What is Services Marketing

Instructor: Syed M. Zubair Azam

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Topics to be explored
1. What are services?

2. Why study services marketing?

3. Goods vs. Services 4. Characteristics of Services

5. Services Marketing Mix

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Marketing Defined
Marketing is an organizational function and a

set of processes for creating, communicating,

and delivering value to customers and for

managing customer relationships in ways that

benefit the organization and its stakeholders.

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Marketing Management Defined

Marketing management is the art and

science of choosing target markets

and getting, keeping, and growing

customers through creating,

delivering, and communicating

superior customer value..

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Basic Marketing concepts

Customer Need
Stated needs Real needs Unstated needs Delight needs Secret needs

Customer Want Customer Demand

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Demand States
Negative Nonexistent Latent

Declining

Irregular

Full

Overfull

Unwholesome

Basic Marketing concepts

Customer Value
Value Proposition Differentiation

Customer satisfaction Customer Delight

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Market Offering
Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas
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Caution!!!
Dont be

Myopic

Services
Anything that cannot be dropped on your foot. The production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange, satisfies an identified need

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Services Industries
Health Care
hospital, medical practice, dentistry, eye care

Travel
airlines, travel agencies, theme park

Professional Services
accounting, legal, architectural

Others:
hair styling, pest control, plumbing, lawn maintenance, counseling services, health club

Financial Services
banking, investment advising, insurance

Hospitality
restaurant, hotel/motel, bed & breakfast, ski resort, rafting

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Goods vs. Services

Goods
Tangible

Services
Intangible

Resulting Implications
Services cannot be inventoried. Services cannot be patented. Services cannot be readily displayed or communicated. Pricing is difficult. Service delivery and customer satisfaction depend on employee actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted. Customers participate in and affect the transaction. Customers affect each other. Employees affect the service outcome. Decentralization may be essential. Mass production is difficult. It is difficult to synchronize supply and demand with services. Services cannot be returned or resold.
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Standardized

Heterogeneous

Production separate from consumption

Inseparability

Nonperishable

Perishable

Tangibility Spectrum
Salt

l Soft Drinks l Detergents l Automobiles l Cosmetics l Fast-food Outlets l l

Intangible Dominant

Tangible Dominant

Figure

Fast-food Outlets Advertising Agencies Airlines Investment Management Consulting Teaching

Growth of Services Sector

5.5 million Tourists (11 % Increase) 81 percent Hotel Occupancy Rate (81,492 Rooms) $184 billion Non-Oil Trade Sector Hotels and Restaurants Trade sector Manufacturing Sector Dubais Real GDP rose to Dh 169 Billion in 2013 Growth 13.7 % (Dh 8.9 Billion) 4.1 % (29.2% of Real GDP) 13.3 %

Transport & Telecommunication

7.9 million Hotel visitors

4.9 % 13 %
2.7 % 4.3 %

Real Estate
Financial Sector Electricity, Gas and Water

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4 Ps of Marketing

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The 8Ps of Services Marketing: (5) Process

How firm does things may be as important as what it does Customers often actively involved in processes, especially when acting as co-producers of service Process involves choices of method and sequence in service creation and delivery
Design of activity flows Number and sequence of actions for customers Nature of customer involvement Role of contact personnel Role of technology, degree of automation

Badly designed processes waste time, create poor experiences, and disappoint customers

The 8Ps of Services Marketing: (6) Physical Environment

Design servicescape and provide tangible evidence of service performances Create and maintain physical appearances

Buildings/landscaping Interior design/furnishings Vehicles/equipment Staff grooming/clothing Sounds and smells Other tangibles
Manage physical cues carefully can have profound impact on customer impressions

The 8Ps of Services Marketing: (7) People

Interactions between customers and contact personnel strongly influence customer perceptions of service quality The right customer-contact employees performing tasks well

Job design Recruiting Training Motivation

The right customers for firms mission

Contribute positively to experience of other customers Possessor can be trained to have needed skills (coproduction) Can shape customer roles and manage customer behavior

The 8Ps of Services Marketing: (8) Productivity and Quality

Productivity and quality must work hand in hand Improving productivity key to reducing costs Improving and maintaining quality essential for building customer satisfaction and loyalty Ideally, strategies should be sought to improve both productivity and quality simultaneouslytechnology often the key
Technology-based innovations have potential to create high payoffs But, must be user friendly and deliver valued customer benefits

Transformation of the Service Economy

Social Changes
Government Business Trends Advances in IT

Policies

Globalization
New markets and product categories Increase in demand for services More intense competition

Innovation in service products & delivery systems, stimulated by better technology

Customers have more choices and exercise more power

Success hinges on: Understanding customers and competitors Viable business models Creation of value for customers and firm

Factors Stimulating Transformation of the Service Economy (1)

Social Changes
Government Business Trends Advances in IT

Policies

Globalization

Changes in regulations Privatization New rules to protect customers, employees, and the environment New agreement on trade in services

Factors Stimulating Transformation of the Service Economy (2)

Social Changes
Government Business Trends Advances in IT

Policies

Globalization
Rising consumer expectations More affluence

More people short of time

Increased desire for buying experiences versus things Rising consumer ownership of high tech equipment

Easier access to information

Immigration Growing but aging population

Factors Stimulating Transformation of the Service Economy (3)

Social Changes
Government Business Trends Advances in IT

Policies
Push to increase shareholder value Emphasis on productivity and cost savings Manufacturers add value through service and sell services More strategic alliances and outsourcing Focus on quality and customer satisfaction Growth of franchising

Globalization

Marketing emphasis by nonprofits

Factors Stimulating Transformation of the Service Economy (4)

Social Changes
Government Business Trends Advances in IT

Policies

Globalization

Growth of the Internet Greater bandwidth

Compact mobile equipment

Wireless networking Faster, more powerful software Digitization of text, graphics, audio, video

Factors Stimulating Transformation of the Service Economy (5)

Social Changes
Government Business Trends Advances in IT

Policies

Globalization

More companies operating on transnational basis Increased international travel International mergers and alliances

Offshoring of customer service

Foreign competitors invade domestic markets

Thanks!!!

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HomeWork
Visit a restaurant and Note its Services.

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