SERVICE

A service is an act or a performance offered by one party to another Examples Barber, Teacher, Beautyparlor ,Doctor ,Lawyer

SERVICE SECTORS Education,Banking,Insurance,Tourism,Healthcare,Entertainment,IT Transportation,Airlines,Road Transport,Railways,Shipping,Hospitality They are different to Goods (products) They are deeds, processes and performance Services are activity or benefit that one party can offer to another which is essentially intangible and doesnt not result in the ownership of anything. CHARACTERISTICS OF SERVICES I. INTANGIBILITY -Services are intangible .They cannot be seen, tasted, smelt and touched. It is not a physical object. The buyer of a service has no idea about the service before he uses it.Intangibility makes it difficult for customers to judge the service The solution is to tangibilise the intangibles Examples-Visualization,Lenses (Computerized),Dentist,Association ,Classroom lecture II. HETEROGENEITY :- It is called inconsistency or variability or nonstandardization

This characteristic makes it difficult in establishing a standard This happens due to different individuals, different time, and varying customer involvement levels. II. HETEROGENEITY (CONT`D):- Pricing also varies among service providers

Examples:- Education, Airlines [on time service differs], Doctors, Salons. III. INSEPARABLE :- It means services are produced and consumed at the same time

GOODS:- Production > Storage > Sale > Consumption SERVICES:- Sale > Production & Consumption

Customers are involved in the production process. The individual delivering the service has to be trained appropriately. Examples-Education, Healthcare [Operation],Cinema, Airlines. IV. PERISHABLE -Services cannot be stored for later use

Example - HOTEL ROOM 10 [rooms] * 30 [nights] = 300 room nights . Demand and capacity planning play a major role Examples- Airlines seats, Hospital beds. In case of Goods- The benefits come from ownership of physical objects or devices In case of Services-The benefits are created by actions or performances

SERVICE TRIANGLE One of the most popular strategic models for Services marketing was developed by Christian Gronross Gronross identified three important groups that play critical roles in successfully accomplishing organisational goals: Company (Top Management) Employees Customers

The model proposes a three-dimensional approach for the development of the overall marketing strategy. INTERNAL MARKETING

Company Employees The concept of Internal Marketing suggests that the philosophy of the management should be to satisfy its employees first. Employees are viewed as the first market for the service organisation to serve, so they are called Internal Customers. Proper pay, good working conditions and motivation play a major role EXTERNAL MARKETING

Company Customers Customers are the co producers of service.Responsibility of the service firm to prepare the customer to receive the service in the right perspective.The major tasks are customer education about the features of the service, preparations required and the mindset and the kind of expectations to be developed.This is the platform where the company makes promises to the customers . INTERACTIVE MARKETING

Internal Marketing and External marketing prepare the stage for actual interaction between employees and customers which is known as Interactive marketing.The interaction between employees and service firms and their customers are also called Service Encounters.This is the stage where the promises made by the company to the customers are fulfilled by the employees. MOMENT OF TRUTH [MOT]

Concept promoted by John Carlson, CEO of SAS Airlines.John changed SAS from business driven to customer driven.The airline had losses to the tune of $20 mn in a year.He used the term MOT to mean those moments in which important brand impressions are formed and where there is significant opportunity for good or bad impressions to be made.
MOT takes place in a service encounter

The concept of MOT is to identify the following moments between: Customers and Employees , Customers and Service Environment, Customers and Systems

Management of MOT-An Employee represents the organization Employees need to be Empowered Employees should have interpersonal skills They should gain trust

Emotional Labor -Emotional labor is a form of emotional regulation wherein workers are expected to display certain emotions as part of their job, and to promote organizational goals. Phil Wealer classified MOT in two categories

Magic moments-It means employees have performed MOT with quality service and customers feels he has got more than expected Misery moments-Customers feel let down or ill treated cheated [Why the hell did I come here?] GOODS SERVICES CONTINUUM

Good and Services continuum means goods and services offering are being intermingled in an unprecedented manner.What a customers gets today is a mix of good and services . Pure tangible Goods Salt, Toothpaste Goods with minor Services Television, Washing Machine Goods and Services in equal measures [Hybrid] Hotel Services with minor Goods Airlines [Transp + Food] Pure Services Physiotherapy, Baby sitting. PRODUCT

A service product is a bundle of features and customers benefits.It is very difficult to describe a service product .A customer has various needs attached to a service product.To understand a service product, it is necessary to understand different levels of product within a service. According to Philip Kotler a marketer needs to think through five levels of the service product.The five levels of the product constitute a customer value hierarchy EXAMPLE HOSPITALITY SERVICE

Core product Rest and sleep Basic product Hotel room, bed, bathroom, towels, desk, closet. [it is how a marketer translates the core benefit into a service package] Expected product Clean bed, fresh towels, working lamps and the relative degree of quietness. [a set of attributes buyers normally expect while purchasing a service]

Augmented benefits Supply of food that suits customer health, anything that surprise or delights the customer. [At this level service firms face severe competition. It is noted to be that each augmentation adds cost. The augmented benefits soon become expected benefits to the customer] Potential product New ways of satisfying the customer. Thus delighting
customers is a matter of exceeding expectations