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CHAPTER 1 INTRODUCTION TO SERVICE MARKETING - Priyanka Nair What are services? • A service can be defined as, “ all the economic activities whose output is not physical product or construction, is generally consumed at the time is produced, and provides added value in forms (such as convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns of its first purchaser”. • Characteristics of services when compared to goods are as follows: 1. 2. 3. 4. Intangibility Perishability Inseparability Heterogeneity Service as company, products, customer service and derived service • Service as companies: includes industries and companies whose core product is a service. Some of the e.g. are Taj Palace Hotels, Birla Sun Life etc. • Service as products: represents a wide range of intangible product offerings that customers value and pay for in the marketplace. • Service as customer service: Normally customer service is not chargeable but it adds on lot on quality in the service delivery. A customer service can occur on- site or offsite. • Service as derived service: here it is believed that the physical goods are actually providing services. For e.g. a medicine is giving medical services, razor is providing barbering services. Service & Technology • Think how dramatically different our world would be without basic technology services. • 1. POTENTIAL FOR NEW SERVICES: Many improved services were developed because of the technology such as fax machine, ATMs, automated voice mails etc. because of internet many companies are now providing creative services and many cars now have an installed road mapping services which not only guides a person onto a correct route but also suggests whether there are hotels or restaurant nearby. • 2. NEW WAYS TO DELIVER SERVICES: There was a time when the companies used to give face-to-face services or by telephone. But with the technological advancement now its been shifted to internet based or wireless services. Services like bill payment, ticket booking, reservations are now easily done at a mouse click. Service & Technology • 3. ENABLING BOTH CUSTOMERS & EMPLOYEES: Technology enables both customer and employees in getting and giving services. It specially helps a customer to serve themselves more effectively. For e.g. online banking helps a customer to access their bank accounts, check balances, transfer the funds, make payments, apply for loans etc without taking the pain to travel and investing time. • 4. EXTENDING THE GLOBAL REACH OF SERVICES: Technology specially Internet itself knows no boundaries. Many companies who work globally are able to be easily in touch with their employees and customer. Many employees work virtually too. The Paradox & Dark Side of Technology • • • • • • Customer’s privacy and confidentiality- a major issue Many customers not eager to interact with company through internet Resistance to change Fear of getting eliminated from job due to technology Quality of life- negative effects on children Technology may take a long time to create customer satisfaction due to lower usage of customers. Service Marketing Triangle • According to Philip Kotler, service marketing requires both external marketing and internal as well as interactive marketing. The three types of marketing in service industries are shown in the following figure. The right side of the triangle shows the external marketing (setting promises). It is the normal activity of the firm to develop price, promote and distribute the service offering to the customers. Any thing that is communicated to the customer before service delivery is seen as a part of external marketing. Service Marketing Triangle • The left side of the triangle shows the internal marketing (enabling the promise). The internal marketing activities of the firm are to train and motivate its employees to work as a team in order to deliver the service. It emphasis on the critical role that enables the employees to keep the promises made to the customer. • The bottom part of the triangle describes the employee’s skill in handling customer contact. It is the real time marketing of “moments of truth” where the employees directly interact with the customer in order to fulfill the promise. 7 P’s Of Service Marketing Product Price Place Promotion People Physical evidence Process