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Intangibilit
y
Inseparabil
ity
Servic
es
Heterogene
ous:
Perishabili
ty:
Intangibility :
A service cannot be touched or tasted.
Precise standardization is not possible.
There is no ownership transfer.
A service cannot be patented.
There are no inventories of services.
Production and consumption are inseparable.
The customers ought to have faith in the person providing service.
Service cannot be readily displayed or communicated.
Inseparability :
Both, the production and consumption of service take place simultaneously.
Service cannot be separated from the person providing it.
Service, such as education, health-care, hairstyling etc. the service provider is the
service in the eyes of consumer.
Heterogeneous:
Equipment-based service are less variable than human-based service.
The inseparability of the service from the provider leads to some variability.
Variability automatically enters in the picture depending on the person performing
the service.
The service delivery opf the same employee can vary from customer to customer
day to day or even hour to hour in the same day.
Variability is inherent in human based service. Thus it is impossible to bring
consistency in service.
Perishability:
A service has a high degree of perishability.
Time element assumes unique importance
If a service is not used today, it is lost forever.
Unutilized services are economic losses.
Mass production is difficult.
Service cannot be returned or resold.
1. Tangibility:
By tangibility, we mean anything which can be touched or viewed.
On the basis of tangibility, goods are found tangible since we can view the goods bought by
us.
Contrary to it, the services are found intangible because it is not possible to touch or view
the services. we can just realize the services used by us.
2. Transferability:
The goods can be transferred from one place to another.
We can carry goods bought by us but not services.
3. Existence:
The goods bought by us remain existent.
The durables continue for a long-time and also non-durables have limited existence.
We dont find the same thing with the services.
4. Heterogeneity:
(1) Introduction:
Key service business in the service sector may be grouped under two heads
Services marketing strategy is evolved through three steps namely: Segmentation, Measuring
Expectations, Managing the Expectation.
(2) Segmentation:
services firm can meet all the expectation of customer and should not try to do it for basic
reason that expectation keep changing and with experience, increasing.
The expectation have to be managed to fit into the capabilities and scope of the process that
a firm possesses.
This necessitates that services strategy, service delivery system and the providers be closely
associated to the customers.
A strategic model for achieving this will include the following basic elements: (1)
segment characteristics, (2) concept formulation, (3) operationalisation (4) delivery
system. These basic elements provide the framework for a strategy in service.
Determination of target segment and its characteristic and more specifically the
expectation is the key to a good services strategy.
The service marketing mix can be studied in following two headings. (1) The Marketing
mix is referred to as the four Ps of marketing or (Traditional Marketing Mix). (2) Expanded
Mix (Augmented mix for services).
Definition:
Market
Target
Summary Table :
PRODUCT
Physical Goods
Features
PLACE
Channels Type
PRICE
Flexibility
PROMOTION
Advertising
Quality Level
Exposure
Price Level
Personal Selling
Accessories
Intermediaries
Terms
Public Relation
Packaging
Outlet Location
Differentiation
Media
Warranties
Transportation
Discounts
Sales Promotion
Product Lines
Storage
Commissions
Publicity
Branding
Managing Channels
Perceived Value
Service Lines
Accessibility
Coverage
Product:
A product, service or idea, may be defined as something which is given to
consumers in exchange for a price. Activities related to a product, service or idea include the
following: packaging, service, warranties, brand .
Price:
Price as the amount that consumer must pay in exchange for the product, service or
idea. Generally, markers consider the following factors in setting price: target customers,
cost, competition, the law, social responsibility.
Promotional:
Promotional activities consist of various means of communicating persuasively with
the target audience. The important promotional method are: advertising, personal selling,
sales promotion
Place:
Basically, place or distribution activities are used to transfer ownership to consumer
and to place product, service and idea at the high time and place. Distribution is made up
of two components: physical distribution, channels of distribution.
Diagrams:
The following diagram help us in understanding the different Expanded marketing Mix as follows;
Process
Market
Target
Summary Table :
PEOPLE
PHYSICAL
EVIDENCE
Equipment
Signage
PROCESS
Flow of activities
standardardized, customized
Number of steps , simple,
complex.
Policies
Employees research
Attitudes
Procedures
Employee discretion
Customer involvement
Reports
Business Cards
Statements
People:
All human actors who play in service delivery and thus influence the buyers
perceptions; namely, the firms personnel, the customer, and other customers in the
service environment.
Physical Evidences:
The environment in which the services is delivered and where the firm and customer
interact, and any tangible components that facilitate performance or communication of
the service.
Process:
The actual procedures, mechanism and flow of activities by which the services is
delivery the service delivery and operating systems.
Market segmentation is the process of dividing a heterogeneous market into homogeneous subunit.
Definition:
According to Philip Kotler defined as, Marketing Segmentation is the sub-dividing of market
into homogeneous sub-sections of customers, where any sub-section may conceivably be selected as a
market target to be reached with a distinct marketing mix.
Significance of segmentation:
Customized Services:
Service offered can be fine-tined to be needs of the customers, so
that they derive maximum satisfaction.
Multiple Choices:
The customers have a choice of selecting a service and
corresponding price range that suits their budget.
Best Distribution Channel:
The most appropriate distribution channel, in terms of money and
efficiency, can be used.
Cost Effective:
By serving a particular segment or a niche, the investment in
resources, marketing production facilities etc., can be minimized, thereby
increasing the return on investment
Definition:
According to Philip Kotler defined as, Marketing Segmentation is the sub-dividing of
market into homogeneous sub-sections of customers, where any sub-section may conceivably
be selected as a market target to be reached with a distinct marketing mix.
Diagram:
Bases of
segmentation
Geographic
Segmentation
demographic
Segmentation
Psychological
segementation
Volume
segmentation
Benefit segmentation
Geographical segmentation:
This segmentation is based on places or locations where consumer
reside. They can divide marketers divide consumer on the basis of
countries, regions, states, cities and towns. So, company may operate in
one or more geographical area as per its capacity.
Demographic segmentation:
Demographic is the study of people in the aggregate, including
population size, age, sex, income, occupation and family lifecycle.
Psychological segmentation:
Psychological segmentation is the process of dividing markets into
segments on the basis of consumer lifestyles, social class or personality
profile.
Volume segmentation:
Markers make an attempt to segments final consumers and organizational consumers based
on usage rate, usage expenses and brand loyalty. Amongst the uses they distinguish segments
based on volume. Segments under volume segments are: heavy usage, medium usage, light
usage.
Benefit segmentation;
Benefit segmentation is the process of grouping consumers into market segment on the basis
of different benefit sought from the product.
Service Positioning
Introduction:
There is an intrinsic relationship between product positioning and product differentiation.
Positioning can be achieved by product differentiation, market targeting and segmentation and
product aggregation.
Definition:
According to Ries and Troat defined as, Positioning is defined as not
what you do to a product but rather what you do to the mind of the
prospect you position the product in the mind of the prospect.
Positioning by features:
For example Music along with a dinner for the restaurant.
Positioning by comparison:
For example, the highest percentage of successful candidates for a
coaching class or educational institution.
Positioning by benefit to consumers:
Indian airlines offers the largest connections to Indian cities and
use it to position itself.
Positioning as an expert:
For example. we understand air travel for an airline.
Positioning through guarantees:
Full satisfaction or your money back by retail shop.
Positioning as a leader:
Number in readership by a newspaper.
Positioning through emotions:
Such as fear, love, environmental concern etc.
Service Product
Meaning:
The term Service product is defined as a bundle of attributes capable of exchange or use,
usually a mix of tangible and intangible forms. It may be an idea, a physical entity, or a service,
or any combination of three.
Definition:
According to American Marketing Association defined as, Activities, benefits or satisfaction
which are offered for sale or are provided in connection with sale of goods
Diagrams:
The following diagram help us in understanding the different Expanded marketing Mix as
follows
e c
p
x
E
te d
A
o re
c
o te
p
n tia l
e n
m
g
u
te d
The core :
The core product represents the basic services of a product. This product is at its basic
level.
The expected :
The expected product consists of the core product together with the minimal purchase
conditions which need to be met.
The Augmented:
Augmented product refers to offerings (product benefit ort service in assition to what
customers expect). This concept enables a product to be differentiated from another.
The potential :
Potential product refers to doing everything potentially product of a restaurant is
viewed in terms of a pleasing flower arrangement, managers word of thanks, readiness
to go out of the way to serve, etc.
SERVICE LIFECYCLE
Introduction:
There are five key stages in the lifecycle of any product or service.
Introduction: New Technology appears. Early adopters.
Growth: Greater awareness of benefits. Rapid growth in demand.
Maturity: Increasing level of competition
Saturation: Intense completion. Market has ceased to grow.
Introduction Stage:
In the beginning, sale of new products or service increase slowly. Profit are nonexistent at this stage because of heavy expenses of product introduction.
Low and slow sales
Highest promotional expenses
Highest product prices
There may be heavy losses
Growth Stage:
your product or service is establishing itself. You have few competitors, sales are
growing and profit margins are good. Now's the time to work out how you can reduce the
costs of delivering the new product.
Sales rise faster
Higher promotional expenses
Product improvements
Maturity:
Sales growth is slowing or has even stopped. You've been able to reduce
production and marketing costs, but increased competition has driven down prices. Now
is likely to be the best time to invest in a new product.
Sales increase at decreasing rate
Normal promotional expenses
Uniform and lower prices
Saturation:
Sales reach and remain on a plateau marketed by the level of replacement demand.
There is little as additional demand to be stimulated.
Decline
New and improved products or services are on the market and competition is
high. Sales fall and profit margins decline. Increased marketing will have little impact on
sales and won't be cost-effective unless new markets are identified.
Rapid fall in sales
Further fall in prices
No promotional expense
Diagrams:
The following diagram help us in understanding the different Service Product Lifecycle as
follows;
Idea Generation
Idea Screening
Concept Testing
Business Analysis
Market Testing
Technical Implementation
Commercialization
New Product Pricing
1.Idea Generation:
Idea Generation is often called the "NSD" of the NSD process.
Ideas for new products can be obtained from basic research using a SWOT
analysis (Strengths, Weaknesses, Opportunities & Threats)
Major sources of new product ideas include:
External sources which consists of: customers, competitors, Distributors,
suppliers.
Internal sources which consists of: R&D
Brain Storming of: Scientists, Engineers, Marketing People, Managers, Salesmen.
2. Idea Screening:
Screening new product idea in order to spot good ideas and drop poor ones as soon as
possible.
The purpose of idea generation is to create a large number of ideas.
The purpose of the succeeding stage is to reduce that number.
3. Concept Testing:
Testing new product concepts with a group of target consumers to find out if the
concepts have strong consumer appeal
Concept can be presented symbolically or physically.
Some people use pictures, world, virtual reality etc. for concept testing.
4. Business Analysis:
Estimate likely selling price based upon competition and customer feedback
Estimate sales volume based upon size of market and such tools as the Fourth
5. Market Testing:
Produce an initial run of the product and sell it in a test market area to determine
customer
6. Technical Implementation:
New program initiation
Finalize Quality management system
Resource estimation
Requirement publication
Publish technical communications such as data sheets
Engineering operations planning
Department scheduling
Supplier collaboration
Logistics plan
Resource plan publication
Program review and monitoring
7. Commercialization:
Launch the product
Produce and place advertisements and other promotions
Length:
Product mix length pertains to the number of total products or items in a
company's product mix, according to Philip Kotler's defined as, "Marketing
Management: Analysis, Planning, Implementation and Control.
Depth:
Depth of a product mix pertains to the total number of variations for each
product. Variations can include size, flavor and any other distinguishing characteristic.
Consistency:
Product mix consistency pertains to how closely related product lines are to one
another--in terms of use, production and distribution. A company's product mix may be
consistent in distribution but vastly different in use
SERVICE QUALITY
Meaning :
Service quality is a critical element of customer perception in the case of pure service.
Quality is a dominant element in customer evaluate of service.
Definition :
According to Zeithaml and Bitner defined as, Service quality is the delivery of
excellent or superior service relative to customer expectations.
In order that the process and output aspects of quality is reflection in the service, an
organization needs the factors or dimensions that indicate quality such as:
Reliability :
Ability to perform the promised to services dependable and accurately.
Responsiveness:
Willingness to help customers and provide prompt service.
Assurance :
Employees knowledge and curtsey. There ability to inspire trust and confidence.
Empathy:
Caring and individualized attention given to customers.
Tangibles:
Physical facilities equipments and other customer conveniences.
How To Improve The Service Quality :
Following are quality guidelines to improve into quality service:
Design the service in cooperation with customers.
Focus your improvement programs.
Create tangible representations.
Use team work to promote service excellence
Create professionalism, trust worthiness reputation and credibility.
Develop proper measurement of quality.
Select employees, job design and training to build service quality.
Reward total quality effort in marketing.
View service as a process not as a function.
Integrate the customer information into accorded the sales channel.