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Mrs A SUJATHA, Asst. Prof., Dept. of MBA, CREC

LECTURE NOTES

ON

SERVICES MARKETING

MBA II YEAR I SEMESTER

(Autonomous)

Mrs A Sujatha

ASST.PROFESSOR

DEPARTMENT OF MANAGEMENT STUDIES

CHADALAWADA RAMANAMMA ENGINEERING COLLEGE CHADALAWADA NAGAR, RENIGUNTA ROAD, TIRUPATI (A.P) - 517506


CHADALAWADA RAMANAMMA ENGINEERING COLLEGE,

TIRUPATI (AUTONOMOUS)


MBA II year Third Semester, Academic Year: 2018-19

Course Name : Services Marketing (17CE00311)

Course Coordinator : Mrs. A SUJATHA

L – T – P : 4 – 0 – 0

Course Instructor : Mrs. A SUJATHA

SYLLABUS

Course Description: To facilitate the students about the concepts of Services Marketing through

cases.

Course Objectives: Students will be to understand

Marketing Management of companies offering Services

Characteristics of services,

To understand consumer behavior in services,

Align service design and standards,

Delivering service, managing services promises

Unit- I Introduction to Services Marketing Classes: 15 Introduction to Services Marketing: Scope and Definition- Services Marketing Environment-

Definition- Goods and Services- Components of Service- Characteristics- Service Delivery as a

System- Service Facility Design and Layout- HRM Issues- -Building Services Aspirations-

Tracking Customer Behavior-.

Unit - II Services Marketing Planning Classes: 15

Services Marketing Planning process – Developing an effective service Strategy – Market

segmentation – Positioning and differentiation of services..

\ Unit - III Customer Expectations of service Classes: 10 Customer Expectations of service: Service expectations, types of expectations, factors that

influence customer expectations of service. Issues in involving customers service expectations,

Customer defined service standards.

Unit - IV Management of Services Marketing Classes: 15

Management of Services Marketing: Introduction- Marketing Mix- Developing a Package- Product

Attractiveness- Components of Promotion Mix- Strategic Services Marketing- Service Target

Segments- Positioning the Services- Creating and Maintaining Value Relationship- Market

Leadership Strategies.


Unit - V Service Marketing Practices Classes: 15

Service Marketing Practices- Marketing of Financial and Insurance Services- Marketing of

Hospitality, Travel and Tourism Products- Marketing of Educational and Professional Services-

Marketing of Healthcare Services.

Reference:

1. John E. G. Bateson, K. Douglas Hoffman: Services Marketing, Cengage Learning, 4e, 2015.

2. Ram Mohan Rao: Services Marketing (Pearson Education) Christoper Lovelock, Jochen wirtz,

Jayanta Chatterjee, Services Marketing, 7th edition Pearson

2015

3. Valarie A. Zeithaml & Mary Jo-Bitner: Services Marketing – Integrating customer focus

across the firm, TMH, 6e, 2013.

4. Nimit Chowdhary, Monika Chowdhary, Textbook of Marketing of Services: The Indian

Experience, MACMILLAN, 2013.

5. Govind Apte: Services Marketing, Oxford Press, 2011.

Mode of Evaluation: Assignments (20%), Seminars (20%), Written Examinations (60%)


CHADALAWADA RAMANAMMA ENGINEERING COLLEGE,

TIRUPATI (AUTONOMOUS)


LESSON PLAN

Subject: Services Marketing, Subject Code: 17CE00

Class: II MBA, Branch: MBA, Semester: III, Academic Year: 2018-19

Name of the faculty: Mrs A SUJATHA

Lecture

No.

Date

(As per

Academ

ic

calenda

r)

Topics to be covered

Actual

Date of

completio

n

Remarks

1 01-08-2018 Introduction to Services Marketing

2 02-08-2018 Importance of Services Marketing

3 03-08-2018 Services Marketing Environment

4 03-08-2018 Characteristics of Service &Components of Service

5 08-08-2018 Difference between Goods and Services

6 09-08-2018 Service Delivery as a System

7 10-08-2018 Service Facility Design and Layout

8 10-08-2018 HRM Issues

15-08-2018 Independence Day

10 16-08-2018 Building Services Aspirations

11 17-08-2018 Tracking Customer Behavior

12 17-08-2018 Services Marketing Planning process

22-08-2018 Eid-UI-Zuha (Bakrid)

13 23-08-2018 Developing an effective service Strategy

24-08-2018 Varlakshmi Vratham

14 29-08-2018 Market segmentation

15 30-08-2018 Benefits of Market Segmentation

16 31-08-2018 Market Positioning

17 31-08-2018

Market Targeting

03-09-2018 Sri Krishnasthami

18 05-09-2018 Positioning process

19 06-09-2018 Planning and branding service products

https://freebcomnotes.blogspot.in/2016/06/market-segmentation.html


Lecture

No.

Date

(As per

Academ

ic

calenda

r)


Actual

Date of

completio

n

Remarks

20 07-09-2018 Differentiation of services

21 07-09-2018 New service development

22 12-09-2018 Introduction to Customer Expectations of service

13-09-2018 Vinayaka Chavithi

23 14-09-2018 Service expectations

24 14-09-2018 Types of expectations

25 19-09-2018 Promotional objectives

26 20-09-2018 factors that influence customer expectations of

service

21-09-2018 Moharam

27 26-09-2018 Issues in involving customers service expectations

28 27-09-2018 Customer defined service standards

29 28-09-2018 Developing a Customer Service Strategy

30 28-09-2018 Value addition to the service product

01-10-2018 to 09-10-2018 I Mid-term Examinations

31 10-10-2018 New service development

32 11-10-2018 Marketing testing

33 12-10-2018 Marketing Communication Objectives

34 12-10-2018 Marketing Communications Mix Theory

17-10-2018 Durgastami

18-10-2018 Vijaya Dasami

35 19-10-2018 Management of Services Marketing

36 19-10-2018 Marketing Mix

37 24-10-2018 Promotion mix

38 25-10-2018 Developing a Package &Importance

39 26-10-2018

Product Attractiveness

40 26-10-2018

Components of Promotion Mix

41 31-10-2018 Strategic Services Marketing

42 01-11-2018 Service Target Segments

43 02-11-2018 Positioning the Services

44 02-11-2018 Creating and Maintaining Value Relationship

06-11-2018

Naraka Chaturdhi

07-11-2018 Deepavali

45 08-11-2018 Market Leadership Strategies


Lecture

No.

Date

(As per

Academ

ic

calenda

r)


Actual

Date of

completio

n

Remarks

46 09-11-2018 Service Marketing Practices

47 09-11-2018 Marketing of Financial and Insurance Services

48 14-11-2018 Marketing of Hospitality Services

49 15-11-2018 Emerging Services in Insurance Sector

50 16-11-2018 Travel and Tourism Services

51 16-11-2018 Tourism marketing mix

21-11-2018 Malid-un-nabi

52 22-11-2018 Elements of travel and tourism industry

23-11-2018 Karthika Punnami/ Gurunanak Jayathi

53 28-11-2018 Marketing of Educational and Professional Services

54 29-11-2018 Effective Marketing Strategy for Professional Firm

55 30-11-2018 Marketing of Healthcare Services

56 30-11-2018 Marketing of Hospitality Services

57 01-12-2018 MODEL TEST

03-12-2018 to 10-12-2018 II Mid-term Examinations

11-12-2018 To 16-12-2018 Preparation

Course Instructor Head of the Dept. Principal


TEACHING PLAN

SUBJECT NAME: Services Marketing (17CE00311)

S.NO CONTENT NO.OF

PERIODS

1

Introduction to Services Marketing: Scope and Definition-

Services Marketing Environment- Definition- Goods and

Services- Components of Service- Characteristics- Service

Delivery as a System- Service Facility Design and Layout- HRM

Issues- -Building Services Aspirations- Tracking Customer

Behavior-.

12

2

Services Marketing Planning process – Developing an effective

service Strategy – Market segmentation – Positioning and

differentiation of services..

10

3

Customer Expectations of service: Service expectations, types of

expectations, factors that influence customer expectations of

service. Issues in involving customers service expectations,

Customer defined service standards.

12

4

Management of Services Marketing: Introduction- Marketing

Mix- Developing a Package- Product Attractiveness-

Components of Promotion Mix- Strategic Services Marketing-

Service Target Segments- Positioning the Services- Creating and

Maintaining Value Relationship- Market Leadership Strategies.

12

5

Service Marketing Practices- Marketing of Financial and

Insurance Services- Marketing of Hospitality, Travel and

Tourism Products- Marketing of Educational and Professional

Services- Marketing of Healthcare Services.

12

TOTAL 58

CHADALAWADA RAMANAMMA ENGINEERING COLLEGE (AUTONOMOUS)

(Affiliated to JNTUA, Approved by AICTE, New Delhi and Accredited by NAAC ‘A’ Grade)

Tirupati – 517506, Chittoor Dt. Andhra Pradesh.


UNIT- 1

Introduction

Every day we interact with various economic activities like - getting courier delivered at the

requested address, making phone call to friend, relative, or client, having coffee at coffee shop, or

taking metro to commute office. Such activities are called services because they involve deed or

act and offered by one party to another for sale.

Services differ from goods in many ways. The way a product is produced, distributed,

marketed, and consumed is not the way a service is. Hence, a different marketing approach is

necessary for the marketing of services.

Today, in this post we are going to explain – What services are? What are the

characteristics of services? How services are marketed?

Definition of Services

According to American Marketing Association services are defined as “activities,

benefits or satisfactions which are offered for sale or provided in connection with the sale of

goods.”

According to Philip Kotler and Bloom services is defined as “any activity or benefit that

one party can offer to another that is essentially intangible and does not result in the ownership of

anything. Its production may or may not be tied to a physical product.”

Types of services

Professional Services Which serve the business market segments in which advisory & problem solving

provide by a qualified professional known for their specialty... e.g. Financial services, advertising,

business and management consultancy, engineering, medical etc

Consumer oriented Services

The ones which the consumer is more acquainted with, such as holiday tour

companies, entertainment, travel, healthcare, social services etc.


Characteristics of Services

1. Intangibility – Services are cannot be touched or hold, they are intangible in nature. For

example – you can touch your Smartphone. But, you cannot hold or touch the services of

your telecom service provider.

2. Inseparability – In case of services the production, distribution, and consumption takes place

simultaneously. These three functions cannot be separated.

3. Variability – It is impossible to provide similar service every time. You’ll experience some

change every time you buy a particular service from a particular service provider. For

example – Yesterday you had a coffee at CCD. Today, you are again at CCD to have a

coffee, but you have got different place to sit today; the person served you coffee is different

today; other people having coffee are also different today. Hence, your experience of having

coffee today is different as compared to yesterday.

4. Perish-ability – You can store goods, but it is not so in the case of services. Services get

perished immediately.

5. Participation of customer – Customer is co-producer in production of services. For delivery

customer involvement is as important as is of the service provider. For example – if you

went to a parlor for haircut, how it cannot be possible without your presence and

involvement.

6. No ownership – In the sale of services, transfer of ownership not take place. It means to say

that consumer never own the services.

Marketing of Services

A different marketing approach is necessary for services marketing, because services differ

from goods in many respects.

Difference between Services and Goods

Basis Services Goods

Tangibility Services are intangible in nature.

They cannot be touched or

hold.

Goods are tangible in nature. They

can be touched and hold.

Separability Services are inseparable in nature.

Production, distribution, and

Function of distribution and

consumption of goods can be


consumption of service take

place simultaneously.

separated from the function of

production.

Ownership Services cannot be owned. They

can be hired for a specific time

period.

Goods can be owned.

Perish-ability Services get perished after a

specific time period. It cannot

be stored for future use.

Goods can be stored for future use.

Heterogeneity Services are more heterogeneous.

It is very difficult to make each

service identical.

Goods are less heterogeneous. It is

possible to make each goods

identical.

Customer Service in a service firm is highly interactive in nature. Customer interacts with

the firm physical facilities, personnel, and tangible elements like the price of the service. The

success of any service firm depends on how its performance is judged and perceived by the

customer. Today, Service Firms are becoming highly competitive, so, it is essential for service

firms to provide high quality services for their survival.

An expanded marketing mix for services was proposed by Booms and Biter (1981),

consisting of the 4 traditional elements–product, price, place, and promotion and three additional

elements–physical evidence, participants, and process. These additional variables beyond the

traditional 4 P's distinguish‘ customer service’ for service firms from that of manufacturing firms.

Importance of Marketing of Services

Given the intangibility of services, marketing them becomes a particularly challenging

and yet extremely important task

A key differentiator: Due to the increasing homogeneity in product offerings, the attendant

services provided are emerging as a key differentiator in the mind of the consumers. Eg: In

case of two fast food chains serving a similar product (Pizza Hut and Domino’s), more than

the product it is the service quality that distinguishes the two brands from each other. Hence,

marketers can leverage on the service offering to differentiate themselves from the

competition and attract consumers.


Importance of relationships: Relationships are a key factor when it comes to the marketing

of services. Since the product is intangible, a large part of the customers’ buying decision will

depend on the degree to which he trusts the seller. Hence, the need to listen to the needs of the

customer and fulfill them through the appropriate service offering and build a long lasting

relationship which would lead to repeat sales and positive word of mouth.

Customer Retention: Given today’s highly competitive scenario where multiple providers

are vying for a limited pool of customers, retaining customers is even more important than

attracting new ones. Since services are usually generated and consumed at the same time,

they actually involve the customer in service delivery process by taking into consideration his

requirements and feedback. Thus they offer greater scope for customization according to

customer requirements thus offering increased satisfaction leading to higher customer

retention.

“SERVICES” in modern economy

The notion of “service” is a very important one, with an increasing role in an expanding

economy which becomes the condition of sustainable and long-term development.

1 At the same time, technical services constitute an important marketing tool. Thus, we can

appreciate that, when the product characteristics and the price of different officers’ are more or

less alike, the buyer will choose the goods according to the services that are offered. In

conclusion, the marketing researcher must find out the services that buyers want and what it is

being offered by the competitive part. This information permits the calculation of the marketing

cost, the formulation of the marketing plan, the choice of the distribution networks,

2 professional users with productive goods. In addition they also provide services that encourage the

buying process. Natural persons and governmental or non-governmental bodies whose duty is to

offer conciliation to the users in view of directing their activity are valuable missionaries of

services.

3 obtain from the producer, in order to direct the first in his research for achieving a productive

activity in permanent evolution. At the same time, the producer offers the distributor a totality of

technical and commercial knowledge that he owns in order to help and encourage him

4 Services characteristics influence promotional activities. The use of new promotional techniques -

based on the utilization, during promotional activities, of some components of the system of

services creation and delivery - reflects the strong relationship between the product and

promotion on the one hand, and the very complex role of services, on the other hand.

5 In all companies the commercial function includes a series of activities that concentrate on

“obtaining an optimal market quota, achieving benefits indispensable for an efficient activity, and

meeting consumers and users' requirements”.

6 customers as a consequence of the services offered, more sales as a result of the growth in the

services number).The symmetry between’s domestic and foreign marketing activities’ the

processes of attaining “customer services” and “employee services” performances’ the internal

customer's behavior (the employee) and the external one's(the customer emphasizes the

opportunity of some researches regarding customers' contribution to services productivity, the

interdependence between the main elements of services marketing, and the one between the main

strategies of the services organizations and the components of services Marketing.

a) The stage that precedes the selling;

b) The stage during the selling that have in view purchasing facilities;

c) The after-selling stage.


7All these stages must assure the continuity of the activity of services, of the means and methods of

selling (without being mistaken with selling promotion).As in the case of any other field, a

certain job feeling must be obvious inactions which must be organized on the basis of general

ideas in order to be constructive and efficient.

MARKETING ENVIRONMENT

Marketing activities are influenced by several factors inside and outside a business firm.

These factors or forces influencing marketing decision-making are collectively called marketing

environment. It comprises all those forces which have an impact on market and marketing efforts of

the enterprise. According to Philip Kotler, marketing environment refers to “external factors and

forces that affect the company’s ability to develop and maintain successful transactions and

relationships with its target customers”.

The marketing program me of a firm is influenced and shaped by a firm’s inwardly

need to begin its business planning by looking outwardly at what its customers require, rather than

inwardly at what it would prefer to produce. The firm must be aware of what is going on in its

marketing environment and appreciate how change in its environment can lead to changing patterns

of demand for its products.

It also needs to assess marketing opportunities and threats present in the surroundings.

An environment can be defined as everything which surrounds and impinges on a system. Systems of

many kinds have environments with which they interact. Marketing can be seen as a system which

must respond to environmental change.

Just as the human body may have problems, it fails to adjust to environmental change. Similarly,

businesses may fail if they do not adapt to external changes such as new sources of competition or

changes in consumers’ preferences.

Importance of Environment Analysis:

The following are the benefits of environment analysis:

1. It helps in marketing analysis.

2. It can assess the impact of opportunities and threats on the business.


3. It facilitates the company to increase general awareness of environmental changes.

4. It is possible to develop effective marketing strategies on the basis of analysis.

5. It helps to capitalize the opportunities rather than losing out to competitors.

6. It facilitates to understand the elements of the environment.

7. It helps to develop best strategies, in the light of analyzing “what is going around the company”.

Need for Environment analysis:

Environmental analysis attempts to give an extensive insight as to the current market

conditions as well as of impact of external factors that are uncontrollable by the marketers. These

variables play an important role in convincing potential customers regarding changes in market

trends, market conditions etc.

Facilitating the corporation’s strategic response to the changes taking place in

environmental factors is the ultimate purpose of environment analysis. The firm has to come up with

alternative programmers’ and strategies in line with environmental realities. This is possible only

with proper environment analysis.

It helps strategic response by highlighting opportunities, the pursuit of which will help the

firm to attain its objectives. It helps to assess the attractiveness and probability position of these

opportunities, and helps to prepare a shortlist of those which are relevant to the firm and which can

be pursued by it

Spotting the opportunities and threats is the central purpose here. It is in the environment

that the firm finds its opportunities; it is in the environment that it finds the treats it has to encounter,

and, it is by tapping the opportunities present and countering the threats embedded therein that the

firm achieves its growth objective. The starting point is thus to spot the opportunities and threats.

Concept of Micro and Macro Environment:

A marketing oriented company looks outside its premises to take advantage of the

emerging opportunities, and to monitor and minimize the potential threats face by it in its businesses.


The environment consists of various forces that affect the company’s ability to deliver products and

services to its customers.

The marketing environment is made up of:

1. Micro-environment and

2. Macro-environment.

We discuss them in detail:

1. Micro-environment:

The micro-environment of the company consists of various forces in its immediate environment that

affect its ability to operate effectively in its chosen markets.

This includes the following:

(a) The company

(b) Company’s Suppliers

(c) Marketing Intermediaries

(d) Customers

(e) Competitors

(f) Public

Brief explanations are given below:

The Company:

In designing marketing plans, marketing management takes other company groups into

account – Finance, Research and Development, Purchasing, Manufacturing, Accounting, Top

Management etc. Marketing manager must also work closely with other company departments.

Finance in concerned with funds and using funds to carry out the marketing plans.

The R&D Department focuses on designing safe and attractive product. Purchasing

Department is concerned with supplies of materials whereas manufacturing is responsible for


producing the desired quality and quantity of products. Accounts department has to measure

revenues and costs to help marketing know-how. Together, all of these departments have impact on

the marketing plans and action.

Internal Environment (Within the Co.):

The marketing management, in formulating plans, takes the other groups into account:

1. Top Management

2. Finance

3. R&D

4. Manufacturing

5. Purchasing

6. Sales Promotion

7. Advertisement etc.

Environmental forces are dynamic and any change in them brings uncertainties, threats

and opportunities for the marketers. Changes in the environmental forces can be monitored through

environmental scanning, that is, observation of secondary sources such as business, trade and

Government, and environmental analysis, that is, interpretation of the information gathered through

environmental scanning.

http://cdn.yourarticlelibrary.com/wp-content/uploads/2015/04/clip_image002154.jpg


Marketers try to predict what may happen in the future with the help of tools like

marketing research and marketing information or marketing intelligence system, and continue to

modify their marketing efforts and build future marketing strategies. The company should think

about the consumer and work in harmony to provide customer value and satisfaction.

Company’s Suppliers:

Suppliers provide the resources needed by the company to product its goods and

services. They are important links in the company’s overall customer “value delivery system”.

Supplier developments can seriously affect marketing. Marketing managers must watch supply

availability – supply shortages or delays, labour strikes and other events can cost sales in the short

run and damage customer satisfaction in the long run. Marketing Managers also monitor the price

trends of their key inputs. Rising supply costs may force price increases that can harm the company’s

sales volume.

In business-to-business marketing, one company’s supplier is likely to be another

company’s customer and it is important to understand how suppliers, manufacturers and

intermediaries work together to create value. Buyers and sellers are increasingly co-operating in their

dealings with each other, rather than bargaining each transaction in a confrontational manner in order

to make supply chain management most effective and value-added products are sold to the target

markets.

Marketing Intermediaries:

Intermediaries or distribution channel members often provide a valuable link between an

organization and its customers. Large-scale manufacturing firms usually find it difficult to deal with

each one of their final customers individually in the target markets. So they chose intermediaries to

sell their products.

Marketing intermediaries include resellers, physical distribution firms, marketing service

agencies, and financial intermediaries. They help the company to promote, sell, and distribute its

goods to final buyers. Resellers are distribution channel firms that help the company to find

customers for goods. These include whole-sellers and retailers who buy and resell merchandise.

Selecting and working with resellers is not easy. These organisations frequently have enough power

to dictate terms or even shut the manufacturer out of large markets.


Physical distribution:

Firms help the company to stock and move goods from their points of origin to their

destinations. Working with warehouse and transportation firms, a company must determine the best

ways to store and ship goods, and safety marketing services agencies are the marketing research

firms, advertising agencies, media firms, and marketing consulting firms that help the company

target and promote its products to the right markets.

When the company decides to use one of these agencies, it must choose carefully because

those firms vary in creativity, quality, service and price. Financial intermediaries include banks,

credit companies, insurance companies, and other businesses that help finance transactions or insure

against the risks associated with the buying and selling of goods. Most firms and customers depend

on financial intermediaries to finance their transactions.

Customers:

Consumer markets consist of individuals and households that they buy goods and services

for personal consumption. Business markets buy goods and services for further processing or for use

in their production process, whereas reseller markets buy goods and services to resell at a profit.

Government markets are made up of government agencies that buy goods and services to

produce public services or transfer the goods and services to others who need them. Finally,

international markets consist of the buyers in other countries, including consumers, producers,

resellers and governments. Each market type has special characteristics that call for careful study by

the seller.

Competitors:

No single competitive marketing strategy is best for all companies. The company’s

marketing system is surrounded and affected by a host of competitors. Each firm should consider its

own size and industry position compared to those of its competitors. These competitors have to be

identified, monitored and outmaneuvered to gain and maintain customer loyalty.

Industry and competition constitute a major component of the micro-environment.

Development of marketing plans and strategy is based on knowledge about competitors’ activities.

Competitive advantage also depends on understanding the status, strength and weakness of

competitors in the market.


Large firms with dominant positions in an industry can use certain strategies that smaller

firms cannot afford. But being large is not enough. There are winning strategies for large firms, but

there are also losing ones. And small firms can develop strategies that give them better rate of return

than large firms enjoy.

Public:

General public do take interest in the business undertaking. The company has a duty to satisfy

the people at large along with competitors and the consumers. A public is defined as “any group that

has an actual or potential interest in or impact on a company’s ability to achieve its objectives.

Public relations is certainly a broad marketing operation which must be fully taken care of

Goodwill, favorable reactions, donations and hidden potential fixture buyers are a few of the

responses which a company expects from the public. Kotler in this regard has viewed that

“companies must put their primary energy into effectively managing their relationships with their

customers, distributors, and the suppliers, their overall success will be affected by how other publics

in the society view their activity. Companies would be wise to spend time monitoring all their

public’s understanding their needs and opinions and dealing with them constructively”.

Every company is surrounded by seven types of public, as shown below:

1. Financial—banks, stock-brokers, financial institutions.

2. Media—Newspaper, magazines, TV.

3. Government—Government departments.

4. Citizen—Consumer Organizations; environment groups.

5. Local—neighborhood residents, community groups.

6. General—General Public, public opinions.

7. Internal—Workers, officers, Board of Directors.


Macro Environment:

The macro-environment consists of broader forces that not only affect the company and the

industry, but also other factors in the micro-environment.

The components of a macro-environment are:

(a) Demographic Environment

(b) Economic Environment

(c) Physical Environment

(d) Technological Environment

(e) Political Environment

(f) Legal Environment

(g) Social and Cultural Environment

A. Demographic Environment:

Demography is the study of population characteristics that are used to describe consumers.

Demographics tell marketers who are the current and potential customers, where are they, how many

are likely to buy and what the market is selling. Demography is the study of human populations in

terms of size, density, location, age, sex, race, occupation and other statistics.

Marketers are keenly interested in studying the demography ethnic mix, educational level and

standard of living of different cities, regions and nations because changes in demographic

characteristics have a bearing on the way people live, spend their money and consume.

For example, one of the demographic characteristic is the size of family. With the number of

small families increasing in India, the demand for smaller houses and household items has increased

significantly. Similarly, the number of children in a family has reduced significantly over the years.

So, per child spending in a family has increased significantly.

According to the World Health Organisation, young people in the age group of 10-24 years

comprise 33% of the population and 42% of our population consists of age group, 0-24 years. Teen-


agers in the age group below 19 years comprise 23%. The senior citizen age group above 65 years

comprise only 8% of total population. About 58% of the working population is engaged in

agricultural activities, with highest, that is 78% in Bihar and Chattisgarh and lowest 22% in Kerala.

Since human population consists of different kinds of people with different tastes and

preferences, they cannot be satisfied with any one of the products. Moreover they need to be divided

in homogeneous groups with similar wants and demands. For this we need to understand the

demographic variables which are traditionally used by marketers, to segment the markets.

Income:

Income determines purchasing power and status. Higher the income, higher is the purchasing power.

Though education and occupation shapes one’s tastes and preferences, income provides the means to

acquire that.

Life-style:

It is the pattern of living expressed through their activities, interests and opinion. Life-style is

affected by other factors of demography as well. Life-style affects a lot on the purchase decision and

brand preferences.

Sex:

Gender has always remained a very important factor for distinction. There are many companies

which produce products and services separately for male and female.

Education:

Education implies the status. Education also determines the income and occupation. With increase in

education, the information is wider with the customers and hence their purchase decision process is

also different. So the marketers group people on the basis of education.

Social Class:

It is defined as the hierarchical division of the society into relatively distinct and homogeneous

groups whose members have similar attitudes, values and lifestyle.

Occupation:


This is very strongly associated with income and education. The type of work one does and the tastes

of individuals influence one’s values, life-style etc. Media preferences, hobbies and shopping

patterns are also influenced by occupational class.

Age:

Demographic variables help in distinguishing buyers, that is, people having homogenous needs

according to their specific wants, preferences and usages. For instance, teenagers usually have

similar needs. Therefore, marketers develop products to target specific age groups.

The youth are being targeted through advertisements and promotional campaigns, stores are being

designed with ‘youthful’ features, youth events are being sponsored, and even new technology is

developed with their tastes in mind.

The age groups that attract the attention of marketers can be classified as:

(i) Infants:

The population of India is growing at an alarming rate. The rate of infant deaths has declined

considerably due to the advancement in medicine. Although infants are consumers of products, their

parents are the decision makers. The size of a family is decreasing and the average income of family

is increasing.

(ii) School going teens:

In this segment, there is a great demand for school uniforms, bags, shoes, books, stationary,

confectioneries, food, albums, bicycles and other similar products.

(iii) Young Adults:

Marketers target the young adults in the age group 18-30 years with products like motorbikes, music

systems, clothes, sports cars etc. Two-wheeler manufacturers in India target this segment of people.

In the last five years, various companies like, Bajaj, Hero-Honda, Kinetic, TVS etc. have introduced

a large number of models to attract young adults.

(iv) Adults (35-45):

Consumers, in this age group, are more health conscious and look for stability and financial

independence. The industries that are benefited by them are: Pharmaceuticals, personal products,


fitness products, gym equipment’s, cars, home appliances, consumer durables, banks, insurance

companies, etc. Marketers push products specifically designed for this age group.

(v) Senior Citizens:

This consumer group boosts the demand for health care services, select skin care products, financial

planning etc.

(vi) Women:

Women constitute nearly 50% of India’s population. They are actively taking up professions.

This shift in their role has generated a greater demand for childcare and convenience products that

save time in cooking, cleaning and shopping.

Marketers are trying to come up with products that are easier to handle, less heavy,

convenient to use etc. The change in the role of women is paving the way for a change in the role of

men. Advertisements portray men cleaning, cooking and caring for their children, which was

unthinkable in the past.

B. Economic Environment:

Economic environment is the most significant component of the marketing environment. It

affects the success of a business organization as well as its survival. The economic policy of the

Government, needless to say, has a very great impact on business. Some categories of business are

favorably affected by the Government policy, some adversely affected while some others remain

unaffected. The economic system is a very important determinant of the scope of private business

and is therefore a very important external constraint on business.

The economical environmental forces can be studied under the following categories:

(i) General Economic Conditions:

General Economic Conditions in a country are influenced by various factors. They are:

1. Agricultural trends

2. Industrial output trends

3. Per capita income trends

4. Pattern of income distribution


5. Pattern of savings and expenditures

6. Price levels

7. Employment trends

8. Impact of Government policy

9. Economic systems.

(ii) Industrial Conditions:

Economic environment of a country is influenced by the prevalent industrial conditions as well as

industrial policies of a country.

A marketer needs to pay attention to the following aspects:

1. Market growth

2. Demand patterns of the industry

3. Its stage in product life cycle.

(iii) Supply sources for production:

Supply sources required for production determines inputs which are available required for

production.

They are:

1. Land

2. Labor

3. Capital

4. Machinery and equipment etc.

Economic environment describes the overall economic situation in a country and helps in analysis

GNP per capita rate of economic growth, inflation rate, unemployment problems etc.


C. Physical Environment:

The physical environment or natural environment involves the natural resources that are

needed as inputs by marketers or those that are affected by marketing activities. Environmental

concerns have grown steadily in recent years. Marketers should be aware of trends like shortages of

raw materials, increased pollution, and increased governmental intervention in natural resources

management. Companies will have to understand their environmental responsibility and commit

themselves to the ‘green movement’.

Potential shortages of certain raw materials, for examples, oil, coal, minerals, unstable cost of energy,

increased levels of pollution; changing role of Government in environment protection are a few of

the dangers the world is facing on physical environment forces. Other aspects of the natural

environment which may increasingly affect marketing include the availability and cost of raw

materials, energy and other resources, particularly if those resources and energy come from non-

renewable sources.

D. Technological Environment:

The technological environment is the most dramatic force now facing our destiny.

Technological discoveries and developments create opportunities and threats in the market. The

marketer should watch the trends in technology. The biggest impact that the society has been

undergoing in the last few years is the technological advancement, product changes and its effects on

consumers.

Technology has brought innumerable changes in human lives, be it in the field of science,

medicine, entertainment, communication, and travel or office equipment. Name any field, and one

can see changes in product or efficiency and faster services.

One of the most dramatic forces shaping people’s lives in technology. Technology has

released such wonders as penicillin, open-heart surgery and birth control pill. It has released such

horrors as the hydrogen bomb, nerve gas, and the sub-machine gun. Every new technology is a force

for “creative destruction”. Transistors hurt the vacuum tube industry, xerography hurt the carbon

paper business, autos hurt the railroads, and television hurt the newspapers.


Instead of moving into the new technologies, many old industries fought or ignored them and their

business declined. Yet it is the essence of market capitalism to be dynamic and tolerate the creative

destructiveness of technology as the price of progress.

Technology essentially refers to our level of knowledge about ‘how things are done’. That

is understanding this aspect of the marketing environment is much more than simply being familiar

with the latest hi-tech innovations. Technology affects not only the type of products available but

also the ways in which people organize their lives and the ways in which goods and services can be

marketed.

Computer-aided design (CAD) and computer-aided manufacturer (CAM) have shortened the time

required for new products to reach the market and increased the variety of products that can be

produced cost effectively. The benefits of CAD/CAM are clearly evident in the car industry. Mass

production is in standardized models. Computer systems have also contributed substantially to the

growth of various forms of direct marketing such as direct mail, direct response marketing etc.

E. Political Environment:

The political environment consists of factors related to the management of public affairs and

their impact on the business of an organization. Political environment has a close relationship with

the economic system and the economic policy. Some Governments specify certain standards for the

products including packaging.

Some other Governments prohibit the marketing of certain products. In most nations, promotional

activities are subject to various types of controls. India is a democratic country having a stable

political system where the Government plays an active role as a planner, promoter and regulator of

economic activity.

Businessmen, therefore, are conscious of the political environment that their organization faces. Most

Governmental decisions related to business are based on political considerations in line with the

political philosophy following by the ruling party at the Centre and the State level.

Substantial number of laws has been enacted to regulate business and marketing to protect companies

from each other, to protect consumers from unfair trade practices, to protect the larger interests of


society against unbridled business behavior. Changing Government agency enforcement and growth

of public interest groups also bring in threats and challenges.

F. Legal Environment:

Marketing decisions are strongly affected by laws pertaining to competition, price-setting,

distribution arrangement, advertising etc. It is necessary for a marketer to understand the legal

environment of the country and the jurisdiction of its courts.

The following laws affected business in India:

1. Indian Contract Act 1872

2. Factories Act 1948

3. Minimum Wages Act 1948

4. Essential Commodities Act 1955

5. Securities Contracts Regulation Act 1956 (SEBI Act)

6. The Companies Act 1956

7. Trade and Merchandise Act 1958

8. Monopolies and Restrictive Trade Practice Act 1969

9. The water (Prevention and Control of Pollution) Act 1974

10. The Air (Prevention and Control of Pollution) Act 1981

11. Sick Industrial Companies (Special Provisions) Act 1985

12. Environment Protection Act 1986

13. Consumer Protection Act 1986

14. Securities and Exchange Board of India Act 1992

15. Different Taxation Laws.


G. Social and Cultural Environment:

Socio-cultural forces refer to the attitudes, beliefs, norms, values, lifestyles of individuals

in a society. These forces can change the market dynamics and marketers can face both opportunities

and threats from them. Some of the important factors and influences operating in the social

environment are the buying and consumption habits of people, their languages, beliefs and values,

customs and traditions, tastes and preferences, education and all factors that affect the business.

Understanding consumer needs is central to any marketing activity and those needs will

often be heavily influenced by social and cultural factors. These cover a range of values, beliefs,

attitudes and customs which characterize societies or social groups. Changes in lifestyle of people

affect the marketing environment.

As health problems in people have increased because of significant changes in their lifestyle, they

have become concerned about their food. They prefer to eat low fat, low or no cholesterol food. This

is especially true for people above 40 years. To a great extent, social forces determine what

customers buy, how they buy, where they buy, when they buy, and how they use the products.

In India, social environment is continuously changing. One of the most profound social

changes in recent years is the large number of women entering the job market. They have also

created or greatly expended the demand for a wide range of products and services necessitated by

their absence from the home. There is a lot of change in quality-of-lifestyles and people are willing to

have many durable consumer goods like TV., fridge, washing machines etc. even when they cannot

afford them because of their availability on hire-purchase or installment basis.

Culture influences every aspect of marketing. Marketing decisions are based on recognition of needs

and wants of the customer, a function of customer perceptions. These help in understanding of

lifestyles and behavior patterns as they have grown in the society’s culture in which the individual

has been groomed. Thus a person’s perspective is generated, groomed and conditioned by culture.

Marketing environment can also be classified as:

(i) Controllable Forces and

(ii) Uncontrollable Forces.

(i) Controllable forces:


Controllable forces consist of marketing policies and marketing strategies. Marketing

policies are framed by the firm depending on its marketing philosophy. The top management is

responsible for framing broad policies. Marketing strategies are developed by middle level

management.

Internal forces are inherent to the firm and can be controlled by the management. Marketing mix

elements are the tools often used to harmonies the internal variables with that of external variables.

The controllable factors are well within the grip of the firm and comparably easy to adjust them to

suit the changes.

These factors are combined into what we have referred to earlier as Marketing Mix. For instance, if

the price appears to be on the higher side a decision to reduce it for a short term or even a long term

is possible and could be implemented as quickly as possible. Off-season prices or discounts are

examples in this connection.

(ii) Uncontrollable forces:

Various elements called uncontrollable variables affect an organisation and its marketing

efforts. It is now recognized by all that even a well conceived marketing plan may fail if adversely

influenced by uncontrollable factors. The offering of the firm and the impact of the uncontrollable

environment interact to determine the firm’s level of success or failure in reaching its objectives.

The external forces are divided into micro-environment and macro-environment. The micro-

environment consists of the suppliers, marketing intermediaries, customers etc. while the macro-

environment consists of the demography, socio- cultural, political, economical, technical, legal

environments etc.

Examples of Threats are:

1. Electronic type-writer with memory replaces manual type-writer.

2. Twin blade shaving system replaces razor shaving system.

3. Fuel efficient small cars against old model cars.

4. Entry of MNCs into Indian market increased competition.


Examples of opportunities are:

1. Marketing opportunities to produce cheap small cars.

2. Marketing opportunities to introduce fully automatic washing machines in the areas where

husbands and wife’s are working.

3. Marketing opportunities to start business in low cholesterol food items.

4. Dismantling of price controls and introduction of market-driven price policy.

Components of a Service

1. The Physical Product:

The physical product is whatever the organization transfers to the customer that can be

touched. It is tangible and physically real. Examples include houses, automobiles, computers, books,

hotel soap and shampoo, and food. As with the rest of the service offering, product design must be

customer- oriented. There is a well-developed method for ensuring that product design matches

customer needs, called Quality Function Deployment (QFD), or more popularly, the House of

Quality.

The procedure was developed in Japan in the 1970s as a way to help marketing managers

and engineers to talk to each other and to work toward a common goal of meeting customer needs.

By linking engineering design features to specific customer needs QFD assures that design

improvements improve the product’s value to customers.



At the same time, it helps the firm to avoid costly engineering improvements that “better

engineering” but do not meet customer needs. Spending time and effort on unnecessary engineering

is known as “over-engineering,” and it is seen most often in technology- driven companies.

2. The Service Product:

The service product is the core performance purchased by the customer, the flow of events

designed to provide a desired outcome. It refers to that part of the experience apart from the transfer

of physical goods and typically includes interactions with the firm’s personnel’. For example, at

some car dealer showrooms customers are allowed to look at the cars in the showroom without being

approached by sales representatives.

Only when shoppers ask to speak to someone will a sales rep speak to them. To further

reduce anxiety, actual sales prices, set to be competitively low, are posted on the cars, so that

customers don’t have to worry about negotiating the price, as at most other auto dealerships.

The cars come with strong service guarantees, and dealer personnel are trained and

empowered to make exceptional efforts to keep customers happy and solve their problems. All of

these aspects of the firm’s interaction with customers must be planned, and they help determine the

nature of the overall service experience.

The service environment is the physical backdrop that surrounds the service, sometimes

referred to as a “services-cape.” For example, going to see a movie is more enjoyable if the theater is

clean, has comfortable seats, and has a spacious, well-lit parking lot. Even though the customer

doesn’t take any of that home it has an important impact on the service experience.

3. The Service Environment:

The service environment (Table 2.4) can also signal the intended market segment and

position the organization. For example, a restaurant near a university campus might signal that it is

catering to college students by putting college memorabilia and pictures of students on the walls. A

car dealer might use its service environment to position it as upscale by decorating its showroom in

the service environment: the ambient conditions, the spatial layout, and the signs and symbols.

The ambient conditions include things such as the lighting and background music. What may

be appropriate for some businesses may be inappropriate for others, depending upon the market


positioning. For example, bright lighting is appropriate for fast food restaurants, but would be

inappropriate for an expensive, romantic restaurant.

The spatial layout can also influence customer satisfaction. For example, Disney World

found that long waiting lines seem shorter if the lines go around frequent turns, and there is some

entertainment along the way. Signs and symbols are also important.

4. The Service Delivery:

T he service delivery refers to what actually happens when customers buy the service. The

service product defines how the service works in theory, but the service delivery is how the service

works in actual practice. We often hear the adage, “Plan your work, and work your plan.”

The service product is the result of “planning your work,” and the service delivery is the

result of “working your plan.” For example, the service design may be that a fast-food customer is

greeted cheerfully within ten seconds, but the actual service delivery may be hindered by the counter

employee joking in the back of the store for five minutes with other employees. What is designed

does not always occur.

SERVICE AS A SYSTEM

The types of relationships a service business has with its customers (and the kinds of

misbehaviors that will be encountered during service delivery) depend to a great extent on the level

of contact customers have with the firm. Whether a service is high, medium, or low contact becomes

a major factor in defining the total service system, which includes the service operations system

(where inputs are processed and the elements of the service product are created), the service delivery

system (where final "assembly" of these elements takes place and the product is delivered to the





customer), and the service marketing system (which embraces all points of contact with customers,

including advertising, billing, and market research)

Parts of this system are visible (or otherwise apparent) to customers; other parts are hidden in

what is sometimes referred to as the technical core, and the customer may not even know of their

existence. Some writers use the terms "front office" and "back office" in referring to the visible and

invisible parts of the operation.

Others talk about "front stage" and "backstage," using the analogy of theater to

dramatize the notion that service is a performance. We like this analogy sometimes referred to as "dra

maturgy" and will be using it throughout the book. The extent to which theatrical elements exist

depends largely on the nature of the service process.

Table summarizes the drama implications for the four categories of service processes

identified in Chapter.

Service operations system: that part of the total service system where inputs are processed and the

elements of the service product are created.

Service delivery system: that part of the total service system where final “assembly" of the elements

takes place and the product is delivered to the customer; it includes the visible elements of the service

operation.

Service marketing system: that part of the total service system where the firm has any form of

contact with its customers, from advertising to billing; it includes contacts made at the point of

delivery.

Front stage: those aspects of service operations and delivery that are visible or otherwise apparent to

customers.

Backstage (or technical core): those aspects of service operations that are hidden from customers

Service Operations System

Like a play in a theater, the visible components of service operations can be divided into

those relating to the actors (or service personnel) and those relating to the stage set (or physical

facilities, equipment, and other tangibles). What goes on backstage is of little interest to customers.


Like any audience, they evaluate the production on those elements they actually experience during

service delivery and on the perceived service outcome.

Naturally, if the backstage personnel and systems (e.g., billing, ordering, account keeping)

fail to perform their support tasks properly in ways that affect the quality of front stage activities,

customers will notice. For instance, restaurant patrons will be disappointed if they order fish from the

menu but are told it is unavailable or find that their food is overcooked.

Other examples of backstage failures include receiving an incorrect hotel bill due to a

keying error, not receiving course grades because of a computer failure in the college registrar's

office, or being delayed on a flight because the aircraft has been taken out of service for engine

repairs.

The proportion of the overall service operation that is visible to customers varies according

to the level of customer contact. Since high-contact services directly involve the physical person of

the customer, customers must enter the service "factory" (although there may still be many backstage

activities that they don't see) or service workers and their tools must leave the backstage and come to

the customers' chosen location.

Examples include roadside car repair by automobile clubs and physical fitness trainers who

work with clients at their homes or offices. Medium-contact services, by contrast, require customers

to be less substantially involved in service delivery. Consequently, the visible component of the

service operations system is smaller.

Low-contact services usually strive to minimize customer contact with the service

provider, so most of the service operations system is confined to a remotely located backstage

(sometimes referred to as a technical core); front stage elements are normally limited to mail and

telecommunications contacts. Think for a moment about the telephone company that you use. Do you

have any idea where its exchange is located? If you have a credit card, it's likely that your

transactions are processed far from where you live.

Service Delivery System

Service delivery is concerned with where, "when, and how the service product is delivered to

the customer. As, this subsystem embraces not only the visible elements of the service operating

system buildings, equipment, and personnel but may also involve exposure to other customers.

Service providers traditionally had direct interactions with their customers. But to achieve

goals ranging from cost reduction and productivity improvement to greater customer convenience,

many services that don't need the customers to be physically present in the factory now seek to

reduce direct contact.

Service Marketing System

In addition to the service delivery system described above, other elements also contribute

to the customer's overall view of a service business. These include communication efforts by the

advertising and sales departments, telephone calls and letters from service personnel, billings from

the accounting department, and random exposures to service personnel and facilities, news stories

and editorials in the mass media, word-of-mouth comments from current or former customers, and

even participation in market research studies.

Collectively, the components just cited plus those in the service delivery system add up to

what we call the service marketing system. This represents all the different ways the customer may

encounter or learn about the organization in question. Because services are experiential, each of these


elements offers clues about the nature and quality of the service product. Inconsistency between

different elements may weaken the organization's credibility in the customers' eyes. Depicts the

service marketing system for a high-contact service like a hotel, dental office, or full-service

restaurant.

As you know from your own experience, the scope and structure of the service marketing

system often vary sharply from one type of organization to another. How things change when we are

dealing with a low-contact service, such as a credit card account. The significance of this approach to

conceptualizing service creation and delivery is that it represents the customer's view, looking at the

service business from the outside, as opposed to an internally focused operations perspective.

Physical Evidence

Many service performances are hard to evaluate. As a result, customers often look for

tangible clues about the nature of the service. For instance, what impression is created in your mind if

you see a damaged vehicle belonging to an express delivery service broken down by the side of the

road? Or observe a poorly groomed flight attendant traveling to (or from) the airport wearing a

frayed and dirty uniform? Or visit a friend in a hospital where the grounds and buildings are

beautifully maintained, the interior decor cheerful rather than institutional, and the friendly staff

wearing smart, spotlessly clean uniforms?


The content of each element will naturally vary from company to company and is in

essence the service strategy of the company. But all elements must be considered and in place.)

1. Service Culture is built on elements of leadership principles, norms, work habits and vision,

mission and values. Culture is the set of overriding principles according to which management

controls, maintains and develops the social process that manifests itself as delivery of service and

gives value to customers. Once a superior service delivery system and a realistic service concept

have been established, there is no other component so fundamental to the long-term success of a

service organization as its culture.

2. Employee Engagement includes employee attitude activities, purpose driven leadership and HR

processes. Even the best designed processes and systems will only be effective if carried out by

people with higher engagement. Engagement is the moderator between the design and the

execution of the service excellence model.

3. Service Quality includes strategies, processes and performance management systems. The

strategy and process design is fundamental to the design of the overall service management

model. Helping the client fulfill their mission and supporting them in the pursuit of their

organizational purpose, must be the foundation of any service provider partnership.


4. Customer Experience includes elements of customer intelligence, account management and

continuous improvements. Perception is king and constantly evaluating how how both customer

and end-user perceive service delivery is important for continuous collaboration. Successful

service delivery works on the basis that the customer is a part of the creation and delivery of the

service and then designs processes built on that philosophy – this is called co-creation.

Layout

Layout Arrangement of a facility to provide; working, service, reception, storage and

administrative areas

Facility layout

Facility layout can be defined as the process by which the placement of departments, workgroups

within departments, workstations, machines, and stockholding points within a facility are

determined.

This process requires the following inputs:

• Specification of objectives of the system in terms of output and flexibility

• Estimation of product or service demand on the system

• Processing requirements in terms of number of operations and amount of flow between

departments and work centers

• Space requirements for the elements in the layout

•Space availability within the facility itself

The layout facility is the physical location of the various departments/units of the

facility within the premises of the facility.

The departments may be located based on the considerations such as:

Less walking distance

Logical sequence of the processing requirements of the product

Emergency services, etc

Factors affecting Layout

Material

Product

Machinery

Labor

Location

Managerial Policies

Type of Industry

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Scope of Facility Layout

Related to material

Less material handling and minimum transportation cost.

Less waiting time for in-process inventory

Related to work place

Safe working conditions from the point of ventilation, lighting, etc.

Least chances of accidents, fire, etc.

Minimum movement of workers

Proper space for machines, worker, tools, etc.

Performance related objectives

Simpler plant maintenance

Increased productivity, better product quality, and reduced cost .

Least set-up cost and minimal change-over

Objective related to flexibility.

Scope for future expansion.

Types of Layouts

1) Process Layout

• Suitable when product having standard features is to be produced in large volumes.

• the specialized machines and equipments are arranged one after another in the order of

sequence required in the production process.

Advantages of Process Layout:

•Greater Flexibility

•Better and more efficient supervision possible through specialization

•Capacity of different product line can be expanded easily.

•Better utilization of men and machine.

Disadvantages Process Layout:

•More floor space

•More work in progress

•More distance travelled by the product.


2) Product Layout

•It is appropriate for producing one standardized product, usually in large volume. It is

also called as flow-shop layout or straight line layouts. The machines are arranged

according to the progressive steps by which the product is made.

•Example: chemical, paper, rubber, refineries, cement industry.

Product Layout Advantages:

•Mechanization of materials is possible and material handling cost can be reduced.

•It requires less floor area.

•It facilitates better production control.

•Production bottlenecks are avoided.

Product Layout Disadvantages:

•Expansion of product line is difficult.

•There is difficulty is supervising.

•Breakdown of equipment disrupts the production.

3) Grouping Technology Layout

Grouping technology layout of cellular manufacturing layout is made for a single part

family i.e parts with common characteristics. In this layout dissimilar machines are

grouped into cells and each cell functions like product layout.


Advantage and Disadvantages:

It reduces material handling cost and simplifies machine changeovers.

It reduces in-process inventory and automate the production but reduces the flexibility.

4) Fixed Position Layout

When due to size, shape and other characteristics constraints, the products cannot be

moved, the machine and operators move around the product.

Example: construction of a building, assemble of an aircraft or ship.

Advantage: Less investment is required in this layout and less transport cost as bulky

machines are not moved.

SERVICE FACILITY DESIGN

• Service operations can be affected directly by the design of the facility.

• Good design and layout enhance the service, from attracting customers to making them

feel more comfortable to ensuring their safety (e.g., adequate lighting, fire exits, and

proper location of dangerous equipment)

• The physical environment or services cape of the supporting service facility influences

both customer and employee behavior and should be designed with an image and feel that

is congruent with the service concept.

• The services cape for a self-service operation plays a central role in guiding customer

behavior through the use of signage and intuitive design of interfaces. •

Offices of professional services such as those of lawyers and physicians, however, should

project competence and authority.

• An organization’s service facility reflects its values and is instrumental in executing its

strategy. Without words, a building communicates a message to both its customers and

employees. For example, the building may communicate modernity and progressiveness

or other features such as pleasantness, safety, and convenience.


SERVICE FACILITY DESIGN

• A well-conceived services cape will encourage an approach behavior for both employees

(e.g., commitment and desire to remain with the firm) and customers (e.g., exploration,

spending money, and returning).

• Because the physical environment elicits an emotional response and influences behavior, the

design of the service facility can intentionally mould the behavior of the participants to

support the organization’s goals.

Environmental Dimensions of Services capes

Ambient Conditions

Spatial Layout and Functionality

Signs, Symbols, and Artifacts’

Factors Influencing Service Facility Design

• Nature and objectives of the service organization

• Land availability and space requirements

• Flexibility


• Security

• Community and environment

Tracking customer behavior

Tracking customer behavior has been a pet rock of mine since I started working in customer

success several years ago. I believe in a Sass model it is critical to know how your customers use

your software for several reasons:

1. Know what features to develop

2. Intelligently engage customers based on what they do

3. Identify patterns in usage to find potential upgrades and at-risk customers

4. Measure Customer Success / on boarding Employee performance

The question though is who should develop this functionality. Is it something you build in-house or

out source. I was curious to know what other companies are doing so I posted a poll in The

Customer Success Management Forum (a great group on LinkedIn). I have to admit I was a little

surprised by the results.

High customer expectations mean that it’s becoming ever more important for marketers

to be able to optimize every touch point along the customer journey, and to deliver seamless

brand messaging.

In addition, marketers are under mounting pressure to attribute sales to all the pre-

purchase online and offline research that customers engage in. But how can we link up the offline

world when it’s so difficult to capture in the first place?

Luckily there are a number of sophisticated techniques that allow us to capture offline

data and attribute it correctly at the point-of-sale. Here’s an overview of five of them.

QR Codes

QR codes are unique barcodes that get added to product packaging, poster ads, and

various in-store print media, and are a great way to track how offline browsing behavior and

marketing activity is affecting your online sales. It also encourages show roomers to buy from

you online, and not from one of your competitors.

Give customers browsing in-store an incentive to scan the QR code on their mobile: for

example, you could offer free delivery for a product they are interested in, with the QR code

linking them directly to the specific product page on your website.

Coupons

Coupons and discount codes allow retailers to advertise online for a discount on in-store

sales, and track the results of that online-to-offline campaign. It works by creating unique coupon

http://www.business2community.com/ecommerce/showrooming-showdown-beat-mobile-shoppers-01310586


codes for each of your PPC ads, which offer some kind of incentive if the user buys in-store.

Each code that consequently becomes an offline sale can then be linked back to the ad to

calculate your ROI.

When using this method, make sure the discount codes are memorable so that

customers can easily use them offline. For larger campaigns, it’s also good practice to keep track

of your custom discount codes in a spreadsheet, so that you don’t forget where you used

particular codes.

Call Tracking

Integrating the contact centre into your multichannel strategy means relying on call

tracking software to generate unique numbers online. Dynamic phone numbers are generated for

individual users looking at your website and clicking your PPC ads, and allow calls to be linked

back to previous online interaction. For example, you can see what keywords they entered, what

ads and clicks inspired the call, as well as what they did after the call (if they don’t purchase over

the phone).

According to a report from Response Tap, a call tracking provider, this is one of

the most difficult offline channels to integrate, as 52 percent of marketers say they don’t have a

complete view of how their online and offline marketing activity is driving phone sales.

Loyalty Schemes

Loyalty or members’ schemes are an ideal strategy for marketers who want to

attribute an in-store sale to that user’s previous online interactions with the company.

Once a customer is signed up to the scheme, or has downloaded the app, their

unique ID gets scanned at the point-of-sale. This then gets tracked back to previous actions taken

on both the website and the app (provided the user is logged in). If you are using Sass-based

loyalty platforms, like Sweet Tooth, the sale can also be added to a user’s account via POS

integrations, making the purchasing experience much more efficient.

Beacons

Beacons allow you to target customers on their mobile as soon as they walk into

your brick-and-mortar store. When they move within reach (standard beacons have a range of 70

meters), you can communicate with customers via Bluetooth on their Smartphone. Not only does

this mean purchasing incentives can be sent to the shopper in real time, but it also allows

marketers to measure what percentage of their online customer base actually walks through their

doors.

House of Fraser, for example, introduced beacon-equipped

mannequins that activated as soon as a customer walked within 50 meters. Push notifications

were then sent out to their mobile with information about the clothes the mannequin was wearing,

the price, and links to specific product pages on the website.

HRM Issues

The most pressing competitive issues facing firms:

Going global

Embracing technology

Managing change

Developing human capital

Responding to the market

Containing costs

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Going global

Globalization

The trend toward opening up foreign markets to international trade and investment.

Impact of Globalization

Partnerships with foreign firms

“Anything anywhere, anytime” markets

Lower trade and tariff barriers

NAFT,EU,APEC,trade agreements

WTO and GATT

Impact of HRM

Different geographies, cultures, laws, and business practices

Issues

Identifying capable expatriate managers

Developing foreign culture and work practice training programs

Adjusting compensation plans for overseas work

Embracing New technology

Knowledge Workers

Workers whose responsibilities extend beyond the physical execution of work to include

planning, decision-making, and problem solving.

Influence of technology in HRM

Human Resource Information System (HRIS)

Computerized system that provides current and accurate data for purposes of control

and decision making.

Benefits

Store and retrieve of large quantities of data

Combine and reconfigure data to create new information

Institutionalization of organizational knowledge

Easier communications

Lower administrative costs, increase productivity, and response times

Managing change

Types of Changes

Reactive change

Change the occurs after external forces have already affected performance

Proactive change

Change initiated to take advantage of targeted opportunities

Formal change management programs help to keep employees focused on the success of the

business.


Managing change through HR

Why change efforts Fail:

Not establishing a sense of urgency

Lacking leaders who have a vision

Lacking leaders who communication the vision

Not removing obstacles to the new vision

Not systematically planning for and creating short term “wins”

Developing Human Capital

Human capital

The knowledge ,skills and capabilities of individuals that have economic value to an

organization

Human capital and HRM

Creation of knowledge

Utilization of knowledge

Application of knowledge

Responding to the Market

Total Quality Management

A set of principles and practices whose core ideas include understanding customer needs ,

doing things right the first time, and striving for continuous improvement.

Six Sigma

A process used to translate customer needs into a set of optimal tasks that are performed in

concert with one another

Reengineering

Fundamental rethinking and radical redesign of business processes to achieve dramatic

improvements in cost, quality, service and speed.

Require that managers create an environment for change

Depends on effective leadership and communication process

Requires that administrative system be reviewed and modified

Containing costs

Downsizing

The planned elimination of jobs(“head count”)

Hidden costs of layoff

Severance and rehiring costs

Pension and benefits payoffs

Loss of institutional memory and trust in management

Accrued vacation and sick day payouts

Benefits of NO-layoff policy

Higher customer satisfaction

A fiercely loyal ,more productive workforce


Outsourcing

Contracting outside the organization to have work done that formerly was done by internal

employees

Employee Leasing

This process of dismissing employees who are then hired by a leasing company(Which

handles all hr related activists) and contracting with that company to lease back the

employees


\


Unit- 2

Services marketing planning process

INTRODUCTION

Service marketing management represents marketing concept in action .The service firm

must be customer oriented & must develop a competitive marketing strategy, that strategy

formulation consists of two steps.

Identifying target markets and their needs

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

ORGANIZING MARKETING PLANNING

Developing a marketing strategy requires market planning and market planning is usually

preceded by market analysis. Before making any strategic plan the manager has to go through

some self questioning. The answers of these critical questions are the beginning of the

development of strategic plan.

How can competitive advantage and more cost efficient operations be achieved


What efforts must be used to develop and test new product service offerings

What role can be assigned to planning and research

The marketing information for planning purposes can be gathered through

marketing research and marketing intelligence. Market research is more structured and

quantifiable while marketing intelligence gathering concentrates on intangible ideas and

trends.

ANALYZING MARKETING OPPORTUNITIES

Analyzing market opportunity is to identify target markets and determine the

changing needs of customers and their bases for choosing among the many alternatives

offered.

Marketing orientation requires organizations to monitor their environment to adjust

their offering so that customer needs are fulfilled. There are some other imp. Factors to be

considered to analyzing the marketing opportunities, they are:

The internal environment

The immediate external environment

The uncontrollable external environment:

Economic Factors

Social Factors

Political and legal factors

Technical factors

SELECTING TARGET MARKET

The process of identifying and evaluating marketing opportunities gives rise to many new ideas, each

of these opportunities must be studied relevance to the company’s resources.

This steps involves:

Segmenting & Targeting


Positioning

Services marketing can not be separated from market segmentation. There are some

segmentation methods which are used by service organization:

Demographic variant

Psychographic variant .

After this process market targeting is focused, deciding on which of the market segment to

target is a challenging one & after this process the service provider decides upon the number of

segments to serve such as :

Undifferentiated marketing

e.g. Mass banking

Differentiated marketing

e.g. bank products for products for corporate clients and individual clients

Concentrated marketing

e.g. special agricultural banks or industrial credit banks.

DEVELOPING THE SERVICE MARKETING MIX

The marketing mix which is these sence of every marketing strategy& includes

tangible dominant products, they are:

Service Product

Place

People

Price

Demand oriented method

Cost oriented method


Competitor based pricing

Process

Physical Evidence

MANAGING AND CONTROLLING MARKETING EFFORT

The service firm must mobilize its people and resources e.g. money equipment, physical facilities

with in the organization to put the strategic plan to work. Another key issue that relates to the

implementation program me is the organizational framework.

Hackett lays out a link of activities that emphasizes on the interrelation of various activities of

the organization. This interdependence between marketing, operations, & human resources is termed

as service management trinity.

There are some strategies to control service performance:

Establishing customer service divisions

Performance Control

Profitability Control

Strategic Control


7 Steps to Developing a Customer Service Strategy

1. Create a Customer Service Vision

The first step in creating a customer service strategy is communicating the customer

service vision to employees. Employees need to understand what the vision and organizational goals

are for customer service and understand their responsibility to help achieve that vision.

An organization that shares a customer service vision, and teaches customer service skills, will

provide a better customer service experience than an organization that leaves the front-line

employees untrained and unprepared for dealing with customer issues.

2. Assess Customer Needs

Organizations often fail, and waste valuable resources, creating products and services that

they thought the customer wanted, only to find out it was not what the customer wanted at all. The

trick is to find out what it is the customer wants and put together plans to meet those needs.

Organizations can’t meet the needs of their customers without understanding what they

want. The first step in a customer improvement initiative is to talk to the customers to find out their

perception of the services being provided and determining what their needs and expectations are.

A customer needs assessment is done by soliciting feedback throughfocus

groups, satisfaction surveys, or customer comment cards, and developing a comprehensive plan to

meet and exceed the customer needs.

There are lots of survey software available. One I like is Survey Gizmo which is an easy to

use online survey tool. It’s a pretty fun tool and you can play with it for free. You should try it and

see what your customers tell you!

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Keep in mind that customer needs and expectations are a moving target. What a customer

wants today will be very different from what the customer wants a year or five years down the road.

As things change, expectations and needs change also.

3. Hire the Right Employees

Hiring with the customer in mind is another step in an overall strategy for strong customer

service.

Screening employees and ensuring that they possess the disposition and skill set to help support a

strong customer service environment is important.

Skills can be taught but attitude and personality cannot. It’s a sad fact but not everyone should

interact with customers.

4. Set Goals for Customer Service

Once customer needs and expectations are identified and customer satisfaction is measured, it

is time to create goals for achieving customer satisfaction.

Employees need to understand what the target is so they can help the organization reach their

corporate objectives.

For example, if you operate a customer call center, a goal might be to answer all calls within X

number of minutes and hold employees accountable to that standard.

If the standard can’t be met, figure out why and fix it.

5. Train on Service Skills

If you hire right, your employees will have a natural ability to serve your customers well.

However, everyone can benefit from practical teaching on the organization’s approach to customer

service.

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The training should explain how the organization would like the employee to behave in every

situation and should help employees understand how to respond to their customers. Employees need

to know what you want them to do.

For example, teach them how to respond to customer complaints, how to be responsive to customers,

how to meet customer needs, when to perform service recovery, how to answer the phone and your

organizations standards for service.

6. Hold People Accountable

Employees should have a good understanding of how their service to the customer affects

the organization’s overall performance and need to be held accountable for achieving customer

satisfaction goals. This is part of a comprehensive performance management system and should

be part of the cultural norm.

For example, share customer satisfaction data with your employees and confront employees when

they are not demonstrating the desired behaviors.

7. Reward and Recognize Good Service

There should be a well thought out system for acknowledging and rewarding employees for

good customer service. Employees need positive reinforcement and should be rewarded when they

demonstrate the desired behaviors of a strong customer service culture.

Having a strong vision and strategy for customer service is a critical component to the success of any

organization. Organizations need to identify who their customers are, what they want and develop

strategies to achieve those customer requirements. A strong customer service strategy is what

separates the successful organizations from the rest.

Market Segmentation: Meaning, Nature and Bases for Market Segmentation

Today, companies have recognized that they cannot appeal to all buyers in the marketplace, as they

are too widely scattered and too varied in their needs and buying practices. Most of the companies

have moved from mass marketing towards market segmentation and targeting. Instead of scattering

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their marketing efforts, firms are focusing on buyers who have greater interest in the values they

create best.

Meaning and Definition:

At its most basic level, the term ‘market segmentation’ refers to subdividing a market along some

commonality and similarity. That is, the members of a market segment share something in common.

The purpose of segmentation is the concentration of marketing energy and force on the subdivision

(or the market segment) to gain a competitive advantage within the segment. The concentration of

marketing energy (or force) is the essence of all the marketing strategies, and market segmentation is

the conceptual tool to help achieve this focus.

In today’s competitive business world, it is not possible to sell everything to everyone. There are

different types of customers, each with different needs, wants, tastes, preferences, different

purchasing power, and so on. Again, in each category of customers, there can be various subgroups.

The marketing people select the type of customers representing the most desirable market and

accordingly make every possible effort to induce and encourage them to buy the goods or services.

Thus, market segmentation enables a firm to frame different marketing mixes for different groups of

customers.

Normally, the market is made up of people with:

a. Different characteristics

b. Different needs and wants

c. Different purchasing power

d. Differences in the degree of willingness to buy

e. Differences in eligibility to buy.

If marketers wish to do an effective marketing job in such diverse and heterogeneous markets, then

they must identify the differences in the different groups of people in the market. This is because one

marketing mix will not satisfy them. In other words, different marketing mixes have to be designed


to satisfy different marketing groups. Thus, there is a need for market segmentation (Figure 2.1).

Thus, market segmentation refers to subdividing a larger market into smaller markets.

Some selected definitions of market segmentation are as follows:

1. According to Philip Kotler, ‘market segmentation is a process of identifying groups of buyers with

different desires or requirements’.

2. According to Skinner, ‘market segmentation is a process of dividing a total market into groups of

consumers who have relatively similar product needs’.

3. According to Carl McDaniel, ‘market segmentation is defined as the process of identifying and

evaluating various strata or layers of market’.

4. According to William Stanton, ‘market segmentation is the process of dividing the total, hetero-

geneous market for a product into several sub markets or segments, each of which tends to be

homogeneous in all significant aspects’.

Nature of Market Segmentation:

1. Systematic process:

Segmentation of market demands a systematic process.

The process consists of the following steps:

a. Defining the market.



b. Data collection to analyse the characteristics of the potential customers.

c. Identifying the bases of segmentation.

d. Defining the market segments.

e. Evaluating the market segments.

f. Selecting the appropriate market segments.

2. Serves many benefits:

Market segmentation brings many benefits to the marketer for selecting target market and using an

appropriate combination of the four P’s.

3. Subject to certain limitations:

Market segmentation is subject to limitations such as:

(a) Difficulties in data collection,

(b) It is a time-consuming process, and

(c) It is expensive.

4. Facilitates customer satisfaction:

Through market segmentation the customers get goods and services of their choice, which helps in

satisfying their needs and wants.

5. Operates as promising marketing strategy:

Market segmentation is better than market aggregation, as the current marketing trend is shifting

from mass marketing strategy to target marketing strategy.

Bases for Market Segmentation:


The variables are the characteristics of individuals, groups, or organizations that the marketing man-

agers use to divide a total market into segments. The choice of segmentation basis is critical because

segmenting on the basis of an unsuitable variable reduces an organization’s chances of satisfying its

consumers’ needs and desires.

Top 4 Bases for Segmenting Consumer Market

The four bases for segmenting consumer market are as follows: A. Demographic Segmentation B.

Geographic Segmentation C. Psychographic Segmentation D. Behavioural Segmentation.

A. Demographic Segmentation:

Demographic segmentation divides the markets into groups based on variables such as age, gender,

family size, income, occupation, education, religion, race and nationality. Demographic factors are

the most popular bases for segmenting the consumer group. One reason is that consumer needs,

wants, and usage rates often vary closely with the demographic variables. Moreover, demographic

factors are easier to measure than most other type of variables.

1. Age:

It is one of the most common demographic variables used to segment markets. Some companies offer

different products, or use different marketing approaches for different age groups. For example,

McDonald’s targets children, teens, adults and seniors with different ads and media. Markets that are

commonly segmented by age includes clothing, toys, music, automobiles, soaps, shampoos and

foods.

2. Gender:

Gender segmentation is used in clothing, cosmetics and magazines.

3. Income:

Markets are also segmented on the basis of income. Income is used to divide the markets because it

influences the people’s product purchase. It affects a consumer’s buying power and style of living.

Income includes housing, furniture, automobile, clothing, alcoholic, beverages, food, sporting goods,

luxury goods, financial services and travel.


4. Family cycle:

Product needs vary according to age, number of persons in the household, marital status, and number

and age of children. These variables can be combined into a single variable called family life cycle.

Housing, home appliances, furniture, food and automobile are few of the numerous product markets

segmented by the family cycle stages. Social class can be divided into upper class, middle class and

lower class. Many companies deal in clothing, home furnishing, leisure activities, design products

and services for specific social classes.

B. Geographic Segmentation:

Geographic segmentation refers to dividing a market into different geographical units such as

nations, states, regions, cities, or neighbourhoods. For example, national newspapers are published

and distributed to different cities in different languages to cater to the needs of the consumers.

Geographic variables such as climate, terrain, natural resources, and population density also

influence consumer product needs. Companies may divide markets into regions because the

differences in geographic variables can cause consumer needs and wants to differ from one region to

another.

C. Psychographic Segmentation:

Psychographic segmentation pertains to lifestyle and personality traits. In the case of certain

products, buying behaviour predominantly depends on lifestyle and personality characteristics.

1. Personality characteristics:

It refers to a person’s individual character traits, attitudes and habits. Here markets are segmented

according to competitiveness, introvert, extrovert, ambitious, aggressiveness, etc. This type of

segmentation is used when a product is similar to many competing products, and consumer needs for

products are not affected by other segmentation variables.

2. Lifestyle:

It is the manner in which people live and spend their time and money. Lifestyle analysis provides

marketers with a broad view of consumers because it segments the markets into groups on the basis


of activities, interests, beliefs and opinions. Companies making cosmetics, alcoholic beverages and

furniture’s segment market according to the lifestyle.

D. Behavioural Segmentation:

In behavioural segmentation, buyers are divided into groups on the basis of their knowledge of,

attitude towards, use of, or response to a product. Behavioural segmentation includes segmentation

on the basis of occasions, user status, usage rate loyalty status, buyer-readiness stage and attitude.

1. Occasion:

Buyers can be distinguished according to the occasions when they purchase a product, use a product,

or develop a need to use a product. It helps the firm expand the product usage. For example,

Cadbury’s advertising to promote the product during wedding season is an example of occasion

segmentation.

2. User status:

Sometimes the markets are segmented on the basis of user status, that is, on the basis of non-user, ex-

user, potential user, first-time user and regular user of the product. Large companies usually target

potential users, whereas smaller firms focus on current users.

3. Usage rate:

Markets can be distinguished on the basis of usage rate, that is, on the basis of light, medium and

heavy users. Heavy users are often a small percentage of the market, but account for a high

percentage of the total consumption. Marketers usually prefer to attract a heavy user rather than

several light users, and vary their promotional efforts accordingly.

4. Loyalty status:

Buyers can be divided on the basis of their loyalty status—hardcore loyal (consumer who buy one

brand all the time), split loyal (consumers who are loyal to two or three brands), shifting loyal

(consumers who shift from one brand to another), and switchers (consumers who show no loyalty to

any brand).


5. Buyer readiness stage:

The six psychological stages through which a person passes when deciding to purchase a product.

The six stages are awareness of the product, knowledge of what it does, interest in the product,

preference over competing products, conviction of the product’s suitability, and purchase. Marketing

campaigns exist in large part to move the target audience through the buyer readiness stages.

Market Segmentation: Top 10 Benefits of Market Segmentation

The top ten benefits of market segmentation are as follows: 1. determining market opportunities 2.

Adjustments in marketing appeals 3. Developing marketing programmes 4. Designing a product 5.

Media selection 6. Timing of marketing efforts 7. Efficient use of resources 8. Better service to

customers 9. Helps in fixing prices 10. Assist in distribution strategies.

Segmentation of target markets has several advantages.

1. Determining market opportunities:

Market segmentation enables to identify market opportunities. The marketer can study the needs of

each segment in the light of current offerings by the competitors. From such study, the marketer can

find out the current satisfaction of customers.

Segments with low level of satisfaction from present offering may represent excellent market

opportunities. For example, customers may not be satisfied with the current offering of water

purifiers in terms of product or after-sale service. Such situation enables a marketer to launch a new

range of water purifiers and market them well.

2. Adjustments in marketing appeals:

Sellers can make best possible adjustments of their product and marketing appeals. Instead of one

marketing programme aimed to draw in all potential buyers, sellers can create separate marketing

programmes designed to satisfy the needs of different customers. Proper advertising and sales

promotional appeals can be made depending on the target audience.


3. Developing marketing programmes:

Companies can develop marketing programmers and budgets based on a clearer idea of the response

characteristics of specific market segments. They can budget funds to different segments depending

on their buying response.

4. Designing a product:

Market segmentation helps in designing products that really match the demands of the target

audience. Products with high market potential can be designed and directed to meet the satisfaction

of the target market.

5. Media selection:

It helps in selection of advertising media more intelligently and in allocating funds to various media.

The funds are allocated to various media depending on the target audience, impact of the media,

competitor advertising, and so on.

6. Timing of marketing efforts:

It helps in setting the timings of the promotional efforts so that more emphasis is placed during those

periods when response is likely to be at its peak. For instance, consumer goods can be heavily

advertised to Christians during Christmas season and to Hindus during Diwali time.

7. Efficient use of resources:

By tailoring marketing programme to individual market segments, management can do a better

marketing job and make more efficient use of the marketing resources. For example, a small firm can

effectively use its limited resources – money, sales force, etc. – in one or two segmented markets

rather than unsuccessfully aiming at a wider market.

8. Better service to customers:

Market segmentation enables a company to concentrate its marketing efforts in a particular market

area, thereby, providing a better service to the target customers. Proper marketing segmentation can

facilitate customer satisfaction.


9. Helps in fixing prices:

The marketing segmentation also enables to fix prices of the goods and services. Since different

market segments have different price perceptions, it is necessary to adopt different pricing strategies

for the markets. For instance, the prices for lower-income groups have to be lower and the product

and promotional efforts are adjusted accordingly.

10. Assist in distribution strategies:

Segmentation also assists in adopting suitable distribution strategies. Different market segments may

require different distribution mix. For example, if the product is of very high quality intended to

target the upper class, then it must be distributed at prestigious outlets located at selective places.

Targeting

Once the marketer creates different segments within the market, he then devises various

marketing strategies and promotional schemes according to the tastes of the individuals of particular

segment. This process is called targeting. Once market segments are created, organization then

targets them.

Targeting is the second stage and is done once the markets have been segmented.

Organizations with the help of various marketing plans and schemes target their products amongst

the various segments.

Nokia offers handsets for almost all the segments. They understand their target audience well and

each of their handsets fulfils the needs and expectations of the target market.

Tata Motors launched Tata Nano especially for the lower income group

There are five patterns of target market selection, which was first put forward by D. F.

Abell:

1. Single Segment Concentration

2. Selective Segment Specialization

3. Product Specialization

4. Market Specialization

5. Full Market Coverage.


1. Single Segment Concentration:

In this case the organisation focuses on just one segment. That is, the marketer prefers to go for

single segment. The company targets a segment and goes for a larger market share instead of a small

share in larger market segment. Through concentrated marketing, the company gains a strong

knowledge of the particular single segment’s need, thus it achieves a strong market position in the

segment and enjoys operational economies, through specializing its production, distribution and

promotion.

For example, the Allahabad Law Book Agency (Specialized only in law books), BPB Publications

(specialized only in computer books) etc. are good examples. Concentrated marketing strategy may

involve more than normal risks. At the same time, the strategy provides higher returns and therefore,

it is possible that competitors might be attracted to find their place in the segment, which may deter

the company to continue with this strategy.

2. Selective Segment Specialization:

In Selective specialization, the firm selects a number of segments, each objectively attractive and

appropriate, as per the company’s objectives and resources. There may be little or no synergy among

those segments, but each segment promises to be a money-maker. This market coverage strategy has

the advantage of diversifying the firm’s risk.

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Even if one segment becomes unproductive, the firm can continue to earn money on other segments.

For example, a company X produces television as well as Walkman, the two different types of

products obviously for two different types of markets, and then it can be cited as example of selective

specialization.

3. Product Specialization:

Under product specialization, the firm concentrates on making a certain product that it sells to several

segments, for example, a microscope manufacturer sells microscopes to university-laborites,

Government laboratories and commercial laborites. It makes different microscopes for these different

consumer groups, but does not manufacture other instruments that these laboratories might use.

Product specialization promises strong recognition of customers within the product areas.

4. Market Specialization:

Here the organisation concentrates on satisfying the range of needs of a particular target group. An

example of this would be an agro-chemical Manufacturer whose principal target market is farmers.

For instance, X Company can implement market specialization strategy by producing all sorts of

home appliances-Television, Washing Machines, Refrigerators, Micro Ovens, Fans, and Flasks etc.

for middle class people. The firm gains a strong reputation to serve this consumer groups of middle

class segment.

5. Full Market Coverage:

When a firm attempts to serve all consumer-groups, with all the product that they might need, it is

called the Full Market concept. Only very large firms can adopt this strategy. Examples are IBM

(Computer Market). General Motors (Vehicle Market) and coca Cola (drink market).

Positioning

Positioning is the act of designing the company’s offering and image to occupy a distinctive place in

the target market’s mind. The end result of positioning is the successful creation of a market- focused

value proposition, a cogent reason why the target market should buy the product.

Market Positioning


This is the act of designing a company’s offering and image to occupy a distinctive place in the target

market’s mind. I.e. The act of creating a difference between a company’s offer from those of

competitors.

Positioning is the process of establishing and maintaining a distinctive place in the market for the

organizations’ product or brands. Positioning starts with the product, but positioning is not what you

do to a product. Positioning is what you do to the mind of the customer. You should concentrate on

the perception of the customer and not the reality of the product. Positioning then is how the product

is perceived and evaluated by the target market, relative to competing products. To the consumer

perception is reality. That is why it is said that a marketing battle is fought in the minds of

consumers. Marketers who attain a superior position in customers’ minds have won the marketing

battle.

A difference is worth establishing to the extent that it satisfies the following criteria.

1) Important: - The difference delivers a highly valued benefit to a sufficient number of

buyers.

2) Distinctive:- The difference is delivered in a distinctive way

3) Superior: The difference is superior to other ways of obtaining the benefit.

4) Pre-emptive: The difference cannot be easily copied by competitors.

5) Affordable - The buyer can afford to pay for the difference.

6) Profitable - The Company will find in profitable to introduce the difference.

Positioning strategies:-

1) Attribute positioning -A company positions itself on an attribute e.g. size, number of years

in existence.


2) Benefit positioning -The product is positioned as the leader in a certain benefit.

3) Use or application positioning -Positioning a product as the best for some use or

application.

4) User positioning -Positioning a product the best for some user group e.g. Bic pen, food for

consumption.

5) Competitor positioning -The product claims to be better in some way then a named

competitor.

6) Product category positioning -The product is positioned as the leader in a certain product

category

7) Quality or price positioning. -The product is positioned as offering the best value

As companies increase their number of claims for their brands, they risk disbelief and loss of clear

positioning. Companies must avoid four major positioning errors.

1. Under Positioning -When buyers have only a vague idea of the brand

The brand is seen as just another entry in a crowded marketplace. E.g. When Pepsi introduced its

clear crystal Pepsi in 1993 (U.S.A.) customers were distinctively unimpressed. They didn’t see

‘clarity’ as an important benefit of a soft drink.

2. Over Positioning -Buyers may have too narrow a image of the brand. These buyers might think

that suits at Sir Henry’s start at 15000/= when in fact it offers affordable suits started at 3000/=

3. Confused Positioning -Buyers might have a confused image of the brand resulting from the

company making too many claims or changing the brands positioning too frequently e.g. Omo, Zain

4. Doubtful Positioning -Buyers might find it hard to believe the brand claims in view of the

products features, price or manufacturers.


Positioning process:

The various steps of developing effective positioning are:

Market positioning

Psychological position

Positioning approaches

Market positioning:

The marketing positioning is defined as the process of identifying and selecting markets or segments

that represents business potential to determine the criteria for competitive process success. This must

be told on following factor.

Through knowledge of needs, wants and perceptions of the target market. Benefits offered by the

service offered.

Psychological positioning:

This step involves the use of communication to convey the firms or its offerings identify and

image of the target market. It converts the needs and positions the offering in the customer mind.

Psychological positioning:

Objective positioning

Subjective positioning

a. Objective positioning:

The objective positioning relates to the objective attributes of the physical project of objectives

positioning depends upon the uniqueness of features.

Ex : A picture of restaurant which looks like any other restaurant.

b. Subjective positioning:

Subjective positioning relates to the subjective attributes of the service offering. It is the mental

perceptions image and other attributes perceived by the tourist and not the physical aspects of the

offering.

Positioning approaches:

There are several approaches to positioning of project and service offerings. The following

positioning approaches level information collected during market protection and psychological

positioning.


Service attributes:

A company can position service alternative such as the facilitating services and the supportive

services.

Service benefits:

A strategy focuses up on the distinctive [attribute such as the facilitating services and the

services] benefit consumer can get with the one of the service.

Service application positioning:

Service application in positioning the basis of the reason for its use

Ex : Hotel inter congenital New Delhi

Competitive positioning:

The positioning may be against the competition or away from the competitive

Quality positioning:

The positioning focus on quality leadership of the firm.

Price positioning:

The positioning is to communication the best value for the price the consumer pay.

Excellence positioning:

The positioning on the perform and the efficiency of the firm.

New service development:

A service can be termed as a new service when it is totally innovative and is created and

offered by the company to the world for the 1st time.

Some new services are adoptive replacement they are the improved versions of the existing

service products, either in technology style status or performance.

● New to the world products

● New product lines

● Additions to the existing product lines

● Improvements & versions of existing products


● Re-positioning

● Cost reductions

Post introduction

Enrolment

Launch

Marketing

Testing

Service

Department Business

Analysis

Testing the

Concept Idea

Screening

Idea

Generation

Idea generation:

The type of new service will depend on organization goals, vision, capabilities & growth plans.

By the new service strategy the org will be in below position to being generating specific ideas.

Idea screening:

This stage identifies those ideas that are potential and premising to be successful services. The

various services ideas are put screening by the evaluation of the idea with the company mission,

image and compatibility.

Testing the concept:

When the new service idea passes the screening stage. It is subject concept testing. It involves

translations the service idea into service concept with specific need satisfying aspects.

Business analysis:

The proposed idea is now viewed as a business proposal. This stage will decide whether the

project has both financial feasibility. The business analysis focuses on estimation of future growth,

major competitor’s price, elasticity of demand.

Service development:

The business proposal must then be converting into the actual service that will be to customer.

All tangible elements as well as the service delivery process must be designed.


Marketing testing:

Marketing testing helps the service firm to re-mix the marketing mix elements in order to

reduce the risk of launch, many service firms resort to testing within the org to its employees and

other benefits.

Post introduction evaluation:

A most service firms conduct market testing under simulated

Services Differentiation:

When the physical product cannot be differentiated, the companies resort to service differentiation

through addition of new services or modification of older ones or the combination of both.

i. Ordering ease:

It refers to how easy it is for the customer to place an order with the company. For example, Dell

Computers made the ordering of computers so simple that customers who are not aware of new

developments in the field can find various options to select from and get the deliveries in adequate

time.

ii. Delivery:

It refers to how well the product-service is delivered to the customer. For instance, DTDC or Fast

Flight is known for speed and efficiency in handling and delivering products. Domino’s Pizza is

known to deliver products within half an hour.

iii. Guarantees.

These can often be used as a differentiator and can be leveraged as a form of competitive advantage.

Companies can differentiate their offerings through guarantees by following certain guidelines:

a. The service guarantee associated with the product should be unconditional

b. The guarantee should be comprehensible and communicative

c. The guarantee should be meaningful and reassure the customer on those aspects that matter to him.


d. Customers should be able to invoke the guarantee easily and without any hassles.

iv. Installation:

It refers to the work done to make a product operational in its planned location. For example,

software application providers come along with step-by-step instructions on how to install software

in the system.

v. Customer training:

Some companies also train their customers or the customer’s employees to use the equipment. For

example, HPCL trains its dealers’ employees regarding handling of the equipment and in the

necessary soft skills to serve customers more efficiently. Some firms

also provide a hot line or a toll-free number for customer assistance and for further information about

new products and services.

vi. Financial arrangement:

Some companies tie up with financial institutions that offer loans to help customers purchase new

products through easy installment schemes, e.g. Maruti Udyog Ltd. has tied up with eight financial

institutions, Citicorp Maruti, Maruti Countrywide, ICICI, HDFC Bank, Standard Chartered, ABN-

AMRO, Kotak Mahindra and Sundaram Finance to help its customers with car finance.

vii. Customer consulting:

It refers to data, information systems and advising services that the seller offers to buyers.

viii. Maintenance and repair:

Companies provide after-sales maintenance and repair services for their products. Subsequent

business from the customer depends to a large extent on whether his experience of maintenance and

repair services from the company has been good or bad. For example, LG provides free service and

replacement of accessories for its hand sets up to one year to customers of Reliance India Mobile.

ix. Disposal:


Companies can also differentiate their products on the basis of disposability of the product after use.

For instance, some companies use plastic containers or wrappers to pack their product. They invite

the customer to return the empty packs to the company in exchange for another pack of the same

product. This strategy helps the firm in increasing its sales as well as establishing itself as an

environment-friendly organization. For example, Hewlett Packard asks its customers to send back

empty cartridges, which it claims it will reuse.

x. Miscellaneous services:

McMillan and McGrath suggest that the companies have opportunities to differentiate at every stage

of the consumption chain through miscellaneous services like improved warranty, maintenance

contract or reward system along with the above mentioned options


UNIT-3

Consumer Expectations

Pre-trial beliefs about a service that function as standards against which

performance is judged.

Customer Expectations of Service

• Recognize that customers hold different types of expectations for service performance

• Discuss controllable and uncontrollable sources of customer expectations

• Distinguish between customers’ global expectations of their relationships and their

expectations of the service encounter

• Acknowledge that expectations are similar for many different types of customers

• Delineate the most important current issues surrounding customer expectations

Types of Expectations

Desired service -- the level of service the customer hopes to receive

Adequate service -- the level of service the customer will accept.


Dual Customer Expectation Levels

The Zone of Tolerance

The extent to which customers recognize and are willing to accept variation in service performance

Zones of Tolerance for Different Service Dimensions

Zone of Tolerance and Importance of Service Dimensions

as a service dimension becomes more important zone of tolerance will narrow and desired

and adequate levels will increase

Zones of Tolerance for First-Time and Recovery Service


Consumers have a narrower zone of tolerance and a higher set of expectations for a service

recovery than for the first time service experience.

Factors that Influence Desired Service

Personal Needs --- states or conditions essential to the physical or psychological well being ---

physical, social, psychological, and functional

Enduring Service intensifiers --- individual stable factors that lead the customer to a heightened

sensitivity

derived service expectations


personal service philosophy

Factors that Influence Adequate Service Expectations

Are short-term in nature and fluctuate more than the factors that influence desired expectations.

Temporary Service Intensifiers

Short-term individual factors that make a customer more aware of the need for service

Perceived Service Alternatives

Other service providers that may perform the same or similar services

Self-perceived service role

Customer involvement in the delivery of the service

Situational Factors


Usually factors beyond the control of the service provider

Situational Factors

Reason for purchase

Consumer mood

Weather

Time constraints

Emergency

Self Perceived Service Role --- how well the customer perceives they are performing their own role

in service delivery.

Factors that Influence Desired and Predicted Service

• Explicit Service Promises

• Implicit Service Promises

• Word of Mouth

• Past Experience

particular service


within the same industry

related services

• More experience the narrower the Zone of Tolerance

• Four factors that influence the desired and adequate service expectations are as follows:

1. Explicit service promises 2. Implicit service promises 3. Word-of-mouth

communications 4. Past experience.

• When consumers are interested in purchasing services, they are likely to seek or take in

information from several different sources. For example, they may call a store, ask a

friend, or deliberately track newspaper advertisements to find the needed service at the

lowest price.

• They may also receive service information by watching television or hearing an

unsolicited comment from a colleague about a service that was performed well. In

addition to these active and passive types of external search for information, consumers

may conduct an internal search by reviewing the information held in memory about the

service.

• 1. Explicit service promises

• 2. Implicit service promises

• 3. Word-of-mouth communications, and

• 4. Past experience.

• 1. Explicit service promises:

• Explicit service promises are personal and non-personal statements about the service

made by the organization to customers. The statements are personal when they are

communicated by salespeople or service or repair personnel; they are non-personal when

they come from advertising, brochures, and other written publications. Explicit service

promises are one of the few influences on expectations that are completely in the control

of service provider.


• Promising exactly what will ultimately be delivered would seem a logical and appropriate

way to manage customer expectations and ensure that reality fits the promises. However,

companies and the personnel who represent them often deliberately overpromise to

obtain business or inadvertently overpromise by stating their best estimates about

delivery of a service in the future.

• Explicit service promises influence both the levels of desired service and predicted

service: They shape what customers desire in general as well as what they predict will

happen in the next service encounter from a particular service provider or in a certain

service encounter.

• 2. Implicit service promises:

• Implicit service promises are service-related cues other than explicit promises that lead to

inferences about what the service should and will be like. These quality cues are

dominated by price and the tangibles associated with the service.

• In general, the higher the price and the more impressive the tangibles, the more a

customer will expect from the service. Consider a customer who shops for insurance,

finding two firms charging radically different prices.

• She may make the inference that the firm with the higher price should and will provide

higher quality service and better coverage. Similarly, a customer who stays at a posh

hotel is likely to desire and predict a higher standard of service than from a hotel with

less impressive facilities.

• 3. The word-of-mouth communication:

• The importance of word-of-mouth communication is shaping expectations of service is

well documented. These personal and sometimes non-personal statements made by

parties other than the organization convey to customers what the service will be like and

influence both predicted and desired service.

• Word of mouth tends to be very important in services that are difficult to evaluate before

purchase and direct experience of them. Experts (including consumer Reports, friends


and family) are also word-of-mouth sources that can affect the levels of desired and

predicted service.

• 4. Past experience:

The customer’s previous exposure to service that is relevant to the focal service, is

another force in shaping predictions and desires. The service relevant for prediction can

be previous exposure to the focal firm’s service.

For example, you probably compare each stay in a particular hotel with all previous stays in that

hotel. But past experience with the focal hotel is likely to be a very limited view of your past

experience. You may also compare each stay with your experiences in the other hotels and hotel

chains.

Customers also compare across industries: hospital patients, for example, compare hospital stays

against the standards set by telephone service, one reason why cable service is often judged to be

poor. In a general sense, past experience may incorporate previous experience with the focal brand,

typical performance of a favorite brand, experience with the brand last purchased or the top-selling

brand, as well as the average performance a customer believes represents a group of similar brands.

Examples of Customer Expectations

Customer expectations are the base assumptions that customers make about your brand, services

and products. When expectations aren't met for one reason or another customers may be either

positively or negatively surprised. The following are illustrative examples.

Sensory Perception

A customer who tastes a confection such as a macaron is expecting a smell, taste and texture.

Quality

A customer of a luxury hotel may be expecting interior designs finished with high quality materials.

A customer of a budget hotel may be expecting a clean, comfortable and quiet room.

Fee Structure

A customer of an airline may expect meals and drinks to be free on an international flight.

Security & Privacy

A customer of a messaging app may expect that their messages to friends and family are private.


Customer Service

Customers of a hotel may expect staff to be courteous, amiable, professional and diligent.

Usability

Customers accustomed to touch screen interfaces may expect a tap zone around each element such

that things don't need to be tapped with unreasonable precision.

Terms

A customer who purchases a product that is delivered with qualitydefects may expect that they are

entitled to a refund if they return it in a reasonable period of time.

Personalization

A customer who returns to the same hotel frequently may expect the hotel to remember their room

preferences.

Performance

A customer expects their bank's website to load within seconds.

Types Customer expectations

Customer satisfaction reflects the expectations and experiences that the customer has with a product

or service. Consumer expectations reflect both past and current product evaluation and user

experiences.

Think about any major purchases you’ve made recently. Did you research your purchase? Did you

collect information from advertising, salespersons, friends, associates, or even test the product?

This information influences our expectations and gives us the ability to evaluate quality, value, and

the ability of the product or service to meet our needs and expectations.

Customers hold both explicit and implicit performance expectations for attributes, features, and

benefits of products and services. The nature of these expectations will dictate the form and even the

wording of customer satisfaction survey questions. Let me repeat this: the nature of these

expectations will dictate the form and even the wording of your satisfaction questions.

Understanding the following 7 customer expectations form the definitions below is

critical before you set out to measure customer satisfaction and increase customer loyalty.

https://simplicable.com/new/bug-vs-defect

https://www.qualtrics.com/market-research/product-development/

http://success.qualtrics.com/download-customer-satisfaction-survey-questions.html


1. Explicit Expectations

Explicit expectations are mental targets for product performance, such as well-identified performance

standards.

For example, if expectations for a color printer were for 17 pages per minute and high-quality color

printing, but the product actually delivered 3 pages per minute and good quality color printing, then

the cognitive evaluation comparing product performance and expectations would be 17 PPM – 3

PPM + High – Good, with each item weighted by the associated importance.

2. Implicit Expectations

Implicit expectations reflect established norms of performance. Implicit expectations are established

by business in general, other companies, industries, and even cultures.

An implicit reference might include wording such as “Compared with other companies…” or

“Compared to the leading brand…”

3. Static Performance Expectations

Static performance customer expectations address how performance and quality are defined for a

specific application. Performance measures related to quality of outcome may include the evaluation

of accessibility, customization, dependability, timeliness, accuracy, and user-friendly interfaces.

Static performance expectations are the visible part of the iceberg; they are the performance we see

and—often erroneously—are assumed to be the only dimensions of performance that exist.

4. Dynamic Performance Expectations

Dynamic performance customer expectations are about how the product or service is expected to

evolve over time. Dynamic expectations may be about the changes in support, product, or service

needed to meet future business or use environments.

Dynamic performance expectations may help to produce “static” performance expectations as new

uses, integrations, or system requirements develop and become more stable.

5. Technological Expectations

Technological customer expectations focus on the evolving state of the product category.


For example, mobile phones are continually evolving, leading to higher expectations of new features.

Mobile service providers, in an effort to limit a consumer’s ability to switch to new technology

phones, have marketed rate plans with high cancellation penalties for switching providers, but with

liberal upgrade plans for the phones they offer.

The availability of low profile phones with email, camera, MP3, blue tooth technology, and increased

storage will change technology expectations as well as the static and dynamic performance

expectations of the product.

These highly involving products are not just feature based, but raise expectations that enhance

perceptions of status, ego, self-image, and can even evoke emotions of isolation and fear when the

product is not available.

6. Interpersonal Expectations

Interpersonal customer expectations reflect the relationship between the customer and the product or

service provider.

Person to person relationships are increasingly important, especially where products require support

for proper use and functioning.

Support expectations include interpersonal sharing of technical knowledge, ability to solve a

problem, ability to communicate, reduced time to problem resolution, courtesy, patience, enthusiasm,

helpfulness, assurance that they understood my problem and my situation, communication skills, and

customer perceptions regarding professionalism of conduct, often including image and appearance.

7. Situational Expectations

In building a customer satisfaction survey, it is also helpful to evaluate why pre-purchase

expectations or post-purchase satisfaction may or may not be fulfilled or even measurable.

The following conditions may be considered:

Expectations may not include unanticipated customer service attributes that are new to that

consumer.

Expectations may be based on vague images, thereby creating wide latitude of acceptable

performance and expected satisfaction.


Product performance expectations and evaluations may be sensory and not cognitive, as in

expectations of taste, style or image. Such expectations are not only difficult to evaluate and

understand, but may change over time and with consumption.

The product use may attract so little attention as to produce no conscious affect or cognition

(evaluation). When measured, this results in meaningless satisfaction or dissatisfaction

information.

There may have been unanticipated benefits or consequences of purchasing or using the

product (such as a uses, usage situations, or features not anticipated with purchase).

The original expectations may have been unrealistically high or low.

The product purchaser, influencer and user may have each been a different type of individual,

each having different expectations.

Your research study may also benefit from considering expectations related to perceived quality and

value.

Issues in involving customers service expectations


Customer defined service standards

Introduction

A tangible product is only one aspect of the supplier/customer relationship. The other aspect is

service; indeed, in many businesses, there is no physical product. The only relationship is service.

Service standards are important for customers, potential customers, employees and management of a

business. They help to define what a customer can expect and to remind management and

employees of the challenge and obligations that they face.

Defining service standards

Service standards are usually defined in terms of:

timeliness

accuracy

appropriateness

‘Delivery in three days’ or ‘calls answered in 20 seconds’ are phrases that give the essence of a

service standard that involves a timeline.

These statements need to be defined precisely before they can be considered as true service

standards. ‘When does the clock start?’, ‘Are we expecting 100% success in the timeframe?’, ‘Is

measurement based on working days or calendar days?’, ‘Does this apply to all locations

worldwide?’ and ‘Does this apply 24 hours/day, 7 days/week?’ are some of the questions that

have to be asked in the process of defining the standard.

So an initial definition of ‘answer the phone within three rings’ may be implemented as ‘Between

8am and 6pm on workdays, 95% of calls will be answered by a human in 15 seconds and 100%

in 40 seconds’.

Similarly, an initial definition of ‘delivery within two days’ could become ‘For addresses in the UK

mainland, parcels will be delivered two working days after receipt of the order’.


Accuracy

Customers expect accurate information and accurate deliveries – only 100% is acceptable as a

standard under this heading. ‘We got most of your order right’ is a response that is not

appreciated by a customer.

Examples of service standards reflecting the accuracy of a service are ‘the information quoted in a

telephone conversation is 100% accurate’ or ‘the parcel received by the customer contained all

the goods ordered by the customer’.

Appropriateness

How often do you hear the exclamation ‘they didn't answer the question!’ It happens often

when politicians are being interviewed on TV but it shouldn't happen in the commercial world.

Appropriateness is about ensuring that the customers' expectations have been met,

particularly in an enquiry situation.

An example

A customer writes to an organisation with a three-part enquiry. The customer receives a

response that is on time, totally correct in what it says – but fails to address one of the three topics

in the original enquiry. Such a response would fail the appropriateness standard – again based on

a 100% expectation.

‘100% of the customer's questions were addressed’ would be a good starting point for such a

standard.

Customer Defined Standards

Operational Standards based on pivotal customer requirements identified by customer.

Examples-: -Customer requirement

-Priorities

-Expectation Level


-efficiency

-effectiveness

Types of Customer – Defined Service

SOFT STANDARDS AND MEASURES

Opinion-based measures that cannot be observed and must be collected by talking to customers

(perceptions, beliefs)

HARD STANDARDS AND MEASURES

Things that can be counted, timed, or observed through audits (time, numbers of events)

One Time Fixes

What aspect of services need to be changed requirement can something be met using one

time fixes.

Technology

Policy

Procedures

Equipments

Furnishing


Process for Setting Customer-Defined Standard

1. Identify existing or desire service standards.

2. Translate customer explanation in to behavior and actions.

3. Determine appropriate standards

4. Develop measurement for standards.

5. Establish target level for standards

6. Track measure against standards.

7. Provide feedback about performance to employees.

8. Update target levels and measures.


06. Track measure against standards.

07. Provide feedback about performance to employees.

08. Update target levels and measures.

Developing Service Performance Index

Customer define standards are service performance index

Purpose

•Identify of the customer most important requirements.

•Requirement link with tangible and measurement aspect.

•Using feedback from Index

•Identify and improve service problems.

Implementation of Service Standards

Ownership

visibility

Commitment.


Ownership

It starts at the top. The chief executive and top management team must be sponsors and

champions. They must ‘walk the talk’, own the communication process and ensure initial and on–

going focus on standards in every employee briefing.

Each service standard must have a management owner, who is accountable for the delivery of the

service. Performance against standard will normally be a feature of that individual's annual review.

The management owner will also have the authority to implement process and other changes to

improve operational performance. But there is no copyright on ideas, so all colleagues should be

encouraged to make suggestions for performance improvement.

Visibility

‘How well are we doing?’ should be a question that employees don't have to ask. Customer

service standards and the current performance against those standards should be communicated to all

employees on a timely basis.

Notice boards, memos, email, team briefings, newsletters and the organization’s intranet are

appropriate methods.

Employees really appreciate the opportunity for discussion. Employees who are based out of the

office are frequently overlooked, so they should get special consideration.

Commitment

The mission or values of an organization are a good place to anchor the commitment to

customer service.

The chief executive, all levels of management and all employees must be committed to

delivering the promise to customers regardless of external or internal influences. It's not easy but

remember: service is your best salesman.


UNIT-4

SERVICE MARKETING MIX – 7 P’S OF MARKETING

The service marketing mix is also known as an extended marketing mix and is an integral

part of a service blueprint design. The service marketing mix consists of 7 P’s as compared to the

4 P’s of a product marketing mix. Simply said, the service marketing mix assumes the service as

a productitself. However it adds 3 more P’s which are required for optimum service delivery.

The product marketing mix consists of the 4 P’s which

are Product, Pricing, Promotions and Placement. These are discussed in my article on product

marketing mix – the 4 P’s.

The extended service marketing mix places 3 further P’s which include People, Process

and Physical evidence. All of these factors are necessary for optimum service delivery. Let us

discuss the same in further detail.

1) Product

The product in service marketing mix is intangible in nature. Like physical products such

as a soap or a detergent, service products cannot be measured. Tourism industry or the education

industry can be an excellent example. At the same time service products

are heterogenous, perishable and cannot be owned.

The service product thus has to be designed with care. Generally service blue printing is

done to define the service product. For example – a restaurant blue print will be prepared before

establishing a restaurant business. This service blue print defines exactly how the product (in this

case the restaurant) is going to be.

2) Place

Place in case of services determine where is the service product going to be located. The

best place to open up a petrol pump is on the highway or in the city. A place where there is

minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be

better placed in a business hub with a lot of companies nearby rather than being placed in a town

or rural area. Read more about the role of business locations or Place element.

3) Promotion

Promotions have become a critical factor in the service marketing mix. Services are easy

to be duplicated and hence it is generally the brand which sets a service apart from its

counterpart. You will find a lot of banks and telecom companies promoting themselves

rigorously.

https://www.marketing91.com/marketing-mix-4-ps-marketing/

https://www.marketing91.com/extended-marketing-mix/

https://www.marketing91.com/difference-between-product-marketing-mix-and-service-marketing-mix/

https://www.marketing91.com/what-is-a-product/

https://www.marketing91.com/how-value-delivery-changed-time/

https://www.marketing91.com/levels-product/

https://www.marketing91.com/types-of-pricing/

https://www.marketing91.com/promotions-in-marketing/

https://www.marketing91.com/people-marketing-mix/

https://www.marketing91.com/physical-evidence-marketing-mix/

https://www.marketing91.com/intangibility-in-services/

https://www.marketing91.com/types-of-products/

https://www.marketing91.com/heterogeneity-in-service-marketing/

https://www.marketing91.com/perishability-services-marketing/

https://www.marketing91.com/ownership-service-marketing/

https://www.marketing91.com/determine-market-potential/

https://www.marketing91.com/7-business-locations-increase-brand-visibility/

https://www.marketing91.com/promotional-mix/

https://www.marketing91.com/what-is-a-brand/


It is because competition in this service sector is generally high and promotions is

necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest by

advertising or promotions.

4) Pricing Pricing in case of services is rather more difficult than in case of products. If you were a

restaurant owner, you can price people only for the food you are serving. But then who will pay

for the nice ambiance you have built up for your customers? Who will pay for the band you have

for music.

Thus these elements have to be taken into consideration while costing. Generally service

pricing involves taking into consideration labor, material cost and overhead costs. By adding a

profit mark up you get your final service pricing. You can also read about pricing strategies.

Here on we start towards the extended service marketing mix.

5) People

People is one of the elements of service marketing mix. People define a service. If you

have an IT company, your software engineers define you. If you have a restaurant, your chef and

service staff defines you. If you are into banking, employees in your branch and their behavior

towards customers defines you. In case of service marketing, people can make or break an

organization.

Thus many companies nowadays are involved into specially getting their staff trained in

interpersonal skills and customer service with a focus towards customer satisfaction. In fact many

companies have to undergo accreditation to show that their staff is better than the rest. Definitely

a USP in case of services.

6) Process

Service process is the way in which a service is delivered to the end customer. Lets take

the example of two very good companies – Mcdonalds and Fedex. Both the companies thrive on

their quick service and the reason they can do that is their confidence on their processes.

On top of it, the demand of these services is such that they have to deliver optimally

without a loss in quality. Thus the process of a service company in delivering its product is of

utmost importance. It is also a critical component in the service blueprint, wherein before

establishing the service, the company defines exactly what should be the process of the service

product reaching the end customer.

7) Physical Evidence The last element in the service marketing mix is a very important element. As said before,

services are intangible in nature. However, to create a better customer experience tangible

elements are also delivered with the service. Take an example of a restaurant which has only

chairs and tables and good food, or a restaurant which has ambient lighting, nice music along

with good seating arrangement and this also serves good food. Which one will you prefer? The

one with the nice ambience. That’s physical evidence.

Several times, physical evidence is used as a differentiator in service marketing. Imagine

a private hospital and a government hospital. A private hospital will have plush offices and well

dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a

differentiator.

So next time some one asks what do you mean by service marketing mix or What are the 7 P’s, then

you know the answer. This is the service marketing mix (7p) which is also known as the extended

marketing mix.

PACKAGING

INTRODUCTION

https://www.marketing91.com/analyse-defeat-direct-competition/

https://www.marketing91.com/pricing-strategies/

https://www.marketing91.com/people-marketing-mix/

https://www.marketing91.com/pricing-strategies/

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• Packaging is a process of covering, wrapping of goods into a package. Packaging involves

designing and producing wrapper for a product.

• Packaging is essential for offering goods in safe and secured position to consumers.

• Packaging’s role is threefold:

To facilitate the use of the product

To protect the product

To sell the product

TYPES OF PACKAGING

1. CONSUMER PACKAGING

• Designed for consumers convenience and appeal, marketing consideration and display.

• The main emphasis is on marketing.

2.INDUSTRIAL PACKAGING

• It is designed to focus on the handling convenience and protection during transportation.

• The main focus is on logistic.

The classification of packaging can also be based on level of packaging done on the product.

• Primary : -Direct contact with product. & Maintain product quality.

• Secondary : -It contains product and primary pack presentation , protection

• Tertiary : -Transport shipping , warehouse storage, bulk handling.

REASONS FOR PACKAGING DESIGN

• Product quality must be maintained.

• Customers must be able to easily access and use the product without harming themselves or

contaminating the product.

• All aspects of a pack development that may give rise to quality problems must be identified and

minimized by good design.

• This packing design coordinator must be fully aware of the involvement required by marketing,

quality assurance and production.

• Once it has fulfilled its role of attracting the consumer’s attention and setting up the expectations

which have encouraged purchase of the product, packing then has a vital role to play in assisting

the product to meet those expectations.

• In addition to containing, protecting and preserving, all of which will almost certainly be taken for

granted.

• Packing works in practical terms by delivering the product into its intended market and to the end

user , in such a way that it is convenient and safe to use.

FUNCTIONS OF PACKAGING


• Presentation: Presentation of a product should be attractive and eye catching.

• Protection: Protection increases life cycle of a product.

• Preservation : It preserves original colors, quality, flavor, etc.

• Economy : Packaging of a product should be economically feasible.

• Convenience : Packaging should be light to handle.

SECONDARY FUNCTIONS

• Containment : Premeasured, pre-weight and then placed in box.

• Identification: Packaging helps to identify the products easily.

• Labeling : Its helps to promote the sale of goods.

• Handling : When packaging is light in weight it facilitate easy to handling of cargo.

• Suitability : It should be match with the product.

Package Development

Package Development is a manufacturer of custom thermoformed and printed

packaging and displays, providing high quality design, engineering, production and fulfillment for

all thermoformed and printed packaging needs.

10 Best Practices for Managing the Packaging Development Process

If you’ve ever gone through the packaging development process, you know how many

variables and unknowns there are to coordinate. The project can quickly leave you feeling like you’re

wrestling a three-headed monster. Once you knock out one area, several others rear their ugly heads

causing you to have to keep forging ahead with a swinging sword.

Although difficult, there are a few best practices you can implement to make this process more

bearable.

Here are 10 of our favorite ways to design a package and its various components and still meet your

product’s brand and operational requirements today and in the future.

1. Coordinate Suppliers

From the packaging material supplier to the machinery suppliers and contract fillers, you

are juggling a lot of critical tasks from the outside world. This can make communication a nightmare

if you don’t get everyone on the same page early on.


Loop in your suppliers from the start. This will help you reduce risks and ensure critical

requirements, such as label design specifications, handling, and label application, are followed.

2. Work with Distributors Early On

The packaging development process has a lot of moving parts. That we’ve covered. Each of

these parts costs money. That’s something that’s often neglected until it’s too late.

When it comes to finding the right manufacturer and distributor, up front cash requirements are

critical to consider. Bottle manufacturers, in particular, require large minimum order quantities

(MOQs). For small companies, buying the minimum can still put a strain on the overall budget.

Large companies also run into this dilemma often during product launches.

What many people don’t realize is that distributors often have bulk inventory on hand. They’re able

to sell this stock for a significantly lower cost than the MOQs required by manufacturers. Even

though the per unit cost is a little bit higher, the overall bill is quite a bit lower.

Talking to your distributor early on could save you money and time getting your product to market.

3. Eliminate the Fluff (Middleman)

Working directly with your manufacturers can help you get what you need faster and easier.

Although it’s tempting to loop in other experts, cutting out the middleman can prove beneficial in the

long run if they don’t provide additional added value like an inventory program or a broader

expertise like a general contractor would.

4. Protect Your Branded Containers

Have a custom container shape? You’re not alone. This is an excellent way to grab buyer’s

attention, but be warned. There are many custom containers these days. One major packaging

distributor has reported that custom containers are up 45% over the past year. You might want to

apply for a patent to protect your design before it’s copied by others.

5. Protect Your Designs

Your label designs are just that – yours. Just like with your container shapes, it’s a smart

practice to protect your label creative. By working with a creative brand designer, you’ll get

exclusive rights to your design, which can prove beneficial when you seek quotes from suppliers.

6. Minimize Renovations

Are you renovating, or changing your packaging design? If so, you’re going to run into a

variety of problems with designers, label producers, and other suppliers. Minimize the need for any

container renovations by planning a bulk change on the entire brand portfolio at once. This way, you

won’t need to go through multiple iterations and can get everything updated in one fell swoop.

7. Keep Customer-Centric

It’s easy to get caught up in the details that you forget to focus on the customer when

designing your label and producing your product. This is dangerous. Every attribute of your product

should enhance the customer’s end experience. From making your container easy to grab and hold to

offering answers to customer questions on your labels, it’s important to keep the customer at the

forefront of all your decisions.


8. Keep the Process in Mind

As you start making decisions, don’t lose sight of the overall process. Each step will need to

feed into the other. Work hard to assemble an efficient supply chain among your suppliers and

distributors from the get go so you’re not trying to widen process bottlenecks once everything gets

going.

9. Remember Your Constraints

While designing your prototypes and deciding on containers or labels, remember your constraints.

Do you have required information, such as nutrition facts, that you must disclose on your labels?

Does your manufacturer have certain regulations about container size or shape you must follow?

Do you have to go through specific tests before your product shape, size, and label can be approved?

Is your label design printable?

Understand what constraints you’ll face during the process so you can prepare yourself for success in

the future instead of setbacks.

10. Consider All Channels

Every channel where you’ll be offering your product (grocery stores, drug stores, hotel

chains, etc.) has a different strategy. One channel might sell using smaller packaging while another

focuses on selling bulk supplies. One channel might sell only using photographs of the products

while another sells in an environment where the customer can pick up and feel the product before

buying.

PRODUCT ATTRACTIVENESS

http://thelabellink.com/must-start-fda-nutrition-label-changes-updates-now/


Promotion Mix

Elements of promotional mix are also called as tools, means, or components. Basically,

there are five elements involved in promotional mix. Some authors have considered more elements,

too. However, we will consider five elements as shown in Figure 1.

1. Advertising:

Advertising is defined as any paid form of non-personal presentation and promotion of ideas,

goods, and services by an identified sponsor. It is a way of mass communication. It is the most

popular and widely practiced tool of market promotion. Major part of promotional budget is

consumed for advertising alone. Various advertising media – television, radio, newspapers,

magazines, outdoor means and so forth – are used for advertising the product.



Characteristics of advertising are as follow:

i. Adverting is non-personal or mass communication. Personal contact is not possible.

ii. It is a paid form of communication.

iii. It is a one-way communication.

iv. Identifiable entity/sponsor-company or person gives advertising.

v. It is costly option to promote the sales.

vi. It can be reproduced frequently as per need.

vii. Per contact cost is the lowest.

viii. Various audio-visual, print, and outdoor media can be used for advertising purpose.

ix. It is a widely used and highly popular tool of market promotion.

2. Sales Promotion:

Sales promotion covers those marketing activities other than advertising, publicity, and

personal selling that stimulate consumer purchasing and dealer effectiveness. Sales promotion mainly

involves short-term and non-routine incentives, offered to dealers as well consumers. The popular

methods used for sales promotion are demonstration, trade show, exhibition, exchange offer,

seasonal discount, free service, gifts, contests, etc.

Characteristics of sales promotion are as follows:

i. The primary purpose of sales promotion is to induce customers for immediate buying or dealer

effectiveness or both.

ii. Excessive use of sale promotion may affect sales and reputation of a company adversely.

iii. It is taken as supplementary to advertising and personal selling efforts.

iv. It involves all the promotional efforts other than advertising, personal selling, and publicity.

v. It consists of short-term incentives, schemes, or plans offered to buyers, salesmen, and/ or dealers.

vi. It in``11volves non-routine selling efforts.

3. Personal Selling:

Personal selling includes face-to-face personal communication and presentation with

prospects (potential and actual customers) for the purpose of selling the products. It involves personal


conversation and presentation of products with customers. It is considered as a highly effective and

costly tool of market promotion.

Characteristics of personal have been listed below:

i. Personal selling is an oral, face-to-face, and personal presentation with consumers.

ii. Basic purpose is to promote products or increase sales.

iii. It involves two-way communication.

iv. Immediate feedback can be measured.

v. It is an ability of salesmen to persuade or influence buyers.

vi. It is more flexible way of market communication.

vii. Per contact cost is higher than advertising.

viii. It involves teaching, educating, and assisting people to buy.

4. Publicity:

Publicity is also a way of mass communication. It is not a paid form of mass communication

that involves getting favorable response of buyers by placing commercially significant news in mass

media. William J. Stanton defines: “Publicity is any promotional communication regarding an

organization and/or its products where the message is not paid for by the organization benefiting

from it.”

It is the traditional form of public relations. Publicity is not paid for by the organisation. Publicity

comes from reporters, columnists, and journalists. It can be considered as a part of public relations.

Publicity involves giving public speeches, giving interviews, conducting seminars, charitable

donations, inauguration by film actor, cricketer, politician or popular personalities, stage show, etc.,

that attract mass media to publish the news about them.

Main characteristic of publicity include:

i. Publicity involves obtaining favorable presentation about company or company’s offers upon

radio, television, or stage that is not paid for by the sponsor.

ii. It is a non-paid form of market promotion. However, several indirect costs are involved in

publicity.

iii. It may include promotion of new product, pollution control efforts, special achievements of

employees, publicizing new policies, etc., for increasing sales. It is primarily concerns with


publishing or highlighting company’s activities and products. It is targeted to build company’s

image.

iv. Mostly, publicity can be carried via newspapers, magazines, radio or television.

v. Company has no control over publicity in terms of message, time, frequency, information, and

medium.

vi. It has a high degree of credibility. Publicity message is more likely to be read and reacted by

audience.

vii. Publicity can be done at a much lower cost than advertising. Company needs to spend a little

amount to get the event or activity publicized.

viii. Frequency or repetition of publicity in mass media depends upon its social significance or the

values for news. Mostly, it appears only once.

5. Public Relations:

The public relations is comprehensive term that includes maintaining constructive relations

not only with customers, suppliers, and middlemen, but also with a large set of interested publics.

Note that public relations include publicity, i.e., publicity is the part of public relations.

William Stanton defines:

“Public relations activities typically are designed to build or maintain a favourable image for an

organisation and a favourable relationship with the organization’s various publics. These publics may

be customers, stockholders, employees, unions, environmentalists, the government, and people in

local community, or some other groups in society.” Thus, public relations include organization’s

broad and overall communication efforts intended to influence various groups’ attitudes toward the

organisation. Some experts have stated that the public relations are an extension of publicity.

Main characteristic of publicity are as under:

i. Public relations is a paid form of market promotion. Company has to incur expenses.

ii. Public relations activities are designed to build and maintain a favourable image for an

organisation and a favourable relationship with the organization’s various publics.

iii. It is an integral part of managerial function. Many companies operate a special department for the

purpose, known as the public relations department.

iv. It involves a number of interactions, such as contacting, inviting, informing, clarifying,

responding, interpreting, dealing, transacting, and so forth.


v. Public relations covers a number of publics – formal and informal groups. These publics may be

customers, stockholders, employees, unions, environmentalists, the government, people of local

community, or some other groups in society.

vi. Public relations activities are undertaken continuously. It is a part of routine activities.

vii. All the officials, from top level to supervisory level, perform public relations activities.

viii. In relation to modern management practices, the public relations is treated as the profession.

Service Marketing Strategies

Definition of Marketing Strategy

The process of adjusting controllable marketing factors to cope with or exploit

uncontrollable environmental forces.

Definitions of Reactive and Proactive Strategies

• Reactive strategy is a slow response to environmental changes.

• Proactive strategy is a rapid response to environmental changes.

• Defensive strategies – rapid responses to protect the organization from environmental

threats.

• Offensive strategies – rapid responses employed to capture opportunities.

Planning the Services Marketing Strategy

• Planning the strategy

• Determination of the service's objectives and manner in which they will be

accomplished.

• Designing the strategy

• Careful specification of what it is that the organization hopes to accomplish.

• Implementing the strategy

• Developing a detailed timetable and itemized budget.

• Controlling the strategy

• Continuous assessment and modification of the success of strategies.

Types of Service Marketing Strategies


Marketing a service differs from promoting a tangible product because consumers often need

to be educated about a service. Service marketing often requires more explanation as to why the

customer needs the product, how it works and why you are the best entity to deliver the service. If

you're a solo entrepreneur, selling a unique skill you have, you're even more under the gun to explain

what you do. Using a multi-pronged educational approach for marketing a service will be your best

bet to boost sales.

Referrals

One of the best ways to market an intangible is through word of mouth. A happy customer

will not wait to be asked about a service from friends and will often want to share her experience

and tell people why she likes the service. Some service providers use referral programs as an

integral part of their marketing. You can offer clients a cash bonus for each referral they send to

you, offer them a free service for each lead or offer their friends a reduced rate on service if they

mention the customer.

Education

Another way to market a service is to provide customer education. You can do this by

offering free seminars, lunch-and-learns or other educational meetings. You can write articles for

magazines and newspapers and give talks at trade shows and conferences. With an educational

marketing strategy, you do not emphasize your product features or prices, but the benefits of

using the service. For example, if you own a dog grooming business, you might write articles for

local newspapers discussing the effects of pet ticks and fleas on a family’s health and a pet’s

well-being, showing how regular grooming can alleviate these problems.

Demonstrations

Customers might be gun shy about trying a service if they aren’t sure what they are

getting. Offering free demonstrations helps ease their concerns and can result in immediate sales.

For example, if you offer personal training, you might contact a large company with a wellness

program and offer to give an employee talk and free exercise class. If you offer public relations

services, you might offer meet with a business owner, discuss his current marketing strategy and

suggest PR initiatives he could try and outline the cost to do so.

Social Media

Social media are hard to escape, with millions of people sending texts and emails to

friends when they see interesting items they want to share. They can also be an inexpensive way

for smaller businesses with few advertising dollars to make an impact. A social media marketing

strategy lets service providers take advantage of free tools such as Facebook and Twitter to

educate consumers and get them to spread the word to their network of contacts. With Facebook,

for example, you can create a free business page that lets you detail your service. Put customer

testimonials and case histories on your page or run contests offering a cash prize or a free session

or visit. Place place Facebook "Like" buttons on your website pages to encourage visitors to share

what they find with friends. Send Twitter messages that give customers free tips. For example, a

landscaper might tweet, "Watering your lawn more than once per week isn't necessary. Once a

week for 30 minutes is all you need."

Segmentation and Targeting of Services

Meaning of segmentation

Market segmentation is the process of dividing an entire market up into different

customer segments. Targeting or target marketing then entails deciding which potential customer

segments the company will focus on. It comes before targeting, which helps a company to be

more selective about who they are marketing their products to. Marketing segmentation and


targeting are equally important for ensuring the overall success of a company. Today,

Segmentation, Targeting and Positioning (STP) are a familiar strategic approach in modern

marketing. The STP model is useful to creates marketing communications plans since it helps

marketers to develop strategies and then create and deliver personalized and relevant messages to

engage with different audiences.

The above diagram shows how STP model works. STP is relevant to digital marketing too,

where applying marketing personas can help develop more relevant digital communications as shown

by these alternative tactical customer segmentation approaches. In addition, STP focuses on

commercial effectiveness, selecting the most valuable segments for a business and then developing a

marketing mix and product positioning strategy for each segment.

Importance of segmentation of services

Focus of the Company

Increase in competitiveness

Market expansion

Customer retention

Have better communication

Increases profitability

As already stated, segmentation is the basis for developing targeted and effective marketing

plans. Furthermore, analysis of market segments enables decisions about intensity of marketing

activities in particular segments. A segment orientated marketing approach generally offers a range

of advantages for both, businesses and customers.


1) Focus of the Company – It is an effective method to enhance the focus of a firm on market

segments. If marketers have better focus, obviously he will have better returns. A number of

automobile companies have started focusing on small car segments. This is nothing else but a

company changing its focus for better returns. Thus companies develop their strategy based on a

new segment which increases its profitability.

2) Increase in competitiveness – Once marketer’s focus increases, their competitiveness in that

market segment will increase. Segmentation increases the competitiveness of companies. For

example, if you are focusing on youngsters, your brand recall and equity with youngsters will be

very high. Your market

share might increase and the chances of a new competitor entering might decreases. The brand

loyalty will definitely increase. Thus market segmentation also increases competitiveness of a

firm from a holistic view.

3) Market expansion- In segmentation expansion is immediately possible. Suppose you have your

market strategy on the basis of geography, then once you are catering to a particular territory, you

can immediately expand to a nearby territory. In the same way, if you are targeting customers

based on their demography (Ex – Reebok targets fitness enthusiasts) then you can expand in

similar products (Ex – Reebok expanding with its fitness range of clothes and accessories).

Segmentation plays a vital role in expansion.

4) Customer retention – By using segmentation, customer retention can be cheered through the life

cycle of a customer. You can take an example of Hospitality segment whether there are hotels,

airlines, or hospitals. Hospitality services is the growing sector in India, where a customer have

an ample number of choices starting from a local Dhabi to a luxurious hotel catering services on

the basis of customer demands.

5) Have better communication – One of the Ps of marketing mix which is absolutely dependent on

STP is Promotion or communication. The communications of a company needs to be spot on for

its target market. Thus if you need a target market, you need segmentation. Communication

cannot be possible without knowing your target market. Imagine if you had to make someone

across a curtain understand what politics is. You would go on about ruling parties, states,

countries and politicians. And when the curtain is taken aside, you find that the person across the

curtain is a 5 year old kid. Is there any use talking to him about politics? This shows why

communication needs segmentation. If you don’t know your market segment, what is their

demography, what is their psychology, where they are from, then how can you form a

communication message.

6) Increases profitability – Segmentation increases competitiveness, brand recall, brand equity,

customer retention, and communications. Thus if it is affecting so many factors of your business,

then definitely it affects the profitability of the firm. We never see people negotiating in a Nike,

Gucci or BMW showrooms. One of the USP’s of this brand is their segmentation. They are in

fact targeting segments which have no need of bargaining or negotiation. Thus their profitability

is high.

Targeting of services

A target market is that selected market (customers), that a company wants to sell its

products and services to, and to whom it directs its marketing efforts. Firstlymarketer needs to

identify the target market and thereafter develops its marketing plan. A target market can be

separated from the market as a whole by geography, buying power and psychographics. Once the

segments have been evaluated the market to be targeted can be selected on the basis of :

Undifferentiated marketing: The undifferentiated marketing strategy emphases on an entire target

market rather than a segment of it. This strategy employs a single marketing mix - one product,

one price, one placement and a single promotional effort to reach the maximum number of

consumers in that target market.


"Marketing," by William M. Pride and O. C. Ferrell, gives commodities says sugar and salt are

examples of products that might be marketed effectively through an undifferentiated strategy, as

many consumers in the overall market have similar needs for the products.

Differentiated marketing: This is a customized approach and satisfies customers according to their

needs. A differentiated marketing strategy targets different market segments with specific

marketing mixes designed especially to meet those segments needs. Each mix includes a product,

price, placement and promotional program customized specifically for a particular segment. For

example, a company that manufactures vitamin supplements might identify gender-based market

segments. It could produce one multivitamin formula for women and another for men. It could

further differentiate by segmenting the gender groups by life stage and creating different

marketing mixes around each one. Differentiated marketing is best suited for markets with

readily identifiable segments, each with distinctive needs.

Concentrated marketing :The concentrated strategy provides a third-way solution that allows

marketers to target a single market segment with a single marketing mix. The ability to specialize

to this degree has the advantage of allowing a company to focus its resources on meeting the

needs of a single, well-defined and well-understood market, which makes it more competitive

against larger companies. On the downside, a concentrated marketing strategy can pigeonhole a

company into a single product and market and leave it vulnerable to the effects of changing

conditions within that market.

Micro marketing :Micro marketing is a marketing strategy in which advertising efforts are focused

on a small group of highly-targeted consumers. Micromarketing requires a company to narrowly

define a particular audience by a particular characteristic, such as ZIP code or job title, and tailor

campaigns for that particular segment. It can be a more expensive technique due to customization

and lack of an economy of scale.

Positioning the Services

Product positioning involves a number of steps including the following: Determining levels of

positioning Identification of key attributes of importance to selected segments Location of

attributes on a positioning map Evaluating positioning options Implementing positioning.

Process of Positioning

Product positioning involves a number of steps including the following:

Determining levels of positioning

Identification of key attributes of importance to selected segments

Location of attributes on a positioning map

Evaluating positioning options

Implementing positioning.

Determining levels of positioning


The first step in positioning is to determine which level(s) –service level, product sector level, and

corporate level –are to receive explicit positioning attention. Some examples will illustrate the

choices that are made by some service organizations. The level or levels of positioning to be

undertaken are usually fairly clear out, although some organization, have placed different

emphasis on these levels at different points in time.

Identification of attributes Once the level of positioning has been determined it is necessary to

identify the specific attributes that are important to the chosen market segments. In particular, the

way in which purchasing decisions are made should be considered. Individuals use different

criteria from making a purchase decision of a service.

Location of attributes on positioning map

The positioning process involves the identification of the most important attribute and

location of various companies‟ services, for these attributes attribute identified, statistical procedures

exist for combining these attributes into aggregate dimensions. Such dimensions are referred to by

various names such as principal components, multi-dimensional scales, factors etc. depending upon

how the data were elicited and which statistical procedures were used. Usually two dimensions are

used on positioning maps and these often account for a large proportion of the „explanation‟ of

the customer’s preference.

Products or services are typically plotted on a two dimensional positioning man such as show

in the following figure. The positioning map can be relation to the selected attributes. The analysis

can be further developed by drawing separate positioning maps for each market segment. Customers

in each market segment may perceive the service and its benefits differently and different map will

show these different positions.


Fig. 6.1 Illustrative positioning man

Positioning maps can be based on either objective attributes or subjective attributes Maps can also

use a combination of objective and subjective attributes.

Evaluation positioning options

Strengthening current position against competitors to avoid head-on attack.

Identifying an unoccupied market position that was not filled by a competitor

Repositioning the competition.

Once a company had identified where it is positioned at present, it then needs to

determine how to enhance or sustain its position relative to its competitors.

Criteria for good positioning

The positioning should be meaningful.


The positioning must be believable.

The positioning must be unique.

Implementing positioning and the marketing mix

How a company and service is positioned needs to be communicated throughout all of its implicit

and explicit interactions with customers. This suggests that all elements of the company, its staff,

policies and image, need to reflect a similar image which together conveys the desires position to

the market place. This means that a company must establish a strategic positioning direction,

which is followed through in all of its tactical marketing and sales activities.

A successful positioning strategy should make the service clearly distinguishable by features which

are desirable and important to the target customer segment. This means that the positioning

strategy should be examined from time to time to ensure that it does not become outdated and

that it is still relevant to the target market segment.

The marketing mix is the key to implementing a positioning strategy. The design of the marketing

mix to implement the positioning must be based on the key salient attributes relevant to the target

segment. These attributes should be identified in the context of analysis of competitors, whose

positions should be assessed to discover their vulnerability. All the elements of the marketing mix

can be utilized to influence the customer’s perception and hence The marketing mix can be used

to develop a coherent totality that creates the positioning in the customer’s mind.

Importance of Positioning

Positioning involves both launching new brands into the marketplace (new brand positioning), and

repositioning old brands. It is concerned with the differentiation of products and services and

ensuring that they do not degenerate into a commodity. To maximize its potential a company

should position itself in its core market segments, where it is objectively or subjectively

differentiated in a positive way over competing offerings.

Positioning is particularly import for services in the market. As a result of competitive pressure the

consumer is becoming increasingly confused by the huge offering of services within each market

sector. These offering are communicated by a vast number of advertising messages promoting


different features of the services. The key to a successful positioning strategy is to promote the

feature which the company is best and which exactly matches the needs of the customer.

Because of intangibility and other features associated with services, consumers find that

differentiation of services can be more difficult and complex. Successful positioning makes it

easier for the customer to see a company’s services as being different from others and exactly

what is wanted.

METHODS OF POSITIONING

Services can be positioned in 6 different ways. They can be positioned by service attributes, use of

application, price/ quality relationship, service class, service user, or competitor.


Market Leadership Strategies

Market leadership is not simple task. Other firms continually challenge the leader’s strengths or try to

take advantages of its weaknesses. The leader firm might become weaker or old-fashioned against

new entrants as well as existing rival firms. It firm can use one or a combination of three strategies to

retain its leadership .


1. Expand the total market strategy:

Market leader firms can normally gain the maximum when the total market expands. The

focus of expanding the total market depends on where the product is in its life cycle. This strategy

can be used when a product is in the maturity stage. For example, the Japanese increased their car

production to enter new countries.

Market leaders can look for new users, new uses, and more usage of its products when the

product is in the maturity stage of the product life cycle. ICICI Bank, for instance, entered into rural

banking and agric business financing when it felt the heat of competition in the overcrowded and

super-saturated urban market. Marti Udyog started True Value car division—used cars certified by

Marti engineers—to expand their market in the rural and urban markets well.

2. Defending market share strategy:

When the leader tries to expand the total market size, it must also continuously defend its current

business against enemy attacks. For example, Coca-Cola must constantly maintain its guard against

Pepsi-Cola. Similarly, Hero Honda should constantly maintain its guard against Bajaj, Honda, Suzuki

and TVS in the two-wheeler market. In this strategy, the leader firm must keep its costs down, and its

price must be consistent with the value that customers see in the product.

There are six ways that a market might use to protect its market position:

(i) Position defense:

This strategy involves allocating maximum resources into the current successful brands. To

overcome a position defense an attacker therefore typically adopts an indirect approach rather than

the head-on attack that the defender expects. For example, HUL increased its ad-spend on Clinic Plus

and Sun silk shampoos and gave heavy promotions through price reduction.



(ii) Flanking defense:

This strategy both guards the market position of leading brands and develops some flank market

niches to serve as a defensive corner either to protect a weak front or to establish an invasion base for

counterattack, if necessary. An ideal example is how HUL successfully nourished its first Rs.100

core Indian-made brand Vim in a competitive dish wash market. It was able to check the attack of

competitors through product innovation, attractive public campaigns, road shows and public

relations.

(iii) Pre-emptive defense:

This defense strategy man oeuvre involves the launching of an offence against an enemy before it

starts an offence. For example, Titan launched more brands and sub-brands to corner the market

share of HMT watches in the early 1990s.

(iv) Counter offensive defense:

This is a strategy of identifying a weakness in an attacker and aggressively going after that market

niche so as to cause the competitor to pull back its efforts to defend its own territory .When a leader

is attacked, he may base his counterattack in the attacker’s territory.

The attacker has to deploy resources to this territory for defense. When Ceat tyres attacked TVS

Srichakra in Tamil Nadu markets, TVS decided to expand its coverage to Ceat tyre’s hub in the north

and west of India through innovative campaigns like road rallies, road shows and attractive public

campaigns.

(v) Mobile defense:

This strategy involves the leader broadening and expanding its territories to new market areas

by diversifying. The leader takes innovation works in both these directions. For instance, a five-star

hotel can become a foreign exchange dealer, inbound and outbound tour operator, flouriest and so on.

Such diversification into related areas comes under mobile defence strategies.

(vi) Contraction defense:

This strategy involves retrenching into areas of strength and is often used in later stages of a product

life cycle or when the firm has been under considerable attack. For example, HUL decided to

concentrate on its core business areas, that is, soaps and detergents, and has emerged as the clear

leader in the toilet industry.

3. Expanding the market share strategy:

Market leaders can improve their profitability by increasing their market shares, like HUL,

Procter and Gamble, McDonald’s and Titan. In conclusion, market leaders who stay on top have

learned the art of expanding the total market, defending their current territory, and increasing their

market share and profitability.


Competing with highly aggressive market leaders presents a formidable challenge to all

newcomers. Take the case of the tea or coffee industry. No newcomers dare enter in to the market as

the top brands of Tata, HUL, and Nestle guard their share so successfully.

In todays world, there is a rise in both, the number of products and the number of competitors

in the market. Naturally everyone wants to be ahead of the competition. But is everyone successful?

Definitely not. Any market will have one single market leader and not several market leaders!!! So

what is it that market leaders do correctly to ward off their competitors? We look at some strategies

which are common for every market leader

https://www.marketing91.com/types-of-products/


UNIT-5

INTRODUCTION TO INSURANCE

Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

Insurance is nothing but a system of spreading the risk of one onto the shoulders of many.

Risk Management, the practice of appraising and controlling risk, has evolved as a discrete of field of study and practice

EVOLUTION OF INSURANCE SECTOR

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance

business. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the

interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs 5

crore from the Government of India.

The 1st general insurance company was developed by britishers in 1850.

Benefits of Insurance Services

Financial Stability for household and firms. Mobilization of Resources and channel savings.

Relieve pressure on Government budget.

Minimization of total risk.

Quality Work Life (QWL). Increased Social Stability.

Organization System of Insurance

Organizations providing Insurance in India are broadly classified into three groups Departmental Organizations.

Corporations Organizations.

Government Companies

Marketing orientation and customer sensitivity are two important considerations for an insurance sector.

Marketing Mix of Insurance Sector

Product Mix- Fire Insurance

Marine Insurance

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Misc. Insurance

Pricing Mix- Important factor that influences the price decisions of insurance business is risk. Tariff advisory

committee was constituted as per Insurance Act 1968. Fixation of rates as per the risk is devised by this committee.

Place Mix- Door to door Marketing.

Through agents. Internet Based Marketing (ICICI Lombard)

Promotion Mix Direct Marketing.

Internal Marketing- Personal Sales Force

External Marketing- Electronic & Print Media Persuasive Advertising

Sales Promotion and Publicity

Contemporary Mixes

People Mix- Customers Agents

Advisors

Process Mix- Hospitality Marketing

Interactive Marketing Physical Evidence Mix- Insurance Certificates.

Premium payments Receipts.

Emerging Services in Insurance Sector

Electronic Clearance Services (ECS):- A policy holder having an account in any bank which is a member of

the local clearing house can opt for ECS debit to pay premiums.

Call Centre & SMS Services:- 24 x 7 Interactive Voice Response System (IVR) . LPG Concept:- Liberalization, Privatization & Globalization

Consolidation of Insurance Operations

Closer ties between insures & banks:- Tie-ups between insurers & banks through banc assurance ( Bank + Insurance) or conglomerates ( financial groups).

Off shoring:- Offshore centers aim to attract international insurance business through attractive concessions

& liberal incorporations requirements Increased public Awareness

Claim settlement services

Current status of GATS on insurance services

Identifying sectors for further liberalization:- intermediation, risk assessment services, reinsurance etc.. Identifying nature of commitments

Liberalization of trading norms.

Ascertaining transparency issues in trade of insurance.

Identifying cross-cutting issues:- normalization of regulatory barriers.

Customer Relationship Management (CRM).

Consolidated insurance services :- a type of insurance service covering all the aspects of risk right from life

insurance to all other general insurances such as fire, marine, wealth-assurance, children's education plans etc.

Basic tenet of idea:- cumbersome policy availing procedures n premium payment services are burden on the

part of customer. So to ease this we have come up with an idea of “Synergy Insurance Services” i.e.

(SES).

Tourism

Tourism is the travel for recreational (fun), leisure (rest), family or business purposes, usually of a limited

duration. Temporary, short-term movement of people to destination outside their resident places.

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Tourism is commonly associated with trans-national travel, but may also refer to travel to another location

within the same country.

FORMS OF TOURISM

Outbound Tourism: Outbound tourism refers to residents to travel outside their home country.

Inbound Tourism: Incoming tourism is also known as 'inbound tourism. Incoming tourism means travelers arriving in different countries from their own.

Domestic Tourism: Domestic tourism is tourism involving residents of one country traveling only within that

country.

MARKETING IN TOURISM

As the production and consumption experiences are inseparable, it is impossible to sample a

tourism service before purchase. Marketing of tourism is based on ◦ Trust

◦ Relationship

◦ Delivering value

DIFFERENT TYPES OF TOURISM IN INDIA

Beach Tourism

Spiritual Tourism

Pilgrimage Tourism Cultural Tourism

Eco System

Medical Tourism Adventure Tourism

History Tourism

ELEMENTS OF TRAVEL AND TOURSIM INDUSTRY

The 3 major sub industries in travel & tourism development are- I Tour Operators & Travel agents

II Hotels and caterers III Transportation

The other peripheral elements include- I. Insurance

II. Entertainment III. Shopping

TRAVEL AND TOURISM AS A SERVICE

The industry is multi- segment one and essentially includes 3 elements-

Attraction of the destination Facilities at the destination

Accessibility and transportation to the destination


Intangibility

Service oriented industries like travel and tourism, strive towards converting the intangible product into an

experience that customer will value and cherish.

Variability Offering the same quality of service each time a customer interacts with the service marketing brand (which

helps in image building)

Inseparability

Tourism is a service in the true sense, because of its unique features. Prospective customers have to travel to the destination to experience the place; and a trail or sampling or test

drive is not possible before purchase.


Marketing of Educational Services

• Education is the process by which society deliberately transmits its accumulated knowledge, skills and

values from one generation to another through institutions. • The act or process of imparting or acquiring general knowledge and of developing the powers of reasoning

and judgment.

Need for Marketing Educational services • Need to “market” their services has not really been felt by the educational sector

• This is because there is always Demand>Supply

• But in the recent years, there is a shift in trends

• Large number of institutions for specialized fields have been set up in the recent years for fields like Management and computer education

• This has lead to increase in competition

Marketing StrategiesBefore Deciding on the Marketing Mix, Educational Institutes should answer certain basic Questions::::

• What Business are we in?

• Who are our customers and What benefits they seek?


Professional Services

Professional services include a range of different occupations which provide support to businesses of all sizes and in all sectors.

Professional Services Marketing

Professional services marketing consists of organized activities and programs by professional services firms that are designed to retain present clients and attract new clients by sensing, serving, and satisfying their

needs through delivery of appropriate services on a paid basis in a manner consistent with creditable

professional goals and norms

Effective Marketing Strategy for Professional Firm • Expanding Service to Existing Clients

• Identifying and Cultivating High Potential Prospective Clients

• Widening and deepening personal referral sources • Favorable awareness programs

• Service and Market specialization

• Replacing Clients

Marketing of healthcare services


THE INDUSTRY “The healthcare industry (also called the medical industry or health

economy) is an aggregation and integration of sectors within the economic system that provides goods

and services to treat patients with curative, preventive, rehabilitative, and palliative care”. One of the world's largest and fastest-growing industries, consuming over 10 percent of gross domestic

product (GDP) of most developed nations.

PRODUCT • Emergency and/or Casualty Services: state-of-the-art ambulances, the CCUs on Wheels, hi-tech

telecommunication for such situations.

• Ambulance Services: linked by state-of-the-art telecommunications and fully equipped with doctors.

• Diagnostic Services: offer a wide range of facilities for instance, Oncology, Orthopedics, Neurology, Plastic surgery and so on.

Pharmacy Services: facility available for 24 hours for in and out patients and also general public.

• Health Diagnosis Programmer" - a complete, comprehensive, periodic health check up. It consists: Master health check up

Executive Health check up

Diabetics health check ups etc. Generally, the service offering in a hospital comprises of the following levels:

1. Core level – the basic treatment facilities and services offered by the hospital like diagnostic services,

emergency services, casualty services etc.

2. Expected level – cleanliness and hygiene levels maintained in the hospital. 3. Augmented level – dress code for staff, air conditioning of the hospital, use of state of art technology,

services of renowned consultants.

Pricing • Pricing strategy not dependant on competitor’s pricing as for the purpose of serving the society and not profit

maximization. It includes:

Initial deposit :The amount depends and extends on : • the category of room

• General ward - lower classes •Deluxe suite - middle and upper classes

• the treatment or surgical procedure planned

PROMOTION • Do not normally undertake aggressive promotion, rely a lot on favorable word of mouth.

• To crease the clientele, introduction of different health services like the acupressure clinic, master health

programmes and diabetes health checkups apart from annual health checkups. • Camps in rural areas to give medical check ups at a reasonable price.

• Sponsor frequent visits to the spastic society, old age homes, etc.

• Advertise in health and fitness magazines, other print and electronic media, through awareness programmes,

text messages,etc.

PLACE

• Contact point between the customer and the hospital or health clinic. • Involves two factors:

Accessibility refers to the ease and convenience with which a service can be purchased, used or received. Availability refers to the extent to which a service is obtainable or capable of being purchased, used and

received.

• Factors influencing the placing decision: market size and structure by geographical regions,

number and types of competitors in the region,

location of potentially attractive consumer segments,

local infrastructure, good road access facilities and public transportation network.

PEOPLE • The behavior and attitude of the personnel offering service will influence the customer's overall perception

of the service.


• It is necessary that the staff in hospital are trained to offer quality patient care with human touch using state

of the art technology.

• Ways to motivate the employees: Concessions to the employee's near ones.

Regular liaison with them at all times and knowing what the employees want .

Active participation of the employees in the activities of the hospital.

PROCESS

In a hospital, the process is divided into four phases: 1. The Joining Phase

Arrival of the patient, Registration.

2. The Intensive Consumption Phase

Diagnosis, Treatment & Information about further actions

3. The Detachment Phase

Discharge of the Patient, Payment 4. Feedback

PHYSICAL EVIDENCE • Good ambience

• Appearance and behavior of staff

• Hygiene and Cleanliness

• Well organized

MEDICAL TOURISM

Medical tourism (also called medical travel, health tourism or global health care) is the rapidly growing

practice of traveling across international borders to obtain healthcare. • Services typically include elective procedures as well as complex specialized surgeries such as joint

replacement (knee/hip), cardiac surgery, dental surgery, and cosmetic surgeries.

• Main purpose being providing and availing better quality healthcare services at comparatively low cost. • Ex-Foreign patients travelling to India to seek medical treatment in 2012, 2013 and 2014 numbered 171,021,

236,898, and 184,298 respectively.

MARKETING OF FINANCIALSERVICES

INTRODUCTION Financial services refer to services provided by the finance industry. The finance industry

encompasses a broad range of organizations that deal with the management of money. Among these

organizations are banks, credit card companies, insurance companies, consumer finance companies, stock

brokerages, investment funds and some government sponsored enterprises.


BANK MARKETING

Provides services

Aimed to satisfy customer’s needs and wants.

Needs and wants may be non financial in nature

Competitive element efficiency and effectiveness,

Organizational objectives are still the driving force

Commercial objective to make

profit Social Objectives

Banking marketing concept emerged in the west in 1950’s in the form of advt & promotion.

The evolution of bank marketing in india can be classified in 3 phases:

1.TRADITIONAL BANKING PERIOD: bankers were concerned with maintenance of a/c’s & transaction of buss’ with customer in lines with the rules & regulations. In spite of this, a strong bond

between banker-customer existed with some selected customers. It was also called “CLASS

BANKING” 2. DEVELOPEMENT BANKING PERIOD: 14 major commercial banks in 1969 was nationalised. The

socio-economic objective of nationalization drove the public sector banks to expand banking activities

& extend it to larger groups of customers. Thus called “MASS BANKING”.

Bankers adopted selling concept to mobilize deposits, they didn’t find the needs of the customers but offered what was available.

However, in 1972 SBI came out with market segmentation scheme & innovative loan plans.

3. BANK MARKETING PERIOD: What caused banking marketing? A .Rising customer needs & expectation due to improvement in general standard of living.

B .Entry of foreign & private sector banks in India.

C . Economic liberalization of Indian economy.

D . Phenomenal growth of competition due to economic liberalization. E .Rise in the Indian middle class with considerable resources.

f. Government intervention in protecting the interest of consumers.

BLENDING OF 7 P’S WITH FINANCIAL SERVICES:

PRODUCT:


• convenience of paying dues.

• Keeping records.

• Transferring funds. • Various deposits.• Loans & advances.

• Consultancy services.

• International banking, • Safe deposits

• Credit card.

• So on…..

Bankers have to identify the core &supplementary product services as it has more market implications. Core product: it’s the fundamental benefit that the customer buys from the bank. Customers donot buy

product but buy benefit. A particular bank differentiates itself from other bank through augmented

product. Augmented product: a basic product with which some ancillary is attached to it. Eg: Suvidha a/c with

CITIBANK, ATM card is free.

Bankers need to add more innovative services with their product in order to have competitive advantage. Product related strategy include:

i. Introduction of new schemes: DEMAT a/c.

ii. ii.Modification of product through technological development: online banking.

iii. iii.Change in the product line or package: from corporate banking to personal banking, or deleting

an existing service line.

PRICE: • In India, banks adopt administered pricing structure to some extent as the deposit & lending rates are

prescribed by RBI. PROMOTION:

• All the promotional tools are essential right from the stage of new product. The objective is to make the ppl

aware of new product, to persuade customers, to remind customers, build image of the bank. • An advertisement in banking is a promise. Eg: newspapers, radio, television, magazines & hoardings. Sales

promotion: brochures , calenders, diaries, penstand.

• Publicity : customers tends to believe a news item rather than an advertisement. WOM an important

promotional tool.

PLACE: • Making the banking service available & accessible to the customer. Selection of suitable location for the

branch. Should have sound availability of transportation, communication, electricity & other necessary facilities for the smooth functioning of the branch

PEOPLE: • Banking product cannot be separated from the ppl who markets them.

• Banks adopts internal marketing in order to make the whole business customer- oriented. • The product is known to the employees before they are effectively marked to the customers.

PROCESS: • Accounting procedure for putting through a transaction. Through automation of transactions, accounting

procedures & data handling.

Eg: loan application , clearance of cheque.

PHYSICAL EVIDENCE: • Imaginative designs of bank brochures , flashy cheque books.

• Attractive brand names, logos, symbols.

• Customers perception of service quality.


HOSPITAL SERVICES

• ISO 9002 certification: quality assurance is a structured & user friendly set of systems, which make the

most complex tasks easy & efficient. Its makes the senior management free from evryday stress in observing & monitoring task which have to be completed on daily basis.

PRODUCT: A. Emergency services. B. Ambulance services.

C. Diagnostic services.

D. Pharmacy services.

E. Casualty services. • Generally the service offering in a hospital comprises of the following levels:

a.Core level: basic treatment facility & services , like, diagnostic services, emergency services, casualty

services. b. Expected level: cleanliness & hygiene levels .

c.Augmented level: dress code of a staff, AC, renounced consultants.

PRICE: • Usually depends on treatment & facilities offered to the patient.

• It does not believe in profit maximization but aims at providing quality service to the customers at a

reasonable price.

PROMOTION: • Transmission of message to present, past & future customers. Includes advertising, sales promotion, personal

selling & publicity.

• Relies on favourable WOM & doesnot depend on extensive advertising. • Conducts campaigns in rural areas.

• Advertises in health & fitness magazines.

PLACE: • Refers to the contact point of between the service provider & the customer. • Accessibility & availability are the 2 main issues:

Accessibility refers to the ease & convenience with which a service can be purchased, used or received.

Availability: refers to the extend to which a service is obtainable or capable of being purchased , used & received.

Hospital must be ideally located.

PEOPLE

The behavior attitude of the personnel providing services will influence the customers overall

perception of the service.

Staff in the hospital must be trained to provide quality patient care with human touch using state of art

technology.

Warm ambiences with cheerful & efficient staff help make the experience of the public a

memorable one.

• The objective of providing quality service to the patients can be achieved by:

A . Motivating employees to be efficient, dedicated & loyal to the organisation.

B . Provide on-the job training to ensure continuous improvement in health care. C .Utilizing services of professionally competent medical consultants.

D . Use of latest technology.

PROCESS• Its a set of activities that take an input, convert it & add value to the input & finally create an

output. Processes are designed by blue prints, which sets a standard for action to take place & to implement the service.

• In a hospital the process is divided into 4 phases:

JOINING PHASE

INTENSIVE CONSUMPTION PHASE

DETACHMENT PHASE


FEEDBACK

JOINING PHASE- • Arrival of patient.

• Registration.

INTENSIVE CONSUMPTION PHASE-

• Diagnosis. • Treatment.

• Information about further action.

DETACHED PHASE- • Discharge of the patient.

• Payment.

FEEDBACK- • Fill an evaluation form, get patients suggestions, & make improvements.

PHYSICAL EVIDENCE • Is the environment in which the service is delivered with tangible commodities & where the firm & the

customer interact.

• The dress code of the staff, trained to be understanding, warm & comforting because the customers are

usually disturbed or unhappy. • Should be well organized, segregated into different departments, air conditioned with good lighting, well

ventilated.

• A good atmosphere will make the customers feel the difference.

TOURISMMARKETING PRODUCT:

• Panoramic view of the location.

• Travel to the destination. • Accommodation & facility.

• Entertainment.

It’s a composite product- combination of attraction, facilities & transportation. Each of the components has its own significance in the product mix.

ATTRACTION OF THE DESTINATION:

i. Natural sites- hill stations, beach so on.

ii.Places of historic interest- monuments, archaeological sites, museums. iii.Events- trade fairs, music festivals, traditional festivals.

iv.Cultural attraction- folklore, art, theater.

FACILITIES: make tourist stay & enjoy the attraction i. Accomodation.

ii.Food.

iii.Local transport.

iv.Recreational facilities. ACCESSIBILITY: tourist arrives at the location-

i. Infrastructure- roads, airport & railways.

ii.Equipment- size & speed of vehicle. The three levels of service package for tourism products are:

CORE PRODUCT: comprises of essential need or benefit sought by the customer.

Eg: relaxation, fun or entertainment. TANGIBLE PRODUCT: comprises of formal offer of the product as given in the brochure stating what

will be provided .

Eg : breakfast, television, telephone, swimming pool, Gym so on.

AUGMENTED PRODUCT: provides vital opportunity to the service providers to differentiate their own products from competitors. Augmented product must be designed & developed around the core

product.


Eg: Complimentary wine, free entrance ticket so on.

PRICE • Pricing of tourist product is a complex matter because of its composite nature. Geographical location of

the destination affects the pricing decision.

• An important way in which the travel & tourism business responds to their highly complex pricing

circumstances, is to operate prices at 2 levels. 1.1st level corresponds with the marketing strategy, which concerns with product positioning, value for

money & long run return on investment.

2.Corresponds to the marketing operation or tactics where the prices are manipulated to match the current

demand & competition. COST BASED PRICING:

for a buss’ to survive in the long run, the average prices charged must be sufficient to cover

fixed & variable cost & assure a reasonable ROI. There exist a high level of fixed cost in tourism pdts & services, the org’ thus resorts to price fixation at marginal cost to attract more visitors when the

capacity is underutilized.

DEMAND BASED PRICING: Tourism is greatly affected by seasonal characteristics. High dd=high pricing & vice versa.

COMPETITION BASED PRICING: fear of customers switching the product.

Travel & Tourism prices are often subject to government regulation. For reasons of public health & safety,

to ensure consumer protection, Governments in all countries frequently intervene or influence pricing decisions.

PROMOTION:

Advertising & sales promotion activities in tourism can be very effective when supplemented by publicity, personal selling & Public relation. PR & publicity include regular articles & photographs of the tour

attraction, use of TV, radio holiday programme & travel journalists for promotion.

WOM promotion is important tool in tourism

Giving incentives to customers- • Price cuts.

• Discount voucher.

• Free gifts. • Price draw. They are used for a short period of time during off season.

Brochures: includes picture & words & positioning of the product & the organization.

PLACE • Infrastructural facilities, transportation, communication are important for the development of the tourist

center.

• The uniqueness of tourism industry is the predominant position of intermediaries.

• 2 major functions performed by the distribution system : i. To extend the no. of points of sale, away from the location at which services are performed or delivered.

ii.To facilitate the purchase of service in advance.

• The middlemen may be tour operators, who are whole sellers, buys tourism products in bulk & makes them available to travel agents who are the retailer.

• The range of tourist products which are bought by the tour operators are airline seat, hotel accomodation,

bus for local sight seeing, they may sell it directly to the customers.

PEOPLE • The sales personnel are responsible for dealing with the customers behind the counter.

• The airline & transportation crew, Resort or Hotel representative, Tourist guide- elements of tourism

marketing. • Contact personnel must be trained on interpersonal skills as well as product knowledge.

• The IATA( International Air Travel Association) & non IATA agents provide self assessment of their

staff. • The assessment is made on 6 selective functional areas:

i. Customer service.

ii.Liaison with customers.


iii. Counter sales.

iv.Product knowledge.

v.Market intelligence. vi.Development of new customers.

PROCESS The operation process of tourism firm will depend on the size of the firm. The steps

involved in the delivery of tourist product are:

1. Provision of travel information- information should be provided at a convenient location where the

potential tourist seeks clarification about his proposed tour. 2. Preparation of itineraries- a series of operation that are required to plan a tour.

3. Liaison with providers of services-contracts have to be entered with the providers of various services

including transportation companies, hotel accommodation so on. 4. Planning & Costing tours- this will depend on the tour selected as well as individual requirements.

5. Ticketing- the computerized reservation system.

6. Provision of foreign currency & insurance.

PHYSICAL EVIDENCE • Tourist attraction is an experience which can be tangibleilised with the help of tangible items, like,

comfortable seats while travelling, layout & design of the resort/ hotel, the sign posts that indicate

directions, route maps, rules & regulations, sign regarding the public utilities. • Provide an elaborate brochures.

MARKETING OF EDUCATIONALSERVICES • Education is a service that is geared primarily to the consumer market, therefore, it can be classified as a

consumer service rather than an industrial service.

INTANGIBLE

• It can be monitored by judging service content (curriculum, course material, student workload, faculty

members). • EDUCATION CANNOT BE SEEN OR TOUCHED & IS OFTEN DIFFICULT TO EVALUATE:

marketer has to build “service differentiation” in the basic product to enable competitive positioning.

PERISHABILITY • PRODUCTION & CONSUMPTION ARE SIMULTANEOUS ACTIVITIES:

face to face teaching necessitates simultaneous production & consumption. However, the open &

distance learning systems which makes use of technology have made it possible for the production & consumption of the service to be carried out at different times, designed to meet the challenge posed

by the perishable character of services.

• NO INVENTORIES CAN BE BUILD UP: unutilized services cannot be stored if there are no students. Better match between supply &

demand would need to be made. Course design & course offered needs to be preceded by a need

analysis of the target population before the decision to launch them is made.

INSEPARABILITY • Transfer of knowledge is directly from the provider to the learner. However, open learning systems have

overcome the characteristics of inseparability.

HETEROGENEITY

• The course can be of same standards but different institutions faculty performance differs. The

heterogeneous characteristic necessitates careful personnel selection, planning, constant & careful

monitoring of standards which can provide cues to the prospective customers to aid choice of institutions.

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