Service Marketing Solved Question Paper May 2017
2017 (May)
Course: 403 (Service
Marketing)
Time: 3 hours
The figures in the margin indicate full marks for the questions
(NEW COURSE)
Full Marks: 80
Pass Marks: 24
1. State whether the following statements are True or False: 1x8=8
a) Affluence in a society and growth in services are not correlated.
Ans: False, High income people more services
b) Services are homogeneous whereas goods are heterogeneous.
Ans: False, Opposite
c) When a service company offers only one package across its market,
it is called differentiated marketing.
Ans: False
d) The service product is a bundle of features and benefits.
Ans: True
e) The price of stock broking service is salary.
Ans: False, Brokerage
f) Quality is a key element in the service business.
Ans: True
g) A modified marketing mix consisting of four Ps can be used as
comprehensive marketing strategy.
Ans: False, 7 P’s
h) Marketing segmentation is to divide the homogeneous market into
heterogeneous segments.
Ans: False, opposite will be the answer
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2. Write short notes on
any four of the following: 4x4=16
a) Service marketing
segmentation.
Ans:
Market segmentation is the sub- dividing of market into homogeneous sub section
of customers, where any sub section may conceivable be selected as a market
target to be reached with a distinct market mix. The marketer has to identify
his targeted customers (segments). For example, a motorcycle manufacturing
company has to identify their market segments, like female officers, teenage
college students, and middle aged customers. After identifying the segments,
the marketer (manufacturer) has to understand their tastes and expectations. In
the case of female customers, they need not use much power full vehicles, like
that the teenagers demand most powerful and stylish vehicles and the middle
aged customers need vehicles having more mileage.
Benefits
of market segmentation
No one can satisfy all people all time, can satisfy some people
all the time or all people for some
time. This concept is reflected in market segmentation:
1. Facilitates proper choice of target market
2. Helps distinguish one customer group from another within a
given market
3. Facilitates effective tapping of the market, adapting the offer
to the target
4. The “divide and rule” concept as a strategy of dividing markets
for conquering them
5. Helps crystalise the needs of the target buyers and bring out
more predictable responses from
them, helps develop marketing programs on a more predictable base, helps develop marketing offers that
are most suited to each group
6. Helps specialization required in products/services, distribution,
promotion, and pricing for matching
the customer group and developing marketing offers and appeals that match the needs of such groups.
7. Makes marketing effort more efficient and economic, helps to
identify less satisfied segments and concentrate on them to improve level of
satisfaction
8. Helps to concentrate efforts on the most production and profitable
segments instead of frittering them
away over irrelevant or unproductive or unprofitable segments
b) Physical evidence.
Ans: Physical evidence is another important variable to be
considered in the context of services marketing. Since a service is intangible,
it is important for the client to search for evidences which enables him to
evaluate the, service. Physical evidences are those tangible clues which
customers may receive during the process of receiving the service. The
customers evaluate the worthiness of the service with the physical evidences
they receive. Physical evidences can be successfully employed to describe the
service-product and its distinguishing qualities.
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c) Expanded marketing mix.
Ans: The services marketing mix is an extension of the traditional
4-Ps framework. The essential elements of product, promotion, price and place
remain but three additional variables – people, physical evidence and process –
are included to 7-Ps mix. These three additional P’s of service marketing are called,
Extended P’s of service marketing. The need for the extension is due to the
high degree of direct contact between the service providers and the customers,
the highly visible nature of the service process, and the simultaneous
production and consumption. While it is possible to discuss people, physical
evidence and process within the Original-Ps framework (for example people can
be considered part of the product offering) the extension allows a more
thorough analysis of the marketing ingredients necessary for successful
services marketing. The additional Ps have been added because today marketing
is far more customer oriented than ever before, and because the service sector
of the economy has come to dominate economic activity in this country. These 3
extra Ps are particularly relevant to this new extended service mix. The
service marketing mix comprises of the 7’ P’s. These included:
Ø People.
Ø Process.
Ø Physical Evidence.
d) Marketing of education.
Ans: A number of classification schemes have been developed to
classify the whole array of services according to some chosen variables. One of
the simplest schemes classifies services as consumer, intermediate and
industrial service. Education is a service that is geared primarily to the
consumer market, therefore it can be classified as a consumer service rather
than an intermediate or industrial service, though packages of industrial
training are also designed for the organisational customers. On the basis of
the way in which services have been bought, education, depending upon the type
and level can be classified both as a shopping service and as a Speciality
service. Swan and Pruden have suggested that establishing whether service is
bought for instrumental motives (i.e. as a means to an end) or an expressive
motive (as an end in itself) provides a useful framework for service designers.
For majority of customer’s education may fulfill the instrumental function, but
there is always a category of customer from whom education and the pursuit of
knowledge are expressive motives.
Another classification scheme categorises services as equipment
based and people based services, depending upon which resource is primarily
used in the production of the service. By its very nature, education is
essentially a people based service though some service delivery systems may
make heavy use of technology and equipment. Services have also been classified
on the level of personal contact as low contact or high contact services.4
Recent developments in open and distance learning systems have successfully
countered the challenge of constantly maintaining high levels of contact, by
creating specialised kinds of user friendly course material and using
multi-media technology to gain access to students. Shostack, who in her studies
has stressed the intangibility characteristic of services has classified
services on the bases of dominance of tangibility/intangibility, along a
continuum of a pure tangible product with high tangibility dominance to a pure
service with intangibility dominance. Accordingly, education can be classified
as a pure service with dominant intangibility content.
e) Micro-environment for
services.
Ans: THE MICRO ENVIRONMENT: This environment influences the organization directly. It includes
suppliers that deal directly or indirectly, consumers and customers, and other
local stakeholders. Micro tends to suggest small, but this can be misleading.
In this context, micro describes the relationship between firms and the driving
forces that control this relationship. It is a more local relationship, and the
firm may exercise a degree of influence. The microenvironment refers to the
forces that are close to the company and affect its ability to serve its
customers. In includes the company itself, its suppliers marketing intermediaries,
customer markets, competitors, and publics.
1. The Suppliers: The suppliers of a company are also an important aspect of the
microenvironment because even the slightest delay in receiving supplies can
result in customer dissatisfaction. Marketing managers must watch supply
availability and other trends dealing with suppliers to ensure that product
will be delivered to customers in the time frame required in order to maintain
a strong customer relationship.
2. The Marketing
Intermediaries: Marketing intermediaries refers to
resellers, physical distribution firms, marketing services agencies, and
financial intermediaries. These are the people that help the company promote,
sell, and distribute its products to final buyers. Resellers are those that hold
and sell the company’s product. They match the distribution to the customers
and include places such as Wal-Mart, Target, and Best Buy. Physical
distribution firms are places such as warehouses that store and transport the
company’s product from its origin to its destination. Marketing services
agencies are companies that offer services such as conducting marketing
research, advertising, and consulting. Financial intermediaries are
institutions such as banks, credit companies and insurance companies.
3. Customers: Another aspect of microenvironment is the customers. There are
different types of customer markets including consumer markets, business
markets, government markets, international markets, and reseller markets. The
consumer market is made up of individuals who buy goods and services for their
own personal use or use in their household. Business markets include those that
buy goods and services for use in producing their own products to sell. This is
different from the reseller market which includes businesses that purchase
goods to resell as is for a profit. These are the same companies mentioned as
market intermediaries. The government market consists of government agencies
that buy goods to produce public services or transfer goods to other who need
them. International markets include buyers in other countries and includes
customers from the previous categories.
4. Competitors: Competitors are also a factor in the microenvironment and include
companies with similar offerings for goods and services. To remain competitive
a company must consider who their biggest competitors are while considering its
own size and position in the industry. The company should develop a strategic
advantage over their competitors.
5. Public: The final aspect of the microenvironment is publics, which is any
groups that has an interest in or impact on the organization’s ability to meet
its goals. For example, financial publics can hinder a company’s ability to
obtain funds affecting the level of credit a company has. Media publics include
newspapers and magazines that can publish articles of interest regarding the
company and editorials that may influence customers’ opinions. Government
publics can affect the company by passing legislation and laws that put
restrictions on the company’s actions. Citizen-action publics include
environmental groups and minority groups and can question the actions of a
company and put them in the public spotlight. Local publics are neighborhood
and community organizations and will also question a company’s impact on the
local area and the level of responsibility of their actions.
f) Non-monetary
cost.
3. (a) Explain the
different components of service marketing triangle. 11
Ans: Service Marketing
Triangle
In the words of Bitner, “Services marketing is about
promises. Promises are made and promises are kept to customers. Service
triangle is the strategic framework which "reinforces the importance of
people in the ability of firms to keep their promises and succeed in building
customer relationships"
The services marketing triangle was
created to handle the complexity that service marketers face when dealing with
intangible products. The service marketing triangle highlights three key
players, these are:
· Company: The management of a company, including full-time marketers
and sales personnel. This is enabled through continuous development and
internal marketing with their employees.
· Employees: This includes anyone that is working within close contact
of the consumer. They play an integral role within the interactive marketing of
service marketing.
· Customers: Anyone that purchases the service of a company. They are
also heavily exposed to the external marketing of a firm.
For marketing to be successful, a marketer
should ensure that there is positive interaction between these three players.
Furthermore, for this success to be accomplished, three types of marketing must
be conducted. These are:
· External Marketing: Making Promises: Involves communication by a company
towards their consumer. This form of communication allows the company to offer
their services, and set the expectation of service quality that the client can
expect. In service marketing this pays particular attention to physical
evidence, such as the appearance of the place of business or appearance of
staff.
· Interactive Marketing: Keeping Promises: Interactive marketing is
revolved around the communication that occurs between the client and the
service delivery personnel. This is one of the most important parts of
successfully utilizing the services marketing triangle, as it is the only time
that the client will have face-to-face experience with the company, via the
providers.
· Internal Marketing: Enabling Promises: A more modern addition to the
services marketing triangle, internal marketing centres on training employees
to the highest standards so they can deliver exceptional service. Without
internal marketing, there is a high chance that the client will receive
sub-standard service.
For the service marketing triangle to be
implemented successfully, all departments of a company must work together to
deliver the highest quality of service that is possible. All members
of an organisation must be conscious of their role in delivering service
quality, and understand what their marketing function is. The concept of
service marketing triangle can be easily understood with the help of following
diagram:
Or
(b) Define services.
Explain the reasons for the growth of the services sector. 4+7=11
Ans: Meaning of Service: According
to the economic point of view a service is an intangible commodity. That is,
services are an example of intangible economic goods. A service is any activity
or benefit that one party can offer to another that is essentially intangible
and does not result in the ownership of anything. Its production may or may not
be tied to physical product.
Definition of Services
According
to American Marketing Association services
are defined as “activities,
benefits or satisfactions which are offered for sale or provided in connection
with the sale of goods.”
According
to Philip Kotler and Bloom services
is defined as “any
activity or benefit that one party can offer to another that
is essentially intangible and does not result in the ownership of
anything. Its production may or may not be tied to a physical product.”
Reasons for growth of
Service market in India
Phenomenal growth has been witnessed in the service
sector in the past one decade. Both the developed as well as the developing
countries have been making multidimensional efforts to market services in a
right fashion. Innovative efforts have been devised both by the public and the
private sector organizations to market services. The multi-faceted developments
in the service sector and intense competition generated by the well-established
multinational and global corporations have been engineering a strong foundation
for the application of modern marketing principles in the service marketing.
Some of the potential reasons that have encouraged the growth of service sector
are:
1. Increased disposable
income: Over the years as the Indian economy has
grown the disposable income of masses has also shown an upward trend. Such a
trend is also found in the developed as well as the developing countries.
Developing countries like ours where the development oriented sector has opened
new job opportunities and the liberalization of economy is opening new vistas,
service marketing has become even more pertinent. The development of corporate
sector makes way for the transformation of industrial economy because as the
economy grows masses get an opportunity to earn more and when they earn more,
it is quite natural that they want to spend more. The positive developments in
the development sector thus open doors for an increase in the disposable income
e.g. Theme Parks such as Essel World.
2. Specialization: Specialization is the end result of the Division of Labour where
individuals specialize in their respective fields. The in depth analysis of
business shows that in reality it is the specialization and perfection that is
driving the global economy. As the level of sophistication in the economic
transformation process is increasing, advanced specialization in respective
fields is the need of the hour. The organizations have now no option but to
promote specialization since this helps them in making possible cost
effectiveness. Exports and professionals like the management consultants, legal
advisers, financial experts, technocrats play a decisive role in managing the
affairs of an organization. Thus it would be right to mention that due to
increasing specialization, a new breed of the service generating organizations
is emerging, e.g. Tata consultancy agency provide tailor made solutions for top
corporate problems. Another example can be of the consultancy services which
provide expert guidance to corporate clients.
3. Upcoming Fashion trends: New development in the corporate culture and the emergence of a
well-established services sector has influenced and changed the lifestyles of
masses. People are receptive towards the new trends in the fashion that has
resulted in the emergence of new tailor made service sectors such as hair
dressing saloons, beauty parlour, jogging and fitness centres. It is not only
the globalization of the industrial sector but even the globalization and
westernization of culture, craze for western living conditions, temperament and
values that show a big impact on the society, e.g. professionally organized
fitness centres such as Health clubs.
4. Information Boom: Recent inventions and innovations in the field of communications
have bridged the gap in the global markets. It is the developed countries that
are making efforts to build a superhighway for communications. The tremendous
opportunity generated by new developments in the field of communications has
influenced almost all the sectors, specifically the service sector. Dramatic
changes have emerged in the advertising, fashion and professional services due
to the developments in the information sharing and broadcasting. Example
Interest & e-mail.
5. Market Sophistication: Changes in the information sector is driving the sophisticated
changes in the market where customer expectations are all time high. Changing
westernized life styles has changed the hierarchy of needs and requirements of
the individuals. The living conditions, food habits, the dresses and hair
styles are changing. In nut shell the customers today are facing a whole new
range of services available to them. Example – Opening up of fast food eating
joints such as McDonalds, KFC, Domino’s and family day care are the end results
of market sophistication.
6. Professionalism in
Education: Success of any organization more or less
depends on the human assets which that organization has, hence the concept of
employee reliability and performance orientation is gaining ground. The
changing corporate culture advocates the presence of excellence in the work
force which can only be achieved by imparting professional knowledge through
professionally trained employees. The organizations that impart professionalism
and the institutions preparing professionally sound human resources would get a
profitable opportunity in this changing scenario. Excellence, perfection,
professionalism would be the attractions which would require development of
world class educational institutions for almost all the disciplines. Examples, Harvard
Business School University of Leeds, IIM figure 1.6. This has encouraged the
development of tourism services, hotel services, banking services, insurance
services, communication services, entertainment services, educational services
Medicare services, consultancy services, and personal care services to gain
ground.
4. (a) What are the various customer
groups? What are their distinctive characteristics? 6+5=11
Or
(b) Discuss the importance
of the study of consumer behaviour in service marketing. 11
Ans: Importance of
studying Consumer Behaviour
The consumer is the focus of marketing efforts. The
modern concept spells out the real significance of buyer’s Behaviour. The modern
marketing management tries to solve the basic problems of consumers in the area
of consumption. To survive in the market, a firm has to be constantly
innovating and understand the latest consumer needs and tastes. It will be
extremely useful in exploiting marketing opportunities and in meeting the
challenges that the Indian market offers. It is important for the marketers to
understand the buyer behaviour due to the following reasons.
1)
Better Consumer: The study of consumer behaviour
enables us to become a better consumer. It will help consumer to take more
precise consumption related decisions.
2)
Studying the need of consumers: It helps marketers to
understand consumer buying behaviour and make better marketing decisions.
3) Market
Prediction: The size of the consumer market is constantly expanding and their
preferences were also changing and becoming highly diversified. So without
studying it, marketers cannot predict the future of their business.
4)
Economic Stability: It is significant for regulating
consumption of goods and thereby maintaining economic stability.
5)
Efficient utilisation of resources: It is useful in
developing ways for the more efficient utilisation of resources of marketing.
It also helps in solving marketing management problems in more effective
manner.
6)
Studying consumer’s mood: Today consumers give more
importance on environment friendly products. They are concerned about health,
hygiene and fitness. They prefer natural products. Hence detailed study on
upcoming groups of consumers is essential for any firm.
7)
Consumer Protection: The growth of consumer protection
movement has created an urgent need to understand how consumers make their
consumption and buying decision.
8)
Studying Consumer’s preference: Consumers’ tastes and
preferences are ever changing. Study of consumer behaviour gives information
regarding colour, design, size etc. which consumers want. In short, consumer
behaviour helps in formulating of production policy.
9)
Market segmentation: For effective market segmentation and
target marketing, it is essential to have an understanding of consumers and
their behaviour.
10)
Marketing research: Marketing managers regarded
consumer behaviour discipline as an applied marketing science, if they could
predict consumer behaviour, they could influence it. This approach has come to
be known as positivism and the consumer researcher who are primarily concerned
with predicting consumer behaviour are known as positivists.
11)
As the marketing research began to study the buying
behaviour of consumers, they soon realized that many consumers rebelled at
using the identical products everyone else used, for example in case of
purchase of house, interiors, car, and dress material etc. people prefers
unique products. Consumer preferred differential products that they felt
reflected their own special needs, personalities and lifestyles.
5. (a) What are the
determinants of Service Quality? How do they influence service business? 6+5=11
Ans: Dimensions and
perspective of Service Quality
The most important service quality
model is the SERVQUAL developed by Parasuraman, Zeithaml and Berry.
There are five main criteria on the basis of which service quality is
determined. They have been arranged in the order of importance as given
below:
1. Reliability:
This implies the capacity of the service firm to deliver the promised service dependably
and accurately. It means that the same service is performed every time,
on time, in the same way and
without mistakes.
2. Willingness:
This refers to the willingness
to help customers and provide prompt service. Customers do not like to
wait unnecessarily and if it happens it reflects badly on the quality of
service. Similarly, in case of service failure, the ability of the firm
to respond professionally and quickly can create a good impact on
service quality.
3. Assurance: This means the knowledge that the providers possess which enables
them to perform the service competently. It also includes courtesy aspects
such as politeness and respect for customers. This conveys trust and
confidence and generally convinces the customer that the service provider
has the customer's best interest at heart.
4. Empathy: It
basically means the power of understanding the customer's feelings and
needs which allows the server to care for
him and provide personal attention to him. Due to this a customer feels that he can approach the server with confidence and has a
feeling of security.
5. Tangibles: This includes the overall appearance of the surroundings, equipment,
information materials and personnel. This can be visible evidence of the care and attention to details
shown by service firm. Service quality has two important
implications for the organization providing the service. First,
decisions must be made on the basic level of quality, which will be
provided to match the quality, which is expected by consumers. Secondly,
decisions have to be made on the management of quality over time. These decisions have significant
influence on the service offerings in the long term.
Or
(b) What are the tools of
Sales Promotion? Explain with examples for any two services. 7+4=11
Ans: Sales
promotion consists of all activities other than advertising, personal selling
and publicity, which help in promoting sales of the product. Such activities
are non-repetitive and one time offers. According to American Marketing
Association, sales promotion includes, “those marketing activities other than
personal selling, advertising and publicity that stimulate consumer purchasing
and dealer effectiveness, such as point of purchase displays, shows and
exhibitions, demonstrations and various non-recurring selling efforts not in
the ordinary routine.”
The main
aim of sales promotion is to increase sales and profits of the firm but it is
quite different from personal selling and advertising. In personal selling,
customer is persuaded by a sales person face to face. Advertising is a
non-personal mass communication media. Sales promotion, on the other hand, is a
non-recurring and non-routine method. Its main aim is to supplement and
coordinate the personal selling and advertising. It is a supporting and
facilitating element of promotional strategy. Sales promotion bridges the gap
of advertising and personal selling.
Sales promotion techniques: (a) Rebate (b) Product
combination (c) Lucky Draw (d) Contest (e) Discounts
(a)
Rebate: Sometimes, the product is made available at special prices less than
the original prices for a limited period of time, e.g., recently Coke and Pepsi
announced special price of their 500 ml bottles.
(b)
Product Combination: Product combination is the bonus items given free with the
purchase of a product. For e.g. A milk shakers along with Nescafe, or mugs with
Bourn vita or a diary along with a packet of chips. They are effective in
getting consumers to try a new product.
(c)
Lucky Draw: A firm of purchased of a fixed amount gives a coupon to a customer
which entitles them for a lucky draw, e.g., Bikanerwala restaurant in
particular season gives lucky draw coupon on purchase of Rs. 200 or more to its
customers which entitles them to win exciting prizes like car etc.
(d) Consumer
Contests: In these, consumer’ are required to participate in some competitive
event involving application of skills or luck and winners are given some
rewards. For instance, Golden Harvest, maker of premium bread usually has
children drawing competition.
(e)
Discounts: These are like price promotion in which certain percentage of price
is reduced as discount from the list price, e.g., most of the retailers of
garment like Snow White and Shopper’s Stop offer their product at generous
discount during a limited period at the end of the season.
(f)
Exchange schemes, Money back offers: This is a popular promotional tool
employed in the consumer durable market. In the scheme old product is exchanged
for new product and also some money back is given to consumers.
Examples:
Exchange
schemes, Money back offers
Akai exchange scheme: The AKAI colour TV (53 cm) was available for a shocking Rs.
5,990. "Bring your old 51 cm or 53 cm colour TV in proper working
condition with remote. Take home the Akai: For Rs. 5,990 in exchange".
Phil 5-in-one-offer: The offer consisted of Philips TV, two in one, iron, mixer
grin (and rice cooker at an attractive price.
Consumer
contests The Bombay Dyeing Contest: The company offered over Rs. one
crore in prizes in 1 990s. The contest carried 25 first prizes (25 Ambassador
cars). Also there were 60,000 other prizes. The entrants had to rank top ten
Indian film stars from a series of 32 names. Entrants had to complete a slogan
on Bombay Dye Fabrics. A panel of judges decided the winners on the basis of
the most Popular ranking and the quality of the slogan.
6. (a) What is market
segmentation? Describe how market segmentation can be used for services. 4+7=11
Ans:
Market segmentation is the sub- dividing of market into homogeneous sub section
of customers, where any sub section may conceivable be selected as a market
target to be reached with a distinct market mix. The marketer has to identify
his targeted customers (segments). For example, a motorcycle manufacturing
company has to identify their market segments, like female officers, teenage
college students, and middle aged customers. After identifying the segments,
the marketer (manufacturer) has to understand their tastes and expectations. In
the case of female customers, they need not use much power full vehicles, like
that the teenagers demand most powerful and stylish vehicles and the middle
aged customers need vehicles having more mileage.
Benefits
of market segmentation
No one can satisfy all people all time, can satisfy some people
all the time or all people for some
time. This concept is reflected in market segmentation:
1. Facilitates proper choice of target market
2. Helps distinguish one customer group from another within a
given market
3. Facilitates effective tapping of the market, adapting the offer
to the target
4. The “divide and rule” concept as a strategy of dividing markets
for conquering them
5. Helps crystalise the needs of the target buyers and bring out
more predictable responses from
them, helps develop marketing programs on a more predictable base, helps develop marketing offers that
are most suited to each group.
Or
(b) What are the
components of the service marketing mix? 11
Ans: Elements of Service
marketing mix
Having identified the various features of the framework of service
marketing mix, a brief description of each element is attempted in the
following paragraphs:
1. PRODUCT (SERVICE PRODUCT): A product is an overall concept of
objects or processes which provide some values to customers. Goods and services
are sub-categories of product. The term produce is used in a broad sense to
denote either a manufactured good or product and a service. Strictly speaking,
customers are not buying goods or services but specific benefits and value from
the total offering. This total offering to the customer is termed as
"offer". Offer represents those benefits that customers derive from
the purchase of goods or service.
Flour levels of product are briefly described
below:
(i) The core or generic product:
The core product represents the basic services of a product. This
product is at its basic level. For example, food served in a restaurant, a bed
in a hotel room for the night, safety of deposits and loanable funds in a bank.
(ii) The expected product: The
expected product consists of the core product together with the minimal
purchase conditions which need to be met. For example, in a restaurant, in
addition to basic food served, aspects such as cleanliness, timely service,
polite and courteous service of bearer,
availability of menu and
background music are expected. In case of
the banking service, apart from the safety of funds invested, customers
expect accuracy of accounts,
timely service, convenient banking hours, courtesy, carrying out the standing instructions are
expected. Customers buying an airline ticket expect a range of additional elements such as
comfortable waiting area, prompt inflight service, good quality food, clean
toilets and timely arrivals.
(iii) The augmented product: Augmented product refers
to offerings (product benefit or services in addition to what customers
expect). This concept enables a product to be differentiated from another. For
example, though IBM has not got technologically advanced core product, they are
praised for excellent customer service. This adds value to their core product
in terms of reliability and responsiveness. The augmented product of a restaurant includes sparkling floors,
ambience, smart employees, courtesy, music of choice, etc. In the case of banking augmented services may
take the form of congenial
waiting room, courteous staff with "May
I help you" attitude, relationship orientation, quicker service,
admission of faults, etc.
(iv) The potential product: Potential product refers
to doing everything potentially feasible to hold and attract the customers. The
concept of potential product of a restaurant is viewed in terms of a pleasing flower arrangement,
manager's word of thanks, readiness to go out of the way to serve, etc. The banking service may include
occasional greetings at home, "The
how are you Mr. X" culture, surprise gifts, readiness to go out of
the way to serve the individual customer, etc. The potential product consists of added features and benefits that may
or may not give benefits to the customers. Potential product offers scope for
redefinition of the product in
order to attract new customers.
2. PRICE: Price plays a significant role in the marketing mix by
attracting revenue to the marketer. Pricing decisions are important for
determining the value of the service as perceived by the customer building of
an image for the service. Price serves as a basis for perception of quality. The pricing strategy
should be in tune with the marketing strategy. Pricing strategy should gain
competitive advantage for the firm. Generally, firms add a percentage mark up
on cost.
3. PROMOTION: Promotion is an important part of the marketing mix
for many marketers. The promotion element of the service marketing mix
communicates the positioning of the service to customers. Promotion adds
tangibility and helps the customer evaluate the service offer. The promotion of
services encompasses a number of areas namely:
(a) Advertising
(b) Personal selling
(c) Sales promotion
(d) Public relations,
(e) Word of mouth; and
(f) Direct mail.
4. PLACE: Place
in case of services determine where is the service
product going to be located. The
best place to open up a petrol pump is on the highway or in the city. A place
where there is minimum traffic is a wrong location to start a petrol pump. Similarly,
a software company will be better placed in a business hub with a lot of
companies nearby rather than being placed in a town or rural area. Read more
about the role of business
locations or Place element.
5. PEOPLE: People
is one of the elements of service marketing mix. People define a service. If
you have an IT company, your software engineers define you. If you have a
restaurant, your chef and service staff defines you. If you are into banking,
employees in your branch and their behavior towards customers defines you. In
case of service marketing, people can make or break an organization.
Thus many companies nowadays are involved into
specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact, many companies have to undergo
accreditation to show that their staff is better than the rest.
6. PHYSICAL
EVIDENCE: Physical evidence is another important
variable to be considered in the context of services marketing. Since a service
is intangible, it is important for the client to search for evidences which
enables him to evaluate the, service. Physical evidences are those tangible
clues which customers may receive during the process of receiving the service.
The customers evaluate the worthiness of the service with the physical
evidences they receive. Physical evidences can be successfully employed to
describe the service-product and its distinguishing qualities.
7. PROCESSES: Service process is the way in which a service is delivered to the
end customer. Let’s take the example of two very good companies – McDonalds and FedEx. Both the companies thrive on their quick service and the
reason they can do that is their confidence on their processes. On top of it,
the demand of these services is such that they have to deliver optimally
without a loss in quality. Thus the process of a service company in delivering its
product is of utmost importance. It is also a critical component in the service
blueprint, wherein before establishing the service, the company defines exactly
what should be the process of the service product reaching the end customer.
7. (a) How do you understand
a tourism offer? Explain the marketing components of a tourism service. 5+7=12
Ans:
Marketing in tourism is the systematic and coordinated execution of business
policy by tourist undertakings. The tourist undertakings may be private or
state owned at local, regional, national and international levels. In the words
of Burkart and Medlick "tourism marketing activities are systematic and
coordinated efforts extended by National Tourist Organisation and or tourist
enterprises at international, national and local levels to optimise the
satisfaction of tourist groups and individuals in view of sustained tourist
growth”.
Tourism offer is the sum of all charges which a tourism service
provide offers to its various users in terms of products and price. There are
various types of users of tourism services and tourism offers are different for
different users. Types of users of Tourism services
I. Non-users are those persons who are not interested in
using the services The reasons may include lack willingness and pursuit of
leisure.
2 Potential users are the prospective users. They have
willingness to avail tourism services. They are influenced through marketing
strategies.
3. Persons who are already using the services of tourism are known
as actual users.
4. Persons who occasionally travel is known as occasional users
of tourism services.
5. Habitual users are in the habit of availing tourism
services regularly.
Marketing of Tourism Services
The
designing of the marketing mix variables in case of tourism is significant as
it helps the marketer in conceiving the right ideas, particularly to raise the
acceptability of the tourist product by stimulating and penetrating the demand.
Framing of a proper marketing mix is significant because it helps the tourist
organization in accomplishing the objective and projecting a fair image.
Product
Mix: Tourism
is a composite product with components like attraction facilities and
transportation. Attraction deserves an intensive care. It includes natural
site, places of historic interest, events and cultural attraction. The
facilities compliment attraction. The facilities include accommodation, food,
transportation and recreational facilities. The transportation component
includes the vehicles and infrastructure. Innovation in the tourism product helps
raising the sensitivity. The users of the service are looking forward to better
and improved product. The provider of the
tourist is a travel agent or the package tour. A well-conceived and designed
package tour, covering a wide range of tourist attraction at an economic price,
helps in attracting the potential tourist. The
travel agent performs numerous activities such as hotel arrangement and
accommodation, site seeing arrangement, domestic transport arrangement, air
travel arrangement etc. In a true sense the tour agents and the travel agents
are the vehicles who can give a fillip to the tourism industry, provided they
are well trained.
Pricing: Pricing
of the tourist product is complex. Geographical location of the destination,
seasonality and varying demand affects the pricing decision. In India the pricing strategies become important for
promoting or contracting the tourism industry, since more than 40% of the total
population are below the poverty line. In order to develop the tourism industry
more and more potential users are to be transformed into actual users.
When a tourist proposes to visit a particular
place, the total cost of his traveling also include the expenses incurred on
transportation, accommodation and communication. Liberal pricing strategy is found to be a productive pricing decision,
particularly in case of tourism industry. The pricing strategy which includes
low income group people, student and retired persons can be more effective.
This is possible if the government concessional and subsidized infrastructural
facilities to the potential tourist below the average income. The different pricing methods generally used are cost
based pricing, demand based pricing and competition based pricing.
Promotions: The promotion mix
includes advertising, publicity, sales support and public relations. The
purpose of promotion is to make available the information to the user.
Advertising the sales promotion can be effective when supplemented by publicity
and personal selling. Radio, TV, newspapers,
cinema and printings are some of the important vehicles for traveling of
messages. Effective slogans raise the effectiveness of advertisement.
Another important component of the promotion mix
is public relation. It helps in projecting the image of an organization. Public
relation and publicity include regular articles and photographs of tour
attraction, use of TV and travel journalists to promote editorial comment.
Public relation officer plays an important role.
He should be efficient, active, impressive, intelligent and well-behaved. Good image
projection can be made if the PRO manages the affair like a professional. It is
said that word of mouth is the best form of publicity. The word of mouth
promotion is an important tool in
tourism marketing.
Place: The
tourist centers should be located at suitable points if the tourist’s spots are
natural there is no question of selection. In a vast country like India with a
divergent socioeconomic and cultural patterns, the promotion of domestic
tourism encourages unity in diversity.
Infrastructural facilities, transport and
communication are important for development of tourist centres. The site
selected should have natural surroundings, increased accessibility and improved
amenities. At the same time, it is also important that the ecological balance
is not disturbed. Since growing ecological imbalances leads to pollution, some
important steps like promoting afforestation, promotion and beautification may
be undertaken in countering the side effects of atmospheric pollution and
maintaining ecological balance.
Or
(b) Explain the marketing
practices of hospitality services in India. 12
Ans: Marketing of Hotel or
Hospitality services
Hotels are a vital and essential part of the tourism industry. A
hotel is an establishment that
provides paid lodging and fooding facilities on a short-term basis.
Types of hotels
1. One star hotels: These hotels belong to the no-frills variety
that offers basic bedding and bathroom facilities. The furniture, décor, etc.
may not be of high quality, but is mostly comfortable. Arrangements for meals
may or may not be included.
2. Two star hotels: The extra star here is for a proper reception
desk and some amount of staff presence. Two star hotels are suitable for people
with limited budgets but who are travelling with their families and need a
reasonably safe place to stay.
3. Three star hotels: Three star hotels are mostly good for
business travellers who are travelling for a short period on business. They are
also a good option for female travellers who are travelling alone and don’t
want the tension of staying at a place where their security could be at risk or
their belongings unsafe. Three-star hotels are generally part of a larger chain
and have footprints in more than one location.
4. Four star hotels: The premium variety of hotels starts from
here. There will be larger rooms, better décor, more amenities, and better
services like availability of porters, 24-hour room service, laundry, and
multi-cuisine restaurants. Four star hotels are mostly used by corporate
travellers where the company pays for the stay.
5. Five star hotels: Five star hotels are top level hotels.
Breakfast served in bed, shoes polished, clothes washed and facilities for
getting almost. Other facilities include huge lobbies, round-the-clock room
service, swimming pools, gyms, sauna, spas, badminton/tennis courts, beauty
salons – etc. The staff in these hotels mostly comprises hotel management
graduates from the best schools, well-trained in customer service, crisis
management, etc. The clientele that five star hotels cater to include big names
from fields of entertainment, business, and sports.
6. Five star deluxe hotels: This type of hotels caters to the
movers and shakers of the world. A private balcony, fully stocked mini-bar,
personal masseur, king-sized beds – these are just some of the rare luxuries
you can treat yourself to at a five-star deluxe hotel. The most well-known
brands belonging to this category include the Taj, Hilton, Leela Palace, Grand
Hyatt.
Hotel
Pricing and Distribution
Pricing: It
is difficult for a hotel to exercise differential pricing except for certain
specific purpose. These may
typically be differentials in tariffs and prices during the peak and lean seasons; group rates; contract rates
for airline crew; special conference rates or special concessions to attract customers etc. However, by and large, hotel
pricing tends to follow or conform
to pricing standards applicable to the particular city area or resort, to
competitive hotels, to the amount of
traffic being generated in the hotel location, tourist location, international or national conference
venue, and so on. Nevertheless, hotel pricing also suffers from a degree of lack of flexibility, although to a lesser extent
than that of the hotel product.
The depreciated valuation of the hotel property, its financial
management efficiencies, credit policies
and other factors, specially cost of empty room-nights, fixed overheads, also
have a bearing on tariffs and menu
prices.
Distribution:
Hotel distribution relies on interdependence with other industries
serving travelers and tourists such
as the transportation industry (airlines, railways, roadways, shipping lines), travel agents and tour operators,
national and state tourism organisations, shopping and entertainment providers. In sum, those services which provide
certain other facilities to the travellers
or the tourist which are bought when accommodation and food are assured.
Communications: This element of the hotel marketing mix is the most important one as it is directly responsible for bringing customers to the hotel. Hotel marketing communications are either direct or indirect. The direct communications are through personal selling, advertising, sales promotion and direct mail. Appropriate messages are conveyed to those who are potential buyers of the hotel product and those who directly influence decisions to buy the hotel product. Personal selling of the hotel product is effective when long-term relationship between the hotel and the customer is sought. It is also required where the level of business per customer is likely to be significant. Indirect marketing communications for hotels include public relations and publicity, both of which may and may not form a part of the hotel’s marketing communication programme but may function independently. The major elements of the hotel communication mix thus are – mass media advertising, direct mail, sales promotion, public relations, and publicity.
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