services marketing

27 th Batch Semester IV

Term End ExamSubject: Services Marketing

Total Marks: 50 Duration: 2.5 Hrs .Instructions: 1) Section I is compulsory. 2) Section II and section III – Solve any two.

3) Figures to the right indicate full marks._____________________________________________________________________________Q. 1 Analyze the following Case (20)

Sushil booked a table in a restaurant for 12 people at the beginning of the Diwali period to celebrate the festive season with his family and friends. He had been a regular visitor to Moti Restaurant and had developed loyalty for this place famous for South Indian food. Most of his friends were from the South so he preferred to treat them at Moti. Another reason for his selection was that the patron of Moti, Raj Kumar knew him well. Since he was a regular visitor, he was quite confident that this dinner would be a success.

Three days before the scheduled get-together dinner Sushil spoke to Raj Kumar and asked him to increase the booking to 16. He looked busy but informed Sushil it would be quite in order and he looked forward to seeing Sushil and party later that week.

As per program, all Sushil's friends met at his residence at 7 p.m. on the appointed day and after having a cup of coffee left for Moti to be there at the scheduled time of 8.30 p.m. They were all relaxed and exchanged jokes on their way and reached the restaurant at 8.20 p.m. With slight difficulty, they located parking place at three different locations for the four cars in which they were travelling.

The guests arrived at the restaurant on time and Sushil was taken aback to find that the table has been set only for 12 persons. Raj Kumar came over seeing a large group gathered around the small table laid in one corner of the dining room. Sushil reminded Raj Kumar of his earlier conversation which he had with him three day ago. He asked him to recollect that the booking had been increased from 12 to 16, and suggested that it may be an oversight that he had forgotten to set the table for 16 people. Sushil then asked him to reset the table immediately for 16 people to avoid any embarrassment to him and his guests.

To Sushil's great amazement and embarrassment Raj Kumar denied that Sushil had asked for a booking for 16 people. He, rather, told Sushil that he had not phoned him at all this week to make amendments in the booking. "You must have been mistaken" said Raj Kumar.

Sushil tried to make him admit his mistake but Raj Kumar was too rigid and continued to take a stand that he had not received any such call and that the booking was for 12 people only. The restaurant was full and Sushil asked Raj Kumar to resolve the matter as his guests had been standing for more than ten minutes. Raj Kumar expressed his helplessness and said there was nothing he could do at the moment.

At such time, Sushil knew that there was no where else they could go at this time. Sushil and his wife along with another couple opted to wait and let 12 members of the group seat themselves. It was after a long wait that they could be accommodated with the group. This could happen only when the guests sitting next to them left after their meal.

All of them settled for the dinner but discussions mostly centered around the service provided by the restaurant. At the end of the dinner Sushil checked the bill and did not leave any tip for the waiters. Before leaving the restaurant Sushil met Raj Kumar in private and explained him that he would not be visiting him again. Raj Kumar admitted that he may have been hasty but thought Sushil was being unreasonable as it was his busiest evening and he should make allowances.

Sushil never visited the restaurant again and his friends too stayed away. They narrated this incident to many people.

Questions for Discussion

1. What were the pitfalls in the service delivery?

2. How would you react to the behavior of Raj Kumar?

3. Had you been Raj Kumar, what could, you have done to turn this problem into a situation which would have won him customers for ever?

4. What are the problems and issues which cause such situations and such behavior of service providers?

Section II Attempt any two

Q.2 What are the different challenges being confronted by the services industry.

Which according to you is the most important & why? ( 9)

Q.3 Discuss the European Quality Award & Malcolm Baldridge National Quality Award.

Highlight the similarities between the two. (9)

Q.4 Write short notes on- (any three) (9)

a. Intangibility

b. Service Blue Print

c. Demand Fluctuation.

d.Customer Delight

e. Internal Marketing

Section III (Attempt any two)

Q.5 In India, the demand for higher education is greater than the supply. Higher education

Institutions use various techniques for eliminating applications for various courses.

Analyze the situation from the ethics viewpoint. (6)

Q.6 Discuss how services are increasingly forming an important component in the marketing

of tangible products. (6)

Q.7 You have to market a low-cost air carrier in India. Choose your market segment criteria

giving reasons for the same. (6)

---------------------------------------------------------------------------------------------------------------------Set 1




3) Figures to the right indicate full marks._____________________________________________________________________________

Q.1 Analyze the following Case (20)

Sunny and his wife Rekha both had degrees in Hotel Management with specialization in catering and hospitality respectively. Both were working at Host, a restaurant located in the midst of the busy business locality. Just hundred meters away was the stock-exchange where hundreds of people gathered everyday to exchange business transactions. The one kilometer of market had offices of many prestigious companies of India, reputed business houses, consultants, multinational companies and industrial houses. The area was known as the financial district of the city.

Because of the educational and work experience, Sunny worked in the restaurant kitchen and Rekha supervised the dinning area, and handled the billing and cash register. The restaurant having space limitations had no scope of expanding its operations. So, for the past ten years they were doing same routine work.

Sunny and Rekha were keen on starting an enterprise of their own and were looking for the right type of business and opportunity. Rekha being in the dining area was always observing the guests coming to the Host. She observed that most of the guests coming for lunch were people belonging to the financial trade like investors, stock brokers, bankers and their business operations were concentrated at the stock exchange. Since the lunch break was only for half an hour they could not afford to be out of their business premises for more than half an hour. Half of the break time went in the to and fro movement to the eating place. They were always found to be intent on finishing their lunch rather than enjoying it. Many of the guests were seen talking on their cellular phones even while eating.

Sunny and Rekha once visited the stock exchange to know the work place of their guests and realized how hard pressed for time they were. They were convinced that if they could offer these customers an appealing lunch at their workplace, they can certainly develop a clientele. Moreover, the customers will be able to relish the lunch as they will be able to utilize the to and fro movement to the restaurant profitably.

They started talking to a select list of potential customers about the service they wanted to introduce. They found that their concept was acceptable to most of them. A demand for onsite

food service was established. Sunny and Rekha worked on the economies of this service and established that they could build a very profitable business.

They decided to quit their jobs and open a small kitchen at their home exclusively to cater to customers requiring onsite food delivered as per their requirements. The focus of the service was 'quality food delivered on time'.

The operational strategy was very simple. They had met the potential clients and asked them to giving their requirements by 10 a.m. and also the time at which they would like the food to be delivered in their office. Normally 1.00 to 1.30 p.m. being lunch time gave them enough time to prepare food and deliver the packets.

The procedure followed by Sunny and Rekha was this:

(a) The service delivery start time fixed at 11 a.m. So all food must be filled, packed, labeled and sorted by this time.

(b) The delivery boys must report at 11 a.m. to pick up their packs. The delivery boys were selected on the basis of their location in the customer area, their knowledge about topography and distribution skills.

(c) The client base of 70 people located at seven different places was served by seven delivery boys each handling 10 customers whose offices were located either in the same building or in the immediate vicinity. The distribution strategy and mode was designed on the basis of client dispersion in the segment. On average, one delivery boy was supposed to handle 8 to 10 clients.

(d) The work study had indicated that each delivery boy can deliver the food and drop back the empty cases within one and half hour from the start of service. The kitchen was located five kilometers from the business offices.

In the same area there are four more organizations providing similar food delivery service and Sunny and Rekha had to compete with them in the same area. To have a proactive approach they started providing a service guarantee stating "Not delivered as promised-don't pay for it." Their main focus was speed of service (SOS).

As a consequence of this service guarantee their service started getting recognition and gained the reputation of reliability, accessibility and responsiveness. More and more customers were willing to enroll themselves as regular members for this service. The other suppliers in the same area are not willing to match the service and guarantee offers of Sunny and Rekha. Their customers started defecting thereby causing economic strain on their business. "How long can they offer this guarantee," commented one supplier as he felt it would be very difficult to continue this. In fact, this was also the concern of Rekha as she was in charge o*f customer management and Sunny was looking after the kitchen management.

The increased flow of customers was alluring them to expand the business but the type of guarantee was forcing them not to expand. But the experience of both convinced them to go

ahead for expansion and cater to the segments they had identified and they were sure of winning without problems.


1. How could Sunny and Rekha create a market niche for their service offerings? What are the characteristics of the niche? What is the customer base?

2. What value-added services did they start offering the clients? Explain at least three of them.

3. What distribution strategies were adopted by them to deliver the food within the promised schedule? Did this build up customer satisfaction? Explain how customers and service providers benefited?

Section II

Attempt any two-

Q.2 What are the challenges in conducting market research for Service Industry (9)

Q.3 Which method should the marketers deploy for pricing their service offering? (9)

Q.4 Write short notes on (any three) (9)

a. Inseparability

b. Service Location.

c. Differential Pricing for Services

d. Interactive Marketing

e. Service Offering

Section III ( attempt any two)

Q.5 You have to introduce a new airline in the Indian market. What strategies are you going

to adopt initially, after a year & after five years to market your airlines? 6

Q 6 Identify the influence of children on the choice of various services such as cable Vs satellite

Channels, music stores, restaurants & multiplexes. 6

Q 7 You are the service provider in the hospitality sector. Design the Balance Score Card

model for your organization. Make realistic assumptions. 6

Set 2




3) Figures to the right indicate full marks._____________________________________________________________________________Section I Compulsory (20)

Q. 1 Analyze the following Case

P.K. Mehta, Ph.D., is an economist who set up a consulting firm in New Delhi in 1992, right after completing four years as a high-level official in the government. P.K. Mehta went into this venture with the hope of providing economic advice, analysis and testimony for law firms and months after opening his firm, Mehta decided he needed to take marketing more seriously. His somewhat random approach to contacting and courting prospective clients had not allowed him to obtain the volume and mix of clients he had hoped to have by that time. He therefore retained a marketing consultant who had been recommended by a friend to give him some direction for his marketing efforts.

The consultant and Mehta immediately agreed that a marketing plan should be developed—Mehta needed a carefully designed marketing program to help him build his practice. But both agreed that before such a plan could be written, a more careful examination of Mehta's external environment and his past marketing actions should be made. Hence, it was agreed that the consultant would first perform a marketing audit of Mehta's firm.

The marketing audit mainly involved a lengthy interview in which Mehta was probed by the consultant for information about potential markets, competitors, legal trends, distinctive competencies, fees, promotional efforts, and so on. Documents and data that Mehta had available in his office were also reviewed. The consultant offered much advice during the course of the interview and also wrote a follow-up audit report containing additional comments and suggestions.

The consultant's report acknowledged that Mehta did indeed have valuable services to offer to law firms and other prospective clients. His government background, his eight years as an economics professor at a major university, and his academic credentials clearly differentiated him as someone uniquely qualified to provide economic advice, analysis, and testimony in government regulatory matters. But the report pointed out that prospective client might not immediately recognize what someone with Mehta's unique skills could do for them. The report therefore emphasized how important it was for Mehta to try to educate prospective clients about how he could help them win cases.

The consultant recommended that Mehta should aim his educational effort at only a limited

number of narrowly defined target markets. The report urged Mehta to do some exploratory research immediately in order to identify some initial target markets. Additionally, more formal research on the potential of various markets was recommended for the near future. Mehta was advised to consider a variety of approaches for carrying out the educational effort, including the use of seminars, a newsletter, the direct mailing of an article he wrote, and cold-calling, followed up (where mutually agreed to) by a written proposal.

Mehta found the audit report to be very provocative and set out to implement some of its suggestions. He immediately began talking to various experts he knew about the potential of working on different types of cases. He also began to gather statistics on how frequently different types of cases were arising. After several weeks of implementing audit recommendations, he felt ready to write his marketing plan for 1993. In the plan he established marketing goals for different target markets. Strategies for educating and appealing to those markets, time schedules for conducting seminars and implementing mailing, and a marketing budget.


1. What exactly is the service product being offered by Mehta? Can such a product be defined in terms of core, tangible and augmented product components? What suggestions do you have for Mehta, to augment his service product?

2. Do you think the marketing approach of 'educating' the prospective clients would succeed in the above case? Give reasons for your answer.

3. What constitutes the target market for Mehta? What are likely to be the consumer expectations of such customers?

Section II (attempt any two)-

Q.2 .What is positioning? Discuss its importance in the success of a Service firm. (9)

Q.3 Critically discuss the importance of distribution in the marketing of Services. (9)

Q. 4 Write short notes on (any three)- (9)

a. Variability

b.Influence of Internet on Marketing Research for Services.

c.Consumer behavior

d.Mass Marketing Vs Micro Marketing in Services.

e.Customer Perception

Section III (any two )-

Q. 5 How has the paradigm shift occurred in ‘place’ of the marketing mix for the banking

Sector ? (6)

Q.6 A fast food chain with a similar brand offers different experiences to the customers

at its outlets in Mumbai & Pune. These are franchised outlets. Identify the underlying issues.

(6)

Q.7 Discuss the use of different promotion mixes at the time of launching a new Restaurant.(6)

Set 3




3) Figures to the right indicate full marks._____________________________________________________________________________

Section I (20)

Q. 1 Analyze the following Case

Arvind is a graduate mechanical engineer from one of the ten best engineering institutes of the country. He is young, energetic and a gold medalist. During the campus interviews he was selected by an industrial house to work in the industrial products division as sales executive. Though he found this job satisfactory he felt his qualifications were inadequate— as all the people superior to him in the organisation were management graduates in addition to their basic qualifications. This inadequacy made him insecure and he soon left this job to acquire an MBA.

He joined the MBA course as a regular student and completed it with distinction. As a part of the MBA curriculum he took up a project work to develop a marketing plan for Autocrop, a small organisation which was producing autoclectric parts for the replacement market. Though Autocorp had established itself as a quality product in the replacement market, the lack of professional competence was a major drawback in establishing its roots in the market. The organisation did not have a professionally qualified marketing manager to energise its sales team members.

The plan submitted by Arvind was based on market analysis, competitor strengths and weaknesses, promotional marketing strategies and strategies of various players in the market. After making a systematic analysis he focused on issues related to demand projections, competitive analysis, marketing mix elements i.e., product offering, promotional, pricing and distribution strategies. Autocorp found the report quite useful and could implement some of Arvind's recommendations to its benefit. But being too small an organisation it could not absorb him.

MK Associates are consultants in the field of management consultancy and training and provide advice and training to various companies in the area of facilities planning, re-engineering and productivity improvement.

The re-engineering department of MK Associates provides services of psychological testing, total quality management, employee training, efficiency studies, process planning, layout studies and application of information technology in business decisions.

The facilities planning department of MK Associates have experts in the field of mechanical, electrical and civil engineering.

They have been provided with the full support of a computer lab, CAD/CAM facilities to optimise the use of facilities. They are fully equipped to provide services related to fulfillment of regulatory obligations, like building bylaws, pollution control, environmental issues and land use, etc.

The productivity improvement department is competent to establish PIPS (Productivity Improvement Programmes) establishing and implementing Productivity Measurement System, selecting and advising productivity improvement approaches, suggesting productivity improvement methods through work redesign, through incentives, through job enrichment, through individual and group participation, etc.

Promoter directors and staff of MK Associates are qualified personnel in the area of mechanical, civil, electrical engineering, industrial engineering, computer assisted designing and have long industrial experience. In fact most of them were employed with reputed companies before promoting MK. Associates.

Their client base is very broad and industries served by them include engineering and merallurgical industries and the mining and allied industries. The clients are from the private and public sector. Advisory and training services are also provided to some government departments.

Rajesh, Managing Director of Autocorp talked to Rakesh, Chief Executive Officer of MK Associates about Arvind and appraised him of the good work done by him for his organisation. He requested Rakesh to interview Arvind and see if he could be absorbed into MK Associates.

Arvind was called for an interview with the directors of MK Associates and was appraised of the business interests of the organisation. No one at MK Associates had ever worked in the field of marketing and their total business was based on their contacts. They were facing great difficulty in expanding the business base.

Since Arvind had a marketing background and experience in industrial products, he was a suitable candidate for marketing consulting services. As marketing consulting services is customer-oriented, they felt that hiring Arvind will result in winning more customers even in the competitive market place.

MK Associates had a competitive edge because of their technical superiority. Their company was doing exceedingly well for the past five years. During these five years of operations, three more consulting organisations in the same field had emerged and were establishing their base in the segment where MK had a stronghold. The impact of this was being felt as they were losing clients every now and them. They were not able to win the tenders they used to do in the past. The technical competency of the staff was no more a competitive edge. They were not even able to diagnose the cause of declining sales of the organisation.

To deal with the above situation, MK Associates offered the position of Marketing Manager to Arvind. Arvind realised that the combination of basic marketing knowledge (as he has worked

as sales executive for three years with Autocrop), his technical background and newly acquired MBA degree will enable him to take on the challenges of marketing consulting services. His marketing knowledge blended with technical expertise of MK Associates will make the organisation proactive in the present competitive environment.Arvind joins MK Associates to take up this challenge. He is assigned the task of making the marketing plan for the organisation.


If you were Arvind-

1. Explain where you will start?2. What would you like to know about the service business?3. What difference is there between marketing autoproducts and the consulting services? 4. How would you use the technical expertise of the staff to market consulting services? 5. What marketing strategy will you suggest to promote consulting services? 6. How will your offerings differ from those your competitors are offering?

Section II (attempt any two)

Q.2 Discuss critically the relationship between customer satisfaction & service quality. (9)

Q.3 Discuss the different ways in which a service provider can use physical evidence in affecting customer perceptions. (9)

Q. 4 Write short notes on ( any three) (9)

a. Perishability

b. DRIP model of promotion of services

c. Pricing objectives

d. External Marketing in Services.

e. Factors affecting choice of service provider

Section III – ( attempt any two)

Q.5 What promotional tools can a marketing consultancy firm use to attract & retain customers?

Justify. (6)

Q.6 A woman boards an aircraft with hand baggage. She tries to stack it on the luggage bin but

is unable to do so independently. Aircraft crew standing close by do not help her. The

women requests the crew. The lady crew responds ‘ stand up on the chair & then keep

the baggage’. Surprised by the response, the guest just stares at her. Then she remarks,

‘I will never fly this airline again’. What is the HR issue in this context. How can the airline

avoid such encounters? (6)

Q.7 Identify two dissimilar services such as hospitality & mobile network services. Discuss

the distribution channels for these & how similar & dissimilar they are from each other. (6)

Set 4

services marketing

Documents

section iii solve

marketing consulting services

section iii

raj kumar

sales executive

competitive edge

marketing audit

prospective clients