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CREATING VALUE IN SERVICE ECONOMY

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Course Detail
Course Distribution
Program(s) Attached To MBA
Core/Elective Elective
Course Pre-requisites Fundamentals of Marketing , Marketing Management, Service
Marketing

ASSESSMENT STRUCTURE
Assessment Items Percentage
Quiz(s) 5
Assignment(s) 5
Class Participation NIL
Midterm Examination 30
Final Examination 40
Project / Presetation 20
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MARKETING

Marketing Is Managing Profitable Customer Relationships

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Marketing Defined

 Old Concept:  Telling And Selling

 New Concept:  Satisfying Customer Needs

How?
 Understand Consumer Needs
 Develop Product Having Superior Values
 Price Promote And Distribute Them Effectively
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No single Definition

Mid 20 Century 1940s

 In 1940 AMA (American Marketing Association) Published A Definition And It Was Published In 1960. According To
It The Marketing Is The Performance Of Business Activity That Directs The Flow Of Product From Producer To
Consumer.
 In 1947 It Is Associated With The Person Status And Defined That “The Marketing Is Delivery Of Standards Of Living
To Society”
1960’s And 1970’s
 In This Era The Marketing Was Considered As The Important Business Function And Define Groups In This Like
 In 1965 The Marketing Is Defines As The Process In Society By Which The Demand Structure Of Economic Goods Is
Satisfying Through Conception, Promotion, Exchange And Distribution Of Goods And Services To The Consumer
 In 1970 The Marketing Is Defined As “Marketing Is Total System Of Interacting Business Activities Designed To Plan
Price Promote And Distribute What Satisfying Goods And Services To Present The Potential Customer
 Marketing Is Any Of Transaction In Which The Commodity Is Transferred From One Owner To And Other Owner
 In 1977 It's Defined As The Activity Of Individual And Organization To Satisfy The Human Wants
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80’S Decade
 In 1980 The Kotler Defined The Marketing As The Human Activity Directing The Human Needs And
Wants By Exchange Process
90s Decade
 The Marketing Is Anticipating Management And Satisfaction Of Demand Through Exchange
Process
21st Century
 The Marketing Of Today Is Not Just Said Spoiling The Customer Through Your Goods And Services But
Also Creation Of Strong Relationship With Customer This Enables Marketer To Determine The Their
Needs Before They Arise 12 The Product They Want And Fulfill Their Desires At A Level Above Their
Expectation
New Definition Of Marketing
 Marketing Is The Activities Set Of Institutions And Processes For Creating Communicating Delivering
And Exchanging Of Rings That Have Value For Customer Clients Partners And Society At Large
 Understanding The Marketplace and 7
Customer Needs

 Needs Wants And Demands

 Market Offerings Product Services And Experiences
 Value And Satisfaction
 Exchange And Relationship
 Markets
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Toffler's Wave Theory

 Toffler Describe Three Types Of Societies Based

On The Concept Of Waves
 The First Wave Is The Settled Agricultural Society
 The Second Wave Is Industrial Age Society
 The Third Wave Is The Post Industrial Society
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Introduction To The World Of Services
Marketing
 Describe Your Service Story
 B2C Services (Resolve Personal Problems)
 B2B Services (Without This Org Not Hope To Succeed
 Offerings And Experiences
 Are You Happy, Delight Or Disappoint?
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Why study services

 Services Dominate The Global Economy

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Job Generation Sector

 IBM Coined The Term "Service Science" To Integrate All

Disciplines
 In Service Oriented Economics: Future Graduates Should "T
Shaped"
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Principal Industries Of Service Sector

 Government Services
 Real Estate Services
 Business And Professional Services
 Wholesale And Retail Services
 Transport, Utilities And Communication Services
 Financial And Insurance
 Health Care Services
 Accommodation And Food Services
 Arts, Entertainment And Recreational Services
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Contribution to the GDP
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B2B Services As A Core Engine Of
Economic Growth

 Core And Non Core Activities

 Outsource Non Core Activities , Processes And Assets

 Outsourcing : Contracting Of Services From An External

Service Provider
 Offshoring Services: That Are Conducted In One Country
And Consumed In Another
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What Are Services

 It Is A Form Of Rental Rather Than Ownership Service Customer Obtain The Right
To Higher The Labor Skills And Expertise Use Physical Object Or Space Accessed
Shared Facilities Networks And Systems
 Services Are Performance That Bring Desired Results
 Dictionary Definition The Action Of Serving Helping Benefiting Welfare Or
Advantage
 Something Which Can Be Bought And Sold But Which Cannot Be Dropped On
Your Foot.
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5 Categories Of Non Ownership
Framework

 Rent Pay For A Desire Experience And Skills

 Labor Skills And Expertise Rentals Car Repair Medical Checkup Management
Consulting
 Rented Goods Services Boats Fancy Dress Costumes Construction And Excavation
Equipment
 Define Space Aircraft Office Building Warehouse
 Theme Parks Golf Clubs Toll Roads
 Access And Use Of Networks And Systems Telecommunication Utilities Banking
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Definition

 Definition Services Are Economic Activities Performed By The By The One

Party To Another of Fun Time Waste These Performance Bring About Desire
Results To Recipients, Objects Or Other Assets

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Services_ A Process Perspective

 Service Can “Process” “People” “Physical

Possessions and Data and In The Form Of Tangible
And Intangible Form
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People Processing

 Tangible Actions + People Involvement

 People Have Sort Out Services Directed At
Themselves
 Customers Must Physically Enter The Service System
 They Must Enter The Service Factory, A Physical
Location Where People Machines (Or Both) Create
And Deliver Service Benefits To Customers
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Possession Processing

 Tangible Actions + Physical Possession

 Production And Consumption Are Not Necessarily
Simultaneous
 Production And Consumption Can Be Described As
Separable
 Freight Laundry And Repair
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Mental Stimulus Processing

 Intangible Actions + People Involvement

 Have Power To Shape Attitude And Influence Behavior
 Example Education News And Information Professional
Advice And Religious Activities
 Service Require Time And Degree Of Mental Effort
 Information Based Contents Digitize And Available Via
Downloads
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Information Processing

 Intangible Actions + Intangible Assets

 Information Can Be Processed By ICT
 Or
 Professional By Using Their Brains
 Intangible Form But Converted Into Tangible Like Letters Reports
 Example Financial And Professional Services
 Information Processing + Mental Stimulus Processing = Information
Based Services
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IHIP characteristics

 Useful Generalization But Do Not Apply On All Services

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7 P's of service marketing

 Product
 Price
 Place
 Promotion

 People
 Process
 Physical Environment
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Product

 Service Products Lie The Heart Of Marketing Strategy

 If Poorly Design?
 Offer Value To The Target Customer And Satisfy Their Needs
 Core Services
 Supplementary Services Surround Core Services
 Accommodation And Information Order Taking Billing And
Payment Yet The Enhancing Services Contain With Consultation
Hospitality Safekeeping And Exceptions
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Place And Time

 Physical And Electronic Channel

 Bank Offers Wide Array Of Distribution Channels
 Information Based Services Can Be Delivered Instantaneously E At
Anywhere In World Through Internet
 Location Or Doorstep
 Time Is Important In Delivery Of Services
 Customer Are Time Sensitive
 Willing To Pay Extra To Save Time
 SSTs
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Price And Other User Outlays

 Payment Is Most Important In Allowing A Value Exchange To Take Place

 Prices Defined Your Profits
 Highly Dynamic( Customer Segment Time And Place Delivery Level Of
Demand Availability Capacity
 Not Only Set Prices But To Minimize Where Possible .(Considering
Image)
 Services Are Actions And Performance ----->Perishable
 Smoothing Demand By Dynamic Prices
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Promotion And Education

 Providing Needed Information And Service

 Persuading Target Customer
 Encouraging Them To Take Action A Specific Times
 In Services Marketing Communication Is Educational In Nature
 Teach Their Customers The Benefits Of Services
 Intangible And Difficult To Visualize And Understand
 Promote Physical Images And Metaphors To Promote Service Benefits

Intangible In Nature (Psychological And Physical)

 Personal Interaction Well Trained Employee In Communication Is Needed (Reduce Risk)
 Documenting Performance (What Happens)
 Create Confidence (Experience Credentials And Expertise)
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Process

 Process What Services Are Concerned How To Do And

What To Do
 Effective Process
 Bad Process ----Ineffective Services Delivery Waste
Time And Disappointing Experiences
 Co-production: Customer As Partial Employees
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Physical Environment

 Physical Environment Or Services Capes

 Visible Cues Provide Evidence Of Service
Quality
 It Facilitate Service Delivery
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People

 Services Marketing Triangle

 Interactive Marketing Is Important In Services
 Employees Can Make Or Break The Brand
 Work Closely With Human Resource
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Service Profit Chain
1. Customer Satisfaction Drives Customer Loyalty 34

2. Value Drives Customer Satisfaction

3. Quality And Productivity Drive Value

4. Employee Loyalty Drives Service Quality And Productivity

5. Employee Satisfaction Drives Employee Loyalty

6. Internal Quality As Delivered By Operations And It Drives Employee Satisfaction

7. Top Management Leadership Underlies The Chain's Success

8. Customer Loyalty Drives Profitability And Growth