118'334 Services Marketing May 29 June 20, 2006 1'303'30pm Session 1'1: Understanding marketing, Ser - PowerPoint PPT Presentation

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118'334 Services Marketing May 29 June 20, 2006 1'303'30pm Session 1'1: Understanding marketing, Ser

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Title: 118'334 Services Marketing May 29 June 20, 2006 1'303'30pm Session 1'1: Understanding marketing, Ser


1
118.334 Services MarketingMay 29 -June 20, 2006
(1.30-3.30pm)Session 1.1 Understanding
marketing, Services and service marketing
framework
Learning Coach Dr. Mohan Agrawal Principal
Strategy Consultant Marketing Aims
Inc. Canada www.marketingaims.com Email
magrawal_at_marketingaims.com
2
Agenda
  • Recap of marketing understanding
  • Services economy
  • Services defined
  • Service family
  • Service marketing challenges

3
1 Marketing Defined
  • A social and managerial process by which
    individuals and groups obtain what they need and
    want through creating and exchanging products and
    value with others.

4
1 Core Marketing Concepts
5
2 Services Our Life
  • Weather forecast on Net
  • Mailbox for letter
  • Bus ride
  • Education
  • Food Service
  • Bank ATM
  • Telephone
  • Hairdresser
  • Dry Cleaners
  • Mail delivery
  • Electricity service
  • Pizza delivery

6
2 Services Our economy
  • In most countries, services adds more economic
    value than agriculture, raw materials and
    manufacturing combined.

7
2 Services Our economy
  • Banking, stock broking
  • Lodging
  • Restaurants, bars, catering
  • Insurance
  • News and entertainment
  • Transportation (freight and passenger)
  • Health care
  • Education
  • Wholesaling and retailing
  • Laundries, dry-cleaning
  • Repair and maintenance
  • Professional (e.g., law, architecture,
    consulting)

8
2 GDP by Industry in the USA, 2005
Source Bureau of Economic Analysis, December 2000
9
2 Changing Structure of Employment
Share of Employment
Agriculture
Services
Industry
Time, per Capita Income
Source IMF
10
3 Facilitating factors
  • Government Policies (e.g., regulations, trade
    agreements)
  • Social Changes (e.g., affluent, time poor, seek
    experiences)
  • Advances in IT (e.g., speed, digitization,
    wireless, Internet)
  • Internationalization (travel, transnational
    companies)

11
4 What is a Service?
  • An act or performance offered by one party to
    another
  • Economic activities that create value and provide
    benefits for customers as a result of bringing
    about a desired change in, or on behalf of, the
    recipient

12
4 Service A Concept in the Making
  • An add on to a physical product American
    Marketing Association (1966).
  • a benefit or activity that one party can offer
    to another which is essentially intangible and
    does not result in the ownership of anything.
    Its production may or may not be tied to a
    physical product. Kotler, 1999.

13
4. Characteristics of a Service
14
4 The Three Most Common Confusions
  • Service,
  • Customer Service
  • Serving a customer

15
4 Goods Vs. Services Fundamental differences
  • Intangibility (service can not be seen, touched
    or put on a shelf)
  • Inseparability or, simultaneity (services usually
    are inseparable between production and
    consumption)
  • Perishability (can not be produced or stored
    before consumption)
  • Variability or, heterogeneity (services are hard
    to standardize)

16
(No Transcript)
17
5 Challenges in Marketing Services
  • A. Intangibility - The product is a process, a
    deed or a performance therefore,
  • For the customer Perceived risk is higher
    harder to evaluate before (even during or after
    the service).
  • For the marketer Harder to help customer
    visualize the product and differentiate from the
    competition.

18
5 Challenges in Marketing Services
  • B.Simultaneity - The provider and the customer
    are part of the product production and
    consumption are simultaneous and inseparable
    therefore,
  • For the customer Some interaction with the
    service provider is necessary and sometimes
    product is shared with other customers.
  • For the marketer Customers are co-producers, and
    their interaction and roles have to be managed.

19
5 Challenges in Marketing Services
  • C. Heterogeneity - The product varies across
    customer, provider, and for the same provider and
    customer from one consumption occasion to the
    next therefore,
  • For the customer Consistency of product quality
    is always suspect, and service provider
    relationship is critical.
  • For the marketer Customization is an
    opportunity and frontline operations and
    customer skills training is critical.

20
5 Challenges in Marketing Services
  • D. Perishability - The product cannot be stored
    and can be produced only after customer
    initiates therefore,
  • For the customer Product needs to be available
    and produced when necessary.
  • For the marketer Supply must match demand
    otherwise (revenue) opportunity to produce is
    lost the task is to manage rather than build
    demand.

21
6 Service Marketing Framework
22
6 What is Marketing Goal?
  • Attract new customers by promising superior value
    and
  • keep and grow the current customers by delivering
    customer value.

23
6 The Traditional Vehicles of Customer Value
24
6 The Specific Vehicles of Customer Value
in services
  • People
  • Physical setting (servicescapes)
  • Service quality and Productivity
  • Balancing the process of demand and supply

25
Websites to check out
  • ORBIS International
  • (http//www.orbis.org), p. 3
  • United Airlines
  • (http//www.ual.com), p. 3
  • America Online
  • (http//www.aol.com), p. 6
  • Veterinary Pet Insurance
  • (http//www.petinsurance.com), p. 8

26
THANK YOU
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