Page 87 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes feeder (non-popular, giving connections to main airlines) routes, and intense competition
brought down its operating margins.
But the biggest problem it faced was in getting the professionally trained personnel –
flight, ground and marketing. It also never could position itself in the minds of the
passengers vis-à-vis Jet airways, Modi-Luft (now defunct) and Air Sahara.
Questions:

1. Do services have different characteristics from goods?
2. Can you explain why, although NEPC was strong in goods, it failed in a service
venture?

3.3 Summary

This unit attempts to give an overview of the functions in as simple manner as possible.
Services have become an integral part of any economy’s infrastructure and have become
indispensable to urban life.

Services marketing is marketing based on relationship and value. It may be used to
market a service or a product. Marketing a service-base business is different from marketing
a product-base business.
There are four special characteristics of services: intangibility, perishability, variability
and inseparability.

A customer cannot see, touch, or feel the service product. There is also no scope for the
customer to make impulse purchase decisions as triggered by visual images and the
touch-and-feel factor – which are not any way possible in intangible service offers.
These are the ways in which intangibility can be overcome: Visualization, Association,
Physical Representation and Documentation.

The perishability factor prevents a service marketer from storing his offers. This robs him
of the privilege of delayed sales. The service marketer suffers from lost opportunities.
Methods to overcome perishability are: over-marketing, managing demand and managing
supply.

Variability conveys to the customer an element of inconsistency and non-standardization
in the service offer and service delivery. The customer’s service encounters are different
every time. This can be overcome by training of internal customers, proper recruitment
and selection of other customers, training of external customers and automation.

Services can be differentiated from products based on factors such as the nature of the
product, customer involvement in the production process, people as part of the product,
quality control problems, difficulty in evaluation, absence of inventories, importance of
the time factor, and nature of distribution channels.
Services can be classified by: end-users, degree of tangibility, people, expertise, and
orientation towards profits.

In end users classification, there can be three types of end users namely: individual
consumers, business-to-business end users and industrial end users.

Services can also be separated as high contact services that involve higher degree of
contact from the customers like financial services and low contact services like ATM.

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