2. INTRODUCTION
STANDARDIZATION
Achieving maximum productivity through standardization of service product
and service design and delivery achieving global economy of scale and
lowest unit cost which is an import tenet of economics
standardization means "one size fits all”
CUSTOMIZATION
Customization on the other hand refers to the tailoring of the campaign
according to the needs of an individual or groups of individuals. These are
high margin products where the volumes are low and the buyers are few.
E.g. Custom made models of cars, Cream lab in C-scheme
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5. Standardization potential
• Economies of scale in production,
• Promotion,
• Distribution and
• Research and development
Standardization can also contribute to a coherent and
consistent global image of the firm and its products
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(video
6. CHALLENGES
• Application of uniform marketing policies,
• Variations across markets in consumer attitudes,
• competitive environments,
• marketing management related variables must be ad
equately assessed
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7. THE GLOBAL CHALLENGE
Global market size: standardization
Local differentiation: customization
Strategy: Determine best combination of global and loc
al activities for competitive advantage
video
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8. Globalization (standardization)
– Developing standardized services marketed worldwide
with a standardized marketing mix
– Essence of mass marketing
Global localization (adaptation)
– Mixing standardization and customization in a way
that minimizes costs while maximizing satisfaction
– Essence of segmentation
– Think globally, act locally
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11. THE RIGHT CHOICE
STANDARDIZATION
Pro’s
• Cost advantages it carries through the various economies
of scale,
• The consistent global image
Con’s
• However, variations across markets indicate that a fully
standardized marketing approach may not be appropriate.
Adjusting the marketing strategy such that it takes into
account these variations enhances the product's chance of
success
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12. THE RIGHT CHOICE
CUSTOMIZATION
Pro’s
• Customization adds value for you and for your clients
• They may experience higher satisfaction
• You know their needs and can look for niche opportunities
Con’s
• Cost increases with added time and complexity
• Customer may not recognize or be willing to pay for the
added cost
video
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13. THE RIGHT CHOICE
The standardization or customization depends on
the product/service and the notion of the
consumers
•Standard approach- laptops, computers, televisio
n, cosmetics ,etc.(universally accepted)
•Customized approach- food and beverages, insu
rance and banking solutions , etc(depends upon h
abits and taste)
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14. THE RIGHT CHOICE
•Standardization allows a firm to economies of
scale and to maintain simpler and more
streamlined operations
•Customization allows a firm to gain specific ad
vantages within given markets that it might not
otherwise will able to achieve
•In practice, most firms fall in the middle of the
continuum between standardization and
customization and follow a policy of
“Think global, act local”
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16. Customer Expectations of Service
Customer Expectations
•Beliefs about service delivery
•Serve as standards or reference points against which
performance is judged
•Customers compare their perceptions of performance with
these reference points when evaluating service quality
•Thorough knowledge about customer expectations is critical
to services marketers
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18. Dual Customer Expectation Levels
Desired Service:
•Level of service that customer
hopes to receive
Adequate service:
•Level of service the customer
will accept
Zone of Tolerance:
•Extent to which we accept variation
in service
ZONE OF
TOLERANCE
DESIRED SERVICE
ADEQUATE SERVICE
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19. Zone of Tolerance
Zone of Tolerance
• The range between desired service and adequate service;
•Range or window in which customers do not notice service
performance
•When service falls outside this range(either very high or very
low), the service gets the customer’s attention in either a
positive or negative way
•Influenced by such factors as predicted service, service promi
ses, word-of-mouth communications, past experiences, service
alternatives, personal needs, and situational factors
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20. Zones of Tolerance for
Different Service Dimensions
LEVEL OF
EXPECTATION
MOST IMPORTANT
FACTORS
LEAST IMPORTANT
FACTORS
ZONE OF
TOLERANCE
DESIRED SERVICE
ADEQUATE SERVICE
ZONE OF
TOLERANCE
DESIRED SERVICE
ADEQUATE SERVICE
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21. Zones of Tolerance for
First-Time and Recovery Service
•First time service
Outcome
Process
•Recovery service
Outcome
Process
LOW EXPECTATIONS HIGH
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22. Factors that Influence Desired Service
DESIRED SERVICE
states or conditions
Essential to the physical or
psychological well being---
physical, social,
psychological,
and functional
PERSONAL NEEDS ENDURING SERVICE
INTENSIFIERS
individual stable factors that
lead the customer to a
heightened sensitivity
- Derived service expectations
- Personal service philosophy
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23. Factors That Influence Adequate Service
Expectations
ADEQUATE SERVICE
TEMPORARY SERVICE INTENSIFIERS
(short-term, individual factors that make a consumer more aware of the
need of service)
PERCEIVED SERVICE ALTERNATIVES
(As the number of alternatives increases, the level of adequate service in
creases and the zone of tolerance narrows)
CUSTOMER SELF-PERCEIVED SERVICE ROLE
(how well the customer perceives they are performing their own role in
service delivery)
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24. SITUATIONAL FACTORS
(Temporary changes in the normal state of things ---- tends to lower the
level of adequate service expected and widen the zone of tolerance)
Example: Reason for purchase, Consumer mood, Weather, Time c
onstraints ,Emergency
PREDICTED SERVICE
(Tell customers when service provision is higher than what can normall
y be expected so
that predictions of future service encounters will not be inflated.)
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25. Factors that Influence
Desired and Predicted Service
Explicit service promises
Make realistic and accurate promises that reflect the service actually delivered rather
than an idealized version of the service.
Implicit service promises
• Ensure that service tangibles accurately reflect the type and level of service
provided.
• Ensure that price premiums can be justified by higher levels of performance by
the company on important customer attributes.
Past experience
Customer’s previous exposure to service that is relevant to the focal service.
Word-of-mouth communications
Simulate word of mouth in advertising by using testimonials and opinion leaders.
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26. Customer satisfaction
Definition:
•What customer expects and how he perceives that service rece
ived lived up to those expectations.
•Service satisfaction is the difference between expectation and
perception of customer
•Objective satisfaction is reduction of the discrepancy between
the current situation and the desired situation
• Depend more on customer & his style than technology or
system
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27. Satisfaction is person’s feelings of pleasure or disappointment t
hat results from comparing a service perceived
performance (or outcome) to their expectations
•Perceived performance = Expectations : customer satisfaction
•Perceived performance < Expectations : customer dissatisfaction
•Perceived performance > Expectations :delighted customer
video
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28. Factors Influencing Customer Satisfaction
•Product/service quality
•Product/service attributes or features
•Consumer Emotions
•Perceptions of equity or fairness
•Other consumers, family members, and coworkers
•Price
•Personal factors
– the customer’s mood or emotional state
– situational factors
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30. Relationship between Customer Satisfaction and
Loyalty in Competitive Industries
0%
20%
40%
60%
80%
100%
Very
dissatisfied
Dissatisfied Neither
satisfied nor
dissatisfied
Satisfied Very
satisfied
Satisfaction measure
Loyalty(retention)
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31. REFRENCES
•Service Marketing by Lovelock , Writz & Chaterjee
•Marketing Management by kotler, keller, koshy & Jha
•R .k . Teas ; journal of marketing ( Expectations, Performance
Evaluation and Consumers” Perception of Quality)
•www.slideshare.net/Hjyotsana/standardization-and-customization
•Videos:
https://youtu.be/69y_Ei1QW84
https://youtu.be/KXLm4K0zcp8
https://youtu.be/bQaHXYt_DNk
https://youtu.be/OaZnCu1hc0I
https://youtu.be/50yfFsz9TbI
32. THANK YOU
Presented by:
R.A. PODAR INSTITUTE OF MANAGEMENT(FMS), JAIPUR
Ankit Deora
Gargy Sharma
Rudrakshi Singh
Sakshi Somani
Shivanshika Shekhawat
Supriya Somani
Surbhi Mathur
