Presentation on theme: "Definining Services “A service is any act or performance that one party offers to another, that is essentially intangible, does not result in the ownership."— Presentation transcript:
1 Definining Services“A service is any act or performance that one party offers to another, that is essentially intangible, does not result in the ownership of anything. Its production may or may not be tied to any physical product.” Philip Kotler.
3 CHARACTERISTICS OF SERVICES: INTANGIBILITYINSEPARABILITYHETEROGENITYPERISHABILITY
4 Marketing problems caused by intangibility Services are subjectively evaluatedServices are difficult to sample before purchaseServices cannot be storedPatent problems are thereDifficulty in pricing servicesDifficulty in displaying or communicating services.
5 Possible solutions to Intangibility problems: Use of Tangible clues.Use of personal sources of informationCreation of strong organizational image.
6 Marketing problems caused by inseparability Service provider is physically connected to the service being providedInvolvement of customers and other customers in the service production process:To start and stopFor processingMental involvementHeterogeneity and Quality issuesUncertainity in schedulingCatering to individual customer demand is difficultArrivals are not under controlMass production is diff.
7 Possible solutions to inseparability problems: Employee selection, training, and motivation.Consumer managementseggregating customershome deliveryProhibit customer entry in certain areasUse of multisite location
8 Marketing problems caused by Heterogeneity: Service standardization and Quality Control are difficult.Many errors in service operations are one time events.
9 Possible solutions to Heterogeneity problems: Customizationtakes extra timeadds to costuncertanity associated with customised servicesStandardizationUse of machinesTraining
10 SOME COMPANIES STANDARDISE THE CORE PRODUCT ALLOW CUSTOMERS TO SEMI CUSTOMISE THE FINAL OUTCOME
11 Marketing problems caused by Perishability: Inventoring problemProblem of Demand – Supply ManagementHigher demand than supplylower demand than supply
12 Possible solutions to Perishability problems: Creative Pricingattract customers in off peak hoursattract another segmentseparate diverse target marketsReservation SystemsDevelopment of Complementary ServicesCapacity SharingPart –Time Employee UtilizationIncrease in Customer Participation
13 CLASSIFICATION OF SERVICES On the basis of degree of TangibilityOn the basis of Labor IntensivenessOn the basis of Degree of Customer ContactOn the basis of skill level of the Service ProviderOn the basis of Goal of Service Provider
14 Service Process Matrix Given By Roger SchmennerLow Degree Of Interaction and customisation and Low degree of Labor Intensity: Service Factory Airlines,HotelsLow Degree Of Interaction & Cus and High degree of Labor Intensity: Mass Service, Schools, RetailingHigh Degree Of Interaction & Cus and Low degree of Labor Intensity: Service Shops, HospitalsHigh Degree Of Interaction & Cus and High degree of Labor Intensity: Professional Service, Physicians, Lawyers
15 Nature of the service act and the recipient of the service Services where tangible actions are directed at peoples’ bodies: Health care, beauty saloonsServices where tangible actions are directed at Physical goods: laundry, repair &maintenanceServices where intangible actions are directed at peoples’ bodies: education, informationServices where intangible actions are directed at Physical goods: banking legal services
16 Nature of Service delivery and type of relationship between Service Organization and its Customers Continuous delivery of service and membership relationship: electric utilityDiscrete transactions and membership relationship:Transit pass, buying clubContinuous delivery of service and No formal relationship:Radio station, Police protectionDiscrete transactions service and No formal relationship: movie theater, Restaurant
17 Customization & Judgment In service Delivery High Extent of judgement and High customization : Surgery,Taxi.High Extent of judgement and Low customization :Education, Preventive Health ProgrammeLow Extent of judgement and Low customization :Public Transport.Low Extent of judgement and High customization: Retail Banking
18 Nature of Demand &Supply Wide Demand Fluctuations but peak demand can be met without delay: electricity , telephoneWide Demand Fluctuations and peak demand cannot be met without delay: Tax preparations, hotels.Narrow Demand Fluctuations and peak demand can be met without delay: Insurance ,bankingNarrow Demand Fluctuations but peak demand cannot be met without delay: Fast food, Movie theater
19 On the basis of Nature of Interaction between Customer & Service Organisation and Availability of service outletsSingle site location where customer travels to service firm: Theater, Barber shopSingle site location where service provider travels to customer :TaxiSingle site location where transaction is at arm’s length: Local TV StationMultiple site location where customer travels to service firm: Bus serviceMultiple site location where service provider travels to customer: Mail DeliveryMultiple site location where transaction is at arm’s length: Telephone company