Marketing

MANAGING PRODUCT SUPPORT SERVICES

MARKETING IN 21ST CENTURY
MAJOR TRENDS IN CUSTOMER SERVICES
MARKETING STRATEGY IN SERVICES

Product Support Services

Manufacturers of equipment small appliances, office machines,
tractors, airplanes, etc. - have to provide product support services.
Companies that provide a good product but provide poor support
services, are seriously disadvantaged. Firms that provide high-quality
service outperform their less service-oriented competitors.
Why?
Product support services are essential, due to the following
factors:
Reliability & failure frequency.
Downtime.
Maintenance & repair.
To provide the best support, a manufacturer must identify the
services customers value most and their relative importance. In case
of expensive equipment, such as medical equipment, manufacturers
offer facilitating services such as installation, staff training,
maintenance and repair services, and financing.

Post-sale Service Strategy

Every company must make provisions for presale and postsale
services to its customers. This is handled by the customer service
department.
P&G prints a toll free number on every product and received
nearly million calls a year include are calls requesting
information on how to use a product or suggestion on how to
improve a product or complaints about a defective product. P&G
welcomes all of these calls, which provides a basis for constantly
improving its operations.
GE annually spend $10 million dollar to operate the GE answer
center 24 hours a day, 365 days a year, it handles a 3 million
calls year. At the heart of the system is a giant database that
provides the centers customer representative (CRs) with instant
access ti 7500000 answer concerning 8500 models in clearly
stated an easy to act upon
Today many companies promise general or complete satisfaction.
Without being more specific thus, P&G advertises. if you are not
satisfied for any reason, return fir replacement, exchange or refund.

Offering guarantees to promote sales:

All sellers are legally responsible
for fulfilling a buyers normal or reasonable
expectations. Warranties are formal statements of
expected product performance by the manufacturer.
Products under warranty can be returned to the
manufacturer or designated repair center for repair,
For e.g.
replacement, or refund. Warranties, whether
Dominos pizza which underwent phenomenal growth when it
expressed or implied, are legally enforceable.
guaranteed 30 minutes delivery on all telephone order for its
pizza. A late arriving pizza would be free (latter amended to $3
of the order). But the company had to cancel its guarantee when
a ST Louis court awarded $78 million to a woman who had been
struck by a speeding domino driven in 1989 .

How to offer Post-Sale Service?

The manufacturer could provide these services

through a customer service department.
The manufacture could make arrangements
with distributors and dealers to provide these
services.
The manufacture could leave it to independent
service specialist firms to provide these
services.
The manufacture could leave it to customers
to service their own equipments.

 Manufacturers usually start out adopting the first

alternative. They want to stay close to the equipment &
know its problems, they also find it expensive to train
others, & this takes time they also discover that they can
make good money running the parts and service business.
Over time, manufacturers switch more of the
maintenance & repair of
services to authorized
distributors and dealer. These middleman are closer to the
customer operate in more locations and can offer quicker
if not better services. Manufactures still make a profit on
selling the parts but leave the servicing profit to their
middlemen.

 Still later, independent service firms emerge; over 40 % of the

auto-service work is now done outside the franchised automobile
dealership by independent garages and chains such as
midas mutter, sears & IC penneys . independent service
organization
have
emerged
to
handle
mainframe,
telecommunications equipments, and a variety of other equipment
lines. They typically offer a lower price & or faster services than
the manufacture or authorized middleman.
Ultimately same large customers take over responsibility for
handling their own maintenance& repair services thus a company
with several hundred personal computers, printer & related
equipment might find it cheaper to have its own service personnel
on site. these companies typically press the manufacture for an
unbundled price, since they are providing their own services.

Marketing Challenges in the 21st

Century

Major Trends in Customer

Services

Equipments manufacturers are building more reliable and more

easily fixable equipment. One reason is the shift from
electromechanical equipments to electronic equipment, which has
fewer breakdowns and is more repairable. Companies are adding
modularity & disposability to facilitate self servicing.

Customer are becoming more sophisticated about buying productsupport service and are pressing for services unbundling. They
want separate prices for each service element and the right to
select the element they want .

Customer increasingly dislike having to deal with a multitude of

service providers handling their different types of equipment. Some
third party service organization now service a greater range of
equipment.

 Service contracts in which seller agrees to provide free

maintenance and repair services for a specified period of
time at a specified contract price, may diminish in
importance. Some new car warranties now cover one
lakh miles before servicing. The increase in disposable or
never failed equipment, makes customer less inclined to
pave from 2% to 10% of the purchase price every year
for a service.
Customer service choices are increasing rapidly, and
this is holding down price and profits on service as
equipment manufactures have to find out how to make
money on their equipment independent of service
contracts.

Positioning: BCG Matrix