Definining Services

A service is any act or performance that one party offers to another, that is essentially intangible, does not result in the ownership of anything. Its production may or may not be tied to any physical product. Philip Kotler.

Service Package

Service Package is a description of a service based on 4 components: Supporting facility Facilitating goods Explicit service Implicit service

Service Package

Supporting facilty: Physical resources that must be in place before a service can be offered.Building etc. Materials purchased or consumed by the buyer.

Explicit service: The essential or intrinsic features readily observable by the senses.(ontime departure, Quality of meal.) Implicit service: Psychological benefits that the customer may sense only vaguely.(Security, safety)

Indian Scenario

The contribution of the services sector to the Indian economy has been 55.2% in GDP and has been growing by 10% annually. Economic Survey 2010-11 put the growth rate of the services sector at 9.6%. The two broad services categories, namely trade, hotels, transport, and communication; and financing, insurance, real estate, and business services have performed well with growth of 11% and 10.6% respectively in 2010-11

Global Scenario

Indian economy remains the second fastest growing in the services growth with 8.9% rate, behind China (10.5%). India is also moving towards a services led export growth. In the first half of 2010-1, services exports growth was 27.4%

Goods Service Continuum

CHARACTERISTICS OF SERVICES:

INTANGIBILITY INSEPARABILITY HETEROGENITY PERISHABILITY

Marketing problems caused by intangibility

Services are subjectively evaluated Services are difficult to sample before purchase Services cannot be stored Patent problems are there Difficulty in pricing services Difficulty in displaying or communicating services.

Possible solutions to Intangibility problems:

Use of Tangible clues. Use of personal sources of information Creation of strong organizational image.

ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion (US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the year ended March 31, 2011. The Bank has a network of 2,533 branches and 6,601 ATMs in India, and has a presence in 19 countries, including India

Infosys

Infosys ranked # 15 in a survey of the world's most innovative companies by Forbes and HOLT, a division of Credit Suisse.

Marketing problems caused by inseparability

Service provider is physically connected to the service being provided Involvement of customers and other customers in the service production process: To start and stop For processing Mental involvement Heterogeneity and Quality issues Uncertainity in scheduling Catering to individual customer demand is difficult Arrivals are not under control Mass production is diff.

Possible solutions to inseparability problems:

Employee selection, training, and motivation. Consumer management seggregating customers home delivery Prohibit customer entry in certain areas Use of multisite location

Marketing problems caused by Heterogeneity:

Service standardization and Quality Control are difficult. Many errors in service operations are one time events.

Possible solutions to Heterogeneity problems:

Customization takes extra time adds to cost uncertanity associated with customised services Standardization Use of machines Training

SOME COMPANIES
STANDARDISE THE CORE PRODUCT ALLOW CUSTOMERS TO SEMI CUSTOMISE THE FINAL OUTCOME

Marketing problems caused by Perishability:

Inventoring problem Problem of Demand Supply Management Higher demand than supply lower demand than supply

Possible solutions to Perishability problems:

Creative Pricing attract customers in off peak hours attract another segment separate diverse target markets Reservation Systems Development of Complementary Services Capacity Sharing Part Time Employee Utilization Increase in Customer Participation

CLASSIFICATION OF SERVICES

On the basis On the basis On the basis Contact On the basis Provider On the basis

of degree of Tangibility of Labor Intensiveness of Degree of Customer of skill level of the Service

of Goal of Service Provider

Service Process Matrix

Given By Roger Schmenner Low Degree Of Interaction and customisation and Low degree of Labor Intensity: Service Factory Airlines,Hotels Low Degree Of Interaction & Cus and High degree of Labor Intensity: Mass Service, Schools, Retailing High Degree Of Interaction & Cus and Low degree of Labor Intensity: Service Shops, Hospitals High Degree Of Interaction & Cus and High degree of Labor Intensity: Professional Service, Physicians, Lawyers

Nature of the service act and the recipient of the service

Services where tangible actions are directed at peoples bodies: Health care, beauty saloons Services where tangible actions are directed at Physical goods: laundry, repair &maintenance Services where intangible actions are directed at peoples bodies: education, information Services where intangible actions are directed at Physical goods: banking legal services

Nature of Service delivery and type of relationship between Service Organization and its Customers

Continuous delivery of service and membership relationship: electric utility Discrete transactions and membership relationship:Transit pass, buying club Continuous delivery of service and No formal relationship:Radio station, Police protection Discrete transactions service and No formal relationship: movie theater, Restaurant

Customization & Judgement In service Delivery

High Extent of judgement and High customization : Surgery,Taxi. High Extent of judgement and Low customization :Education, Preventive Health Programme Low Extent of judgement and Low customization :Public Transport. Low Extent of judgement and High customization: Retail Banking

Nature of Demand &Supply

Wide Demand Fluctuations but peak demand can be met without delay: electricity , telephone Wide Demand Fluctuations and peak demand cannot be met without delay: Tax preparations, hotels. Narrow Demand Fluctuations and peak demand can be met without delay: Insurance ,banking Narrow Demand Fluctuations but peak demand cannot be met without delay: Fast food, Movie theater

On the basis of Nature of Interaction between Customer & Service Organisation and Availability of service outlets

Single site location where customer travels to service firm: Theater, Barber shop Single site location where service provider travels to customer :Taxi Single site location where transaction is at arms length: Local TV Station Multiple site location where customer travels to service firm: Bus service Multiple site location where service provider travels to customer: Mail Delivery Multiple site location where transaction is at arms length: Telephone company