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What is a Service? Defining
the Essence
- An act or performance offered by one party to another (performances are intangible, but may involve use of physical products)
- An economic activity that does not result in ownership
- A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets
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Some Industries - Service Sector
- Banking, stock broking
- Lodging
- Restaurants, bars, catering
- Insurance
- News and entertainment
- Transportation (freight and passenger)
- Health care
- Education
- Wholesaling and retailing
- Laundries, dry-cleaning
- Repair and maintenance
- Professional (e.g., law, architecture, consulting)
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Classification of Services
Pure Tangible Product
Materials / Components
Computers
Major Product with
Minor Services
Product = Service
Major Service with
Minor Product
Business Hotels
Good Transportation
Banking
Pure Intangible
Service
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- Intangibility – Services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase.
- Inseparability - Services are produced and consumed simultaneously.
- Variability or Heterogeneity – Services are highly variable
- Perishability – Services cannot be stored.
- Non Ownership - Services are rendered but there is no transfer of title
Major Characteristic of Services
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The Marketing Mix
- The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion.
- Generally acknowledged that this is too narrow today; now includes , Processes, Productivity [technology ]People [employees], Physical evidence
- Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers.
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The “8Ps” of Integrated Service
Management vs. the Traditional “4Ps”
- Product elements
- Place, cyberspace, and time
- Process
- Productivity and quality
- People
- Promotion and education
- Physical evidence
- Price and other user outlays
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The Give and Get of Marketing
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Great Words on Marketing
- “The
purpose of a company is ‘to create
a customer…The only
profit center is the customer.’”
- “A business
has two—and only
two—basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs.”
- “The
aim of marketing is to make selling unnecessary.”
- “While
great devices are invented in the Laboratory, great products are invented
in the Marketing department.”
- “Marketing
is too important to be left to the marketing department.”
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Drivers of Customer Satisfaction
- Many aspects of the firm’s value proposition contribute to customer satisfaction:
- The core product or service offered
- Support services and systems
- The technical performance of the firm
- Interaction with the firm and it employees
- The emotional connection with customers
- Ability to add value and to differentiate as a firm focuses more on the top levels
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Marketers and Markets
- Marketers
are focused on stimulating exchanges with customers who make up markets – B2C
or B2B.
- The market
is comprised of people who play a series of roles: decision makers, consumers, purchasers, and influencers.
- It is absolutely
essential that marketers have a detailed understanding of consumers,
their needs and wants.
- Much happens before and after the sale
to affect customer satisfaction
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Stages of Customer Interaction
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What Changed in Marketing…
- Organize by product units
- Focus on profitable transactions
- Look primarily at financial scorecard
- Focus on shareholders
- Marketing does the marketing
- Build brands through advertising
- Focus on customer acquisition
- No customer satisfaction measurement
- Over-promise, under-deliver
- Organize by customer segments
- Focus on customer lifetime value
- Look also at marketing scorecard
- Focus on stakeholders
- Everyone does the marketing
- Build brands through performance
- Focus on customer retention
- Measure customer satisfaction and retention rate
- Under-promise, over-deliver
Old Economy
New Economy
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Are Banks truly
marketing-savvy and customer -
centric?
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- Myth 1 – The larger the range of products, the more customer-centric I am.
Mythbuster – The range of
products has
emerged from being
competition-centric.
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- Myth 2 – Better technology (read CRM) leads to
- better customer service.
Mythbuster – Technology
alone does not deliver,
helps people do.
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- Myth 3 – Launch a product and the customer will start
- using instantly.
- - Give a customer a card and he will learn how to play
- with it immediately
Mythbuster – Customers need
To be educated too…
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Mythbuster – Customers are not
only present where competition is.
- Myth 4 – The only way to get a customer is from
- competition.
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- Myth 5 – Just advertise and - You will sell.
Mythbuster – Advertising will
only sell,
Not retain customers.
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Myth 6 – No difference between marketing & selling
Mythbuster – “Selling focuses
on the needs of the seller; marketing
on the needs of the buyer.
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Myth 7 – In the absence of relationships ‘trust’ builds
financial brands
Mythbuster – Trust is not
a differentiator at all…
it is the very minimum that the customer expects!!
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So what will the differentiators
be :
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The real differentiator of
customer – centricity in a
commoditised world of financial products -
Customer Service !
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- Thank You
- sagarnarsian@yahoo.com
Drucker, Yogi Berra, A Chinese Proverb, William Davidow, David Packard