SERVICE MIX STRATEGY & POSITIONING The Expanded Marketing Mix Required for Services Service Focus Strategies Service Positioning
PHYSICAL EVIDENCE
Facility design Equipment Signage Employee dress Other tangibles
PROCESS
Flow of activities Number of steps Level of customer involvement
Marketing is the only function to bring operating revenues into a business; all other functions are cost centers The 7Ps of services marketing are needed to create viable strategies for meeting customer needs profitably in a competitive marketplace
Product
A core product
Accompanied by supplementary services
Objective: To offer value to target customers To satisfy their needs better than competing alternatives
Exceptions Safekeeping
KEY:
Hospitality
Core and Supplementary Services at Luxury Hotel (Offering Much More than Cheap Motel!)
Reservation Cashier Business Center Room Service A Bed for the Night in an Elegant Private Room with a Bathroom Valet Parking Reception
Price
Admission to a service performance Time based Monetary value of service delivered (e.g.commission) Consumption of physical resources (e.g.food and beverages)
Promotion
The 7Ps of Services Marketing: Promotion & Education Informing, educating, persuading, reminding customers Marketing communication tools Media elements (print, broadcast, outdoor, retail, the Internet, etc.) Personal selling, customer service Sales promotion Publicity/PR Imagery and recognition Branding Corporate design
Advertising
Broadcast, podcasts Print Internet
Press releases/kits
Press conferences Special Events Sponsorship Trade Shows, exhibitions
Interactive software
Voice mail
Media-initiated coverage
Place
The 7Ps of Services Marketing: Place & Time Delivery decisions: Where, When, How
Negotiation flow
To sell the right to use a service
Product flow
To develop a network of local sites
Availability of Service Outlets Type of Interaction between Customer and Service Organization Customer goes to service organization Single Site Multiple Sites
Theater Barbershop
Mail delivery
Broadcast network
Telephone company
Time of Service Delivery Traditionally, schedules were restricted Service availability limited to daytime, 40 to 50 hours a week Historically Sunday is considered as a rest day in Christian tradition, Saturday in Jewish tradition, and Friday in Muslim tradition
Payment
Pay by bank card Direct debit
Consultation
Conduct e-mail dialog Use expert systems
Billing
Receive bill Make auction bid Check account status Core
Order-taking
Make/confirm reservations Submit applications Order goods, check status
Exceptions
Make special requests Resolve problems Eg. Website message board
Hospitality
Safekeeping
Record preferences Eg. Room type & view, allergies
People
Services marketing is mostly dependent on Service Providers and their interaction with customers
PEOPLE All human actors participating in the service delivery and thus influencing the buyers perceptions:
firms personnel, the customer other customers in the service environment
Process
PROCESS the actual procedures, mechanisms, and flow of activities by which the service is delivered the service delivery and operating systems e.g. appointment, registration or payment systems
The 7Ps of Services Marketing: Process Process involves choices of method and sequence in service creation and delivery Design of activity flows Number and sequence of actions for customers Nature of customer involvement Role of contact personnel Role of technology, degree of automation Badly designed processes waste time, create poor experiences, and disappoint customers
Physical Environment
PHYSICAL EVIDENCE includes the environment in which the service is delivered and where the firm and customer interact, and any tangible component that facilitates performance or communication of the service
Marketing Management
Service Strategy
All great service companies have a clear, compelling service strategy. They have a reason for being that energises the organisation and defines the word service. A service strategy captures what gives the service value to customers. To forge a path to a great service, a companys leaders must define correctly that which makes the service compelling. They must set in motion and sustain a vision of service excellence, a set of guideposts that point to the future and show the way.
Leonard Berry
A business must set itself apart from its competition. To be successful it must identify and promote itself as the best provider of attributes that are important to target customers
George S. Day
Narrow
Service Focused
Wide
Unfocused (Everything for everyone)
Many
NUMBER OF MARKETS SERVED
Few
Source: Robert Johnston Achieving Focus in Service Organizations, The Service Industries Journal, Vol. 16, January 1996, pp. 1020
Product attributes DHL going all the way, FedEx Relax its FedEx, UPS Deliver more Price/quality relationships Geico you can save 15% or more on car insurance Reference to competitors (usually shortcomings) the bigger, better network
Possible Dimensions for Developing Positioning Strategies Usage occasions Ski Resorts offer downhill and cross-country skiing in the winter; hiking and mountain biking in the summer User characteristics CheapTicket online services is for travelers who are comfortable with both internet usage and self service Product class Blue Cross offers a variety of different health insurance packages for its corporate customers to choose from in putting together their employment benefits
Positioning Maps
Predictions can be made of how positions may change in light of future developments Simple graphic representations are often easier for managers to grasp than tables of data or paragraphs of prose
Charts and maps can facilitate visual awakening to threats and opportunities, suggest alternative strategic directions
PALACE
Shangri-La No action? Atlantic Sheraton Italia Castle Alexander IV Airport Plaza Moderate Service
Less Expensive
New Grand
Continental Action? PALACE Financial District No action? Shopping District and Convention Center Italia Alexander IV Atlantic Airport Plaza Inner Suburbs Heritage Marriott Sheraton Shangri-La Regency
Castle
Moderate Luxury