Service Marketing

Services
The American Marketing Association defines services as Activities, benefits and satisfactions which are offered for sale or are provided in connection with the sale of goods.. Services marketing is marketing based on relationship and value. Marketing a service-bases business is different from marketing a productbase business. There are several major differences, including: The buyer purchases an intangible. The service may be based on the reputation of a single person. It's more difficult to compare the quality of similar services The buyer cannot return the service When one markets a service business, one must keep in mind that reputation, value, delivery of service and follow-through are keys to a successful venture.

Service is defined as a social act which takes place in direct contact between the customer and representatives of the service company. Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. (Kotler) All those economic activities that are intangible and imply interaction to be realised between service provider and consumer. Van Looy

Types of services
Transportation Public utility services Communication Trading services Financial Services

Real estate Services

Marketing Related services Government provided services Engineering services Entertainment Services Business and Professional Services Hospitality Services

Nature of Services
Simultaneous production and consumption of services. Customer are the part of the process. Word of mouth publicity of services. Donald Cowell says goods are produced, sold and then consumed, where as the services are sold & then produced and consumed

Characteristics of service Marketing

There are four Distinctive characteristics of service which create special marketing challengers and opportunities. These referred as 4Is of

Intangibility Inconsistency Inseparability Inventory

Feature

Marketing Problem Present Can not be easily displayed Cannot be patented Provide tangible clues

Marketing Strategy

Stimulate word of mouth Use personal source Used post purchase communications

Intangibility

Standardization hard to achieve

Inconsistency

Stress standardization and performance. Focus on employee training programs

Hard to set quality control

Can only predict quality Harder to mass produce product

Inseparability less

Consider licensing and other forms of credential requirements Need strong training programs, incentives

efficient than goods production Focus on personal attention

Consumer must be present

Inventory

Value can be short lived Time period is limited Can not be inventoried

Focus on convenience, Saving time , fast service Extended Hours focus on competence and expertise

Manage capacity to balance supply and demand.

8 To 8 banking

Weekdays Offer

Different Ticket Fares

Types of Services Production

Service Production
Isolated Production (Tele banking, Films distribution)

Co-production

Self Service (ATM, Cold drink vending Machines )

(Dental Services)

Classification of Services
a. By Market Segment
Final Consumer Organizational Consumer

Coaching, Taxi, Car Wash Life insurance.

By Market Segment

Management Consulting, Machinery repair, Accounting services.

b. By degree of Tangibility

By degree of Tangibility Rental Goods

Car rental, Hotel Room rental

Owned Goods
Television Repair, Plumbing Repair

Non-Goods
College education, Legal Services

c. By skill of the service provider

Professional By skill of the service provider

Legal Services, Medical Services, Accounting services Taxi Services, Security services.

Nonprofessional

d. By Goals of the service provider

Profit making By Goals of the service provider

Insurance firms, Airlines

Non-Profit Making

Indian Postage services, University, Libraries

e. By degree of Regulation

By degree of Regulation Highly Regulated

Hospitals, Insurance, Banking

Limited Regulated
Catering, Fast food

Non Regulated
Housing Painting, Housing Keeping

f. Degree of Labour Intensiveness

Degree of Labour Intensiveness

Equipment based Services Operated by relative unskilled operated Operated by skilled operators

People based services Skill Labour

Automated

Unskilled Labour

Professionals

Vending Machines

Dry Cleaning, Airlines Taxis

Plumbing repair, Gurds, Lawyers, Appliance Repair House keeping Accountants

g. By Degree of Customer Contacts

High Contact By Degree of Customer Contacts Low Contact

Universities, Hotel

Automatic car wash, Janitorial services

Goods Service Continuum

Today, no tangible goods is offered to a customer with out some associated services. No service is marketed without some physical good associated with production or delivery of that services.

Pure goods

Goods Related

Service Related

Pure Services Banking Legal Services, Hairstyling

Television Lipstick Oven, Car

Pizza Food Service Financing-Car Bus transportation Warranty-Fan Equipment- leasing Service contractComputer

Maslows Hierarchy of Need

Hierarchy of Needs
Self-actualisation

Human Need
Becoming what one is capable of becoming Self esteem and esteem for others

Analogues Customer Need

Customer relationship is as a true partnership in the long term Supplier grand's prestige and status. And also offer innovative services, at his her risk to provide value to customer .

Esteem

Belongingness

Affection, acceptance and friendliness

Openness, accessibility, relationship oriented, feasibility, service attitude

Timely performance, accurate, competitive, guaranteed, correct pricing. Customer needs a core product or service which works.

Safety

Security & Safety freedom from Physical harm, uncertainty of the future Hunger, thirst, Air

Physiological need

Psychological Factors
Learning
Changing ones behavior on the basis of past experience. The learning theory is the result of four influences Drive Cues Drive Consumer possesses a drive to Response return on investment Reinforcement Cues Cues help to determine when where and will be done. A friend recommended to buy a particular stock.

Response
Reinforcement

The consumer respond to recommendation.

The rewards in terms of interest earned if gratifying the reinforcement occurs

Beliefs and Attitude

Beliefs
Beliefs is a specific deeply held conviction.

Attitude
An attitude is a hypothetical construct that represents an individual's degree of like or dislike for an item. Attitudes are generally positive or negative views of a person, place, thing, or event-- this is often referred to as the attitude object

Personal Factors Age and Family Cycle

Stages of Family cycle Young and single Full nest: youngest child under six Full nest : older couples with dependent children Empty nest: older couples, no children at home.

Economic Circumstances Occupation Personality and self- concept

Personality can be defined as the aggregation of an individuals traits or characteristics that make him or her unique

Consumer Buying Process

Generic Consumer buyer Behavior Process Awareness Search for Comprehension Attitude development Evaluation of Alternatives

Purchase
Consumption

Post purchase

Organizational Buying Behavior Process

Need Identification Define objective and specification

Identify Alternatives Evaluation Alternatives Select Supplier

Market Segmentation
Market segmentation is the process of dividing the total market for product into several smaller group. Market segmentation as an element of marketing strategy, recognizes the wisdom of specialization to suit the needs of a segment of the market rather than trying to be all things to all people.

Segmentation Strategies
Some principal segmentation alternatives are.

Geographic Segmentation Demographic Segmentation Psychological Segmentation Volume segmentation Benefit Segmentation

Geographic Segmentation
Geographic segmentation divides consumer on the basis of countries, regions, states, cities and towns. A firm may decide to market products or services in certain areas and not in other.

Ex. Bank locate their branches where they are able to meet their business goals.

Demographic Segmentation
Demography is the study of people in the aggregate, including population size age, sex, income, occupation and family life cycle.

Ex. Extensively used in Banking and

tourism industry.

Stages of Likely preferences and Family cycle need at attraction

Child New experiences. Other children to play with paternal guidance and support. New experiences. Excitement, Status, more independence from parents. Other teenagers active participation New experiences, freedom of action. New experiences. Romance. Solitude.

Teenager Young Adult Young Couple

Facilities for babies. Young Couple withConvenience for people with baby babies. Economy- family ticket for Growing family example for all the family. Chance to learn something, Empty nesters more passive participation. Elderly Watching rather than doing.

Psychographic Segmentation
Psychographic segments is the process of dividing markets in to segments on the bases of consumer style , social class or personality profile.

Ex. Bank might identity the young professional on the fast track as
the prime market for credit cards sales.

Life style Social Class Personality

Life Style
The people are grouped according to their life style. This segment is based on the peoples activity, interest and opinions

Type
Gregarious Hedonist

Life style
Self indulgent, spend on new product.

Contemporary Housewife
The affinent Sophisticate Tight- fisted traditionalist Troubled Homebaby Anxious rebel Archetype provider Contented Conservative Mrs. Up to date

Aspires of modernity but still uses fairness cream

Have money, will spend. Leads a sheltered life, dresses life the film stars Believes in destiny Would much rather work than stay at home Satisfied being a housewife-very hospitable. Believe in destiny Tries new product, is trendy

Mrs. Non-sense

Individualistic, conservative, self centre.

Path finder India Ltd

Social Class
Social Class is the status hierarchy by which groups and individuals are classified on the basis of esteem and prestige.

Ex. Mobile Phone services

Personality
Personality is the sum total of an individuals enduring internal psychological traits that make the person unique.

Key personality traits

Self confidence Dominance Autonomy Sociability Defensiveness Adaptability Emotional stability

Volume Segmentation
Marketers make an attempt to segment consumers on the bases of volume used is known as volume segment Heavy Usage Medium Usage Light Usage Non users.

Benefit segmentation
Benefit segmentation is the process of grouping consumers in to market segment on the basis on different benefit sought from the product.

What inspire you a service product?

Influence of promotion campaign. Assessment of service offered. Willingness to pay for the service. How easy it would be to buy it.

Marketing Mix in Service Marketing

What is Marketing Mix

The specific combination of elements used to achieve an organization's /Individual objectives and satisfy the target market .

Product Price

Place
Promotion People Physical Evidence Process

Extended Marketing Mix

People

Physical Evidence
Process
These additional Ps are added specifically to help service managers to deal with 4Is of service.

Intangibility Inventory Inconsistency Inseparability

Product
Product is bundle of attributes capable of exchange or use, usually a mix of tangible and intangible form. It may be an idea, physical entity, or a service or combination of all three.

Level of Services
Level 1 Core Service Level 2 Expected Service Level 3 Augmented Service

Level 4 Potential Service

Quality
A reputation of good quality is a major advantage because perception of risk for many service consumers is very high. The good quality bridge the gap between pre-use perception and post-use experience of the service consumed

Five stars of service quality are:

Reliability Assurance Tangibles

Empathy
Responsiveness

Two Dimensions of Quality Technical Quality

Relates to the quantifiable aspect of service that is what is being done. This aspects can be measured.

Functional Quality
Relates to how technical quality is delivered to the consumers. This aspects cannot be as accurately measured as technical quality quality.

Product Attributed Approach

Starts with the Company

Company describes what the product represents Company develops product bases on its definitions Decreased like hood of satisfied customers Long term misleading of market place.

Customer oriented approach

Starts with the consumer Consumer describes what a product represents Company develop product based on consumer definition Increased like hood of satisfying customers Long term competitive edged in the market place.

Product item
Product item is a specific model, brand or size of product a company sells such as a college course on business management, one year compulsory deposit in a bank.

Product line
A product line is a group is group of closed related products offered by an organization for example Product line of Bank Loans , Saving A/Cs, FD, D mat A/Cs etc.

Product Mix
It consists of all the individual products available by an organization to the market. Product mix has several product lines and each product line has several products, models, Styles, Sizes. Width

No. of different product lines a company is offering.

Depth It refers to the Product line depth.

Brand
Service customers do not switch brands frequently as compared to product service customer aim to achieve zero defection by providing practicing services. Services can not be standardized like product. Firm can achieve zero defection. Focus on what competitors lacking on. Marketers provide facilities to customers to switch.

Band Name
A well known brand name provides improved image and adds value to the services.

Brand loyalty
Brand Loyalty is a scenario where the consumer fears purchasing and consuming product from another brand which he does not trust.

Brand loyalty is the extent to which a consumer constantly buys the same brand within a product category.

Brand loyalty exists when the consumer feels that the brand consists of right product characteristics and quality at right price. Even if the other brands are available at cheaper price or superior quality, the brand loyal consumer will stick to his brand.

Branding of Services
Service branding is difficult, it calls for maintenance of consistent quality.

Some tact's for branding

BY slogan

By Logo

By colour

Place
The distribution system may be defined as the channels, or means used by which services provider gains access to potential buyers of the service products.

Need of the market: Poor location leads to postponement or delay in

service operation or the customers will look for service at arms length.

Technological Innovation: Use technology in distribution provides

competitive edge.

Convenience: Providing service at arms length. Situations

Customer Service provider Service Provider Customer

Arms length transactions

Accessibility to range and choice of service literature and brochures. Accessibility to components such as visas, traveler cheques, insurance and cards. Accessibility to booking points in every main town and cities. Accessibility to the alternative brands Accessibility to alternative agents.

People participating in distribution process are known as channels of distribution process are known as channel of distribution.

Intensive Distribution Selective distribution Exclusive distribution

Major Intermediaries
Franchising. Electronic Channels. Distribution through agents and brokers.

Characteristics Objectives

Intensive Distribution Volume sales Corresponding profit Wide coverage market

Selective Best Image Good profit Margins Reasonable channel control

Exclusive Exclusive Image High profit margins price stability and loyalty

Intermediaries Services

All types of firms Many no. of outlets

Organizational Consumer All types of consumers Final consumes Mass Marketing Continuous communication for superior Quality Limited channel control

Well establish firms Moderate number of outlets

Well establish firms few outlets

Customers

Brand Conscious Brand loyal Moderate number of Few customers customers final customers Final Consumers Promotion Mix Pleasant Ambience Good service Final consumers Personal selling Pleasant ambience Good services Continuous communication superior services Limited sales

Marketing focus

Disadvantages

Difficult to carve out a niche

Promotion
Promotion is a descriptive term for the mix of communication activities which services organization carry out in order to influence those publics on whom their sales depend.

Promotion Mix
Advertisement Personal Selling Sales Promotion Publicity Public Relations Word of mouth Direct Mail Tele-marketing E-marketing.

Why Promotion?
Promotion is used in hope to influence the recipients feeling beliefs or behavior through any form of communication.

Target market groups Trade contract Opinion formers Consumer advocacy group Government Local, national and international Politicians. Channel Members Employees Other professional bodies associations who are related to the specific areas influence policy making. Stock holders General Public Competitors.

Promotion add value

It creates Image and prestige It reduces the perceived risk. It add direct promotion value It reassures.

Process of Integration of Communication Mix to promotion and communication plan

Identification of target audience

Determination and setting objectives

Message development for right communication effects

Selection of the communication mix.

Selection of the communication mix.

There should the perfect blend of promotion mix and marketing strategy of the firm. Each situation should we examined. Following

criteria should be considered.

Overall marketing objective Nature of the service Characteristic of the target consumer. Nature and attitudes of intermediaries. Activities of competitors, Cost effectiveness Integration with other marketing elements. Management Issues Legal and ethical considerations.

Guidelines of a Service Communication

Provide tangible Clues. Make the service understood Communication continuity.

Promising what is possible.

Capitalizing on word of mouth. Direct communication to employees.

Communication Mix
Advertising Is any paid form of non-personal
communication through the media about a product/service that has a identified sponsor.

Approaches of service ad
Provide tangible clues Make service appear more tangible by personalizing it. Focus on Benefits Build Image.

Objectives of an Advertisement
Changing Attitude. Building Image. Achieving Sales.

Types of objectives
Demand Oriented Information

Illustration
To create brand awareness of a product/service To acquaint customers with new service/products/business To reduce the time it takes sales people to answer basic questions To gain brand preference To increase traffic To achieve brand loyalty To stabilize sales To maintain brand loyalty To sustain brand recognition and image

Persuasion

Image Oriented Industry To develop and maintain a favorable industry image. To generate Primary demand To develop and maintain a favorable company image. To generate demand.

Company

The maximum Impact of the advertisement can be obtained by using RUB FORMULA

Repetitive: Repetition is reputation

U B

Uniform: the Ad should be consistent

Basic : The ad should be clear, uniform, Easy, flippant ad do not endure

Choosing Advertising Media

Waste Cost Reach Regularity Permanence

Persuasive
Clutter

Lead Time.

Media Types
Press and Newspapers Magazines Television

Cable TV
Out door Cinema Exhibitions Direct Mail Telemarketing Flyers Internet.

Sales Promotions
Sales promotion involves paid marketing communication activities (other than advertising, publicity or personal selling) that are intended to stimulate consumer purchase and dealer effectiveness.

Sales Promotion Methods directed at channel Partners.

Trade Shows/ Meetings Training Special Offers/trade discounts Point of purchase display. Push Money Sales Contests Free Merchandise Demo Models Gifts .

Sales Promotion Methods directed at Business Users/ Consumers. Samples Contests Coupons Rebates/Refunds Bonus Packs/Multi Packs

Gifts.

Personal Selling
Personal Selling involves oral communication with one or more prospective buyers by paid representatives for the purpose of making sales.

Objective of Personal Selling.

Demand Oriented objective Information (Attributes, queries handling ) Persuasion (Convert suspect in to prospect, outsmart competition, cross selling.) Reminding. ( Post purchase service, Repeat Buying, product delivery)

Image oriented. ( to be respected by the Employees, Customers)

Public Relations
Public Relations concern are the efforts of a service firm to win the esteem of its publics: Media, Security analysts, stock holders, employees, customers and society at large.

Physical Evidence
Physical Evidence is defined as the environment in which the service is delivered and where the firm and the customers interact; and any tangible commodities that facilitate performance or communicate the service.

What is Physical Evidence?

The general elements of physical evidence include.

1. Exterior Facilities 2. Interior Facilities 3. Other tangibles

Elements of Physical Evidence

Organization Physical Facilities Facility Exterior Exterior Design Parking Land Scape Surrounding Environment Business Cards Stationery Billing Statements Reports Employee dress Uniforms Brochures Other tangibles

Facility Interior Interior design Equipments Layout Air quality/temperature

Process
Process is the way of undertaking transaction, supplying, information & providing services on a way which is acceptable to the consumer and effective to the organization.

Blue Print
Service blue print is a visual portrayal of a service plan.

Preparation of Blue print

Represent the (service) product in the form of its molecular structure. Break down the process logical steps. Recognize the variability in the process. (Ask customer for product requirements, Hair Cut, Ask customer for product requirements. )

Identify the backstage elements in the process.

Molecular Structure
Hair-Cutting Skills

Mens hair care, Shaving, & other goods

Hair Styling Skills

Shop

Equipments, e.g. Scissors, razor, trimmers

One-Man Gents Barber

Ambience

Tangible Intangibles

Advice and Consultancy

HairCutting Skills

Multi-Staffed unisex Hairdresser

Health and beauty Sids

Hair Styling Skills

Saloon

Equipments e.g . Driers

Manicure Skills

Molecular Structure
Ambience

Tangible Intangibles

Service Mapping
Service Mapping is a technique which is used to portray an existing service situation and provides a useful tool to assess and identify service evidence opportunities.

Line of interaction
Line of interactions provides distinction between customers and front line staff parts in the service encounter.

Line of Visibility The line visibility distinguishes the front office and the back office.

Line of internal interaction Line of internal interaction divides the front line employees and the operation support staff

Advantages of Blue Print

Provides an overview

Identifies fail points

Improved service design Rational service design Continuous quality improvement Provide integrated view of service Identifies resources. Constitutes a rational basis for both external and internal marketing.

Facilitates top down and bottom up approach to quality improvement.

People

Employee
A customer perceive the quality of the service from the appearance, interpersonal behavior, attitude of contact personnel, in fact the front line managers are the impression. Managers of the organization. Friendly and warm employees increase customer loyalty. A dissatisfied employee cannot deliver a satisfaction service.

The management in order to deliver satisfactory service develop jobs to satisfy the . individual needs of the employees and address the following issues.
Employees Recruitment Training Motivation Team Work Customers Education Training Communicating Culture and Value Employee Research

The Gap 3 of Gap Model of Service quality.

a) Deficiencies in human resources Policies Ineffective recruitment Role ambiguity and role conflict. Poor employee-technology job fit Inappropriate evaluation of compensation system. Lack of empowerment, perceived control and team work. b) Failure of match supply and demand Failure to level peak and valley of demand In appropriate customer mix. c) Customers not fulfilling roles Customer lacking knowledge of their roles and responsibilities. Customers negatively impact on each other.

Recruitment
. Recruitment refers to the process of attracting, screening, and selecting qualified people for a job at an organization or firm. For some components of the recruitment process, mid- and large-size organizations often retain professional recruiters or outsource some of the process to recruitment agencies.

Training And Development

Training is process of providing specific skills And development is process of providing attitude needed for success.

High Customer turn over

Low profit margins
High employee turnover poor quality

Repeat emphasis on attracting new customer

Low skills level jobs

Use of technology to control quality

Employee dissatisfaction Payments of low wages

Failure to develop customer loyalty

Employee become bored Minimization of training

Customer dissatisfaction

Minimization of selection efforts

Cycle of failure

No continuity in relationship with customers

Low customer turn over

High profit margins
High employee turnover poor quality

Repeat emphasis on customer loyalty

High skills level jobs Training and empowerment to control quality

Employee Satisfaction

Customer loyalty
Extensive training Intensified selection efforts

Above average wages

Customer Satisfaction

Cycle of success

Continuity in relationship with customers

Empowerment
Employee empowerment is a strategy and philosophy that enables employees to make decisions about their jobs. Employee empowerment helps employees own their work and take responsibility for their results. Employee empowerment helps employees serve customers at the level of the organization where the customer interface exists.

According to Bowen and Lawler Removing the barriers that prevent workers from exercising the creativity.
Suggestion Involvement Job Involvement High Involvement

Relationship Marketing
Relation ship marketing is a marketing with the conscious aim to develop and management long term and trusting relationship with customers, distributors, suppliers or other parties in the marketing environment.

Relationship Marketing defined

Relationship marketing: the process where by the seller and the buyer join in a strong personal, professional mutually profitable relationship over a time. Pathmarajah (1993)

5 Es of Relationship Marketing.
Effective Efficient

Enjoyable
Enthusiastic Ethical

Comparison of seller and buyer reactions when the sale is first made.

Seller

Buyer

Objective achieved Judgments postponed; applies test of time

Selling Stops
Focus goes elsewhere

Shopping continues
Focus on purchase; wants affirmation that expectations have been met.
Tension increased

Tension released

Relationship Reduced Commitment made; or ended relationship intensified.

Contracting transactional and Relationship marketing Transactional Marketing

Do the deal and Disappear Push Price Short-term thinking and acting Build the business on deals Getting new customers No structure for business Selling focused Short term empathy Incentive for doing the deal Foundation on selling

Relationship Marketing
Negotiate a win-win sale situation and stay around. Promote Price Long term thinking and acting Build the business on relationship Keeping all customers and client Structure created to support business. Relationship focused for result Long term empathy Incentive for long term relationship and revenue Foundation on revenue trust

Race for the sale result After sales support and services poor- seen as cost .
Product service focused Rewards- incentives for doing deals

Swift, strong, safe and enduring in result. After sale support and service seen investment.
People expectation and perception focused Rewards and incentives for maintaining relationship

The deal is the end. Pursuit of deal

Sale is beginning pursuit or long term

Application of Relationship marketing

Lost for good customer:
Customer makes a series of purchase over a time faces high cost in switching to the new supplier, and views the commitment o a particular supplier as relative permanent.

Always a share customer: Always a

share customer who purchase regularly, has little loyalty to a particular supplier and can switch easily from one supplier to another.

The

Most customer are of this category. Wide range of factors like, Product category, Pattern of product use. Customer and supplier relationship.

Intermediate

type.

Marketing Strategy Continuum

Relationship marketing displaced transactional marketing. The driving forces are
Better or more diverse technology Growing Customer satisfaction level Customer access to more options Competition

Strategies for Service Marketing.

Tangibilising the Intangibles

Service being intangible it is difficult for the prospective customers to evaluate it in advance as there are no features of service that demonstrate the existence of benefits. Therefore the benefit of the service can not be communicated or displayed directly.

Tangibilising through Visualization

Visualization plays a great role in presenting the tangible element of the service.

Tangibilising through Association

Associate the service with a tangible good, person, object or place.

By Physical Representation
Service when represented by some physical representation help in building trust of customer.

Cards

Menu Cards

Uniforms

By Documentation
The documentation is used by service providers to tangibles there intangibles. They cite facts and figures in their promotions to support the claim of their performance in terms of dependability reliability and responsiveness

Branding
Branding also adds tangibility to intangibles. Brands helps in differentiating the services from its competitors in term of name, logo and identifying features and forms an important component of communication mix.

Tangibilising through Selling Services

Many services are delivered in personal form so service provider using professionals of specialization rather than sales person. It is because personal contact may be seen as necessary to establish the credentials. In these situations the service professionals and the way they personally handle the sale may be seen by the customers as the best measure of the service being offered.

Tangibilising Services Through Benefit.

The AT & T, the citi bank and the Times Group are revolutionising the credit cards Industry by offering tangible benefit customers; discounts on long distance telephone calls, frequent flyer programmers

Tangibilising Through Positioning

The intangibility of services makes positioning decision difficult. Service positioning must rely on the performance attributes which can be measured only after a purchase. The ways to use positioning in services marketing are: Develop a tangible representation Membership card.

Associate the intangible object better understood by the customer.

Khushiyon ki home delivery Focus on the relationship between the company and the customer Relationship beyond Banking

Popularize the company name although the service vendor may have variety of offering. Ashok Elite Hotel Ashok Classic Hotel Ashok Comfort Hotel

Offer a tangible benefit on the purchase. Sun DTH

Establish unique product position.

Strategies for dealing with Inconsistency

For standardization of services generally two methods are used

Industrialize Services

Establish set rules and procedure.

Industrialize Services
For standardization of service, organizations do Industrialization of services delivery which lowers inefficiency and excessive variability

Hard technology means substituting people for machinery.

Soft technologies is a way to industrialize services by substituting

preplanned systems for individual services

Ex. many travel firms sell prepackaged vacations tours. This standardized transportation, accommodation food and sight seeing.

Hybrid technology is technique for industrialization services that combine

both hard and soft technologies.

Ex. Specialized low priced repair services.

Establish set rules and procedure.

The use of planned systems with specific set of rules and routines can be used to manage performance effectively in service delivery. Though perfect standardization is not possible but reliability to a reasonable extent is achieved. Ex. Limited menu restaurants like Pizza hut & McDonalds, Jambo king

Strategies for dealing with inseparability

The strategies to deal with inseparability should focus on gathering a positive services encounters so that consumers are assured t o good quality and strong relationship develops between employees and customers.

Build Membership Relationship Personalized the services Provides sensitivity training.

Build Membership Relationship

Customer dont buy product they buy relationship. Therefore service organization must develop relationship. Type of relationship between the service organization and customers Nature of Delivery Continuous Deliver Membership Relationship Insurance Telephone Subscription College enrollment Banking Automobile Long-distance Telephone call Theatre Series subscription Commuter ticket No formal Relationship Radio Station Police Protection Public Highway

Discrete transactions

Car rental Mail Service Public transportation Pay Phone

Membership Relationship
Membership relationship is a formal exchange relationship in which the consumers identity is known and in which a record of each customer transaction may be maintained.

Personalize the Service

Personalizing the service is developing a close business relationship in which the service provider becomes familiar with the needs of the individual customers.

Ex. Hairstylist .

Provide sensitivity training.

The service must be delivered at

Right Time Right Place Right Way

The way you interact with the customer reflect on the service delivery as an whole. Therefore the service organization should provide training that enable its staff to appreciate the impact their manner can have on customer satisfaction.

Strategies for dealing with Inventory.

Demand Management
In service industry the demand that can not be met is often lost business.

Unique features for planning and control

The out put can not be invented Extremely variable demand Operations are labour intensive. Location of service operations is dictated by the location users.

Problems resulting from a Non-inventoriable output. Strategies

Use Part time employees

Overtime
Reservation system

Problems resulting from the Demand variability

Strategies
Queuing Reservation system Personnel scheduling Careful control on price and promotion.

Problems resulting from the Lobour Intensiveness

Strategies
Industrializing their service production. Efficient use of personnel through scheduling.

Problems resulting from the System Location Strategies

Planed and control operations. Personnel scheduling

Demand Vs Capacity
Demand Exceeds Capacity (Lost is Business) Demand Exceeds optimum Capacity (Service quality Declines) Excess Capacity (Wasted resources)

Maximum available Capacity

Optimum Capacity utilizations (Demand supply well in balance)

Low utilization

Cycle 1

Time

Cycle 2

Variation in Demand Relative To Capacity

Capacity Constrains
To diverse the effective strategies for managing demand, understanding of capacity constraint is essential. Time Constraints Labour Constraints Equipments constraints Facilities Constraints.

Matching Capacity and Demand

Match Capacity by Shifting Demand

Service organization attempts to convince customers to shift from peck to slow demand period.

Using Marketing Mix to Match Capacity and Demand

By Service Variations. The nature off the service may be varied depending upon the demand pattern I.e. requirement of a service depending on season of the year, day of the week or time of the day.

By communicating with customers

Use communication to motivate customers to consume service during non peak period.

By Modify timing and location of service delivery.

Some service organization modify the time and place of delivery to meet the market need. Time sensitivity occurs when demand varies at different times and product is not storable

By adjusting Price

Adjusting Capacity to meet demand

There are four resources which need adjustment, during the peak and slow demand periods Time Staff Equipments Facilities

By Stretch the existing Capacity

Stretching capacity during peak period and shrink capacity during slow period to avoid wastage of resources. Ie time, staff, equipments, facilities.

By stretching Time Additional demand can be met by expanding the working hours.

By stretching Staff
Work longer hours during peak demand periods.

By stretching Equipments Expands equipments usage time.

By stretching Facilities Add more Facilities.

Services are people-oriented businesses. The customer interacts with providers at the moment of truth. Great service companies draw their success from two sources. First, they provide superior rational or utility satisfaction. The excellence based on superiority of structure and systems can bring a firm to a competitive threshold but cannot help it jump over it. It is emotional delivery or passionate performance that sets the service leaders apart. After studying this chapter, you should be able to: Appreciate the role played by vision and mission in creating energy and passion in people. Know different components of vision or mission. Appreciate how people with a sense of mission commit to a cause.

Business With Vision and Mission

The customer today is very different from her counterpart in the past. She is critical. She is discriminating. Marketers are intelligently discriminated from the ones that are mediocre and the ones that are excellent. It is no longer possible to survive with ordinary service. Ordinary service is a pass. The service standards have to be lifted to the level f extraordinary. The service must win tough hearts and souls. British Airways provides air transportation service to its customers, but so do others in the industry. Fed Ex transports and delivers small packets reliably overnight but so do others. The distinction of the past is shared by the rivals, and it happens faster than ever before. The service must cross over the rational threshold....

Mission and Services What significance does the presence of a mission hold for a service organization? Services differ from goods in so far as the value and value delivery are concerned. In goods, the values are embedded in a physical object, while in services, the values are embedded in the performer. This makes it necessary that provider and customer must come together and interact to create and consume value. Accordingly the value creation necessitates customerprovider interactions. It is this moment of truth when service encounters take place, opportunities exist to transform a passive and dull interaction into a spirited celebration. Service providers do not produce lifeless products. On the contrary, their roles involve interactions with live human beings capable of thinking and feeling. It is for this reason excellence in service operations is not all that is required to win a service war. This, however, does deliver victories in goods industries. Employee performance has become more important, because parity on the technical side of the operations is achieved faster by the rivals. It is in this context employee performance assumes great importance in building superiority in service performance. Customers in the air travel market may not find much difference in the connections, schedules, fares and reliability levels of major players, but they do feel differently about players in the industry. So is the case with participants in the hospitality sector. This feel of service that touches the heart of customers and positions the provider in good light is ....

Relationships and Services

People in goods systems direct their energies to physical objects. Services, on the other hand, involve human interactions. And this constitutes a critical difference between the two types of marketing. The management approaches like quality, effectiveness and control procedures often are transported from goods marketing to service environments without appraising the relationship differences between the producer and the produced and between the maker and the made. The relationship between the maker and the made, i.e. the inanimate object like a car or a carpet, is emotionless and impersonal. Consequently quality, efficiency and productivity become a number-centric game. In services, the relationship between the producers and the produced is different. It is formed of an intersection between human to human. And people cannot be treated in the same way as objects could be. Josephy Grenny8 argues that quality of service is inextricably linked to how employees see and feel about the people we serve. People in service organizations require strength of character to be able to see each individual as unique with his or her goals, need and concerns which are same as ours. The starting point for achieving quality in services is this vision and putting this value in action. People must imbibe the value to deal with other in the same way as they would like to be dealt with.

Mission and Vision: Some Examples

Most of the organizations bank upon employee behaviours to run the business. Employee behaviours are essential for organizational functioning at its basic level. But when behaviours match with the expected standards, the working is catapulted to a higher level. The strategy demands that employee behaviours must converge on to something demanded by the logic. Fusion between the strategy and values results in strong behaviours. Companies with strong cultures generally have well-defined and accepted values. These values set the standards for behaviours. Vision and mission statements are popular methods of making a statement of intention. They seek to convey the results expected and values that must form the basis of all behaviours. A study revealed that over 70 per cent of Indian companies use mission and vision statements to convey espoused values and aspirations.10 The following is a sample of these statements used by companies to signal the corporate identity.

Service Strategy Many times firms fall into the ape trap. The lure of quick success pulls companies to adopt strategies of successful companies that have made mark for themselves. This aping often takes place when a service company attempts to replicate the strategy that has worked for a good company. But this adoption is thwarted by the fact that what works in goods may not be workable in services. Similarly, the success model invented by a service firm gets copies across the board in the same industry by many others in the same industry. Again this intra-industry duplication creates bad copies of the original with marginal or little success. For instance, McDonald's success attracted many clones in the fast-food industry. But most of them have faded wi....

Integrative Elements
The strategy elements proposed hitherto do not appear to be any different from commonly stated strategy elements. These seem to be fundamental building blocks of a strategy. Any strategist planning for a service firm cannot do without planning for the target market, developing notions about the service concept, planning for operational strategies and design of delivery system. If this is so, then strategy formation using these elements is not likely to create any significantly different results. It is not a recipe for achieving extraordinary service success. The crucial distinction between the mediocre performers and breakthrough service firms lies in how these strategy elements are integrated. The strategy parts are bonded together by thr....

Developing Service Strategy Berry23 argues that service leadership requires a compelling service strategy. It provides blueprint to people on how to serve customers. Quite contrary to mission, statement service strategy is itself a mission which galvanizes people into achieving goal by providing direction. It defines the value that service provides to customers. Consider the following service firm and assess what value these provide to their customers: American Express Cards Subway restaurants Career Launcher Jet Airways IDBI Bank Big Bazaar ICICI Bank Saravana Bhavan (South Indian food chain) Gati (logistics company) State Bank of India Bharti Airtel

Big companies are not built on the power of advertising. Rather, success and bigness are the end result of the strategy that these employ which catapults them into high-performance brands. Success in the marketing context essentially implies strong performance on two counts: the customer value and differentiation. American Express cards deliver excellent card-related services along with premium exclusivity. It is the largest charge card issuer and also the largest traveller cheques issuer. At the core of its service are the privileges that customers become entitled to once they are arrived. The brand stands for outstanding service. Jet Airways emerged as the most preferred business people's airlines.

SUMMING UP Some of the companies stand out from the rest in their field of operations. In the services filed, the shining examples include Southwest Airline, McDonald's, Disney, Wal Mart and Nordstorm. What sets these companies apart from the pack is the service excellence. They are driven by a vivid definition of service concept and flawless execution. Service excellence is not merely an exercise in the development of competition beating strategy. It is much more. Strong service strategy is always rooted in a service vision. The service vision aims for much more than merely achieving excellent financial results for the business. Success lures everybody. But it is difficult to achieve, more so in business field. A cursory observation of any field of business activity would reveal the presence of two sets of firms. There are firms that are mediocre performers and then there are excellent performers. Creating excellence and sustaining it over a period of time is not easy. What sets apart a firm from being just a good player than the excellent ones is vision and strategy. Vision and a sense of mission can transform ordinary people working on ordinary job into missionaries who put their hands and hearts in their performance. These days, it is within easy reach of everybody to be able to make a good physical product and provide good technical service. But it requires tremendous stretch and toil to be able to put soul into it. That is where superlative service firms create difference and advantage. Thus, in order to achieve dramatic results for customers, articulation of a vision and a sense of mission are essential. A vision must move out of posters on the wall and table displays and get expressed through actions, emotions and culture of the firm.