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Services Marketing
The service sector
The services sector has been growing at a rate of 8% per annum in recent years
More than half of our GDP is accounted for from the services sector
This sector dominates with the best jobs, best talent and best incomes
What is services?It is the part of the product or the full product for which the customer is willing to see value and pay for it.
What is a service?
It is intangible.It does not result in ownership.It may or may not be attached with a
physical product
Difference between physical goods and servicesPhysical goods Services
tangible intangible
homogeneous heterogeneous
Production and distribution are separated from consumption
Production, distribution and consumption are simultaneous processes
A thing An activity or process
Core value processed in factory Core value produced in the buyer-seller interaction
Customers do not participate in the production process
Customers participate in production
Can be kept in stock Cannot be kept in stock
Transfer of ownership No transfer of ownership
Services could meet
Personal needs – haircuts, tution, massage parlours
Business needs – courier services, office cleaning services, delivering fresh flowers
Characteristics of servicesIntangibilityInseparabilityPerishabilityHeterogeneity
Characteristics Unique to Services
Intangible Actions or events
Can’t be seen, held, or touched Heterogeneous
No two service experiences alike
Service quality depends on uncontrollable factors
Actual service often not what was planned
Production and consumption inseparable Services can’t be saved, returned, or resold
Once services are delivered, they are lost
Difficult to synchronize supply and demand
Asim Sarwar
Consumer Behavior in Services
Overview the generic differences in consumer behavior between services and goods
Introduce the aspects of consumer behavior that a marketer must understand in six categories of consumer behavior:
• Need Recognition• Information search• Evaluation of service alternatives• Service purchase and consumption• Post purchase evaluation• Role of culture
Recognition of Need:
Primary Need : Need by occasion urgency and priority
Secondary need : Follow up needs to primary demands which could include both goods as well as services.
The need recognition is the first and most important step in the buying process. If there is no need, there is no purchase. This recognition happens when there is a lag between the consumer’s actual situation and the ideal and desired one.
Maslow’s Hierarchy of Needs
Esteem Needs
Social Needs
Safety Needs
Physiological Needs
Self-Actualization
Consumer Behavior in Services
Information search▪ Personal and non-personal sources▪ Perceived risk
Previous personal experience Word of Mouth recommendation(WOM) Reference groups Media communications Internet sources
Evaluation of service alternatives During the evaluation of alternatives stage, the
consumer evaluates all the products available on a scale of particular attributes.
Post purchase Behavior Post-purchase behavior is when the customer
assesses whether he is satisfied or dissatisfied with a purchase.
If the product has brought satisfaction to the consumer, he will then minimize stages of information search and alternative evaluation for his next purchases in order to buy the same brand. Which will produce customer loyalty.
Categories in Consumer Decision-Making and Evaluation of Services
Information Search
Evaluation of Alternatives
Purchase and Consumption Post-Purchase
Evaluation
Use of personal sources Perceived risk
Evoked set Emotion and mood
Service provision as drama Service roles and scripts Compatibility of customers
Attribution of dissatisfaction Innovation diffusion Brand loyalty
Culture Values and attitudes Manners and customs Material culture Aesthetics Educational and social
institutions
Ali Kamran
Factors Effecting decision making process
Culture 1. Sub culture2. Social class
Social factors1. Reference Group2. Family3. Role and status
Personal Factors1. Age 2. Occupation3. Lifestyle
Psychological Factors1. Motivation2. Perception
Consumer Evaluation Processes for Services
Search Qualities attributes a consumer can determine
prior to purchase of a product Experience Qualities
attributes a consumer can determine after purchase (or during consumption) of a product
Credence Qualities characteristics that may be impossible
to evaluate even after purchase and consumption
Gaps Model of Service Quality
Customer Gap:▪ difference between expectations and
perceptions Provider Gap 1:
▪ not knowing what customers expect Provider Gap 2:
▪ not having the right service designs and standards
Provider Gap 3:▪ not delivering to service standards
Provider Gap 4:▪ not matching performance to
promises
The Customer Gap
ExpectedService
PerceivedService
GAP
Service Marketers can influence
Make realistic accurate promises that reflect the service actually delivered rather than idealized version of service.
Ask contact people for feedback on the accuracy of promise made in advertising and selling • Ensure service tangibles accurately reflect the type and level of service provided.
Use market research to determine sources of derived customer expectation and their requirement.
Educate customers to understand their role and perform better.
Identify influencers and opinion leaders for the service and concentrate marketing efforts on them.
Building Customer Relationship
GettingEnhancingRetainingSatisfying
The first step in managing a loyalty based business system is finding and acquiring the right customers.
After acquisition of the desirable customers the next step is to build relationships and turn them into loyal customers who will generate a growing revenue stream for the company.
A loyal customer is a consistent source of revenue for the organization. This loyalty has to be sustained by continuously providing superior quality and value.