Page 203 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes  Product Value: The worth assigned to the product by the customer.

Example: A customer might choose a Philips DVD because of superior features and
technology.

Service Value: The worth assigned to the service by the customer. The customer chose

Philips for its guarantees, warranties, large distribution networks, retail outlets and service
centres.
Personnel Value: The worth assigned to the service-providing personnel by the customer.

The customer bought it from a Philips showroom because of the personnel’s superior
product knowledge and customer-orientation.
Image Value: The worth assigned to the image of the service or the service provider by the

customer. The customer chose Philips because of the name association with quality,
innovation, etc.
Monetary Price: The actual rupee price paid by the consumer for a product; in the above

example, for the Philips DVD.
Time Costs: The time the customer has to spend to acquire the service. For the customer

who wanted to buy the DVD, this would include travelling time, product inquiry at
various retail outlets, clarification, demonstration, sales and payment time at the Philips
showroom as well as installation of the DVD.
Energy Costs: The physical energy spent by the customer to acquire the service. To purchase

the DVD, the customer would have had to endure travelling hassles, shopping
inconvenience, by himself or with the family, etc.
Psychic Costs: The mental energy spent by the customer to acquire the service, that is,

worrying and aggravation. The customer would have suffered anxiety during the selection,
delivery and installation of the DVD, especially if there were hassles. The last could
happen, for instance, if the wall paint is scratched/scraped and furniture damaged during
installation.

Self Assessment

Fill in the blanks:
1. is what customers are willing to pay for services.

2. is the ratio of perceived benefits of the service to be purchased to price and
other added costs.
3. is the worth assigned to the service-providing employees by the customer.

4. costs refer to the mental energy spent by the customer to acquire the service.

11.2 Uses and Objectives of Pricing

The importance of pricing to the development of marketing strategy is reflected in the diverse
range of strategic uses to which it is put:

At the beginning of the life of a new service, price is often used to gain entry to a new

market.

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