Service Marketing

SERVICE MARKETING

Marketing Management

Subject:

Introduction to Service  A service is an intangible product involving a deed, performance, or an effort that cannot be physically possessed.

Characteristics of Service: 1. 2. 3. 4.

Intangibility Inseparability Perishability Heterogeneity

Intangibility You cannot hold or touch a service unlike a product. However, the experience consumers obtain from the service has an impact on how they will perceive it. What do consumers perceive from customer service? The location, and the inner presentation of where they are purchasing

Inseparability A

product when produced can be taken away from the producer. But Services cannot be separated from the service providers. For instance, the service provided by a waiter in a restaurant is all a part of the service production process and is inseparable. The

Perishibility Services last a specific time and cannot be stored like a product for later use. If travelling by train or air the service will only last the duration of the journey. The service is developed and

Heterogeneity It is very difficult to make each service experience identical. If travelling by plane the service quality may differ from the first time you travelled by that airline to the second. A concert performed by a group on two nights may differ in some ways as it is very difficult to standardize every dance move. Systems and procedures are put into place to make

The Service Industry Transportation services Communication services Financial services (banking, insurance, real estate etc.) Tourism services Health services Auto repair services Business services Legal services Government services Education

Service marketing • Starbucks CEO Howard Schultz quoted- “customer always comes in second-employees matter more” • The idea is that happy employees will unleash their enthusiasm on customer, creating even greater customer satisfaction.

Type of service marketing Three kinds of service marketing exists• Internal: Company to employees

• External: Company to customers

External Marketing: It is a promise a company makes to a customer about the service and its delivery. External marketing uses all the elements of communicating and reaching the customers through advertising, sales promotion, selling, merchandising and all.  Internal Marketing: It is all about applying marketing concepts to your own employees. You should be able to first convince or market your concept to your own employees and enable them to deliver the service of the customers. For this it is important to identify and fulfill your internal customers i.e. employee needs. Internal marketing is thus a key to meeting the promises made through interactive

Marketing mix for services •Process •People •Physical Evidence

7 Ps of The Banking Sector

Product Mix It includes all different product lines a company offers to its customers. SAVINGS ACCOUNT

• ATM Network • 7-Day Banking • Telebanking • iConnectInternet Banking

• CREDIT CARDS Rewards Dial-A-Draft Credit Limit Increase 24-Hour ATMs Concession on Personal Remittances Overdraft Facility,

PRICE MIX It is nothing but the interest rates charged by the different banks.

ATM Card Issue

Free – 2 ATM cards issued free if it joint account

Add – on Card

RS. 100 – Beyond 2 cards

Duplicate Card

Rs. 100

Other General Charges Current Account

Savings Account

Transaction Charges

NIL

NIL

Charges for issue of Cheques book

NIL

NIL

Issue of duplicate statement

Rs. 25 per page

Rs. 25 per page

Account closure

Rs.100

Rs.100

Place Mix It is the location analysis for banks branches. Some of the factors affecting the location analysis :The Tradeare Area Population Characteristics Commercial Structure Proximity to other convenient Outlets Real Estate Rates Proximity to Public Transportation Location of Competition

Promotion mix It is making the customer more and more aware of the services and benefits provided by the banks. Different ways of promotion are :Public Relations Personal Selling Sales Promotion Word-of-mouth Promotion Telemarketing

PROCESS • The process mix constitutes the overall procedure involved in using the services offered by the bank. A process should be such that the customer is easily able to understand and easy to follow. • Let’s take for example the process for application for a car loan. Now this mainly involves 3 things.  Producing of proper documents 5.Filling up of application form 6.Paying for the initial down payment.

Process cont….. The smaller and simpler the procedure, the better the process, and the customer will be more satisfied. It Refers to the systems used to assist the organisation in delivering the service. For example:- Banks that send out Credit Cards automatically when their customers old one has expired again require an efficient process to identify expiry dates and renewal. An efficient service that

Physical evidence • Physical evidence is the overall layout of the place i.e. how the entire bank has been designed. Physical evidence refers to all those factors that help make the process much easier and smoother. • For example, in case of a bank, the physical evidence would be the placement of the customer service executive’s desk, or the location of the place for depositing cheques. The more the bank does to make the service easier

People An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organization wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, aptitude, and service knowledge to provide the service that consumers are paying for. Many British organizations aim to apply for the Investors In People

The service-profit chain

Ethics In Service Marketing Various ethical issues and concerns: • Aggressive promotions through telemarketing and personal selling • Invasion of customer’s privacy • Misleading claims backed by poor service performance

Managing Service quality • Gap between management perceptions and consumer expectations • Gap between management perceptions and service quality specifications • Gap between service quality specifications and service delivery • Gap between service delivery and external communication

Determinants of service quality • Reliability – delivering on promises • Responsiveness – willing to help • Assurance – inspiring trust and confidence • Empathy – individualising customers • Tangibles- physical representation

Managing Service Productivity • Giving quality service is an expensive business • Not every consumer is willing to pay extra for service quality • Service providers would have to find their optimum service quality/cost ratios • Making services obsolete by product innovations