Service Marketing - Strategic Aspects Of Services Marketing - Notes - Business Management, Study notes of Business Administration

Download Service Marketing - Strategic Aspects Of Services Marketing - Notes - Business Management and more Study notes Business Administration in PDF only on Docsity! STRATEGIC ASPECTS OF SERVICES MARKETING We will now take up the strategic part of the services marketing area, through a discussion centered on the classic STP (segmentation, target marketing and positioning) aspects of services. The marketing of products also involves these steps, as you would be aware if you had a marketing management course before this one.Our emphasis will be on finding out the reasons for the services tending to be different at times, and we will focus on Indian service examples most of the time. Segmenting the Service Market Imagine that you were an entrepreneur with assured funding from a bank, and wanted to start a new service business. The reason for starting a service business could be your belief that services are more profitable in the long run. How do you go about this task of identifying a new business? Most likely, you would have to begin by deciding whom you want to market your service to. It is possible that some well-defined groups or segments already exist in the business area that you have identified. For example, if you want to start a hotel in Goa, there are two broad segments one can readily imagine-tourists and business travelers. However, these broad units could also be segmented based on other variables. For example, the domestic versus foreign clients, male or female customers, or young and middle- going to market. The segmentation variables can broadly be classified into three types: 1. Demographic 2. Psycho graphic 3. Behavioural SEC Grid for Segmenting Customers There is an alternative segmentation method called the socio-economic classification (SEC), popular with marketers of both goods and services. This is a matrix or grid, which combines information about a customer‘s occupation and education level, and is called the SEC level of the individual. This is sometimes used as a substitute for income-based segmentation by marketing research companies, while collecting the data. The advantage of the SEC according to marketing researchers is that it is easier to get accurate data on occupation and education level than on income. Besides, it could reflect reality better as the person‘s aspirations for certain products or services could be linked to his SEC rather than income alone. The following section gives an idea of what the categories look like. The SEC grid itself is shown in the following Fig. This grid applies to the Indian urban households, and has been formulated by the Indian Market Research Society. It is based on a similar SEC Grid developed in other countries, but has been adapted to the Indian context. Illiterate Schoo School SSC College, Grad/ Grad/Post F 0 B 7 The education and occupation indicators are those of the chief wage earner. If he is retired, then the occupation before retirement is considered for the classification. F 0 B 7 A subset within A1 is the class A1+, comprising households which belong to SEC A1, where the monthly household income is above Rs 10000. Estimated Size of the different SEC Groups the estimated sizes of the various SEC categories, according to the National Readership Survey (NRS) 2000 have been given in TABLE All Urban Top 8 Metros Total Households ('OOOs) 52783 % 14148 % SEC A1 + 1167 2.2 631 4.5 A1 2383 4.5 1018 7.2 A1/A2 6032 11.4 2083 14.7 B1/B2 10110 19.2 2767 19.6 Just to take the opposite view and see what may be required if he were to serve all possible segments in all possible geographical areas (even if we limit ourselves to just the city of Bangalore), he may have to open 30 restaurants of different kinds in different areas of the city, catering to different types of customers and tastes. This would probably test his resources, hampering many aspects of his control over the business such as hiring, training, quality of service, and so on. It might also require him to take a massive amount of loan, and increase his chances of failure. The point of this example is that it is usually prudent for a service provider to choose one or a few of all possible target segments. He may, after gaining confidence in serving that segment, expand into serving the same type of customers elsewhere, or even try entering different segments by say, adding north Indian food items to his restaurant‘s existing south Indian menu. To provide a parallel from the consumer goods field as an illustration, Procter and Gamble, the multinational producer of consumer goods, decided to cut back on its product and market segments in India in the early part of this decade, after an attempt to beat Hindustan Lever in product range and distribution failed. As a general principle, if a marketer of services tries to be everything to everyone, he runs the risk of being a nobody, or rather, nobody‘s preferred provider. This is not to say that the ambition should be absent, but only that it isles risky to proceed a step at a time. This is because a firm‘s resources are usually limited, whatever be its size. Another example from the software industry may be useful. Tata Consultancy Services (TCS), India‘s top IT exporter, took several decades to grow steadily to the position it enjoys today, in the difficult market for specialized services in an internationally competitive situation. It expanded its reach slowly and grew steadily in line with its corporate objectives and philosophy, choosing to remain a privately held company even though many companies after it used the stock market route for a quicker growth rate. TCS felt comfortable growing the way it did, unlike many others who rose rapidly and fell into oblivion as quickly, partly because they tried too many things at once.