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Chap 01 Introduction

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Chap 01 Introduction

Uploaded by

quy57782
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Part 1

FOUNDATIONS
FOR SERVICES
MARKETING

1-1
Chapter

Introduction to Services 1

§ What are Services?


§ Why Service Marketing?
§ Service and Technology
§ Characteristics of Services
§ Service Marketing Mix
§ Staying Focused on the Customer

1-2
Objectives for Chapter 1:
Introduction to Services
§ Explain what services are and identify important trends in services.

§ Explain the need for special service marketing concepts and practices and
why the need has developed and is accelerating.

§ Explore the profound impact of technology on service.

§ Outline the basic differences between goods and services and the
resulting challenges and opportunities for service businesses.

§ Introduce the expanded marketing mix for services and the philosophy of
customer focus as powerful frameworks and themes that are
fundamental to the rest of the text.

1-3
Examples of Service Industries
§ Health Care
§ hospital, medical practice, dentistry, eye care
§ Professional Services
§ accounting, legal, architectural
§ Financial Services
§ banking, investment advising, insurance
§ Hospitality
§ restaurant, hotel/motel, bed & breakfast
§ ski resort, rafting
§ Travel
§ airline, travel agency, theme park
§ Others
§ hair styling, pest control, plumbing, lawn maintenance, counseling services, health
club, interior design

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Contributions of Service Industries to
U.S. Gross Domestic Product

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Tangibility Spectrum

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Why Service Marketing?

§ Services dominate U.S. and worldwide


economies
§ Service as a business imperative in goods-
focused businesses
§ Deregulated industries and professional service
needs
§ Service marketing is different
§ Service leads to profits

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Service Marketing

Services are deeds, processes, and


performances provided or coproduced
by one entity or person for another
entity or person.

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Percent of U.S. Labor Force by Industry

1-9
Percent of U.S. Gross Domestic
Product by Industry

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Characteristics of Services
Compared to Goods

Intangibility Heterogeneity

Simultaneous
Production
and Perishability
Consumption

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Comparing Goods and Services

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Implications of Intangibility

§ Services cannot be inventoried

§ Services cannot be easily patented

§ Services cannot be readily displayed or


communicated

§ Pricing is difficult

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Implications of Heterogeneity

§ Service delivery and customer satisfaction


depend on employee and customer actions

§ Service quality depends on many uncontrollable


factors

§ There is no sure knowledge that the service


delivered matches what was planned and
promoted

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Implications of Simultaneous Production
and Consumption
§ Customers participate in and affect the
transaction

§ Customers affect each other

§ Employees affect the service outcome

§ Decentralization may be essential

§ Mass production is difficult


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Implications of Perishability

§ It is difficult to synchronize supply and demand


with services

§ Services cannot be returned or resold

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Search, Experience, and Credence Qualities

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Challenges and Questions for Service
Marketers
§ Defining and improving quality
§ Designing and testing new services
§ Communicating and maintaining a consistent image
§ Accommodating fluctuating demand
§ Motivating and sustaining employee commitment
§ Setting prices
§ Organizing to facilitate strategic and tactical decision-making
§ Finding a balance between standardization and personalization
§ Protecting new service concepts from competitors
§ Communicating quality and value to customers
§ Ensuring the delivery of consistent quality service

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Traditional Marketing Mix

§Elements an organization controls that can be


used to satisfy or communicate with customers:
§ Product
§ Price
§ Place
§ Promotion

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Expanded Mix for Services – The 7 Ps
§ Product
§ Price
§ Place
§ Promotion

§ 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.
§ 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.
§ Process
§ The actual procedures, mechanisms, and flow of activities by which the service is
delivered—the service delivery and operating systems.

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Expanded Marketing Mix for Services

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Ways to Use the 7 Ps

Overall Strategic Specific Service


Assessment Implementation
§ How effective is a firm’s § Who is the customer?
service marketing mix? § What is the service?
§ Is the mix well-aligned with § How effectively does the
overall vision and strategy? service marketing mix for a
§ What are the strengths service communicate its
and weaknesses in terms benefits and quality?
of the 7 Ps? § What changes/
improvements are needed?

1-24

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