price bundling SERVICE PRICING STRATEGIES by X1OoHG9

VIEWS: 12 PAGES: 30

									             1. INTRODUCTION TO SERVICES AND SERVICE INDUSTRY

WHAT ARE SERVICES?

1] Services are activities, benefits or satisfaction which are offered for sale, and are provided
in connection with the sale of goods – AMA
2] Service is action of an organization that maintains and improves the well being and
functioning of people.
3] E.g.:       Personal services - dentists, lawyers, etc
               Wider aspect- airline service, hotel services, construction services etc

COMPARATIVE ANALYSIS: PRODUCT AND SERVICES

1] Tangibility                                2] Transferability (Physical transfer)
3] Existence                                  4] Heterogeneity
5] Reselling

CHARACTERISTICS OF SERVICES

1] Intangibility                                                     2] Perishability
3] Inseparability/simultaneity (of creation and delivery)            4] Ownership/Resell
5] Heterogeneity (Quality aspect)                                    6] Quality measurement
7] Nature of Demand (by season, by time – e.g. peak hours)

WHY MARKET SERVICES?

1] Higher disposable income                 2] Increasing specialisation
3] Growing fashion consciousness            4] Professionalism in fields (E.g. education)
5] Information explosion                    6] Increased sophistication/civilised lifestyles
7] Government activities – cultural exchange policies, trade policies, global partnerships etc

CONTRIBUTION OF SERVICES MARKETING

1] Creation and expansion of job opportunities 2] Optimum utilisation of resources
3] Accelerates capital formation               4] Increases standard of living
5] Investment in R & D – better technology, increased speed, better efficiency, meeting
increased supply, up to date MIS

SERVICES IN DEVELOPING COUNTRIES

1] Huge untapped potential
2] Basic services- healthcare, education not developed
3] Quality of services- low
4] No service delivery standards set
5] Lack of market research
6] Need for government intervention
7] Proper channels to human, financial and intellectual resources needed
8] Potential to contribute to country’s GDP and economic development
CLASSIFICATION OF SERVICES

1] Business & professional services – banking, insurance, accountancy, medicine, lawyers
2] Infrastructural services – roads, railways, motor transport, power, oil
3] Public services – police, defense
4] Trade services – wholesale & retail
5] Personal services – education, medical, gymnasiums, hotels, spas
6] Individual & group services – beauty parlors, medical, coaching classes (education)

CONCEPTS IN SERVICES MARKETING

1] Internal marketing – directed towards employees

2] External marketing - directed towards consumers

3] Moment of truth
                               2. SERVICES MARKETING

NEED FOR SERVICES MARKETING MIX

1] Formulating marketing mix for services is as important as for products
2] Service expectation levels of consumers are at an all time high
3] Offering quality services is not enough
4] Proper promotion, sound pricing strategy, placement decisions, hiring right staff and
studying consumers enhances service delivery process

Hence formulation of service marketing mix needs to be done on a professional level, by
experts

                                        I] PRODUCT

SERVICES PRODUCT MIX

1] Service product is intangible and perishable in nature
2] Product mix decides the magnitude of success, intensity of profits and satisfaction levels of
the consumer
3] Factors influence the product mix based of the type of service provided
4] Eg: Hotel service, quality of consumers
       Transport services-emerging lifestyles, levels of urbanization
       Personal care services- trends, tastes, fashion

Consumers buy…                                      not…
Speed/ comfort                                      An air ticket
Adventure/ fun                                      Tour package
Bill paying convenience                             Credit cards
Beauty                                              Beauty treatments/ cosmetics

LEVELS OF A SERVICE PRODUCT

1] Core product – seat in a theatre, room in a hotel, services in a bank
2] Generic product – provides core product (superstores)
3] Expected product – consumer perception (speed in a bank, expertise/accuracy in
consultancy services, security in insurance)
4] Augmented product - additional attraction provided to get an edge over competition, this
helps to keep marketing efforts pro active
5] Potential product – process of discovering new ways to attract more customer, retain
existing and fight competition (24x7 call centres, banks open on Sunday)

PRODUCT DEVELOPMENT

1] Proactive or reactive
2] Idea generation – concept screening – assess market potential – cost analysis – test
marketing – final launch
3] Need identification – size of market – cost-benefit analysis – introduction of new product
FACTORS TO BE NOTED WHILE DEVELOPING A SERVICE PRODUCT MIX

1] Enrich peripheral services
2] Understand service quality expectations
3] Study behavioral profile of consumers (offering product is as important as formulating it)
4] Take support of information technologies
5] Product for all (single product for all/offer different specialisation in same product)

                                         II] PRICE

PRICING OF SERVICES

1] Research and expertise pertaining to the pricing of services is found lacking
2] Pricing approaches developed for products are applied to services too
3] The challenge is to determine a price at which the service product is sold and also gives
profitable returns
4] Perception of value for a consumer = trade off between perceived benefits of service to be
purchased and perceived sacrifice in terms of cost to be paid

CONSIDERATIONS OF SERVICE PRICING

1] Demand considerations – if price is perceived to be fair, perceived no. of substitutes,
perceived value of service, if price is perceived to be measure for quality (decides extent of
demand inelasticity, price sensitivity, cross price elasticity etc)
2] Cost considerations – cost based pricing difficult as very small portion of tangible goods
sold, intangible service difficult to price, profit considerations also included
3] Customer considerations – price is one of the cues during pre-purchase, price is often used
as determinant of quality levels, consumers are less certain about price tag for perceived
value
4] Competitive considerations – for consumers, comparing prices of competitors may not be
the best parameter, service standards/delivery processes may differ
5] Product considerations – e.g. price bundling

SERVICE PRICING STRATEGIES

1] Satisfaction based pricing – benefit driven or flat rate pricing
2] Relationship pricing – encourages a customer to expand his dealings with service
provider
3] Efficiency pricing- value for money, appeals to consumers as best service and a cost
effective one
Price discrimination (different prices for different consumers), penetration, skimming,
follow the competitor, price bundling are also few of the strategies for pricing effectively

                                     III] PROMOTION

SERVICE PROMOTION MIX

Guidelines for an optimum promotion mix:
1] Develop word of mouth communication network (Customers refer friends etc)
2] Don’t over-promise
3] Tangibilize the intangible factors
4] Feature working relationships between customer and service provider
5] Propagate minimum/zero variance in service delivery
6] Focus on service quality dimension
7] Position & differentiate the service via the delivery process
8] Make the service more easily understood

DEVELOPING PROMOTION STRATEGY

1] Select target market
2] Develop firm’s positioning strategy
3] Develop promotion/communication budget and mix
4] Define communication objectives (in line with PLC)
5] Divide communication objectives and target audience – for users, non users, etc.

ELEMENTS OF PROMOTION MIX

1] Advertising – TV, radio, newspapers, magazines, outdoor, POP etc.
2] Publicity
3] Sales promotion – gifts, contests, discounts, commission, fairs
4] Personal selling
5] Word of mouth
6] Telemarketing

                                         IV] PLACE

PLACE FACTOR IN SERVICES MARKETING

1] Managing service firm’s physical evidence
2] Includes everything tangible
3] It affects consumer experience throughout the duration of service encounter, plays major
role in ‘packaging’ of the services
4] Use of physical evidence is extensive in services like hospitals, hotels and minimal in
insurance service, postal services, laundry services etc

FACTORS TO BE CONSIDERED

1] Location – (Nature of services, competition etc)
        Low contact services: remote sites, less expensive
        High contact services: accessibility, visibility, customer convenience
2] Layout – Architecture, entrance, signs, symbols
3] Ambiance- Lighting, colours used, size perceptions, shape, sound/scent/touch appeals
4] Service delivery process to be kept in mind (Suitable facility provision)- many mini
service encounters and physical evidence at each, contribute to overall service perception of
the consumer
                                        V] PEOPLE
PEOPLE IN SERVICES

1] Includes both, employees and consumers - moment of truth is dependent on both
2] Hire right people
3] Develop/train employees to deliver services as per standards
4] Study target market/potential & current customers
5] Observe service delivery process, keeping ‘people’ in mind
6] Give due importance to consumers feedback
7] Employ CRM – identify, attracting, differentiating and retaining customers

                                       VI] PROCESS
SERVICE ‘PROCESS’

1] Factors to be considered while designing service process
2] Nature of service
3] Degree of intangibility
4] Level of contact
5] Capital intensive/labour intesive
6] Use of technology, machinery, equipment
7] Degree of customisation (for each customer)

                                      VII] PLANNING
CAPACITY PLANNING

1] Throws light on the quality and quantity of service needed in future
2] Market conditions, likes, tastes, expectations of consumers are studied
3] Their potential is rated
4] Lapses in current process are identified and corrective measures taken
5] Firm tries to match the service offerings to the market demand
6] Problems – i] Task of predicting behaviour of users is difficult
                ii] Unavailability of sufficient lead time in many cases

IMPORTANCE OF CAPACITY PLANNING

Capacity planning is important for:
1] Staying in business
2] Fighting competition
3] Enhancing profits
4] Enhancing growth curve of the service firm
5] Preparing the firm for anticipated/sudden changes in demand, quality of services, new
trends, changing tastes etc (Decreasing response time)

CAPACITY SCHEDULING

1] Based on capacity planning
2] It helps schedules capacity according to the plan – man, machines, money, materials
3] A detailed scheduling of need and usage of above factors is essential on a time map
4] Helps optimum utilisation of time and other resources
5] Reduces wastages
CASE

        A passenger with a confirmed ticket on early morning flight from Ahmedabad to
Mumbai could reach Ahmedabad only by 3.30 pm because the train by which he was
traveling to Ahmedabad got marooned due to floods at night. He reached Ahmedabad
traveling by special buses arranged by the railways.

        When he went to the airlines reservation office in town, the assistant wanted to know
whether he had any certificate from the railways confirming all this. He did not. He was then
told as per rules, he had to be treated a ‘No Show’ and he would get no refund on the earlier
ticket. He could buy a fresh ticket for either of the evening flights, both of which were late
and fully booked. He could take his chances at the airport. He agreed.

        The assistant then endorsed the morning ticket for either of the evening flight (without
any extra charges) and told him to go to the airport immediately and enter his name among
the wait-listed passengers. When he reached the airport in about 30 minutes, he found that his
name was already among the wait-listed passengers. Apparently the assistant in the office had
called up and entered his name in the list
                           3. SERVICE QUALITY MANAGEMENT

WHAT IS SERVICE QUALITY?

Service Quality= Customer Satisfaction???
Customer satisfaction
Short term and transaction specific measure
Service quality
An attitude formed by a long term, overall evaluation of a firm’s performance

PERCEIVED SERVICE QUALITY

1] Perception is the judgment of the consumer about the service performance
2] Customers try to form the perceptions based on the ‘P’s used during service experience
3] Perceptions of optimum service quality keep changing
4] Various factors govern the way a consumer perceives the service product, post-purchase
and experience

MEASURING SERVICE QUALITY

Important to identify
       a] Expectations       b] Firm’s delivery standards         c] Service gaps

SERVQUAL: A 44 item scale that measures consumer expectations and perceptions
regarding the five service quality dimensions

FIVE DIMENSIONS OF SERVICE QUALITY

1] Tangibles Dimension – it assesses the firm’s ability to manage its tangibles
2] Reliability Dimension – firm’s consistency and dependability in performance
3] Responsiveness Dimension – firm’s commitment to providing services in timely manner,
in line with what is expected
4] Assurance Dimension – firm’s competence, courtesy to customers and security of its
operations
5] Empathy Dimension – firm’s ability to put itself in its customers’ place

SERVICE GAPS

The distance between a customer’s expectation of a service and perception of the service
actually delivered. TYPES OF SERVICE GAPS

1] Knowledge gap – difference between what consumers want and what managers think
consumers want
2] Standards gap – difference between expectation of service ‘standard’ of consumer and
actual standards maintained
3] Delivery gap – difference between standards set by the firm and its actual performance
during delivery
4] Communications gap – difference between firm’s promises of service through external
communications and its actual delivery
TQM

1] A way of management where continuous quality improvement is a way of doing business
2] No upper limit for quality, hence unlimited scope for enhancing the standards of delivery
3] Element of TQM in services:
       i] Managing people                    ii] Managing technologies
       iii] Managing infrastructure          iv] Quality Control

EFFECTS OF TQM

1] Helps in energising the innovation process
2] Makes business cost effective
3] Accelerates productivity
4] Increases profitability
5] Enhances brand value/projects a fair image

SERVICE FAILURES

1] Breakdown in the delivery of service
2] A service that does not meet consumer’s expectations
3] Firm needs to be proactive to avoid such incidents
4] There are various ‘critical incidents’/moments of truth with potential of a service failure

TYPES OF SERVICE FAILURES

1] System failure: unavailable service, unreasonably slow service, other core service failures
2] Employee responses to customer needs and requests – both implicit and explicit: special
needs, customer preferences, customer error, disruptive others
3] Unprompted/unsolicited employee behaviour: level of attention, unusual action, cultural
norms, adverse conditions

CONSUMER COMPLAINTS

1] Complaints: Instrumental, non instrumental
2] Why do customers complain? ------To correct an undesirable state, to release frustration, to
test consensus of compliant (validating the complainer’s evaluation), to create an impression
3] Complaint outcomes: voice, exit, retaliation

SERVICE RECOVERY

A firm’s reaction to a complaint that results in customer satisfaction and goodwill
Service recovery steps:
       1] Measure the costs
       2] Encourage complaints
       3] Anticipate needs for recovery
       4] Respond quickly
       5] Train employees
       6] Empower the front line
7] Close the loop
                                    4. TOURISM MARKETING

TOURISM MARKETING – THE CONCEPT

Tourism:
Temporary, short term movement of people to destinations outside the place where they live
and work, and their activities during their stay at these destinations

Tourists:
Persons traveling for pleasure, health and domestic reasons, business purposes

Tourism marketing:
   • It is a process of creating a product for providing a service
   • It is an effort to convert potential tourists into actual tourists; an efforts to satisfy
       tourists

TYPES OF TOURISM

1] Domestic                            2] International
3] Rural                               4] Religious
5] Eco-tourism                         6] Medical tourism
7] Culinary                            8] Motor
9] Parental                            10] Shopping

                                      MARKETING MIX

PRODUCT MIX
1] Accommodation                                2] Recreation
3] Restaurant                                   4] Attraction
5] Transportation                               6] Shopping

FACTORS TO BE NOTED WHILE DESIGNING A PACKAGE TOUR

1] Destination
2] Management at airport/station
3] Travel timings (airlines, buses, railways)
4] Hotels
5] Resort representatives
6] Tour agents/operators
7] Others

PRICE MIX

Pricing decisions influenced by product mix, distribution, promotion, competition, desired
image, emerging trends etc
       *Decision between trade-up market and trade-down market

PLACE DISTRIBUTION
1] One tier system   2] Two tier system   3] Three tier system
PROMOTION

1] Advertising                        2] Sales promotion
3] Word of mouth                      4] Personal selling
5] Telemarketing

PEOPLE

1] Travel Agents                      2] Travel Guides

MARKET SEGMENTATION IN TOURISM INDUSTRY

1] By geography                       2] By demography
3] By purpose                         4] By socio-economic base

TOURISM INDUSTRY IN INDIAN PERSPECTIVE AND ITS FUTURE

1] Huge potential - employment opportunities, foreign exchange, tax generation, profits
2] Preserve and enrich cultural heritage
3] Provide adequate infrastructure
4] Providing adequate education and training to new generation
5] Provide incentives to private sector
6] Thrust on aggressive promotion and image building




UNIVERSITY QUESTIONS

1] Tourism products
2] Scientific planning and management
3] Financial consequences that arise due to perishability of tourism service
4] Blueprint of a process in tourism industry
                         5. HOTEL AND HOSPITALITY MARKETING

HOTEL
A public place where all possible facilities like accommodation, entertainment etc are
provided to people who stay, for a temporary period

CLASSIFICATION OF HOTELS

1] Residential                           2] Commercial
3] Resort                                4] International
5] Floating
6] On basis of standards and control (Approved, unapproved by Dept. of Tourism)
7] On basis of stars (Facilities, quality, luxury aspects)

                                     MARKETING MIX
PRODUCT

1] Reception                                  2] Lodging
3] Boarding                                   4] Entertainment
5] Shopping                                   6] Personal care
7] Communication & Transport                   8] Medical


PRICE

1] For room tariffs         2] For food and beverage          3] For functions
Pricing strategy for promotions:
1] Seasonal discounts       2] Trade discounts                3] Special discounts

PROMOTION

1] Advertisements: Which ones suit hotel industry the most?
2] Publicity
3] Sales promotion tools::: For guests/customers, for travel agencies, for hotel staff
4] Word of Mouth
5] Telemarketing

PLACE- PHYSICAL EVIDENCE

In services, due to intangibility factor, the distribution systems and channels are not given
importance. What we need to distribute while delivering hospitality services is information.
Channels of distribution
1] Zero level: Hotel Companies >>> Users
2] One level: Hotel Companies >>> Travel Agents>>> Users
3] Two level: Hotel Companies>>> Tour Operator>>> Travel Agents>>> Users

PEOPLE
1] Users/ Customers
2] Employees: Receptionists, porters, housekeepers, waiters, doormen, chefs, back end staff
                             6. TRANSPORT MARKETING

Indian Railways
1] The largest railway in Asia
2] The fourth most heavily used system in the world
3] Carries 14 million passengers a day
4] Track route length more than 62,000 kilometers

Indian Roads
1] Length of 2 million kilometers
2] More than 20,000 kilometers of highways
3] Carry almost 60% of the country’s passenger traffic and 40% of freight

Maritime Transport in India
1] India has 12 major and 185 minor ports
2] More than 16,000 kilometers of inland waterways

Airports
1] India has 60 airports, including 11 international airports
2] Two govt. airlines (Air India and Indian Airlines)
3] One helicopter service (Pawan Hans) owned by government

                                       MARKETING MIX

For rail transport                      For road transport                    For air transport

1] Product (Passenger,freight, mail)    1] Product (Passenger, goods, mail)   1] Product
2] Pricing                              2] Price                              2] Price
3] Promotion                            3] Promotion                          3] Promotion
4] People                               4] People                             4] People
5] Place/physical evidence              5] Place                              5] Place


TRANSPORT MARKETING IN INDIAN PERSPECTIVE [university questions]

1] Problems faced by bus and trucking industry
2] Rail – Road coordination
3] National and State highways
4] Importance of road transportation in the Indian economy
                       7. HEALTHCARE AND HOSPITAL MARKETING

TYPES OF HOSPITALS

Basis Of Objective         Basis Of Ownership           Basis Of Medical System
1] Teaching cum research   1] Government                1] Allopath
2] General                 2] Private                   2] Ayurved
3] Special                 3] Voluntary agencies        3] Homeopath
                                                        4] Unani

MARKETING MEDICARE

1] Users are found satisfied
2] Time honored service mix
3] Mass awareness
4] Thrust area identification
5] Vulnerable segments are identified
6] Services can be made cost effective
7] Behavior dimension given importance
8] Better trained staff

THRUST AREAS FOR MEDICARE IN INDIA

1] Immunization                   2] AIDS
3] Drug addiction                 4] Epidemics

                                 MARKETING MIX

PRODUCT

       Line Services            Supportive Services      Auxiliary Services




1] Emergency                 1] Sterilization         1] Registration
2] Out patient               2] Laboratory            2] Records – patients,
3] In patient                3] Radiology             stock keeping
4] Intensive Care            4] Nursing               3] Store management
5] Operation Theatre         5] Catering              4] Transport
                             6] Laundry               5] Mortuary
                                                      6] Dietary
                                                      7] Engineering
                                                      8] Security
PROMOTION

1] Advertising and Publicity
2] Inculcate mass awareness
3] Word of mouth

PRICE

1] No income group: Free
2] Low income group: Subsidized
3] Middle income group: Cost + losses from low income group
4] High income group: Cost + losses from no income group
Positioning of the hospital, product mix,
ownership type also affect pricing structure

PEOPLE


PLACE (DISTRIBUTION MIX)


PHYSICAL EVIDENCE



EMERGING TRENDS IN MEDICARE

1] New developments
2] Opportunities and challenges in the field

UNIVERSITY QUESTIONS

1] Social marketing principles in hospitals
2] Tata memorial cancer hospital
3] Various ‘P’s in Hospital and Healthcare marketing
                      8. HOUSING AND CONSTRUCTION INDUSTRY

INTRODUCTION

1] One of the fastest growing sectors in India
2] Growth – 34 % annually
3] Need for quality infrastructure
4] Average profit from construction in India is 18%, which is double that of the US
5] Five per cent of the country’s GDP is contributed by the housing sector
6] The relaxed FDI rules implemented by India has invited more foreign investors

List of Infrastructure Sectors with FDI:

1] Electricity Generation (except Atomic energy)
2] Commercial development of real estate
3] Roads, Toll Roads & Highways
4] Vehicular Bridges, Ports & Harbours
5] Hotels
6] Townships, Housing, Infrastructure and
Construction Development Project
7] Setting up/ development of industrial park

HOUSING AND URBAN DEVELOPMENT CORPORATION [HUDCO]

It was incorporated on 25th April 1970. It was formed to assist agencies and authorities in
upgrading the housing conditions in the country, aims to provide financing for housing
developments. HUDCO Niwas Yojana for the lower income group (LIG), HUDCO home
loans by HUDCO Bank.

The activity areas of HUDCO include:

1] Urban housing
2] Rural housing
3] Repairs and renewal
4] Working women ownership housing
5] Land acquisition

MAHARASHTRA HOUSING AND AREA DEVELOPMENT AUTHORITY
[MHADA]- URBAN HOUSING

1] It was established in 1977. It is primarily engaged in constructing and selling housing to
low and middle income groups in urban and semi-urban areas. It undertakes repairs/
revamping of MHADA buildings and other dilapidate structures, also manages the post-repair
and construction debris
2] 30,000 housing units in Mumbai in Majaswadi, Chandivali, Oshiwara and Powai etc (MIG
buildings of Tata Colony and Nirmal Nagar in Bandra, LIG Flats in Andheri, Ghatkopar, and
Bandra LIG Flats in MHADA Colony)
3] Slum dwellers rehabilitated under the program of Environmental Improvement of Slum
4] Running out of land, requested the state government for 700 hectares of salt-pan land in
the Vikhroli-Mulund area
The activities of MHADA are as follows:

1] Creation of land reserve for shelter
2] Slum upgradation outside Mumbai
3] Maharashtra Urban Development Project (MUDP)
4] Reconstruction/upgradation work for slums in suburban Mumbai
5] Reconstruction of old BDD chawls in Mumbai city

NATIONAL HOUSING BANK [NHB]

It was established on 9th July 1988 under the National Housing Bank Act, 1987. It is a
principal agency to promote Housing Finance Institutions and to provide financial support to
such institutions.

Functions of NHB are as follows:
1] To issue directions to housing finance institutions
2] To ensure their growth on sound lines
3] To provide loans, advances and any other form of financial assistance to scheduled banks
and housing finance institutions
4] To formulate schemes for the purpose of mobilization of resources and extension of credit
for housing
5] To promote a sound housing finance system to cater to all segments of the population
6] To make housing credit more affordable
Swarna Jayanti Rural Housing Finance Scheme’ seeks to provide improved access to
housing loans to borrowers for construction/acquisition/ up-gradation of a house in
rural areas of the country

NHB VISION
                      9. IT AND COMPUTER SERVICES MARKETING

CONCEPT OF IT

1] Definition : Use of hardware, software services along with supporting infrastructure to
manage and deliver information using voice, data and video
2] Includes hardware as well as software
3] Penetrated in most of the other service industries – examples?

                          MARKETING MIX FOR IT SECTOR

Product
1] Software: High customization according to client needs
2] Hardware: Different product lines/versions
3] Training centers: Range of courses offered according to market needs (Languages taught)
(e.g. Aptech, NIIT)

Price
More customization for software compared to hardware

Promotion
1] Word of mouth
2] Advertisements in case of training centers
3] Branding for high end service providers/large scale firms/MNCs

Place
Distribution network according to market segmentation/scale of business

Physical evidence
1] Low contact service sector
2] Infrastructure support more important than accessibility

THRUST AREAS OF IT SECTOR IN INDIA

1] Infrastructure and services    2] Electronics governance
3] Mass campaign for IT awareness 4] Education

UNIVERSITY QUESTIONS
1] Essence and future of IT/Role of IT in services
2] The dot com generation (e-commerce) failed miserably. Explain wrt SSM, what could
have saved the dot com from going bust
3] Role of IT industry in employment generation in Indian context
                         10. MARKETING OF FINANCIAL SERVICES

TYPES OF FINANCIAL SERVICES

1] Capital market                    2] Money market

FINANCIAL PRODUCTS AND SERVICES

1] Merchant Banking
2] Mutual Funds
            – Open and close ended
            – Income/growth/specialised/balanced/taxation fund
3] Venture Capital- An investment in a start-up business that is perceived to have excellent
growth prospects but does not have access to capital markets. Here immediate
returns/dividend is not a priority. It aims to increase the value of their investment




   PROMOTIONS: PERSONAL & IMPERSONAL
   BRANDING – HOW IMPORTANT IS IT?
   PLACE
   PEOPLE (CUSTOMER SERVICE)

MARKET SEGMENTATION

1] Urban/rural
2] Income levels
3] Based on investment objectives, age etc

CHALLENGES FACED BY FINANCIAL SECTOR

1] Lack of investor awareness                2] Lack of updated MIS
3] Lack of qualified personnel               4] Lack of transparency

UNIVERSITY QUESTIONS

1] What are the benefits of Mutual Funds?
2] Explain the financial services available to the corporate sector
                                    11. BANK MARKETING

INTRODUCTION

Bank is an institution a) dealing with money and credit b) where funds can be deposited and
borrowed c) which transfers funds from where they are available to where they are needed.
Banking services are the backbone of economic growth of the nation.

BANKING INDUSTRY SECTOR IN INDIA

1] Public sector banks –
       a] SBI & subsidiaries like State Bank of Bikaner & Jaipur, State Bank of Travancore,
       State Bank of Patiala, State Bank of Saurashtra, State Bank of Indore, State Bank of
       Mysore and State Bank of Hyderabad)
       b] Nationalized banks (Bank of India, Canara Bank)
       c] RRBs (Aurangabad Jalna Gramin Bank, Thane Gramin Bank)

2] Private sector banks (HDFC, ICICI, UTI…)

MARKET SEGMENTATION IN BANKING

Segment                              Sub segment
1] Agricultural sector               Area of land owned
2] Household sector                  Income/ demographics
3] Industrial sector                 Private, public, co-op, large scale, small scale etc
4] Institutional sector              Religious, charitable, educational
5] Service sector                    Financial and non financial
6] Trade & Commerce                  Wholesalers, retailers

                      MARKETING MIX FOR BANKING SECTOR

PRODUCT

1] Deposits – FD, RD
2] Advances – Loans, Finance (Pre and post shipment), bill discounting
3] International banking – letters of credit, foreign currency
4] Consultancy – Investment counseling, tax planning, project counseling
5] Miscellaneous – Traveler's cheque, credit cards, etc

PROMOTIONS

1] Advertising
2] Personal Selling
3] Tele marketing
4] Word of Mouth
5] Publicity
PRICING

RBI and IBA guidelines are taken into consideration. Two fold strategy by banks:
1] Interest paid to the customers (Deposits)
2] Interest to be charged to the customers for various services (Loans, current a/c etc)

PEOPLE

1] Front line                 2] Back end

PLACE [Distribution channels-
recent developments]

1] Automated Teller Machines
2] Tele - banking
3] Internet Banking
4] Mobile Banking

PHYSICAL EVIDENCE

1] Location decisions for branches/ATMs (Acc to positioning strategy: High/Low Contact)
2] Entrance, Signage, Ambiance
3] Layout – Entrance, architecture, Service delivery process to be kept in mind


CHALLENGES FOR INDIAN BANKING SECTOR

1] Foreign competition
2] Technological advancements/Security in operations
3] Innovation
4] Diversified product/distribution mix
5] Increased consumer awareness
                                 12. INSURANCE MARKETING

WHAT IS INSURANCE?

A contract between two parties whereby one party called insurer undertakes in exchange for a
fixed sum called premiums, to pay the other party called insured a fixed amount of money on
the happening of a certain event

                    MARKETING MIX OF INSURANCE SECTOR

PRODUCT

A] LIFE INSURANCE

1] Whole life and term policies
2] Endowment policies: A lump sum amount in case of death/expiry of the policy
3] Money back policies: Periodic payments during the term of the policy itself; In case of
death, payment of full sum assured
4] Annuity / Pension policies: Premium is paid as a single lump sum or through
installments to get regular income after the retirement

B] GENERAL INSURANCE

1] Auto Insurance                    2] Health Care Insurance
3] Travel Insurance                  4] Home Insurance
5] Fire Insurance                    6] Marine Insurance
7] Accident Insurance

PRICE

For life insurance the premium depends on three factors:

1] Costs: Fixed percentage of insurer’s office expenses, salaries, computers, and maintenance
of buildings, commissions to be paid to the agents
2] Mortality: Mortality tables allow the insurer to calculate the average chance of someone
dying within one year
3] Interest: The insurance firm receives interest on the premium payment, from the time of
policy taken, up to the maturity/death. When the period is longer , the effects on interest
income is more

For general insurance (Auto) the premium depends on:

1] Make of the vehicle
2] Year of manufacture
3] Place of registration
4] Current showroom price of the vehicle
Discounts may be offered for existing clients renewing the policy
DISTRIBUTION

1] Personal selling (Insurance agents)
2] Internet
3] Innovations in insurance distribution – Bancassurance
4] Tie ups with financial products (Mutual funds etc)

PROMOTION

1] Advertisements                                           2] Personal Selling
3] Tie ups with banks, financial service providers          4] Tele marketing
5] Word of mouth

                                CLAIMS MANAGEMENT

FOR LIFE INSURANCE: Notification to the company that the payment is due under the
terms of the policy (expiry date)

1] In case of the death of the person insured, Death certificate issued by Municipal Authority
need to be submitted
2] In case of unnatural death claim, First Information Report, Post - Mortem Report, Police
Report
An investigation is made into the documents by the insurance firm before settling the claim

FOR AUTO INSURANCE: Documents required for auto insurance claim:

1] Claim form duly signed
2] RC copy of the vehicle
3] Driving license copy
4] FIR on a case-to-case basis (in case of accident)
5] Original estimate (in case of accident)
6] Original repair invoice, payment receipt from the service center (in case of accident)
7] RTO transfer papers duly signed, mentioning that the vehicle cannot be located (in case of
theft)

CHALLENGES FOR INSURANCE SECTOR

1] Innovation in insurance distribution channel      2] Penetration in rural areas
3] Competition                                       4] Monopoly in life insurance
5] Changes in environment, terrorism, wars etc       6] Consumer expectations

UNIVERSITY QUESTIONS

1] Market segmentation in insurance industry
2] Insurance in no more a public sector monopoly in India
3] Environmental factors affecting insurance
4] Physical evidence in Insurance industry
5] Consumer decision making process in insurance purchase
CLASS PARTICIPATION ACTIVITY

[2]
         SERVICE BLUEPRINT/ SERVICE MAPPING
         BENCHMARKING
         BRANDING IN SERVICES

[3]
         RELEVANCE OF QUALITY IN SERVICES

[5]
         DETERMINANTS OF QUALITY IN HOTEL INDUSTRY

[8]
         IMPACT OF INNOVATION AND TECHNOLOGY IN HOUSING &
          CONSTRUCTION INDUSTRY
         RECENT TRENDS IN HOUSING SECTOR
         RURAL HOUSING

								
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