SERVICE STRATEGIES

Introduction
Marketing, as a philosophy of business, states

that a firm should base all its activities on the

needs and wants of customers in selected

target segments or markets.

Peter Drucker once said that marketing is more

than just a department or a management

function or an activity in an organisation.

Marketing Process
The four step marketing approach
Understand market

Segment it
Develop marketing programme

Marketing organisation
Three step value concept Choose the value Develop the value Communicate the value
Cont.

The Value Creation and Delivery Sequence

Revisiting the Services Marketing Mix

George and Barksdale7, as early as 1974, surveyed 400 companies from both manufacturing and service sectors. The following observations about service companies which are:
Less likely to have marketing mix activities carried out in the marketing department. Less likely to perform analysis in the offering area. More likely to handle their advertising internally. Less likely to have an overall sales plan. Less likely to develop sales training programs. Less likely to use marketing research firms and marketing consultants. Less likely to spend much on marketing as a percentage of gross sales.

Market Planning in Services

Function Goods Services

Philosophy

Mission

Market needs and Category of Problems of customers and proper resource allocation to products . solve them Manufacture standard products at a central location and distribute Market any system of products, skills and assets that can solve and market them to end-users. customer problems; Usually lengthy, costly, high-risk process to develop new products; need-specialized facilities and staff; possibility of protection via patents and trade secrets. Usually conceptual, based on known technology; comparatively little lead time and investment prior to commercial development; easily copied.

Research and Development

Capital Investment

Often requires extensive investment and lead time for construction of plants and equipment and to increase capacity; high barriers to competitive entry.

People are the principal capital; generally lower investment and time requirements; often just office facilities; returns on investment and assets tend to be higher, but entry barriers are Cont. low.

Raw Material Energy

Low cost, reliable long-term sources; subject to wide swings in price and availability due to political and economic conditions.

Usually less vulnerable shortages, inflation, price foreign exchange fluctuations.

to and

Production

Facilities to make, store, and ship tangible goods; production people have little or no customer contact.

The training and support of people dealing directly with the customer, often on the customers premises.

Promotion and Marketing

Filling a tangible need and the products brand name, features, packaging, pricing and delivery; promote to distribution channels as well as the end-user, since the primary customer is often a distributor/dealer.

Marketed directly to the client and based on intangibles, such as the reputation and capabilities of the supplier; often requires educating clients about problems they dont know they have; referrals are important.

Purchase is viewed as an customer takes Transaction acquisition; possession of the product and is responsible for its use.

Purchase is viewed as an expense; if a product is involved in the service, the supplier is responsible for its use (except for lease/ rental).

Pricing

Tends to be based on costs, easier to compare with competing products, therefore, harder to pass on price increases; vulnerable to discounts, rebates, etc.

Tends to be based on benefits and value to the user and other intangibles that are harder to compare; usually fewer discounts, deals, premiums, and coupons.

Differences between Market Planning for Goods and Services

Critical Success Factors in Services Marketing

CSFs relate to limited strategic areas where results insure a successful competitive performance

Certain variables prove to be determinants of organisations success The following key factors to be considered for success in service organisations:

Clear positioning strategy

Outlining the elements of the product package Emphasis on quality

Customer retention
Capturing and using customer data Soliciting feedback from customers and employees

Top management commitment.

Customer Orientation

Marketing is the philosophy where the whole business is seen from the point of view of the customer
Customer relations is the essence of service marketing strategy

Customer Relations in Services Marketing Managing and operating contacts are the responsibilities of operations of non-marketing departments
Company

Employees

Interactive Marketing

Customers

Services Marketing Model

The tasks of marketing management can be divided in two heads. The first category of

tasks relate to giving promises and the second to fulfilling promises.

Customers experiences of the moments of truth are based on certain expectations created by the GIVING PROMISES: THE service provider. The traditional marketing efforts TRADITIONAL give promises, which correspond with the OR EXTERNAL MARKETING personal need and aspirations of the target group of customers.

Employees abilities and motivation to meet the expectations of customers as created by external marketing efforts are backed up by internal FULFILLING PROMISES: marketing efforts. By creating and maintaining a INTERNAL service culture through marketing campaigns and AND activities directed towards the employees, the INTERACTIVE MARKETING organisation may prepare its employees for the moments of truth.

Corporate Strategy

Service Concept

Internal Marketing Creating the prerequisite for Giving promises to customers

External (Traditional ) Marketing

creating expectations by giving promises Responsibility of marketing specialists mainly

Responsibility of every manager and supervisor mainly

THE MOMENT OF TRUTH CUSTOMER

Life path

Personal needs

EMPLOYEES
Personal needs Image

CUSTOMERS

Words of mouth

Interactive Marketing (= keeping promises)

Image

Role Conflict and Ambiguity

Contact personnel

System and physical resources The customer and fellow customers Management support Material support and support personnel Technology and systems support Price Corporate/local image

Previous experiences

Responsibility of operations personnel, etc. (mainly) as part-time marketers

An Overview of a Market-Oriented Management

 Function of marketing is to establish, develop, and

commercialize long-term customer relationships

HRD and operations management need to be integrated with marketing Need for putting the customer at the heart of your business

Revamp business processes

Managing service recovery to build customer satisfaction Service companies must have a customer/ market focus and integrate operations, sales, customer service, human resource and technology with a long-term perspective

The Interlocking Efforts to Keep Customers

Measure what matters

Put the customer at the heart of the business

Manage the business from the customers point of view

Convert customer satisfaction into profit

KEEPING CUSTOMERS

Manage quality

Manager service recovery

Keep the relationship vibrant