Service Marketing: Marketing Mix (7 Ps) PDF

Service Marketing: Definition, Features, Problems in Marketing Services Service marketing in healthcare industry- Marketing Mix in case of service marketing-HOSPITAL MARKETING MIX -7 P’s Dr. Babita Das Paul.  Definition...

Service Marketing: Definition, Features, Problems in Marketing Services Service marketing in healthcare industry- Marketing Mix in case of service marketing-HOSPITAL MARKETING MIX -7 P’s Dr. Babita Das Paul.  Definition of Service Marketing “A service is an intangible product involving a deed , a performance or an effort that can be physically possessed” –Berry and Parasuraman. Service marketing is marketing based on relationship and value. It may be used to market a service or a product. With the increasing prominence of services in the global economy, service marketing has become a subject that needs to be studied separately. Marketing services is different from marketing goods because of the unique characteristics of services namely, intangibility, heterogeneity, perishability and inseparability. CONT…. As defined by Philip Kotler and Kevin Lane Keller, “ A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything and its production may or may not be tied to a physical product ”. Service marketing in healthcare industry.  “The healthcare industry (also called the medical industry or health economy) is an aggregation and integration of sectors within the economic system that provides goods and services to treat patients with curative, preventive, rehabilitative, and palliative care” Features / characteristics of Services: 1. Intangibility: A physical product is visible and concrete. Services are intangible. The service cannot be touched or viewed, so it is difficult for clients to tell in advance what they will be getting. For example, banks promote the sale of credit cards by emphasizing the conveniences and advantages derived from possessing a credit card. Intangibility of services means there are no such aspects and a service can not be seen , touched and tested or smelled. 2. Inseparability: Personal services cannot be separated from the individual. Services are created and consumed simultaneously. The service is being produced at the same time that the client is receiving it; for example, Teachers, musicians, dancers, etc. create and offer services at the same time. CONT… 3. Heterogeneity (or variability): Services involve people, and people are all different. There is a strong possibility that the same enquiry would be answered slightly differently by different people (or even by the same person at different times). It is important to minimize the differences in performance (through training, standard setting and quality assurance). The quality of services offered by firms can never be standardized. 4. Perishability: Services have a high degree of perishability. Unused capacity cannot be stored for future use. If services are not used today, it is lost forever. For example, spare seats in an aeroplane cannot be transferred to the next flight. Similarly, empty rooms in five-star hotels and credits not utilized are examples of services leading to economic losses. As services are activities performed for simultaneous consumption, they perish unless consumed. CONT… 5. Changing demand: The demand for services has wide fluctuations and may be seasonal. Demand for tourism is seasonal, other services such as demand for public transport, cricket field have fluctuations in demand. 6. Pricing of services: Quality of services cannot be standardized. The pricing of services are usually determined on the basis of demand and competition. For example, room rents in tourist spots fluctuate as per demand and season and many of the service providers give off-season discounts. CONT…  7. Direct channel: Usually, services are directly provided to the customer. The customer goes directly to the service provider to get services such as bank, hotel, doctor, and so on. A wider market is reached through franchising such as McDonald’s and Monginis.  8. Client Based Relationships: According to Paul Peter and James H. Donnelly, the success of certain services depends on developing and maintaining interaction with customers that causes satisfaction and leads to repeated purchases over time.  9. Customer Contact: This refers to those services where interaction between service provider and the consumer is necessary for service delivery. In these situations, service delivery employees become the source of creating satisfied customers. One of the major principles of customer contact is that satisfied employees leads to satisfied customers, and vice versa Problems in Service Marketing:  1. A service cannot be demonstrated.  2. Sale, production and consumption of services takes place simultaneously.  3. A service cannot be stored. It cannot be produced in anticipation of demand.  4. Services cannot be protected through patents.  5. Services cannot be separated from the service provider.  6. Services are not standardized and are inconsistent.  7. Service providers appointing franchisees may face problems of quality of services.  8. The customer perception of service quality is more directly linked to the morale, motivation and skill of the frontline staff of any service organization. Marketing Mix in case of service marketing  The original Four P’s of marketing detail the important components of product marketing. Academics and marketing practitioners point out that services differ from products; they are intangible, heterogeneous, perishable and inseparable from the service provider. Additional P’s have evolved to help create a comprehensive framework for marketing services. Applying the 7 P's in a service business is essential to developing a marketing plan. HOSPITAL MARKETING MIX  PRODUCT  A product is a set of attributes assembled in an identifiable form. The product is the central component of any marketing mix. The product component of the marketing mix deals with a variety of issues relating to development, presentation and management of the product which is to be offered to the market place. It covers issues such as service package, core services and peripherals, managing service offering and developing service offering.  Hospitals today offer the following services:  1. Emergency services – Emergency services and care at most of the hospitals is unique and advanced. The hospitals have state-of-the-art ambulances. The CCU's on Wheels under supervision by medical and para-medical staff. There is hi-tech telecommunication available to a patient in an emergency at any given time. Cont…  2. Ambulance services – Hi-tech ambulances linked by state-of-the-art telecommunications are fully equipped with doctors that are available to render medical attention and assistance in case of emergencies at the patient's doorstep.  3. Diagnostic services – Modern Hospitals are multi-speiality and multi- disciplinary, that can handle any kind of ailment, they offer a wide range of facilities for instance, Oncology, Orthopedics, Neurology, Plastic surgery and so on. CONT…  4. Pharmacy services – Most of the hospitals also have a pharmacy which is open 24 hours. It caters to the needs not only of the inpatients and outpatients, but also patients from other hospitals who require emergency drugs.  5. Causality services – Causality service includes a 24 hrs. causality department, which attends to the accident or emergency cases.  Apart from the above mentioned services, hospital also offers "Health Diagnosis Program" which is a complete, comprehensive, periodic health check up offered for busy executives, professionals, business persons and so on. The health diagnosis program comprises of the following:  1. Master health check up 2. Executive Health check up 3. Diabetics health check ups etc., CONT…  Generally, the service offering in a hospital comprises of the following levels:   1. Core level – it comprises of the basic treatment facilities and services offered by the hospital like diagnostic services, emergency services, casuality services etc.  2. Expected level – it comprises of cleanliness and hygiene levels maintained in the hospital.  3. Augmented level – it comprises of dress code for staff, air conditioning of the hospital, use of state of art technology, services of renowned consultants. PRICE  It is one of the most prominent elements in the marketing mix. Price charged must be able to target customers and it should co-ordinate with other elements of the marketing mix. Price usually depends on treatment prescribed by the respective consultants and the facilities offered to the patient.  As a service is intangible, it is very hard for deciding the price of the particular service offered. Pricing strategy adopted does not depend on the price offered by competitors. The pricing strategy is formulated after consulting the concerned heads of department. Prices of various facilities revised every year depending on the change in technology. Before fixing prices, government controls are also taken into consideration.  On admission, an initial deposit will be collected at the inpatient billing counter. The amount extends on the category of room and the treatment or surgical procedure planned. Various categories of rooms, ranging from the general ward which attends to the needs of the lower classes to the deluxe suite which attends to the needs of the middle and upper classes are available.  A hospital does not believe in profit maximization, it aims at providing quality service for its customers at reasonable price.  PLACE  It refers to contact point between the customer and the service provider, who gets the benefit of the service. This element in the marketing mix leads to the identification of a suitable location.  The two major issues considered regarding the decision of a place are accessibility and availability of the service to customers. Accessibility refers to the ease and convenience with which a service can be purchased, used or received. Availability refers to the extent to which a service is obtainable or capable of being purchased, used and received.  Factors influencing the placing decision are market size and structure by geographical regions, number and types of competitors in the region, location of potentially attractive consumer segments, local infrastructure, good road access facilities and public transportation network. A hospital must be ideally located and must be easily accessible to all. PROMOTION  Promotion function of any service organization involves the transmission of message to present, past and potential customers. Customers need to be made aware of the existence of the service offered. Promotion includes advertising, personal selling, sales promotion and publicity.  Hospitals do not normally undertake aggressive promotion, they rely a lot on a favorable word of mouth. To crease the clientele, a hospital may continuously introduce different health services like the acupressure clinic, master health programs and diabetes health checkups apart from annual health checkups offered to different companies. (Corporate clients)  Hospitals conduct camps in rural areas to give medical check ups at a reasonable price so that the rural people approach the hospital again in the future. They also sponsor frequent visits to the spastic society, old age homes, etc. Hospitals generally advertise in health and fitness magazines. PEOPLE  The People component reflects the important role played by individuals in the provision of services. People are also an important element in the marketing mix.  Service personnel play an important role in an organization which offers service. The behaviour and attitude of the personnel offering service will influence the customer's overall perception of the service. Customers are a source of influencing other customers by word of mouth.  It is necessary that the staff in hospital are trained to offer quality patient care with human touch using state of the art technology.   The objective of offering quality service to the patients can be attained by:  < Motivating employees to be efficient, dedicated and loyal to the organization.  < Offering regular on-job training of employees to ensure continuous improvement in health care.  < Utilizing services of professional competent medical consultants.