This slideshow talks about important aspects of service marketing such as consumer's service expectations, evaluation, Design and Standard

1. Department of MBA
IMS Engineering College,
Ghaziabad
Marketing of Services
UNIT 2
Customer Expectation, service evaluation
Service Development, Design and Standard

2. Consumer Purchase Process
Need
Recognition
Information
Search
Evaluation
of
Alternatives
Purchase
Decision
Post
Purchase
Behaviour

3. Consumer Behaviour
Service vis-à-vis Goods
• Goods are returnable but services are not. Hence
customers purchase services after going through review,
feedback etc.
• In case of services, consumers look for good
‘experience’, hence service encounters are extremely
important. In case of goods, the product’s quality gives
good / bad experience.
• Physical evidence or ‘servicescape’ matters a lot in
service delivery, in case of goods it matters less
• Since services are given through people, interpersonal
skills of service provider are more important in case of
services than in case of products

4. How Consumer’s behaviour is
undergoing a change?
• The following factors are contributing to a
change in consumer’s behaviour:
Increase in income
Improvement in healthcare and education
Technology (consumers are comfortable with
it)
Digital ways of marketing (more awareness)
Leisure and entertainment (more spending)

5. Consumer
Service Expectations
• Desired Service (The level of service that the
customer hopes to receive) – Ideal service
• Adequate Service (The level of service that the
customer is willing to accept)

6. Zone of Tolerance
• Zone of tolerance – the extent to which the
customer is willing to accept the variations in
the delivery of service

7. Service
Expectations Hierarchy

8. Factors Influencing
Service Expectation
• Beliefs (information +WOM)
• Personal Philosophy towards service
• Needs and Wishes
• Service providers image and reputation
• Promises made through external
communication
• Prior Experience with the service provider

9. Managing customer’s
Service Expectations
• Communication with customer
• Service guarantees
• Price policy
• Positioning
• Service Quality

10. Perception of Services &
Evaluation
• Customers perceive services when they get it
• Perceptions can be related to the service,
manner of delivery and service provider
(organization)
• Perceptions are not fixed but change with time
depending on the experiences

11. RATER Model
for service Evaluation
• Reliability: Minimizing mistakes in service
delivery
• Assurance: Instilling a feeling of trust and
confidence in the customer
• Tangibility: Using relevant objects (products)
in service delivery
• Empathy: Keeping the foot in customer’s shoe
• Responsiveness: Quickly reaching out to he
customer

12. Customer Satisfaction
• Customers feel satisfied when they perceive
the service experience in line with their
expectations (if the service satisfies the need of
the customers)
• The higher the level of fulfillment, the higher
the level of satisfaction.
• Factors influencing customers satisfaction –
Service features, Customer’s emotions (state of
mind)

13. Service Encounters
• These are called the ‘moments of truth’ –
situations when the customer is experiencing the
service
• Service provider and customer are in contact with
each other during service encounter
• Service encounters can be – remote, telephonic,
face to face
• Out come of service encounters will decide
customer’s service perception based on which the
customer will feel satisfied or dissatisfied

14. Service Development,
Design & Standards
• For service to succeed, it is important to focus on
development, design and specification of service
• Service design is the activity of planning and
organizing people, infrastructure, communication and
material components of a service in order to improve
its quality and the interaction between the service
provider and its customers.
• The service specification is a written document that
grows up during the design process. It describes the aim
of the project in a detailed way and the evolution of the
ideas developed step by step.

15. New Service
Development Process
• The process for the
new service
development has
been mentioned as:
Idea Generation
Idea Screening
Concept Testing
Business Analysis
Service Development
Test Marketing
Commercialization
Monitoring

16. New Service
Development Process
• The Process of New Service Development
involves 8 major steps
• The first four steps are taken before product
development – these are idea generation (through
brainstorming), idea screening, concept testing
and business analysis
• The next four steps involve product development,
test marketing, commercialization and review.
• In test marketing, the service is given to a small
group of consumers and feedback is taken from
them regarding its features, performance and
quality

17. Service Levels
Note – Here, by product we mean the service
offering (service product)

18. Service Levels
• Core Service: What consumers are really buying
when purchasing a Service, in this, it is the core
problem or need which is addressed.
• Basic Service : Basic Service is one level up. It
refers to the actual Service being offered to the
customer
• Expected Service : Expected Service is what the
customer expects from the seller. E.g. in a two
star hotel stay service, air conditioner is expected

19. Service Levels
• Augmented Service : Augmented Service can
be defined as the Service in which the seller
has added something from his own.
Augmented means higher than the expectation
of the consumer
• Potential Service : Potential Service is one
which does not exist currently but has a
possibility of existing in future. E.g. wi-fi
services during fights

20. Customer Defined
Service Standards
• Service standards: Service standards are the
benchmarks in service delivery that are followed
by service organizations. E.g. Flipkart promises
that the product ordered by a customer will reach
his home within 2 working days, this is a service
standard of Flipkart.
• Service standards are important for evaluation of
services by organizations as well as customers
and also for improving service delivery

21. Customer Defined
Service Standards
• Service standards can be of two types:
• Hard standards: can be expressed in terms of
numbers and measured precisely e.g. time, no. of
calls etc
• Soft standards: cannot be expressed in terms of
numbers and cannot be measured precisely, these
can only be ‘experienced’ e.g. behaviour related
standards such as politeness, courtesy etc
• Service standards are normally developed by
organization

22. Customer Defined
Service Standards
• Service standards can also be defined by
customers, on the basis of their service
expectations.
• Customer service standards are a company's
rules or guidelines that inform and shape the
customer's relationship with the business at
every step throughout the customer experience.
These are visible to as well as evaluated by the
customers
• E.g. ‘namaste’ gesture by PVR cinema employees

23. Service Demand and Capacity
• Demand is the amount of a particular economic
good or service that a consumer or group of
consumers will want to purchase at a given price
• Managing Capacity means managing the limits
of an organization's resources, such as its labor
force, manufacturing and office space, technology
and equipment, raw materials, and inventory
• Capacity is usually constant whereas demand
usually fluctuates
• Overuse or underuse of a service results in Gap 3
of the Gap model- failure to deliver what was
designed and planned

24. Service Demand and Capacity
• Fluctuations lead to :
(a)Excess demand: the level of demand exceeds
max
capacity
(b)Excess capacity: demand is below optimum
(c)Demand exceeds optimum capacity: No one is
turned away, but quality may still suffer
(d)Demand and supply are balanced at the level of
optimum capacity: Staff and facilities are
occupied at ideal level

25. Strategies for
Managing Capacity
(High Demand)
• a) Stretch time, labor, facilities and equipment
• b) Train employees for multiple skills
• c) Hire part-time employees
• d) Pay the employees to work overtime
• e) Rent facilities and equipments
• f) Outsource activities

26. Strategies for
Managing Capacity
(Low Demand)
• (a) Carry out maintenance, repairs and
renovations
• (b) Conduct training for employees
• (c) Offer leave to employees
• (d) Retrench employees

27. Strategies for
Managing Demand
(High Demand)
• a) Communicate busy hours to the customers
• b)Offer incentives for non-peak usage
• c) Focus on loyal customers
• d) Communicate advantages of non-peak
usage
• e) Do not offer discounts

28. Strategies for
Managing Demand
(Low Demand)
• a) Attract current market segments by focusing
on sales
• and advertising
• b) Attract new segments with promotional
schemes
• c) Offer discounts
• d) Bring the service to the customer
• e)Modify hours of operation