MM-SC-304 - Service Marketing (Marketing Management)
MM-SC-304 - Service Marketing (Marketing Management)
1. Define and explain term Services. State the broad classification and characteristics
of services.
->Definition of Services: Services refer to intangible economic activities that are performed
by one party for another. Unlike goods, which are tangible and can be touched or seen,
services are experiences, performances, or actions that one party provides to another.
Services are characterized by their intangibility, inseparability, variability, and perishability.
Characteristics of Services:
1. Intangibility:
• Services are intangible, meaning they cannot be touched, felt, or seen. They
lack physical form, making it challenging for customers to evaluate them
before purchase.
2. Inseparability:
• Services are variable in nature due to their reliance on human factors and
interactions. The quality of a service may vary from one service encounter to
another, as it depends on factors such as the service provider, customer, and
the context in which the service is delivered.
4. Perishability:
• Services are perishable, meaning they cannot be stored for future use. Once
the service is performed, it cannot be saved or inventoried. This characteristic
poses challenges in managing supply and demand for services.
1. Business Services:
Understanding these classifications and characteristics is crucial for businesses and service
providers to effectively manage and market their services, considering the unique challenges
posed by the intangible and variable nature of services.
• In services marketing, the "product" refers to the core service offered. This is
the primary reason customers seek the service. For example, in healthcare, the
core service is medical treatment. Understanding and defining the core service
is crucial for positioning and differentiation.
2. Price:
• The "place" element in services marketing focuses on how and where the
service is delivered. It's not just about physical locations but also includes
channels and methods of distribution. For example, online services are
distributed through digital channels, while traditional services may rely on
physical locations.
4. Promotion:
• Holistic Approach: The extended marketing mix provides a more holistic approach
to services marketing, recognizing the unique challenges and opportunities posed by
intangibility, variability, and inseparability.
• Customer-Centric Focus: People, process, and physical evidence place a strong
emphasis on the customer experience. The interactions, processes, and tangible
elements contribute to shaping the customer's perception of the service.
• Service Quality Management: The extended mix helps in managing and improving
service quality. Attention to people (employees), process efficiency, and physical
evidence contributes to delivering consistent and high-quality services.
• Differentiation: Through the extended marketing mix, service providers can
differentiate themselves from competitors. Creating a positive and memorable
customer experience becomes a key element of differentiation.
• Relationship Marketing: The emphasis on people and the customer journey in the
extended mix supports the development of long-term relationships with customers.
Building trust and loyalty is essential in services marketing.
3. What is the relationship between customer perception, customer satisfaction and
customer quality?
-> The relationship between customer perception, customer satisfaction, and customer
quality is interconnected and plays a vital role in shaping the overall success and
sustainability of a business. Let's break down the relationship between these three elements:
1. Customer Perception:
• Customer perception refers to how customers view and interpret the various
aspects of a product or service. It is influenced by a combination of personal
experiences, expectations, and external factors. Perception is subjective and
can vary from one customer to another.
2. Customer Satisfaction:
Relationships:
A service blueprint is a visual representation of the service delivery process that helps to
identify key components, interactions, and touchpoints involved in delivering a service.
Below is a simplified service blueprint for a 5-star hotel.
1. Customer Actions:
• Support Processes:
• Reservation system for managing bookings.
• Housekeeping for room preparation and cleanliness.
• Kitchen for food preparation.
• Employee Actions:
• Housekeeping staff preparing rooms.
• Kitchen staff preparing meals.
4. Processes:
• Tangible elements such as room key cards, menus, promotional materials, and
amenities in the room.
7. Customer Support:
Customer complaining behaviors can vary widely based on individual personalities, cultural
factors, and the specific context of the service encounter. Understanding the nature of
complaining behaviors is crucial for businesses to address customer issues effectively. Here
are some common types of complaining behaviors:
1. Active Complainers:
1. Listen Actively:
• Keep the customer informed about the steps being taken to resolve the issue.
• Set realistic expectations regarding timelines for resolution.
7. Learn and Improve:
1. Demand Forecasting:
• Strategy: Use historical data, market research, and trends to forecast demand.
• Example: A hotel may analyze booking patterns from previous years to
anticipate peak seasons and adjust staff levels accordingly.
2. Dynamic Pricing:
1. Demand Forecasting:
• Example: A theme park might analyze historical attendance data, local events,
and weather forecasts to predict peak days. Based on this forecast, they can
adjust staffing levels, ride operations, and ticket prices.
2. Dynamic Pricing:
• Example: Ride-sharing services like Uber and Lyft implement surge pricing
during high-demand periods, encouraging more drivers to be available when
demand is high.
3. Peak Offsetting:
• Example: Retail stores may implement flexible working hours for employees,
adjusting shifts to align with peak shopping hours during weekends or
holidays.
6. Cross-Training Staff:
• Example: An airline might invest in expanding its fleet during peak travel
seasons to meet the increased demand for flights.
9. Membership Programs:
• Example: Hotels and local tour operators may collaborate to offer joint
packages during peak tourist seasons, ensuring that both businesses can handle
the increased demand.
12. Promotions and Special Events:
• Description: The process begins with the customer initiating contact with the
service provider.
• Strategies:
• Effective Communication: Clearly communicate service offerings,
terms, and conditions.
• Personalization: Tailor interactions to individual customer needs and
preferences.
• Accessibility: Ensure easy access to information and services through
various channels.
2. Service Production:
• Description: This stage involves the actual creation and delivery of the
service.
• Strategies:
• Employee Training: Ensure staff is well-trained to perform their roles
effectively.
• Standardization: Implement standardized processes to maintain
consistency.
• Technology Integration: Use technology to enhance efficiency and
accuracy in service delivery.
3. Feedback:
• Description: Gather feedback from customers about their experience with the
service.
• Strategies:
• Surveys and Reviews: Implement surveys and encourage customers to
leave reviews.
• Continuous Improvement: Use feedback to identify areas for
improvement.
• Customer Support: Provide channels for customers to express
concerns and seek resolution.
4. Resolution and Follow-Up:
• Employees are ambassadors for the brand. If they believe in and are aligned
with the brand values, they are more likely to project a positive image to
customers, contributing to the overall brand perception.
6. Innovation and Problem Solving:
• Engaged employees are more likely to contribute ideas, innovations, and
solutions to challenges. Internal marketing fosters an environment that
encourages creativity and problem-solving.
7. Reduced Employee Turnover:
• Satisfied and engaged employees are more likely to create positive customer
experiences, leading to increased customer loyalty and repeat business.
10. Appraise utility of GAP model of service quality.
-> The GAP Model of Service Quality, developed by Parasuraman, Zeithaml, and Berry, is a
framework that identifies the gaps that can occur during the service delivery process,
leading to differences between customer expectations and perceptions. The model helps
businesses assess and understand these gaps, facilitating the improvement of service quality.
Here is an appraisal of the utility of the GAP Model:
1. Identification of Service Quality Issues:
• Utility: The model identifies specific gaps at different stages of the service delivery
process, such as the knowledge gap, policy gap, delivery gap, communication gap,
and perception gap.
• Benefits: Businesses can pinpoint the root causes of service quality issues and focus
on addressing them effectively.
2. Customer-Centric Approach:
• Utility: The model is centered around customer expectations and perceptions,
providing insights into the factors that influence customer satisfaction.
• Benefits: Businesses can prioritize efforts to meet or exceed customer expectations,
enhancing overall customer satisfaction.
6. Continuous Improvement:
• Utility: The GAP Model is dynamic, encouraging continuous monitoring and
improvement of service quality.
• Benefits: Businesses can establish a culture of continuous improvement, adapting to
changing customer expectations and market conditions.
7. Enhanced Communication:
• Utility: The model emphasizes the communication gap and the importance of
managing customer expectations.
• Benefits: Businesses can improve communication strategies to align customer
expectations with the service they deliver, minimizing the likelihood of
dissatisfaction.