UNIT II

SERVICE MARKETING
OPPORTUNITIES

ASSESSING SERVICE
MARKET POTENTIAL

Determine the Potential Buyers and

Users of the Product or Services
Determine how many individual
Customers are in the Potential Groups of
Buyers Defined in the Previous Stage
Estimate the Potential Purchasing or
Usage Rate

CLASSIFICATION OF SERVICES

Classification based on Degree of

Involvement of the Customer:
People

Processing - School or training

center for dance the students availing the
services have to be present in person
Possession Processing - Person wants his
car to be serviced
Mental Stimulus Processing Advertising, entertainment, and education
and consultancy services
Information Processing - Accounting,
insurance, legal services

CONT

Classification based on the Service

Tangibility:
Highly

tangible Rent
Service linked to tangible goods Organization buys a photocopying machine,
the manufacturer offers free service for a
few years
Tangible goods linked to services Airline services-offer food and magazines to
passengers
Highly intangible - Massage parlor

CONT

Classification based on Skills and

Expertise Required:
Professional

services - Doctor, a Pilot, an

IT consultant or a corporate-trainer
Non-professional services - Baby-sitting
and housekeeping

CONT

Classification based on the business

orientation of doing service
provider:
Not-for-profit

organizations government schools and social service

organizations are not in the business to
make a profit.

Commercial

organizations - Airlines,
insurance firms and restaurants charge
customers for the services

CONT

Classification based on the type of

end user:
Consumer services - , Beauty care,

physiotherapy and hair Cutting

Business

to Business (B2B) service -

Market research, consultancy and

advertising
Industrial services - Installation and
plant maintenance

EXPANDED MARKETING MIX

MARKETING MIX

Product
Price
Place
Promotion

EXPANDED MARKETING
MIX

People
Physical Evidence
Process

SERVICE MARKETING MIX

Product
The

core service of a restaurant is to serve

good food to the customers while the
secondary service includes providing them
with a good ambience. It is easy to
differentiate products from one another
when compared to services
How can a customer differentiate between
the services of two banks which offer similar
schemes and interest rates

CONT

Price
The

owner of a movie theater can increase

or decrease the price of tickets depending
on the demand for them. Similarly, hotel
owners can raise the room tariff during the
peak season and lower it during the lean
season.

CONT

Place
ATMs

to their customers at all important

locations to improve accessibility to their
services.

Promotion
Encouraging

and promoting positive wordof-mouth publicity, developing strong

brands, offering a trial use of service for the
customers and finally, by managing
advertising and public relations effectively
to clearly communicate the message to the
customers.

CONT

People
When

a customer behaves pleasantly in a restaurant and

creates a good ambience, it enhances the experience of
other customers as well

Physical Evidence
For

example, courier company FedEx differentiates

itselffr<Jm its competitors based on its delivery process. It
promises prompt and perfect delivery to customers at all
times of the year. This confidence is founded on an
efficient delivery process developed by the company that
encompasses various stages, right from collecting the
parcel, to maintaining a database, to tracking the parcel
continuously and delivering it at the right place in time

Process
Banks

have introduced ATMs to offer convenience to

customers and also reduce the human element in the
service delivery process

SERVICE MARKETING
ENVIRONMENT

Micro Environment
Suppliers
Market

Intermediaries
Customers
Competitors
Public

Macro Environment
Demographic

Environment
Economic Environment
Physical Environment
Technical Environment
Political & Legal Environment
Social & Cultural Environment

TRENDS IN SERVICE
MARKETING ENVIRONMENT

Applying Product Marketing Techniques

to Services.
Branding Services
Internal Marketing of Services &
Services Organizations
Niching Service
Direct Sales of Services Internationally.

UNDIFFERENTIATED
MARKETING APPROACH

The undifferentiated marketing

approach, also known as the mass
marketing approach, aims at serving all
the consumers by offering a single
product/service
Eg : An insurance company that offers a
single policy for insuring

DIFFERENTIATED
MARKETING APPROACH

The differentiated marketing approach,

also known as the product-variety
marketing approach aims at targeting
consumers of various segments by
offering different products or services
each segment.
Eg : The airlines from the earlier
example may opt to serve the business
traveler segment, domestic traveler
segment, and international traveler
segment, and might design its
marketing mix to cater to the needs of
the consumers of all the three segment

CONCENTRATED
MARKETING APPROACH

The concentrated marketing approach,

also known as the single segment
strategy, aims to serve limited
segments in the total market.

MARKET SEGMENTATION
IN SERVICE

A marketer's 'market segment

consists of his existing as well as
prospective customers whose
needs, desires, and expectations
are different from the customers of
other segments and match the
resource-constraint set of the
marketer.

BASES OF MARKET SEGMENTATION

Demographic Segmentation
Age
Sex
Size

and structure of family

Income
Educational level

Geographic Segmentation
Psychographic Segmentation
Life-style
Personality
Behaviorist

Segmentation

Benefit Segmentation
Volume Segmentation

REQUIREMENTS FOR
EFFECTIVE SEGMENTATION

Measurability
A

firm that has no intermediaries and sells

its products directly to the customers can
easily gather information relating to
customer purchase behavior like frequency,
mode of payment, volume, and product
groups, from their existing customer
database

Accessibility
If

a service is aimed at attracting the

teenager segment, then the advertisements
should be developed keeping the target
segment in mind.

CONT

Substitutability
A

very niche segment like young graduates

working in shifts (especially those in the
BPO and related sectors), might not be a
good choice. Ideally, a large segment that
has the capability of earning and sustaining
profits should be targeted.

Actionability
Ability

of firms to effectively design and

manage marketing mixes in order to attract
and serve different segments.

PROCESS OF MARKET
SEGMENTATION

Identify Bases for Segmenting the

Market
Develop Profiles of Resulting Segments
Develop Measures of Segment
Attractiveness
Select the Target Segments
Ensure that the Target Segments are
compatible

SERVICE MARKETING
TARGETING

Targeting follows market segmentation as a

natural step and is defined as the process of
estimation and comparison of the previously
identified segments for selecting one or more
segments that fetch the best results for the
business.
Marketers compare the segments based on their
attractiveness in terms of their ability to earn
and sustain profits, and their compatibility with
the objectives and resources of the company.
A fitness and beauty center that targets young
women who are figure and health conscious is
likely to earn more profits than just offering
services to women of all ages.

BASES OF MARKET TARGETING

Segment Size and Growth Potential

An

educational institution should collect the current

data for full-time students, part-time students, and
distance-education students and then compare the
data based on their ability to earn profits for the
institution to choose its target segment

Structural Attractiveness
Marketers

should first analyze the segment

attractiveness on the basis of its present and Potential
Competition

Company Objectives and Resources

Evaluation

of a segment alone, based on its size,

growth potential and structural attractiveness is
insufficient while choosing the target segment.
An airline that aims to serve the business class and to
top the list in the business traveler segment nationally
and internationally, should have the necessary
resources to serve the needs of business travelers.

TARGETING STRATEGIES

Single-segment Strategy
Selective Specialization
Product Specialization
Market Specialization
Full-Market Coverage

GUIDELINES FOR SELECTING

TARGET MARKET

Target Certain People

Affordable Service
Targetable
Track Record of Consumer
Estimating the Record
Market Research.

POSITIONING OF
SERVICES

Positioning is defined as the

process of establishing and
maintaining a distinctive place in
the market for an organization
and/or its individual product
offerings.

POSITIONING STRATEGIES

Attribute Positioning
Allahabad

Bank positions itself as the oldest bank in India

Benefit Positioning
Banks

like ICICI and Citibank offer facilities like A TMs and

internet banking to their customers.

Use/Application Positioning
India

positions itself as. the destination for tourists

seeking inner peace

Competitor Positioning
llPM

positions itself against the IIMs

Category Positioning
Entertainment

park

Quality/Price positioning
Some

of the OberoiHilton hotels are positioned as high

quality, high-price hotels. The Taj group is trying to
position some of its hotels in the 'value for money'
category.