Services Marketing Chapter 1st

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Syllabus

Concept and development of service marketing

Differences in goods versus services marketing

Challenges for services marketingThe service marketing triangle

Service marketing Mix

Chapter 1


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Concept of Services marketing

Definitions :

American Marketing Association : Services are activities,benefits,satisfactions

which are offered for sale or provided in connection with sale of goods.

William J. Stanton : Services are separately idenfifiable,intangible activities whichprovide want, satisfaction when marketed to consumers and/ or industrial users

and which are not necessarily tied to sale of product or another service.

Philip Kotler : Service is any act or performance that one party can offer to another

that is essentially intangible and does not result in the ownership of anything. Itsproduction may or may not be tied to a physical product.

Services are economic activities offered by one party to another. Often time-

based,performances bring about desired results to recipeients,objects or other

assest for which purchasers have responsibility.


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In exchange for money,time,and effort, service customers expect value from access

to goods,labor,professional skills,facilities,networks,and systems, but they do not

normally take ownership of any of the physical elements involved.

What constitutes the service sector?

- Pure stand alone services like physiotherapy,counselling and consultancy

- A combination of service and goods like restaurants, retailing etc.

- Service as a component of goods in the total marketing-mix, like after sales

service, service and repair of home appliances etc.

Thus, service is distinct from yet also simultaneously a part of - the products

marketing mix.


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DEVELOPMENT OF SERVICE MARKETING

Human civilization closely relates with all the developments recently seen

in service marketing sectors.

Production of surplus quantity of goods has given birth to the concept of

exchange.

Service has emerged to recent definition through various changes.

It just was the concept of religion which after 1960 A.D. get changed to the

concept of social organization and volunteering.

Finally during 90s the concept developed and the service rendering firms

were defined as the associations with solutions to customers problems.

And in recent scenarios the service market is

found generally connected with the Knowledge

Company (companies working in the field of IT)


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DEVELOPMENT OF SERVICE MARKETING

Self sufficient economy- service was limited within family and community,but it has no economic value.

Barter economy- service was related to exchange of goods.

Production oriented economy- service was availability of goods.

Production oriented economy- durability of good was key issue.

Marketing concept.

Societal marketing concept.

Service marketing.

Holistic marketing concept.


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Reasons for Development of Service sector

Change in the family system

Change in the life system, philosophy of life,vision

Economic properity

Concept of service,leisure,pleasure changed

Urbanization

New business organizations

Awareness of people,educated people

Change in marketing concept

Create demand then satisfy It became part of every business.

Importance of personalized service.


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Nature / Characteristics of Service Product

1. Intangibility

2. Variability

3. Perishability

4. Inseparability

5. Simultaneity


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Service marketing triangle

Like manufacturing industries

Services industries are also bound to

apply several strategies to gain

competitive advantages in the market.

They often practice their strategies

via slogan like Royal bank of Scotland

(one of the largest bank of the world)promises to make it happen

to its customers. DHL offers on-time

delivery, Apollo hospitals aim

at touching lives

and Ncell- for nepal. Services marketing triangle is also strategies :

Internal Marketing

External Marketing

Interactive Marketing

Assignment !!

Make the list of 20 big companies

punchline.

Firm

Employees Customers

Internal

Mkt.

Interactive

Mkt.

External

mkt.


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EXTERNAL marketing ( makingthe promise)covers all the series

of marketing activities that are carrieddown to communicate targetcustomers of the market. This involvessetting the companys promise ofvalue and satisfaction to thecustomers.

The promises would becommunicated through promotionalcampaigns through Newspapers,Multimedia and improving the qualityof service, providing better serviceand meeting customers expectationultimately satisfies the customers. This

all goes with externalMarketing which often been pursued

by Service providers.


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Internal Marketing(Enablingthe service)

menas that the service firm must be

centered and motivate and contact

employees and support people to work

as a team toprovide customers satisfaction.

Marketers must get everyone in the

organization to be customer centered.

Most of airlines, hotels they give theirbest attention to prepare their human

resources so that their internal

marketing would be flawless.


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Interactive Marketing :(Delivering the service)

It says service quality depends

heavilyon the quality of the buyer-sellerinteraction

during the service encounter. Inproduct

marketing, product quality oftendepends little onhow the product is obtained. But in

services

marketing, service quality dependson both the service provider and the

quality of the delivery. Servicesmarketers , therefore have tomastered in interactive marketingskills.

Interactive here does mean the skillsof the service provider and his

ability of quality service.


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Challenges for Services marketing- To know the needs and expectations of modern customers.

- Designing and testing of services

- To maintain same image of service which is consistent

- Service delivery while fluctuating demand

- To evoke and inspire or say motivate service employees.

- Fixing the service price

- To maintain balance between standardization and personalization

- Saving to be copied new service concept

- To communicate exact value and quality of the service to the targeted customers.

- Keeping quality of service consistent


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Service marketing V/s Goods marketing

Service marketing is to manage, develop, promoteand exchanged service to attain organizational

goal. It is to plan, develop and provide service to

the customers to satisfy their need to attain

organizational goal.

Services marketing is marketing based on

relationship and value. It may be used

to market a service or a product.


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Whereas Product marketing concerns withexecuting conception, distribution, promotion,

pricing of goods to satisfy needs of customersalong with creating value to customers andcapture value from customers for organizationas profit and revenue.

Product marketing deals with the first of the"4P"'s of marketing, which are Product,Pricing, Place, and Promotion.


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When you are marketing a service, you are reallymarketing relationship and value. This relationship and

value needs to be marketed differently than if you aremarketing actual products.

Another major difference between marketing services

and marketing products is that when a buyer purchasesa service, the buyer is purchasing something that isintangible, instead of a tangible product, like acomputer or a sprinkler system or a web page.


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It is pretty easy to compare the quality of

different products. It's easy for you to see if onecomputer works more quickly than another

computer, or if one TV has a better picture than

another picture, or if your child can break a toymore easily than another toy. However, it is

much more difficult to compare the quality of

similar services that are provided.


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Products are returnable. However, services are notreturnable. How to market services. Generallyspeaking, marketing a product requires what areknown as the "4 P's": Product, Price, Place, andPromotion. Marketing a service adds three more "P's"to the traditional "4 P's": People, Physical evidence,and Process. Service marketing also includes marketingwhat is known as the service scape, which is the

aesthetics of your business place: the outside of yourbusiness building, the inside of your business building,and the way that the employees look.


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The ownership is not transferred in Servicemarketing.

Ownership is transferred in product marketing when

a purchase is made.

It is not possible to produce, transport and sale inshop so service marketing needs to develop point ofsale. Such as reservation system, service order etc.

However it can be done on product marketing.


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Service marketing compulsorily needs to managetangible evidence, service environment, service

employee personality etc for value creation. But

in product marketing, product itself represents itvalue and quality.

It is difficult to maintain standardization on service

delivering in service marketing. There is

variability in service delivered by a same service

provider at a same time. Whereas it can be done

on product marketing by standardized products.


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Service management significantly considers timemanagement. Since, service is produced for ontime consumption though it is not stored andconsumed later after purchasing. Product doesntneed necessarily consumption at the time ofpurchasing and production.

Benchmarking is difficult in service marketingthan product marketing.


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The role of Human resource

management is crucially considered

in service marketing than productmarketing as service quality and

value depends up personality,

quality of service provider.

In service marketing bad service

cant be replaced which affects

adversely in good will of firm inlong term whereas products can be

replaced to rectify the errors.

Documents

Services Marketing Chapter 1st