Basic Service Marketing Concepts PGP 2011-13 New.ppt 16 Aug

7/31/2019 Basic Service Marketing Concepts PGP 2011-13 New.ppt 16 Aug

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Todays class

. What makes Services different from Product

. How do you classify Services

. Enormity of service sector


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What services did Susan consumed and which

were co-produced?


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Lets draw a tangibility continuumfor Susan


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Services Classified according toService Process

Who or what is the direct recipient of the service

PEOPLE POSSESSIONS

What is the nature

of the service act

TANGIBLE

ACTIONS

INTANGIBLE

ACTIONS

People

processing

Possession

processing

Information

processing

Mental

stimulus

processing


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People Processing

Strategy:

Design simple processes in service factory

Design servicescape around the customer

Customize as far as possible

Enhance the experience for repurchase

Peoples bodies

Tangibl

eactions

Beauty salons

Passenger

transports

Health careGyms

Restaurants

Shopping

Customers needs to be physically presentCustomers must be prepared to spend time co-operating with the

service providers


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Mental Stimulus Processing

Services that interact with people'smind include education, news andinformation.

Strategy:Easy on the mind of the consumer

Add tangible clues

Feedbacks & follow ups

Peoples mind

Intangible

actionsEducation

Broadcasting

Theatre

Museums


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Possession Processing

Physical treatment to customersbelongings

Production and consumption are oftennot simultaneous ~ quasi-

manufacturing Customers are less physically involved

Drop off and pick up

Service factory may have to go to thecustomer

Strategy: Problem must be solvedwith some tangible enhancement

Accompanied with a convenientservice

Service Guaranteed

Peoples tangible

possession

Tangible

actions Freighttransport

Auto repairs

Laundry & Dry

cleaning

Tailoring

Veterinary care


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Information Processing

The most intangible form of serviceoutput but may be transformed intomore tangible forms

Customer involvement may be fairly

limited Face to face contact is not strictly

necessary but often desirable

Relationships and trust are important

Strategy

Intensive use of ITAnywhere, anytime

New service features throughwebsites, email, internet

More opportunities for self-service

Peoples Intangible

assets

In

Tangibleactions

Banking

Insurance

Legal services

Accounting


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Impact ofINTANGIBILITY

Implications Cannot be stored

Cannot be patented

Cannot be readilydisplayed

Difficult to

communicate Difficult to price

Strategy Tangible clues

A good price

WOM

Organizational image

Positioning

Advertising


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Impact ofPERISHABILITY

Implications Cannot hold

inventory

How to managedemand fluctuation

Strategy Cope with fluctuating

demand

Better match throughprocess

Improve the speed and

quality of operation Eg early bird discounts, dyna

fares


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Uniqueness of services: HETEROGENEITY(VARIABILITY)

Implications

Difficult to standardize

Difficult to control quality

Strategy

Industrialize

Customize

Standardizeprocedures


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Uniqueness of services INSEPARABILITY(simultaneous production and consumption)

Implications Consumer is involved in

production

Difficult to mass produce

Other consumers impact

on thecustomers experience

Strategy Selection and

training of contactperson

Manage consumer

Multi-site location


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Enormity of service sector

Growth of service sector world over and inIndia

Drivers of service sector in India

Integrated role of different services The sunrise service sectors


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Shift in Sectoral Distribution Worldover

0

10

20

30

40

50

60

70

80

90

P

roportationoftotalemployement

Year

Service

Manufacturing

Agriculture


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Why service sector changing

Service sector got deregulated eg airlines &telecommunications

More feeder services to enhance core product eg reliance Outsourced hub due to highly skilled low cost educated

workers

Social set up changing more working women

More disposable income


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Contribution of services in GDP

across countriesCountry 1980 1990 2000 2010

US 67 74 77 78

Japan 54 57 69 70

France 56 66 76 78

Italy 48 60 70 73

China 13 21 40 42

India 38 42 50 59

Souce : nic.in


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Contribution of service sector in India

Impact

The workforcehas increasedfrom


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Why this change ?????


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Drivers of service sector

Political factors Privatization of some profit and non profit services

Deregulation

International agreements

One world

Economic factors

Emerging middle class Rise in Disposal income

Rise in consumerism

Rise in GDP (6.5%)


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Drivers of service sector

Social factors

Increase in working population

Large population of highly-educated and fluent English-speaking worker

Desire for leisure and entertainment

Demanding more customized service

Demand for convenience goods

Technological factors

Pressures on improving productivity

Internet penetration

Increase in R&D

Increase in standard of living & disposable income


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Integrated role of Services


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Some of these have risen , some havedecline and some have changed


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Business services

Business services includes informationtechnology (IT) and information technology

enabled services, communication services,financial services, hotels and restaurants,community services and trade (distribution)services are among the fastest growingsectors
http://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Information_technology_enabled_serviceshttp://en.wikipedia.org/wiki/Information_technology_enabled_serviceshttp://en.wikipedia.org/wiki/Information_technology_enabled_serviceshttp://en.wikipedia.org/wiki/Information_technology_enabled_serviceshttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Information_technology


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Sunrise service Industry of India

India'S IT MarketTurn over of $1.2 billion in 2004-05.Employs 697,000 peopleCurrent GDP is 1.4%Software exports earns a revenue of $12billion

The BPO SectorGrowing at 60-70% annually

Turnover 2004-05 reached US$5.8 billionEmploys 200,000

Documents

Basic Service Marketing Concepts PGP 2011-13 New.ppt 16 Aug