Author: indiafreenotes

The marketing concept dictates that marketing decisions should be based upon customer needs and wants. Buyers purchase goods and services to satisfy their needs and wants. Thus when a buyer engages in a market transaction he perceives a bundle of benefits and satisfactions to be derived from that transaction. However he does not usually divide the market offering into its component parts.

From the sellers’ view point however the market offering can be divided into its component parts. The marketing mix is the convenient means of organizing all the variables controlled by the marketer that influence transactions in the marketplace. It is a ‘checklist approach’ where marketer’s attempt to list and organize the variables under their control which may be important in influencing transactions in the market place.

The formulation process of marketing mixes in services markets is much the same as in other types of markets typically this involves:

(a) Separating the offering into its components or sub mixes;

(b) Coordinating the sub mixes into the marketing mix.

The specific marketing mix adopted by a particular organization will of course vary according to circumstances (e.g. level of demand, range of service being offered). The marketing mix process then is a constant one of fashioning and reshaping the component elements in response to changing market circumstances and needs.

Inevitably there is much overlap and interaction between the various components of a marketing mix. Decisions cannot be made on one component of the mix without considering their impact upon the other components.

Also the precise elements and their importance within any marketing mix at any point in time will vary. The outline that follows therefore indicates some of the key areas to which marketing managers need to devote their attention in formulating their marketing mixes for services markets. It is illustrative not comprehensive. Service organizations will almost certainly need to adapt it in their strategy planning.

Marketing Mix:

1. Product:

The service product requires consideration of the range of services provided, the quality of services provided and the level of services provided. Attention will also need to be given to matters like the use of branding, warranties and after-sale service. The service product mix of such elements can vary considerably and may be seen in comparisons of service range between a small local building society and one of the largest in the country; or between a small hotel offering a limited menu range and a four star hotel offering a wide range of meals.

2. Price:

Price considerations include levels of prices, discounts allowances and commissions, terms of payment and credit. Price may also pay a part in differentiating one service from another and therefore the customers perceptions of value obtained from a service and the interaction of price and quality are important considerations in many service price sub mixes.

3. Place:

The location of the service providers and their accessibility are important factors in services marketing. Accessibility relates not just to physical accessibility but to other means of communication and contact. Thus the types of distribution channels used (e.g. travel agents) and their coverage is linked to the crucial issue of service accessibility.

4. Promotion:

Promotion includes the various methods of communicating with markets whether through advertising, personal selling activities, sales promotion activities and other direct forms of publicity, and indirect forms of communication like public relations.

Expanded mix for services:

Because services are usually produced and consumed simultaneously, customers are often present in the firm’s factory, interact directly with the firm’s personnel, and are actually part of the service production process. Also, because services are intangible customers will often be looking for any tangible cue to help them understand the nature of the service experience.

These facts have led services marketers to conclude that they can use additional variables to communicate with and satisfy their customers. For example, in the hotel industry the design and decor of the hotel as well as the appearance and attitudes of its employees will influence customer perceptions and experience.

Acknowledgment of the importance of these additional communication variables has led services marketers to adopt the concept of an expanded marketing mix for services shown in the three remaining columns in Table 2.1. In addition to the traditional four Ps, the services marketing mix includes people, physical evidence, and process.

5. People:

All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment. All of the human actors participating in the delivery of a service provide cues to the customer regarding the nature of the service itself. How these people are dressed, their personal appearance their attitudes and behaviors all influence the costumers perceptions of the service.

The service provider or contact person can be very important. In fact, for some services, such as consulting, counselling, teaching, and other professional relationship – based services, the provider is the services. In other cases the contact person may play what appears to be a relatively small part in service delivery, for instance, a telephone installer, an airline baggage handler, or an equipment delivery dispatcher. Yet research suggests that even these providers may be the focal point of service encounters that can prove critical for the organization.

6. Physical Evidence:

The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service. The physical evidence of service includes all of the tangible representations of the services – such as brochures, letterhead, business cards, report formats, signage, and equipment. In some cases it includes the physical facility where the service is offered, for example, the retail bank branch facility.

In other cases, such as telecommunication services, the physical facility maybe irrelevant..In this case other tangibles such as billing statements and appearance of the repair truck may be important indicators of quality. Especially when consumers have little on which to judge the actual quality of service they will rely on these cues just as they rely on the cues provided by the people and the service process. Physical evidence cues provide excellent opportunities for the firm to send consistent and strong messages regarding the organization’s purpose, the intended market segments, and the nature of the service.

7. Process:

The actual procedures, mechanism and flow of activities by which, the service is delivered the service delivery and operating systems. The actual delivery steps the customer experiences, or the operational flow of the service, will also provide customers with evidence on which to judge the service.

Some services are very complex, requiring the customer to follow a complicated and extensive series of actions to complete the process. Highly bureaucratized services frequently follow this pattern, and the logic of the steps involved often escapes the customer.

Another distinguishing characteristic of the process that can provide evidence to the customer is whether the service follows a production-line/standardized approach or whether the process is an empowered/customized one. None of these characteristics of the service is inherently better or worse than another.

Rather, the point is that these process characteristics are another form of evidence used by the consumer to judge service. For example, two successful airline companies, Southwest in the United States and Singapore Airlines, follow extremely different process models. Southwest is no-frills (no food, no assigned seats), no exceptions, low-priced airline that offers frequent, relatively short length domestic flights.

All of the evidence it provides is consistent with its vision and market position. Singapore Airlines, on the other hand, focuses on the business traveler and is concerned with meeting individual traveler needs. Thus, its process is highly customized to the individual, and employees are empowered to provide nonstandard service when needed. Both airlines have been very successful.

The three new marketing-mix elements (people, physical evidence, and process) are included in the marketing mix as separate elements because they are within the control of the firm and any or all of them may influence the customer’s initial decision to purchase a service, as well as the customer’s level of satisfaction and repurchase decisions.

Certainly Marketing managers in services markets need to undertake research about the markets and market segments for which their respective marketing mixes are shaped. Wherever possible the services marketing manager will need to research and analyses the characteristics of the markets served. It is these problems of conducting such analysis and research.

1. Developing a marketing strategy involves two tasks. These are selecting target markets and formulating marketing mixes.
2. In services marketing adaptations and adjustments may be required, although the processes of devising marketing strategies and formulating marketing mixes are similar irrespective of market type.
3. In the analytical stage preceding strategy formulation, common questions posed about all products may give rise to different answers for services.
4. The marketing mix may have to be revised for use in services contexts. In particular people, processes and physical evidence may have to be incorporated into the marketing mix framework.

In order to be able to make a clear and relevant classification of services, we would first need to understand the concept of the word itself. Services usually refer to processes and not physical products. To understand more, read this article on difference between goods and services. Some services may include people whereas other services (like online services) may including objects which are managed by people.

Examples of services which include people can be a hair salon, education, theater, restaurants, and public transportation. On the other hand services that include objects include repairs and maintenance, dry cleaning, banking, legal services, insurance, etc.

1. Classification of service based on Tangible Action

Wherever people or products are involved directly, the service classification can be done based on tangibility.

(i) Services for people: Like Health care, restaurants and saloons, where the service is delivered by people to people.

(ii) Services for goods: Like transportation, repair and maintenance and others. Where services are given by people for objects or goods.

2. Classification of services based on Intangibility

There are objects in this world which cannot be tangibly quantified. For example  the number of algorithms it takes to execute your banking order correctly, or the value of your life which is forecasted by insurance agents. These services are classified on the basis of intangibility.

(i) Services directed at people’s mind: Services sold through influencing the creativity of humans are classified on the basis of intangibility.

(ii) Services directed at intangible assets: Banking, legal services, and insurance services are some of the services most difficult to price and quantify.

The most intangible form of service output is represented by information processing. The customer’s involvement in this type is service is not required. Generally, customers have a personal desire to meet face to face but there is no actual need in terms of the operational process. Consultancy services can be an example of this type of services where the relationship can be built or sustained on trust or telephone contact. However, it is more indicated to have a face-to-face relationship in order to fully understand the needs of the customer.

A more general classification of services based on the type of function that is provided through them can be as follows:

• Business services.
• Communication services.
• Construction and related engineering services.
• Distribution services.
• Educational services.
• Environmental services.
• Financial services.
• Health-related and social services.
• Tourism and travel-related services.
• Recreational, cultural, and sporting services.
• Transport services.
• Other services not included elsewhere.

7 Important Characteristics of Services

(i) Perish-Ability

Service is highly perishable and time element has great significance in service marketing. Service if not used in time is lost forever. Service cannot stored.

(ii) Fluctuating Demand

Service demand has high degree of fluctuations. The changes in demand can be seasonal or by weeks, days or even hours. Most of the services have peak demand in peak hours, normal demand and low demand on off-period time.

(iii) Intangibility

Unlike product, service cannot be touched or sensed, tested or felt before they are availed. A service is an abstract phenomenon.

(iv) Inseparability

Personal service cannot be separated from the individual and some personalised services are created and consumed simultaneously.

For example hair cut is not possible without the presence of an individual. A doctor can only treat when his patient is present.

(v) Heterogeneity

The features of service by a provider cannot be uniform or standardised. A Doctor can charge much higher fee to a rich client and take much low from a poor patient.

(vi) Pricing of Services

Pricing decision about services are influenced by perish-ability, fluctuation in demand and inseparability. Quality of a service cannot be carefully standardised. Pricing of services is dependent on demand and competition where variable pricing may be used.

(vii) Service quality is not statistically measurable

It is defined in form of reliability, responsiveness, empathy and assurance all of which are in control of employee’s direction interacting with customers. For service, customer’s satisfaction and delight are very important. Employees directly interacting with customers are to be very special and important. People include internal marketing, external marketing and interactive marketing.

The following are the characteristics of services:

1. Intangibility:

Services are intangible and therefore cannot be touched, handled, smelt or tasted (physical senses). This is because service itself is an activity. A service however, can be experienced. A service also gives a certain amount of satisfaction to the consumers. On account of the intangibility, there is no ownership created in case of services. A service can only be generated and used and can never be owned.

2. Perishability:

A service has to be consumed simultaneously with its production. A service cannot be stored like a tangible commodity. Services are perishable in terms of delivery and time. An empty seat on a plane never can be utilized and charged after departure. Revenue once lost is lost forever.

When the service has been completely rendered to the requesting service consumer, this particular service irreversibly vanishes as it has been consumed by the service consumer. Example – after the passenger has been transported to the destination, he cannot be transported again to the previous location at the previous point of time.

3. Inseparability:

Commodities once produced can be sold at a later point of time but in case of services it is not possible. Examples – In the cases of services of a doctor to his patient, teacher to his student, the simultaneous presence of both-the producer of the service and the consumer of the service at that point of time is absolutely necessary.

The service provider is indispensable for service delivery as he must promptly generate and render the service to the requesting service consumer. Therefore the service provider, the service itself and the service consumer are inseparable.

4. Simultaneity:

Services are generated and consumed during the same period of time. As soon as the service consumer has requested the service (delivery), the particular service must be generated from scratch without any delay. The service consumer instantaneously consumes the rendered benefits to satisfy his wants. Therefore the production and consumption of services are always simultaneous.

5. Variability:

Each service is unique. Services lack homogeneity. Example – a doctor treats two patients with similar ailments on the same day. The level of satisfaction in the minds of these patients after the treatment will never be the same. The difference is caused by factors such as the mood of the doctor, the fatigue level of the doctor, the way the service is perceived by the individual patient etc. There will a difference in the service even if the same doctor treats the same patient on two different occasions.

This is because the moods of the doctor and the patient do not remain the same on both the occasions. No two units of service are identical even if they are generated by the same person. Factors like quality control, standardization etc. which can be very successfully implemented in case of production of tangible goods cannot be applied in case of services. Services always vary with each other.

6. Ownership:

No ownership is created in case of services. At the time of creating a service or delivering a service, the service provider does not own the service. He only owns the physical infrastructure necessary to create the service. Similarly at the time of consumption or after the consumption, the service consumer does not own the service. He only consumes the service.

After the consumption, the consumer has only the experience but the service itself would have become non-existent. A service cannot be owned by anybody because it is basically an intangible product.

Accounting procedures may baffle you, and legal statutes may daze you, but if you’re like many small-business owners, the one facet of your business that you can comprehend and that sustains your interest is marketing, perhaps because it involves the relatable yet always surprising realm of human behavior.

Unfortunately, most of what you read focuses on marketing a product, not a service. If your specialty is a service, the question that probably drives you most is What factors affect consumer behavior in the service disciplines? Along with that, you are probably curious about whether consumers follow the same decision-making process while they shop for a service as they do when they shop for a product.

Dive Right In to Consumer Behavior Theory

• Understanding how consumers shop for financial services, health care, lawyers and home service contractors, all of which provide fascinating insights about consumer behavior in services in general.
• Revisiting the five steps in the traditional decision-making process.
• Reviewing suggestions for positioning services in the marketplace.

Contradictions Riddle Consumer Behavior

Brace yourself for some beguiling truisms about the significance of consumer behavior. Given what you already know about marketing, these observations shouldn’t come as much of a surprise:

• Consumers know exactly what they want.
• Consumers sometimes know little about what they want.
• Consumers can make careful, methodical decisions.
• Consumers can make impulsive decisions.
• Consumers say they would use online tools to expedite their search for services.
• Consumers don’t use online tools even when they’re available.

Smart Phone Usage Transformed Marketing

Rather than feel perplexed by these truisms, they should remind you that sometimes you must trust your instincts to guide you. Those same instincts fortified you to start a small business in the first place.

Also as you think about the most effective ways to market your service, it may help to keep certain facts about the factors affecting consumer behavior in mind. This information shouldn’t surprise you, but it should inform your most important marketing decisions.

Most Americans own smart phones, not just cellphones. In fact, 95 percent of people ages 18 to 34 and 67 percent of people ages 50 and up own smart phones.

People rely on their smart phones more than desktop computers or tablets to make searches for services. Since 2016, these digital searches have been one of the most dominant factors affecting consumer behavior, for both products and services. Beyond making purchasing decisions on the go, this insight suggests that consumers aren’t particularly interested in comparison shopping.

Consumer Behavior With Financial Services

If you sell banking, financial or insurance services – or any service, for that matter – you’ll want to bookmark Accenture’s 2019 Global Financial Services Consumer Study for a later read. The company surveyed 47,000 customers across Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America and developed four customer personas that could arguably benefit anyone who wants a crash course in consumer behavior theory.

“The differences between these personas are striking and highlight how traditional demographic segmentation, such as age or wealth, can miss important nuances of how consumers view their financial providers,” the report says.

Four Personas May Sound Familiar

The personas identify:

Pioneers: Pioneers are the risk-takers who are tech-savvy and crave innovation. They are the ones most eager to engage with banking, financial and insurance providers on their smart phones.

Pragmatists: Pragmatists view technology dispassionately. For them, it’s a means to an end rather than an all-consuming passion.

Skeptics: These people are wary of technology and financial providers. Ironically, more than one-third are age 35 and under, which means they can be a tricky target group to engage.

Traditionalists: This older-than-55 group still values personal connections, tends to avoid technology and is losing faith in service providers.

Assess Conclusions About Consumer Behavior in Economics

Despite these differences, the study discerned five findings about consumer behavior in economic matters:

• Consumers expect providers to provide solutions to their needs.
• Consumers appreciate personalized service, such as offering a discount for a safe driving record.
• Consumers expect their online experiences – desktop, tablet and smart phone – to be fully integrated.
• Consumers trust their financial providers, and this feeling appears to be increasing.
• Consumers are more likely to share their personal information as long as they get something for it in return, such as a better deal.

The report distills a great deal and says a mouthful about consumer behavior in economics and marketing in general – when it concludes: What brings customers together sets them apart.

Consumer Behavior With Health Care Services

Any small-business owner whose interests even occasionally enter the health care field can benefit from the findings of a survey of 4,530 adults conducted by the Deloitte Center for Health Solutions. Certain factors affecting consumer behavior underscore most of the findings: Consumers are more practical than ever, focusing on issues such as cost and convenience, perhaps because these commodities elude them.

The study found that:

• Consumers are relying more on quality ratings, though a gap exists between their expressed interest and how often they use this tool.
• Consumers are amenable to new health care services, especially at-home diagnostic testing.
• The number of people who wear devices to track their health information has more than doubled since 2013. Moreover, many of these people are willing to share the information with a health care provider – an insight that could present an opportunity for a niche marketing campaign. 

Ailing Consumers Want a Seamless Experience

These findings about consumer behavior in health care services led researchers to suggest that business owners, marketers and other people vested in the patient journey should:

• Offer online tools when they’re needed most, or when consumers search for a caregiver, look for alternatives, and shop for testing or diagnostic services. 
• Create a seamless and communicative experience among the patient, caregiver and other members of a care team.

Consumer Behavior With Legal Services

You might conclude that people who shop for legal services tend to fit the traditionalist persona identified in Accenture’s financial services study. This is the commonality that binds many of the findings in the Legal Trend Report, which is billed as “the most comprehensive and the most granular analysis of lawyer activity ever published.”

The findings paint a picture of consumers who know what they want and are determined to find it, even if they rely on traditional means of communication to do so. Nearly 70 percent of the respondents say they prefer a law firm that promptly answers their first phone call or email.

Legal Consumers Are Money Conscious

Once that initial line of communication is open, the factors affecting consumer behavior include:

• A free, initial consultation. Nearly 65 percent of the respondents referred to this offer as a deal-breaker.
• Fixed fees was cited by nearly half of the people in the poll.
• Finances and customer service. In this category, 28 percent of people say they choose a firm if it accepts credit card payments, while 27 percent say that pleasant text message exchanges weighed heavily in their decision-making process, and nearly 20 percent say the firm’s website lured them. 

The significance of this last consumer behavior cannot be overstated. Although consumers are shopping for legal services online and presumably are nudged into filling out and sending online contact me cards, they prefer to pick up the phone or send an email instead.

Consumer Behavior With Home Services

Consumers make more than 5 billion Google searches a day, and many of them are for contractors who specialize in home services such as electrical, plumbing, roofing and carpentry work.

By now, the owners of these companies know that their business must have a website that clearly explains the scope of their services. Research shows that 63 percent of consumers search for a home service company by scanning websites, and 30 percent of consumers won’t consider a business that doesn’t have one.

Consumers Are Impatient With Websites

However, the factors affecting consumer behavior with regard to home services don’t end there. More consumers than ever are conducting searches from their smart phones, and they’re in a big hurry to find what they’re looking for. Consider:

• Nearly half of consumers expect a webpage to load in 2 seconds or less, and they’ll abandon a website and move onto another if it doesn’t.
• Google says that for every 1-second delay, conversions – turning a visitor into a potential customer – drop by 12 percent.
• Nearly 85 percent of consumers will abandon a site where they’re prepared to make a purchase if the connection is not secure.

Word-of-Mouth Still Matters

Despite their dependence on technology, consumers shopping for home services still rely on one of the oldest forms of marketing: word-of-mouth. Small-business owners in this field should know that:

• Recommendations can increase conversions by up to 5.5 times.
• Converted customers acquired through word-of-mouth boast a retention rate that is nearly 40 percent higher than customers acquired by other means.
• Social media reviews and comments can influence the behavior of nearly 70 percent of consumers. 

Word-of-Mouth Affects Consumer Behavior

Word-of-mouth remains one of the most influential factors affecting consumer behavior throughout the entire, five-step decision-making process. It’s a point worth remembering as you market your service and lead potential customers through the process, both online and in person.

A fundamental consumer behavior theory is that most consumers follow this progression for services and products before signing a contract or making a purchase:

• Recognize a need or problem
• Gather information about how to fill that need or solve that problem
• Compare and contrast worthwhile alternatives
• Make a decision
• Evaluate the wisdom of the decision

Develop Your Brand, Develop Yourself

It’s a lot of information to digest, although the parallels among consumer behavior in services can be so striking that they should leave an indelible mark on your memory and your marketing decisions. In addition to following your gut instinct, other tips about marketing services should assist your best efforts:

• Assuming that people do business with people they know, like and trust (and check out via word-of-mouth), go out of your way to develop a rapport with potential customers.
• Develop a keen understanding of your customer’s needs. If you do this and find a way to address these needs, you have likely found a customer for life.
• To a certain extent, you are the product,so you must sell yourself too, touting your own features and benefits.

Start thinking of yourself, not only your company, as a brand_._ Everything you do everything you say, how you dress, how you conduct a business meeting – and everything else you embody are part of your brand. It helps if you clearly differentiate your brand from others. If you’re uncomfortable drawing a direct contrast and citing competitors’ names, then be sure to explicitly state who you are, what you stand for and why you’re decidedly different and better.

Perhaps no better definition of personal branding exists than the one offered by Amazon founder Jeff Bezos: “Your brand is what people say about you when you’re not in the room.”

With the increasing use of the computer, companies are becoming more interested in the development of a corporate wide, inte­grated management information system. The purpose of such a sys­tem is to bring all of the flows of recorded information in the entire company into a unified whole. Thereby it is hoped that the manager’s capacity to plan and control the company’s activities will be improved. Such a system is often seen as a marked improvement over current procedures.

As companies have attempted to introduce such a system, how­ever, a consensus seems to be growing, especially among some computer hardware manufacturers, that a more realistic approach is to begin with smaller systems, such as one in marketing, or in production.

As Business Week recently put it, “Skeptics are backing of and asking whether one big system is such a good idea after all.” The reason for this change in view is the growing awareness that these smaller subsystem, such as one for marketing, can per­haps be conceptualized in enough detail to be operational, whereas, in the current state of the art, the larger systems probably cannot.

The human mind simply cannot grasp the whole manage­ment operation with efficient clarity and detail to permit it to be structured and modeled. New concepts will probably have to be developed to aid us in thinking about such a complex phenome­non. In the meantime, management can proceed to develop the smaller systems. In building the smaller systems too, we can ben­efit by learning from the mistakes that were made with global systems.

Marketing information systems are really the frameworks used for managing, processing and accessing data. They can be simply a sharing of information by key departments, but are more likely to be some form of integrated system based around information technol­ogy. The important issue is that the information from such a system is presented in a way that is useful to the marketing decisions.

There are three basic components of a good marketing information system:

1. Information acquired via market intelligence
2. Information from operating data
3. Information library.

Marketing information system is a set of procedures and methods for regular and planned collection, analysis and presentation of information in making marketing decisions. It is an interacting, continuing, future-oriented structure of persons, machines and procedures designed to generate an orderly flow of information collected from internal and external sources of information.

It is an integrated combination of information, information processing and analysis, equipment and tools (i.e., software and hardware) and information specialists who analyse and interpret the collected information and provide it to decision-makers to serve their analysis, planning and control needs.

Marketing information system is a broader and more encompassing term than market research and a variation of the term management information system. Marketing Information System (MIS) is the structure of people, equipment and procedures used to gather, analyses and distribute information required by an organisation.

These are the data to be used as a basis for marketing decisions. Market research reveals that information is collected for a specific reason or project; the major objective is a one-time use.

Marketing information system is a consciously developed plan for information flow (side by side with goods flow) and it is an ongoing or continuous process.

Such marketing information systems are beginning to evolve, as the following two examples illustrate:

1. MIS to Help Develop Marketing Plans:

To help its managers develop their marketing plans, the Gillette Company uses information gathered from five different types of regularly recurring research projects. The five projects were designed to provide the managers a complete picture of the razor and blade market, including detailed descriptions of consumers, competition, and dis­tribution. The five projects, and the usefulness of the information they gather, are as follows.

These five projects provide Gillette marketing managers with information on market shares, brand loyalty and brand switching, consumer attitudes, brand and advertising awareness, product advantages versus competition, inventory levels, out-of-stock, retail prices and display, local advertising, and more.

As the data are gathered from recurring studies, the managers have a complete picture of current market and competitive conditions from the most recent set of studies, and they know the recent trends that exist in all of these data. All of these items of information provide the Gillette man­agers an excellent historical record on which to base the development of their new marketing plans.

2. MIS to Evaluate the Marketing Plan’s Effectiveness:

Gross margin, marketing expenditures, and contribution to earnings are recorded for each market area and also totally. This information is also shown for each market (1) as a percentage of the total for all markets and (2) as the dollar amount of change this year compared with last year. Additionally, the total industry sales in dollars, the firm’s market share, the percentage of retail distribution achieved for the product, and television media costs are shown for each market, both for this year and last.

With these data, management can observe changes in demand (as reflected in total industry sales); changes in sales, costs, and earnings, changes in competition (as reflected in market share and retail distribution percentages) and, changes in advertising costs (as reflected in television media costs). This information is available by market and for all markets. With such information management can reappraise a product’s marketing expenditures plan as well as the effectiveness of the advertising-sales promotion mix used and then make changes.

For example- in Area A, advertising and promotion expenses of $100,000 produced $260,000 of contribution to earnings, while in Area E advertising and pro­motion expenses of $400,000 produced only $280,000 of contribution to earnings. This suggests that the company might increase its total contribution to earnings by shifting some advertising and promotion money from Area E to Area A.

Concluding Comments on Marketing Research Usage:

The materials show that marketing research is being used to measure the characteristics of markets, to obtain information needed for forecasting, to evaluate new-product ideas and improve existing products, to assist man­agers in making better advertising and promotion decisions, and for many other purposes. Marketing research is used throughout the four phases of the administrative process, from establishing strategies all the way through to evaluating the effectiveness of the marketing plan used to try to achieve the established strategy.

The role of marketing research appears to be headed for higher levels of sophistication and utilization as more and more companies begin to develop their own Marketing Information Systems (MISs).

Scope

Scope 1. Strategy Implementation:

MIS helps in product launches, authorizes the co-ordination of marketing strategies, and is an integral part of Sales Force Automation (SFA), Customer Relationship Management (CRM), and customer service systems implementations. It permits decision makers to more effectively manage the sales force as well as customer relationships.

Some customer management software companies are extending their CRM applications to include Partner Relationship Management (PRM) capabilities. This has become increasingly important as many marketers are choosing to outsource important marketing functions and form strategic alliances to address new markets.

Scope 2. Strategy Development:

Information needed to develop marketing strategy is also provided by MIS. It supports strategy development for new products, product positioning, marketing communications (advertising, public relations, and sales promotion), pricing, personal selling, distribution, customer service and partnerships and alliances. MIS gives the foundation for the development of information system-dependent e-commerce strategies.

Scope 3. Market Monitoring:

MIS enables the identification of emerging market segments, and the monitoring of the market environment for changes in consumer behaviour, competitor activities, new technologies, economic conditions and governmental policies at the time of using market research and market intelligence.

Scope 4. Wider Applications:

Under modern marketing ideologies, MIS includes operational, sales and marketing process-oriented systems, which serve in daily marketing operational activities such as direct mailing (database marketing), telemarketing and operational sales management. The users are middle management and operative sales and marketing personnel.

Scope 5. Support Management and Decision Making:

Marketing information systems support management decision making. Management has five distinct functions and each of them needs support from MIS. These are planning, organising, co-ordinating, decision-making and controlling.

Scope 6. Functional Integration:

MIS the co-ordination of activities within the marketing department and between marketing and other organisational functions like engineering, production, manufacturing, product management, finance, logistics, and customer service.

Marketing Information System Characteristics

1. MIS is an ongoing process. It operates continuously.
2. MIS acts as a data bank and facilitates prompt decision-making by manager.
3. MIS operates in a rational and systematic manner and provides required information.
4. MIS is future-oriented. It anticipates and prevents problems as well as it solves marketing problems. It is both a preventive as well as curative process in marketing.
5. The gathered data is processed with the help of operations research techniques. Modem mathematical and statistical tools are available for problem-solving in the field of marketing.
6. MIS is a computer-based method of data collection, processing, and storage.
7. Management gets a steady flow of information on a regular basis — the right information, for the right people, at the right time and cost.
8. Marketing Information System stands between the marketing environment and marketing decision-makers. Marketing data flows from the environment to the marketing information system. Marketing data is processed by the system and converted into marketing information flow, which goes to the marketers for decision-making.

In the past, most decisions were made on the basis of reports prepared through manual labour. Today, managers, with the help of specialists, can employ sophisticated mathematical and statistical techniques, such as simulation, allocation models, PERT network, inventory models, and similar quantitative models to minimise the risks of doing business in a real-time MIS environment.

They can do this on the basis of up-to-date information recalled or retrieved from the computer’s database. Computer is now regarded as an indispensable ready reckoner for effective managerial decision-making. The introduction of computers has facilitated the setting up of Marketing Decision Support System (MDSS).

The System comprises collection, storage, analysis and reporting of marketing data. MIS is normally centralised, whereas MDSS is decentralised and allows marketing and sales managers to interact directly with the database.

(1) Product

A product means what we produce. If we produce goods, it means tangible product and when we produce or generate services, it means intangible service product. A product is both what a seller has to sell and a buyer has to buy. Thus, an Insurance company sells services and therefore services are their product. In India, the Life Insurance Corporation of

India (LIC) and the General Insurance Corporation (GIC) are the two leading companies offering insurance services to the users. Apart from offering life Insurance policies, they also offer underwriting and consulting services.

(2) Pricing

With a view of influencing the target market or prospects the formulation of pricing strategy becomes significant. The pricing in insurance is in the form of premium rates. The three main factors used for determining the premium rates under a life insurance plan are mortality, expense and interest. The premium rates are revised if there are any significant changes in any of these factors.

• Mortality (deaths in a particular area) When deciding upon the pricing strategy the average rate of mortality is one of the main considerations. In a country like South Africa the threat to life is very important as it is played by host of diseases.
• Expenses: The cost of processing, commission to agents, reinsurance companies as well as registration are all incorporated into the cost of installments and premium sum and forms the integral part of the pricing strategy.
• Interest: The rate of interest is one of the major factors which determines people’s willingness to invest in insurance. People would not be willing to put their funds to invest in insurance business if the interest rates provided by the banks or other financial instruments are much greater than the perceived returns from the insurance premiums.

(3) Place

This component of the marketing mix is related to two important facets

i) Managing the insurance personnel, and

ii) Locating a branch.

The management of agents and insurance personnel is found significant with the viewpoint of maintaining the norms for offering the services. This is also to process the services to the end user in such a way that a gap between the services- promised and services offered is bridged over. In a majority of the service generating organizations, such a gap is found existent which has been instrumental in making worse the image problem. The transformation of potential policyholders to the actual policyholders is a difficult task that depends upon the professional excellence of the personnel. The agents and the rural career agents acting as a link, lack professionalism.

(4) Promotion:

The insurance services depend on effective promotional measures. In a country like

India, the rate of illiteracy is very high and the rural economy has dominance in the national economy. It is essential to have both personal and impersonal promotion strategies. In promoting insurance business, the agents and the rural career agents play an important role.

Due attention should be given in selecting the promotional tools for agents and rural career agents and even for the branch managers and front line staff. They also have to be given proper training in order to create impulse buying. Advertising and Publicity, organization of conferences and seminars, incentive to policyholders are impersonal communication.

Arranging Kirtans, exhibitions, participation in fairs and festivals, rural wall paintings and publicity drive through the mobile publicity van units would be effective in creating the impulse buying and the rural prospects would be easily transformed into actual policyholders.

(5) People

Understanding the customer better allows to design appropriate products. Being a service industry which involves a high level of people interaction, it is very important to use this resource efficiently in order to satisfy customers. Training, development and strong relationships with intermediaries are the key areas to be kept under consideration. Training the employees, use of IT for efficiency, both at the staff and agent level, is one of the important areas to look into. Human resources can be developed through education, training and by psychological tests. Even incentives can inject efficiency and can motivate people for productive and qualitative work.

(6) Process:

The process should be customer friendly in insurance industry. The speed and accuracy of payment is of great importance. The processing method should be easy and convenient to the customers. Installment schemes should be streamlined to cater to the ever growing demands of the customers. IT & Data Warehousing will smoothen the process flow.

IT will help in servicing large no. of customers efficiently and bring down overheads.

Technology can either complement or supplement the channels of distribution cost effectively. It can also help to improve customer service levels. The use of data warehousing management and mining will help to find out the profitability and potential of various customers product segments.

1. Flow of activities: all the major activities of banks follow RBI guidelines. There has to be adherence to certain rules and principles in the banking operations. The activities have been segregated into various departments accordingly.
2. Standardization: banks have got standardized procedures got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some standardization in them. This is because of the rules they are subject to. Besides this, each of the banks has its standard forms, documentations etc. Standardization saves a lot of time behind individual transaction.
3. Customization: There are specialty counters at each branch to deal with customers of a particular scheme. Besides this the customers can select their deposit period among the available alternatives.
4. Number of stores: numbers of steps are usually specified and a specific pattern is followed to minimize time taken.
5. Simplicity: in banks various functions are segregated. Separate counters exist with clear indication. Thus a customer wanting to deposit money goes to ‗deposits ‘counter and does not mingle elsewhere. This makes procedures not only simple but consume less time. Besides instruction boards in national boards in national and regional language help the customers further.

(7) Physical Distribution:

Distribution is a key determinant of success for all insurance companies. Today, the nationalized insurers have a large reach and presence in India. Building a distribution network is very expensive and time consuming. Technology will not replace a distribution network though it will offer advantages like better customer service. Finance companies and banks can emerge as an attractive distribution channel for insurance in India. In Netherlands, financial services firms provide an entire range of products including bank accounts, motor, home and life insurance and pensions. In France, half of the life insurance sales are made through banks. In India also, banks hope to maximize expensive existing networks by selling a range of products.

The physical evidences include signage, reports, punch lines, other tangibles,

employee‘s dress code etc.

1. Tangibles: banks give pens, writing pads to the internal customers. Even the passbooks, chequebooks, etc. reduce the inherent intangibility of services.
2. Punch lines: punch lines or the corporate statement depict the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers. Banking marketing consists of identifying the most profitable markets now and in future, assessing the present and future needs of customers, setting business development goals, making plans-all in the context of changing environment.

In India, banks hope to maximize expensive existing networks by selling a range of products. It is anticipated that rather than formal ownership arrangements, a loose network of alliance between insurers and banks will emerge, popularly known as bank assurance. Another innovative distribution channel that could be used are the non-financial organizations. We can‘t deny the fact that if foreign banks are performing fantastically, it is not only due to the sophisticated information technologies they use but the result of a fair synchronization of new information technologies and a team of personally committed employees. The development of human resources makes the ways for the formation of human capital.