TYBMS SEM 5 : Marketing: Services Marketing (Q.P. April 2019 with Solution)

 Paper/Subject Code: 46004/Marketing: Services Marketing

TYBMS SEM 5 : 

Marketing:

Services Marketing

(Q.P. April 2019 with Solution)

N.B. 1. All questions are compulsory

2. Figures to the right indicate marks.

Q1 A) Match the columns (any eight)                                08

Column A	Column B
1 Service	A Tangible aspect
2 High Contact	B Line of visibility
3 Service encounter	C Exception petal
4 Physical Evidence	D Empathy
5 Service Flower	E ITC
6 Service Blueprint	F Enabling Promises
7 Quality Dimension	G Moment of Truth
8 Zone of Tolerance	H Intangible in Nature
9 Internal Marketing	I People based
10 Innovation in services	J Accept Variance

Ans:

Column A	Column B
1 Service	H Intangible in Nature
2 High Contact	I People based
3 Service encounter	G Moment of Truth
4 Physical Evidence	A Tangible aspect
5 Service Flower	C Exception petal
6 Service Blueprint	B Line of visibility
7 Quality Dimension	D Empathy
8 Zone of Tolerance	J Accept Variance
9 Internal Marketing	F Enabling Promises
10 Innovation in services	E ITC

Q.1 (B) True or False (Attempt any 8)                 08 

1. Services cannot be owned, touched and stored. 

Ans: True

2. Service Marketing Triangle developed by Philip Kotler. 

Ans: False

3. Services are only people based. 

Ans: False

4. A Service blueprint is a flowchart of service process. 

Ans: True

5. Responsiveness refers to the willingness to help customers to provide prompt service. 

Ans: True

6. Demand for services is not so volatile in nature. 

Ans: False

7. The flower of service concept developed by Christopher Lovelock. 

Ans: True

8. Service Gap model is divided into customer gap and employee gap. 

Ans: False

9. Servicescape is landscape in which service is transacted. 

Ans: True

10. Zone of tolerance is the gap between desired service and adequate service. 

Ans: True

Q2. A) Define Services. Explain the various ways to overcome the challenges of service marketing.                 07

Services are intangible activities or benefits that an organization provides to satisfy customer needs and wants, without the transfer of ownership of any physical product.

According to the American Marketing Association:
"A service is an activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything."

Examples:

• Healthcare, education, banking, tourism, hospitality, telecom, and consultancy.

Challenges of Service Marketing

Marketing services is more complex than marketing physical goods due to the unique characteristics of services. These challenges stem from the Four I’s:

1. Intangibility

• Services cannot be seen, touched, or measured before purchase.

2. Inseparability

• Services are produced and consumed at the same time.

3. Variability (Heterogeneity)

• Quality can vary based on who provides the service, when, and how.

4. Perishability

• Services cannot be stored or inventoried for future use.

Ways to Overcome Challenges in Service Marketing

1. Overcoming Intangibility

Customers can't physically assess the service before purchase.

• Use tangible cues: ambiance, décor, uniforms, branding.

• Highlight testimonials and reviews.

• Offer guarantees and warranties (e.g., “100% satisfaction guaranteed”).

• Use visuals and videos to demonstrate service quality.

2. Overcoming Inseparability

The customer and service provider must often be present together.

• Train staff to deliver consistent and professional experiences.

• Improve customer interaction skills.

• Use self-service technologies (ATMs, kiosks, apps).

• Enhance customer participation through clear instructions and involvement.

3. Overcoming Variability

Service quality may differ from person to person or day to day.

• Develop standard operating procedures (SOPs).

• Regular employee training and development.

• Use automation where possible (e.g., chatbots, self-check-in).

• Take customer feedback to monitor and improve quality.

4. Overcoming Perishability

Services cannot be stored for later use.

• Use demand forecasting and scheduling to manage capacity.

• Offer off-peak pricing or promotions to balance demand.

• Implement reservation systems (e.g., appointment booking).

• Use part-time staff or flexible shifts during peak hours.

B) Distinguish between Goods and services.             08 

	Goods	Service
1. Tangibility	Goods are tangible, meaning they have a physical form. They can be seen, touched, stored, and inspected before purchase. Example: A mobile phone, car, or a bag.	Services are intangible, meaning they cannot be physically touched or stored. They are experienced rather than owned. Example: Getting a haircut, consulting a lawyer, or attending a yoga class.
2. Ownership	Goods involve a transfer of ownership from seller to buyer. Once purchased, the customer becomes the owner of the good.   Example: When you buy a car, it legally becomes your property.	Services do not involve ownership. You only gain access to or use of the service for a limited time.   Example: When you stay at a hotel, you don’t own the room — you're paying to use it temporarily.
3. Production and Consumption	Goods are usually produced, stored, and then sold. Production and consumption happen separately.   Example: A bakery produces bread in the morning and sells it later in the day.	Services are produced and consumed simultaneously. The customer often must be present during delivery.   Example: A massage or medical treatment is delivered and consumed in real-time.
4. Perishability	Goods are less perishable — they can be stored in inventory for later sale.   Example: Packaged food or electronics can sit on a shelf for weeks.	Services are highly perishable — they expire the moment they are offered and not used.   Example: An empty hotel room or missed doctor's appointment cannot be sold later.
5. Consistency and Quality Control	Goods are usually standardized — meaning quality can be controlled during production.   Example: Every unit of a branded chocolate bar will taste the same.	Services are variable — quality may differ depending on who provides the service, when, and how.   Example: Two taxi drivers may offer completely different experiences.
6. Customer Involvement	Goods typically require less customer involvement in the production process.   Example: A customer simply chooses and buys a TV.	Services often require active customer involvement.   Example: In a music class, the student's participation affects the outcome of the service.
7. Returnability	Goods can be returned or exchanged if defective or unwanted.   Example: You can return a dress if it doesn’t fit.	Services cannot be returned once delivered.   Example: You can’t return a haircut once it's done — although complaints may lead to compensation.

OR 

Q2. C) Explain Product Service continuum with the help of diagram. 07 

D) Explain the following terms: 08 

(i) Service recovery 

Service Recovery refers to the actions a company takes to respond to a service failure — that is, when a service doesn’t meet the customer’s expectations.

It’s about:

• Acknowledging the failure

• Fixing the problem

• Restoring customer satisfaction

• Preventing recurrence

Important

• Services are intangible and often people-driven, so mistakes are bound to happen.

• A poor recovery can lose a customer forever.

• A great recovery can turn a frustrated customer into a loyal advocate — this is known as the Service Recovery Paradox.

"A well-handled complaint can actually lead to higher customer loyalty than if no issue occurred at all."

Elements of Effective Service Recovery

1. Acknowledgment

   • Apologize sincerely — even if it’s not your fault.

2. Fix the Problem

   • Resolve the issue quickly and correctly.

3. Empathize

   • Show genuine care and understanding of the customer’s frustration.

4. Offer Compensation (if needed)

   • Refunds, discounts, free upgrades, etc.

5. Follow-Up

   • Check if the customer is satisfied with the resolution.

6. Learn from the Failure

   • Analyze root causes to prevent future problems.

Example in Healthcare (Service Recovery Scenario):

Situation: A patient’s appointment is canceled last minute due to a scheduling error.

Poor Response:

• "You’ll have to rebook, we’re busy today."

Good Service Recovery:

• Immediate apology from staff

• Rescheduled appointment at patient's convenience

• Doctor personally apologizes during next visit

• A small token gesture (e.g., waived consultation fee)

Example in Banking:

Situation: A customer is charged wrongly for a service.

Service Recovery:

• Apologize for the error

• Refund the amount quickly

• Send an email confirming resolution

• Offer a goodwill gesture like reward points

Tools for Service Recovery

• Training staff to handle complaints empathetically

• Empowering frontline employees to make decisions on the spot

• Feedback systems like surveys or complaint forms

• Customer Relationship Management (CRM) tools to track and follow up

Service Recovery Paradox

Sometimes, if a company recovers exceptionally well from a failure, the customer may end up being more satisfied than if nothing had gone wrong.
But! This only works if:

• The problem was small to moderate

• It’s not a recurring issue

• The recovery is swift and thoughtful

(ii) Service encounter 

A Service Encounter is the moment of interaction between a customer and a service provider (human or automated) during the delivery of a service.

It’s also called the "moment of truth", because it's when the customer forms a real-time impression of the service quality.

Features

• Can be face-to-face, phone-based, online, or self-service.

• Can happen once or multiple times during a service experience.

• It's where expectations meet reality — and where satisfaction is shaped.

Example: In the Healthcare Industry

Service Encounter Examples:

• Talking to the receptionist while booking an appointment

• Consultation with the doctor

• Receiving test results from a nurse

• Using a hospital’s online appointment system

Each of these is a service encounter.

Example: In the Banking Sector

• Visiting a bank and interacting with a teller

• Chatting with a customer care agent online

• Using an ATM or mobile banking app

Even an ATM interaction is a service encounter — it’s the "interface" where the service is experienced.

Why Service Encounters Matter

• They define customer perceptions of the brand.

• A positive encounter can build trust and loyalty.

• A negative encounter, even a small one, can damage the entire customer relationship.

(iii) Type of contact 

These types are based on how and where the customer interacts with the service provider. This was highlighted in service design and operations by scholars like Shostack and Lovelock.

The main types:

1. High Contact Services

• The customer is physically present and interacts directly with the service personnel or environment.

• Service is consumed and produced at the same time.

Examples:

• Visiting a hospital or clinic

• Dining at a restaurant

• Attending a university lecture

• Getting a haircut

Characteristics:

• Face-to-face interaction

• Often emotional or personal

• Servicescape (physical environment) plays a big role

2. Low Contact Services

• Minimal or no physical presence of the customer is needed.

• Most interactions happen via technology, phone, or online.

Examples:

• Mobile banking

• Online shopping

• E-learning modules

• Insurance purchased online

Characteristics:

• More efficient and scalable

• Technology-based interactions

• Less need for physical infrastructure

3. Mixed Contact Services

• A combination of both high and low contact.

• Some parts of the service require physical presence; others can be done remotely.

Examples:

• Booking a flight online (low contact) → airport check-in and boarding (high contact)

• Online doctor consultation (low contact) + lab test at a clinic (high contact)

Characteristics:

• Offers convenience and flexibility

• Requires integrated systems (tech + human touch)

Q3 A) Explain the “Flower of Service’ concept with reference to banking sector. 07 

The Flower of Service is a model that describes the core service surrounded by supplementary services which add value and enhance the customer experience.

• At the center: The Core Service – the main benefit the customer seeks.

• Around it: 8 Supplementary Services, grouped as:

  • Facilitating services – make the core service accessible

  • Enhancing services – add value and differentiation

Flower of Service in the Banking Sector

The primary benefit — e.g., safekeeping and management of money, credit access, and financial transactions.

Supplementary Services in Banking

🔹 Facilitating Services:

1. Information

   • Product brochures, online FAQs, interest rate sheets, mobile app guides.

   • Example: A bank explains loan options or digital banking features.

2. Order Taking

   • Account opening, loan application, credit card issuance.

   • Example: Online account opening forms or in-branch service desks.

3. Billing

   • Statements, fee disclosures, SMS alerts for charges.

   • Example: Monthly credit card statement sent by email or app.

4. Payment

   • Online banking, ATMs, UPI, cheques, auto-debit.

   • Example: Paying credit card bills via app or UPI.

🔹 Enhancing Services:

5. Consultation

   • Financial advice, investment planning, loan counseling.

   • Example: A relationship manager suggests a suitable savings plan.

6. Hospitality

   • Comfortable waiting areas, refreshments, polite staff.

   • Example: Premium customers offered lounge access or coffee at select branches.

7. Safekeeping

   • Locker facilities, document storage, secure login credentials.

   • Example: Safe deposit lockers for valuables.

8. Exceptions

   • Handling special requests, complaint resolution, fraud support.

   • Example: Reversing a mistaken charge or reissuing a lost debit card quickly.

Example: Applying the Flower to a Premium Banking Experience

A customer visiting a private banking branch may:

• Get a consultation with a wealth advisor

• Enjoy hospitality with a personal lounge and refreshments

• Use order-taking services to invest in mutual funds

• Receive safekeeping for legal documents

• Get real-time billing alerts via app

• And benefit from exception handling if there's a card dispute

B) Explain Physical evidence and People elements of marketing mix with reference to Health care industry.             08

The People and Physical Evidence elements of the 7Ps marketing mix, specifically in the context of the healthcare industry:

PEOPLE in Healthcare

🔹 Definition:

In services marketing, People refers to all individuals directly or indirectly involved in delivering the service — including employees and even customers themselves.

 In Healthcare:

People play a critical role because the service experience often depends entirely on interactions between the healthcare provider and the patient.

People in Healthcare:

• Doctors and Specialists – Core service providers; expertise and bedside manner matter deeply.

• Nurses and Support Staff – Patient care, communication, responsiveness.

• Receptionists & Admins – First point of contact, handle scheduling, billing, etc.

• Patients – Their cooperation, communication, and behavior influence the service outcome.

Example in Action:

• A compassionate doctor who listens carefully and explains treatment clearly can lead to higher patient satisfaction, even if the outcome is the same.

• A rude or disorganized receptionist can negatively affect a patient’s perception of the entire hospital.

Importance:

• Affects trust, compliance, and reputation.

• Helps in service differentiation (e.g., hospitals known for "warmth" and "care").

PHYSICAL EVIDENCE in Healthcare

🔹 Definition:

Physical evidence refers to the tangible cues and physical environment that support or represent the service. Since services are intangible, customers rely on physical evidence to judge quality.

In Healthcare:

It includes everything the patient sees, hears, touches, or smells — forming part of the servicescape.

Physical Evidence in Healthcare:

• Hospital building and interior – Cleanliness, lighting, design, comfort of waiting areas.

• Signage and directions – Clear wayfinding reduces anxiety.

• Uniforms and appearance of staff – Symbolize professionalism and hygiene.

• Medical equipment – Modern, well-maintained tools boost patient confidence.

• Documents and materials – Prescription forms, discharge papers, hospital brochures.

• Online presence – Website design, appointment system, and even social media reviews.

Example in Action:

• A hospital with clean, well-lit, and organized interiors gives patients a feeling of safety and professionalism.

• A cluttered or outdated website may make patients question the hospital’s efficiency.

Importance:

• Enhances credibility and perceived quality.

• Helps create a positive brand image and reduce anxiety in a high-stress environment.

Q4 A)What is Service Blueprint? Explain the different steps in building service blue print.                 07

A Service Blueprint is a visual diagram that maps out the entire process of delivering a service, from the customer’s point of view to the back-end operations.
It helps businesses understand how a service is delivered, identify pain points, and improve both customer experience and operational efficiency.

Purpose of a Service Blueprint:

• To analyze, plan, and improve service processes

• To align frontstage (what customers see) and backstage (internal processes)

• To design better service experiences

Components of a Service Blueprint:

Customer Actions : Steps taken by the customer during the service

Frontstage (Visible) Employee Actions : Actions of staff that are visible to the customer

Backstage (Invisible) Employee Actions : Actions not seen by the customer but necessary for service

Support Processes : Systems or processes supporting employees (e.g., software, logistics)

Physical Evidence : Tangible elements experienced by the customer (receipts, emails, brochures)

Lines (of Interaction, Visibility, Internal Interaction) : Boundaries separating roles and stages

Steps in Building a Service Blueprint:

1. Identify the Service to Be Blueprinted

• Choose a specific service or customer journey (e.g., "Booking a hotel room").

2. Define Customer Actions

• List every action the customer takes (e.g., searching hotels, booking, checking in).

3. Map Frontstage Employee Actions

• Add what service staff does in response to customer actions (e.g., receptionist checks availability).

4. Map Backstage Employee Actions

• Include behind-the-scenes steps (e.g., housekeeping preparing room, IT processing payment).

5. Include Support Processes

• Add systems or internal support functions (e.g., booking software, inventory systems).

6. Add Physical Evidence

• Highlight touchpoints the customer sees or interacts with (e.g., booking confirmation email, lobby ambiance).

7. Draw Lines of Interaction

• Line of Interaction: Between customer and frontstage.

• Line of Visibility: Separates what customer sees from what they don't.

• Line of Internal Interaction: Between frontstage and backstage/support.

8. Analyze and Improve

• Look for gaps, bottlenecks, or redundancies.

• Use blueprint to improve efficiency, consistency, and user experience.

Q.4 B) How will you balance the gap between demand and supply in service marketing     08 

In service marketing, managing the demand-supply gap is crucial because services are perishable (they can’t be stored), and customer satisfaction depends on timely delivery.

Why the Gap Exists:

• Sudden peak demand (e.g., holiday rush at hotels)

• Limited capacity (e.g., number of seats, staff, equipment)

• Unpredictable customer behavior

• Seasonal fluctuations

Strategies to Balance Demand and Supply:

Managing Demand

1. Differential Pricing

   • Charge higher during peak times and lower during off-peak to shift demand.

   • Example: Movie ticket prices vary by time of day.

2. Promotional Incentives

   • Offer discounts or bonuses during off-peak periods to encourage early or delayed use.

   • E.g., “Happy hours” in restaurants.

3. Reservation Systems

   • Helps control and spread out demand.

   • Example: Online booking for doctor appointments or hotel rooms.

4. Develop Complementary Services

   • Offer alternative or add-on services to engage customers during waiting time.

   • Example: Free Wi-Fi or entertainment in waiting areas.

5. Queue Management Systems

   • Use digital or physical queue systems to make high demand periods more organized and efficient.

Managing Supply

1. Flexible Workforce

   • Use part-time or seasonal staff during peak periods.

   • Example: Hiring more delivery agents during festive seasons.

2. Increase Operational Efficiency

   • Streamline service processes using technology or automation.

   • Example: Self-check-in kiosks at airports or banks.

3. Outsourcing

   • Delegate non-core tasks to third parties to focus on peak service areas.

   • E.g., outsourcing customer support during high volume seasons.

4. Capacity Sharing

   • Collaborate with other providers to share capacity.

   • Example: Hotels using overflow partnerships with nearby lodges.

5. Service Redesign

• Modify how services are delivered to handle more volume.

• Example: Shift from individual to group training sessions in gyms.

OR 

Q4 C) Explain the different elements of transnational strategy.             07

A transnational strategy is an international business strategy that aims to combine global efficiency with local responsiveness.
It is used by companies that operate in multiple countries and need to balance global integration with adaptation to local markets.

It's the middle ground between:

• Global Strategy (standardization across countries) and

• Multidomestic Strategy (customization for each market)

Elements of a Transnational Strategy:

1. Global Integration

• Focus on achieving efficiency and consistency across international operations.

• Example: Using a centralized supply chain or global R&D to reduce costs and drive innovation.

• Benefit: Economies of scale, unified brand image

2. Local Responsiveness

• Adapting products, services, or marketing to fit local cultures, preferences, and laws.

• Example: McDonald's serves paneer burgers in India and teriyaki burgers in Japan.

• Benefit: Meets customer needs, improves market acceptance

3. Knowledge Sharing Across Borders

• Transferring knowledge, innovation, and best practices between country units.

• Encourages collaboration across regions (e.g., regional teams learning from each other).

• Benefit: Builds a strong learning organization

4. Flexible Organizational Structure

• Requires a matrix or hybrid structure to manage both global and local needs.

• Involves decentralized decision-making for local markets and centralized control for global efficiency.

• Benefit: Balances control with flexibility

5. Coordination and Control Systems

• Uses technology, performance metrics, and internal reporting to ensure coordination across all units.

• Helps manage complex interdependencies between global and local teams.

6. Global Brand with Local Flavor

• Maintains a consistent brand identity while allowing room for local customization.

• Example: Coca-Cola markets itself as the same drink everywhere but tailors ads and packaging based on local cultures.

Q.4 D) Write a note on emerging trends in Tourism sector.         08 

The tourism industry is constantly evolving due to changes in consumer preferences, technology, environmental awareness, and global events. In recent years, the sector has seen several emerging trends that are shaping the future of travel.

Emerging Trends in the Tourism Sector:

1. Sustainable and Eco-Tourism

• Travelers are becoming more environmentally conscious.

• Demand is rising for eco-friendly stays, low-carbon travel, and nature-based experiences.

• Example: Eco-lodges, wildlife sanctuaries, plastic-free tours

2. Digital and Smart Tourism

• Integration of AI, VR/AR, mobile apps, and smart devices into the tourism experience.

• Contactless check-ins, virtual tours, and AI-based travel planning are now common.

• Example: Virtual reality tours of historical places before visiting

3. Workation and Bleisure Travel

• A blend of business and leisure: Travelers work remotely while exploring new places.

• Popular after the rise of remote work culture.

• Example: Professionals staying in Goa or Bali while working online

4. Experiential and Cultural Tourism

• Tourists now seek authentic local experiences over traditional sightseeing.

• Activities like cooking classes, farm stays, tribal visits, and cultural festivals are growing in popularity.

5. Health and Wellness Tourism

• Travel focused on mental and physical well-being is booming.

• Spa retreats, yoga vacations, Ayurvedic treatments, and detox trips are in demand.

• India is emerging as a global hub for wellness tourism.

6. Personalized Travel Experiences

• Use of data and AI to create customized travel packages.

• Travelers expect tailored itineraries based on interests, preferences, and budgets.

7. Rise of Local and Domestic Tourism

• Especially after the COVID-19 pandemic, more people are exploring nearby destinations.

• Boosts rural and lesser-known areas, promoting inclusive development.

8. Adventure and Solo Travel

• Increased interest in adventure sports, trekking, scuba diving, and solo travel for self-discovery.

• Popular among younger generations and social media-driven travelers.

9. Responsible and Ethical Tourism

• Focus on respecting local culture, heritage, and communities.

• Tourists prefer companies that give back to the local economy and avoid exploitation.

Q 5 A) Case study Analysis 

Manya Travels Pvt. Ltd. a Travel and tourism company has been arranging regular tours to various places in India and had few tie ups with star graded hotels. 

In December 2017 Mr. Mohak Suvarna with his family booked a package tour to Kerala with Manya Travels and checked in one of the hotels where Manya travels have tie ups. However Mr. Mohak did not like the room and decided to register his complaint about the room. After booking the complaint, to his surprise within two minutes of the receiving electronic communication, the hotel manager called him to say that because the hotel was entirely booked being a busy season, the room could not be exchanged, however the guest could expect a hospitality gift from the hotel for his inconvenience. 

The next day garden facing room was available and which was offered to Mr. Mohak if he wished to shift. Mr. Mohak declined and told the manager that he and his family were quite comfortable in the present room. 

Questions: 

1) What is service recovery ? Analyse the service recovery in the case. 05 

2) What would be the effect of this incident on Manya Travels ? 05 

3) Why do you think Mr. Mohak declined to change his room? 05

 

OR 

Q 5 B) Attempt Short Notes (Any Three) 15 

1. Branding in Service

"Branding in service" refers to the process of creating a distinctive identity and perception for a service-based business in the minds of customers. Unlike product branding, where tangible items are branded, service branding focuses on intangible elements like customer experience, trust, and emotional connection.

Key aspects of branding in service:

1. Intangible Nature

• Services are experiences, not physical products. So, the brand promise must be clear and consistently delivered (e.g., “fast and friendly banking”).

• Because customers can't "see" a service before buying, they rely heavily on brand reputation and reviews.

2. Customer Experience is Everything

• In services, the brand is the experience. Every touchpoint (website, staff, response time, tone) shapes the perception.

• Employees are often “brand ambassadors” — their behavior and interaction play a huge role in delivering the brand promise.

3. Consistency

• The same quality and feel across locations, platforms, and interactions build trust and recognition.

• Example: Ritz-Carlton is known globally for impeccable service due to consistent training and standards.

4. Emotional Connection

• Strong service brands tap into customer feelings — security, comfort, efficiency, prestige, etc.

• Think about Airbnb (belonging), Zappos (happiness), or Spotify (personal connection through music).

5. Visual & Verbal Identity

• Though intangible, strong service brands still use logos, colors, taglines, and tone of voice to create recall and consistency.

• Example: Slack uses a friendly tone, vibrant visuals, and playful messaging — it humanizes a tech tool.

6. Differentiation

• In crowded markets, branding is key to standing out. Why choose Uber over a taxi? It’s not just service — it’s how the brand communicates ease, control, and modernity.

Examples of Strong Service Brands:

• FedEx – Reliability ("When it absolutely, positively has to be there overnight")

• Amazon – Customer obsession

• Apple Genius Bar – Premium, personalized tech support

• Netflix – Personalized entertainment experience

2. Positioning in Service

Positioning in Service refers to how a service brand defines itself in the minds of its target customers — essentially answering “Why should a customer choose us over others?” It's about carving out a distinct, desirable, and credible place in the market based on the service experience, value, and emotional appeal.

Service positioning is the strategic process of:

• Identifying your target audience

• Defining what unique value you deliver

• Creating a clear and consistent perception in customers' minds

It goes beyond just features — it’s about benefits, emotions, expectations, and experience.

Elements of Service Positioning

a) Target Market

Who are you serving? Families? Professionals? Gen Z? Businesses? This defines your tone, service model, pricing, and delivery.

b) Point of Differentiation (POD)

What makes your service better, faster, easier, cheaper, more reliable, or more enjoyable?

c) Brand Personality & Tone

How does your brand “behave”? Friendly? Premium? Innovative? Trustworthy?

d) Service Attributes

Things like response time, convenience, staff professionalism, atmosphere (physical or digital), customization, etc.

e) Customer Experience

How you treat customers before, during, and after the service is part of your position — especially in services.

4. Positioning Statement (Framework)

A simple formula to define your positioning:

For [target customer],

[Brand name] is the [category] that [unique benefit/point of difference]
because [reason to believe/proof].
Airbnb is the online marketplace that offers unique stays and cultural immersion,
because it connects you with real homes and hosts in over 220 countries.

Example – Airbnb

For travelers seeking authentic local experiences,

Real-World Examples of Service Positioning

• Spotify: Personalized music experience for everyone, anytime. Positioned on accessibility, personalization, and vibe.

• FedEx: Reliability and speed — “When it absolutely, positively has to be there overnight.”

• Coursera: Flexible, accessible, university-quality learning for self-driven people.

3. TQM in Service

Total Quality Management (TQM) in Service is all about creating a culture where continuous improvement, customer satisfaction, and quality service delivery are embedded into every aspect of the organization.

Unlike in manufacturing, where TQM focuses on physical defects or production processes, in services it emphasizes people, processes, and customer interaction — because service quality is often intangible, variable, and experienced in real time.

Definition of TQM in Service

A holistic approach to long-term success through customer satisfaction, involving all members of an organization in improving processes, culture, and service delivery.

Elements of TQM in Services

Customer Focus : Understand customer needs, expectations, and perceptions (e.g., feedback loops, surveys)

Continuous Improvement (Kaizen): Constantly improve service delivery — reduce wait times, improve response, etc.
Employee Involvement : Staff at all levels are empowered to suggest and implement quality improvements
Process-Centered : Services are mapped as processes (e.g., handling a customer complaint), and improved systematically
Leadership Commitment : Management leads by example and reinforces a quality-first culture
Data-Driven Decisions : Use data (like customer satisfaction scores, NPS, service KPIs) to guide improvements
Integrated System : Everyone, across departments, aligns to the same service quality standards and goals

Unique Challenges of TQM in Services

• Intangibility: Service quality is judged by perception, not just measurable output

• Inseparability: Service is delivered and consumed at the same time — no “rework”

• Variability: Quality may vary by who delivers it (human factor)

• Perishability: Services can’t be stored — if not delivered well the first time, the moment is lost

Benefits of TQM in Service Organizations

• Higher customer satisfaction and retention

• Reduced service failures and complaints

• More motivated and engaged employees

• Competitive advantage through superior service quality

• Better reputation and brand equity

Tools Used in TQM (Service Sector)

• Service Blueprints (to map and improve service delivery)

• Pareto Analysis (identify major sources of complaints/issues)

• Fishbone Diagrams (Ishikawa) (analyze root causes)

• PDCA Cycle (Plan-Do-Check-Act) for continuous improvement

• Benchmarking (compare with industry best practices)

• Employee training programs on quality awareness

4. Options for service Delivery

Service delivery options refer to the different ways a service can be provided to customers. The choice depends on factors like the type of service, target market, technology, cost structure, and desired customer experience.

1. Traditional Face-to-Face Delivery

• In-person interaction at a physical location.

• Common in: healthcare, hospitality, salons, legal services.

• Pros: Personalized experience, trust-building, immediate feedback.

• Cons: Limited by location and hours, higher operating costs.

2. Online / Digital Delivery

• Services delivered over the internet (websites, apps, or platforms).

• Examples: e-learning (Coursera), telehealth, online banking, SaaS platforms.

• Pros: Scalable, convenient, 24/7 availability.

• Cons: Requires digital infrastructure, less human touch.

3. Remote / Phone-Based Delivery

• Services provided via call centers or one-on-one phone consultations.

• Common in: tech support, financial services, mental health counseling.

• Pros: Personalized without face-to-face interaction, accessible.

• Cons: Can be impersonal or frustrating if not well-handled.

4. Self-Service

• Customers use tools or systems to complete the service themselves.

• Examples: ATMs, self-check-in kiosks, customer portals, chatbots.

• Pros: Cost-effective, fast, reduces staff workload.

• Cons: Poor user experience can lead to frustration; not ideal for complex services.

5. On-Site Service (At Customer's Location)

• Service provider goes to the customer.

• Common in: home repairs, delivery/installation, personal trainers, mobile clinics.

• Pros: Convenience for the customer, tailored experience.

• Cons: Logistical challenges, higher travel costs.

6. Hybrid Service Delivery

• Mix of digital and human interaction.

• Example: A customer books online, consults via video, then visits in-person if needed.

• Pros: Flexibility, efficiency, and personalization.

• Cons: Requires more coordination and integration of channels.

7. Automated Service Delivery

• AI-powered systems, bots, or IoT used to deliver service automatically.

• Examples: recommendation engines, automated diagnostics, smart home support.

• Pros: Fast, data-driven, scalable.

• Cons: Lack of human judgment or empathy in complex situations.

8. Subscription-Based Service Models

• Service delivered continuously over time for a recurring fee.

• Examples: streaming services (Netflix), subscription boxes, software (SaaS).

• Pros: Predictable revenue, long-term customer relationships.

• Cons: Requires constant value delivery to prevent churn.

5. People Mix

In the extended marketing mix (7Ps) for services, "People" refers to everyone involved in the delivery of the service, including:

• Employees

• Management

• Frontline staff

• Support teams

• Even customers, in some cases (think: self-service, co-creation, or group experiences)

Since services are intangible, variable, and often delivered live, the people involved directly shape the customer's perception of service quality, reliability, and brand personality.

• Services are often inseparable from the people delivering them.

• A smile, attitude, tone of voice, or how a complaint is handled can make or break the customer experience.

• Employees help create trust, loyalty, and even word-of-mouth marketing.

Components of the People Mix

1. Service Staff / Frontline Employees

• Face of the brand. Interact directly with customers.

• Need to be trained in soft skills, empathy, communication, and service standards.

2. Recruitment & Training

• Hire for attitude, train for skill.

• Ongoing training ensures consistent service quality and culture.

3. Internal Marketing

• Employees are treated like internal customers.

• Motivated, informed, and engaged employees deliver better service.

4. Appearance & Behavior

• Uniforms, body language, grooming — these all signal professionalism and brand tone.

• Friendly vs formal? Fast vs thorough? It all reflects brand positioning.

5. Customer Participation

• In some services, customers are part of the delivery (e.g., fitness classes, co-working spaces, workshops).

• Managing expectations, behavior, and satisfaction of all parties is part of the people mix.

How to Optimize Your People Mix

• Hire employees who align with your brand values

• Invest in training, not just technical skills but emotional intelligence

• Use mystery shoppers, customer feedback, and employee input to improve

• Recognize and reward exceptional service behaviors

• Build a culture where every employee feels ownership of customer satisfaction