Service Marketing Flashcards
Salient Features of Services
Intangibility: Cannot be seen or touched.
Inseparability: Produced and consumed simultaneously.
Perishability: Cannot be stored or inventoried.
Heterogeneity: Variability in service delivery.
Ownership: No ownership of the service, only its value.
Marketing mix of services
4Ps: Product, Price, Place, Promotion.
+3Ps: People, Process, Physical Evidence.
Focus: Customer experience, trust, and quality.
Difference: Goods vs. Services Marketing Mix
Product: Tangible vs. Intangible.
Price: Cost-based vs. Perceived value.
Place: Supply chain vs. Accessibility.
Promotion: Features vs. Trust-building.
+3Ps: Key in services for customer satisfaction.
Meaning of SERVQUAL
A framework to measure service quality by comparing customer expectations vs. perceptions.
Focuses on identifying and bridging service gaps to enhance customer satisfaction.
Dimensions of SERVQUAL
Tangibles: Physical elements of the service.
Reliability: Consistent and accurate delivery.
Responsiveness: Promptness in assistance.
Assurance: Staff competence and trustworthiness.
Empathy: Personalized, caring attention.
How SERVQUAL Helps
Identifies service quality gaps.
Enhances customer satisfaction.
Improves service delivery processes.
Builds customer trust and loyalty.
Provides a competitive advantage.
What is a Spillover Effect?
A spillover effect occurs when the growth or activity in one sector impacts other sectors positively or negatively.
Example: Growth in the IT industry boosts demand for education, real estate, and transportation.
Spillover Effects of Service Economy Growth in India
Boost to Employment.
Growth in Infrastructure Development.
Expansion of Knowledge Economy.
Contribution to Exports.
Urbanization and Lifestyle Changes.
Financial Inclusion and Digital Transformation.
Increased Demand in Ancillary Sectors.
Shift in Consumer Behavior.
Service Blueprint for a Hotel
Maps the entire service process into:
Customer Actions: Booking, check-in, stay, and check-out.
Frontstage: Visible interactions (e.g., reception, room service).
Backstage: Invisible staff activities (e.g., housekeeping, meal prep).
Supporting Processes: IT systems, procurement, and maintenance.
Lines of Interaction: Separate customer, visible, and backend processes.
Meaning of Services Gap Model
A framework to identify and address gaps between customer expectations and perceptions of service.
Aims to improve service quality by understanding discrepancies in service delivery.
Gaps in the Services gap Model
Gap 1: Knowledge Gap – Difference between customer expectations and management’s perception.
Gap 2: Policy Gap – Difference between management’s perceptions and service specifications.
Gap 3: Delivery Gap – Difference between service standards and actual delivery.
Gap 4: Communication Gap – Difference between what is promised and what is delivered.
Gap 5: Perception Gap – Difference between customer perceptions and expectations.
How service gap model helps
Identifies weaknesses in service delivery.
Focuses on aligning service with customer expectations.
Guides continuous improvement in service quality and customer satisfaction.
Process in Financial Services
Meaning:
Series of procedures and interactions that deliver financial services to customers.
Importance:
Ensures efficiency, trust, and consistency in service delivery.
Examples:
Online Banking: Easy and secure money transfer process.
Loan Application: Clear steps from documentation to loan disbursement.
Physical Evidence in Financial Services
Meaning:
Tangible elements that represent the intangible financial services.
Importance:
Builds trust, differentiates services, and reinforces the brand.
Examples:
Bank Branch Design: Clean, modern layout reflects professionalism.
ATM and Mobile App Design: User-friendly interfaces convey reliability.
Integrating Process & Physical Evidence
Why Integration Matters:
A seamless combination of process and physical evidence enhances the customer experience.
Example:
Account Opening: Clear process (forms, documentation) supported by well-designed physical evidence (modern branch, organized paperwork).
Key Benefit:
Builds customer trust, satisfaction, and brand loyalty.
What Does “customer as a Co-Producer” Mean?
Definition:
Customers play an active role in the creation and delivery of a service.
Key Points:
Active Participation: Customers provide information, make decisions, or interact with the service provider.
Customization: Customers help tailor the service to their specific needs.
Examples of Customers as Co-Producers
Healthcare Services:
Customer Role: Sharing medical history, making treatment decisions.
Impact: Affects the quality of diagnosis and treatment.
Restaurant Services:
Customer Role: Ordering, providing preferences, giving feedback.
Impact: Influences meal satisfaction and service quality.
Benefits and challenges of having customers as co-producers
Benefits and Challenges of Co-Production
Benefits:
Increased Quality: Customization leads to higher satisfaction.
Efficiency: Streamlined services tailored to customer needs.
Brand Loyalty: Active involvement fosters emotional connection.
Challenges:
Inconsistent Participation: Some customers may not engage fully.
Customer Misunderstanding: Potential for errors or dissatisfaction due to lack of knowledge.
Why Customers are Co-Producers:
- active participation
- customization
- Influencing service quality
What are E-Services?
Services delivered digitally through online platforms.
Example: Online banking, e-learning.
Key Features of e-services
Intangibility
online or 24/7 Accessibility
Customization
Automation
User Interaction minimal
Benefits and challenges of e-services
Benefits:
Convenience
Cost-Effectiveness
Scalability- large audience
Efficiency
Personalization
Challenges:
Technology Dependence
Security Concerns
Digital Literacy
Customer Trust
What is Service Life Cycle?
The stages a service goes through: Introduction, Growth, Maturity, Saturation, and Decline.
Helps businesses plan strategies for each phase.
Key Stages Service life cycle
Introduction: Launch and awareness.
Growth: Rapid adoption and scaling.
Maturity: Stabilized demand, intense competition.
Saturation: Market reaches full potential.
Decline: Reduced demand and phasing out.
Importance of Service Life Cycle
Strategic Planning: Tailors strategies for each stage.
Cost Management: Optimizes resource allocation.
Customer Retention: Adapts to customer needs.
Innovation: Drives service improvements.
Competitive Advantage: Maintains market relevance.
What is the Johnston Model?
A model that helps businesses segment the market based on customer needs.
Aims to offer tailored services for different customer groups.
Key Elements
Market Segmentation: Divides customers based on needs and behaviors.
Service Package: Different offerings for each segment.
Targeting: Focus on specific segments with tailored services.
Positioning: Market the service to appeal to the targeted segment.
Application and Example
Customization: Tailors services to meet unique needs.
Competitive Advantage: Differentiates from competitors.
Example: Hotel targeting leisure vs. business travelers with different offerings.
Servicescapes
Definition: Physical environment where services are delivered (e.g., lighting, design).
Importance:
Influences customer behavior and satisfaction.
Shapes brand image.
Example: Luxurious hotel lobby design.
Perishability & Inseparability in Service Marketing
Perishability: Services cannot be stored; unused capacity is lost.
Strategy: Dynamic pricing, last-minute deals.
Inseparability: Services are produced and consumed simultaneously.
Strategy: Focus on quality customer interaction and feedback.
CRM in Service Marketing
Definition: Strategies to manage customer interactions and data.
Role:
Personalization, retention, communication, and loyalty.
Example: Hotels tracking guest preferences to offer tailored experiences.
