SERVICE PRODUCT

SERVICE PRODUCT AUDIT

 Necessary for the company to know what the

customers perceive about the service product ,
and the main benefits they expect , seek &
experience from it.
 An impartial brand review – the service offer
audit- is necessary for the marketer to get the
correct proposition
 Market research cos

 Helps marketers in avoiding marketing myopia

CLASSIFICATION OF SERVICES
CREATING A PRODUCT RANGE
 Should offer a wide range of products
 This helps them to draw in more customers &
satisfy their varying needs.
 Helps in being more competitive

 A new firm may offer just one product

EXAMPLES
 Bata : the giant shoe manufacturer earler sold
only shoes but now it is also into apparels ,
accessories etc.
 On the other hand :

 Talwalkar’s : health & fitness chain of Mumbai

 Lakme beauty Saloon : Beauty Treatment while

Ayush Therapy Clinic : Ayurvedic treatment
 On the other hand :

 Air India : the national carrier also offers

accommodation through Centaur chain of Hotels
 Indian Railways : yatri niwas
 Thomas Cook offers the entire range of Travel
services : ticketing, visa & passport services,
parabanking, foreign exchange .

 SBI offers the entire range of retail banking

services like Personal Banking , credit cards,
home loans, personal loans, small business
finance, large institutional finance, international
banking, agricultural banking, insurance,
bancassurance etc.
 The complete range of a firm’s offers is called :
Product Mix .
PRODUCT MIX
 Width
 Length

 Depth

 Consistency

 Refer To Figure.
PRODUCT LIFE CYCLE
 Why should a marketer study PLC?
eg . Pool parlours in Mumbai & metros

 Characteristics of different stages?

CHARACTERISTICS OF STAGES OF PLC
 INCUBATION STAGE

 No revenues
 Only expenditure

 Ideation & testing of concepts

 Market Planning
INTRODUCTION STAGE
 Sluggish sales
 High cost per custmer

 Financial Losses

 Innovative customers or adopters

 Few (if any) competitors

GROWTH STAGE
 Increasing sales
 Cost per customer falls

 Profits rise

 Increasing number of customers

 More competitors
MATURITY STAGE
 Peak Sales
 Cost per customer lowest

 Profits high

 Mass market

 Stable number of competitors

DECLINE STAGE
 Declining Revenue
 Cost per customer low

 Profits fall

 Customer base shrinks

 Number of customers decline

POSTMORTEM STAGE
 No Revenues
 Quality time is spent in monitoring & servicing
the customers.
 Eg. Daewoo & IBM
MARKETING RESPONSES TO PLC
INTRODUCTION STAGE

 Service marketer can move with a high speed as

compared to the goods marketer as he does not
have to face problems of production, inventory ,
storage , logistics etc.
RAPID SKIMMING
 Expensive initiative, combining high price & high
promotion
 Directed at low aware & low willingness to buy
market.
 Very useful if the market size & potential is high
and likelihood of competition to quickly creep in
is very high.
 Service firms adopt this strategy when it has a
short term goal of profit maximisation
 Target market is : early adapters & innovators
who are ready to pay a high price for being the
early users
RAPID SKIMMING
 Eg. Lifetime membership fee for the upmarket
club ‘the club’ was half a million in 1998, got 183
members.
 Early entrants in Cell phone market,
Hutch/Orange, BPL mobile etc, followed this
strategy.
SLOW SKIMMING
 This strategy is used when the firm is confident
of earning well in time.
 Lack of competition due to requirement of heavy
investments in technology & systems
 Public sector under takings, infrastructure
services like airlines, telecommunications etc.
 Target customers are mostly , business &
industrial users
 Eg five star hotels, ERP & Supply chain mgmt
system providers like SAP, BaAn, Mindtree
Consulting etc.
RAPID PENETRATION
 When the service firm has a long term objective
 Entry barriers

 Eg. ICICI bank

 Big bazar

 LG & Samsung
SLOW PENETRATION
 When the market size is large
 Market is well aware of the service offer

 Market is sensitive to price

 But competition is almost non-existent