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_mar
  keting

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

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 4Ps of marketing (managing
  services is an interdisciplinary exercise)
• to understand consumer economics, its
  relationship to firm performance and implications
  for a firms 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 companys bottomline.

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

6
Marketing Analysis Framework
3 Cs
Customers
Competitors
Company
Market Intelligence
Promotion
Product
4 Ps
Price
Place
7
Framework for Services Marketing
Company
Internal Marketing
External Marketing
Customers
Employees
Interactive Marketing
8
Services Marketing Mix
People
Place
Product
Customer
Process
Promotion
Price
Physical Evidence
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 producers perspective,
  and not the consumers perspective
• Question for You
• What do you make of their claim?
• Tomorrows Session
• First of Three Sessions on Customer Analysis
• I need your answers to the 3 questions posed
• Cold Call