In order to overcome the difficulties given in the previous article, given strategic responses can be implemented:
Intangibility of Service Performances
Intangibility prevents the consumer from having the benefit of the touch, see and feel factor. This makes it difficult for him to comprehend the enormity of the service offer.
Thus, the entire strategy should be based on communication, persuasion, and tangibilisation. These are the following ways in which intangibility can be overcome or minimized:
1. Visualisation: The marketer should find ways and means to help the customer visualize the transaction process and the service transaction benefits of consuming the service product. Pictures, films, etc., should be used evocatively.
For example, in the sixties, the state government of Jammu of Kashmir used sections of the Rajendra Kumar Starrer Arzoo for their tourism promotion.
So beautiful was the visualization of verdant Kashmir that it successfully conveyed the promise of tourism in the state.
Junglee, Starring Shammi Kapoor and Saira Bano did the same for a snowy Kashmir. Kashmir ki kali was a showcase for the beauty of the state, as represented by the charm of a very youthful and appealing Shannila Tagore.
Between them, the three films succeeded in positioning Kashmir, in the minds of tourists, as the ultimate get-away.
2. Association: The intangibility of the service offer makes it difficult for the marketer to convince consumers about its credibility, character, or the “ability to keep its word”, “service delivery”, etc.
This can be overcome by associating the offer with some living persona, or known inanimate objects. This is almost akin to having a known personality endorsing the offer.
In this way, the marketer can build a bridge and expect the association to rub off positively on the service offered, morphing the endorser’s personality on it.
The consumer makes the analogy, believes the service delivery promise, and gets some idea of its character. This makes it easier to build a relationship with customers.
ICICI Bank seeks to associate itself with the rejuvenated and dynamic Amitabh Bachchan. “The Big B” is an appropriate symbol of enduring popularity, versatility, strength, character, and genuine success.
For NllT, the leading computer education firm, to get itself linked with Viswanathan Anand was a very intelligent move.
NUT was after all propositioning itself as a Mecca for young minds seeking computer education and intelligent solutions for their career. Viswanathan Anand is an international icon of intelligence, a chess grandmaster.
3. Physical Representation: The intangibility factor in a service offer forces a marketer to go for tangible representations symbolizing the existence and character of service industries.
The tangibles help in making the offer believable. Some of the ways in which this can be used are:
i. Uniforms: This has been in use by many service organizations over a long period of time effectively. They not only covey uniformity, discipline, and conformity but also professionalism.
They also improve visibility for the service organization. Hospitals, the church, the army, police, airlines, and shipping firms have seen the uniform’s utility very early on.
Restaurants, hotels, utility firms (electricity, water supply, garbage cleaners) are identifiable by their uniforms.
ii. Colours: This is used in servicescapes like interiors, stationery, glow signs, buildings, etc. The corporate colors are a part of their logo and other corporate communication tools.
Colour communicates uniquely and softly sells the firm’s viewpoint, e.g., IBM is known as ‘Big Blue’, after the color of its famous logo.
ICICI Bank uses orange which stands for knowledge and intelligence, while ICICI Prudential Insurance uses vermillion red for power, faith, and gentle association with sindoor that married Hindu women put on their forehead and hair-partition.
As for the color component, ICICI has succeeded in making its orange-red color synonymous with the brand.
Be it signboards at ATM centers, outdoor advertisements, ATM cards, checkbooks, even furniture in the offices, they have followed consistent branding strategies.
Reliance has followed the same route with its distinctive cyan, aquamarine, and magenta color scheme.
iii. Logos and Mascots: This is not unique to service firms but has been effectively used by them to overcome intangibility.
Logos, derived from the Greek word logos, implied … “word”. Kings used it in their royal seals and English Lords and other nobility used them in their family crests.
Service firms have sought to convey their mission and vision through them. Most schools, colleges, and universities have them to convey their core values, through mottos and distinctive badges.
4. Documentation: The documentation is used by service providers to tangibilise their intangibles. They cite facts and figures in their promotions to support the claim of their performance in terms of dependability, reliability, and responsiveness.
- Sahara airline advertises its performance and uses perform? figures to tangibilise their offerings.
- Indian Airlines advertises major awards received by the Indian Airlines in the recent past and they publicize it in their in-flight magazines and also in other print media.
- Hotel Orchid advertises the awards received by it in the recent past and emphasizes its hotel as the hallmark of the environmentally sensitive hotel.
The customers buy services on trust, therefore they become loyal to the service, which justifies their trust.
The competitors who want to break this loyalty have to put in considerable and consistent efforts over a period of time and maybe they have to overspend in overcoming this loyalty.
Correspondingly this effort may be considerably less in the product environment, as the consumer can touch, sample, and try the product before use.
Thus tangible elements which are associated with the service are of special importance and they are:
i. People: People are often the critical elements of the service delivery and they form the tangible evidence of equality.
- In a hotel, it is the people who create the difference in good and bad service delivery. A trained employee may be able to win a customer for life with a small gesture of goodwill.
- In credit card marketing, financial marketing, real estate marketing where the face to face contact is required, the people provide the physical evidence of the services they are marketing.
ii. Place: Play important role in tangibilishing the services offering. Quality of service is perceived by the customer from the place of delivery.
- The clean, well laid down interiors of a hotel/hotel room depicts the quality of service delivery.
- In banking, customers perceive the quality of service from the premises of a bank branch. How do you perceive the quality of service when you compare the premises of American Express with the State Bank of India?
iii. Promotion: The goal of promotional strategies for services is to make them tangibles – to dramatize their benefits.
- Many resorts send promotional videotapes of facilities and benefits available at the resort for a preview of customers before they decide to buy a service.
- Happi holidays have introduced holidays abroad now – and pay later creating a benefit for executives, a self-employed professional who is resident Indian with a gross income of ₹9000/- per month. It is very simple to choose the Happi Holidays Tour. Complete the credit application form and submit it with the required information and the booking deposit. On receiving the credit approval, sign a simple credit agreement and deposit post-dated cheques. Then set off on your dream holiday.
- Personal Point Care Ltd. Through its promotional campaigns offers life long assurance scheme; the benefit of staying slim forever for a one-time payment.
iv. Branding: Branding is the business process of managing a trademark portfolio so as to maximize the value of the experiences associated with it, to the benefit of key stakeholders.
To elaborate, a brand is a proprietary, visual, emotional, rational, and cultural image that one associates with a company or a product It is always clubbed with a communication message, which it wants to be communicated to the consumers.
It is this communication that binds the consumers in some psychological aspects to a brand, enhancing the brand image, personality, and loyalty.
5. Selling Services: In practice, face-to-face selling tends to be more prevalent in the service industry.
This is, in large part, because many such services are also ‘delivered’ in a personal form; with some service providers using ‘professionals of specialization’ rather than a salesperson.
It is because personal contact may be seen as necessary to establish the credentials’ – the integrity of the service provider, where the service itself is an intangible quantity.
In these situations the sales professionals and the way they personally handle the sale may be seen by the customers as the best measure of the service being offered; the method of promotions may become, by default, the ‘product’.
For example, in the courier sector, the quality of service is perceived by customers from the fact of how the package deliverer acts during face-to-face interaction.
Renowned courier companies train their staff in interpersonal skills to handle services to customer expectations.
6. Tangibilising Services through Benefits: The AT and T, Citibank, and the Times Group is revolutionizing the credit card industry by offering tangible benefits to customers; discounts on long-distance telephone calls, frequent flyer programs.
For example, Times Card announced an exclusive tie-up with Hut and provided lucrative benefits to its cardmembers.
7. Tangibilising through Positioning: The intangibility of service makes positioning decisions difficult.
Unlike goods positioning, which may stress attributes and consumer analysis (such as touching, tasting, and so on) prior to purchase the service positioning must rely on performance attributes (such as how well a truck handles following a tune-up) which can be measured only after purchase.
Variability of Service Performances
Variability conveys to the customer an element of inconsistency and non-standardization in the service offer and service delivery.
The customer’s service encounters are different every time. Some of the ways to overcome variability in the service process are:
1. Training of Internal Customers: This is one of the most important Iholsdur a service^organisation to beat heterogeneity or variability.
The variability occurs due to the difference in the background of the internal customers, their varying moods, experiences, involvement, orientation, and skills.
Training would be the equalizer and all the internal customers – employees, channel partners, associate partners, and third party administrators — would project uniformity in the service delivery to the customers.
This projection is more important because what the customers perceive is service quality.
Different types of training are:
- Orientation-cum-Induction program,
- Refreshing session,
- The re-skilling session, and
- Motivational, leadership, group dynamics.
2. Recruitment and Selection of Internal Customers: A manager could choose to have better quality personnel through quality recruitment and selection.
This would ensure that the internal customers are from the same background, levels of skills, and orientation, and would thus deliver homogenous services. The decision-maker would get a chance to get the right persons for the right jobs.
3. Training of External Customers: Another way to reduce variability is to train the customers to go through the transaction process.
Service is a transaction between the service provider and the customer. It is not enough if only one of the players (read provider) in the transaction game is at a high level of competence.
To complete the transaction process, the customers should also be knowledgeable about the service offer, process, rules, and norms.
Otherwise, the learning curve of the customer tends to be longer, delaying the service transaction and lowering the service quality.
Therefore, the organization can also attempt trying to train the external customers in the transaction process. It would definitely enhance the quality of transactions.
Thus, students admitted to business courses are given a fortnight of orientation and basic foundation teaching and training. It could also imply literacy training for illiterate customers.
State Bank of India has a Social Banking Department whose main job is to try and improve the literacy of rural customers.
With them becoming literate they would then be able to attempt writing cheques and deposit slips on their own, and thus save a lot of valuable time for the bankers in making the service transaction better.
4. Automation: Another way to improve homogeneity and standardization is to go for large-scale automation in the service transaction process.
Automation will bring consistency in service delivery and transactions. Thus, banks are going in a big way for ATMs (Automated Teller Machines).
Hotels, airports, railway stations, and many apartments have got touch-screen inquiry systems. Automation to a great extent attempts to overcome variability and introduce homogeneity.
Inseparability of Service Performances
There are the following ways to overcome inseparability: –
1. Training of Internal Customers: The service provider with the help of his organization should take extra quality effort to train other service providers, as trainees under an expert.
The intention is to bring more service providers of the same expertise into the market. Then the number of people who can be served at one time would be more and the catchments area of service could also be widened.
For example, a professor of management has teaching assistants who would sit in his class, observe and adopt the different pedagogical (teaching methodology) skills, carry-on supervising assignments, tests, and group work and also help the professor in evaluations.
The teaching assistant also develops case studies, teaching materials, and follows-up with the class for smooth coordination. Inseparability is sought to be overcome by bringing-out in the market more and more qualified and capable service providers.
2. Adoption and Innovation of other Methods of Service: Psychiatrists have innovated with the concept of group therapy to achieve their treatment goals.
With group therapy, the psychiatrists see many patients, simultaneously by design and the methods seem to be delivering results.
Organizations like Alcoholics Anonymous and drug rehabilitation centers are successfully using this technique. Modem day gums use group therapy only.
3. Video Conferencing: Inseparability can be overcome by the service expert giving instructions through video and satellite conferencing. Expert opinions in medical and legal matters are sought and received through video and satellite equipment.
4. Robotics: Many intricate surgeries are now carried out with the help of robots.
Perishability of Service Performances
The perishability factor prevents a service marketer from storing offers. This robs him of the privilege of delayed sales. The service marketer suffers from lost opportunities.
But there are ways and mean: to overcome the perishability factor as described below:
1. Over-Marketing: A service marketer targets more customers than he has the capacity to serve. In this way, if there are drop-outs and cancellations, the actual number of customers is the same as servicing capacity.
Then the service marketer does not suffer from any opportunity loss. Obviously, no good service marketer worth his salt would like to be in the position of having customers on the doorstep and turning them down.
So, the trick is to do over-marketing with lots of clauses, catches, and conditions. The customer is made to participate in the over-marketing process and also to agree beforehand to many conditions.
i. Restaurants bill customers who do not turn-up after having taken table reservations. The customer cannot complain, as that particular clause would have been agreed upon by him when making the reservation.
Similarly, customers are denied service even after reservations if they arrive later than the agreed time; the next person in the waiting line is offered the service.
This method is pursued only to cut down the losses due to perishability and in order to avoid clientele right down the line.
ii. Ticket Reservation System of Indian Railways under this system Indian Railways has a term named RAC (Reservation against Cancellation) which means if anyone cancels his reservation the offer will go to the immediate waiting person.
2. Managing Demand: With no scope for delayed sales or stocking of inventory, it is all the more imperative for a service marketer to manage demand.
Accurate demand management would aid estimation and forecasting which would in turn help to avoid perishability. Nine different types of demand have been identified.
The service marketer has to understand and adopt them in his marketing to avoid perishability. These are:
i. Rising Demand: This occurs when the service offer is in the growth stage of the product life cycle, customers are aware of the service category and service brand, and the rate of adoption is increasing in geometric progression with more first-time buyers trying the service offer and customers making repeat purchases.
The service marketer not only should recognize this trend but also measure the rate of rising demand.
This information would enable him to cater to the rising demand by appropriately increasing the capacity of service – facilities, service personnel, etc., – and avoid lost opportunities.
ii. Falling Demand: There could be many reasons for declining demand for a particular service offer: direct competition, substitute competition, unattractive pricing, poor service delivery, etc.
Falling demand for video parlor services due to the popularity of satellite broadcasting TV channels is another case of technology changing the pattern of demand for services.
Whatever be the reasons, the service marketer should identify the declining demand, measure the rate of decline, analyze the causes, and bring innovative marketing programs into the market place to arrest the trend.
If the service category itself is on the decline, get-out of the market, and cut losses.
iii. Zero Demand: The market may not be having a need for a particular service offer because of various demographic, socioeconomic, and sometimes geo-demographic factors.
The service marketer has a choice: either create demand for the service by finding-out the needs, wants, and desires of the market or do enter the market.
iv. Full Demand: In this situation, the service marketer will find the demand is equal to supply. It is an ideal situation for the firm but danger lurks when a new entrant brings-out his offer.
Then either the market has to increase consumption or else the players battle it out amongst themselves fighting for the same pie.
Only the fittest tend to survive; mergers and acquisitions become the norm or else the weaker players face closure and bankruptcy.
v. Overfull Demand: This takes place when demand far outstrips supply, and the service marketer is not able to handle the demand.
This implies that there are either fewer capable players or entry barriers and regulations against the free-market enterprise.
Either way, the service marketer cannot be complacent and has to be prepared for de-marketing his service.
If not, disillusionment may set in and negative feelings might creep_ into the customer’s mind.
vi. Negative Demand: This is a kind of anti-demand. The customer would do anything to avoid consuming a particular service.
This could be because they might fear bodily harm, irreversibility in consumption, high risk, etc. They would sometimes pay to avoid the consumption/experience of the service offer.
Cosmetic surgery – With increasing media reports of the harmful effects of cosmetic surgery and beauty treatments, there might be a negative demand by the target market for the service.
Similarly, there are people who have a phobia against vaccination and would do anything to avoid it. The service marketer has to communicate the reversibility in the purchase to his target market. Otherwise, they tend to be price sensitive.
vii. Latent Demand: This is a demand that lies deep inside a consumer unquenched, as no service offer exists to satisfy it.
The consumer may not be able to accurately express his demand and features of the offer and therefore may not be able to voice his desire. But when such a service does come in the market as an offer, the customer grabs it.
- Good Day-Care Centers and Creche: With women coming-out of the workforce in larger numbers, there was an urgent need for such services.
- Sangam Direct: With urbanization came commuting, DINKs (Double Income No Kids), and plain dual income. This left less and less time for shopping and leisure. So when Hindustan Lever Limited (HLL) started Sangam Direct, the direct-retailing venture promising home delivery of 5,000 brands when ordered through the telephone, Mumbaikars leapt at the offer.
viii. Seasonal or Irregular Demand: Demand for certain services fluctuates with seasons or is irregular. Sometimes, there is regularity in their irregularity (seasonal).
In some seasons there would be peak demand, while in others there would be less. This greatly affects the service management, delivery, and profitability.
The service marketer should, with suitable promotions shift the demand to off-peak hours/seasons.
ix. Unwholesome Demand: People tend to lose interest in the service offer when they receive new information about the process or ingredient in the service.
3. Managing Supply: A service marketer suffers from perishability if he is not able to manage supply. That is, during demand the service provider is not in a position to deliver only because he is neither prepared nor ready – due to supply bottlenecks.
i. Goods: Supply problems in respect of goods occur in those services that are highly tangible like retailing, car rentals, restaurants, tourism, hotels, pubs, etc.
If certain merchandise is not available when a customer asks for it (stock-out), the customer is free to go to another retailer. Thus, the service marketer forever loses that revenue.
ii. Systems and Processes: Supply problems occur here when the systems and processes of service delivery failure and the provider is not able to offer the service as he is entirely dependent on them.
iii. People: Perishability occurs when the service marketer is not able to organize internal customers in the right place at the right time in requisite numbers.
The internal customers are employees, channel partners, etc., – all those who play the role of providers.
- Peak-Hour Essential Services: A retail bank during peak hours might shut-down a few non-urgent desks/counters and concentrate only on essential services.
- Include the Customer in the Process: This is a novel way to beat perishability due to the supply problem of personnel. The customer is made to be a partner and a part of the service delivery. Executive buffet lunch is a classic example of a high-quality service offer delivered with minimal staff support.