Marketing of Services: Sonali P. Banerjee
Marketing of Services: Sonali P. Banerjee
Marketing of Services: Sonali P. Banerjee
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Marketing of Services
Sonali P. Banerjee
Amity Business
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(5 Mins)
Amity Business
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Common Excuses
• I don’t have enough time….
• I don’t get paid to be nice. I am measured
by my productivity and accuracy
• How can we do good job if the computer is
always down
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Service Sector
Definition
• An industry comprised of companies that
primarily earn revenue through
providing intangible products and services.
Service industry companies are involved
in retail, transport, distribution, food services, as
well as other service-dominated businesses.
Also called service sector, tertiary sector of
industry.
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What is services?
• It is the part of the product or the full
product for which the customer is willing to
see value and pay for it.
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Difference between physical goods and
services
Physical goods Services
tangible intangible
homogeneous heterogeneous
Production and distribution are Production, distribution and
separated from consumption consumption are simultaneous
processes
A thing An activity or process
Core value processed in factory Core value produced in the buyer-
seller interaction
Customers do not participate in the Customers participate in production
production process
Can be kept in stock Cannot be kept in stock
Transfer of ownership No transfer of ownership
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Strategic Product
Implications
• the core service can be enhanced through
the addition of supplementary services,
thereby creating added value
• the life cycle of services has to be
managed
• the branding of a service can be difficult as
the customer often has nothing tangible to
show
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Continued…
• Quality is hard to define, measure, control,
and communicate
• Quality is defined by the consumer
• It’s important to measure customer
satisfaction with an organization’s service
quality.
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Pricing Services
The characteristics of perishability, inability
to store, and fluctuating demand for
services create pricing challenges.
• Pricing Strategies include:
– Discount strategies: Cheaper by the week.
– A variable pricing strategy: Kids eat free,
movies cheaper on Tuesdays.
– Price competition
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Distribution of Services
• because most services are tied directly to a specific
service provider, most have been distributed directly
to customers
• with advancing technology, many firms are now
delivering services through machines
• channels of distribution are necessarily short; some
firms use one agent intermediary, such as
insurance, real estate, and travel agents
• some firms use franchises to distribute services
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Promotion of Services
• customer contact personnel represent the main
channel of customer communication
• service providers must ensure that each service
encounter is a positive one if customers are to
develop a positive image
• many professional service firms are now
permitted to advertise
• other elements of the promotional mix are used,
including publicity and community affairs
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Other Considerations in
Marketing Services
• Impact of Technology:
– Remember, not everyone likes impersonal
technology
• Performance Measurement:
– Customer perceptions are essential.
• Prospects for Growth:
– It is very likely that services will continue to take
an increasing share of the consumer pocket.
– The use of marketing programs in all services is
expected to increase considerably.
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Characteristics of services
• Intangibility
• Inseparability
• Perishability
• Variability
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Differentiation in services
• Offering
• Faster and better delivery
• Image
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Determinants of service quality
• Reliability – delivering on promises
• Responsiveness – willing to help
• Assurance – inspiring trust and confidence
• Empathy – individualising customers
• Tangibles- physical representation
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Customer Service Expectations
• Desired Service – the ‘wished for’ service
• Adequate Service – the service that would
be acceptable
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Zone of Tolerance
School
Don’t
• Ignore customer
• Blame customer
• Leave customer to fend for himself
• Downgrade
• Act as if nothing is wrong
• ‘pass the buck’
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Do’s
• Acknowledge problem
• Explain causes
• Apologies
• Compensate/upgrade
• Lay out options
• Take responsibility
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Adaptability
Don’t
• Promise and fail to keep them
• Show unwillingness to try
• Embarrass the customer
• Laugh at the customer
• Avoid responsibility
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Do’s
• Recognise the seriousness
• Acknowledge
• Anticipate
• Accommodate
• Adjust
• Explain rules/policies
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Spontaneity
Don’t’s
• Exhibit impatience
• Yell/laugh/swear
• Steal from customers
• Discriminate
• Ignore
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Do’s
• Take time
• Be attentive
• Anticipate needs
• Listen
• Provide information
• Show empathy
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Coping
Don’t
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Types of complainers
• Passives
• Voicers
• Irates
• Activists
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Customer complaints
• It pays to resolve customer complaints
• On an average only 5 % dissatisfied
customers complain. Others simply go
over to the competitor
• A satisfied consumer speaks to an
average of 3 people on his her experience
• A dissatisfied consumer gripes to on an
average 11 persons about his/her
unpleasant experience
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Causes behind service switching
• Pricing
High Price
Price Increase
Unfair Pricing
Deceptive Pricing
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• Inconvenience
Location
Wait for Appointment
Wait for Service
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• Competition
Found Better Service
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• Involuntary Switching
Customer Moved
Provider Closed