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The First P: Service Product or Service Package:

A service is a bundle of features and benefits. However these benefits have relevance to a
specific target market. Hence while developing a service package it is important that the
package of benefits in the service offer must have a customer perspective. Gronroos
constructed that the services are product offers consists of 3 levels. The first level is that
of basic service package which includes core service, facilitating services and supporting
services. The 2nd level is that of an augmented service offering where accessibility
interaction and customer participation is given equal importance in delivering the service
product . the third level is that of the market communication of the service offering as in
its absence the augmentation service package doesn’t have any relevance to the customer.

The service package:


The package concept of service product suggests that what you offer to the market is a
bundle of different services, tangible and intangible, but there is a main or substantive or
core service and around it are built the auxiliary or peripheral or facilitator services. It is
important to note that facilitating services are mandatory and if these were left out, the
entire service would collapse. In the service package there are yet other type of services
called supporting services. The basic difference between the 2 is that supporting services
don’t facilitate the consumption of core services but are used to increase the value and
thus differentiate it from competition
e.g. in a 500 room hotel the core service is lodging and room service, bellboy services
are facilitating services and health club , car rental are support services. However it may
not always be possible to draw a line of distinction between facilitating and support
services. For e.g. in a typical city hotel business center might be the support service but
in a business and convention hotel the same service would be facilitating service

The augmented service offering:


The basic service package is not equivalent to the service product the customer
perceives, which is infact based on customer experience and evaluation. Therefor there is
a need to involve the customer in the production of service offering and thereby
reinforcing that the basic service package has to be expanded to a more holistic model of
augmented service offering. The issues related to the accessibility of the service
interaction with the service organisation and consumer participation are also integral
elements of the service product.

Market communication of the service offering:


A favorable image enhances the service experience and a bad image may even destroy it.
In such a scenario the issue of management of image through communication becomes a
integral part of developing the service product but the important point to note here is that
apart from the conventional methods of promotion corporate image and word of mouth
are, if not more, equally important. A negative comment from a fellow customer is more
than adequate to neutralize the effect of your efforts of mass media advertising, media
blitz and direct promotion.
Developing a service offering:
The first step in developing a new service offering is to assess the customer benefits,
which is done through market research and available appropriate information.

In the second step, these consumer benefits have to be translated into core, facilitating
and support services, with a view to defining what general benefits these service
organizations would offer to its customers.

The third stage is that of developing the augmented service offer.


A careful planning at the fourth stage is essential because of the right service in the right
form and in the right quality and quantity is not delivered, the entire customer oriented
plan would collapse.

Finally the appropriate market communication strategy should be prepared and its
implementation plan should be defined not only to inform and persuade the customers
but also to enhance the desired image.

The 2nd P: Pricing


A particular product or service is acceptable to the customer at a particular price and if
the price ids increased it is likely that the same product or service might become less
acceptable to the customer. Another issue related to pricing is that of perceptions about
quality. Generally to most customers high price means high quality.

Service pricing follows the principles and practices of pricing of goods and therefore
they are either cost based or market based.
Following aspects should be taken into consideration while pricing services:
1. Demand fluctuations should be successfully handled
2. Service prices should be based on costs so as to take into account the tangible
clues
3. Service pricing should be such as to provide value addition and quality indication
4. The pricing strategy should cope up with the degree of competition.

Pricing objectives:
The pricing of services is greatly influenced by the basic service characteristics. However
in setting price objectives several factors in relation to the overall marketing strategy of
the corporation should be considered

Planned market position for the service product: Gitlow suggested that price not only
influences the market position but also affect the customers perceptual positioning. It is
therefore important to keep market or customer position while deciding on pricing
strategy
Product life cycle: the stage of life cycle of the service product is of utmost importance.
For instance, At the introductory stage if there is no competition and the demand is high
you may opt for high price, to make maximum gains in the short term (skimming
policy). In a similar situation but with a low demand you may opt for low prices to
penetrate into the market. Also you have to consider the elasticity of demand i.e. whether
the demand is sensitive to the change in price or not.
Competition: competition should be studied both from the point of interbrand and also
from the viewpoint of the brand that provides the same need satisfaction. For e.g. a
private airline is facing competition from the national and other private airlines but also
from the railways faster trains on the same routes during convenient timings
Strategic role of pricing: Lastly it is important to understand the strategic role of pricing
in your overall marketing strategy. For e.g. a hotel chain might offer a package of low
price or discount with a view to making people try out their services. It is likely that in
the short run it might be a loosing proposition but in the long run, it may give more
customer satisfaction and thereby better utilization of services

The 3rd P: Place:


Because of intangibility of services they cannot be stored, transported and
inventoried. Also because of inseparability, they must be created and sold at the same
time. These 2 characteristics make the channel very short and direct. Most service is
distributed through direct sales at best one direct agent and middleman can be added to it.
For e.g.: an insurance agent, courier service. Keeping in view the characteristics and
potential management problems, there are distinct channel configurations that can be
noticed:
The dominant channel configuration in the service sector is where agents and
brokers play an imp role. The major function of these agents and brokers is to bring
together the producer and consumer of service. These agents can be classified as broker
or sales agents. E.g.: travel agents
The agents may be trained in the creation and production of service and then
franchised to sell it. E.g.: Shehnaz Hussain beauty parlours.
In some cases actual product is not transferable & therefore tangible representations are
created and transferred. This kind of tangible is used for marketing insurance services
where a contact document exists as a physical & tangible representation of the service.
Delivery of service involves creating time and place utilities, thus, factor of
location keeping in mind the potential markets is significant in channel selection
decision. The problem of standardisation and uniformity restrains the use of middlemen
& the geographical area that can be catered. Thus, it is impt to select a good location to
attain maximum coverage of the market place.

The 4th P: Promotion


There are clear differences in information usage between goods and services. First, the
difference is that the consumers of services are less likely to purchase without
information, than those of goods. Second, the consumer of services will prefer personal
sources to impersonal sources of information. And third, the basic characteristics of
services have implications for communication strategies. The above three differences
influence the decisions regarding the
Communications objectives
Target audiences
Planning of each of the sub elements in the promotion mix

Promotion objectives: the basic objective of promotion would be to develop public


relations and create a brand image. The promotion mix should use indirect selling
techniques, packaging and customization.

Target audiences: In service sector there should be a direct contact between the
customers and there service providers. Therefore some promotion should be directed
towards the employees so as to motivate them to serve the customers better. The target
audience also includes buyers, influencer and the decider or user of the buying cycle.

Planning the Promotion mix: a customer is buying the performance of the service
personnel and therefore the advertising in service industry shouldn’t only restrict itself to
encouraging consumption, but also it should encourage employees to perform well.
Effective advertising programs should be such that they have a positive effect on contact
personnel, capitalize on word of mouth, provide tangible clues, make offer easily
understandable and contribute continuity.

Planning for promotion mix: planning the promotiom mix calls for the right advertising
strategies, consumer promotions, efficient selling methodologies and good public
relations for the right kind of publicity.

Advertising of services:
Consumer promotions in service marketing: in execution of any kind of promotion
scheme, the service marketer should carefully consider six basic elements, namely,
product scope, market scope, value, timing, identification of the beneficiary & protection
against competition.
To give an element of intangibility, premiums can be frequently used.
Price/quantity promotion can help generating long term commitment from consumers eg.
Group rates for hotels.
Prize promotions can be used frequently and add excitement and involvement.

Selling services: since services are intangible in nature, it is of utmost importance to sell
them in a manner, that will convince your target customer.

The sales person must develop a personal relationship with the client. Quite often it is the
personal relationship rather than the service itself that results in satisfaction or
dissatisfaction of the service.
The seller must adopt a professional orientation and make a strong impression of
competency, honesty and sincerity.
He can use indirect selling techniques by creating a derived demand or playing the role
of a buying consultant. Eg most hotels first sell the location and then the hotel to the
customer.
They have to build and maintain a favourable image as public opinion and word of
mouth publicity plays an important role in the marketing of services.
A service seller deals with a host of services rather than one. Their thoroughness on each
and ability to package them to suit each customer's need would determine the success.
Therefore the ability of the seller to customize the service offering is very important.

Public relations and publicity:


Promotional activities like community relations, event management, media blitz,
corporate identity programmes have relevance and should be used effectively by
marketers.
Eg: a medical doctor specialising in eye care running his own clinic cum nursing home
and organizing free eye camps in competence. all over the region. This community
service will not only spread his name but also prove his

Communication strategy:
The service marketer should attempt to reflect a consistent & attractive personality in all
manifestations of the organizations that reach the public.
Also one must aim for a recognizable human personality to endorse the service.
Stress on specialization, rather than all things for all people. This will help in creating a
unique positioning.

The 5th P: People


It is the employees of an organisation which represent the organisation to its customers.

In a service organization, employees are essentially the contact personnel with customer.
Therefore, an employee plays an important role in the marketing operations of a service
organisation.

To realize its potential in services marketing, a firm must realize its potential in internal
marketing - the attraction, development, motivation and retention of qualified employee-
customers through need meeting job-products. Internal marketing paves way for external
marketing of services. In internal marketing a variety of activities are used internally in
an active, marketing like manner and in a coordinated way.
The starting point in internal marketing is that the employees are the first internal market
for the organization.

The basic objective of internal marketing is to develop motivated and customer conscious
employees.

A service company can be only as good as its people. A service is a performance and it is
usually difficult to separate the performance from the people. If the people don’t meet
customers' expectations, then neither does the service. Therefore, investing in people
quality in service business means investing in product quality.

BANKING

1. PRODUCT MIX
The banks primarily deal in services and therefore, the formulation of product mix is
required to be in the face of changing business environment conditions. Of course the
public sector commercial banks have launched a number of policies and programs for the
development of backward regions and welfare of the weaker sections of the society but at
the same time it is also right to mention that their development-oriented welfare
programs are not optimal to the national socio-economic requirements. A proportional
contraction in the number of customers is found affecting the business of public sector
commercial banks. The changing psychology, the increasing expectation, the rising
income, the changing lifestyles, the increasing domination of foreign bans and the
changing needs and requirements of the customers at large make it essential that they
innovate their service mix and make them of worked class. The development of new
generic product, especially when the business environment is regulated is found a
difficult task. However, it is pertinent that banks formulate a package in tune with the
changing business conditions. Against this background, we find it significant that the
banking organizations minify, magnify, combine and modify their service mix.
In the formulation of service mix, the banks can follow two guidelines, first is related to
the processing of product to market needs and the second is concerned with the
processing of market needs to product. In the first process, the needs to the target market
are anticipated and visualized and therefore, we expect the prices likely to be productive.
In the second process, the banks react to the expressed needs and therefore we consider it
reactive. It is essential that every product is measured up to the accepted technical
standards. This is because no consumer would buy a product, which contains technical
faults. Technical perfection in service is meant prompt delivery, quick disposal, and
presentation of right data, right filing, proper documentation or so. If computers start
disobeying, the command and the customers get wrong facts, the use of technology
would be a minus point, and you don’t have any excuse for your faults.
Marketing aims not only offering but also at creating\innovating the services\schemes
found new to the competitors vis-a vis- to the customers. The enhanced customer
patronage would be a reward to the bank. The additional attractions, the product
attractiveness would be a plus point of your mix, which would help you in many ways.
This makes it essential that the banking organizations are sincere to the innovations
process and try to enrich their peripheral services much earlier than the competitors. We
also find the product portfolio of the banks. While formulating the services mix, it is
also pertinent that the bank professionals make possible affair synchronization of core
and peripheral services. To be more specific, the peripheral services need an intensive
care since the core services are found by and large the same. Innovating the peripheral
services thus appears to be an important functional responsibility of marketing
professionals. We can’t deny the fact that if the foreign banks have been getting a
positive response; the credibility goes to their innovative peripheral services. Thus, the
formulation of product mix is found to be a difficult task that requires world-class
professionalism.

2. PROMOTIONAL MIX:
Promotion mix includes advertising, publicity, sales promotion, word – of – mouth
promotion, personal selling and telemarketing. Each of these services needs to be applied
in different degree. These components can be useful in the banking business in the
following ways:

Advertising
Advertising is paid form of communication. Banking organizations use this component
of the promotion mix with motto of informing, sensing and persuading the customers.
While advertising it is essential to be aware of key decision making areas so that
instrumentally helps banks at micro and macro levels.

Finalizing the budget:


This is related to the formulation of the budget for advertisement. The bank
professionals, senior executives and even the policy planners are found to be involved in
the process. The business of a bank determines the scale of the advertisement budget. In
addition, the intensity of competition also plays a decisive role since in the majority of
cases; we find a increase in the budget due to a change in the competitor’s strategy.

Selecting a suitable vehicle:


There are a number of devices to advertise, such as broad cast media, telecast media and
print media. In the face of the budgetary provisions, it is necessary to select a suitable
vehicle. For promoting the banking business, the print media is found to be economic as
well as effective.

Making possible creative:


The advertising professionals bear the responsibility of making the appeals, slogans and
messages more creative. Here, creative means making the advertisement programs
distinct to the competitive organizations, which are active in influencing the impulse of
the customers and successful in informing and sensing the customers. This requires an in-
depth knowledge of the receiving capacity of the target market for which the
advertisements are designed.

Testing the effectiveness:


It bears an analogous significance that our advertisements are effective in influencing the
impulse of customers by energizing persuasion. For making the process effective, it is
essential to test the effectiveness before launching of the commercial advertisements.

Instrumentality of branch managers:


At micro level, a branch manager bears the responsibility of advertising locally so that
the messages reach the target audience.

Characters and themes:


At apex level it is also important that while advertising the senior executives watch the
process minutely and select events, characters having a regional orientation. The popular
characters and sensational moments are likely to be impact generating. The theme for
appeals and messages also needs due attention. Of course, they have a legitimate right of
advertising but it is not meant that like the goods manufacturing organizations, the
service generating organizations also start making invasion on culture. It is necessary to
regulate a bias to gender, profession, region or so.

Public relations:
In the banking services the effectiveness of public Relations is found in high magnitude.
It is in this context that difference is found in designing of the mix for promoting the
banking services.

Telemarketing:
The telemarketing is a process of promoting the business with the help of sophisticated
communication network. Telemarketing is found instrumental in advertising the banking
services and the banking organizations can use this tool of the promotion mix both for
advertising and selling. This minimizes the dependence of banking organizations on sales
people and just a counter or center as listed in the call numbers may service multi-
dimensional services.
Telemarketing is likely to play an incremental role in marketing the banking services.
The leading foreign banks and even some of the private sector commercial banks have
been found promoting telemarketing and they have been getting positive results for their
efforts.

Word-Of- Mouth:
Much communication about the banking services actually takes place by word- of- mouth
information, which is also known as word- of- mouth promotion. The oral publicity plays
an important role in eliminating the negative comments and improving the services. This
also helps the banker to know the feedback, which may simplify the task of improving
the quality of services. This component of promotion mix is not to influence budget
adversely or generate additional financial burden. By improving the quality of services
and by offering small gifts to the word- of- mouth promoters, bankers can get more
business command in their area.
The above facts make it clear that such kind of promotion is influenced by a number of
factors. The most dominating factor is the quality of services offered. The bank
professionals, the frontline staff and the senior executives should realize that
degeneration in quality would make this tool effective.

3. PRICE MIX:
In the formulation of marketing mix, the pricing decisions occupy a place of outstanding
significance. The pricing decisions include the decisions related to interest and fee or
commission charged by banks. Pricing decisions are found instrumental in motivating or
influencing the target market. The RBI regulates the rate of interest and the Indian
Banks’ Association controls other charges. In our country, the price mix is more
important because the banking organizations are also supposed to sub serve the interests
of the weaker sections and the backward regions. Also in making the pricing decisions,
the Government Of India instrumentalists or commands everything as a shadow policy
maker. This also complicates the price mix for banking sector.
Pricing policy of a bank is considered important for raising the number of customers vis-
à-vis the accretion of deposits. Also the quality of service provided has direct relationship
with the fees charged. Thus while deciding the price mix customer services rank the top
position. Banks also have to take the value satisfaction variable in to consideration. The
value and satisfaction cannot be quantified in terms of money since it differs from person
to person. Keeping in view the level of satisfaction of a particular segment, the banks
have to frame the pricing strategies.
The banking organizations are required to frame two- fold strategies. First, the strategy is
concerned with interest and fee charged and the second strategy is related to the interest
paid. Since both the strategies throw a vice- versa impact, it is important that banks
attempt to establish a correlation between two. It is essential that both the buyers as well
as the sellers have feeling of winning.

4. THE PEOPLE
Sophisticated technologies no doubt, inject life and strength to our efficiency but the
instrumentality of sophisticated technologies start turning sour id the human resources
are not managed in a right fashion. We can’t deny the fact that if foreign banks are
performing fantastically; it is not only due to the sophisticated information technologies
they use but the result of a fair synchronization of new information technologies and a
team of personally committed employees. The moment they witness lack of productive
human resources even the new generation of information technologies would hardly
produce the desired results. In addition to the professional excellence, the employees
working in the foreign banks are generally value- based. Thus we accept the fact that
generation of efficiency is substantially influenced by the quality of human resources.
The quality for banking sector is an aggregation of all the properties, which are found
essential for generating the efficiency and projecting a fair image. Even efficiency
essentially is supported by ethical dimension, humanity and humanism.
The development of human resources makes the ways for the formation of human
capital. Human resources can be developed through education, training and by
psychological tests. Even incentives can inject efficiency and can motivate people for
productive and qualitative work.

5. THE PROCESS
Flow of activities: all the major activities of banks follow RBI guidelines. There has to
be adherence to certain rules and principles in the banking operations. The activities
have been segregated into various departments accordingly.
Standardization: banks have got standardized procedures got typical transactions. In fact
not only all the branches of a single-bank, but all the banks have some standardization in
them. This is because of the rules they are subject to. Besides this, each of the banks has
its standard forms, documentations etc. Standardization saves a lot of time behind
individual transaction.
Customization: There are specialty counters at each branch to deal with customers of a
particular scheme. Besides this the customers can select their deposit period among the
available alternatives.
Number of stores: numbers of steps are usually specified and a specific pattern is
followed to minimize time taken.
Simplicity: in banks various functions are segregated. Separate counters exist with clear
indication. Thus a customer wanting to deposit money goes to ‘deposits’ counter and
does not mingle elsewhere. This makes procedures not only simple but consume less
time. Besides instruction boards in national boards in national and regional language
help the customers further.
Customer involvement: ATM does not involve any bank employees. Besides, during
usual bank transactions, there is definite customer involvement at some or the other place
because of the money matters and signature requires.

6. THE PHYSICAL EVIDENCE


The physical evidences include signage, reports, punch lines, other tangibles, employee’s
dress code etc. The company’s financial reports are issued to the customers to emphasis
or credibility. Even some of the banks follow a dress code for their internal customers.
This helps the customers to feel the ease and comfort
Signage: each and every bank has its logo by which a person can identify the company.
Thus such signages are significant for creating visualization and corporate identity.
Tangibles: banks give pens, writing pads to the internal customers. Even the passbooks,
chequebooks, etc reduce the inherent intangibility of services.
Punch lines: punch lines or the corporate statement depict the philosophy and attitude of
the bank. Banks have influential punch lines to attract the customers.
Banking marketing consists of identifying the most profitable markets now and in
future, assessing the present and future needs of customers, setting business development
goals, making plans-all in the context of changing environment.

8 P’s of TRAVEL INDUSTRY

PRODUCT ELEMENTS

BENEFIT MEANING WITH RESPECT TO THE TRAVEL


AND TOURISM INDUSTRY
1. CORE The fundamental benefit or service that Traveling
BENEFIT the customer is buying
2 BASIC Basic, functional attributes Ticketing, hotel reservation
PRODUCT
3 EXPECTED Set of attributes/conditions the buyer Customer friendliness, good food
PRODUCT normally expects
4 AUGMENTED That meets the customers desires Prompt services, comfortable and
PRODUCT beyond expectations convenient trip, spectacular sights,
music
5 POTENTIAL The possible evolution to distinguish Totally customized tour packages, A
PRODUCT the offer grade service at every stage

The services a product offers consist of three levels.


The first level is that of the basic service package which includes core service,
facilitating services and supporting services. In the case of the travel and tourism
industry, the core services would include traveling, ticketing, hotel reservations, food
services etc.
The second level is that of an augmented service offering where accessibility, interaction
and customer participation is given equal importance in delivering the service product.
Accessibility of Service
- N umber and skills of personnel
- Working hours and time used in performing various tasks
- Location of service outlet
- Exterior and interior of service outlet
- Infrastructure, hardware, documentation
- The number and knowledge of consumers simultaneously involved in the process

Interaction with service organization


- Interactive communication between employees and customers
- Interactions with the physical and technical resources of the organization needed in
the service production process
- Interaction with other customers involved in the process.

Customer Participation
- How well is the customer aware about the process of service delivery and his or her
role
- How well is the customer prepared to share information
- How well is the customer willing to share information or use the service equipment

The third level is that of the market communication of the service offering as in its
absence the augmentation service package does not have any relevance to the customer.

PLACE
Because of intangibility (from production to sales) of services, they cannot be stored,
transported and inventoried. Hence traditional distribution channels available for product
marketing like wholesalers and other intermediaries cannot be used. Even the retailing
cannot be an independent activity. Similarly, because of the inseparability, i.e., in case of
services production cannot be separated from selling, services must be created and sold at
the same time.
These two characteristics make the channel very short and direct. Most services are
distributed through direct sales. At best one agent or middleman can be added to it, like
in the case of insurance, travel agency, courier service, etc.
So we see that there is a little controversy regarding the distribution of services. There is
one school, which says that since the service cannot be separated from the producer of
the service, direct selling sales channel are the only method of distribution available for
services. The advantage of direct selling is that the service can be offered to the customer
at a lower cost. The other school partially disagrees with this theory and suggests that it
is possible to have intermediaries but the channel of distribution would be rather short
and simple as compared to tangible goods.

PROCESS
The importance of process management is that it assures service availability and
consistent quality. Without sound process management, balancing service demand with
service supply is extremely difficult. Service cannot be inventoried; therefore, it becomes
essential to find out ways and means to handle peak load to optimize different customer
needs with varied expertise levels within the service organization.
In marketing management, operations management has been recognized as an integral
function. In manufacturing sector, for example, logistics in distribution are vital to satisfy
customer needs. Similarly, in services sector, where there is no tangible product, the
operations management is vital to deliver satisfaction because here the operations
management would decide how the process of service delivery would function, or in
other words, the interactive experience that would deliver the service benefits to the
consumers.
Shostack gave a much-simplified version and described the 'process' in three stages. First,
a process can be broken down in logical steps to facilitate analysis and control. Second,
there are more than one available options of processes in which output may differ.
Finally, each system includes the concept of deviation or tolerance standards in
recognition that the processes are 'real time' phenomena that do not conform perfectly to
any model or description, but function within a norm.
One can observe how changes in complexity and divergence influence their market
position. For managers in service industries, taking a structural approach can help
increase their control over some of the critical elements of the service system
management. Therefore, for marketers in service industries, process design may be a tool
that can substantially increase their impact and role in marketing their services.

PRODUCTIVITIY /QUALITY
Productivity in services refers to how you transform the inputs into outputs, which are
valued by the customer. Quality refers to the degree to which the service satisfies the
customer by meeting their wants and expectations. Productivity and quality need to be
omnipresent for the industry to complete its service obligations aptly. Only if your firm
is productive and the quality meets the requirements of the customers can your
performance be graded as excellent.
Here are five key things to consider when developing the performance strategy for your
business.
Have you found a way to fit marketing into your schedule?
Do you keep track of both your long and short-term projects (including marketing
projects), and review that list daily?
Do you have a way of combating procrastination and delay?
Do you maintain the highest standards of integrity and excellence?
Are you continually working to improve your skills in all areas of your business?
In a service organization, employees are essentially the contact personnel with the
customer. Therefore an employee plays an important role in the marketing operations of
a service organization.
According to him, "the internal marketing concept states that the internal market of
employees is best motivated for service-mindedness and customer-oriented performance
by an active marketing like approach where a variety of activities are used internally in
an active, marketing like and coordinated way." The starting point in internal marketing
is that the employees are the first internal market for the organization.
To realize its potential in services marketing, a firm must realize its potential in internal
marketing - the attraction, development, motivation and retention of qualified employee-
customer through need-meeting job-products. Internal marketing paves the way for
external marketing of services.
The companies that practise internal marketing most effectively will
compete aggressively for talent market share,
offer a vision that brings purpose and meaning to the workplace,
equip people with the skills and knowledge to perform their service roles excellently,
bring people together to benefit from the fruits of team play,
leverage the freedom factor,
nurture achievement through measurement and rewards, and
base job-product design decisions on research.

PROMOTION AND EDUCATION


It is now established that there are clear differences in information usage between goods
and services. First, the difference is that consumers of services are less likely to purchase
without information than those of goods. Second, the consumer of services will prefer
personal sources over impersonal sources of information. And third, the basic
characteristics of services have implications for communication strategy. George and
Berry keeping in view the intangibility of services, proposed that in the case of services a
customer is buying the performance of the service personnel and therefore the advertising
in service industries should not only restrict itself to encouraging consumption, but also it
should encourage employees to perform well. They proposed the following six basic
guidelines to help design effective advertising programmes.
The advertising should have positive effects on contact personnel. . It should capitalize
on the word of mouth.
It should provide tangible clues to the customers.
It should make the service offering easily understood.
It should contribute to the continuity.
It should promise only what is possible.

Here are five key things to consider when developing the promotional strategy for your
business:
Are you networking enough? For many service businesses, networking is the key
promotional technique. Join organizations; get to know people; get involved; keep in
touch with people; do what you can to help them; be visible in your community.
Do you have a good, solid marketing letter that highlights your benefits and moves
people to take action? This one inexpensive marketing tool is one of the most powerful
when written properly.
Do you do personal PR such as speaking and writing? Again, these don't take much
money but pay big dividends. Speak at Rotary, your Chamber of Commerce, at business
associations and alumni groups. Write for your local paper; the trade journal of your
industry, or even for someone else's newsletter. You can use the reprints later for
credibility.
Are you mailing to people on your list? This is an absolute must. Don't let people forget
who you are and how you can help them. From two to six times a year send clients and
prospects a newsletter or other type of keep-in-touch mailing.
Do you have a Web Site? You should. It doesn't take a lot of money to create a web page
and even less to post it. This is a powerful media that can serve as a combination direct
mail piece, brochure and newsletter. Given the price of entry, it's crazy not to have one.

Glynn Shostack once observed, "A physical object is self defining; a service is not" and
therefore the marketing task in service industries is "defining for the service what the
service cannot define for itself."
Though a customer cannot see a service, but definitely he can see various tangible clues
of the service offer like facilities, communication material, objects, employees, other
customers, price, etc. On the basis of his perceptions on the tangible clues, the customer
makes the purchase decision. These clues might be both intended and unintended ones
and, therefore, managing evidence is integral to the service marketing mix. Shostack
even observed that the management of evidence comes first for service marketers.
The argument here is that the physical environment, facilities and atmosphere; give
enough physical evidence to help shape customer perceptions. Many service marketers
have neglected this aspect while the others gave due emphasis to issues like exterior of
buildings, office furniture, layout, colour 0.£ interiors, and even carry-bags, tickets, cash
memos, labels, etc. The advocators of public relations have even coined a specific term
called 'corporate identity' and suggested that such tools can create a visual identity that
the public as customers can recognize. The corporate identity media can successfully
contribute towards the marketing objectives provided they are attractive, distinctive and
memorable.

PRICE AND OTHER USER COSTS


Pricing is yet another variable of the marketing mix. A particular product or service is
acceptable to the customer at a particular price and if the price is increased, it is likely
that the same product or service might become less acceptable to the customer. The other
issue, which is related to pricing, is that of perceptions about quality. Generally, to most
customers, high price means high quality. However, some customers don't need the
highest quality at the maximum price. Detergents are one such example where average
quality detergents at moderate prices are market leaders.
Service pricing follows the principles and practices of pricing of goods and, therefore,
they are either cost based or market based.
Within these categories prices may be profit oriented, government controlled,
competitive or customer oriented. However, the characteristics of services do influence
the pricing and, therefore, different methods of pricing are to be followed.

There are some basic guidelines for pricing of services. These guidelines may help in
developing an appreciation of the framework for service pricing.
1. For services, the pricing strategy should be such that demand fluctuations are
successfully handled. Since services are perishable, they cannot be inventoried. In such a
situation pricing strategy should be such that it should encourage the customers to delay
their use of services till the period of low demand.
2. Service prices should be based on costs so as to take into account the cost of tangible
clues of intangible services. To the first time users of services the "services offer-
package" is less understood if it is primarily dominated by intangibles. Therefore, the
tangible and material content of the service product should be integrated in the 'service-
offer package', which has definite cost implications.
3. The service pricing should be such a to provide value addition and quality indication
to the customers. In situations of "homogeneous" services, the pricing strategy may be
market oriented or customer oriented. But in heterogeneous services, the price may be
used as a quality indicator.
4. The pricing strategy should be such as to cope-up with the degree of competition
operating within a certain geographic and time zone. Services are inseparable from the
person who provides them and the service providers have both geographic and time
limits or markets, which can be served by them.

The 8 P’s with reference to The Taj Mahal Hotel


Product Element
This gracious turn-of-the century hotel is located 32 km from the airport and
minutes away from Mumbai's commercial, shopping and banking districts. The Taj
Mahal Hotel has an old-world Heritage Wing and a contemporary Tower Wing. The
hotel's premium suites have been used by royalty and Heads of State.
Taj believes that the their core product is space. This space is supplemented with
the services they provide like the restaurants, health club, banquets, discotheque, bar,
business centers etc. Their other supplementary products also include travel
arrangements, ticketing, airport pick-ups, sightseeing etc. The hotels various other
departments like the house keeping, front office, food and beverage, room service and
maintenance, all provide the supplementary services to the customer.

A few of the Facilities and Services offered are as follows:-


Types of Accommodation
582 centrally air-conditioned rooms including 49 suites.

Tower Wing Rooms: With easy access to the Business Centre, these contemporary
rooms offer guest amenities like Internet connectivity, 2-line speaker phones with
international direct dial facility and voice mail. Mini bar, personal safe, channel music
and television with satellite programmes. A complimentary in-room fax can be provided
on request. Guests have a choice of rooms that overlook the city or face the Gateway of
India and the Arabian Sea.

Heritage Wing Rooms: These rooms are renowned for their architecture and exude an
aura of old-world elegance. Each corridor in this Wing resembles an art gallery, and the
design, décor and furnishing ensure that no two rooms are alike. Guests have a choice of
rooms that overlook the city or pool or face the Gateway of India and the Arabian Sea.

Taj Club: Located on the top floors of the Heritage Wing, Taj Club is designed for the
discerning business traveler. Guest amenities and services include complimentary airport
limousine transfers, private check-in at the Club desk, in-room fax, personal safe, a
complimentary bottle of wine, valet service and complimentary deluxe Continental
breakfast. Taj Club guests can also enjoy complimentary tea/coffee throughout the day
and cocktails during the Cocktail Hour at the Club Lounge. Taj Club also offers guests
exclusive Meeting Rooms and a Business Service Unit on the Club Floor.
Suites: Choose from elegantly appointed Junior Suites, Executive Suites, tastefully
decorated Large Suites, newly renovated Luxury Suites or spacious, plush Grand Luxe
Suites. The finest suites at The Taj Mahal are the luxuriously appointed Presidential
Suites. Each of these suites is decorated with original paintings and antiques that
transport guests into a world of regal luxury and grandeur. Grand Luxe and Presidential
Suite guests can also avail of a personal Valet Service.

Broadband wireless Internet access at select Taj hotels


Now when you stay at select Taj hotels in Mumbai (including The Taj Mahal Hotel),
New Delhi, Kolkata, Chennai, Bangalore and Hyderabad, you no longer need to be in
your room or at the Business Centre to use the Internet. Multiple 'hot spots' located
across the hotels lets you get onto the Internet from almost any place in the hotel -
quickly and without plugging in! What's more, there is a Cyber Butler on call, should
you need any
assistance with getting connected.

Facilities and Services


Swimming pool, fitness centre and spa, beauty parlour, barber shop, travel desk, car
rental, pastry shop, book shop, shopping arcade, currency exchange, doctor-on-call and
babysitting. Complimentary use of steam, Jacuzzi and gymnasium at the fitness centre
for all guests. Arrangements for golf, badminton, squash, billiards, tennis and table tennis
on request. 24-hour room service and laundry service

Place and Time


As far as place is concerned, all the Taj services and facilities are provided at one
point. To ensure timely delivery of their services, they have set processes in place and
incase of failure or delay of service, they have built in contingencies and trained their
staff to communicate the delay to the customer in the right manner.
One of the incidents that Mr. Vivek Sah, the Training Manager at Taj provided us
with to explain this concept further is of the implementation of the contingency plan
during the breakdown of the elevator. In case of breakdown of the elevator, the Room
Service makes use of the elevator in the other wing to ensure timely delivery to the
customer.
They also have complaint management systems where they encourage customer
feedback. Each of their feedback form is numbered and hence if any feedback form is
missing, the staff is held liable for it. This is to ensure that the management views every
feedback form.
To ensure standadization in their services, they have Standard Operating Procedures
(SOP), e.g the food that is served in the restaurant will be of the same quality and taste at
any given day and time.

Process
In order to ensure that the core product and the supplementary product is
developed and delivered in the right manner and at the right time, the hotel has formed
certain set processes. When the room is being prepared for customer check-in , the
house-keeping department make sure that all the room amenities are provided as per the
check list. For e.g. certain room amenities like 3 embroidered laundry bags, 2 closed
slippers with logo, 2 shoe bags, etc. are provided by The Taj Mahal Hotel.
Infact the processes are so specifically laid down that hotel staff are even advised on
what to say and what words to use while talking to a customer. The following example
will illustrate this better. When a customer asks for something to be done instead of
saying “no problem, the staff is taught to say ‘ most certainly’.

The Taj Blueprint

When the service provider comes in contact with the customer, he needs to surpass the
customer’s expectations, for which a blue print is made and followed by the service
provider, in this case the Taj Mahal Hotel.

Dinner Service Sequence


Procedure
1 Greet Guests Entrance Host(ess) / Manager
2 Smile using appropriate Entrance Host(ess) / Manager
salutation,correct posture,eye-
contact and guest name where
possible.
3 Smoking/Non-smoking Entrance Host(ess) / Manager
preference to be confirmed.
4 Assist guests to their seats. Restaurant Host(ess) / Manager
5 Unfold the napkins, ladies firstRestaurant Captain
6 Suggest the Dinner buffet, and Table Captain / Manager
describe the buffet highlights -
specials etc.
7 Present the food menu along Table Captain / Manager
with the beverage list/ wine
menu, if A La Carte is desired
by the guest. Suggest daily
specials and advice non
availability`s, prior to food
orders.
8 Suggest bottled water and Table Captain
offer wine by glass.
9 For wine service, appropriate Table Captain / Server
glassware to be present on the
table.
10 For all orders, serve ladies Table Captain / Server
first
11 Clear plates accordingly Table Captain / Server
before guests return after
second helping from buffet.
12 For A La Carte orders, plates Table Captain / Server
to be cleared only after all
complete their meal.
13 Replenish the cuttlery Table Captain / Server
accordingly.
14 Napkins to be folded neatly in Table Captain / Server
half and placed on the left
arm-chair, when guests leave
for second helping.
15 For A La Carte orders, offer Table Captain / Server
dessert menu and describle
items.
16 Offer tea / coffee after entrée Table Captain / Server
and side plates are cleared.
17 Always maintain table top Table Captain / Server
clean, before resetting the
table
18 Place bill folder with cheque Table Captain / Server
on table for signature, as per
guest convinience
19 Thank all guests using their Table Captain / Server / Host(ess) /
names respectively. Manager
20 Bid farewell. Restaurant Captain / Server / Host(ess) /
Manager
21 Upon guest departure, clear Table Captain / Server
table immediately.

Productivity
The Taj as a hotel does not compare itself to only Indian hotels, but even with the
hotels internationally as it claims to have “World Class Quality”. In order to ensure that
its inputs are transformed into desired outputs, they provide extensive training to their
employees irrespective of the field they come from.
The Taj Mahal hotel has various quality tools to enhance quality. This involves
every department, as they have to make sure that the raw material as well as the finished
product is of top quality. At The Taj, it is the responsibility of the purchase department to
make sure that the raw materials are purchased at the Right Time, Right Place, Right
Cost and from the Right Source, in order to avoid any hindrances in their productivity
and quality.
Taj has developed enormous credibility in terms of trustworthiness being the oldest brand
of hotels, with the reputation of being World class and honest service provider. Security,
Communication and understanding the customer psychology are special assets the Taj
management has mastered with time.

People
People here mean the customers, employees, management and the society. It is
the final customer who is to be satisfied and this can be done only with the help of the
employees, who are directed and guided by the management. In the end the final motive
of Taj is to provide consistently and relentlessly an Indian experience of warmth and
hospitality by anticipating and exceeding guest expectations. They also provide various
customer services such as ‘The Taj Inner Circle Group’, ‘Taj Advantage’ and ‘Taj
Epicure’.
In order to ensure the productivity of their employees they provide them with
various facilities such as medical help, consultation, traveling facilities, perks and
bonuses. The employers here each have their own lockers in which they keep their
uniforms and other belongings, they also have bunkers with small beds so that the
employees working in shifts can catch some sleep if need be.
In spite of the fact that human resources management is such an integral part of
the service industry of which hotels form a major part, its role has begun to be
acknowledged only recently. The Taj Group of Hotels is probably one of the first Indian
hotel chains to have recognised and respected the significance of HR in the hospitality
industry. Says K S Srinivasan, GM-corporate human resources, The Taj Mahal Hotel,
Mumbai, “Functions like sales, marketing and HR are not hotel-specific, unlike those of
chefs, housekeepers, bartenders, stewards and the like. They are, in fact, common to all
businesses.”
He asserts that HR, as a function, is like a partner in the business in any
organisation and not a stand-alone function. It is the key to effective utilisation of the
manpower that the hotel industry is so dependent on. And the Indian hotel industry is
among the most labour intensive since the number of people serving guests is the
maximum here. It is precisely for this reason that the significance of HR requires to be
appreciated.
It is not merely monetary rewards that employees seek today; the intriguing
aspect is the learning experience that the job promises. “It is precisely with this very
thought in mind that the Taj Group of Hotels, a Tata enterprise and one of the oldest
hotel chains in the country, decided on a training programme for the operations trainees,”
explains Srinivasan.
Interactive sessions between the Taj management and the director of the Tata
Institute of Social Sciences (TISS), a Tata educational and research institution, led to an
interesting and comprehensive tailor-made course curriculum being chalked out. Thus
was born the ‘Taj TISS HR Associate Programme’, a one-year course comprising four
modules that are designed to give equal importance to and impart balanced knowledge of
both the theoretical and the practical aspects of all HR-related functions of the hotel
industry.
After finalising the course details, the Taj made announcements about the course,
offering interested trainees with two to three years of work experience an opportunity to
apply. The response was encouraging and five trainees were shortlisted for the first batch
of the training programme.
Each of the four modules have four sections. The first stage consists of theoretical
lessons, providing a sound background to the practical application of the knowledge
required of them in the second stage. In the third stage, the students return to the Institute
and their performance is evaluated by professors of TISS. In the fourth and final stage,
grades are awarded. While practical training sessions for the first three modules have
been organised at the Taj hotels across the country, the fourth modules practical sessions
had students of the first batch working in Tata companies such as TISCO and Tata
Consultancy Services (TCS). “This gave them a wider scope and more exposure, besides
making them realise that HR skills in a service-specific industry like the hotels are much
more challenging than their application in the manufacturing or any other industry,”
observed Srinivasan. He said he himself had started off in the manufacturing industry
and only later did he move over to the service industry. “I have been in the industry for
over a decade now and am well-set here,” he added.
The key to retaining staff and ensuring the success of any business organisation
lies with the HR department and its effective functioning. Any organisation, including
hotels, incur heavy expenditure on their employees, especially between the time of
recruitment and the employees’ acquisition of the skills imparted during their training. It
can be inferred, therefore, that a high employee turnover rate lowers the efficiency of the
staff as a whole owing to their constant on-the-job training and skill enhancement.
“An organisation must be able to create for itself a unique place and image in the minds
of the employees, both present and prospective. This enables the employees to aspire to
be a part of the organisation, giving it their very best,” says Srinivasan. “Though the
training programme has and will continue to cost us money, we believe that it is truly
worthy investment,” he added.
“The Taj group,” says Srinivasan, “is an expanding organisation and we are a people-
oriented company. What we need are people who can match our organisational standards.
We are also looking to create and ensure a constant supply of good quality HR
professionals, which is why we decided to impart training of an extremely specialised
nature to our management trainees. I have observed them at the end of the programme
and must say that they appear all charged up and raring to go,” he remarked.
The Taj-TISS joint programme is expected to create a demonstration effect in the
industry with more hotel groups placing additional emphasis on the HR training
programmes.
To be a successful HR professional, what is required most is the aspirants’ ability to
challenge themselves as well as their colleagues. Only then can they get the very best
from themselves and their team. “Challenges in the HR field are immense and since it is
so people-centric, it is only obvious that professionals should have strong people-
management skills,” explains Srinivasan. Besides this, a right attitude towards the job
and life in general is extremely essential. “As a manager myself, what I would look for in
an applicant would be the ability to fit into my organisation perfectly and be emotionally
balanced, competent and above all, be a cultural fit, fulfiling the basic values that the Taj
is known for,” concludes Srinivasan.

Promotion and Education


They carry out their promotions by the means of calendars, monthly letter to their
‘Inner Circle Customers’, informing them about their upcoming events and offers. Taj
has television advertisements on popular channels like CNBC, and print ads in magazines
and newspapers. Taj takes part in exhibitions like wherein they promote their holiday
packages. They also have special offers during the “off-season” etc. Also The Taj is the
only hotel chain to personify itself and in promotion campaigns and advertisements the
Taj is often referred to as “She” The print ads for the Taj are :-

Physical Evidence

The Taj Mahal Hotel was built in 1903. The architect was Sitaram Vaidya. It had a very
ethnic look to it, which kept up their image of providing an Indian experience of warmth
and hospitality. They realized that modernization is the name of the game and had The
Taj redesigned by Mr. Chambers, Mr. Wilkes and Mr. Bernard from Singapore.

Some of the recent renovations that have been carried out at the Taj are
The exterior has been given a new and modern look while still retaining the old world
charm of the building.

The entrance has splendidly carved bronze and glass doors Soaring onyx columns stretch
to a luminous alabaster ceiling; while underfoot, rich hand-woven carpets set off a
magnificent floor painstakingly inlaid with semi-precious stones. The eclectic mix of
western contemporary style and traditional Indian motifs creates a veritable feast for the
sense.
The city's most exclusive restaurant, The Zodaic Grill provides a graceful setting for an
intimate dining experience. Under a magnificent trompe l'oeil dome, they serve the finest
gourmet cuisine complemented by an extensive wine list, as a classically trained pianist
entertains patrons.

Price and Other User Costs

Taj realizes that their prices are high and not affordable by all, but this is due to various
overheads that it incurs and the superior quality that it offers. For e.g. a roadside
sandwich seller sells his sandwich for Rs.10 as he has no overheads and has no quality
standards to maintain, like the quality of the bread and the vegetables. But at The Taj,
they serve the best quality and also incur overhead expenses.
Also the target audience that the Taj caters to are the one’s who come to the Taj for it’s
ambience and world class standards, therefore they say that their prices are justified as
they help The Taj retain the exclusivity that it stands for.

7 Ps of marketing for hospitals


¬ Product:
The service product is an offering of commercial intent having features of both

intangible and tangible, seeking to satisfy the new wants and demands of the consumer.

Hospital industry is action oriented and there is a lot of interaction with the customers

(patients). The service product of the hospitals normally have the following features:

o Quality Level: When we talk about marketing hospitals, it is natural that

we are very particular about managing our services in the right fashion.

Supportive services play an important role in improving the quality of

medicare. These services which include laboratory, blood-banks,

catering, radiology and laundry, in a true sense determine the quality of

services made available by medical and para-medical personnel. They

get a strong base for treatment since the diagnostic aspect determines

a direction. To get the best result from OT, it is natural that

equipments are properly sterlised. In addition, the dresses and clothes

are also required to be made bacteria free. The patients are required

to wear disinfected linen which should be made available. The radiology

department should have hi-tech facilities keeping in view the pressure

of work. Of late, we find sophisticated equipments and unless hospitals

make the same services available the same, the quality of services

cannot be improved.

o Accessories: This is a very good way of segmenting customers. Many

hospitals provide additional services such as catering, laundry, yoga

sessions, cafeterias, etc. for the customers (patients)who are willing to

pay extra. Hospitals have different wards - General and Special.

Certain hospitals provide services for the family members of the

patients (when they are not from the same city) – accommodation and

catering.

o Packaging: It is the bundling of many services into the core service. Eg:

Apollo hospital offers a full health check-up to the patients. Similarly

other hospitals also offer package deals for health check-ups. For
example if a person has to undergo a bypass surgery, he can pay a lump

sum amount during admission, say rupees 1 lakh for all procedures,

tests, stay, etc, at once.

o Product line: hospitals through their services offer many choices to the

patients and cover a wide range of customer needs. For example: Apollo

hospital has dental department, cardiology department, etc. and within

the dental department it has dental surgery, root canal, etc.

o Brand name: The hospitals, to differentiate themselves, and their services

from others use a brand name. The intangibility factor of the service

makes it all the more important for the hospitals to do so.

o Place

Under hospital marketing, distribution of Medicare services plays a crucial role. This

focuses on the instrumentality of almost all who are found involved in making services

available to the ultimate users. In case of hospitals the location of hospital plays a very

important role. The kind of services a hospital is rendering is also very important for

determining the location of the hospital.

Eg. Tata memorial hospital specializes in cancer treatment and is located at a centre place

unlike other normal hospitals, which you can find all over other places.

It can be unambiguously accepted that the medical personnel need a fair blending of two

important properties i.e. – they should be professionally sound and should have in-depth

knowledge at psychology. A particular doctor might be famous for his case handling

records but he may not be made available for all the patients because of the place factor.

Now in this case the service provided, that is the doctor may be a visiting doctor for

different hospitals at different locations to beat the place factors.

Unlike other service industries, under hospital marketing all efforts should be for making

available to the society the best possible medical aid.


In a country like India, which is geographically vast and where majority of the population

lives in the rural areas, place factor for the hospitals play a very crucial role. A typical

small village / town may be having small dispensaries but they will not have super speciality

hospitals. For that they will have to be dependent on the hospitals in the urban areas.

ϖ People

Under hospital marketing the marketing mix variable people includes all the different

people involved in the service providing process (internal customers of the hospitals) which

includes doctors, nurses, supporting staff etc. The earliest and the best way of having

control on the quality of people will be by approving professionally sound doctors and other

staff.

Hospital is a place where small activity undertaken can be a matter of life and death, so

the people factor is very important. One of the major classifications of hospitals is –

private and government. In the government hospital the people factor has to be specially

taken care of. In Indian government hospitals except a few almost all the hospitals and

their personnel hardly find the behavioural dimensions significant. It is against this

background that even if the users get the quality medical aid they are found dissatisfied

with the rough and indecent behaviour of the doctors.

Under hospital marketing a right person for the right job has to be appointed and they

should be adaptable and possess versatility. The patients in the hospitals are already

suffering from trauma, which has to be understood by the doctors and other staff. The

people of the hospital should be constantly motivated to give the best of their effort.

¬ Process

Process generally forms the different tasks that are performed by the hospital. The

process factor is mainly dependent on the size of the hospital and kind of service it is

offering. A typical process involved in a medium sized hospital can be as follows.


Apart from this flow there are other allied activities like record keeping administration at

services etc which fall under the process factor. These stages do not exist separately but

are interlinked. The most important elements are lines of communication within the setup.

The experience of the patient depends on the final interplay of all these factors.

¬ Physical evidence

It does play an important role in health care services, as the core benefit a customer

seeks is proper diagnosis and cure of the problem. For a local small time dispensary or

hospital physical evidence may not be of much help. In recent days some major super

speciality hospitals are using physical evidence for distinguishing itself as something

unique.

Physical evidence can be in the form of smart buildings, logos, mascots etc. a smart

building infrastructure indicates that the hospital can take care of all the needs of the

patient.

Examples -
1. Lilavati hospital has got a smart building, which helps, in developing in the minds of

the people, the impression that it is the safest option among the different

hospitals available to the people.

2. Fortis and Apollo hospitals have a unique logo, which can be easily identified.

Physical evidence also helps in beating the intangibility factor.

¬ Promotion:

Hospitals for promotion use either advertisement or PR or both after taking into

consideration the target customers, media type, budget and the sales promotion.

Since a few years the prime times in T.V. are reserved for advertising social issues like

family planning, use of different types of contraceptives, care for the girl child and so

on. These commercials use the common man approach for reference group appeal. In

case of health care products and services use for “common man” appeal is widely

prevalent. The use of celebrities is not as effective as that of a common man. An

ordinary person thinks that if it works well for people like him, it will also work equally

well for him. The identification with the common man is easy and quick.

Besides TV, other media of promotion are to be used innovatively. Unlike the urban

area, in rural areas newspapers and magazines do not have the same impact in

conveying messages. In villages, hoardings and wall writings near the markets and

recreation centers attract the attention of villagers. This market consists of 180

million strong middle income group and a small income group. This group has a large

discretionary income. These discerning consumers are very careful in choosing health

care services. The last decade has witnessed a health, appearance and nutrition

conscious population.

The health care field has become very competitive. Although around one-fourth of our

population stays in urban India, three fourths of the total doctors have engaged

themselves in this part. Many of these doctors visit the contiguous rural areas, but

they may operate from the urban area. The patients of upper middle and upper income

group have a wide choice to make from a number of clinics and hospitals. Therefore,
many hospitals have abandoned traditions and adopted marketing strategies to woo

more and more patients to their clinics.

Word-of-mouth plays a very important role in promotion of hospitals. A person in need

of a health care service does not know for sure where to search for relevant

information. He consults his family members, relations and friends first. The patients

who come to a hospital generally have the old patients of that hospital as referrals.

Word-of-mouth plays an important role during information acquisition stage of the

customers as there are no objective performance measures to judge the various

alternatives available to them. Therefore, satisfied past patients of a hospital can

bring more number of patients to that hospital than a number of advertisements.

In a competitive market place, the images of the firms swill affect their competitive

standing. One factor that is likely to have a significant impact on the health care scene

is the growth of hospital chains such as Apollo Hospitals, Birla Health Centres ,etc.

Artificial heart transplants and other complex operations although are few in number

and generate a small portion of the total revenue, they help in generating word-of-

mouth which health care providers are actually interested. Many of these companies

are spending a lot in corporate advertising for Image building.


MARKETING MIXES IN THE INSURANCE INDUSTRY
PRODUCT MIX

The formulation of product mix for the insurance business makes it significant to take a
look at the services and schemes of insurance organisations. The product portfolio is
known and the process of formulating a package should be known. It is natural that the
users expect a reasonable return for their investments. It is quite natural that the
insurance organisations want to maximise profitability. Both of these dimensions are
found interrelated.

It is well known that the key objectives of insurance business are mobilisation of
savings and channelisation of investments. This makes it essential that insurance
business is made lucrative so that the users /potential users get incentives to buy a
policy or to invest in the insurance organisations. The insurance organisations also
need to promote the underwriting activities, which would activate the process of
arresting the regional imbalance. In the context of formulating the product mix, it
is essential that the insurance organisations promote innovation and in the product
portfolio include even those services and schemes which are likely to get a positive
response in the future.

The corporate objectives indicate that the insurance organisations are required to be
careful, especially while launching a new policy. The policies should not only generate
enough premium but it is also important that the policies cover persons working in the
informal sector, serving as porter, working as manual labourers, or engaged in farm
sector. It is the need of the hour that the insurance organisations make their service
internationally competitive. This makes a strong advocacy in favour of innovative
product mix strategy for the public sector insurance organisations. Thus the formulation
of product mix should be in face of innovative product strategy. Strategies of foreign and
private insurance companies should be taken into consideration while initiating the
innovative process.

The formulation of product strategy should assign due weightage to the rural segment
emerging as a big profitable segment especially in the 21st century. The policies and
schemes should have rural orientation so that backward and neglected regions of the
country get priority attention and the regional imbalance is minimised.

In this context, it is also pertinent that the insurance organisation make possible welfare
orientation and include in the product portfolio even those policies and schemes which
become instrumental in safeguarding the interest of the weaker sections of the society.
The formulation of package is also found important. Designing a package on the basis of
the needs and requirements of the concerned segment would make the product mix more
competitive.

The partially tapped or totally untapped profitable segments of the future should be
identified and tapping the potentials optimally is also important.
A sound product portfolio is the need of the hour and therefore the regulatory barriers or
constraints in activating the innovation process should be minimised.

Product Planning & Development


The purpose of insurance business is to generate profits besides subserving the social
interests. The present business is likely to be more competitive.
Product is like a stage on which the entire drama of successful marketing is acted. It is
like an engine that pulls the rest of the marketing programmes. It is in this context that
the product management in an insurance organisation needs an intensive care.
Yesterday, the policyholders had limited hopes and aspirations but today they expect
more and they would even like something more tomorrow. This focuses on the fact that
strategic decisions are influenced by the environmental conditions.
The product development needs a new vision, a new approach and a new strategy. Till
now the public sector insurance organisations have made possible an optimum utilisation
of their marketing resources especially in rural areas where tremendous opportunities are
available. Thus they should assign due weightage to the development services /schemes
which cater to changing needs and requirements of the rural segment.
In the development of product, the corporate investments need due priority.
Channelising the corporate investments influences the rate of profitability of insurance
companies and also contributes considerably to the socio-economic transformation
process.

Thus the product planning and development should:


Give due weightage to the socially and economically backward classes
Maximise the mobilisation of savings by offering lucrative schemes.
Assign due weightage to interests of investors.
Maintain economy in business by promoting cost effectiveness.
Act as a trustee of policyholders.
Keep in mind the emerging trends in business environment.
Improve the quality of customer / user services.

PROMOTION MIX

With the advent of private players in the insurance, companies resort to rampant
promotion. Promotion mix for this sector is as follows:

Advertisement
Advertisement can be done through the telecast media, broadcast media and print media.
Insurance companies have been making optimal use of all the three kinds. Use of World
Wide Web, as media is almost negligible and will not be very frequent in the near future
considering the fact that the majority of customer base of these companies is not yet
exposed to the Internet. The telecast media has been the most effective of all in case of
the insurance sector. Most of the companies have their separate advertising section to
take care of this aspect. An important consideration while making the decision as to the
selection of the media is budgetary constraint. Since the insurance companies work on a
large scale, usually this constraint does not stand as an obstacle.

Publicity
It is a device to promote business without making any payment and therefore it could be
also called as unpaid form of persuasive communication bearing a high rate of
sensitivity. Developing
rapport with the media is an important aspect of publicity. This makes it essential that
the PR officers working in the insurance organisations maintain contacts with the media
personnel, organise press conference, and offer small gifts and momento to them. These
days LGD marketing is gaining popularity the world over. It also can be applicable here.
At the apex and regional levels, the PRO’s bear the responsibility of projecting positive
image of the organisation. Thus it is necessary to select suitable personnel for this. They
should be in particular taught to deal with people, simple things like talking, greeting etc.

Sales Promotion
Incentives to the end users for taking the policy play an important role in promoting the
insurance business. Since the insurance business is also related to achieving of a
particular target, it is pertinent that the policymakers assign due weightage to the same.
The offering of small gifts during a particular period, the rebate, discount, bonus can
increase business of organisation by leaps and bounds. Besides, there can be gifts for the
insurance agents also.

Personal Selling
Personal selling in case of the insurance organisations is quite important considering the
existence of the insurance agents spread at all levels. Selection of these agents, their
training is responsibility of the organisation. There is difference in urban and rural
market. Rural customers might be uneducated / uninformed etc. compared to the urban
customer. Hence the organisations will have to make selections of the rural and urban
agents accordingly.

Word of Mouth Promoting.


The word – of- mouth communications result into wider publicity, which substantially
sensitise the process of influencing the impulse of users/prospects of the insurance
services. The satisfied group of customers, opinion leaders, the social reformists, the
popular personalities act as word of mouth communicators. The advertisement slogans
may be insensitive, the publicity measures may be ineffective but the positive feelings of
friends and relations communicated cannot be ineffective. This makes it clear that the
most important thing in the promotion of any business is the quality of services.

Telemarketing
With the development of satellite communication facilities and with the expansion of the
television network, we find telemarketing gaining popularity the world over. The
insurance organisations in general need to promote telemarketing. The foreign insurance
companies have been assigning due weightage to this and in India this is beginning to
gain importance with the advent of competition in this sector. The telemarketer is
supposed to be well aware of the telephonic code so that the task of satisfying the
customers/their queries will not consume much of time.

World Wide Web


In banking as well as insurance, more and more importance is being given to online
contact facilities whereby complaints/comments could be sent through an email. Email
is fastest written mode of communication and since it has been recognized legally, its use
to clear doubts has been in full swing.

PRICE MIX

In the insurance business, the pricing decisions are concerned with the premium charged
against the policies interest charged for defaulting the payment of premiums & credit
facilities, commission charged for underwriting & consultancy services. The formulation
of pricing strategies becomes significant with the viewpoint of influencing the target
market or prospects. To be more specific in the Indian context where the disposable
income in the hands of prospects is found low, the increasing inflationary pressure has
been instrumental in contracting the discretionary income, the increasing consumerism
has been making an assault on the saving potentials of masses, it is pertinent that the
insurance organizations in general & public sector insurance organizations in particular
adopt such a strategy for pricing that makes it a motivational tool & paves the ways for
increasing the insurance business. Of course, a motivational pricing strategy is required
to be given due weightage. This necessitates a new vision for setting premium structure
& paying the bonus & charging the interest.

The strategy may have a new vision in the sense that the insurance organizations prefer
to make a mix of high & low pricing strategy. The motive is to make the premium
structure commercially viable so that the insurance organisations succeed in having a
sound product portfolio besides fuelling development orientation. The pricing decisions
make it essential that the insurers keep in their minds the nature of policy vis-à-vis the
segment to which the prospects belong.

In the tangible products, cost of production is taken as the basis for fixation of
prices. Even in the insurance business, it is found to be an important consideration
& a dominating base. This makes the cost of insurance a decisive factor for
charging premium. The important bases for determining the cost are rate of death,
rate of interest & the expenses incurred on the insurance business. The mortality
table helps the determination of death rate. It is to predict future mortality. The
best method of construction of mortality table is to select a large number of persons
at attained age, which is meant age close to the birth rate. The second important
element is the rate of interest. On the basis of mortality rate, it is estimated that
when & how much amount is to be received as premium & would be paid as
claims but on the basis of interest rate, it is estimated that how much interest can be
earned by investing the insurance funds. The last element is cost which focuses on
different types of expenses. There are certain expenses, which incurred at the time
of inception of the policy. This necessitates determination of the nature of expenses.
The determination of expenses according to occurrence & equal distribution of the
expenses every year for equitable distribution of loading are found significant to
make possible a sound management of expenses.

The process of rate of fixation in the insurance organizations is not so scientific &
identifies the cases of moral hazard. It is easier to identify the physical hazard but the
task of identifying the moral hazard is found difficult. The premium charged is to be
made rational to cater to the payment of claims on a priority basis including the
catastrophic losses, management expenses & margin of profit. It is essential that various
related to both the hazards are estimated in a scientific way. The actual process of rating
consists of three steps, e.g. classification, discrimination & scheduling.

The price mix decisions are:

Making possible cost of effectiveness


Restructuring of premium
Due priority to profit generating investments.
Rationalizing or optimizing the social costs
Paving avenues for channelising the productive investments
Assigning dude weightage to the policies meant for the socially & economically
backward classes
Making the ways for maximizing profit

PLACE

The first component of the marketing mix is related to the place decisions in which our
focus would be on the two important facets – managing the insurance personnel and
locating a branch. The management of agents and insurance personnel is found
significant with the viewpoint of maintaining the norms for offering the services. This is
also to process the services to the end user in such a way that a gap between the services-
promised and services – offered is bridged over. In a majority of the service generating
organizations, such a gap is found existent which has been instrumental in aggravating
the image problem. The policy makers make provisions; the senior executives specify the
standards and quality and the branch managers with the cooperation of the front-line staff
and others bear the responsibility of making available the promised services to the end
users. The public sector insurance organizations have failed in both the areas. The agents,
rural career agents, the front-line staff and even a majority of the branch managers have
become a party gap.

The transformation of potential policyholders to the actual policyholders is a difficult


task that depends upon the professional excellence of the personnel. The agents and the
rural career agents acting as a link lack professionalism. The front-line staff and the
branch managers are found not assigning due weightage to the degeneration process. The
insurance personnel if not managed properly would make all efforts insensitive. Even if
the policy makers make provision for the quality upgradation, the promised services
hardly reach to the end users. This makes it significant that the insurance organizations in
general and the public sector insurance organizations in particular keep their minds in
changing the expectations of customers and the prospects. The behavioral profile of
insurance personnel is studied in a right fashion and the changes required due to the
changing perception of expectation are incorporated. It is essential that they have rural
orientation and are well aware of the lifestyles of the prospects or users. They are
required to be given adequate incentives to show their excellence. While recruiting
agents, the branch managers need to prefer local persons and by conducting refresher
courses to brush up their faculties to know the art of influencing the users/prospects. In
addition to the agents, the front-line staff also needs an intensive training programme.
This makes it essential that the branch managers organize an ongoing training
programme, which focuses on behavioral management.

Another important dimension to the Place Mix is related to the location of the insurance
branches. While locating branches, the branch manager needs to consider a number of
factors, such as smooth accessibility, availability of infrastructural facilities and the
management of branch offices

and premises. In addition it is also significant that the branch managers assign due
weightage to the safety provisions. The management of offices makes it significant that
the branch mangers are particular to the office furnishing, civic amenities and facilities,
parking facilities and interior office decoration.

Thus the place management of insurance branch offices needs a new vision, distinct
approach and an innovative style. This is essential to make the work place conducive,
attractive and proactive to the generation of efficiency. The motives are to offer the
promised services to thee end users without any distortion and making the branch offices
a point of attraction. The branch managers need professional excellence to make place
decisions productive.

PEOPLE

People are most important component of marketing mix for the insurance industry.
Sophistication in the process of technological advances makes the ways for the personnel
in such a way that an organization succeeds in making possible a productive utilization of
technologies used or likely to be used. Professional qualification requirements change as
technological develops & evolves. The use of computers microcomputers, fax machines,
sophisticated telephonic service, e-mailing, intra-net service have been found throwing a
big impact on the perception of quality of service. This makes it essential that the
insurance organizations also think in favour of developing personnel in line with the
development and use of information technologies.

The front-line-staff as well as the branch managers are required to be given the training
facilities so that they in position to make possible an effective use of the technologies.
The insurance organizations bear the responsibility of developing the credentials of their
employees. In this context, it is also significant that they think about the behavioral
profile of insurance personnel. It is pertinent that the employees are well aware of the
behavioral management. They know & understand the changing level of expectations of
users & make sincere efforts to fulfill the same. In this context, it is also significant that
the senior executive while recruiting, training & developing the insurance personnel
make it sure that employees serving the organization have a high behavioral profile in
which empathy has been given due place. The psychological attributes become
significant with the viewpoint of influencing the prospects or retaining the users. It is in
this context that the insurance companies need a rational plan for the development of
insurance personnel.
PHYSICAL EVIDENCE

Physical evidence includes facility design, equipment, signage, employee dress,


tangibles, reports & statements.

Signage:
Signage personifies the insurance company. It gives an identity by which users recognize
the company. A signage depicts the company’s philosophy & policy.

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