1. 1 Introduction to Services Marketing Session 1

2. P3 Jan/Feb -2005Services Marketing – Professor V. Padmanabhan2 Administrative Details Syllabus –Cases –Additional Readings Optional Text –Lovelock, Christopher, “Services Marketing”, 4th edition Performance Evaluation –Class Participation (Individual)40% –Project (Group)60% Course Website –http://faculty.insead.edu/padmanabhan/services_marketing

3. P3 Jan/Feb -2005Services Marketing – Professor V. Padmanabhan3 Service: Some Definitions Service Sector includes all economic activities whose output –is not a product –generally consumed as it is produced –provides added value in form “Anything sold in trade that could not be dropped on your foot ” - The Economist

4. P3 Jan/Feb -2005Services Marketing – Professor V. Padmanabhan4 Course Headlines Services are significantly different from products on several dimensions. The consequences is that as managers you need –a broader conception of the search, purchase, consumption and post-consumption phases of the consumer experience –manage a broader set of variables that go beyond the traditional 4P’s of marketing (managing services is an interdisciplinary exercise) –to understand consumer economics, its relationship to firm performance and implications for a firm’s strategic and tactical decisions There are very few pure plays (pure product or pure services). Consequently, you need to be good at managing products and services to grow your and your company’s bottomline.

5. P3 Jan/Feb -2005Services Marketing – Professor V. Padmanabhan5 Product versus Service : Generic Differences Nature of product –Tangible versus Intangible Customer involvement in production –Co-production People as part of the product –Product + Process Simultaneity of Production and Consumption –Quality Control Search –vs- Experience –vs- Credence Attributes Consider QB House –hair-cut as a service

6. P3 Jan/Feb -2005Services Marketing – Professor V. Padmanabhan Marketing Analysis Framework 3 C’s C ustomers C ompetitors C ompany S ( Segment )T ( Target) P ( Position ) Market Intelligence 4 P’s Product Price Place Promotion

7. P3 Jan/Feb -2005Services Marketing – Professor V. Padmanabhan7 Framework for Services Marketing Company Employees Customers Internal MarketingExternal Marketing Interactive Marketing

8. P3 Jan/Feb -2005Services Marketing – Professor V. Padmanabhan8 Services Marketing Mix Customer People Physical Evidence Process Place Promotion Price Product

9. P3 Jan/Feb -2005Services Marketing – Professor V. Padmanabhan9 Final Comments Related Reading –The Four Service Marketing Myths, Vargo and Lusch, Journal of Service Research, May 2004. IHIP = Intangibility, Heterogeneity, Inseparability and Perishability Issue –Differences reflect the producer’s perspective, and not the consumer’s perspective Question for You –What do you make of their claim? Tomorrow’s Session –First of Three Sessions on Customer Analysis –I need your answers to the 3 questions posed Cold Call