Introduction to Services Marketing
Session 1
Administrative Details
• Syllabus
•
•
Cases
Additional Readings
• Optional Text
• Lovelock, Christopher, “Services Marketing”, 4th edition
• Performance Evaluation
•
•
Class Participation (Individual)
Project (Group)
40%
60%
• Course Website
http://faculty.insead.edu/padmanabhan/services_marketing/SvcsMktg_JanFeb06/
1
Examples of Projects
• Reinventing the Restaurant Experience in Paris
• GPS Aided Fleet & Salesforce Management
• In Flight Retailing Services for LCC
• Pet Hotels
• Customer Economics and CRM in Micro-Finance
• The Fractional Aircraft Ownership Opportunity in Russia
• Leveraging Services for Growth in The Automobile
Marketplace
• Introducing Mexican Fast Food in Europe
Service: Some Definitions
• Service Sector includes all economic activities
whose output
• is not a product
• generally consumed as it is produced
• provides added value in form
• “Anything sold in trade that could not be
dropped on your foot ” - The Economist
2
Course Headlines
• Services are significantly different from products on several
dimensions. The consequences is that as managers you need
• a broader conception of the search, purchase, consumption and
post-consumption phases of the consumer experience
• manage a broader set of variables that go beyond the traditional
4P’s of marketing (managing services is an interdisciplinary
exercise)
• to understand consumer economics, its relationship to firm
performance and implications for a firm’s strategic and tactical
decisions
• There are very few pure plays (pure product or pure services).
Consequently, you need to be good at managing products and
services to grow your and your company’s bottomline.
Product versus Service : Generic Differences
• Nature of product
• Tangible versus Intangible
• Customer involvement in production
• Co-production
• People as part of the product
• Product + Process
• Simultaneity of Production and Consumption
• Quality Control
• Search –vs- Experience –vs- Credence Attributes
• Consider QB House
•
hair-cut as a service
3
Marketing Analysis Framework
33C’
’s
CC’s
Market Intelligence
Customers
Competitors
Company
T
S
(Segment)
P
(Target)
(Position)
Promotion
Product
Price
44P’
’s
PP’s
Place
Framework for Services Marketing
Company
Internal Marketing
External Marketing
Customers
Employees
Interactive Marketing
4
Services Marketing Mix
ple
Peo
Product
Place
Process
Customer
l
ica
ys xt
Ph onte
C
Promotion
Price
Final Comments
• Related Reading
• The Four Service Marketing Myths, Vargo and Lusch, Journal of Service
Research, May 2004.
• IHIP = Intangibility, Heterogeneity, Inseparability and Perishability
• Issue
• Differences reflect the producer’s perspective, and not the consumer’s
perspective
• Question for You
• What do you make of their claim?
• Tomorrow’s Session
• First of Three Sessions on Customer Analysis
• I need your answers to the 3 questions posed
• Cold Call
5