Download ch 1 intro to service mktg

CHAPTER 1
INTRODUCTION TO SERVICE MARKETING
- Priyanka Nair
What are services?
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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”.
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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
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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.
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Service as products: represents a wide range of intangible product offerings that
customers value and pay for in the marketplace.
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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.
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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
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Think how dramatically different our world would be without basic technology
services.
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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.
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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
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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.
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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
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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
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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
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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.
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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