Introduction to Services Marketing Session 1 1

Introduction to Services Marketing Session 1 1

Administrative Details • Syllabus – Cases – Additional Readings • Optional Text – Lovelock, Christopher, “Services Marketing”, 4 th edition • Performance Evaluation – Class Participation (Individual) – Project (Group) 40% 60% • Course Website – http: // faculty. insead. edu/padmanabhan/services_marketing P 3 Jan/Feb -2005 Services Marketing – Professor V. Padmanabhan 2

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 P 3 Jan/Feb -2005 Services Marketing – Professor V. Padmanabhan 3

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 4 P’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. P 3 Jan/Feb -2005 Services Marketing – Professor V. Padmanabhan 4

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 P 3 Jan/Feb -2005 Services Marketing – Professor V. Padmanabhan 5

Marketing Analysis Framework 3 C’s Market Intelligence Customers Competitors Company T S (Segment) P (Target) Product Price (Position) Promotion 4 P’s Place

Framework for Services Marketing Company Internal Marketing External Marketing Customers Employees Interactive Marketing P 3 Jan/Feb -2005 Services Marketing – Professor V. Padmanabhan 7

Services Marketing Mix ople Pe Place Product Process Customer l ica ys nce Ph ide Ev Promotion P 3 Jan/Feb -2005 Price Services Marketing – Professor V. Padmanabhan 8

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 P 3 Jan/Feb -2005 Services Marketing – Professor V. Padmanabhan 9