UNIT IV

SERVICE DELIVERY,
PRICING AND PROMOTION

POSITIONING OF
SERVICES

Projecting the image of the Product or

Service
To Influence the Perceptual Process of
Consumers against a Product or
Services
What you do to a Product. What you
do to the mind of the Prospect

STEPS IN DEVELOPING A
POSITIONING STRATEGY

Identify the Competitors

Determine how the Competitors are
Perceived and Evaluated
Determine the Competitors Position
Analyze the Customers
Select the Position
Monitor the Position

WAYS OF POSITIONING
SERVICES

By Attributes, Features or Customer Benefits

By Price Value
By Use of Application
By Users or Class or Users
With Respect to Product Class
Against Competition
By Endorsement
By Quality Dimensions
By Service Evidence
By

People, Physical Evidence, Process

By Availability
By Comparison

FIVE DIMENSIONS OF
SERVICE QUALITY

Tangibles
Reliability
Responsiveness
Assurance
Empathy

DIFFERENTIATION
STRATEGIES IN SERVICES

Best Cost Provider Strategy

Based on Low Cost
Based on Differentiation

SERVICE DELIVERY

Service Place or Service Distribution

Distribution of Services differs from
Tangible Goods
Objective of Delivery Service --- Right
Time, Right Place, Accessible to
Consumers with ease and convenience.

CHARACTERISTICS OF
SERVICE DELIVERY

Inseparability of Production and

Consumption
Difficulty in Balancing Demand and
Supply
Lack of Standardization of Services
Recovery Services

DESIGNING DELIVERY
SYSTEM

Elements of Service Delivery System

The

Market
The Service Encounter and Experience
Retention

SERVICE DELIVERY
STRATEGIES

Multi Site Strategy:

Dominate

the Service Arena

Started as Single Site Operations
Repeating the Same Model and Formula at
Other Locations
Eg: KFC, Mc.Donalds, Mega Mart, Chennai
Silks

CONT

Multi Service Strategy:

To

grow by Multiplying the Services

Here the Services are Expanded
Add New Services to its Portfolio to Offer an
Expanded assortment to Satisfy its
Customers Better.

CONT

Multi Segment Strategy:

The

Services offered remain more or less

constant whereas the Market Segment that
is Served Varies.
Eg: Cinema Theatres, Hotels, Exhibitions.

CONT

Hybrid Strategies:
Well

Defined and Clearly Differentiated

Involves Multi Site, Multi Service and Multi
SegmentStrategies.

SERVICE CHANNEL

To handle distribution of Services

Made available to the Target Customers
Two Service Marketers:
Service

Principal : Creates the Service

Concept
Service Deliverer : Interact with the
Customer in the Actual Execution of Service.

ISSUES FOR CHANNEL

SELESCTION

Market Coverage
Costs & Other Economic Criteria
Control
Flexibility / Adaptability
Overall Ability to Add Value

KEY CHANNELS

Agents & Brokers:

Franchising:

Service Providers Agents

Selling Agents
Purchasing Agents
Facilitating Agents
To Expand the Business at Min Cost, Maintain
Consistent Quality & Share Financial Risks

Electronic Channel:

Online Marketing

MANAGING EFFECTIVE
SERVICE DELIVERY

The place on Distribution of Services

refers to Availability of a Service
When and Where it can be Purchased
The Service Provider gain access to
Potential Buyer of the Services Product

PRICING OF SERVICES

Service Pricing is Differs from The

Pricing of Goods
Price has single name in Manufacturing
Sector and it takes different names in
Service Sector
Eg:
Advertisement
Boarding

& Lodging
Share and Stock

OBJECTIVES

Profit Maximization
Increase Sales Volume
Status Quo Oriented Objectives
Society Oriented Objectives
Survival
Maximize Market Share
Service Quality Leadership
Operation Oriented Objectives
Patronage Oriented Objectives

COMPONENTS

Cost
To

make a Profit must Recover the Full Cost

Add Sufficient Margin to yield Profit
Loss Leaders

Value
Value

is Low Price
Whatever want in a Product
Quality = Price Pay
What I Get for What I Give

Competition
Increase

number of Competitors
Increase number of Substituting Offers
Wider Distribution of Competitors and / or
Distribution

METHODS

Cost Based Pricing

Variable

Cost
Fixed Cost
Financial Cost and Profits

Competitor Based Pricing

Going

Rate Pricing
Sealed-Bid Pricing
Pricing Below the Competition
Pricing Above the Competition

CONT

Demand Oriented Pricing

By
By
By
By
By

Customer
Product or Service
Location
Time
Quantity

Value Bases Pricing

PRICING STRATEGIES

Price Discounting
Odd Pricing
Penetration Pricing
Bundled Pricing
Prestige Pricing
Market Segmentation Pricing
Loss Leadership Pricing
Bid Pricing
Money Back Guarantees
Gain and Risk Sharing Pricing

SERVICES MARKETING
TRIANGLE

Variants
Company
Customers
Employees

or Providers

Environment
Internal

Marketing
External Marketing
Interactive Marketing

CONT

INTERNAL MARKETING

Occurs within the Company or

Organization
Aligns, Motivates and Empower
Employees to satisfy the Customer
Viewing Employees as Internal
Customers
Role of Internal Marketing:
Management

of Change
Building Corporate Image
Strategic Internal Marketing

CONT

Benefits:
In

Empower
Encourage
Employee Development
Coordination

In

Employee Perspective

Company Perspective

Operational Framework
Help Analyzing Customers
Evaluating Cost of Implementing Strategy

EXTERNAL MARKETING

Firm engages in to Set up its Customers

Expectation
Make Promises
Communicates to the Customer before
Service Delivery
Promotion Mix for External Marketing:
Advertising
Personal

Selling
Sales Promotion
Publicity and Public Relations
Direct Marketing.

CONT

Essentials of External Marketing

Motivate

your Troops
Remind Existing Customers why they are
Customers
Generate New Leads
Recruit Great People from your Competitors
Garner more Positive Publicity
Build the Brand

INTERACTIVE MARKETING

Interaction between the Front Office

Employees and Customers
Interaction between Buyer and Seller
Conceptualization and Implementation
of a Marketing Policy

CONT

4 Cs of Delivering Customer Service

Convenience
Connectedness
Choice
Creativity

Methods
Profile

of the Customer
Purchase Made
Quantity Purchased

SERVICE MARKETING
COMMUNICATIONS

Promotion compasses all the Tools in the

Marketing Mix whose major role is
Persuasive Communication
Promotion includes, Advertising,
Personal Selling, Sales Promotion and
Other Selling Tools

OBJECTIVES

General Objective
Build

Awareness
Differentiate the Service
Communicate the Benefits
Maintain Overall Image

Objective Targeted at Customers

Increase

Awareness on New Services

Encourage Trial
Encourage Non Users
Persuade Existing Customer to Continue Service
Reinforce Advertising

Objective Targeted at Intermediaries

Persuade

Intermediaries

CONT