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Wednesday, May 10, 2017

Marketing of Various Types of Services

Unit – 4: Marketing of Various types of Services

Marketing of Financial services
Financial services are the economic services provided by the finance industry, which encompasses a broad range of organizations that manage money, including credit, unions, banks, credit card companies, insurance companies, accounting companies, consumer finance companies, stock brokers, investment funds and some government sponsored enterprises. Following is the list of some typical financial products available in the market.

a)      Savings and Recurring Account
b)      Current Account
c)       Fixed Deposits
d)      Retail Loan Products
e)      Commercial Loans
f)       Leasing and Hire Purchase
g)      Credit Cards
h)      Insurance
i)        Mutual Funds

Beside these, banks and finance companies provide a number of fee-based Services such as merchant banking, issue management for raising equity from the market, foreign exchange advisory services etc.


Branding of Financial Products / Services: Branding is a major input in the marketing strategy of commercial products, can be successfully used in the marketing of financial services too. Brand is a broad term that includes practically all means of identifying a product e.g., the LIC logo, Citibank’s “City” – schemes, Canara Bank’s “Can”-etc. The concept of branding of financial products offers several advantages. Brands command customer loyalty for the product. Each brand has a consumer franchise which can be used to its advantage. Financial products aim to attract the investors to bring his savings into the market. This is quite a delicate task because the investor’s money is involved. Most of the financial instruments are very similar. This is where the advantages of branding can be exploited. Branding can help in creating differentiation between the various financial products or public issues. Branding can also help to create some insulation from the competitor’s promotional strategy. A successful brand will be demanded by a consumer even if the price is slightly higher. Trust is the key element if people are expected to part with their money. A good name evokes that trust and gives the investors’ confidence that their money will be safe. Branding, especially umbrella branding, helps the consumers to decide whether to buy a product when the new product quality cannot be determined prior to purchase. Another strong advantage of branding is that good brands help to build the company’s corporate image. In umbrella branding, the advertising and promotion costs of subsequent products can be reduced considerably. This is because the brand-name recognition and preference is already there.
Pricing of Banking products / services: Pricing affects the product cost and also plays a key role in decision making of the buyers (customers). Pricing is affected by competition, seasonality and general trend of demand and supply. It can be said that the price is determined by cost, demand and competition in the market.
1. Market based pricing system: In order to understand consumers based inputs on pricing system, we should also take into account the market related pricing systems which adopt one or more of the following approaches
i) Perceived value pricing
ii) Psychological pricing
iii) Promotional pricing
iv) Skimming
2. Cost Based Pricing: These are the main cost based pricing methods.
1) Standard cost pricing
2) Cost-plus pricing
3) Break-even analysis
Promotion of Banking products and services: The promotion efforts include the marketing communication through:
a)      Advertising
b)      Sales Promotion
c)       Personal Selling
d)      Publicity
e)      Bank’s internal communication process, etc.
These elements of promotion serve as the link between the Bank and the target segment of its market (customers). promotion does not mean only advertisements but a Bank’s conscious communication efforts towards integrating its marketing strategies with business plans. Promotion thus means the Bank’s well organized, planned and goal oriented communication efforts which must be in congruence with its overall business goals and objectives in the desired market area keeping specific needs of customer in mind.
Advertising: Advertising is a very effective and most frequently used promotional tool in marketing of banking services; it is desirable to measure the effectiveness (impact) of an advertisement campaign. For this there cannot be any one criterion to assess the effectiveness. Normally below mentioned methods are used to measure effectiveness of advertising.
Sales Promotion: Advertising and Sales Promotion as parts of the marketing mix are integrated with the marketing objectives and they are often co-ordinate with other selling efforts. As the name suggests, sales promotion is a collective name given to all measures used to promote the sales. Any sales by an intending seller of a product presupposes a corresponding buyer and, therefore, to sell anything the buyer has to be made aware about the product and its advantages to the buyer. The visible benefits of the product have to be demonstrated to facilitate buyer’s decision to buy that product.
Personal Selling: Sales promotion also can be done through personal selling. In banking context, it is the person at the counter who is the primary contact point with both existing and potential buyers (customers). Well informed and well-trained staff at the counter, eager to explain the schemes to the customer using smile, courtesy and proper communication process can ensure successful sales promotion through personal selling, within the branch, across the counter.
Significance of personal selling:
1. It is a direct personal relation between the buyer and the seller.
2. It is oral presentation in a conversation
3. It is a two-way communication.
4. It is selling goods and services.
5. It is found more effective in the service generating organisations.
6. It is based on the professional excellence or expertise of an individual.
7. It is an important element of the promotion mix.
Internal Communication: Internal communication is another form of sales promotion. In order to supplement external communication measures, most of the banks also have internal communication strategies in the form of an annual budget or business and corporate plan which spell out its goals, objectives and targets during the financial year.
Marketing of Health care services
Health care is one of our basic needs. Hospitals play an important role in giving health care facility to customers. The type of health services available in India can be broadly categorized into two:
a) Government owned
b) Privately owned / commercial
The Government has a network of institutions at primary, secondary, and tertiary levels. These include sub-centers, primary health centers, community health centers, rural hospitals and dispensaries in rural areas, sub-divisional and divisional hospitals, medical college hospitals and specialized hospitals. One important government health care scheme is the Employee State Insurance scheme designed for industrial workers. The scheme is mainly financed by contributions from employers and employees in the implemented areas. The scheme provides both medical benefits as well as cash benefit like sickness benefits, disablement benefit, maternity benefits etc. Health care needs in India has been categorised into three main categories in the customers point of view.
1) Emergency Care: As the name suggests, this is required in situations of dire necessity like accidents, fire, stroke etc. These are the situations when the survival of the patient is in question.
2) Routine Care: This refers to periodic patient visits to the medial professional involving checkups and for ailments where meeting a doctor is essential but an immediate meeting is not critical.
3) Elective Treatment: This is a medical procedure that a patient chooses to undertake on his or her own initiative. These include ‘Life Stage Treatments’ (associated with events which people typically plan for at some stage in their life like permanent birth control procedures, teeth removal in old age etc) and ‘Life Style Treatments’ (associated with activities that people undertake to improve their ‘Self’, boost their image e.g. cosmetic surgeries, weight reducing treatments, hair implantation etc.). Life Style Treatment segment is likely to grow in India at a fast rate.
Pricing of Health care services: Pricing is one of the most important decisions in the service providers point of view. The pricing strategy for any given service, medical services included, depends on three basic fundamentals. These are costs, value and competition. The costs represent the monetary value of everything that the organization has to utilize in order to create and offer the service for the patients. In the short run or the long run, all costs must be recovered if the organization is to earn profits. Costs thus represent the lowest limit below which in the long run, prices cannot be set. Consumer’s perception of value of a given service would thus set the upper limit beyond which prices cannot be set. Between these two limits service organizations may have the freedom to charge whatever prices they determine, but for the presence of a third variable, the competition. You are not the only provider of health services in the market. There may be several other providers with similar or better services. The prices that your competitors charge for a similar service will limit your freedom of setting prices between the two limits provided by the costs and the consumer’s concepts of value. The prices being charged by the competition would thus determine the actual level at which prices for a given treatment or service may finally be set in between these two limits.
Promotion of Health care services: Communication is an essential part of marketing. In fact it is one of the elements of marketing mix i.e., promotion. Few goods or services, despite being well developed, priced and distributed can sustain the market place without effective promotion. Promotion can broadly be understood as “communication by marketers that inform, persuades and reminds potential buyers of a product to influence an opinion or elicit a response.” The various elements of promotional mix are advertising, sales promotion, public relations and personal selling. In the case of health care services, word of mouth communication (WOM) has very importance. In order to avoid uncertainty or risk, consumers tend to rely more on information from personal sources (e.g. friends) than from non-personal sources (e.g. mass media). Therefore, word of mouth communication becomes a critical part of health care marketing. WOM can be defined as “Oral, person-to-person communication between a receiver and communicator whom the receiver perceives as non commercial regarding a brand, a product or a service.”
Here there are some issues in WOM in health care marketing:
i) Word of mouth is more effective than advertising. And in the health care field, the difference is even more striking than in other purchase categories.
ii) The effectiveness of word of mouth applies across the board in terms of the kinds of responses marketers traditionally seek. Word of mouth communication not only increases awareness and knowledge, but is also persuades and lead to action, such as actually choosing the provider one has heard about.
iii) Favourable w.o.m. communication can’t overcome personal negative experience.
iv) Health care organizations should encourage its employees, their spouses to become involved in community and neighborhood groups and to educate them on what to say when they get there, in the hope that a source of word of mouth communication is listening.
v) Word of mouth increases as the level of satisfaction increases. An emotionally positive experience with a health care provider increases w.o.m. and satisfaction which in turn, raises the odds that w.o.m. will be positive. A marketer, therefore, has an opportunity to enhance experience that leads to positive w.o.m. So, health care marketers should seek a mandate to provide emotional highs to the patients and prevent strong emotional negatives, even if these goals involve serious trade-off.
vi) Consumers of medical care are more likely to engage in negative w.o.m. than they are to complain to their health care provider. Health care providers, therefore, must make a greater effort than marketers in other industries to make complaining easy and acceptable.
Marketing of Hotel or Hospitality services
Hotels are a vital and essential part of the tourism industry. A hotel is an establishment that provides paid lodging  and fooding facilities on a short-term basis.
Types of hotels
1. One star hotels: These hotels belong to the no-frills variety that offers basic bedding and bathroom facilities. The furniture, décor, etc. may not be of high quality, but is mostly comfortable. Arrangements for meals may or may not be included.
2. Two star hotels: The extra star here is for a proper reception desk and some amount of staff presence. Two star hotels are suitable for people with limited budgets but who are travelling with their families and need a reasonably safe place to stay.
3. Three star hotels: Three star hotels are mostly good for business travellers who are travelling for a short period on business. They are also a good option for female travellers who are travelling alone and don’t want the tension of staying at a place where their security could be at risk or their belongings unsafe. Three-star hotels are generally part of a larger chain and have footprints in more than one location.
4. Four star hotels: The premium variety of hotels starts from here. There will be larger rooms, better décor, more amenities, and better services like availability of porters, 24-hour room service, laundry, and multi-cuisine restaurants. Four star hotels are mostly used by corporate travellers where the company pays for the stay.
5. Five star hotels: Five star hotels are top level hotels. Breakfast served in bed, shoes polished, clothes washed and facilities for getting almost. Other facilities include huge lobbies, round-the-clock room service, swimming pools, gyms, sauna, spas, badminton/tennis courts, beauty salons – etc. The staff in these hotels mostly comprises hotel management graduates from the best schools, well-trained in customer service, crisis management, etc. The clientele that five star hotels cater to include big names from fields of entertainment, business, and sports.
6. Five star deluxe hotels: This type of hotels caters to the movers and shakers of the world. A private balcony, fully stocked mini-bar, personal masseur, king-sized beds – these are just some of the rare luxuries you can treat yourself to at a five star deluxe hotel. The most well-known brands belonging to this category include the Taj, Hilton, Leela Palace, Grand Hyatt.
Hotel Pricing and Distribution
Pricing: It is difficult for a hotel to exercise differential pricing except for certain specific purpose. These may typically be differentials in tariffs and prices during the peak and lean seasons; group rates; contract rates for airline crew; special conference rates or special concessions to attract customers etc. However, by and large, hotel pricing tends to follow or conform to pricing standards applicable to the particular city area or resort, to competitive hotels, to the amount of traffic being generated in the hotel location, tourist location, international or national conference venue, and so on. Nevertheless, hotel pricing also suffers from a degree of lack of flexibility, although to a lesser extent than that of the hotel product.
The depreciated valuation of the hotel property, its financial management efficiencies, credit policies and other factors, specially cost of empty room-nights, fixed overheads, also have a bearing on tariffs and menu prices.
Distribution: Hotel distribution relies on interdependence with other industries serving travelers and tourists such as the transportation industry (airlines, railways, roadways, shipping lines), travel agents and tour operators, national and state tourism organisations, shopping and entertainment providers. In sum, those services which provide certain other facilities to the traveller or the tourist which are bought when accommodation and food are assured.
Communications: This element of the hotel marketing mix is the most important one as it is directly responsible for bringing customers to the hotel. Hotel marketing communications are either direct or indirect. The direct communications are through personal selling, advertising, sales promotion and direct mail. Appropriate messages are conveyed to those who are potential buyers of the hotel product and those who directly influence decisions to buy the hotel product. Personal selling of the hotel product is effective when long-term relationship between the hotel and the customer is sought. It is also required where the level of business per customer is likely to be significant. Indirect marketing communications for hotels include public relations and publicity, both of which may and may not form a part of the hotel’s marketing communication programme but may function independently. The major elements of the hotel communication mix thus are – mass media advertising, direct mail, sales promotion, public relations, and publicity.
Marketing of Tourism Services
Marketing in tourism is the systematic and coordinated execution of business policy by tourist undertakings. The tourist undertakings may be private or state owned at local, regional, national and international levels. In the words of Burkart and Medlick "tourism marketing activities are systematic and coordinated efforts extended by National Tourist Organisation and or tourist enterprises at international, national and local levels to optimise the satisfaction of tourist groups and individuals in view of sustained tourist growth" .
From the above, the following points can be understood:
(i) Tourism marketing is a process of creating a product or service.
(ii) It comprises fact finding and marketing research.
(iii) Tourism marketing aims at transforming potential tourists into the actual tourists.
(iv) It is confined to generating demand and increase of market share.
(v) Tourism marketing is a managerial process involving a sequence of activities aiming at customer satisfaction.
Types of users of Tourism services
I. Non-users are those persons who are not interested in using the services The reasons may include lack willingness and pursuit of leisure.
2 Potential users are the prospective users. They have willingness to avail tourism services. They are influenced through marketing strategies.
3. Persons who are already using the services of tourism are known as actual users.
4. Persons who occasionally travel are known as occasional users of tourism services.
5. Habitual users are in the habit of availing tourism services regularly.
Marketing mix for tourism product: The designing of the marketing mix variables in case of tourism is significant as it helps the marketer in conceiving the right ideas, particularly to raise the acceptability of the tourist product by stimulating and penetrating the demand. Framing of a proper marketing mix is significant because it helps the tourist organization in accomplishing the objective and projecting a fair image.
Product Mix: Tourism is a composite product with components like attraction facilities and transportation. Attraction deserves an intensive care. It includes natural site, places of historic interest, events and cultural attraction. The facilities compliment attraction. The facilities include accommodation, food, transportation and recreational facilities. The transportation component includes the vehicles and infrastructure. Innovation in the tourism product helps raising the sensitivity. The users of the service are looking forward to better and improved product. The provider of the tourist is a travel agent or the package tour. A well conceived and designed package tour, covering a wide range of tourist attraction at an economic price, helps in attracting the potential tourist. The travel agent performs numerous activities such as hotel arrangement and accommodation, site seeing arrangement, domestic transport arrangement, air travel arrangement etc. In a true sense the tour agents and the travel agents are the vehicles who can give a fillip to the tourism industry, provided they are well trained.
Pricing: Pricing of the tourist product is complex. Geographical location of the destination, seasonality and varying demand affects the pricing decision. In India the pricing strategies become important for promoting or contracting the tourism industry, since more than 40% of the total population are below the poverty line. In order to develop the tourism industry more and more potential users are to be transformed into actual users.  When a tourist proposes to visit a particular place, the total cost of his traveling also include the expenses incurred on transportation, accommodation and communication. Liberal pricing strategy is found to be a productive pricing decision, particularly in case of tourism industry. The pricing strategy which includes low income group people, student and retired persons can be more effective. This is possible if the government concessional and subsidized infrastructural facilities to the potential tourist below the average income. The different pricing methods generally used are cost based pricing, demand based pricing and competition based pricing. 
Promotions: The promotion mix includes advertising, publicity, sales support and public relations.  The purpose of promotion is to make available the information to the user. Advertising the sales promotion can be effective when supplemented by publicity and personal selling. Radio, TV, newspapers, cinema and printings are some of the important vehicles for traveling of messages. Effective slogans raises the effectiveness of advertisement.  Another important component of the promotion mix is public relation. It helps in projecting the image of an organization. Public relation and publicity include regular articles and photographs of tour attraction, use of TV and travel journalists to promote editorial comment. Public relation officer plays an important role. He should be efficient, active, impressive, intelligent and well-behaved.  Good image projection can be made if the PRO manages the affair like a professional. It is said that word of mouth is the best form of publicity. The word of mouth promotion is  an important tool in tourism marketing.

Place: The tourist centers should be located at suitable points if the tourists spots are natural there is no question of selection. In a vast country like India with a divergent socioeconomic and cultural patterns, the promotion of domestic tourism encourages unity in diversity.  Infrastructural facilities, transport and communication are important for development of tourist centres. The site selected should have natural surroundings, increased accessibility and improved amenities. At the same time it is also important that the ecological balance is not disturbed. Since growing ecological imbalances leads to pollution, some important steps like promoting afforestation, promotion and beautification may be undertaken in countering the side effects of atmospheric pollution and maintaining ecological balance.

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