products. Internal marketing paves the way for external marketing of services.The companies that practise internal marketing most effectively will compete aggressively for talent market share, offer a vision that brings purpose and meaning to the workplace, equip people with the skills and knowledge to perform their service roles excellently, bring people together to benefit from the fruits of team play, leverage the freedom factor, nurture achievement through measurement and rewards, and base job-product design decisions on research.

PROMOTION AND EDUCATIONIt is now established that there are clear differences in information usage between goods and services. First, the difference is that consumers of services are less likely to purchase without information than those of goods. Second, the consumer of services will prefer personal sources over impersonal sources of information. And third, the basic characteristics of services have implications for communication strategy. George and Berry keeping in view the intangibility of services, proposed that in the case of services a customer is buying the performance of the service personnel and therefore the advertising in service industries should not only restrict itself to encouraging consumption, but also it

should encourage employees to perform well. They proposed the following six basic guidelines to help design effective advertising programmes.The advertising should have positive effects on contact personnel. . It should capitalize on the word of mouth.It should provide tangible clues to the customers.It should make the service offering easily understood.It should contribute to the continuity.It should promise only what is possible.

Here are five key things to consider when developing the promotional strategy for your business:Are you networking enough? For many service businesses, networking is the key promotional technique. Join organizations; get to know people; get involved; keep in touch with people; do what you can to help them; be visible in your community.Do you have a good, solid marketing letter that highlights your benefits and moves people to take action? This one inexpensive marketing tool is one of the most powerful when written properly.Do you do personal PR such as speaking and writing? Again, these don't take much money but pay big dividends. Speak at Rotary, your Chamber of Commerce, at business associations and alumni groups. Write for your local paper; the trade journal of your industry, or even for someone else's newsletter. You can use the reprints later for credibility.Are you mailing to people on your list? This is an absolute must. Don't let people forget who you are and how you can help them. From two to six times a year send clients and prospects a newsletter or other type of keep-in-touch mailing.Do you have a Web Site? You should. It doesn't take a lot of money to create a web page and even less to post it. This is a powerful media that can serve as a combination direct mail piece, brochure and newsletter. Given the price of entry, it's crazy not to have one. Glynn Shostack once observed, "A physical object is self defining; a service is not" and therefore the marketing task in service industries is "defining for the service what the service cannot define for itself."Though a customer cannot see a service, but definitely he can see various tangible clues of the service offer like facilities, communication material, objects, employees, other customers, price, etc. On the basis of his perceptions on the tangible clues, the customer makes the purchase decision. These clues might be both intended and unintended ones and, therefore, managing evidence is integral to the service marketing mix. Shostack even observed that the management of evidence comes first for service marketers.The argument here is that the physical environment, facilities and atmosphere; give enough physical evidence to help shape customer perceptions. Many service marketers have neglected this aspect while the others gave due emphasis to issues like exterior of buildings, office furniture, layout, colour 0.£ interiors, and even carry-bags, tickets, cash memos, labels, etc. The advocators of public relations have even coined a specific term called 'corporate identity' and suggested that such tools can create a visual identity that the public as customers can recognize. The corporate identity media can successfully

contribute towards the marketing objectives provided they are attractive, distinctive and memorable.

PRICE AND OTHER USER COSTSPricing is yet another variable of the marketing mix. A particular product or service is acceptable to the customer at a particular price and if the price is increased, it is likely that the same product or service might become less acceptable to the customer. The other issue, which is related to pricing, is that of perceptions about quality. Generally, to most customers, high price means high quality. However, some customers don't need the highest quality at the maximum price. Detergents are one such example where average quality detergents at moderate prices are market leaders.Service pricing follows the principles and practices of pricing of goods and, therefore, they are either cost based or market based.Within these categories prices may be profit oriented, government controlled, competitive or customer oriented. However, the characteristics of services do influence the pricing and, therefore, different methods of pricing are to be followed.

There are some basic guidelines for pricing of services. These guidelines may help in developing an appreciation of the framework for service pricing.1. For services, the pricing strategy should be such that demand fluctuations are successfully handled. Since services are perishable, they cannot be inventoried. In such a situation pricing strategy should be such that it should encourage the customers to delay their use of services till the period of low demand.2. Service prices should be based on costs so as to take into account the cost of tangible clues of intangible services. To the first time users of services the "services offer-package" is less understood if it is primarily dominated by intangibles. Therefore, the tangible and material content of the service product should be integrated in the 'service-offer package', which has definite cost implications.3. The service pricing should be such a to provide value addition and quality indication to the customers. In situations of "homogeneous" services, the pricing strategy may be market oriented or customer oriented. But in heterogeneous services, the price may be used as a quality indicator.4. The pricing strategy should be such as to cope-up with the degree of competition operating within a certain geographic and time zone. Services are inseparable from the person who provides them and the service providers have both geographic and time limits or markets, which can be served by them.

The 8 P’s with reference to The Taj Mahal Hotel

Product ElementThis gracious turn-of-the century hotel is located 32 km from the airport and

minutes away from Mumbai's commercial, shopping and banking districts. The Taj Mahal Hotel has an old-world Heritage Wing and a contemporary Tower Wing. The hotel's premium suites have been used by royalty and Heads of State.

Taj believes that the their core product is space. This space is supplemented with the services they provide like the restaurants, health club, banquets, discotheque, bar, business centers etc. Their other supplementary products also include travel arrangements, ticketing, airport pick-ups, sightseeing etc. The hotels various other departments like the house keeping, front office, food and beverage, room service and maintenance, all provide the supplementary services to the customer.

A few of the Facilities and Services offered are as follows:- Types of Accommodation582 centrally air-conditioned rooms including 49 suites.

Tower Wing Rooms: With easy access to the Business Centre, these contemporary rooms offer guest amenities like Internet connectivity, 2-line speaker phones with international direct dial facility and voice mail. Mini bar, personal safe, channel music and television with satellite programmes. A complimentary in-room fax can be provided on request. Guests have a choice of rooms that overlook the city or face the Gateway of India and the Arabian Sea.

Heritage Wing Rooms: These rooms are renowned for their architecture and exude an aura of old-world elegance. Each corridor in this Wing resembles an art gallery, and the design, décor and furnishing ensure that no two rooms are alike. Guests have a choice of rooms that overlook the city or pool or face the Gateway of India and the Arabian Sea.

Taj Club: Located on the top floors of the Heritage Wing, Taj Club is designed for the discerning business traveler. Guest amenities and services include complimentary airport limousine transfers, private check-in at the Club desk, in-room fax, personal safe, a complimentary bottle of wine, valet service and complimentary deluxe Continental breakfast. Taj Club guests can also enjoy complimentary tea/coffee throughout the day and cocktails during the Cocktail Hour at the Club Lounge. Taj Club also offers guests exclusive Meeting Rooms and a Business Service Unit on the Club Floor.

Suites: Choose from elegantly appointed Junior Suites, Executive Suites, tastefully decorated Large Suites, newly renovated Luxury Suites or spacious, plush Grand Luxe Suites. The finest suites at The Taj Mahal are the luxuriously appointed Presidential Suites. Each of these suites is decorated with original paintings and antiques that transport guests into a world of regal luxury and grandeur. Grand Luxe and Presidential Suite guests can also avail of a personal Valet Service.

Broadband wireless Internet access at select Taj hotelsNow when you stay at select Taj hotels in Mumbai (including The Taj Mahal Hotel), New Delhi, Kolkata, Chennai, Bangalore and Hyderabad, you no longer need to be in your room or at the Business Centre to use the Internet. Multiple 'hot spots' located across the hotels lets you get onto the Internet from almost any place in the hotel - quickly and without plugging in! What's more, there is a Cyber Butler on call, should you need any assistance with getting connected.

Facilities and Services Swimming pool, fitness centre and spa, beauty parlour, barber shop, travel desk, car rental, pastry shop, book shop, shopping arcade, currency exchange, doctor-on-call and babysitting. Complimentary use of steam, Jacuzzi and gymnasium at the fitness centre for all guests. Arrangements for golf, badminton, squash, billiards, tennis and table tennis on request. 24-hour room service and laundry service

Place and TimeAs far as place is concerned, all the Taj services and facilities are provided at one

point. To ensure timely delivery of their services, they have set processes in place and incase of failure or delay of service, they have built in contingencies and trained their staff to communicate the delay to the customer in the right manner.

One of the incidents that Mr. Vivek Sah, the Training Manager at Taj provided us with to explain this concept further is of the implementation of the contingency plan during the breakdown of the elevator. In case of breakdown of the elevator, the Room Service makes use of the elevator in the other wing to ensure timely delivery to the customer. They also have complaint management systems where they encourage customer feedback. Each of their feedback form is numbered and hence if any feedback form is missing, the staff is held liable for it. This is to ensure that the management views every feedback form.To ensure standadization in their services, they have Standard Operating Procedures (SOP), e.g the food that is served in the restaurant will be of the same quality and taste at any given day and time.

ProcessIn order to ensure that the core product and the supplementary product is

developed and delivered in the right manner and at the right time, the hotel has formed certain set processes. When the room is being prepared for customer check-in , the house-keeping department make sure that all the room amenities are provided as per the check list. For e.g. certain room amenities like 3 embroidered laundry bags, 2 closed slippers with logo, 2 shoe bags, etc. are provided by The Taj Mahal Hotel.Infact the processes are so specifically laid down that hotel staff are even advised on what to say and what words to use while talking to a customer. The following example will illustrate this better. When a customer asks for something to be done instead of saying “no problem, the staff is taught to say ‘ most certainly’.

The Taj Blueprint

When the service provider comes in contact with the customer, he needs to surpass the customer’s expectations, for which a blue print is made and followed by the service provider, in this case the Taj Mahal Hotel.

Dinner Service Sequence

Procedure1 Greet Guests Entrance Host(ess) / Manager2 Smile using appropriate

salutation,correct posture,eye-contact and guest name where possible.

Entrance Host(ess) / Manager

3 Smoking/Non-smoking preference to be confirmed.

Entrance Host(ess) / Manager

4 Assist guests to their seats. Restaurant Host(ess) / Manager5 Unfold the napkins, ladies firstRestaurant Captain6 Suggest the Dinner buffet, and

describe the buffet highlights - specials etc.

Table Captain / Manager

7 Present the food menu along with the beverage list/ wine menu, if A La Carte is desired by the guest. Suggest daily specials and advice non availability`s, prior to food orders.

Table Captain / Manager

8 Suggest bottled water and offer wine by glass.

Table Captain

9 For wine service, appropriate glassware to be present on the table.

Table Captain / Server

10 For all orders, serve ladies first

Table Captain / Server

11 Clear plates accordingly before guests return after second helping from buffet.

Table Captain / Server

12 For A La Carte orders, plates to be cleared only after all complete their meal.

Table Captain / Server

13 Replenish the cuttlery accordingly.

Table Captain / Server

14 Napkins to be folded neatly in half and placed on the left arm-chair, when guests leave for second helping.

Table Captain / Server

15 For A La Carte orders, offer dessert menu and describle items.

Table Captain / Server

16 Offer tea / coffee after entrée and side plates are cleared.

Table Captain / Server

17 Always maintain table top clean, before resetting the table

Table Captain / Server

18 Place bill folder with cheque on table for signature, as per guest convinience

Table Captain / Server

19 Thank all guests using their names respectively.

Table Captain / Server / Host(ess) / Manager

20 Bid farewell. Restaurant Captain / Server / Host(ess) / Manager

21 Upon guest departure, clear table immediately.

Table Captain / Server

ProductivityThe Taj as a hotel does not compare itself to only Indian hotels, but even with the

hotels internationally as it claims to have “World Class Quality”. In order to ensure that its inputs are transformed into desired outputs, they provide extensive training to their employees irrespective of the field they come from. The Taj Mahal hotel has various quality tools to enhance quality. This involves every department, as they have to make sure that the raw material as well as the finished product is of top quality. At The Taj, it is the responsibility of the purchase department to make sure that the raw materials are purchased at the Right Time, Right Place, Right Cost and from the Right Source, in order to avoid any hindrances in their productivity and quality.Taj has developed enormous credibility in terms of trustworthiness being the oldest brand of hotels, with the reputation of being World class and honest service provider. Security, Communication and understanding the customer psychology are special assets the Taj management has mastered with time.

PeoplePeople here mean the customers, employees, management and the society. It is

the final customer who is to be satisfied and this can be done only with the help of the employees, who are directed and guided by the management. In the end the final motive of Taj is to provide consistently and relentlessly an Indian experience of warmth and hospitality by anticipating and exceeding guest expectations. They also provide various customer services such as ‘The Taj Inner Circle Group’, ‘Taj Advantage’ and ‘Taj Epicure’.

In order to ensure the productivity of their employees they provide them with various facilities such as medical help, consultation, traveling facilities, perks and bonuses. The employers here each have their own lockers in which they keep their uniforms and other belongings, they also have bunkers with small beds so that the employees working in shifts can catch some sleep if need be.

In spite of the fact that human resources management is such an integral part of the service industry of which hotels form a major part, its role has begun to be acknowledged only recently. The Taj Group of Hotels is probably one of the first Indian hotel chains to have recognised and respected the significance of HR in the hospitality

industry. Says K S Srinivasan, GM-corporate human resources, The Taj Mahal Hotel, Mumbai, “Functions like sales, marketing and HR are not hotel-specific, unlike those of chefs, housekeepers, bartenders, stewards and the like. They are, in fact, common to all businesses.”

He asserts that HR, as a function, is like a partner in the business in any organisation and not a stand-alone function. It is the key to effective utilisation of the manpower that the hotel industry is so dependent on. And the Indian hotel industry is among the most labour intensive since the number of people serving guests is the maximum here. It is precisely for this reason that the significance of HR requires to be appreciated.

It is not merely monetary rewards that employees seek today; the intriguing aspect is the learning experience that the job promises. “It is precisely with this very thought in mind that the Taj Group of Hotels, a Tata enterprise and one of the oldest hotel chains in the country, decided on a training programme for the operations trainees,” explains Srinivasan.

Interactive sessions between the Taj management and the director of the Tata Institute of Social Sciences (TISS), a Tata educational and research institution, led to an interesting and comprehensive tailor-made course curriculum being chalked out. Thus was born the ‘Taj TISS HR Associate Programme’, a one-year course comprising four modules that are designed to give equal importance to and impart balanced knowledge of both the theoretical and the practical aspects of all HR-related functions of the hotel industry.

After finalising the course details, the Taj made announcements about the course, offering interested trainees with two to three years of work experience an opportunity to apply. The response was encouraging and five trainees were shortlisted for the first batch of the training programme.

Each of the four modules have four sections. The first stage consists of theoretical lessons, providing a sound background to the practical application of the knowledge required of them in the second stage. In the third stage, the students return to the Institute and their performance is evaluated by professors of TISS. In the fourth and final stage, grades are awarded. While practical training sessions for the first three modules have been organised at the Taj hotels across the country, the fourth modules practical sessions had students of the first batch working in Tata companies such as TISCO and Tata Consultancy Services (TCS). “This gave them a wider scope and more exposure, besides making them realise that HR skills in a service-specific industry like the hotels are much more challenging than their application in the manufacturing or any other industry,” observed Srinivasan. He said he himself had started off in the manufacturing industry and only later did he move over to the service industry. “I have been in the industry for over a decade now and am well-set here,” he added.

The key to retaining staff and ensuring the success of any business organisation lies with the HR department and its effective functioning. Any organisation, including hotels, incur heavy expenditure on their employees, especially between the time of recruitment and the employees’ acquisition of the skills imparted during their training. It can be inferred, therefore, that a high employee turnover rate lowers the efficiency of the staff as a whole owing to their constant on-the-job training and skill enhancement.“An organisation must be able to create for itself a unique place and image in the minds

of the employees, both present and prospective. This enables the employees to aspire to be a part of the organisation, giving it their very best,” says Srinivasan. “Though the training programme has and will continue to cost us money, we believe that it is truly worthy investment,” he added.“The Taj group,” says Srinivasan, “is an expanding organisation and we are a people-oriented company. What we need are people who can match our organisational standards. We are also looking to create and ensure a constant supply of good quality HR professionals, which is why we decided to impart training of an extremely specialised nature to our management trainees. I have observed them at the end of the programme and must say that they appear all charged up and raring to go,” he remarked.The Taj-TISS joint programme is expected to create a demonstration effect in the industry with more hotel groups placing additional emphasis on the HR training programmes.To be a successful HR professional, what is required most is the aspirants’ ability to challenge themselves as well as their colleagues. Only then can they get the very best from themselves and their team. “Challenges in the HR field are immense and since it is so people-centric, it is only obvious that professionals should have strong people-management skills,” explains Srinivasan. Besides this, a right attitude towards the job and life in general is extremely essential. “As a manager myself, what I would look for in an applicant would be the ability to fit into my organisation perfectly and be emotionally balanced, competent and above all, be a cultural fit, fulfiling the basic values that the Taj is known for,” concludes Srinivasan.

Promotion and EducationThey carry out their promotions by the means of calendars, monthly letter to their

‘Inner Circle Customers’, informing them about their upcoming events and offers. Taj has television advertisements on popular channels like CNBC, and print ads in magazines and newspapers. Taj takes part in exhibitions like wherein they promote their holiday packages. They also have special offers during the “off-season” etc. Also The Taj is the only hotel chain to personify itself and in promotion campaigns and advertisements the Taj is often referred to as “She” The print ads for the Taj are :-

Physical Evidence

The Taj Mahal Hotel was built in 1903. The architect was Sitaram Vaidya. It had a very ethnic look to it, which kept up their image of providing an Indian experience of warmth and hospitality. They realized that modernization is the name of the game and had The Taj redesigned by Mr. Chambers, Mr. Wilkes and Mr. Bernard from Singapore.

Some of the recent renovations that have been carried out at the Taj areThe exterior has been given a new and modern look while still retaining the old world charm of the building.

The entrance has splendidly carved bronze and glass doors Soaring onyx columns stretch to a luminous alabaster ceiling; while underfoot, rich hand-woven carpets set off a magnificent floor painstakingly inlaid with semi-precious stones. The eclectic mix of

western contemporary style and traditional Indian motifs creates a veritable feast for the sense. The city's most exclusive restaurant, The Zodaic Grill provides a graceful setting for an intimate dining experience. Under a magnificent trompe l'oeil dome, they serve the finest gourmet cuisine complemented by an extensive wine list, as a classically trained pianist entertains patrons.

Price and Other User Costs

Taj realizes that their prices are high and not affordable by all, but this is due to various overheads that it incurs and the superior quality that it offers. For e.g. a roadside sandwich seller sells his sandwich for Rs.10 as he has no overheads and has no quality standards to maintain, like the quality of the bread and the vegetables. But at The Taj, they serve the best quality and also incur overhead expenses.Also the target audience that the Taj caters to are the one’s who come to the Taj for it’s ambience and world class standards, therefore they say that their prices are justified as they help The Taj retain the exclusivity that it stands for.

7 Ps of marketing for hospitals

Ø Product:

The service product is an offering of commercial intent having features of

both intangible and tangible, seeking to satisfy the new wants and demands of the

consumer. Hospital industry is action oriented and there is a lot of interaction with

the customers (patients). The service product of the hospitals normally have the

following features:

o1 Quality Level: When we talk about marketing hospitals, it is natural

that we are very particular about managing our services in the

right fashion. Supportive services play an important role in

improving the quality of medicare. These services which include

laboratory, blood-banks, catering, radiology and laundry, in a true

sense determine the quality of services made available by medical

and para-medical personnel. They get a strong base for treatment

since the diagnostic aspect determines a direction. To get the best

result from OT, it is natural that equipments are properly sterlised.

In addition, the dresses and clothes are also required to be made

bacteria free. The patients are required to wear disinfected linen

which should be made available. The radiology department should

have hi-tech facilities keeping in view the pressure of work. Of late,

we find sophisticated equipments and unless hospitals make the

same services available the same, the quality of services cannot

be improved.

o2 Accessories: This is a very good way of segmenting customers. Many

hospitals provide additional services such as catering, laundry,

yoga sessions, cafeterias, etc. for the customers (patients)who are

willing to pay extra. Hospitals have different wards - General and

Special. Certain hospitals provide services for the family members

of the patients (when they are not from the same city) –

accommodation and catering.

o3 Packaging: It is the bundling of many services into the core service.

Eg: Apollo hospital offers a full health check-up to the patients.

Similarly other hospitals also offer package deals for health check-

ups. For example if a person has to undergo a bypass surgery, he

can pay a lump sum amount during admission, say rupees 1 lakh

for all procedures, tests, stay, etc, at once.

o4 Product line: hospitals through their services offer many choices to the

patients and cover a wide range of customer needs. For example:

Apollo hospital has dental department, cardiology department, etc.

and within the dental department it has dental surgery, root canal,

etc.

o5 Brand name: The hospitals, to differentiate themselves, and their

services from others use a brand name. The intangibility factor of

the service makes it all the more important for the hospitals to do

so.

o6 Place

Under hospital marketing, distribution of Medicare services plays a crucial role. This

focuses on the instrumentality of almost all who are found involved in making

services available to the ultimate users. In case of hospitals the location of hospital

plays a very important role. The kind of services a hospital is rendering is also very

important for determining the location of the hospital.

Eg. Tata memorial hospital specializes in cancer treatment and is located at a centre

place unlike other normal hospitals, which you can find all over other places.

It can be unambiguously accepted that the medical personnel need a fair blending

of two important properties i.e. – they should be professionally sound and should

have in-depth knowledge at psychology. A particular doctor might be famous for his

case handling records but he may not be made available for all the patients because

of the place factor. Now in this case the service provided, that is the doctor may be a

visiting doctor for different hospitals at different locations to beat the place factors.

Unlike other service industries, under hospital marketing all efforts should be for

making available to the society the best possible medical aid.

In a country like India, which is geographically vast and where majority of the

population lives in the rural areas, place factor for the hospitals play a very crucial

role. A typical small village / town may be having small dispensaries but they will not

have super speciality hospitals. For that they will have to be dependent on the

hospitals in the urban areas.

v People

Under hospital marketing the marketing mix variable people includes all the

different people involved in the service providing process (internal customers of the

hospitals) which includes doctors, nurses, supporting staff etc. The earliest and the

best way of having control on the quality of people will be by approving

professionally sound doctors and other staff.

Hospital is a place where small activity undertaken can be a matter of life and

death, so the people factor is very important. One of the major classifications of

hospitals is – private and government. In the government hospital the people factor

has to be specially taken care of. In Indian government hospitals except a few

almost all the hospitals and their personnel hardly find the behavioural dimensions

significant. It is against this background that even if the users get the quality

medical aid they are found dissatisfied with the rough and indecent behaviour of the

doctors.

Under hospital marketing a right person for the right job has to be appointed and

they should be adaptable and possess versatility. The patients in the hospitals are

already suffering from trauma, which has to be understood by the doctors and other

staff. The people of the hospital should be constantly motivated to give the best of

their effort.

Ø Process

Process generally forms the different tasks that are performed by the hospital. The

process factor is mainly dependent on the size of the hospital and kind of service it

is offering. A typical process involved in a medium sized hospital can be as follows.

Apart from this flow there are other allied activities like record keeping

administration at services etc which fall under the process factor. These stages do

not exist separately but are interlinked. The most important elements are lines of

communication within the setup. The experience of the patient depends on the final

interplay of all these factors.

Ø Physical evidence

It does play an important role in health care services, as the core benefit a customer

seeks is proper diagnosis and cure of the problem. For a local small time dispensary

or hospital physical evidence may not be of much help. In recent days some major

super speciality hospitals are using physical evidence for distinguishing itself as

something unique.

Physical evidence can be in the form of smart buildings, logos, mascots etc. a smart

building infrastructure indicates that the hospital can take care of all the needs of

the patient.

Examples -

1. Lilavati hospital has got a smart building, which helps, in developing in the

minds of the people, the impression that it is the safest option among the

different hospitals available to the people.

2. Fortis and Apollo hospitals have a unique logo, which can be easily identified.

Physical evidence also helps in beating the intangibility factor.

Ø Promotion:

Hospitals for promotion use either advertisement or PR or both after taking into

consideration the target customers, media type, budget and the sales promotion.

Since a few years the prime times in T.V. are reserved for advertising social

issues like family planning, use of different types of contraceptives, care for the

girl child and so on. These commercials use the common man approach for

reference group appeal. In case of health care products and services use for

“common man” appeal is widely prevalent. The use of celebrities is not as

effective as that of a common man. An ordinary person thinks that if it works well

for people like him, it will also work equally well for him. The identification with

the common man is easy and quick.

Besides TV, other media of promotion are to be used innovatively. Unlike the

urban area, in rural areas newspapers and magazines do not have the same

impact in conveying messages. In villages, hoardings and wall writings near the

markets and recreation centers attract the attention of villagers. This market

consists of 180 million strong middle income group and a small income group.

This group has a large discretionary income. These discerning consumers are

very careful in choosing health care services. The last decade has witnessed a

health, appearance and nutrition conscious population.

The health care field has become very competitive. Although around one-fourth

of our population stays in urban India, three fourths of the total doctors have

engaged themselves in this part. Many of these doctors visit the contiguous rural

areas, but they may operate from the urban area. The patients of upper middle

and upper income group have a wide choice to make from a number of clinics

and hospitals. Therefore, many hospitals have abandoned traditions and

adopted marketing strategies to woo more and more patients to their clinics.

Word-of-mouth plays a very important role in promotion of hospitals. A person in

need of a health care service does not know for sure where to search for relevant

information. He consults his family members, relations and friends first. The

patients who come to a hospital generally have the old patients of that hospital

as referrals. Word-of-mouth plays an important role during information

acquisition stage of the customers as there are no objective performance

measures to judge the various alternatives available to them. Therefore,

satisfied past patients of a hospital can bring more number of patients to that

hospital than a number of advertisements.

In a competitive market place, the images of the firms swill affect their

competitive standing. One factor that is likely to have a significant impact on the

health care scene is the growth of hospital chains such as Apollo Hospitals, Birla

Health Centres ,etc. Artificial heart transplants and other complex operations

although are few in number and generate a small portion of the total revenue,

they help in generating word-of-mouth which health care providers are actually

interested. Many of these companies are spending a lot in corporate advertising

for Image building.

MARKETING MIXES IN THE INSURANCE INDUSTRY

PRODUCT MIX The formulation of product mix for the insurance business makes it significant to take a look at the services and schemes of insurance organisations. The product portfolio is known and the process of formulating a package should be known. It is natural that the users expect a reasonable return for their investments. It is quite natural that the insurance organisations want to maximise profitability. Both of these dimensions are found interrelated.

It is well known that the key objectives of insurance business are mobilisation of savings and channelisation of investments. This makes it essential that insurance business is made lucrative so that the users /potential users get incentives to buy a policy or to invest in the insurance organisations. The insurance organisations also need to promote the underwriting activities, which would activate the process of arresting the regional imbalance. In the context of formulating the product mix, it is essential that the insurance organisations promote innovation and in the product portfolio include even those services and schemes which are likely to get a positive response in the future.

The corporate objectives indicate that the insurance organisations are required to be careful, especially while launching a new policy. The policies should not only generate enough premium but it is also important that the policies cover persons working in the informal sector, serving as porter, working as manual labourers, or engaged in farm sector. It is the need of the hour that the insurance organisations make their service internationally competitive. This makes a strong advocacy in favour of innovative product mix strategy for the public sector insurance organisations. Thus the formulation of product mix should be in face of innovative product strategy. Strategies of foreign and private insurance companies should be taken into consideration while initiating the innovative process.

The formulation of product strategy should assign due weightage to the rural segment emerging as a big profitable segment especially in the 21st century. The policies and schemes should have rural orientation so that backward and neglected regions of the country get priority attention and the regional imbalance is minimised.

In this context, it is also pertinent that the insurance organisation make possible welfare orientation and include in the product portfolio even those policies and schemes which become instrumental in safeguarding the interest of the weaker sections of the society.The formulation of package is also found important. Designing a package on the basis of the needs and requirements of the concerned segment would make the product mix more competitive.

The partially tapped or totally untapped profitable segments of the future should be identified and tapping the potentials optimally is also important.

A sound product portfolio is the need of the hour and therefore the regulatory barriers or constraints in activating the innovation process should be minimised.

Product Planning & DevelopmentThe purpose of insurance business is to generate profits besides subserving the social interests. The present business is likely to be more competitive.Product is like a stage on which the entire drama of successful marketing is acted. It is like an engine that pulls the rest of the marketing programmes. It is in this context that the product management in an insurance organisation needs an intensive care.Yesterday, the policyholders had limited hopes and aspirations but today they expect more and they would even like something more tomorrow. This focuses on the fact that strategic decisions are influenced by the environmental conditions.The product development needs a new vision, a new approach and a new strategy. Till now the public sector insurance organisations have made possible an optimum utilisation of their marketing resources especially in rural areas where tremendous opportunities are available. Thus they should assign due weightage to the development services /schemes which cater to changing needs and requirements of the rural segment.In the development of product, the corporate investments need due priority.Channelising the corporate investments influences the rate of profitability of insurance companies and also contributes considerably to the socio-economic transformation process.

Thus the product planning and development should:Give due weightage to the socially and economically backward classesMaximise the mobilisation of savings by offering lucrative schemes.Assign due weightage to interests of investors.Maintain economy in business by promoting cost effectiveness.Act as a trustee of policyholders.Keep in mind the emerging trends in business environment.Improve the quality of customer / user services.

PROMOTION MIX

With the advent of private players in the insurance, companies resort to rampant promotion. Promotion mix for this sector is as follows:

AdvertisementAdvertisement can be done through the telecast media, broadcast media and print media. Insurance companies have been making optimal use of all the three kinds. Use of World Wide Web, as media is almost negligible and will not be very frequent in the near future considering the fact that the majority of customer base of these companies is not yet exposed to the Internet. The telecast media has been the most effective of all in case of the insurance sector. Most of the companies have their separate advertising section to take care of this aspect. An important consideration while making the decision as to the selection of the media is budgetary constraint. Since the insurance companies work on a large scale, usually this constraint does not stand as an obstacle.

PublicityIt is a device to promote business without making any payment and therefore it could be also called as unpaid form of persuasive communication bearing a high rate of sensitivity. Developing rapport with the media is an important aspect of publicity. This makes it essential that the PR officers working in the insurance organisations maintain contacts with the media personnel, organise press conference, and offer small gifts and momento to them. These days LGD marketing is gaining popularity the world over. It also can be applicable here. At the apex and regional levels, the PRO’s bear the responsibility of projecting positive image of the organisation. Thus it is necessary to select suitable personnel for this. They should be in particular taught to deal with people, simple things like talking, greeting etc.

Sales PromotionIncentives to the end users for taking the policy play an important role in promoting the insurance business. Since the insurance business is also related to achieving of a particular target, it is pertinent that the policymakers assign due weightage to the same. The offering of small gifts during a particular period, the rebate, discount, bonus can increase business of organisation by leaps and bounds. Besides, there can be gifts for the insurance agents also.

Personal SellingPersonal selling in case of the insurance organisations is quite important considering the existence of the insurance agents spread at all levels. Selection of these agents, their training is responsibility of the organisation. There is difference in urban and rural market. Rural customers might be uneducated / uninformed etc. compared to the urban customer. Hence the organisations will have to make selections of the rural and urban agents accordingly.

Word of Mouth Promoting.The word – of- mouth communications result into wider publicity, which substantially sensitise the process of influencing the impulse of users/prospects of the insurance services. The satisfied group of customers, opinion leaders, the social reformists, the popular personalities act as word of mouth communicators. The advertisement slogans may be insensitive, the publicity measures may be ineffective but the positive feelings of friends and relations communicated cannot be ineffective. This makes it clear that the most important thing in the promotion of any business is the quality of services.

TelemarketingWith the development of satellite communication facilities and with the expansion of the television network, we find telemarketing gaining popularity the world over. The insurance organisations in general need to promote telemarketing. The foreign insurance companies have been assigning due weightage to this and in India this is beginning to gain importance with the advent of competition in this sector. The telemarketer is supposed to be well aware of the telephonic code so that the task of satisfying the customers/their queries will not consume much of time.

World Wide WebIn banking as well as insurance, more and more importance is being given to online contact facilities whereby complaints/comments could be sent through an email. Email is fastest written mode of communication and since it has been recognized legally, its use to clear doubts has been in full swing.

PRICE MIX

In the insurance business, the pricing decisions are concerned with the premium charged against the policies interest charged for defaulting the payment of premiums & credit facilities, commission charged for underwriting & consultancy services. The formulation of pricing strategies becomes significant with the viewpoint of influencing the target market or prospects. To be more specific in the Indian context where the disposable income in the hands of prospects is found low, the increasing inflationary pressure has been instrumental in contracting the discretionary income, the increasing consumerism has been making an assault on the saving potentials of masses, it is pertinent that the insurance organizations in general & public sector insurance organizations in particular adopt such a strategy for pricing that makes it a motivational tool & paves the ways for increasing the insurance business. Of course, a motivational pricing strategy is required to be given due weightage. This necessitates a new vision for setting premium structure & paying the bonus & charging the interest.

The strategy may have a new vision in the sense that the insurance organizations prefer to make a mix of high & low pricing strategy. The motive is to make the premium structure commercially viable so that the insurance organisations succeed in having a sound product portfolio besides fuelling development orientation. The pricing decisions make it essential that the insurers keep in their minds the nature of policy vis-à-vis the segment to which the prospects belong.

In the tangible products, cost of production is taken as the basis for fixation of prices. Even in the insurance business, it is found to be an important consideration & a dominating base. This makes the cost of insurance a decisive factor for charging premium. The important bases for determining the cost are rate of death, rate of interest & the expenses incurred on the insurance business. The mortality table helps the determination of death rate. It is to predict future mortality. The best method of construction of mortality table is to select a large number of persons at attained age, which is meant age close to the birth rate. The second important element is the rate of interest. On the basis of mortality rate, it is estimated that when & how much amount is to be received as premium & would be paid as claims but on the basis of interest rate, it is estimated that how much interest can be earned by investing the insurance funds. The last element is cost which focuses on different types of expenses. There are certain expenses, which incurred at the time of inception of the policy. This necessitates determination of the nature of expenses. The determination of expenses according to occurrence & equal distribution of the expenses every year for equitable distribution of loading are found significant to make possible a sound management of expenses.

The process of rate of fixation in the insurance organizations is not so scientific & identifies the cases of moral hazard. It is easier to identify the physical hazard but the task of identifying the moral hazard is found difficult. The premium charged is to be made rational to cater to the payment of claims on a priority basis including the catastrophic losses, management expenses & margin of profit. It is essential that various related to both the hazards are estimated in a scientific way. The actual process of rating consists of three steps, e.g. classification, discrimination & scheduling.

The price mix decisions are:

Making possible cost of effectivenessRestructuring of premiumDue priority to profit generating investments.Rationalizing or optimizing the social costsPaving avenues for channelising the productive investmentsAssigning dude weightage to the policies meant for the socially & economically backward classesMaking the ways for maximizing profit

PLACE

The first component of the marketing mix is related to the place decisions in which our focus would be on the two important facets – managing the insurance personnel and locating a branch. The management of agents and insurance personnel is found significant with the viewpoint of maintaining the norms for offering the services. This is also to process the services to the end user in such a way that a gap between the services-

promised and services – offered is bridged over. In a majority of the service generating organizations, such a gap is found existent which has been instrumental in aggravating the image problem. The policy makers make provisions; the senior executives specify the standards and quality and the branch managers with the cooperation of the front-line staff and others bear the responsibility of making available the promised services to the end users. The public sector insurance organizations have failed in both the areas. The agents, rural career agents, the front-line staff and even a majority of the branch managers have become a party gap.

The transformation of potential policyholders to the actual policyholders is a difficult task that depends upon the professional excellence of the personnel. The agents and the rural career agents acting as a link lack professionalism. The front-line staff and the branch managers are found not assigning due weightage to the degeneration process. The insurance personnel if not managed properly would make all efforts insensitive. Even if the policy makers make provision for the quality upgradation, the promised services hardly reach to the end users. This makes it significant that the insurance organizations in general and the public sector insurance organizations in particular keep their minds in changing the expectations of customers and the prospects. The behavioral profile of insurance personnel is studied in a right fashion and the changes required due to the changing perception of expectation are incorporated. It is essential that they have rural orientation and are well aware of the lifestyles of the prospects or users. They are required to be given adequate incentives to show their excellence. While recruiting agents, the branch managers need to prefer local persons and by conducting refresher courses to brush up their faculties to know the art of influencing the users/prospects. In addition to the agents, the front-line staff also needs an intensive training programme. This makes it essential that the branch managers organize an ongoing training programme, which focuses on behavioral management.

Another important dimension to the Place Mix is related to the location of the insurance branches. While locating branches, the branch manager needs to consider a number of factors, such as smooth accessibility, availability of infrastructural facilities and the management of branch offices

and premises. In addition it is also significant that the branch managers assign due weightage to the safety provisions. The management of offices makes it significant that the branch mangers are particular to the office furnishing, civic amenities and facilities, parking facilities and interior office decoration.

Thus the place management of insurance branch offices needs a new vision, distinct approach and an innovative style. This is essential to make the work place conducive, attractive and proactive to the generation of efficiency. The motives are to offer the promised services to thee end users without any distortion and making the branch offices a point of attraction. The branch managers need professional excellence to make place decisions productive.

PEOPLE

People are most important component of marketing mix for the insurance industry. Sophistication in the process of technological advances makes the ways for the personnel in such a way that an organization succeeds in making possible a productive utilization of technologies used or likely to be used. Professional qualification requirements change as technological develops & evolves. The use of computers microcomputers, fax machines, sophisticated telephonic service, e-mailing, intra-net service have been found throwing a big impact on the perception of quality of service. This makes it essential that the insurance organizations also think in favour of developing personnel in line with the development and use of information technologies.

The front-line-staff as well as the branch managers are required to be given the training facilities so that they in position to make possible an effective use of the technologies. The insurance organizations bear the responsibility of developing the credentials of their employees. In this context, it is also significant that they think about the behavioral profile of insurance personnel. It is pertinent that the employees are well aware of the behavioral management. They know & understand the changing level of expectations of users & make sincere efforts to fulfill the same. In this context, it is also significant that the senior executive while recruiting, training & developing the insurance personnel make it sure that employees serving the organization have a high behavioral profile in which empathy has been given due place. The psychological attributes become significant with the viewpoint of influencing the prospects or retaining the users. It is in this context that the insurance companies need a rational plan for the development of insurance personnel.

PHYSICAL EVIDENCE

Physical evidence includes facility design, equipment, signage, employee dress, tangibles, reports & statements.

Signage:Signage personifies the insurance company. It gives an identity by which users recognize the company. A signage depicts the company’s philosophy & policy.