ORGANISING DELIVERY SYSTEM

Organizing the delivery system and channel/intermediaries is the next important task. Issues in this regard spring from the service offer. The delivery system must fulfill the service offer and generate the expected satisfaction! Location decision and decision on use of channels/inter-mediaries are the two main issues here

Location decision

Location decision, i.e. where to locate the service performance is the first issue. Actually, many services are ‘fixed’ location-wise and service providers are able to serve only a limited number of customers located in the area. Thus, choosing the location appropriately and attracting the right kind of and maximum number of consumers is of special importance in service marketing.

Using Channels/Intermediaries

Decision on use of channel/intermediaries is a part of organizing the delivery system. Here, the service marketer should first decide whether he should use intermediaries at all or should reach out to the customers directly. There are actually two aspects to be considered in the decision:
i. Does the service lend for marketing through intermediaries?
ii. Whether in the given context, intermediaries will be able to provide the service more effectively and economically than the principle?

Franchising

Franchising can be an answer to the distribution problem in service marketing. Franchising seems to work particularly well in services like hotels, restaurants, car rentals, fast-food outlets, beauty parlours, computer education, travel agencies, office services, packers and movers couriers and business centres).

PRICING STRATEGY

The Perishability of service is the main factor that creates a problem in pricing in services. In services, the fluctuation in demand cannot be met through inventory. Hence, variation in price depending on time/season of demand/consumption becomes the natural strategy. Hotels offering lower tariffs in off-season and telephone service providers offering lower tariffs for after peak hour calls are examples of how service marketers can offset the perishable characteristic of services through a pricing strategy.
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In India too, the service sector has been emerging as the dominant component of the economy. Agriculture and industry are growing at a slower pace, while services are growing more rapidly. Share of services in the country’ GDP has increased from 36 percent in 1980-81 to 44 per cent in 1997-98. In the latter year, the share of services was in fact, just 25 per cent in 1955-56. It increased to 40 per cent in 1987-88 and 46 per cent 1999-2000.

It seems that the notion that the majority of the people need only roti, kapda and makan has to be given up. Even the poor seem to need and be availing of several services, especially the ones like education, entertainment, information and healthcare. The middle class and the affluent are, of course, availing of a much larger variety of services, including dining out, and travel.

Certain types of services have been growing particularly rapidly. Higher education services is one example. Health care is another. Financial services is yet another. Health care has, in fact, become the fastest growing sector of the economy, growing at a compound rate of 26 per cent annually between 1993-2000. Entertainment too is now among the fastest growing sectors. Spending on hotels and restaurants has grown at a compound rate of 18 per cent. Services backed by technology and equipment, like vending machines, coffee and sandwich dispensing machines, computerized patient history records, etc., have also registered good growth.

COMPONENT TASKS IN SERVICE MARKETING


UNDERSTANDING THE NATURE OF THE SERVICE

As a starting point in understanding the nature of the service, the marketer should figure out what exact need is met by the services. It gives the basic clue to its nature. It gives the basic clue to its nature. Some services are directed at people while others are directed at goods, through in the final analysis both aim at satisfying people. For example, entertainment is directed at people while dry-cleaning is directed at goods (clothes). Again, out of the services directed at people bodies, those directed at people’s minds, and those directed at their bodies as well as minds. An analysis from this angle will give some additional clues on the nature of the services.

UNDERSTANDING THE CUSTOMER AND HIS EXPECTATION OF THE SERVICE

Services marketers must understand the customers well and correctly size up their expectations of the service. For this, they must obviously carry out a thorough customer analysis. The important point is that customer analysis in a service context involves first-hand and not second-hand knowledge about the customers. The sales and service staff must be encouraged to make plenty of personal contacts with the customers and gather relevant first-hand data on their requirements/expectations of the service.