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CHAPTER CHAPTER -- 33

SERVICES MARKETING SERVICES MARKETING MANAGEMENTMANAGEMENT

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IntroductionIntroductionMarketing management process for Marketing management process for servicesservicesOrganizing marketing planningOrganizing marketing planningAnalyzing marketing opportunitiesAnalyzing marketing opportunitiesSelecting target marketSelecting target marketDeveloping the service marketing mixDeveloping the service marketing mixManaging & controlling marketing Managing & controlling marketing efforteffort

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INTRODUCTIONINTRODUCTION

Service marketing management Service marketing management represents marketing concept in action. represents marketing concept in action. The service firm must be customer The service firm must be customer oriented & must develop a competitive oriented & must develop a competitive marketing strategy, that strategy marketing strategy, that strategy formulation consists of two steps:formulation consists of two steps:

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* Identifying target markets and * Identifying target markets and their needstheir needs

* Developing a marketing mix that * Developing a marketing mix that satisfies the unique needs of satisfies the unique needs of these target marketsthese target markets

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MARKETIN MANAGEMET PROCESS FOR MARKETIN MANAGEMET PROCESS FOR SERVICESSERVICES ( Fig. 3.1)( Fig. 3.1)

ORGANIZING MARKETING PLANNING

ANALYSING MARKETING OPPORTUNITIES

SELECTION OF TARGET MARKET

DEVELOPING MARKETING MIX

MANAGING MARKETING EFFORT

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ORGANIZING MARKETING PLANNINGORGANIZING MARKETING PLANNING

Developing a marketing strategy requires Developing a marketing strategy requires market planning and market planning is market planning and market planning is usually preceded by market analysis. usually preceded by market analysis. Before making any strategic plan the Before making any strategic plan the manager has to go through some self manager has to go through some self questioning. The answers of these critical questioning. The answers of these critical questions are the beginning of the questions are the beginning of the development of strategic plan. development of strategic plan.

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The questions may be:The questions may be:

What is the specific type of service What is the specific type of service business?business?Who are customers, how can they be Who are customers, how can they be identified, & what benefits are they identified, & what benefits are they seeking?seeking?How can the business be defended How can the business be defended from competitors?from competitors?

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How can competitive advantage and How can competitive advantage and more cost efficient operations be more cost efficient operations be achieved?achieved?What efforts must be used to develop What efforts must be used to develop and test new product service and test new product service offerings?offerings?What role can be assigned to What role can be assigned to planning and research?planning and research?

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The marketing information for The marketing information for planning purposes can be gathered planning purposes can be gathered through marketing research and through marketing research and marketing intelligence. Market marketing intelligence. Market research is more structured and research is more structured and quantifiable while marketing quantifiable while marketing intelligence gathering concentrates on intelligence gathering concentrates on intangible ideas and trends. intangible ideas and trends.

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ANALYZING MARKETING ANALYZING MARKETING OPPORTUNITIESOPPORTUNITIES

Analyzing market opportunity is to Analyzing market opportunity is to identify target markets and identify target markets and determine the changing needs of determine the changing needs of customers and their bases for customers and their bases for choosing among the many choosing among the many alternatives offered.alternatives offered.

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Marketing orientation requires Marketing orientation requires organizations to monitor their organizations to monitor their environment to adjust their environment to adjust their offering so that customer needs offering so that customer needs are fulfilled. There are some other are fulfilled. There are some other imp. Factors to be considered to imp. Factors to be considered to analyzing the marketing analyzing the marketing opportunities, they are:opportunities, they are:

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The internal environmentThe internal environmentThe immediate external environmentThe immediate external environmentThe uncontrollable external The uncontrollable external environment:environment:

Economic FactorsEconomic FactorsSocial FactorsSocial FactorsPolitical and legal factorsPolitical and legal factorsTechnical factorsTechnical factors

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SELECTING TARGET MARKETSELECTING TARGET MARKET

The process of identifying and The process of identifying and evaluating marketing opportunities evaluating marketing opportunities gives rise to many new ideas, each of gives rise to many new ideas, each of these opportunities must be studied these opportunities must be studied relevance to the companyrelevance to the company’’s s resources. This steps involves:resources. This steps involves:

Segmenting & TargetingSegmenting & TargetingPositioningPositioning

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Services marketing can not be Services marketing can not be separated from market separated from market segmentation. There are some segmentation. There are some segmentation methods which are segmentation methods which are used by service organization:used by service organization:

Demographic variantDemographic variantPsychographic variantPsychographic variant

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After this process After this process market market targetingtargeting is focused, deciding on is focused, deciding on which of the market segment to which of the market segment to target is a challenging one & after target is a challenging one & after this process the service provider this process the service provider decides upon the number of decides upon the number of segments to serve such as :segments to serve such as :

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Undifferentiated marketing Undifferentiated marketing ––e.g. Mass bankinge.g. Mass bankingDifferentiated marketing Differentiated marketing ––e.g. bank products for products for e.g. bank products for products for corporate clients and individual clientscorporate clients and individual clientsConcentrated marketing Concentrated marketing –– e.g. special e.g. special agricultural banks or industrial credit agricultural banks or industrial credit banks.banks.

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DEVELOPING THE SERVICE DEVELOPING THE SERVICE MARKETING MIXMARKETING MIX

The marketing mix which is the The marketing mix which is the essence of every marketing strategy essence of every marketing strategy & includes tangible dominant & includes tangible dominant products, they are:products, they are:

Service Product Service Product PlacePlacePeoplePeople

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PricePrice-- Demand oriented methodDemand oriented method-- Cost oriented methodCost oriented method-- Competitor based pricingCompetitor based pricing

ProcessProcess

Physical EvidencePhysical Evidence

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MANAGING AND CONTROLLING MANAGING AND CONTROLLING MARKETING EFFORTMARKETING EFFORT

The service firm must mobilize its The service firm must mobilize its people and resources e.g. money people and resources e.g. money equipment, physical facilities within equipment, physical facilities within the organization to put the strategic the organization to put the strategic plan to work. Another key issue that plan to work. Another key issue that relates to the implementation relates to the implementation programme is the organizational programme is the organizational framework.framework.

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Heskett lays out a link of activities Heskett lays out a link of activities that emphasizes on the that emphasizes on the interrelation of various activities interrelation of various activities of the organization. This of the organization. This interdependence between interdependence between marketing, operations, & human marketing, operations, & human resources is termed as service resources is termed as service management trinity.management trinity.

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The service Management The service Management TrinityTrinity (Fig. 3.2)(Fig. 3.2)

Operationsmanagement

Marketing Management

Human Resource Management

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There are some strategies to control There are some strategies to control service performance:service performance:

Establishing customer service Establishing customer service divisions divisions Performance ControlPerformance ControlProfitability ControlProfitability ControlStrategic ControlStrategic Control

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SUMMARYSUMMARY

The application of the management The application of the management process involves following steps.process involves following steps.

Organizing the marketing Organizing the marketing opportunitiesopportunitiesAnalyzing the marketing Analyzing the marketing

opportunitiesopportunitiesSelecting the target marketSelecting the target market

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Developing the marketing mixDeveloping the marketing mixManaging the marketing effortManaging the marketing effort

Thus, this chapter very briefly Thus, this chapter very briefly explains the marketing management explains the marketing management process, the foundation on which process, the foundation on which corporate and functional strategy is corporate and functional strategy is built.built.

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