Services Marketing - CLassification

Service Classification
PGDM T4
Dr. Aby Abraham
Servicescapes
• The Servicescape perspective considers all the experiential elements
consumers encounter in a service context. The physical service
environment consumers experience
• Service environments, also called servicescapes, relate to the style
and appearance of the physical surroundings and other experiential
elements encountered by consumers at service delivery sites (Bitner
1992)
Servicescapes serve four purposes
• they engineer the consumer experience and shape consumer
behaviour
• they convey the planned image of the firm and support its positioning
and differentiation strategy
• they are part of the value proposition
• they facilitate the service encounter and enhance both service quality
and productivity
Low-Contact Service Encounters
• Voice-to-voice : Telephone based
• Price checking, making a booking or an order
• After-sales service and service recovery processes
• Customer expects : “adaptiveness”, “assurance”, “empathy” and
“authority”.
• Self-service encounters : Self-service technology-enabled encounters
allow for the production and consumption of services without relying on
service personnel
• Consumers are often dissatisfied with SSTs if they deliver poor service or
the technology fails
Paradigm in Service Marketing
Source: https://theinvestorsbook.com/service-marketing.html
Service Categories
• The services can be either
tangible or intangible;
people-oriented or product
oriented
People Processing Services
• People processing here refers to the physical
presence of the customer at the service
system or location, to avail the service. For
example, a person needs to be physically
present at the ‘salon’ to get a hair cut.
Product/Possession Processing Services
• Services are related to a specific product or
its possession with limited or no involvement
of the customer
• Services offered by ‘packers and movers’
Mental Stimulus Processing Services
• The services which influence the consumer’s
mental abilities, religious believes, behaviour,
perception, lifestyle and attitude are termed as
mental stimulus processing services.
• Educational institutes deliver knowledge which
develops the mental ability of a person.
Information Processing Services
• These are a unique form of intangible products
where the information acts as a product, or
information technology is used.
• Such decisions are considered to be critical due
to massive investment and a high level of risk;
therefore, absolute customer involvement can be
seen over here.
Customer Oriented
• Customization of the product offering
becomes essential as compared to that of
the manufacturing industry.
• The customer’s needs, perception and
requirements are given significance while
carrying out the business operations in as a
service provider.
Single Take
• Service is a one-take action, i.e., it cannot be restored, redone,
replaced or exchanged. It is intangible and irreversible; thus, it needs
to be perfect and well-delivered at the first time itself.
• Requires trained and experienced personnel to provide services
because a lousy consumer experience may lead to negative publicity,
which affects the brand name and equity.
Service as a Process
• Service industry, the process plays an
important role - the steps involved in
availing the service by the consumer.
• An organization must keep a watch over
each of these steps.
• It must ensure humbleness, honesty and
sincerity of the personnel involved in the
interaction with the consumers, while the
execution of each of these steps.
Speed and Accuracy
• The consumers prefer prompt services without

any interruption.
• Therefore, the rate with which the service is
provided is considered as a parameter for
efficient service. It is also responsible for the
selection of one service provider over the other,
by the consumers.
Characteristics of Service Marketing
• The basic features which differentiate
service marketing from the usual
marketing are
Intangibility
• The service is considered as an intangible product
• The consumer’s buying decision is wholly based on his understanding
of the service offering. He/she spends ample time and efforts in
decision making, especially for those services which involve huge
investment and risk.
• The marketer’s assurance on the performance of the service
influences the consumer’s decision.
• Even a little negative publicity may lead to consumer turnover
Use of Tangible Products
• The service providers make use of various tangible or real products to
deliver appropriate service to the consumers. The products absorbed
for providing services create value for the customers.
• For instance, a travel agent needs to book train tickets, resorts etc.
(which are usually available in a physical form) for the clients.
• Thus, the traveller’s experience of the journey is based on the
tangiables available to him/her.
No Stock Maintenance
• The services are intangible and are provided then and there; thus,
unlike products, no inventory needs to be maintained in such cases.
• The profitability in the service industry depends upon the excellence
of the service provider and business operations.
• A photographer is known for his/her skills, clicks and portfolio, and
he/she doesn’t need to maintain any stock.
Low Price Sensitivity
• The consumers are not price-
conscious but are more
concerned about the quality of
service they get. A zero-defect
service product has the highest
earning potential.
Value Creation Process
• The four significant elements or 4P’s of a service which is responsible
for consumer satisfaction and value creation are the paces, people,
proof and process involved.
• The service marketing mix constitutes of these elements along with the
traditional marketing mix elements, i.e., product, price, promotion and
place.
• Ola cab services are known for the instant booking of cabs, humble
drivers, facility of ‘one-time password’ and easy app accessibility
Assessing Market
Opportunities & STP
PGDM T4
Dr. Aby Abraham
Services Classification - Basis
• Market Segment
• Degree of Tangibility
• Skills of the Service Provider
• Goals of the Service Provider
• Degree of Regulation
• Degree of Labour Intensiveness
• Degree of Customer Contact
• Market Segment
• B2B
• B2C
• Degree of Tangibility
• Rental Goods (Hotel Room, Car, etc)
• Owned Goods (TV Repair, House repair, etc)
• Non Goods (Education, Banking, etc)
• Skills of the Service Provider
• Professional (highly skilled : Legal, Medical, Management, etc)
• Non-Professional (unskilled : Taxi, Security, Laundry, etc)
• Goals of the Service Provider
• Profit (Airlines, Hotels, Insurance)
• Non-Profit (Postal services, Public Libraries, NGO)
• Degree of Regulation
• High Regulation (Airlines, Railways, etc)
• Limited Regulation (Hospitality sector)
• No Regulation (Personal Services : Barber, Laundry, Beauty Salon)
• Degree of Customer Contact
• High Contact (Customer spends a long time : Education, Hospital, etc)
• Low Contact (Customer spends few minutes to hours : Postal services,
Appliances repair)
• Degree of Labour Intensiveness
• Equipment Based Services
• Completely Automated Services (ATM, Coffee Vending Machines)
• Unskilled Operators (Dry Cleaning, PoS machines)
• Skilled Operators (Cranes, Airlines, Trains)
• People Based Services
• Unskilled (Security Guards, Housekeeping)
• Skilled (Printing, Catering)
• Professionals (Lawyer, Doctor, Management Consultant)
Assessing Market Potential
• Market potential - The total demand for a service in a given business
environment
• Depends on:
• Market Size
• Market Growth potential
• Competition
• Profitability
• Service and Consumer type
STP
• Segmentation - grouping consumers by some criteria
• Targeting - choosing which group(s) to sell to
• Positioning - consumer perception of a brand or product relative to
the perception of competing brands or products
Segmentation
• Segmentation is diving the market into smaller groups of buyers with
distinct needs, characteristics, or behaviours that might require
separate marketing strategies or mixes.
Ways
• Geographic Segmentation - grouping consumers based on their
region, city, climate etc.
• Demographic - group consumers based on age, gender, race etc.
• Geodemographics - used for classifying and characterizing
neighbourhoods or localities based on the principal that residents
living near each other are likely to have similar demographic, socio-
economic and lifestyle characteristics.
• Psychographic - divides a market into different groups based on social
class, lifestyle, or personality characteristics
• Behavioral – Divides buyers into segments based on consumer
knowledge, attitudes, uses or response to a product
Targeting
• After dividing the market into segments, the organization then
evaluates the different segments and decide how many or which
segment it can serve best.
Targeting approaches
• Undifferentiated Marketing (Mass Marketing) – Under this strategy
the marketer attempts to appeal to one large market with a single
marketing strategy. While this approach offers advantages in terms of
lowering development and production costs, since only one product is
marketed, there are few markets in which all customers seek the
same benefits.
Targeting Approaches
• Differentiated Marketing – This is were the firm targets more than
one market segments by introducing several products, each aiming at
a different segment.
• Concentrated Marketing (Niche Marketing) - This strategy combines
mass and segmentation marketing by using a single marketing
strategy to appeal to one or more very small markets.
• Customized or Micro-Marketing – This target marketing strategy
attempts to appeal to customers with specific wants. For micro-
marketing segmentation to be effective the marketer must, to some
degree, allow customers to “build-their-own” products
Positioning
• Positioning is concerned with the perception customers hold
regarding a product or company. In particular, it relates to marketing
decisions an organization undertakes to get customers to think about
a product or company in a certain way compared to its competitors.
Consumer typically form their understanding of the product over a
period of time using information from a variety of sources
Positioning in Competitive Market
STP for Rajagiri Business School
• Segmentation
• Targeting
• Positioning
Apply the concepts. Submit as a small write-up.

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Service Classification

• The consumers prefer prompt services without

Apply the concepts. Submit as a small write-up.

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