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MODULE 1:

Q1. Significance and classification of service marketing.

Significance:

A key differentiator: Due to the increasing homogeneity in product offerings, the attendant
services provided are emerging as a key differentiator in the mind of the consumers. Eg: In case
of two fast food chains serving a similar product (Pizza Hut and Dominos), more than the product
it is the service quality that distinguishes the two brands from each other. Hence, marketers can
leverage on the service offering to differentiate themselves from the competition and attract
consumers.
Importance of relationships: Relationships are a key factor when it comes to the marketing of
services. Since the product is intangible, a large part of the customers buying decision will
depend on the degree to which he trusts the seller. Hence, the need to listen to the needs of the
customer and fulfill them through the appropriate service offering and build a long lasting
relationship which would lead to repeat sales and positive word of mouth.
Customer Retention: Given todays highly competitive scenario where multiple providers are
vying for a limited pool of customers, retaining customers is even more important than attracting
new ones. Since services are usually generated and consumed at the same time, they actually
involve the customer in service delivery process by taking into consideration his requirements and
feedback. Thus they offer greater scope for customization according to customer requirements
thus offering increased satisfaction leading to higher customer retention.

Classification:

The Degree of Tangibility of Services

Restaurant Services V/S Consultant Services

Whether the Service is Directed to the Customer or His Possession

Haircut or hotel check in v/s car or TV repair

The Time & Place of Service Delivery

Pest control has to be on site, but software services can be provided via internet in any
location

Level of Customization V/S Standardization

Some services are more customized like lawyers, doctors. On the other hand few services are
standardized like a computer course, Mc Donalds menu etc.

Formal or Informal Relationship with Customers

Clubs require formal membership whereas Disneyworld, or a movie theatre only requires people to
buy a ticket

Extent to which Demand & Supply Fluctuate

Some services have steady demand example a downtown restaurant and some services have highly
fluctuating demand on the basis of time of the day, season etc. like electric power.
Interaction with People or Inanimate objects/Environment

Some transactions could be done on phone while others require physical presence like taking a flight

Q2. What is services and characteristics?

A service is an act, deed or performance of an intangible nature that does not result in ownership of a
tangible commodity but creates value and benefits for the customer

The 4 characteristics of services are as follows:

INTANGIBILITY
Services are intangible and do not have a physical existence. Hence services cannot be touched, held,
tasted or smelt. This is most defining feature of a service and that which primarily differentiates it from a
product. Also, it poses a unique challenge to those engaged in marketing a service as they need to attach
tangible attributes to an otherwise intangible offering.

PERISHABILITY
Services cannot be stored, saved, returned or resold once they have been used. Once rendered to a
customer the service is completely consumed and cannot be delivered to another customer. eg: A
customer dissatisfied with the services of a barber cannot return the service of the haircut that was
rendered to him. At the most he may decide not to visit that particular barber in the future.

INSEPERABILITY
This refers to the fact that services are generated and consumed within the same time frame. Eg: a
haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which
the customer may consume even after a few hours of purchase. Moreover, it is very difficult to separate a
service from the service provider. Eg: the barber is necessarily a part of the service of a haircut that he is
delivering to his customer.

VARIABILITY
Given the very nature of services, each service offering is unique and cannot be exactly repeated even by
the same service provider. While products can be mass produced and be homogenous the same is not
true of services. eg: All burgers of a particular flavor at McDonalds are almost identical. However, the
same is not true of the service rendered by the same counter staff consecutively to two customers.
Q3. Difference between product marketing and service marketing.

Q4. Service marketing mix.

1. Product: In case of services, the product is intangible, heterogeneous and perishable.


Moreover, its production and consumption are inseparable. Hence, there is scope for customizing
the offering as per customer requirements and the actual customer encounter therefore assumes
particular significance. However, too much customization would compromise the standard
delivery of the service and adversely affect its quality. Hence particular care has to be taken in
designing the service offering.
2. Pricing: Pricing of services is tougher than pricing of goods. While the latter can be priced easily
by taking into account the raw material costs, in case of services attendant costs - such as labor
and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the
cost of the food served but also has to calculate a price for the ambience provided. The final price
for the service is then arrived at by including a markup for an adequate profit margin.
3. Place: Since service delivery is concurrent with its production and cannot be stored or
transported, the location of the service product assumes importance. Service providers have to
give special thought to where the service would be provided. Thus, a fine dine restaurant is better
located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is
better situated in the countryside away from the rush and noise of a city.
4. Promotion: Since a service offering can be easily replicated promotion becomes crucial in
differentiating a service offering in the mind of the consumer. Thus, service providers offering
identical services such as airlines or banks and insurance companies invest heavily in advertising
their services. This is crucial in attracting customers in a segment where the services providers
have nearly identical offerings.

5. People: People are a defining factor in a service delivery process, since a service is inseparable
from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by
its staff. The same is true of banks and department stores. Consequently, customer service training for staff
has become a top priority for many organizations today.
6. Process: The process of service delivery is crucial since it ensures that the same standard of service is
repeatedly delivered to the customers. Therefore, most companies have a service blue print which provides
the details of the service delivery process, often going down to even defining the service script and the
greeting phrases to be used by the service staff.
7. Physical Evidence: Since services are intangible in nature most service providers strive to incorporate
certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that
have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while
they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a
tangible and unique experience to their guests.

MODULE 2:

Q5. Consumer decision making process.

A consumer goes through several stages before purchasing a product or service.

NEED

INFORMATION GATHERING/SEARCH

EVALUATION OF ALTERNATIVES

PURCHASE OF PRODUCT/SERVICE

POST PURCHASE EVALUATION

1. Step 1 - Need is the most important factor which leads to buying of products and services. Need infact is
the catalyst which triggers the buying decision of individuals.

An individual who buys cold drink or a bottle of mineral water identifies his/her need as thirst. However in
such cases steps such as information search and evaluation of alternatives are generally missing. These two
steps are important when an individual purchases expensive products/services such as laptop, cars, mobile
phones and so on.

2. Step 2 - When an individual recognizes his need for a particular product/service he tries to gather as much
information as he can.

An individual can acquire information through any of the following sources:

Personal Sources - He might discuss his need with his friends, family members, co workers and
other acquaintances.
Commercial sources - Advertisements, sales people (in Tims case it was the store manager),
Packaging of a particular product in many cases prompt individuals to buy the same, Displays
(Props, Mannequins etc)
Public sources - Newspaper, Radio, Magazine
Experiential sources - Individuals own experience, prior handling of a particular product (Tim
would definitely purchase a Dell laptop again if he had already used one)
3. Step 3 - The next step is to evaluate the various alternatives available in the market. An individual after
gathering relevant information tries to choose the best option available as per his need, taste and pocket.
4. Step 4 - After going through all the above stages, customer finally purchases the product.
5. Step 5 - The purchase of the product is followed by post purchase evaluation. Post purchase evaluation
refers to a customers analysis whether the product was useful to him or not, whether the product fulfilled
his need or not?

Q6. Factors influencing customer expectation of services.

Factors that influence customer expectations of service

Sources of Desired Service Expectations:

1. Personal needs physical, social, psychological, and functional needs

2. Lasting service intensifiers individual factors that lead the customer to a heightened sensitivity to service

a. Derived service expectations- customer expectations driven by another person or group of people. Ex. Family,
other people, managers or supervisors, or own customers in B2B.

b. Personal service philosophycustomers underlying generic attitude about the meaning of service and proper
conduct of service providers

Sources of Adequate Service Expectations:

1. Temporary Service Intensifiers short-term individual factors that make a customer more aware of the need
for service EX. Personal emergency like car accident, car repair.

2. Perceived service alternatives other providers from whom the customer can obtain service, do it yourself or have
many or few choices (airport in small versus big towns)

3. Self-perceived service role degree to which a customer exerts an influence on the level of service they receive (if
customer does not show up regularly for allergy shots, customers more lenient with allergist)

4. Situational factors service conditions beyond control of service provider (Katrina)

5. Predicted service what customers think they are likely to get (if predict good service, the level of
adequate service is high)

Sources of both Desired and Predicted Service Expectations

1. Explicit personal and non-personal statements made by the organization to customers


2. Implicit- service related cues other than explicit promises that lead to inferences about what the service should
and will be like (Price and tangibles)

3. Word of mouth

4. Past experiences

Q7. Service failure and recovery and customer satisfaction.

A service failure, simply defined, is service performance that fails to meet a customer expectations. Typically, when
a service failure occurs, a customer will expect to be compensated for the inconvenience in the form of any
combination of refunds, credits, discounts or apologies.

Service recovery refers to the actions taken by an organization in response to a service failure.

Reasons of failures can be

unavailability of services when promised

delivered late

outcome is incorrect

they are poorly executed

Employees may be rude or uncaring.

Service recovery efforts play a crucial role in achieving (or restoring) customer satisfactions in every organization,

things may occur that have a negative impact on its relationships with customers. The true test of a firms

commitment to satisfaction and service quality isnt in the advertising promises or the decor and ambience of its

offices, but in the way it responds when things go wrong for the customers.

The components of effective recovery system are:


Service recovery strategies:

The first strategy is to make the service fail-safe by doing it right the first time. It avoids negativities of
failures and it is the most important dimension of service quality.
The second strategy is to encourage and track complaints. According to research, almost 50% of customers
encountered problems by do not complain. This segment will have a higher chance of switching to
competitor as organization has no control over it. Encouraging complaint is healthy and it will allow
organization to learn. Tracking complaints will ensure no complaints are left out. Technology can be used
to aid in handling of complaints.
The third strategy is to act quickly. Complaining customers want quick responses and do not want to be
ping-pong around different employees, which will seem to be shirking responsibilities.
The fourth strategy is to provide adequate explanations. This allows customers to understand why the
failure occurred.
The fifth strategy is to treat customers fairly. They want justice in their complaint-handling process, which
involves procedure (speed, convenience, follow-up etc), interaction (behavior of service representatives)
and outcome. Therefore it is important that the process.
The sixth strategy is to cultivate relationship with customers. Long term relationship will allow customers
to be more forgiving and open to the recovery process.
The seventh strategy is to learn from recovery experience. Organizations can learn through using tools to
help evaluate experiences. They can use blueprinting, control charts, fishbone diagram (cause and effect
diagram) to use those acquired knowledge in their recovery effort. The last strategy is to learn from lost
customers through market research and get into the root cause analysis of why they left.

Q8. Service encounter and moments of truth.

A moment of truth is usually defined as an instance wherein the customer and the organization come into contact
with one another in a manner that gives the customer an opportunity to either form or change an impression about
the firm. Such an interaction could occur through the product of the firm, its service offering or both. Various
instances could constitute a moment of truth - such as greeting the customer, handling customer queries or
complaints, promoting special offers or giving discounts and the closing of the interaction.

1. Remote encounters,
Encounter can occur without any direct human contact is called as Remote Encounters. Such as, when a
customer interacts with a bank through the ATM system, or with a mail-order service through automated dial-
in ordering. Remote encounters also occur when the firm sends its billing statements or communicates others
types of information to customers by mail.

2. phone encounters,

In many organizations, the most frequent type of encounter between a customer and the firm occurs over the
telephone is called as phone encounter. Almost all firms (whether goods manufacturers or service businesses)
rely on phone encounters in the form of customer-service, general inquiry, or order-taking functions.

3. Face-to-face encounters

A third type of encounter is the one that occurs between an employee and a customer in direct contact is called
as Face-to-Face Encounter. In a hotel, facetoface encounters occurs between customers and maintenance
personnel, receptionist, bellboy, food and beverage servers and others.

MODULE 3:

Q9. Service blue printing.

A service blueprint is an operational planning tool that provides guidance on how a service will be
provided, specifying the physical evidence, staff actions, and support systems / infrastructure needed
to deliver the service across its different channels.

It is a picture or map that portrays the service system

Its significance is that the different people involved in providing services can understand and
deal with the process objectively.

It depicts simultaneously the service process, the points of customer contact, and the
evidence of service from the customers point of view.

Steps in service blueprint:


Components of service blueprint:

Q10. Service scape.

Servicescape is a concept that was developed by Booms and Bitner to emphasize the impact of the
physical environment in which a service process takes place. The concept of servicescape can help
assess the difference in customer experience between a fast-food franchise restaurant and a small,
family-run restaurant.

It refers to service setting or environment concrete and abstract where a service is performed.

Servicescape may be classified as:

1. Self-service: ATMs, dispensing and vending machines

2. Interpersonal Services: high contact, the service provider and customer must be together.
hospital, school

3. Remote services: mail order shopping, radio, telecommunications

Q11. Concept of productivity and service improvement.

1. Improving Staff:

One way is through improving the knowledge, skills, attitudes and behaviour of existing and new staff involved in

service delivery and performance through better systems of recruitment, training, development and motivation.

Thus staff in contact with customers handling the visible elements of the service can be trained in handling queries

and complaints, in product knowledge, in the operations of internal systems.

2. Introducing Systems and Technology:

Service organisations can reap productivity improvements if they become more systems and technology oriented.
3. Introducing New Services:

It is possible to design a more effective service that eliminates or reduces the need for the less effective service.

4. Customer interaction:

It is possible to change the way in which customers interact with service providers. This is particularly possible with

high contact services.

5. Reduce the Mismatch between Supply and Demand:

A significant feature of many service organizations is the mismatch that often exists between supply of the service

and demand for it. A major goal in marketing services is to get greater control over supply and demand and to obtain

a better balance between the two.

Q12. Understand demand and supply and strategies to match demand and supply.
MODULE 4:
Q13. GAP Model.

Costumer gap:

The customer gap is the difference between customer expectations and customer perceptions. Customer expectation
is what the customer expects according to available resources and is influenced by cultural background, family
lifestyle, personality, demographics, advertising, experience with similar products and information available online.
Customer perception is totally subjective and is based on the customers interaction with the product or service.
Perception is derived from the customers satisfaction of the specific product or service and the quality of service
delivery. The customer gap is the most important gap and in an ideal world the customers expectation would be
almost identical to the customers perception.

Provider gap: can be of 4 types

Gap 1: Not knowing what customers expect.

Gap between consumer expectation and management perception: This gap arises when the management or
service provider does not correctly perceive what the customer wants or needs. For instance hotel
administrators may think guests want better food or in-house restaurant facilities, but guests may be more
concerned with the responsiveness of the staff or the cleanliness of their rooms.

Gap 2: Not selecting the right service designs and standards.

Gap between management perception and service quality specification: This is when the management or service
provider might correctly perceive what the customer wants, but may not set a performance standard. An
example here would be that hospital administrators may tell the nurse to respond to a request fast', but may not
specify how fast'.

Gap 3: Not delivering to service standards.

Gap between service quality specification and service delivery: This gap may arise in situations pertaining to
the service personnel. It could happen due to poor training, incapability or unwillingness to meet the set service
standard. An example would be when a doctor's office has very specific standards of hygiene communicated but
the hired staff may have been poorly trained on the need to follow these strict protocols.

Gap 4: Not matching performance to promises.

Gap between service delivery and external communication: Consumer expectations are highly influenced by
statements made by company representatives and advertisements. The gap arises when these assumed
expectations are not fulfilled at the time of delivery of the service. For example a hospital printed on its
brochure may have clean and furnished rooms but in reality, it may be poorly maintained in this case the
patient's expectations are not met.

Q14. Concept of service quality

The customers judgment of overall excellence of the service provided in relation to the quality that was
expected.

Service quality is a focused evaluation that reflects the customers perception .

This perception is based on five factors relevant to the context.

1. Reliability-delivering promises

2. Assurance inspiring trust & confidence

3. Tangibles- representing the service physically

4. Empathy-treating customers as individuals

5. Responsiveness-being willing to help

Hard and soft measures of service quality:

Hard measures refer to standards and measures that can be counted, timed or measured through audits.
Typically operational processes or outcomes.

e.g. how many trains arrived late?

Soft measures refer to standards and measures that cannot easily be observed and must be collected by talking to
customers, employees or others

e.g. SERVQUAL, surveys, and customer advisory panels.

Tools to address service quality problems:

Fishbone diagrams: A cause-and-effect diagram to identify potential causes of problems.

Pareto charts: Separating the trivial from the important. Often, a majority of problems is caused by a
minority of causes i.e. the 80/20 rule.

Blueprinting: A visualization of service delivery. It allows one to identify fail points in both the frontstage
and backstage

Q15. CRM and Six sigma to enhance service quality.

Customer Relationship Management or CRM is used in managing a companys interactions with prospective
customers and current customers. It is a strategy designed to help companies increase their productivity and improve
customer satisfaction and retention. Since the CRM system gathers data from different sources including customer
calls, online chat and social media, these sources give a fuller picture that lets you know the needs of customers and
what they feel about the products and services offered. This way, you will know if there is a need to improve the
products and services offered. CRM also helps to develop loyal customers through Trust, commitment, ethical
practices, fulfillment of promises, emotional bonding, personalization and customer orientation. CRM hence helps to
enhance and improve the service quality by building strong relationship with customers.

SIX sigma:

Sigma is a Greek alphabet and is used in statistics as a measure of variation in a process i.e. the capability
of the process to perform defect free work.

A defect is anything that results in customer dissatisfaction.

As sigma increases, cost goes down while profitability, productivity and customer satisfaction go up.

Six sigma is a high performance, data driven approach for analyzing the root causes of business processes/
problems and solving them.

Six Sigma provides a suitable strategy with appropriate indicators toward continuous improvement.

Six Sigma methodology and statistical methods ensure the throughout improvement in quality and
reduction in rejects.

Phase 1-Define:

In the first sigma we determine what the problem is and what we want to achieve.

In order to fix the problem, you have to understand the problem. Can you clearly describe the problem that takes
place? Can you define it? What is happening? Why is it happening? The first step to six sigma is to clarify and
understand the customer service problem. Once this is done, were ready to move one towards fixing the problem.

Phase 2-Measure:

In the second sigma we measure the data and effect of problems taking place.
Once we understand what is going on, we can outline variables and details associated with our problem were
attempting to resolve. Seek out every piece of evidence associated with our customer service actions so that we can
accurately plan to perfect the service offering.

Phase 3-Analyze:
The third sigma is where analysis of root causes takes place.
Once weve identified the problem, measured the effect and outlined the details of the problem, we can analyze the
action taking place and what contributes to problems. Under what circumstances does the problem arise? What are
the root causes that bring about problems? Are there certain groups or people typically associated with the problem?
Is it related to one specific action? Is it limited to any particular segment of our business or offering? In short, where
and when exactly is the failure taking place?

Phase 4-Improve:

In the fourth sigma we finally address the typical solutions.


What are the steps commonly taken to resolve the problem? What recommendations can be make to keep the
problem from happening? What changes need to be made to our process to apply these recommendations? Who is
the final decision maker of these process changes? Who is going to institute change? How is the change going to be
communicated?

Phase 5-Control:

Finally, the fifth sigma is where we create the controls to keep the correct process going.
In order to maintain efficiency and productivity in our service offering we must maintain correct process. Controls
need to be created to ensure that quality work is being performed and that triggers are in place to prevent defects. In
service, a trigger could be maintaining employee morale. Ensuring adequate breaks, autonomy of work, optimal
equipment, or anything that will contribute to the sustained near-perfect performance from those who participate in
the system

Six Sigma can be an effective quality management blueprint to improve experience and decrease ineffective
practices leading to bad customer service.
Following Six Sigma in customer service can increase profits, improve customer service employee engagement, and
increase the quality of the customer experience creating customer loyalty.

MODULE 5:

Q16. Internal Marketing.

Internal marketing is the side of the service marketing triangle between your organization and your employees who
provide your services to customers. Marketing issues include adequate training on the services to be delivered and
customer satisfaction service techniques. Internal marketing requires you to be involved with your employees and let
them know the goals and even problems facing the business. Internal marketing also can include a performance
rewards system for employees who deliver the highest level of customer service.

Factors of internal marketing include:


Enabiling the promise.

Marketing to employees

Communications

Love your product,perform your task better..

Q17. Role of service personnel.

Service personal are the people chosen by the organisation. Once recruited they must give their best work. They
must be able to perform well and attract as many customers as possible. They must be able to fulfil customer needs,
customer service etc. They play the major role who would help the company to achieve their goals. They must also
be able to also influence the five dimensions of service quality: reliability, responsiveness, empathy, assurance, and
tangibles.

They are the service.

They are the organization in the customers eyes.

They are the brand.

They are marketers.

Their importance is evident in:

The services marketing mix (people)

The service-profit chain

The services triangle

Q18. Job characteristics

obtain and evaluate all relevant information to handle product and service inquiries

organize workflow to meet customer timeframes

maintain customer databases

communicate and coordinate with internal departments

follow up on customer interactions

Provide feedback on the efficiency of the customer service process.

Q19. Pricing strategies.

Q20. Distribution channels.

1. Company owned channels

2. Franchising

3. Agents and brokers

4. Electronic channels

Franchisees

service outlets licensed by a principal to deliver a unique service concept it has created
e.g., McDonalds, mothers pride playschool, Lakme beauty saloons, archies, NIIT, Snowhite drycleaners

Benefits:

Leveraged business format for greater expansion and revenues

Consistency in outlets

Knowledge of local markets

Shared financial risk and more working capital

Challenges:

Difficulty in maintaining and motivating franchisees

Inconsistent quality

Control of customer relationship by intermediary

Agents and Brokers

representatives who distribute and sell the services of one or more service suppliers

e.g., travel agents, independent insurance agents

Benefits:

Reduced selling and distribution costs

Intermediarys possession of special skills and knowledge

Wide representation

Knowledge of local markets

Challenges:

Loss of control over pricing

Representation of multiple service principals

Electronic Channels

all forms of service provision through electronic means

e.g., ATMs, university video courses, TaxCut software

Benefits:

Consistent delivery for standardized services

Low cost

Customer convenience

Wide distribution

Customer choice and ability to customize

Quick customer feedback

Challenges:
Price competition

Inability to customize with highly standardized services

Lack of consistency due to customer involvement

Changes in consumer behavior

Security concerns

Competition from widening geographies

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