MODULE 4

Provider Gap 1

Customer Company

Service Delivery
GAP 3

Customer-Driven Service Designs and Standards

Managing Services Promises

Integrated Services Marketing Communciation Pricing of Services

Provider Gap 1

Customer Company

Service Delivery
GAP 4

External Communications to Customers

Communications and the Services Marketing Triangle

Company

Internal Marketing
Vertical Communications Horizontal Communications

External Marketing Communication

Advertising Sales Promotion Public Relations Direct Marketing

Employees

Interactive Marketing
Personal Selling Customer Service Center Service Encounters Servicescapes

Customers

Approaches for Integrating Services Marketing Communication or Strategies to match Promises with Delivery
Manage Customer Expectatio ns
Address the service Intangibilit y

Manage Service Promises

Goal: Delivery greater than or equal to promises

Manage Internal Marketin g Commun

Improve Custome r Educatio n

PRICING OF SERVICES

Agenda

Three basic price structures and difficulties associated with usage for services. Customer definitions of VALUE

The role of non monetary costs

Non monetary costs represents other source of sacrifice perceived by consumers when buying and using a service. It includes:-

1.
2. 3.

4.

Time cost Search cost Convenience cost Psychological cost

e-banking)

(insurance, bank loans, medical treatment, ATM,

Price as an indicator of Service Quality

Price is an indicator of both service costs and service quality. Pricing too low can lead to inaccurate inferences about the quality of the services. Pricing too high can set expectations that may be difficult to match in service delivery.

Three Basic Price Structures and Challenges Associated with Usage for Services
CHALLENGES :
1. Small firms may charge too little to be viable 2. Heterogeneity of services limits comparability 3. Prices may not reflect customer value

CHALLENGES :
1. Costs are difficult to trace 2. Labor is more difficult to

price than materials

3. Costs may not equal the customers perceived value

CHALLENGES :
1. Monetary price must be adjusted to reflect
the value of non-monetary costs 2. Information on service costs is less available to customers, hence price may not be a central factor

Four Customer Definitions of Value

Value is low price.
Value is everything I want in a service.

Value is the quality I get for the price I pay.

Value is all that I get for all that I give.

Pricing Strategies When the Customer Defines Value as Low Price

Value is low price.
Discounting

Odd pricing Synchro-pricing Penetration Pricing

Value as Low Price contd.

3. Synchro-Pricing Place Differentials Time Differentials Quantity Differentials Incentive Differentials

4. Penetration Pricing

Pricing Strategies When the Customer defines Value as Everything Wanted in a Service

Value is everything I want in a service.

Prestige pricing

Skimming pricing

Value is everything I want in a service

Prestige Pricing - Here service marketers offer high quality or status services. - Demand increases as price increases. Example: 7-Star Hotel.

Skimming Pricing - Here new services are introduced at high prices. - The companies have a strong grip over the

Pricing Strategies When the Customer Defines Value as Quality for the Price Paid

Value is the quality I get for the price I pay.

Value pricing Market segmentation pricing

Value as Quality for the Price I Pay

Value Pricing
It sets selling prices on the perceived value to the customer, rather than on the actual cost of the product, market price, competitors prices or the historical price.

Market Segmentation Pricing - Different prices are charged to groups of

customers irrespective of service providing costs.

Pricing Strategies When the Customer Defines Value as All That Is Received for All That Is Given

Value is all that I get for all that I give.

Price framing Price bundling Complementary pricing Results-based pricing

Value is all that I get for all that I give

Price Framing Price Bundling Complementary Pricing Result-Based Pricing

Summary
Value is low price. Discounting
Odd pricing Synchro-pricing Penetration Pricing

Value is everything I want in a service. Prestige pricing

Skimming pricing

Value is the quality I get for the price I pay.

Value pricing Market segmentation pricing

Value is all that I get for all that I give.

Price framing Price bundling Complementary pricing Results-based pricing

Thank You