1. 7 P’s of Services:
1. Product
2. Prices
3. Place
4. Promotion
5. Process: Steps of doing things e.g. Call Centre, Banks, Insurance etc.
6. People
7. Physical Evidences: Clues, ambience etc.
In product marketing only 4 P’s are lying but in service marketing not only top 4 but
other 3 P’s are also equally important.
How services are different from product?
1. Goods are tangible means we can see, touch & feel before buying whereas
services are intangible we can’t be seen and touch but we can only feel it.
2. Consumption and procurement of goods may not occur simultaneously whereas
in services it is mandatory that the consumption & procurement of services occur
at the same time/ simultaneously.
3. Goods cannot be stored whereas services can be stored for long time period.
Example: Insurance.
4. Goods can be owned and services cannot be owned.
5. 7 P’s are lying under services marketing whereas only 4 P’s are lying under
product marketing.
In case of Banks:
Product: Current account and savings accounts, loan etc.
Price: Locker charges, interest rates etc.
Place: Branches at different places, ATMs etc.
Promotion: Advertisements
Process: it is the stipulated set of procedures that is applicable to all and that must
be followed to reduce the heterogeneity of services.
It is the set of procedures that have to be followed from the company’s point of view.
2. People: people are central of the service marketing because people (employees)
are the giver of the services and the people (customers) are the receiver of the
services.
The services marketing triangle explains the concepts and highlights the
importance of people:
1. The management promises the customer the timely services e.g. Dominos
promises its customer delivery within 30 min. or free pizza.
2. Management enables their employees by giving them training. So that the
employees are enabled to deliver the services. E.g. Dominos provides training to
its staff and provides two wheeler to the delivery boys.
3. The employees finally interact with the customer if the employee is rude or has a
language problem the entire services explain gets smarted on the other hand of
the customer is rude again services so also bad. So we can say that the people
are central to services deliver.
Management
Enabler Promisor
Employees Interacting/ Receiver Customer
Services Marketing Triangle
Physical Evidence: Services cannot be tried so before availing the services, every
customer should focus on same clues; these clues help the customer in taking
decisions. For e.g. in Banking: No. of Employees present on their seats.
Physical evidences are the clues that give indication about the quality of services.
For e.g. while planning to have a meal at a restaurant, the parking, the cloth on the
table, general cleanliness, uniform of the waiter give indications about the services,
we are about to experience.
Assignment:
3. Benchmarking and Blueprinting
Blueprinting: It is the process that is laid down from the customer’s point of view.
Example:
Customer Arrives Park Vehicle Goes For
Registration
Goes to Market to Bring Grocery Looks For A Market Hires A Cab/ Own
Car
Comes Back Unfasten Boat Himself Load Groceries
Return Cooks His Food Looks for a Direction Stays in Boat 3 Days
GAP Analysis
Customer Expectation Communication to Customer
Actual Service Decline GAP 5
GAP 4
Perceived Service
GAP 3
Service Delivery Specification
GAP 2
Management perception of customer expectation
G
A
P
1
4. Serve- Qual Model
Five Dimensions of Service Quality:
1. Reliability: the extent delivering consistent service and maintaining consistent
standard throughout is a measure of reliability.
Example: 1. Indian Railways are never on time enhance score very badly on
reliability.
2. Indigo Airlines always goes off & consistency delivers on time delivery or
departure of its flight.
3. City Bank assures 100% secure i-banking.
2. Assurance: The level to which the management and the employees of an
organisation manage to build confidence in the mind of the customer that all their
problems will be taken care off.
Example: When a tourist books a room in a five star hotel & find that the room is not
so clean & the bed linen is dirty. Assurance involves the manager coming to him.
a) Accepting the fault
b) Apologizing
c) Taking all necessary actions
d) Giving a Complementary Gifts as free dinner or free entry in casino or disco to
specify his mood.
3. Empathy: The extent to which the manager or an employee put themselves into
the customer’s shoe and then look for a solution is termed as empathy. For e.g.
Customer Care of Airtle.
4. Tangibility: A service that provides tangible cues to its customer or prospective
customer is considered good on service quality. Example on entering in a
restaurant, the overall ambience, parking facility, dress of chef or waiter give
possible hints about the service we are about to buy.
A good service provides the customer many such tangible cues.
5. Consideration: The extent to which customer recommends a service to other is
a measure of service quality.
5. Managing Demand and Supply in Services:
What makes service industries so distinct from manufacturing ones is their immediacy: the
hamburgers have to be hot, the motel rooms exactly where the sleepy travelers want them,
and the airline seats empty when the customers want to fly. Balancing the supply and
demand sides of a service industry is not easy, and whether a manager does it well or not
will, this author writes, make all the difference. In this rundown of the juggling feat service
managers perform, the author discusses the two basic strategies—“chase demand” and
“level capacity”—available to most service companies. He goes on to discuss several ways
service managers can alter demand and influence capacity.
The literature on capacity management focuses on goods and manufacturing, and many
writers assume that services are merely goods with a few odd characteristics. Unfortunately,
these researchers never fully explore the implications of these strange traits:
1. Services are direct; they cannot be inventoried. The perishability of services leaves the
manager without an important buffer that is available to manufacturing managers.
2. There is a high degree of producer-consumer interaction in the production of service,
which is a mixed blessing; on the one hand, consumers are a source of productive capacity,
but on the other, the consumer’s role creates uncertainty for managers about the process’s
time, the product’s quality, and the facility’s accommodation of the consumer’s needs.
3. Because a service cannot be transported, the consumer must be brought to the service
delivery system or the system to the consumer.
4. Because of the intangible nature of a service’s output, establishing and measuring
capacity levels for a service operation are often highly subjective and qualitative tasks.
Whereas the consumption of goods can be delayed, as a general rule services are produced
and consumed almost simultaneously. Given this distinction, it seems clear that there are
characteristics of a service delivery system that do not apply to a manufacturing one and that
the service manager has to consider a different set of factors from those that would be
considered by his or her counterpart in manufacturing. And if one looks at service industries,
it is quite apparent that successful service executives are managing the capacity of their
operations and that the unsuccessful are not. So, the “odd characteristics” often make all the
difference between prosperity and failure.
6. Gap analysis:- In business and economics, gap analysis is a tool that helps
companies compare actual performance with potential performance. At its core are
two questions: "Where are we?" and "Where do we want to be?" If a company or
organization does not make the best use of current resources, or foregoes
investment in capital or technology, it may produce or perform below its potential.
This concept is similar to the base case of being below the production possibilities
frontier.
Gap analysis identifies gaps between the optimized allocation and integration of the
inputs (resources), and the current allocation level. This reveals areas that can be
improved. Gap analysis involves determining, documenting, and approving the
variance between business requirements and current capabilities. Gap analysis
naturally flows from benchmarking and other assessments. Once the general
expectation of performance in the industry is understood, it is possible to compare
that expectation with the company's current level of performance. This comparison
becomes the gap analysis. Such analysis can be performed at the strategic or
operational level of an organization.
Benchmarking:- is the process of comparing one's business processes
and performance metrics to industry bests or best practices from other industries.
Dimensions typically measured are quality, time and cost. In the process of best
practice benchmarking, management identifies the best firms in their industry, or in
another industry where similar processes exist, and compares the results and
processes of those studied (the "targets") to one's own results and processes. In this
way, they learn how well the targets perform and, more importantly, the business
processes that explain why these firms are successful.
Benchmarking is used to measure performance using a specific indicator (cost per
unit of measure, productivity per unit of measure, cycle time of x per unit of measure
or defects per unit of measure) resulting in a metric of performance that is then
compared to others
Benchmarking: It means comparing oneself to the best in the business.
For example: City bank is the best on IT support, ICICI is best in aximpillary services.