Transcript MKT 346 Chap 1 Concepts - Cal State LA

Chapter 1:
Introduction to
Services Marketing
MKT 346: Marketing of Services
Dr. Houston
Why Study Services?

Services Dominate the Economy in Most Nations
 Most New Jobs are Generated by Services
Transforming the Service Economy
Social
Changes
Business
Trends
Advances in
IT
Government
Policies
Globalization
Five Major Forces
Are
Transforming
The Service Economy
Transforming the Service Economy
Social
Changes
Government
Policies
Business
Trends
Advances in
IT
Globalization
● New markets and product categories
● Increase in demand for services
● More intense competition
Innovation in service products & delivery systems, stimulated by better technology
Customers have more choices and exercise more power
Success hinges on:
● Understanding customers and competitors
● Viable business models
● Creation of value for customers and firm
What Do Services Involve?

Services involve:


A form of rental
Benefits without transfer of ownership

Customers pay for the temporary right to:


Hire the labor and expertise of personnel
Obtain access to facilities and networks
Five Broad Categories
of Non-Ownership Framework
 Rented goods and services
 Defined space and place rentals
 Labor and expertise rentals
 Access to shared physical environments
 Systems and networks (access and usage)
Four Categories Of Services
(Fig 1.10)
Defining Services
Activities, processes, and performances offered by
one party to another
In exchange for money, time, and/or effort
Eight Distinctive Challenges
of Marketing Services
Intangibility
Difficult to visualize and understand
Cannot be stored (perishability)
Co-produced with customers
Service personnel and customers play key role
Service experience varies widely
Time factor is very important
Distribution can be through non-physical channels
Services Require
An Expanded Marketing Mix
● Marketing can be viewed as:
 A strategic and competitive direction
 A set of functional activities
 A customer-driven orientation
● Marketing is the only function that brings
operating revenues into a business
 All other functions are cost centers
Expanded Services Marketing Mix:
The Seven Ps of Services Marketing
●Product elements (Chapter 4)
●Place and time (Chapter 5)
●Price and other user outlays (Chapter 6)
●Promotion and education (Chapter 7)
●Process (Chapter 8)
●Physical environment (Chapter 10)
●People (Chapter 11)
Framework For Developing
Effective Service Marketing Strategies
Understanding Service Products, Consumers & Markets
Part I: Chapters 1 - 3
Applying the 4 Ps to Services
Part II: Chapters 4 - 7
Managing the Customer Interface
Part III: Chapters 8 - 11
Implementing Profitable Service Strategies
Part IV: Chapters 12 - 15
MKT 346 Chapter 1 Key Concepts
 Why study services?
 Eight common differences/special challenges of services
(versus products)
 Seven Ps of services marketing
 Defining services
 Five major forces transforming service economy
 What are services?
 Five broad categories within service non-ownership
framework
 Four broad categories of service