CHAPTER 6

Services
Marketing

Basic concept of services marketing and how
to go beyond

service to create experiences

Polytechnic Sultan Abdul Halim Mu’adzam Shah

6

CHAPTER SIX

THE FUTURE OF
SERVICES

MARKETING

Table of
Contents

Chapter 1: Introduction To Services
Marketing

Chapter 2 : Creating the Service Product

Chapter 3: Customer Behavior in Service
Encounters

Chapter 4 : Service Marketing
Programmed

Chapter 5: Managing Service Quality

CHAPTER 6: THE FUTURE OF
SERVICES MARKETING

6.1 UNDERSTAND THE FUTURE OF
SERVICES MARKETING

UNDERSTAND THE FUTURE OF SERVICE MARKETING

THE PAST: WORLDWIDE WEB TO WEB 2.0
The web is a place or application of
communication between an individual and
another individual. Users now have no
problems in the content of communication.
They can now see and hear as well as talk to
each other about what’s going on at your
company as well as your competitors.
Examples of Web 2.0 google doc, youtube,
twiter, facebook, maps, blogger and others.

THE PRESENT: AGE OF THE MOBILE
COMPUTER

Computer programs or mobile phones that contain
various applications that you can launch with the
touch of a finger. This means that today’s technology

can make it easier for employees to perform
services. For example, the foodpanda app makes

food deliveries

THE FUTURE: THE RISE OF INTELLIGENT
APPS

Amazon, Apple, and Google’s digital voice assistants
are great examples of smart applications that

combine natural machine production, processing,
and learning. These digital voice assistants make our
lives very easy and convenient as they provide up -to
-date information on weather, traffic, adjust smart
LEDs, coordinate meetings, and make your moments

lighter by telling stories and playing music.

THE ROLES OF
TECHNOLOGY
IN SERVICE

a) Increased productivity

Againts the background of a world increasingly
shaped by technology and can increasingly high
amount of technological support in the
implemention of services e.g. regarding
communication, provision of data and diagnosis
the question arises. etc.

b) Enhancing decision
making

Decision making in business has changed
from decisions being made by management
to decision being made throughtout the
different levels of a business.

c) Improving the delivery
of service through the
use of internet
technologies

The challenge of improving IT service
delivery has never been greater
improving the delivery of IT services is
one of the most challenging aspects of
running an IT organization.

d) Customer targeting and
relationship management

CRM technology can track customer
interests, needs and buying habits as they
progress through their life cycles and tailor
the marketing effort accordingly. This way
customers get exactly what they want as
they change

6.2 JUSTIFY THE
NEED TO IMPROVING

SERVICE
PRODUCTIVITY

Productivity is a measure of the rate at which
outputs of goods and services are produced
per unit of input for example of input is labour,
capital, and raw materials.. Its calculated as the

ratio between the output and input

IMPROVING GENERIC
SERVICE PRODUCTIVITY-

PRODUCTIVITY IMROVEMENT
STRATEGIES

Customers- driven
strategies

Generic Productivity-
improvement strategies

Typical strategies to improve service
productivity:

• Careful control of costs at every step in
process

• Efforts to reduce wasteful use of materials
and labour

• Replacing workers by automated machines
• Installing experts systems that allow
paraprofessionals to take onwork

previously performed by professionals who
earn higher salaries

Customer – driven
strategies

❑ Change timing of customer
demand

By shifting demand away from
peaks managers can make better
use of firm’s productive assets and

provide better services

❑ Involve customers more in
production

a) Get customers to self-serve
b) Encourage customers to obtain

information and buy from
firm’s corporate websites

❑ Ask customers to use third
parties

Delegate delivery of
supplementary service elements

to intermediary organizations

CHANGING CUSTOMER
DEMANDS DEPENDING ON THE
SITUATION

❑ Commercial- geographic
considerations form the basic for
estimations about the direction of
customer demand:

- Delivery time expected by the customer
(factor). While the expected delivery time
depends largely on cultural differences.
The long-range direction of customer
demands is shapes by demographic and
political changes.

Customers involve in production

❑ Customers are often willing to help their
preferred brands improve their
products and services.

❑ From reviewing products and services
to testing beta solution to providing
ideas for new offerings.

❑ Customers are happy to share their
insights to help the companies they like
most improve and get the products and

services they want in the process.

Encourage customers
to used third party

▪ Definition of ‘third party’
- An individual or entity that is involved

in a transaction but is not one of the
principals. The third party often has a
lesser interest in the transaction than

the principals.

▪ Ask customers to use third parties
delegate delivery of supplementary
service elements to intermediary
organizations.



Backstage changes may
impact customers

Backstage improvements can ripple to
front and affect customers
Keep abreast of proposed backstage
changes not only to identify such
ripples but also to prepare customers
for them.
For example : New printing peripherals
may affect appearance of bank
statements.

Front stage efforts to
improve productivity

▪Front-stage productivity enhancements
are especially visible in high contact
services. Some improvements only require
passive acceptance, while others require
customers to change behaviour must
consider impacts on customers and
address customer resistance to changes
▪Better to conduct market research first it
changes are substantial

Control on cost reduction
strategies

❑ In absence of new technology, most
attempts to improve service productivity
seek to eliminate waste and reduce labour
costs

❑ Workers who try to do several things at
once may perform each task poorly

❑ Excessive pressure breeds discontent and
frustration among customer contact
personnel, who are caught between :

a) Meeting customer needs
b) Achieving management’s productivity

goals

6.3 Understand
The Prospects
For Growth In
Global Services

a) Deregulation and
liberazation of

trade in services

❑ Deregulation is the act or process of
removing or reducing state regulation.

❑ It is therefore opposite of regulation,
which refers to the process of the
government regulating certain activities.

❑ Deregulation attempts to free economic
activity from binding rules from the state.

❑ As a basis of free trade amongst nations,
the idea is to allow competition to ensure
the most efficient practices prevail, which
should average out and benefit everyone.

❑ Liberalization refers to a relaxation of

previous government restrictions, usually in

areas of social or economic policy.
❑ In some contexts this process or concept is

often, but not always, referred to as

deregulation.
❑ Liberalization of autocratization (or not, as

in the case of the Prague Spring).
❑ There is also a concept of hybrid

liberalization as, for instance, in Ghana

where cocoa crop can be sold to a variety

of competing private companies, but there

is a minimum price for which it can be sold

and all exports are controlled by the state.

b) Quality services as a
business

imperative

Quality services
❑ An assessment of how well a

delivered service conforms to the
client`s expectations.
❑ Service business operators often
assess the service quality provided
to their customers in order to
improve their service, to quickly
identify problem, and to better
assess client satisfaction.

Business imperative
❑ A business imperative is a major

change or goal that your company

promises to reach.
❑ Unlike an idea, an imperative does

not have the option of not

working.
❑ Strong, focused objectives will

drive and strengthen your

business.
❑ To this end, initiating a number of

business imperatives will drive and

motivate your company toward a

brighter future.

c) Homogenization of
global

consumers

❑ Consumer goods are becoming
homogenous all over the world.

❑ People use the same kind of things:
from planes and cars to pins.

❑ With this goes a consumerism way
of life and system of values that
concentrate on the material world
and on physical comfort.

d) Global economies of scale

❑ Economies of scale are the cost
advantages that an enterprise
obtains due to expansion.

❑ There are factors that cause a
producer`s average cost per unit to
fall as the scale of output is
increased.

❑ “Economies of scale” is long run
concept and refers to reductions in
unit cost as the size of a facility
and the usage levels of other
inputs increase.

❑ More simply put, when more
goods can be produced on a
larger scale with lower costs,
economies of scale is said to
be achieved.

e) Enabling technology

❑ Equipment and/or methodology that,
alone or in combination with
associated technologies, provides the
means to generate giants leaps in
performance and capabilities of the
user.

❑ For example, the coming together of
telecommunication technologies,
internet, and groupware has leveled
the field so that even smaller firms are
able to compete in areas where they
otherwise could not.

❑ An enabling technology is an
invention or innovation, that
can be applied to drive
radical change in the
capabilities of a user or
culture.

❑ Enabling technologies are
characterized by rapid
development of subsequent
derivative technologies, often
in diverse fields.

f) Following the client

❑ Monitoring a job, enquiry, sale,
etc, to get feedback on the
schedule, requirements,
effectiveness, or other such
factors.

❑ Following up is a part of
following through.