nakakamatay

• MKTG E2 : SERVICE MARKETING : INTRODUCTION
• Agenda


  • Learnings from the previous Marketing-related subjects
  • Discussion of basic Marketing Concepts
• THINK OF A TOPIC/S FROM YOUR PREVIOUS SUBJECTS THAT YOU THINK ARE RELATED TO SERVICE MARKETING!
• Service


  The production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange, satisfies an identified need
• Service


  Any act or performance that one party can offer to another that is essentially intangible and does not result in any ownership of anything. Its production may or may not be tied to physical products
• Difference between physical goods and services

  • Tangible
  • Intangible
  • Homogeneous
  • Heterogeneous
  • Production and distribution are separated from consumption
  • Production, distribution and 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 production process
  • Customers participate in the production
  • Can be kept in stock
  • Cannot be kept in stock
  • Transfer of ownership
  • No transfer of ownership
• Intangibility


  • Service cannot be seen, tasted, felt, heard or smelled before purchase
  • Inability to assess the value gained from engaging in an activity using any tangible evidence
• Intangibility of services


  • Leads to customers having difficulty in evaluating competing services, perceiving high level of risk, placing great emphasis on personal information sources, using price as a basis for assessing quality
  • Results in management response through reducing service complexity, stressing tangible cues, facilitating word-of-mouth recommendations, focusing on service quality
• Inseparability


  • Services are produced and consumed simultaneously
  • Provider-client interaction is a special feature of service marketing
  • Key quality of services as distinct from goods
• Inseparability of services


  • Leads to customers being co producers of the service, often being co-consumer of a service with other consumers, often having to travel to the point of service production
  • Results in management response through attempts to separate production and consumption, management of consumer-producer interaction, improvement in service delivery system
• Variability


  • Two dimensions: 1) Extent to which production standards vary from a norm, both in terms of outcomes and of production processes 2) Extent to which a service can be deliberately varied to meet the specific needs of individual customers
• Causes of service variability

  • Services are produced live
  • Often no chance to correct mistakes before consumption
  • Often reliant on fallible human inputs
  • May be difficult to blueprint service process
• Consequences of service variability

  • High levels of perceived risks for buyers
  • Difficulty in presenting an image of consistent quality
  • Difficulty in developing a strong brand
• Perishability


  The way in which service capacity cannot be stored for sale in the future
• Causes of perishability


  • Inability to store services
  • Short-term supply inelasticity
• Consequences of perishability


  • Problems where demand patterns is irregular
  • Requirement for "just-in-time" production of services
  • If not managed effectively, congestion occurs at peak periods and unused capacity at off-peak periods
• Due to the increasing homogeneity in product offerings, the attendant services provided are emerging as a key differentiator in the mind of the consumers
• Relationships are a key factor when it comes to the marketing of services. Since the product is intangible, a large part of the customers' buying decision will depend on the degree to which he trusts the seller
• Given today's highly competitive scenario where multiple providers are vying for a limited pool of customers, retaining customers is even more important than attracting new ones
• Since services are usually generated and consumed at the same time, they actually involve the customer in service delivery process by taking into consideration his requirements and feedback
• 8 P's of Service Marketing

  • Product elements
  • Place and time
  • Price and other outlays
  • Promotion and education
  • Process
  • Physical environment
  • People
  • Productivity and quality
• Product elements


  Service products consists of a core product that responds to the customer's primary need and an array of supplementary service elements that helps the customers to use the core product effectively as well as adding value through welcomed enhancements
• Place and time


  Delivering product elements to customers involves decisions on where and when the former are delivered to the latter, as well as the methods and channels employed
• Price and other outlays

  The value inherent in payment is central to marketing's role in facilitating the value of exchange between firms and customers. Outlays may include additional monetary costs, time expenditures, unwanted mental and physical efforts, exposure to negative experiences
• Promotion and education


  Providing needed information and advice, persuading target customers of the merits of a specific brand or service product, encouraging them to take action at specific times
• Process


  Where services are concerned, how a firm does a thing, the underlying process, SOP (standard operating procedure)
• Physical environment


  The appearance of buildings, landscapes, vehicle, interior finishing, equipment, staff member's uniforms, printed materials, and other physical cues that provides tangible evidence of service quality
• People


  Despite of technology advances, many services will always require direct interaction between customers and contact personnel
• Productivity and quality


  Improving productivity is essential to any strategy for reducing costs. Improving quality which should be defined from a customer's perspective is essential for product differentiation and for building customer satisfaction and loyalty
• Gaps Model of Service Marketing

  • Gap 1: Inadequate market research orientation, lack of upward communication, insufficient relationship focus
  • Gap 2: Absence of customer driven standards, inadequate service leadership, poor service design
  • Gap 3: Deficiencies of human resource policies, failure to match supply and demand, customers not fulfilling roles
  • Gap 4: Ineffective management of customer expectations, overpromising, inadequate horizontal communications
• Four categories of services

  • People processing
• People processing


  Customers must physically enter the service factory and co-operate actively with the service operation. Managers should think about process and output
• Productivity


  Improving productivity is essential to any strategy for reducing costs
• Quality


  Improving quality, which should be defined from a customer's perspective, is essential for product differentiation and for building customer satisfaction and loyalty
• Gaps Model of Service Marketing

  • Gap 1: Inadequate market research orientation, lack of upward communication, insufficient relationship focus
  • Gap 2: Absence of customer driven standards, inadequate service leadership, poor service design
  • Gap 3: Deficiencies of human resource policies, failure to match supply and demand, customers not fulfilling roles
  • Gap 4: Ineffective management of customer expectations, overpromising, inadequate horizontal communications
• Four categories of services

  • People processing
  • Possession processing
  • Mental stimulus processing
  • Information processing
• The purchase process for service

  1. Pre purchase stage

  2. Service encounter stage

  3. Post purchase stage
• Consumer behavior in service marketing

  • Search qualities
  • Experience qualities
  • Credence qualities
• Customer expectations


  The beliefs about service delivery that serve as standards or reference points against which performance is judged
• How consumers handle perceived risk

  • Seeking information from respected personal sources
  • Relying on a firm that has a good reputation
  • Looking for guarantees and warranties
  • Visiting service facilities or trying aspects of service before purchasing
  • Asking knowledgeable employees about competing services
  • Examining tangible cues or other physical evidence
  • Using the internet to compare service offerings and search for independent reviews and ratings