Marketing Mix Services Marketing. 1.PRODUCT Marketing science is product oriented Product marketing...
-
Upload
may-cunningham -
Category
Documents
-
view
225 -
download
0
Transcript of Marketing Mix Services Marketing. 1.PRODUCT Marketing science is product oriented Product marketing...
1.PRODUCT
Marketing science is product oriented Product marketing principle is not
applicable to services marketing. It will be like saying apples are just like
oranges except for their appleness With regard to marketing mix we use all
the four of them in services though with a considerable difference.
We will also consider another three-People,Physical evidence & Process
1.PRODUCT
There are four levels of service1. Generic: The basic benefit the
serviceprovides Ex: In a restaurant, serving space,
food & the service providers In a Bank, banking space, loanable
funds, safety of deposits
1.PRODUCT2. Expected: The benefit expected by the Customer from the service provider Ex: Restaurant: Cleanliness, timely service
and polite & courteous service Ex:Bank-Correct transaction, timely service,
banking hours, minimum courtesy 3. Augmented: To add something to the
expected which will please the customer Ex: Restaurant - Sparkling floor, smiling
employees, welcome note Ex: Bank: Congenial waiting room, friendly
employees, quicker service, admission of fault
1.PRODUCT
4. Potential - Beyond the usual & expected - pleasant surprise
Ex: Restaurant - welcome flowers choicest wine, manager’s word of thanks
All purchases have tangibles & intangibles. Hence proper mix is necessary to satisfy the customers
The mix may lead to segmentation of the market
AIRLINES TRAVEL1. Economy Travelers: Want travel at the
lowest cost. Focus is transport Tangible service element- Aircraft Intangible service element- Transport
2. Business Professional :Want convenient timing. Focus is service schedule & transportation
Tangible: The appearance of flight assistants
Intangible: Punctuality
Economy Class - They want convenience in preflight and post flight arrangements
Their focus is transportation & pre & post flight
service Tangible : Aircraft & agent Intangible: Comfort & personal care
AIRLINES TRAVEL
Airlines Travels
Business Class: They want exquisite travel. Their focus is food, beverages Tangible-Space, seats Intangible-Comfort & personal care
3. Cargo : Punctuality, pre & post Delivery facilities.Their focus is delivery & service
2.PRICE1. It is difficult to price services. 2. Since the services are perishable it is
difficult to calculate the unit cost. Hence service provider uses some unit to calculate the price
Ex : A doctor fixes the rate for each kind of surgery.
Ex:A lawyer fixes the rate per hour he devotes to the client or for each appearance in the court.
3. Since services are perishable it is very difficult to price a service keeping in mind the demand fluctuation & the inflexibility of supply
2.PRICE There are cases where price is administered &
in other cases it is meter driven Ex: Bus fare, Electricity charges Hence the common method for pricing services
is the cost plus method Variable cost, overhead & a determined margin Value-in-use Pricing: Establishing a price based a price based
on a product's value to the customer as opposed to the on a product's value to the customer as opposed to the manufacturer's cost of production. This method of manufacturer's cost of production. This method of pricing is effective only when consumers have no pricing is effective only when consumers have no effective substitutes.effective substitutes.
3.PLACE - DISTRIBUTION
Since services are often inseparable from the provider, direct marketing is commonHence, franchising is gaining importanceCritical factors to choose a location a) Convenience - It is important for retail
stores, banks, repair services, theatres b) Cost of operating - Where convenience is
not a critical factor, cost becomes the critical factor.
Ex: Specialty stores, wholesalers
3.PLACE - DISTRIBUTIONc) Proximity to competition -For shopping services it is better to be close to thecompetitor Ex: Fast food, Tailors, Designersd) Availability of support system-Tourism, Resorts,
Hotelse) Geographic & environmental factors
Entertainment, Holidaying etc these factors become important
Hill stations, heritage of sterling resorts, gambling resorts
3.PLACE - DISTRIBUTION
f) Communication network - It is very crucial for many services.
Ex: Merchant banking, Financial services and software
Transport facilities- These are crucial for wholesalers, couriers, mail order houses
4.PROMOTION A) Services are intangible so it is good to provide some tangibility, likeumbrella for Insurance, LIC symbol, UTI’s
Kumbham
Since services are intangible, consumers can not see & build a mental picture,so we should go for frequent advertising
B) Since credibility & experiential qualities dominate service it is important to use opinion leaders
The word of mouth promotion is very effective for services
4.PROMOTIONC) Since producer & seller can not be
separated, they should emphasize qualities & experiences (even their pictures may be used)
Useful to create awareness (brochures, newsletters, news releases can be used also)
D) Supply is inflexible in short run & its difficult to meet seasonal demand
Useful to de-market a service during peak season and promote it in lean season
4.PROMOTION Direct response advertising is becoming popular.
After creating awareness through advertising, sellers can phone / brochures / persons for solicitation.
Ex: Investment companies, travel resorts
Good method to evaluate cost per order & very personalized.
For Institutional sellers, it is less of advertising and more of personal selling.
Where a service requires the consumers (not customers) physical presence, more advertising is useful.
5.PEOPLE People means all humans who play a part in service delivery & who influence buyer’s perception
Ex: Employees, customers, other customers in the service encounter
All of them give cues to the customer regarding the nature of the service through their dress,
appearance& attitude
Service provider is very importantIn some cases he himself is the service
There are two types of People – 1. Direct contact with customer Ex: Lawyer, Psychiatrist, Consultant
2. Indirect or no contact with customer Ex: Airline baggage handler, telephone
installer (not important people but their behavior affects service quality)
5.PEOPLE
6.PHYSICAL EVIDENCEAs services are intangible, customers rely ontangible cues / physical evidence to evaluateservice o before purchase, o during consumption &o after consumption
Physical evidence is to Service what Packaging is
to a Product - the silent salesperson – givingconfidence & favorable impression
6.PHYSICAL EVIDENCEAll the more important for communicating about Credence (credibility) service – Auto repair Experiential (experience based) service - Hotels
Facility (exterior) – Exterior design, parking, landscapeFacility (interior) - Interior design, signage, layout, equipt.
Other tangibles - Business cards, employee dress, stationar
billing statement
Physical evidence is called Servicescape
Variation in form & use of Physical Evidence
Servicescape Usage
Elaborate Physical Evidence
LimitedPhysical Evidence
Self-ServiceCust Only
Super market ATMPost Office
Remote Service
Telephone CoInsurance Co
Telephone mailOrder
Interpersonal Service
Hotels, HospitalBank
Dry cleanersHair salon
Servicescape effects on Behavior
Stimulus>Organism>ResponseBehaviors in Servicescape - Response Human behavior is influenced by the
physical setting in which it occurs We act to physical setting in two ways -
Approach or Avoidance Consumers come to servicescapes with
a goal Physical setting helps in that goal
Internal Response to the Servicescapes - Organisms
Employees & Customers respond to physical surrounding
cognitively, emotionally & physiologically & these responses
influence their behavior
Effect on cognition is BeliefEx: Type of office furniture & decor & the apparel worn
by the lawyer may influence one’s belief about his
success
Effect on emotionEx: Feel happy, light hearted, relaxedCoolers & music may lead to pleasurable environment people spend money
Effect on physiology - Noise may cause physical
discomfort, temperature, aircraft seatsEnvironmental Dimensions - Stimuli Ambient conditions - Temperature, light
music and colorEx:Non AC movie theatre may influence your
view of the movie Inanimate Objects Other Physical Evidence - Signs, symbols &
artifactsEx: Signs outside, white table clothes in a hotel
Internal Response to the Servicescapes - Organisms
7.PROCESS
Process - actual procedures and flow of activities by which the service is delivered
Process is often inseparable from customer as he / she experiences the process
Within the control of service firm and influences purchase decision
Various steps a customer goes through to receive service provides evidence on which service is judged
7.PROCESS
A person looks if a service is standardized or customized
If the process empowered If it is very complex, requires complicated &
extensive actions to complete a transaction Ex: Bank loan
1. Product : Selection & production of appealing menu
2. Price : Pricing of menu offerings3. Place : Creation of viable network of
outlets supporting facilities - warehouses4. Promotion : In the media & backed by point
of sale merchandising5. People : Friendliness, prompt response to
dinners, their fulfilling orders & handling of payments, ability to keep the line moving, ability to be enthusiastic & smiling.
Using 7 Ps In a Fast Food Restaurant
6. Physical Evidence: Essential for convenience of service, enjoyment of meal & efficiency to
serve Large numbers of in a short time
Using 7 Ps In a Fast Food Restaurant
7. Process :The task schedules, supervision of activities involved in meal preparation, packaging & serving.
Design of order forms, pre-programming cash
registers, forecasting the demand for menu
Ideal cooking, handling of food, disposal of waste and coping with the customer complaints
Using 7 Ps In a Fast Food Restaurant