Introduction to Services Marketing

1. Introduction to Services Marketing Session 1

2. Administrative Details • Syllabus • Cases • Additional Readings • Optional Text • Lovelock, Christopher, “Services Marketing”, 4th edition • Performance Evaluation • Class Participation (Individual) 40% • Project (Group) 60% • Course Website • http://faculty.insead.edu/padmanabhan/services_marketing Services Marketing – Professor V. Padmanabhan

3. 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 Services Marketing – Professor V. Padmanabhan

4. 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. Services Marketing – Professor V. Padmanabhan

5. 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 Services Marketing – Professor V. Padmanabhan

6. T S P (Segment) (Target) (Position) Marketing Analysis Framework 3 C’s Customers Competitors Company Market Intelligence Promotion Product 4 P’s Price Place Services Marketing – Professor V. Padmanabhan

7. Framework for Services Marketing Company Internal Marketing External Marketing Customers Employees Interactive Marketing Services Marketing – Professor V. Padmanabhan

8. Services Marketing Mix People Place Product Customer Process Promotion Price Physical Evidence Services Marketing – Professor V. Padmanabhan

9. 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 Services Marketing – Professor V. Padmanabhan