Professional Documents
Culture Documents
An activity / performance given by a service provider to a service User to solve his problem and give satisfaction and at the same Time help the company to achieve its commercial and financial Objectives. A service product is mostly intangible in nature and the purchase Of a service product does not result in ownership by the user. A Service is not a thing E.G: Renting a room Transportation by any mode Seeing a movie Getting advice from a doctor / lawyer Education Banking services Buying insurance Hiring a taxi Performance by an actor / artist
COMMERCIAL
Sales (volume, value) Market share Growth rate Ranking Retaining existing and Developing new customers
FINANCIAL
Profit Return on investment (RoI)
ECONOMIC ACTIVITIES
WHAT? National wealth (GDP) creating activities CLASSIFICATION OF EAs PRIMARY EAs Agriculture, forestry, mining& fishing SECONDARY EAs Manufacturing & construction TERTIARY EAs Services
SECTORS OF ECONOMY
a) b) c) AGRICULTURE SECTOR, TREND MANUFACTURING AND CONSTRUCTION SECTOR, TREND SERVICES SECTOR, TREND
since the WW II, services sector of economy (all types of services) has grown fast in MDCs, EG: USA, we and JP.
PAKISTAN:
a. b. c. agriculture sector 40%, manufacturing + construction sector 35%, services sector 25%.
fast growth rate 8%, best jobs, high income, best talent future of services sector is bright.
different definition of a service product. what is included / not included in services sector. different bases of measuring the size of services sector.
a) b) c) d) employment basis output basis expenditure on services role in export
3.
SERVICE ECONOMY
AN ECONOMY IN WHICH:
a) a greater portion of the national wealth(GDP) is created by the services sector of economy (t.eas), b) most people are employed in services c) most expenditure is on services and d) export of services plays an important role.
3)
OUTSOURCING OF BUSINESS SERVICES business services previously carried-out by the COS themselves, are being outsourced today. COS can now hire many types of services without owning them at less cost. THUS, SERVICES COs HAVE BEEN SET-UP. EG: MRAS, ADAS, engineering maintenance COS, training institutions, transport & food providers, janitorial services COS etc. 5) GROWTH OF DEMAND FOR SERVICES FROM CONSUMERS. WHY? a) society is getting wealthier, thus, the lifestyle is changing - transfer of certain kinds of household jobs to others - people have turned to services expenditure b) life expectancy is increasing c) life is becoming complex d) more complex products 6) GROWTH OF DEMAND FROM CERTAIN PROFESSIONS 7) GLOBALIZATION OF BUSINESS 8) GROWTH OF GOVERNMENT SIZE
GLOBALIZATION OF BUSINESSES
INCREASED DEMAND FOR :
COMMUNICATION SERVICES TRAVEL SERVICES INFORMATION SERVICES LEGAL SERVICES HOSPITALITY SERVICES
SERVICES NEEDED
travel, hotels,
day-care nurseries, female servants health-care services, old-age hostels skilled labour / mechanics for maintenance and repair professional / consultants & advisers, adult educational centers
need for new services EG: computers, TVS, fax, internet etc.
services are barren and unproductive activities which perish instantly. do not add wealth to a nation.
LATER ON:
i.
ii.
iii.
J.B. say rejected ADAM smiths views. accepted that services are useful activities, which satisfy customers needs. are productive and add wealth to a nation. ALFRED marshal useful and need satisfying activities which get destroyed at the moment of their creation. different researchers business activities which do not change the physical form of a good but which are needed in moving products from the manufacturer to the end users. EG. WHLS, RETS, ECT
CHARACTERISTICS OF SERVICES
1) 2) 3) 4) 5) INTANGIBILITY PERISHABILITY INSEPARABILITY HETROGENEITY / VARIABILITY / INCONSISTANCY NO OWNERSHIP BY THE USER distinguish them from goods these characteristics create both challenges and opportunities in the marketing of services and affect their mmix
INTANGIBILITY
five senses what? cannot be seen, ------------- before purchase. therefore, difficult to judge their quality before hand. however, opinion about their quality can be obtained from others. buyers have faith in the s. provider
PROBLEMS CREATED: cannot be packaged, displayed, demonstrated, sampled, patented, makes choice difficult etc.
f)
PERISHABILITY
what ? produced, delivered and consumed at the same time. cannot be stored. cannot be produced before hand. therefore, if not used at the time a service is produced, it gets destroyed for ever. loss of revenue
PROBLEMS CREATED since services cannot be stored, cannot be produced before hand and since their demand fluctuates too often, therefore, planning their demand and supply is relatively difficult. e.g. 1) public transport 2) hotel rooms (holiday places) 3) telephone service
offer flexible / differential pricing strategy at different times of the year, days of the week, day / night* intermittent promotion, not continuous offer group discount* organize special shows, introduce a new product during idle time introduce reservation system
*short term steps. habitual
b) supply side use part-time employees temporary increase in equipment
what?
INSEPARABILITY
cannot be separated from service provider or the source and often from the service user
PROBLEMS CREATED 1) requires the presence of the service provider and the service user mostly produced, delivered and consumed at the same time. lot of interaction and customers participation. encounter points.
2) limits the scale of operation. mass production not possible 3) affects quality. professional and entertainment services are needed from a specific service provider. quality depends on both service provider and service user. 4) direct sales is the main channel of distribution (except TAS, EAS). this is an opportunity. some services can be delivered electronically.
PROBLEMS CREATED
NO OWNERSHIP
does not become owner, can use the service / facility. no transfer of ownership title. payment is made for using the service / facility.
PROBLEM CREATED
some time no evidence of purchase and use STRATEGY TO OVER COME PROBLEM provide a physical clue
INSEPARABILITY
REQUIRES THE PRESENCE OF S. PROVIDER & ALSO OFTEN OF THE CUSTOMER(S) MOSTLY SOLD DIRECTLY LIMITED SCALE OF OPERATION EACH UNIT OF SERVICE MAY DIFFER. DIFFICULT TO STANDARDIZE QUALITY
NO EVIDENCE OF PURCHASE AND USE
HETROGENITY
NO OWNERSHIP
RESTAURANT
AIR TRAIVAL
TEACHING
DEG OF TANG. Es
CAR TOOTHPASTE
the molecule, including the nucleus of a S.PRODUCT, is dominated by intangible elements, no ownership of the source which produces the service.
the molecule, including the nucleus, is dominated by tangible elements. ownership of the physical product.
AIR TRAVEL
CAR
limited scale of operation. absence of mass production precise standardization of quality is difficult (who, when & where provided) cannot be stored, inventory not possible, cannot produce before hand demand fluctuation is often & difficult to even-out cannot be owned an activity
CLASSIFICATION OF SERVICES
no strict bases of classification. different authors have used different bases A. BASIC SOURCE OF SERVICE
1) PEOPLE-BASED SERVICES
2.
i. rendered by professionals / consultants ii. rendered by skilled labour iii. rendered by unskilled labour i. automated equipment ii. equipment operated by professionals or skilled people iii. equipment operated by unskilled people
EQUIPMENT- BASED SERVICES
B.
2.
3.
C.
SELLER RELATED BASES i. S. PROVIDERS MOTIVE profit (business services) not-profit (charity services) ii. SECTOR WHICH PROVIDES THE SERVICE Govt. sector services federal, provincial and local government business sector services private non profit sector services
FUNCTION PERFORMED BY SERVICES communication, transportation, educational, financial, health services etc.
D.
TIME & EFFORTS SPENT S. PROVIDERS PREFERENCE PRIOR PLANNING FOR PURCHASE PRICE LEVEL
NO / LITTLE
STRONG
VERY STRONG
NO / LITTLE
YES
YES
LOW
HIGH
HIGH
NO
YES
NO
FREQUENTLY
INFREQUENTLY
INFREQUENTLY
B.
CHARITY ORGANIZATIONS
a)
MARKETING CONCEPT
b)
MARKETING MANAGEMENT
everybody is customer focused. decisions in all departments are customer focused. coordinated function
not so in marketing management. isolated function. CS the is responsibility of the marketing department only.
PURPOSE OF BUSINESS
to continuously create, win and retain sufficient number of satisfied customers, profitably. to achieve it, a company needs to use the marketing concept.
3) 4) 5) 6) 7)
1) DHL 2) CITIBANK 3) MARRIOTT HOTELS 4) SINGAPORE AIRLINE comply with criteria of a marketoriented company.
NOT MARKET- ORIENTED COMPANIES 1) PTCL 2) KESC 3) NBP do not comply with criteria of a market-oriented company.
B.
C.
stating in everybodys job description how his / her job affects cs.
a)
TWO CONFLICTING VIEWS marketing is less used / developed in services REASONS 1) problems created due to specific characteristics of services. 2) opposition to marketing from some professions 3) many services organizations are small and in direct contact with customers, therefore, such businesses do not need marketing 4) demand is greater than supply. 5) some services COS have monopoly or no / little competition. 5) prevented by law. 6) poor quality of management personnel in some services cos. they are not trained in marketing. 7) overall lack of availability of marketing know-how about services marketing.
REASONS
1)
2) 3)
4) 5) 6)
positive change in attitude towards marketing in services COS during the last 30 years. EG: BIA, hotels, car rental COS etc.. are successfully fighting competition. have successfully introduced new s. products. EG: credit cards, consumer financing schemes, new insurance policies, different educational courses etc. removal of legal / professional barriers. movement of marketing personnel from manufacturing businesses to services cos. development of services marketing know-how and teaching services marketing in business schools
3)
INTERNAL MARKETING
EXTERNAL MARKETING
EMPLOYEES
INTERACTIVE MARKETING
CUSTOMERS
unlike goods, intangibility characteristic of services makes consumers choice of different competing products difficult. opinion can be obtained from others. inseparability makes marketing strategy of services localized. relatively difficult to sell services on nationwide basis. perishability makes storage of services impossible, thus, planning supply and demand of services is difficult heterogeneity makes ensuring of uniform quality difficult.
SALES AND PROFIT IS NOT THE OBJECTIVE OF MARKETING, IT IS THE BYPRODUCT AND REWARD OF CUSTOMER SATISFACTION.
LEVEL OR DEGREE OF CS
1) JUST SATISFIED CUSTOMERS APP = EPP show loyalty towards the product or brand and they may repeat purchase. HIGHLY SATISIFIED OR DELIGHTED CUSTOMERS APP > THAN EPP show high loyalty towards the product or brand due to both emotional and rational affinity. they will repeat purchase. DIS-SATISFIED CUSTOMERS APP IS <THAN EPP customer switches to another product or brand
2)
3)
BENEFITS OF CS
A SATISFIED CUSTOMER buys again talks favorably to others. pays less attention to competing brands and to their promotion. buys other products of the same company. makes easy to increase price by a reasonable margin.
METHODS OF TRACKING CS
track both own and major competitors CS level FOUR METHODS: 1) complaint and suggestion system - through a form, toll-free telephone number, fax, e-mail etc., the company motivates customers to give feedback (likes / dislikes), on using the product. - often used by restaurants, hotels, airlines, petrol stations, hospitals etc - less than 5% customers complain / give suggestions. think wont do any good - switch if not satisfied.
2)
customer satisfaction survey - periodically. - the company interviews customers in person, over telephone or mails a questionnaire to a random sample of tm customers, to get feedback on their level of CS, both on own and competitors brands. ghost or mystery shopping - a ghost shopper is a hired customer. - shopping by a ghost shopper, both of companys and competitors products. his report, containing findings, forms basis of CS level.
3)
4)
lost customer analysis and interview with ex-customers a) the company monitors trend in customer loss rate and b) interviews ex-customers
SERVICE PRODUCT
a) b) c) d) e) f) product mix and product mix dimensions quality quantity branding reliability warranty
c) people- based
d) equipment-based
to analyze and plan a service product in details, it is better to divide it into 5 levels.
each level adds both: a) customer value(benefits) and
b) cost
cr
del
brn
comp
xs
co
qlty fs service offer or augmented product level f. equipment potential product level
rest, comfort sleep facilities for personal preparation room service availability of snacks pleasant view etc. as benefits, when he rents a hotel room. thus, benefits should be central or the main focus in designing a hotel room or any S.PRODUCT. main and additional reasons for purchase
1. 2. 3. 4. 5. 6.
rest, sleep and facilities for personal preparation would mean a hotel room having: - comfortable bed, bed sheets etc. - suitable furniture - ALMIRAH - bathroom with necessary facilities - quiet environment give CS
product-mix:a companys assortment of products, new and old, offered to tm customers for CS / CD and to achieve companys objectives. product-line:a group of closely related products which have similar uses / functions, tm customers, prices and which are distributed through the same channel.
each product-line is usually handled by a separate team of executives (group pm, PMS/BMS)
DIMENSIONS OF PRODUCT-MIX
three dimensions of product-mix 1) product-mix breadth / width i. this means number of product - lines carried by a company. ii. takes a long time to develop and add a product-line. iii. mix extension. iv. costs lot of money. risky v. decision at highest level. 2) product-line length this means number of different brands in a product line
3)
product line depth variants of brands within a product-line. both number 2) and 3) are line-extensions. take less time and investment. less risky. decisions at mm / GPM level
SPORTS
CURRENCY EXCHANGE
tennis TCS normal Pakistani seminar hall food squash CNS rooms Chinese training rooms arrangements swimming single continental personnel indoor double Thai games executive Japanese cars golf single coaches double suites e-rooms honeymoon rooms
DIMENSIONS OF PRODUCT-MIX
a company can expand its product-mix and grow by adding new product-lines or by increasing product-line length or depth. a company can also prune/contract its product-mix by eliminating a product-line or a product/brand / variant
3) 4)
5) 6) 7)
SOURCES OF NEW SERVICE PRODUCTS acquisition through new product development process
REASONS:
1)
2)
3) 4) 5) 6) 7)
the basic service product expected by the customer, is not well designed. not based on the benefits sought by the tm customers. lack of company-client interface during the development process of a NSP. wrong criteria used in market segmentation and product positioning. these are not customer wanted criteria. good NSP but market potential has been overestimated. faulty pricing, promotion, distribution or SDS inaccurate / unhealthy spread of image of a NSP by customers competitors fight harder than expected
2.
IDEAS SCREENING BY A MANAGEMENT TEAM separate workable ideas from non-workable ideas by a management team, on the following criteria, to justify use of resources additional manpower, space, machines required. commercial aspects. development time. survived idea(s). concept development and concept testing. a) concept development develop a meaningful verbal and pictorial description of the survived business proposal b) concept testing test the product concept with a suitable number of tm customers, using verbal and pictorial description, to judge their understanding and liking / disliking.
3.
4.
DETAILED BUSINESS ANALYSIS OF THE PRODUCT BASED ON THE SELECTED IDEA a) estimated sales, costs and profit for three consecutive years
into the new service product this means: i. investment ii. hiring and training of staff iii. construction of operational facility iv. designing SDS.
6.
7. 8.
b) where c) how stage 1,2,3 and 4 do not involve much costs. many s. products fail at these stages. other stages involve lot of costs.
1)
2)
3)
concept testing is difficult of a service product because describing something which is mostly intangible, is very difficult. results vary too-much, which depend on : service provider physical environment the customer home-use tests are not possible.
opportunity to evaluate a s. product before its creation and introduction. opportunity to get input on the specifications (intangible and tangible elements) of a new s. product, from the users.
1) 2)
1) developing the desired specifications of a new S.PRODUCT is difficult, particularly of people- based services. 2) testing of new services is difficult. 3) great risk of being quickly copied. cannot be patented. Examples: a) airlines (films, duty free items) b) banks (various kinds of accounts) 4) lack of new ideas in service innovation
2) 3) 4) 5)
4) gap between the actual services delivery and the promotional claims
5) gap between the actual service and the expected service
PROMOTIONAL CLAIMS 4
2)
top managements commitment to quality they must act as a role model of quality management can show its commitment to quality by: a) by setting objectives and incentives based on quality job done and not on quantity job b) promote quality oriented people in all departments c) provide TQM training to everybody set high quality standards EG: i. Swissair- 96% CS ii. Citibank phone call answered within 10 seconds iii. customers letter answered within two days
3)
4)
have a system for monitoring service performance i. own ii. major competitors via ghost shopping, customer surveys, suggestions and complaint form / toll free telephone number have a system to resolve complaints quickly satisfy both employees and customers state in everybodys job description how his job affects customer satisfaction
5) 6) 7)
4)
BRANDING
SERVICE PRODUCT BRANDING BRANDING MEANS GIVING A NAME, SYMBOL AND A NUMBER TO A PRODUCT IN ORDER TO DIFFERENTIATE ONE PRODUCT FROM ANOTHER. IN THE PAST, BRANDING WAS MAINLY USED IN CONSUMER GOODS. TODAY IT IS ALSO BECOMING POPULAR IN SERVICES. BRAND, BRAND NAME ,TRADEMARK EXAMPLEX MOAVAN ACCOUNT (FAYSAL BANK) IZAFA TERM CERTIFICATES (FAISAL BANK) INDIGO (MOBILINK) DJUICE (TELE NOR) JAZZ (MOBILINK) SMART (TELENOR) BAHBOOD SAVING CERTIFICATES (NATIONAL SAVINGS)
PRICE
MARKETING-MIX IN SERVICES
PRICE DEFINING PRICE IMPORTANTACE OF PRICE FOR THE COMPANY AND THE CUSTOMER PRICING OBJECTIVES FACTORS WHICH AFFECT PRICE DETERMINATION PRICING METHODS PRICING STRATEGIES PRICE LEVELS DISCOUNTS PAYMENT MODES AND TERMS (MOP, TOP)
PRICING
DEFINITION:A) AMOUNT OF MONEY NEEDED BY A CUSTOMER TO OBTAIN A PRODUCT. IT GENERALLY INCLUDES THE PRICE OF PSS OR SSP OFFERED BY THE COMPANY. B) WORTH OR VALUE OF BENEFITS OF A PRODUCT IN THE MIND A CUSTOMER, MEASURED IN SOME MONETARY UNITS.
CHARACTERITCS OF PRICE
1) AN ELEMENT OF M-MIX. IT MUST BE CUSOMTER-ORIENTED
2)
3) 4)
UNLIKE OTHER Ps OF M-MIX, PRICE GENERATES REVENUE, OTHER ELEMENTS INCUR COSTS.
UNLIKE OTHER Ps OF M-MIX, PRICE CAN BE CHANGED QUICKLY. IT IS THE MOST FLEXIBLE ELEMENT OF M-MIX SETTING PRICE AND FIGHTING PRICE COMPETITION IS NUMBER ONE PROBLEM FACING THE MARKETING EXECUTIVES.
PRICING OBJECTIVES
1. 2. 3. 4. 5. MAXIMIZATION OF CURRENT PROFIT HIGH CURRENT SALES VOLUME AND MS TO REFLECT PRODUCT QUALITY LEADERSHIP TO BE ENSURE SURVIVAL OF THE COMPANY. SHORT TERM OBJECTIVE. TO MAINTAIN STATUS QUO OF THE CURRENT PRICE LEVEL IN THE MARKET AND TO AVOID A PRICE WAR MANAGEMENT MUST DECIDE PRICING OBJECTIVES BEFORE SETTING THE PRICE
THE CLEARER A FIRM IS ABOUT ITS PRICING OBJECTIVES, THE EASIER IT IS TO SET THE PRICE.
6) 7) 8)
4) 5) 6)
PRICING STRATEGIES
1. DIFFERENTIAL / FLEXIBLE DISCRIMINATORY PRICING STRATEGY
TWO OR MORE PRICES OF THE SAME SERVICE TO ACCOMMODATE DIFFRENCES IN CUSTOMERS, LOCATIONS AND TIMINGS, etc
PRICING STRATEGIES
THREE SUCH PRICING STRATEGIES, EACH FOR A DIFFERENT PURPOSE.
a) b) c) CUSTOMER- SEGMENT FLEXBLE PRICING STRATEGY LOCTION FLEXIBLE PRICING STRATEGY TIME FLEXIBLE PRICING STRATEGY
MAJOR DISADVANTAGE: CUSTOMERS GET HABITUAL, DELAY PURCHASES
PRICING STRATEGIES
2. DISCRETE PRICING STRATEGY
QUOTING A PRICE WITHIN THE FINANCIAL AUTHORITY OF A DECISION MAKER WHO HAS SYMPATHTIC ATTITUDE TOWARDS A SERVICE PROVIDER.
PRICING STRATEGIES
5. FIRST LOSS-ORDER PRICING STRATEGY
REDUCING PRICE FOR THE FIRST ORDER WITH THE HOPE OF GETTING FUTURE BUSINESS AT A BETTER PRICE
DISCOUNTS
DISCOUNTS
PERCENTAGE REDUCTION IN THE LIST PRICE OF A PRODUCT. TYPES OF DISCOUNTS. 1. TRADE DISCOUNT: FOR PERFORMING CERTAIN DISTRIBUTION FUNCTIONS. 2. CASH DISCOUNT:FOR PAYING BILL WITHIN A SPECIFIED PERIOD. E.G 2 \ 10 , NET / 30.
DISCOUNTS
3. QUANTITY DISCOUNTS TO ENCOURAGE CUSTOMERS TO BUY LARGE QUANTITIES / AMOUNT. CAN BE ON:(a). NONCUMULATIVE BASIS DISCOUNT BASED ON THE SIZE OF EACH INDIVIDUAL ORDER. ENCOURAGES LARGE ORDERS. (b) CUMULATIVE BASIS DISCOUNT BASED ON TOTAL VALUE OR VOLUME PURCHASED IN A CERTAIN PERIOD. CUSTOMER IS TIED UP WITH THE SELLER. E.G FFPs, FGPs
DISCOUNTS
4. SEASONAL DISCOUNT: SLACK / OFF-SEASON TO EVEN-OUT DEMAND AND SUPPLY, TO AVOID INVENTORY COST. 5. PROMOTIONAL ALLOWANCE FOR PROMOTIONAL SERVICES PERFORMED BY THE MM. EG: DISPLAYS, RETAILERS AD SHOWING PRODUCT.
SELLERS
PLACE
MARKETING-MIX IN SERVICES
PLACE LOCATION. ACCESSIBILITY VIA PHYSICAL AND COMMUNICATION MEANS DISTRIBUTION CHANNELS DISTRIBUTION COVERAGE
PLACE DISTRIBUTION
TWO ASPECTS/ DECISIONS A. LOCATION OF SERVICES PROVIDER SINGLE OR MILTI-SITE LOCATIONS FACTORS TO BE CONSIDERED IN LOCATION
1) DOES THE CUSTOMER GO TO THE SERVICE PROVIDER OR DOES THE SERVICE PROVIDER GO TO THE CUSTOMER 2) ACCESSABLE VIA PHYSICAL AND COMMUNICATION MEANS
PLACE DISTRIBUTION
B. DISTRIBUTION CHANNEL STRUCTURE AND EXTENT OF COVERAGE.
1. 2. 3. DIRECT DISTRIBUTION CHANNAL IS USED MOST OFTEN INDIRECT DISTRIBUTION CHANNEL. USED LESS EXTENSIVE, SELECTIVE OR EXCLUSIVE DISTRIBUTION COVERAGE
PROMOTION
MARKETING-MIX
PRODUCT
PRICE
PLACE
PROMOTION
PERSONAL SELLING
ADVERTISING
PUBLIC RELATIONS
PUBLICITY
MARKETING-MIX IN SERVICES
PROMOTION TO INFORM, CONVINCE OR REMIND
STRESS ON AVAILABILITY, CONSISTENT SERVICE QUALITY, PEOPLE, AND PHYSICAL ENVIRONMENT / EVIDENCE AND LOCATION
PROMOTIONAL-MIX:
1) 2) 3) 4) 5) PERSONAL SELLING ADVERTISING SALES PROMOTION TECHNIQUES P. RELATIONS AND PUBLICITY MAILING
PROMOTION DEFINITION
PURPOSE TO COMMUNICATE WITH (TO INFORM, PURSUADE OR REMIND) AND TO INFLUENCE TM CUSTOMERS TO USE COMPANY`S PRODUCT(S).
DEFINITION PROMOTION IS TO INFORM, PERSUADE OR REMIND TARGET MARKET CUSTOMERS OF A PRODUCT OR A COMPANY, THROUGH VARIOUS METHODS OF PROMOTION, IN ORDER TO ACHIEVE MARKETING OBJECTIVES.
PROMOTIONAL METHODS
FIVE MTHODS, EACH WITH DIFFERENT FEATURES AND SUITABLE IN DIFFERENT PROMOTIONAL SITUATIONS.
1) 2) 3) 4) 5) PERSONAL SELLING (PS)* ADVERTISING (AD)* SALES PROMOTION TOOLS OR TECHNIQUES (SPTs) PUBLIC RELATIONS (PR) PUBLICITY (PB)
*PRIMARY METHOD .
IMC
METHODS MUST BE COORDINATED FOR GREATEST IMPACT
a) b) SEQUENSE SAME MESSAGE
PROMOTIONAL METHODS
1)
PERSONAL SELLING
DIRECT PRESENTATION OF A PRODUCT TO A CUSTOMER OR A GROUP OF CUSTOMERS, THROUGH A REPRESENTATIVE, EITHER IN A FACE TO FACE SITUATION OR OVER PHONE (TELEMARKETING) DIRECTED AT INFLUENCERS, END-CUSTOMERS OR ON MIDDLEMEN.
PROMOTIONAL METHODS
2) ADVERTISING:
PROMOTIONAL METHODS
3)
COMPARE SALE BEFORE, DURING AND AFTER A SALES PROMOTION TOOL HAS BEEN USED, TO JUDGE EFFECETIVENESS OF SPTs SUPPORTIVE PROMOTIONAL METHOD TO PERSONAL SELLING OR ADVERTISING.
PROMOTIONAL METHODS
THREE KINDS OF SALES PROMOTION TOOLS:
a) SALES FORCE INCENTIVES
b) TRADE INCENTIVES
c) CONSUMER INCENTIVES
PROMOTIONAL METHODS
4) PUBLIC RELATIONS
A VARIETY OF COMMUNICATION EFFORTS, MADE BY A COMPANY, TO CREATE A FAVOURABLE ATTITUDE / OPINION OF VARIOUS PUBLICS * TOWARDS THE COMPANY OR ITS PRODUCTS SO THAT SELLING BECOMES EASY. EFFORTS. PR MODES / TOOLS: NEWSLETTERS, LOBBYING (INFLUENCING VIA PERSONAL CONTACTS), SPONSORING EVENTS BUILDS RELATIONS. USUALLY, NO SPECIFIC PRODUCT PROMOTIONAL MESSAGE IS COMMUNICATED IN PUBLIC RELATION
PROMOTIONAL METHODS
5) PUBLICITY
A SPECIAL FORM OF PUBLIC RELATIONS. INVOLVES RELEASING NEWS, ARTICLES, PHOTOGRAPHS, HOLDING PRESS CONFERENCES ETC., ABOUT A PRODUCT OR THE COMPANY, TO THE MASS MEDIA, FOR PUBLICATION / BROADCASTING AS A NEWS ITEM. IT IS NONPAID
PROMOTIONAL MIX
AN APPROPRIATE COMBINATION OF PERSONAL SELLING, ADVERTISING, SALES PROMOTION TECHNIQUES, PUBLIC RELATIONS AND PUBLICITY, IN ORDER TO ACHIEVE PROMOTIONAL AND MARKETING OBJECTIVES. PROMOTIONAL OBJECTIVES AWARENESS, KNOWLEDGE, LIKING, PREFERENCE, BUY, LOYALTY AND TO HAVE BRAND NAME ON THE TOP OF MIND.
MARKETING OBJECTIVES:
SALES, MS, GR, RANKING,RETAINING EXISTING AND DEVELOPING NEW CUSTOMERS AND PROFIT.
e) f) g) h) i) j)
PEOPLE
MARKETING-MIX IN SERVICES
a)
PEOPLE PLAY A CENTRAL ROLE IN BUILDING CS BY CREATING AND DELIVERING THE SERVICE, PARTICULARLY THE CUSTOMERS CONTACT STAFF TWO CATEGORIES OF PEOPLE COS STAFF
CUSTOMERS CONTACT STAFF CUSTOMERS NON-CONTACT STAFF THE CUSTOMER OTHER CUSTOMERS
b)
CUSTOMERS
i. ii.
THEIR APPEARANCE AND BEHAVIOUR INVOLVE THEM IN SERVICE PRODUCTION AND DELIVERY PROCESS
TYPES OF STAFF
CUSTOMER-CONTACT STAFF
CONNECTS CO TO CUSTOMER CONNECTS CUSTOMER TO THE COMPANY. THEREFORE, HE IS THE COMPANY BACKBONE OF CO, CRITICAL FACTOR. WHY?
PROCESSES
MARKETING-MIX IN SERVICES
PROCESSES
WHAT INDIVIDUAL SMALL,SEQUENTIAL, SPECIFIC AND VALUE ADDING STEPS CARRIED OUT TO PRODUCE AND DELIVER A SERVICE OR COMPLETE A TASK.
WRITTEN MECHANIZE CUSTOMERS INVOLVEMENT
KINDS:
PRODUCTION AND DELIVERY PROCESSES
PROCESS
WHAT SMALL, SEQUENTIAL, SPECIFIC AND VALUE ADDING STEPS TO COMPLETE A TASK EXAMPLE FROM McDONALDS STEPS:
1) GREETING BY THE COUNTER ATTENDANT. GOOD AFTERNOON 2) ASK THE CUSTOMER TO GIVE HIS ORDER MAY I TAKE YOUR ORDER 3) REPEAT BACK THE ORDER TO AVOID MISTAKES 4) ASK IF THERE IS SOMETHING ELSE THE CUSTOMER WOULD LIKE WOULD YOU LIKE TO ORDER FRENCH FRIES 5) ASK FOR PAYMENT 6) ANNOUNCE, ASSEMBLE THE ORDER AND PRESENT IT WITH COURTESY. THANK AND ASK THE CUSTOMER TO COME AGAIN.
HIGH
PRICE
PROFIT
LOW
MARKET SHARE
IT MEANS PERCENTAGE OF A MARKET OR OF A PRODUCT CLASS
CONTROLLED BY A COMPANY OR BY A PRODUCT / BRAND
USERS
INFREQUENT, FREQUENT LOYAL , RETAIN USE MORE OFTEN, OM INTRODUCE NEW USES RM
CURRENT MARKET
NEW MARKET
4. DIVERSIFICATION STRATEGY
2.
3.
TACTICS a) DEVELOP A NEW PRODUCT b) OFFER BENEFITS VIA NEW PRODUCT FEATURES.
DIVERSIFICATION STRATEGY
ENTER A NEW MARKET WITH A COMPLETELY NEW PRODUCT, BOTH UNRELATED WITH THE CURRENT BUSINESS. Eg
PIA : HOTEL BUSINESS, SPEEDEX SAS: HOTEL BUSINESS, AUTO RENTAL SERVICES ALFALAH : WARID
THIS STRATEGY IS ADOPTED WHEN GROWTH IS NOT POSSIBLE FROM THE OTHER THREE STRATEGIES. RISKY, COSTLY AND LONG-TERM STRATEGY. TOP EXECUTIVES MAKE THIS DECISION.
PROFITABILITY
PROFIT = REVENUE COSTS = (UNITS X PRICE) (VPCs + FCs) FOUR WAYS TO INCREASE PROFITABILITY 1) INCREASE VOLUME (UNITS) 2) INCREASE PRICE 3) REDUCE VPCs VIA BETTER PURCHASE OF INPUTS. 4) REDUCE FCs VIA EFFECTIVENESS AND EFFICIENCY OF PEOPLE THROUGH TRAINING AND UPTO DATE USE OF TECHNOLOGY IN OPERATION.
LONG-TERM PROFITABILITY
PRODUCT OR BRAND
INCREASE VOLUME
INCREASE PRODUCTIVITY
PRODUCT DEVELOPMENT
MARKET DEVELOPMENT
MARKET PENETRATION
COST * REDUCTION
OPERATION
MARKETING
4.
GROWTH STRATEGIES
NINE WAYS TO GROW :
1. 2. 3. 4. 5. 6. INCREASE PRODUCT-LINES (INCREASE P-MIX WIDTH) INCREASE PRODUCT-LINE LENGTH AND DEPTH. MARKET PENETRATION STRATEGY (MORE USAGE) MARKET DEVELOPMENT STRATEGY(MORE USERS) PRODUCT DEVELOPMENT STRATEGY (BANKS: CREDIT CARDS). PRODUCT DIVERSIFICATION STRATEGY EG: AIRLINES HAVING OWN HOTELS
GROWTH STRATEGIES
7) FORWARD INTEGRATION
GOING INTO A NEW BUSINESS IN WHICH THE OUTPUT OF THE CURRENT BUSINESS CAN BE GAINFULLY USED AS AN INPUT TO PRODUCE AN OTHER PRODUCT EG : DRYCLEANING EQUIPMENT MANUFACTURING COMPANIES GOING INTO DRYCLEANING BUSINESS.
8)
BACKWARD INTEGRATION
GOING INTO A NEW BUSINESS IN WHICH THE OUTPUT OF THE NEW BUSINESS CAN BE GAINFULLY USED AS AN INPUT FOR THE CURRENT BUSINESS EG : DRYCLEANING COMPANIES ACQUIRING EQUIPMENT MANUFACTURING COMPANIES.
9)
HORIZONTAL INTERRATION
ACQUIRING / MERGIING WITH A SIMILER COMPANY
3. INTERNAL PROCESSES B) VISIBLE PART - CONSISTS OF : 1. CUSTOMER CONTACT STAFF 2. THE CUSTOMER 3. OTHER CUSTOMERS 4. PHYSICAL SETTING 5. FACILITATING EQUIPMENT 6. DELIVERY PROCESS
VISIBLE PART
NEED FOR INFORMATION FOR DECISION MAKING DURING VARIOUS STAGES OF MANAGEMENT
CHARACTERISTICS OF INFORMATION
1) 2) 3) 4) 5) RELEVANT ADEQUATE TRUE / ACCURATE UPDATED ON TIME
INFORMATION IS AVAILABLE BOTH FROM INSIDE AND OUTSIDE A COMPANY, THROUGH MR. UNLESS INFORMATION IS USED, IT IS WORTHLESS.
ICR
MKT. I S
2
MDSS
MR
ii.
CHOICE OF METHOD DEPENDS UPON THE NATURE OF TASK, TIME AVAILABLE AND THE COST.
POSTAL
PERSONAL OBS
ELECTRONIC OBS
INDIVIDUAL
FOCUS GROUPS
RESPONSES /
5.
6.
i. ii.
COLLECT DATA
OWN OR OUTSIDE STAFF ACTIVE PHASE, EXPENSIVE PHASE, PRONE TO ERROR
7.
i. ii.
8.
QUESTIONNAIRE
IS A SET OF APPROPRIATE QUESTIONS, PRESENTED TO A RESPONDENT FOR RECORDING ANSWERS, RESPONSES OR OBSERVATIONS. USED COMMONLY
QUESTIONNAIRE
CHARACTERISITCS OF A GOOD QUESTIONNAIRE A) SIMPLE WORDS B) SHORT AND SIMPLE QUESTIONS C) SEQUENTAL QUESTIONS. D) PERSONAL QUESTIONS TOWARDS THE END. E) ONE SPECIFIC IDEA PER QUESTION. F) NOT TOO MANY QUESTIONS. 10 12 QUESTIONS ARE SUFFICIENT.
QUESTIONNAIRE
G) INCLUDE BOTH OEQs AND CEQs 1) OEQs (DICHOTOMOUS, MULTIPLE CHOICE, SCALING, DIRECT AND INDIRECT). - GENERALLY, MAKE THE RESPONDENT THINK - ANSWERED IN RESPONDENTS OWN WORDS - REVEAL MORE INFO. 2) CEOs (DICHOTOMOUS, MULTIPLE CHOICE, SCALING, DIRECT AND INDIRECT). - GENERALLY, DO NOT MAKE THE RESPONDENT THINK - RESPONDENT MAKES HIS CHOICE OF ANSWER FROM THE PRE-SPECIFIED ANSWERS. TEST THE QUESTIONNAIRE BEFORE ITS USE ON A LARGE SCALE.
4)
5)
2.
EFFECTS ON MR
REDUCES INCENTIVE FOR R&D (INNOVATION) THUS, FUCUS ON ME-TOO SERVICES HOME-USE TESTS ARE NOT POSSIBLE. CREATES PROBLEMS IN CONCEPT TESTING MR RESULTS MAY BE VERY WRONG OR DIFFERENT.
4)
2)
PLANNING
SETTING OBJECTIVES, MAKING STRATEGIES / TACTICS DETERMING RESOURCES DECIDING MONITORING MECHANISM AND ITS TIMING
5) TAKING ACTIONS
ORGANIZATION STRUCTURE, STAFFING, GIVING RESPONSIBILITIES, EMPOWRING,TRAINING; COACHING COMMUNICATING AND EXECUTING THE PLAN
2) SMART
3) PURE
6) PRIORITIZED
HOW A PERSON OR A COMPANY INTENDS TO ACHIEVE THE OBJECTIVE (S). OVERALL AND NON-SPECIFIC ACTION, METHOD OR A GAME PLAN. GENERATE AND EVALUATE ALTERNATE STRATEGIES BEFORE SELECTING THE FINAL STRATEGY INVITE PARTICIPATION LOOK FOR CREATIVITY LONG-TERM DETAILED AND SPECIFIC ACTIONS WHICH WILL BE TAKEN TO IMPLEMENT THE CHOSEN STRATEGY IN ORDER TO ACHIEVE THE OBJECTIVE (S).
TACTICS
INVITE PARTICIPATION
SHORT TERM
WHAT IS PLANNING?
ONE OF THE STAGES OF MANAGEMENT PROCESS DURING WHICH:A MANAGER AFTER HARD THINKING AND INTENSIVE CONSULTATION:1) SETS OBJECTIVES / GOALS 2) ESTABLISHES STRATEGY
a) b) c) TM SCAs IN THE MARKETING-MIX PRODUCT POSITIONING
3) DEVELOPS A DETAILED PLAN OF SPECIFIC ACTIONS / TACTICS 4) DETERMINES NEEDED RESOURCES 5) DECIDES A MONITORING OR CONTROLLING MECHANISM AND ITS TIMING NEEDED IN ALL COMPANIES, IN ALL BUSINESS FUNCTIONS AND AT ALL LEVELS. A PLAN IS THE RESULTANT DOCUMENT PRODUCED AT THE END OF THE PLANNING STAGE A PLAN GIVES A CLEAR ROAD MAP TO FOLLOW.
IT IS A WORKING DOCUMENT
DECIDE TM
DECIDE RESOURCES
DECIDE MONITORING MECHANISM AND ITS TIMING
VARIOUS Ps OF M-MIX PRODUCT SUPPORT SERVICES COMPANY PERFORMANCE A) SALES B) MS, GR, RANKING
HUMAN RESOURCE AND THEIR SKILLS (QUANTITY & QUALITY) NON-HUMAN RESOURCES (QUANTITY & QUALITY) COMPANY IMAGE
3.
SELECT TM VIA SEGMENTATION CREATE SDAs DEVELOP DISTINCT PRODUCT POSITIONING DEVELOP AN APPROPRIATE M-MIX TO ACHIEVE CS DECIDE RESOURCES DECIDE MONITORING MECHANISM AND ITS TIMING
CREATE AN APPROPRIATE ORGANIZATION. RECRUIT STAFF WITH ABILITY / TALENT, WILLINGNESS / MOTIVATION AND SUITABLE PERSONALITY. EXECUTE THE PLANNED STRATEGIES AND TACTICS.
7.
REPRIMAND
SERVERE VERBAL DISAPPROVAL OF A BIG WRONG ACT OF AN EXPERIENCED SUBORDINATE, BY HIS SENIOR
BENEFITS OF PLANNING
GIVES DIRECTION VIA GOALS SETS YARDSTICK OR STANDARDS REDUCES / AVOIDS UNCERTAINTY OR HAZARDS BY LOOKING AHEAD, ANTICIPATING CHANGE AND ITS IMPACT; AND RESPONDING TO CHANGE IMPROVES EFFECTIVENESS AND EFFICIENCY DUE TO WELL THOUGHT SPECIFIC ACTIONS MAKES OTHER STAGES OF MANAGENENT RUN EASY AND SMOOTH ENSURES COORDINATION BETWEEN VARIOUS PEOPLE AND DEPARTMENTS
B)
WILL NOT DO
PLANNING WILL NOT GIVE A PERFECT CRYSTAL BALL. IT WILL NOT PREDICT FUTURE WITH 100% ACCURACY
PLANNING PROCESS
WHERE ARE WE NOW ?
WHERE DO WE WANT TO Go TO ?
FOR THE BUDGET / PLANNING YEAR, TO GUIDE MANAGERS DURING THE REMAINING PHASES OF MANAGEMENT . IT IS A WORKING DOCUMENT
PERIOD OF PLANNING
A) STRATEGIC PLANNING / PLAN
1) LONG-TERM MORE THAN 5 YEARS TOP MANAGERS 2) MEDIUM-TERM 2-5 YEARS
MANY COMPANIES OPERATE WITHOUT FORMAL PLANS. NOT GOOD, NOT DO WELL.
TOP MANAGERS
OPERATIONAL PLANNING