DRIVE WINTER 2014 PROGRAM

SUBJECT CODE & NAME MK0015Services Marketing and Customer Relationship Management

Qno1 Discuss the eight different demand situations of Service.

A .Eight different demand situations
Answer Votter has identified eight different demand situations:

1. Negative demand occurs where most or all segments in a market

possess negative feeling towards a service, to the extent that they may even
be prepared to pay to avoid receiving that service. Many medical services
are perceived as unpleasant and are purchased only in distress, even though
there may be benefit to individuals from receiving regular preventive
treatments.
2. No demand occurs when a product is perceived by certain segments as
being of no value. The task of marketers seeking to create demand in such
segments is to reformulate the product offering and promotional methods
used so that the products benefits are more readily comprehended by the
target segments.
3. Latent demand occurs where an underlying need for a service exists but
there is no product that can satisfy this need at an affordable price to
consumers. New products have to be developed or made available at a price
that would allow latent demand to be turned into actual demand. This is
heavily dependent on adequate media exposure.
4. Faltering demand is characterized by a steady fall in sales which is
more than a temporary downturn. Task of management is to identify the
causes of this downturn and to develop a strategy for reviving demand. The
used car market can be seen as an example of faltering demand. New cars
are being positioned in such a way that customers are being lured to
purchase brand new cars as opposed to second-hand cars.
5. Irregular demand is characterized by uneven distribution of demand
through time. The inability to store services from a period of low demand to
others of high demand means that this pattern of demand poses major
problems for many service industries. It can be overcome by combination of

demand management, designed to reduce the irregularity of demand and

supply management, aimed at meeting demand as closely as practical.
Dental works may be seen as an example of irregular demand.
6. Full demand exists where demand is currently at a desirable level and
one which allows the organization to meet its objective. The managements
task shifts from increasing the volume of demand to improving its quality by
concentrating on high value activities aimed at high spending segments.
Demand for medicine is always considered as a potent example of full
demand. Irrespective of season, month, day or time, people always require
medical attention.
7. Overfull demand occurs where there is excess demand for a service on
a permanent basis. The marketing task is to stifle demand in a manner which
does not cause long-term harm for e.g., stifling demand by high prices alone
may build an exploitative image which may be harmful in the future should
demand need to be stimulated.
8. Unwholesome demand occurs when an organization receives demand
which it would prefer not to have. It may be forced to decrease demand
because of legal requirement (the post office cannot refuse to deliver letters
for customers who are very expensive to service or because of a
longstanding commitment to supply a service to a customer.

Qno2. Elaborate GAP analysis in detail. A Explanation of GAP Model.

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Answer - GAP Model and GAP analysis: A gap analysis helps bridge that
space by highlighting which requirements are being met and which are not.
The tool provides a foundation for measuring the investment of time, money
and human resources that's required to achieve a particular outcome. The
gaps model was first introduced in the year 1985 and it provides an excellent
structure to manage service excellence and customer-driven innovation.
This model offers an incorporated view of the relationship between the
customer and the company. This model is based on a substantial research
performed by several service providers. As in the Gronroosjyku model, it
shows the perception gap and summarise the contributory elements. The
provider gaps are those that happen within the organisation. It is the
difference between the expectations of the customer and the understanding;
the firm has regarding those expectations. Most of the organisations fail to
meet the client expectations due to their lack of understanding of those
aspirations. The provider gaps include GAP 1, GAP 2, GAP 3, GAP 4 and GAP

5. Each GAP occurs due to the inconsistencies and discrepancies in the

quality management process.
GAP 1: The lack of proper understanding of the client expectations might
cause a sequence of bad decisions and result in poor quality perception by
the clients. A service organizations must examine the gap in a proper way
and try to fill it up.This is known as the management perception gap. This
occurs mainly due to the difference between the service expected by the
customers and the perception the management have regarding the customer
expectations. Failure in understanding the client expectations leads the
services organisations into trouble. Figure: explains the important factors
that led to GAP 1.

GAP 2: GAP 2 is the second test the firms need to cross. They can achieve
this by implementing excellence in performance. Service design and the
performance standards are the pre-requisites for achieving the excellence in
performance. Translation of service quality is a complex procedure the
service providers need to manage.
This occurs due to the difference between the management perception of
client expectation, designs, and the standards of customer driven service.
The precise perception of the service providers regarding the customer
expectations will not be sufficient to deliver better quality service. Some of
the service firms will have effective information and communication network.
These firms will be capable of supervising without a gap in the first level
This is known as the quality specification gap. Figure: explains the important
factors that led to GAP 2.

GAP 3: This means service delivery gap and occurs due to the difference
between the client driven service designs and service delivery and
standards. Even if you formulate guidelines to perform services, it will not
assure quality service performance. The standards should be supported by
adequate and suitable resources like systems, people and technology. The
employee motivation and satisfaction play a prominent role in the entire
procedure.
Figure: explains the important factors that led to GAP 3.

GAP 4: Service firms assure their efficiency through external marketing

process to the existing as well as the potential clients. These promises do
make an impact on the customer expectations. These expectations will serve
as standards against which the client assesses the quality of the delivered
service or product. This is the Market Communication gap and refers to the
service delivery and external communications to the customers.
Figure: explains the main factors that results in GAP 4.

Gap 5: It is difficult to evaluate the reasons for this gap, but the
organizations need to expect some negative results when such a gap occurs.
But you can see that this GAP also creates a positive impact. If the perceived
quality surpass the accepted quality, the clients will be happy, which in turn
will be beneficial for the organization. Figure: explains the factors that lead to
GAP 5.

The identification of the possible gaps helps the management in checking

various levels and averts the probable mistakes. You can perform an audit of
all these errors which creates confidence in the service provider and the
organization. These audits enable them to perform well at the crisis
situations. The GAP model helps the management to identify the real reasons
for quality problems and to determine different ways to avoid those gaps.

Qno3 Interaction plays a lead role in building customer

relationships. Explain CIM in this context. A Explanation of CIM
Explanation of Methods
Answer Customer Interaction Management

Customer Interaction Management constitutes the customer relationship

technologies with addition of technology-based interactive solution. The
interactive channels that are currently available enable very effective
customer interactive communications which leads to customer interaction
management, which is an important dimension of customer relationship
management. A management system is required to manage this relationship
between the company and customer. This management system is called
Customer Relationship Management (CRM). CRM provides information
regarding the customers to the organisation. CRM can benefit both the
company and the customers. The information stored in CRM helps the
company to get more information about the customers. The customers get
the benefit of the desired quality of services. Once the interaction between
the company and customer starts increasing, it marks the beginning of a
long term relationship. For example, customer uses the banking service to
transfer some amount to another account. If the money is not transferred on
time, the customer will not be satisfied with the service provided by the
bank. The customers begin to trust the bank depending on the quality of
service provided by the bank.

CIM Methods
CRM is a term that is often referred to in marketing. However, there is no
complete agreement upon a single definition. This is because CRM can be
considered from a number of perspectives. This section mainly focuses on
the types of Technological Applications in CRM. There are three types of
technological applications in CRM: They are:

Analytical CRM.

Collaborative CRM.

Operational CRM.

Now let us discuss each Technological application in detail.

Collaborative CRM:
Another form of CRM is called Collaborative CRM, a highly effective method
of communication as it covers direct interaction with customers including
feedback and issue reporting. Interaction can take place through web pages,
email and automated voice response. As an important approach to customer
relationship management, Collaborative CRM greatly improves on services
offered and addresses such issues as sales, technical support and marketing.

It acts as a dynamic tool which allows a business to share any information

collected from interactions with customers.
Operational CRM:
Operational CRM provides support to front office business processes, such
as sales, marketing and service. Each interaction with a customer is
generally added to a client database. This customer information can later be
retrieved from the database as necessary. In this way, the customers can
interact with different people in a company, even when they operate in a
variety of channels (Multi channel marketing) over time without having to
mention their personal data every time. Operational CRM method is the part
of CRM which deals with the actual interactions with customers, typically in
the form of call centres, websites, blogs, communities, direct mail and direct
sales.
Analytical CRM:
Analytical CRM is the part of Customer Relationship Management, which
always deals with storage, analysis and applications of the knowledge about
customers and about ways to approach customers, typically using
databases, statistical tools, data mining, machine learning, Business
Intelligence and reporting methodologies.

Qno4. What are the various types of conflicts in marketing services?

A .Explanation of types
Answer - Types of conflicts
There are five different conflicts given below. There are certain occasions
when these modes need to be used or applicable. Let us briefly explain those
situations and the behavioural aspects that need to be possessed by the
marketing personnel while dealing with the customers.

Competing: It is called as uncooperative mode. This competing mode helps

in situations:

When there are emergencies, where you need to make quick decisions.
When you need to implement unpopular action such as incorporating
unpopular rules or discipline.
When competitors start taking benefits out of non-competitive
behaviour.

Collaborating: It is a mode where you give an equal importance to your

personal as well as relationship goals. It is used in situations:
When you focus on building the process knowledge.
When both the parties are interdependent.
When both the parties have same goal and sufficient time to settle
issues.
Compromising: It is a mode where both the parties mutually accept on
something. It is used in situations:
When parties decide to settle their complex issues.
When both the parties have same goals and are equally powerful.
Avoiding: It is a mode, where issues are either postponed or withdrawn.
It is used in the situations:
When there is need to collect more information on particular issues.
When any conflict needs to be settled before taking any actions.
When there is more harm than any benefits at the current situation.
Accommodating: It is a mode where the main concern is to fulfil the
relationship needs. In this mode, you give less importance to your own
needs. It is used in situations:
When you need to provide quick solutions at no time.
When you need to achieve temporary settlement.
When you need to avoid any disruption.

Qno5 Elaborate the important steps that service providers should bear in
mind while implementing one to one marketing.
A Explanation
Answer There are four important steps that service providers should bear
in mind while implementing one-to-one marketing.
They are as follows:
Identifying customers: A fair number of customers must be identified by
an organization as target customers. It is equally crucial to understand them
and their needs in as much detail as possible. The portfolio should ideally
contain more than the name and address, it must also include information
regarding their preferences, likes, dislikes etc. In other words, a snapshot will
not suffice; a company must strive to know its customer well if it wants to
establish a long profitable relationship.
Differentiating the customers: Customers are different in two ways.
They represent different levels of value to the company and they have
different needs as well. Once each customers needs and values have been

established, it is possible to tailor the companys behaviour to each customer

in order to reflect those values and needs.
Interacting with customers: It is important to be both cost-efficient and
effective when the company is interacting with its customers. Cost-efficiency
improves by directing customer interaction towards more automated
channels. Providing information on its website would be more economical
than supporting a call centre. Effectiveness improves by generating timely,
relevant information which provides either better insight into a customers
needs or a more accurate picture of customers value to the company. Every
interaction with a customer should take place in the context of all previous
interactions with that customer. A conversation should always aim to pick up
the threads of the last conversation.
Customizing the companys behaviour: In the final step, to lock a
customer into a learning relationship, some aspects have to synchronize with
the customers individually expressed needs. This could either mean mass
customizing a product that has been manufactured or it could also include
reshaping some aspects of the service that is part of the product. This may
include the way in which the invoice is prepared.
It is possible that managers may dismiss one-to-one marketing as
tedious and unrealistic. They may find the seamless integration of several
data banks and other contact points, futile in generating a compact customer
portfolio. Tracking each customer may appear risky as there is no surety of
the customer buying the service. But the benefits emanating from successful
implementation of relationship marketing should justify investment of time
and money in the endeavour. One-to-one marketing increases cross-selling
as customers requirements are known more intimately, it reduces customer
attrition as the company learns of increasingly more sophisticated and
effective ways to serve the customers evolving needs, it reduces transaction
costs as the customers requirements are known and can be promptly
served, and it leads to higher levels of customer satisfaction as the
companys total offering is tailored to are designed to cater to need specific
behaviour.

Qno6 Positioning a service in the marketplace is much like positioning a

product. Explain Service positioning and its purpose with the help of an
example.

A Explanation of service positioning

Explanation of purposes
Example

Answer

EXPLANATION OF SERVICE POSITIONING

To position a service, you need to carry on customer research program. This

program helps you to identify what newspapers and magazines your
customers are reading. It will tell you where the customers get their
information from. And it should tell you which media they are using for
information about any service. Your market targeting survey and customer
research will help to choose a proper media that is best for reaching your
customers. We have discussed how we can target and reach customers.
Now, we will move on to positioning of services. Positioning is the process of
designing a company's service offers and images so that, it acquires an
individual and valued position in the minds of the customers. The objective
of positioning a service is to ensure that it occupies a certain position in the
minds of the consumers, differentiating it from what the competitors offer.

Purposes:
Targeting is the process of gaining knowledge of everything that you can
from the chosen market segment, the customer segment and then using that
knowledge to aim the business offer. Once you complete a sufficient number
of customer surveys, evaluate the results to identify which market segment
is suitable for your business to target. Ensure that the market segment which
you choose:

Provide easy access to your services. Your services should be easily

accessible by the customers, whether it is by visiting your shop or ordering
by phone, fax, email or your web site.

Be updated with other services that are same as the services provided
by you.


Provide you with a good price for your services that allows you to
achieve a reasonable profit margin.

After targeting the market segment, you will come to know who and where
your customers are, and how vast the market is, hence you need to
economically reach them with your message. To reach your services to
customers, you need to communicate the service message through the
media. The objective of using the media is to grab the attention of your
target customers. It also provides you the highest return on investment for
your advertising.

Example:
1.

Market segmentation.

2.

Target market.

3.

Differentiated advantage.

4.

Keys to successful positioning.

5.

Clarity.

6.

Consistency.

7.

Credibility.

8.

Competitiveness.