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Chapter: Business Science : Services Marketing : Service Delivery and Promotion

Service Marketing Triangle

EXTERNAL MARKETING: INTERACTIVE MARKETING: INTERNAL MARKETING


SERVICE MARKETING TRIANGLE




EXTERNAL MARKETING:

 

Ø         The Company makes promises towards customers regarding what they can expect and how it will be delivered.

Ø           Here consistent and realistic promises should be set.

 

 

INTERACTIVE MARKETING:

 

Ø           Promises which are made by external marketing must be kept.

 

Ø           Service promises are kept or broke by the employees of the firm.

 

 

INTERNAL MARKETING

 

 

 

Ø         In order for providers and service system to deliver on the promises made they must have skills, abilities and motivate to deliver.

Ø           Promises are  easy to make unless providers  are recruited, trained, they can opt  keep  up

 

promise.

 

PRICING

 

Approaches to pricing services

 

 

I COST BASED PRICING:- PROBLEMS

 

 

1.Small firms may charge too little to be viable.

 

2.Prices may not reflect customer value.

 

3.Heterogenity limits comparability

 

 

II COMPETITOR BASED PRICING: - PROBLEMS

 

 

1.Costs are difficult to trace.

 

2.Labor is more difficult to price than materials.

 

3.Costs may not equal value.

 

 

III DEMAND BASED PRICING: - PROBLEMS

 

 

 

1.Information on service costs is less available to customers, hence price may not be a central factor. 2.Monetary price must be adjusted to reflect the value of nonmonetary costs.

 

 

WHAT IS REVENUE MANAGEMENT:

 

 

It means setting prices according to predicted demand levels among various market segments.

 

 

 

The least price sensitive segment is allocated capacity first at the highest price, followed by the next segment at a lower price.

 

 

Ex: Travelers often reserve airline seats, hotel rooms.

 

 

 

A good revenue management is able to predict with reasonable accuracy how many customers will want to use a service for a given slot at each of service price levels and to block the relevant amount of capacity at each level. (Price Bucket).

 

Effects of Competitors pricing on Because of Revenue management:

 

 

Revenue management system monitor booking pace, competitor pricing is indirectly picked up.

 

 

 

If a firm prices too low, it will experience a higher booking pace and its cheaper seats will fill up quickly.

 

 

A SUSTAINABLE COMPETITIVE ADVANTAGE

 

 

 

This concept of providing a service that consumers feel is superior to the competition and sustainable over time is called a sustainable competitive advantage (SCA).

 

 

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Business Science : Services Marketing : Service Delivery and Promotion : Service Marketing Triangle |


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