service marketing 7 th chapter

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7 TH Chapter Bhavani BABA COLLEGE OF ENGINEERING

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PLANNING AND MANAGING SERVICE DELIVERY

1. CREATING DELIVERY SYSTEM IN PRICE,CYBERSPACE AND TIME2. THE PHYSICAL EVIDENCE OF THE SERVICE3. THE ROLE OF INTERMEDIARIES4. MARKETING PLANS FOR SERVICES: The marketing planning process

1st

TOPIC PLANNING AND MANAGING SERVICE DELIVERY

The various methods in delivery of service

In this the service must be accessible to customers and the potential customers.

The delivery of the service takes place to the customer by the following.

1. Location : It involves considering where to deliver the service to the customer.A location is concerned with situating a service firm resources, operation

and staff.

2. Accessibility: Services must be both accessible and available to customer andpotential customer for the value of the service to be realized.

3. Channel of distribution(or) direct distribution: Many service organization choosedistribution method which do not use intermediateries

The following are to be considered in direct distribution which are as followsa) Company resources: The structure of the service organization will influence

the choice of distribution strategy.

b) Type of services: The type of service also influences the direct distribution.c) Geographic spread of the market: A service firm that operates locally in a

limited geographical area may prefer to reach customers directly.

d) Government restrictions: The legal and political restrictions i.e. thegovernment rules and regulation effects the direct distribution.

e) Customer preference: Needs and wants are to be considered in planning adistribution strategy.

4. Service inventory (or) shortage: Service are perishable in nature .Therefore servicescannot be kept .Therefore it is required that the service location should be such that it

is easily accessible by the customer.

5. Managing channels: While choosing a distribution channel the firm need to considerintensity of market coverage can be achieved by one of the three major types of

distribution

a) Intensive distribution: It is a strategy in which a producer sellsproduct and services at retail and wholesale levels.

b) Service distribution: It is a strategy in which a producer sells itsgoods and services through multiple but not all possible whole seller


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and retailer in a market where a consumer might reasonably look for

it .

6. Exclusive distribution : It is a strategy in which a supplier agree to sell its productsand services only to a single whole seller(or) middleman (or) retailer in a given

market.

2 nd TOPIC THE PHYSICAL EVIDENCE OF THE SERVICE

Definition of physical evidence: It is defined as the environment in which the service

is delivered and where the firm and the customer interact and any tangible

commodities that facilitate performance (or) communication of the service.

Elements of physical evidence

1. Physical environment: It plays an important role in customer satisfaction becauseit is perhaps the first tangible element that the customer comes into contact with

when he (or) she approaches a service provider usually it includes.

a. Layout: A layout refers to the design of the service outlet. The service outletshould be spacious and provide comfortable seats in case customers need to

wait a while to be attended on.

b. Atmosphere: A customers decision to REVISIT a service outlet largely

depends on its atmosphere.

2. Communication: The employee should be available at the entrance to provide theguidance.

3. Tangible products accompanying service: Some service provider offer tangibleproducts with the service as a part of the service offering.

Ex: Hotels provide free chocolates.

4. Price: The pricing should be in such a way that it should attract the customer.5. Service personnel: Some service provider should have a proper dress code for

employees. The employees are dressed up in a clean and attractive uniform.

6. Brand (or) corporate identity: Brand adds tangibility to pure service.Classification (or) types of physical evidence

Essential evidence: Without the physical elements the service cannot be delivered.

Ex: Physical equipments in the Gym.


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Peripheral evidence: The tangible offered by service provider to customers to

confirm the delivery of service as a simple gift constitute peripheral service.

Implication (or) advantages of physical evidence

1) It increases productivity.2) Creates good impression.3) Differentiation from competitors.4) Service quality management.5) Repositioning of a service.

Guidelines for effective physical evidence

1) Recognizing the strategic impact of physical evidence: Physical evidence canplay a major role in shaping service quality expectations and perceptions.

2) Map the physical evidence of service: In this everyone should be able to see theservice process and existing elements of physical evidence.

3) Updating: Here updating and modernizing the physical evidence will take place.4) Assessing and identifying physical evidence opportunities: In this the firm

concerns whether the physical evidence of service suits the needs and preferences

of the target market

5) Clarify roles of services cape: In this the organization tries where the serviceorganization should be located.

6) Work cross functionally : A serice firm is concerened with communication adesired image, with sending consistent and competitive message through all forms

of evidence.

Services cape

Definition of service scape: The physical appearance of the service organization is called

services cape.

Designing services cape: In this we have the following.

1) Atmospherics: It refers to ensuring comfortable living conditionswithin which the services capes .Comfort refers to a state of well

being, where life is easy and pleasant.

i) Colour: Colours are used for the purpose of attracting the

customer and create an positive image in the minds of the customer.

ii) Noise : The noise will create unpleasant in the service scape.

iii) Smell:Any foul (or) bad smell should not be there .A pleasant

fragrance should be there.

iv) Temperature and humidity: In this the maintaining of good

and acceptable temperature should be there.


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2) Signs, symbols and artefacts: Painting showing in the walls arecalled artefacts.

3) Spatial layout: Arrangements of the equipment is called as layoutand convenient layout be arranged .

If the above all are good then the customers will approach otherwise it will lead to

avoidance.

Types of service scape

1) A self servic scape: The role of employees is limited .Customer perform most ofthe activities either on their own(or) with alittle help of service provider.

Ex: ATM, self restaurants

2) An interpersonal service scape: These are the service settings in which it attracts,satisfy and facilitate the activities of both customer and employees at the same

time.

Ex: services of hotels, services of schools

3) A remote sevice scape: These are service settings where there is little (or) nocustomer involvement in theb service scape.

Ex: Call centers, telecommunication

3rd

TOPIC CREATING DELIVERY SYSTEM IN PLACE,CYBERSPACE AND

TIME

PLACE: LOCATION OF SERVICE PREMISES

There are several factors are to be considered in decision about the service location.1. Nature of service: Due to the factors of inseparateability and the perish ability of

service, therefore the location must be accessible to the customer and made

available to them when they need the service in order to maximize their market

opportunities.

2. Nature of interactions: In case the interaction between the service firm andconsumer is necessary the next factor to be considered is where the service is

delivered is it in the place of the service provider (or) at the place of the

consumer?

3. Competitive positioning: Multiple locations can serve as a barrier to competitionby building a firm competitive position and establishing market awareness.

4. Natural geographical location: In this the holiday resorts in the hill station (or)on beach are dependent (or) geographical location rather than the convenience of

the customer.

5. Nature of customer demand: Different group of customers may have differentneeds, which must be analyzed and segmented.


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6. Technological advancement: With the increase in the level of automation thereis a great reduction in the choice of location decisions.

Ex: Banks it is possible to separate the service provider from the customer

through phone banking (or) Atm.

7.

Infrastructural facilities: Some service activities like financial service requirerapid communication facilities with the other companies.

8. Target market decisions: Though the location is influenced by the above factorscompetitive advantage can be gained only if the service is more specific to the

requirements of the target market segment.

TIME: WHEN SHOULD SERVICE BE DELIVERED

For some highly responsive service operations, the standard havebecome24/7

hours services, 24 hours a day, 7 days a week around the world.

Factors that encourage extended operating hours.

Five factors are driving this trend: 1) Economic pressure from pressures: The

growing no of two income families and single wage earners who live along need

time outside normal working hours to shop and use other service.

2) Economic incentives to improve asset utilization: The extending hour is

often good, especially when part time employees can be hired without paying

them either overtime (or) benefits.

3) Availability of employees to work: Changing lifestyles and desire for part

time employment have combined to create a growing labour pool of people who

are willing to work evenings and nights.

SERVICE DELIVERY IN CYBERSPACE

Due to the no of technological advances has taken place due to immense use of

EDI (electronic data exchanging).These advances have lead to the following.

1. Increased use of self serviceoperationsEx: Many marketing firms have put their services on websites and those who

need get it by self service.

2. Providing data bank servicesEx: A service provider may require information to make a mailing list to target

a specific audience.

Advantages of cyberspace

1. Consisting delivery for standardized service.2. The electronic channel offers low cost.3. It provides convenience to the customer.4. Electronic channels do more than allow the service provider to interact with

a large no of end users.

5. In this customer choice will be there.6. Through this the quick feedback from the customer will take place.


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Disadvantages of cyberspace

1) Price competition will take place.2) Inability to customize with highly standardized electronic services.3) Lack of consistency because of the customer involvement.4)

Requires changes in consumer behaviour.

5) Lack of security of information.4 th TOPIC MARKET PLANNING

Definition of market planning: According to American marketing association

Marketing planning is the work of setting up objectives for marketing activity and of

determining and scheduling the steps necessary to achieve such objectives.

Features of market planning :1) It should provide a strategy for accomplishing the

company mission (or) goal.

2) It must provide for the use of the existing resources. Allocation of all equipments ,financial

resources and human resource must be described.

3) An appropriate organization must be described to implement the marketing plan.

4) The plan should be flexible.

Elements of market planning

1) Objectives: Setting up of objective is the first step of planning.2) Forecasts: Forecasting is an art of drawing conclusions about the future.3) Policies: Policies are the guild lines for achieving the set objectives of the firm.4) Procedure: Procedures are laid down to serve as guidelines to the actual

marketing activity.

5) Schedule : Schedule shows the time and period when a particular activity has t beundertaken.

6) Budget: An important part of planning indicates the financial aspect of themarketing operations.

7) Programme: A special kind of panning programme helps the solution of someproblems.

SCOPE OF MARKET PLANNING

The activities of market planning include two divisions according to tome:

1) Long term marketing process: PHILIP KOTLER He has pointed outthat the following situations should be considered while preparing long

term marketing plan they are as follows.

I. Diagnosis: The planning process starts with an attempt by thecompany to size up the present market situation and the factors

responsible for it .


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II) Prognosis: In prognosis the company estimates where it is likely to go if present market

trend continues what sales and profits can the company make in the long period.

III) Objective: If the prognosis indicates that the company has no future the company should

decide upon fresh objectives about the amount of sales and profits in the changed

circumstances.

IV) Strategy: It lays down the broad principles by which the company hopes to secure an

advantage over competitors an attractiveness to buyers and a full exploitation of company

resources.

V) Tactics: These suggest how to use the company s strategies to achieve its objective.

VI) Control: The control section of a long range plan should contain performance target

which should be checked periodically.

2) SHORT TERM (OR) ANNUAL MARKETING PLANEach year companies prepare annual plan. The annual plan is developed in the

context of the companies long range plan.

Different approaches to annual planning

i) External planning: In it the management considers continuing its current strategyand estimates the likely profits and sales it could achieve. If these are satisfactory

they are established as the company goals.

ii) Goal planning: In it the management selects the strategy with the most attractiveconsequences. This sort of planning is most logical of the three approaches.

Importance of market planning

1) Management by objectives: Clear cut objectives of the company help in themanagement of the various activities ,programmes and operations of all the

departments which are formulated in keeping the overall onjective and goals of the

company.

2) Better coordination: Market planning helps better coordination in activities of all thedepartments.

3) Better in control : Planning is useful for better control.4) Satisfaction of consumers: Under marketing planning the actual wants of the

consumers are studied properly and activities are channelized to provide full

satisfaction to customers.

5) Higher performance standards: Marketing planning helps in evolving higherperformance standards.

Disadvantages of market planning

1)

No control over supply.2) Lack of time.


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3) Uncertain market research.4) Scientific marketing planning not possible.5) An expensive procedure.

FACTORS EFFECTING MARKETING PLANNING

1) Availability of fund.2) Population3) Production knowledge4) Selling skill5) Level of competition.6) Organization structure.7) PROCESS OF MARKET PLANNING

Strategic context

1) Mission2) Corporate objectives

Situation review

1)Market audit

2) Swot analysis

3)key assumption

Marketing strategy formulation

1) Corporate level strategic planning2) Business unit level strategic

planning

3) Functional level strategic planning

Resource allocation and monitoring

1) Monitoring programmes2) Monitoring ,control and review.


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Step 1 Strategic context

1) Mission: The mission represents the combination ofpurpose, strategy ,values andbehaviour of an organization and incorporates the core tasks an organization intends to carry

out in order to achieve the corporate purpose within the constraints of the corporate vision.

2) Corporate objectives: It can be defined as a major target organization will adopt for longrange purposes and more often than not is represented in the organization mission statement.Step 2 Situation review

1)Market audit: The marketing audit involves analysis of the external end internal

environment.

External marketing : 1) the business and economic environment

2) The market

3) Competition

Internal marketing: 1) Organization performance and structure

2) Marketing objectives3)Marketing strategy

4)Planning systems

Market audit process

Step 1) Setting the objectives and scope: In this a meeting between the company officer and

a potential auditor to explore the nature of the marketing operations and the potential value of

a market audit.

Step 2) Gathering the data : In this step the gathering of the data will take place.

Step 3) Preparing and presenting the report: In this step after gathering the data the

marketer prepares notes and present the report.

2) Swot analysis : In this the analysis of the strength

weakness

opportunities

Threats

Will take place.

3)

Key assumption : All companies have key determinants of success about which assumptionshave to made before the planning process can be proceed.It is a question of standardizing the

planning environment.

Step 3) Market strategy formulations

1) Corporate level strategic planning: The corporate level strategy planning addresses thefundamental questions such as what is the purpose of the enterprise,what business wants to be

in and how to expand or get into such business.

2) Business level strategic planning : Business level strategy is applicable which have differentbusiness and each business is treated as strategic business unit.


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3) Functional level strategies: The functional level strategies are concerned with coordinating thefunctional areas of the organization 9marketing,finance,human resources,production,research

and development etc).

Resource allocation and monitoring

1) Monitoring programmes: It includes the following.a) Defining appropriate action: What need to done?b) Scheduling and timing: When will be done?c) Responsible areas: Who will perform it?d) Planning the budget: How much cost will it require?

2) Monitoring ,control and reviewAfter marketing formulation the control and review of the plan will take place and if any

manipulations are necessary then they will manipulate it.

5Th Topic THE ROLE OF INTERMEDIARIES

There are different types of intermediaries they are as follows.

1) Agents and brokers2) Franchise operators.

AGENT AND ITS TYPES

Definition of agents: It can b defined as an intermediary who act in behalf of service

principal (here the service principal is the owner of the company) and is authorized tomake agreements between the customers and the service principal.

Types of agents

1) Service provider agents: They work for two (or) more related services from noncompeting service creators in a specific geographic territory.

For example :A travel agent represent Indian airlines and does the banking for

passengers travelling by Indian airlines for a fee (or) commission and may also

provide booking for tour related services for a tour operator.

2) Selling agents: Here the selling agents have contractual authority to sell a serviceprincipal output usually because the principal is not interested , feels unqualified (or)lacks the resources to do so.

Brokers

Definition of brokers: Broker is the middleman who will bring the service principal

and the customer together and facilitate the negotiation.

Ex: Insurances companies like LIC agents.

Advantages of hiring agents and brokers

1) It reduces the cost.2)

Special skills and knowledge will be there in agents and brokers.3) Knowledge of the local market will b there.


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4) The customer can buy the service through the agents through which the time sndenergy of the customer will be not be wasted.

Disadvantages of hiring agents and brokers

1) Reduced control on pricing and other marketing areas.2) Promotion of various service providers offers.

FRANCHISE OPERATORS

Franchising: Franchising is the most often used channel for the distribution of services. It is like the

retailing selling of services.

The franchiser is authorized to distribute service to the end customers on behalf of the service

principal.

The franchising involves a contractual arrangement between a franchiser (service principal) and afranchisee.

It allows the franchisee to conduct service business under the established brand name of the company,

following guidelines.

THE ADVANTAGES OF FRANCHISER

1) Business expansion: Through the franchiser expansion of the business is possible.2) Improved revenues: The business expansion also brings more revenues.3) Reduce risk: The franchiser also helps in reducing risk in the business.4) Consistency in service offering : It maintains consistency in all business processes like

training the service personnel, deciding the price structure etc.

5) Increased working capital and minimized financial risk: Through the franchiser therewill be increase in the working capital and minimize the financial risk.

THEDISADVANTAGES OF FRANCHISER

1) Trouble in motivating franchisees.2) Conflict between franchisees and the franchiser.3) Quality maintenance i.e. the franchisees might not follow the standard procedure.


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service marketing 7 th chapter

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