CURRENT AND FUTURE

CHALLENGES IN SERVICES
MARKETING
 INSEPERABIL
ITY
MARKETING CHALLENGES
 Physical connection of the service provider to the service
 Involvement of the customer in the production process
 Involvement of other customers in the production process

POSSIBLE MARKETING SOLUTIONS

 Emphasis on selecting and training public contact personnel
 Consumer Management
 Use of multisite locations

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 HETEROGENEI
TY
MARKETING CHALLENGES
 Lack of ability to control service quality before it reaches the consumer.
 Most errors are one-time events and cannot be foreseen nor corrected ahead of time
 Consistency of service varies from firm to firm, among employees of the firm and also
while interacting with the same service provider on day-to-day basis
 Service
standardization and quality control are difficult to achieve and maintain since
each employee is a different personality
POSSIBLE MARKETING SOLUTIONS
 Customization

 Standardization

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 INTANGIBILI
• TY
Means that cannot be seen
• Service cannot be touched
• There is no precise standardisation method for services
• Services cannot be patented
• There are no inventories in services
• The consumer is part of the service process because he consumes the service.
• This causes increase in the uncertainty level
• To reduce this factor, customers look for signals of service quality.
• Bowen (1990) argued that intangibility has been over emphasized and it is difficult to understand.
• ‘Intangibility can be reduced by using strong messages in advertising and publicity in order to
support a clear position’ (Davies, 1998).
EXAMPL
ES
• In case of online ticket booking

• In case of restaurants
• The ability of a teacher to teach
• Airline passengers have no guarantee for a good flying experience
or safe arrival of their baggage before the journey.
• A cosmetic surgery where the result of the surgery can’t be seen
by the consumer before the surgery.

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CHALLENG
ES
• Standardization
• Pricing the service
• Buying a promise

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 NON
•
OWNERSHIP
You cannot own or store a service like you can a product
• Services are used or hired for a period of time
• Customer pays only to secure access to or use of the service

EXAMPLES
• Aeroplane ticket
• Hotel room
• Banking services
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TRANSUMERS &
TRANSUMPTION
• Transient + Consumer = Transumer
• Individuals that engage in renting and non - ownership
consumption are called Transumers
• Example – Zipcar & Zoomcar

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 CHALLENG
ES make
• Non ownership can sometimes
it difficult for a customer to assess
and appreciate the advantages of
purchasing the service.
• The marketer therefore needs to pay
particular attention in emphasizing
benefits of non- ownership

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 PERISHABIL
ITYit cannot be repeated in exactly
• Once a service has occurred
the same way
• You cannot put service in the warehouse, or store in your
inventory

EXAMPLES
• Restaurants
• Doctors treatment
• A movie or airline ticket

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 CHALLENG
ESperformance as balancing supply
• Perishability can affect company and
demand is very difficult

EXCEPTIONS

• Services are stored in systems, buildings,

machines, knowledge and people. The
emergency clinic is a store of skilled
people, equipment and procedures. The
hotel is a store of rooms

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 CUSTOMER
•
•
MISBEHAVIOUR
No proper mechanism to manage the misbehaviour of customers towards the frontline employees.
70% of female retail workers are subjected to sexual harassment by consumers at work.

Negative outcomes for frontline workers

includes increased intention to quit, loss
of interest in their work,
withdrawal from customer
interactions, and reduced job
performance.
 PRODUCTIVITY IN SERVICE
• Difficult to SECTOR
define productivity in service sector.
• To different people, productivity means different things.
• Hard to standardize the inputs and outputs which are
highly heterogeneous.
• Trade-off between quality and quantity.
• Low or negative productivity growth in some service
industries is connected to measurement problems.

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 PROBLEMS IN MEASURING
• PRODUCTIVITY
Difficult to measure the outputs. (Insurance, gambling, banking,
options trading)
• The output includes quality, which is intangible and difficult to quantify.
• The inputs also include both intangible and tangible elements

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 CUSTOMER
EXPECTATIONS
• Customer expectations are always evolving.

• Different customers have different expectations from the same

customer.
• Types of Expectations:
• Fuzzy Expectations
• Implicit expectations
• Explicit expectations
• Unrealistic expectations

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 DEFINING AND MEASURING
QUALITY
Garvin identifies five perspectives
• Transcendent view: Innate excellence, a mark of
uncompromising standards and high achievement.
• Product based approach: Quality as a precise and
measurable variable
• User based definition: Quality lies in the eyes of the
beholder
• Manufacturing based approach: Conformance to internal
specifications driven by productivity and cost containment.
• Value based definition: Defines quality in terms of value and
price 16
 DESIGNING AN EFFECTIVE
SERVICE CUSTOMER
ORGANIZATION
Presence or absence of intermediaries
•Cut down on cost v/s service quality of interaction High
contact v/s low contact
• More involvement of the customer with the service(moment of truth),
There are greater risk of mistakes of poor service, Complex to
manage
• Usually through mail or telecommunication contact, less
complex, management control can be tighter.

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Duration of service delivery process:
• More duration – more value has to be generated and cost will be high due to
internal monitoring and communicating those values to customers.
Level of complexity:
• High complexity – assist the user every stage – high cost –train the personnel, risk
of going wrong is high.
Degree of risk:
Service managers should identify the consequences of the service failure for their
customers.
Failure may range from personal inconvenience to monetary loss.

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 STRATEGIC CHALLENGES IN
SERVICES
MARKETING
Positioning a service in marketplace
Competitive advantage
• Value for money
• People are the key
• Convenience
• Quality and speed
• Differentiation in meaningful ways

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 TO SELECT THE TARGET
• Identifying theMARKET
market segments with better opportunities
• Relating firm’s ability to match competing offerings rather than looking only for
sales and profit potential.
• To judge the current and prospective customers how do they see value
generated by the provider.
• Redesigning the existing services: Easy or complex?
• Believing in expert definition of expert’s perception to reality and customers
perception to reality is way to different.
• Concept of copy positioning. : E.g. Marlboro man
• Coping up with changes of the perception and expectation of the target market.
E.g. Nokia

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 HIT
 Competitive Pricing LIST
-- Indigo Airlines

 Communication – Internal and External

 Using Social Media – Lens kart

 Technology – Ola (security)

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 Quality Control – BPO (cut calls), KFC mouse incident

 Efficient Automation ( No Human interaction). E.g. Health care.

 Security Issues E.g. banking sector.

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 REFERENC
•
•
ES
Harris, S. B. (2004). Services Marketing. PALGRAVE.
JHA, S. (1994). Services Marketing. HIMALAYA PUBLISHING HOUSE.
• LOVELOCK, C. H. (1996). SERVICES MARKETING. Prentice Hall, Inc.
• Cengagebrain. (n.d.). Retrieved from
http://www.cengagebrain.com.au/content/hoffman35209_0170135209_02.01_chapter01.pdf
• Services Marketing. (n.d.). Retrieved from http://areas.kenan-
flagler.unc.edu/Marketing/FacultyStaff/zeithaml/Selected%20Publications/Problems%20an
d%20Strategies%20in%20Services%20Marketing.pdf
• Economic Times. (n.d.). Retrieved from
http://articles.economictimes.indiatimes.com/2013-12-
22/news/45475783_1_aditya-ghosh-indi-go-interglobe-aviation
• Ibnlive. (n.d.). Retrieved from
http://www.ibnlive.com/news/india/amazon-india-launches-one- day-delivery-service-in-
select-cities-at-rs-99-654358.html
• Medianama. (n.d.). Retrieved from http://www.medianama.com/2014/07/223-future-group-e-
commerce/
• NDTV. (n.d.). Retrieved from
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