Transcript Chapter 9

Chapter Nine
Services Marketing
Chapter Objectives
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Discuss impact of the services sector.
Identify unique characteristics of services.
Explain components of the purchasing process.
Identify factors that impact the purchase decision.
Discuss relevant elements of the service encounter.
Describe the post-purchase evaluation of services.
Discuss how service quality is measured.
Describe an effective service recovery process.
Explain the importance of the customer value package.
The Service Sector
Pure
Services
Pure
Goods
Accounts for 79% ($6.95 trillion) of U.S. GDP
Accounts for 77% of total U.S. employment
Reasons for growth
- Aging population
- Longer life expectancy
- Increased leisure time
- Higher per-capita income
- Increased time pressure
– More women in workforce
– Sedentary life style
– Advanced technology
– Changing social and
cultural values
Characteristics of Services
Intangibility
Variability
Characteristics
of
Services
Perishability
Inventory*
Inseparability
Intangibility
Issues and Strategies*
• Patent Protection
– Continuous Innovation
– Rapid recoup of R & D investment
– Promote the “Original” (Strong corporate image)
• Pricing
– Roles of costing, forecasting
• Quality Perception
– Word of Mouth
– Tangible (Extrinsic) Cues
In order to address
intangibility,
fastfood
restaurants
may stress extrinsic
attribute cues, such
as the quality of the
food, prices, or the
restaurant’s location.
Perishability (Inventory),
Inseparability and
Variability (Inconsistency)
Issues and Strategies*
• Perishability (Inventory)
– Managing Supply
– Managing Demand
• Inseparability
– Distribution, Operations Management
• Variability (Inconsistency)
– Computerization and technology
– Standardization of processes, training
Cool Hunting #3
The Purchase Process for Services
1. Pre-purchase phase: Consumers
evaluate alternatives and make
purchase decision. (Evaluate and
reduce risk)
2. Service encounter: Actual interaction
between the customer and the service
provider. (Note “Blueprinting”)
3. Post-purchase phase: Consumers will
evaluate the quality (technical and
functional) of service, and their level
of satisfaction.
Service Quality
• Internal measures
• Gap theory
• Service quality dimensions
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Tangibles
Reliability
Responsiveness
Empathy
Assurance
Service Failure and Recovery
Service failures are defined as instances
where a service is either not performed
at all or is poorly performed.
Firm switching behavior
Negative word of mouth
Service recovery program
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Why Customers Switch Firms
Attitude of indifference (69%)
Dissatisfied with service (14%)
Competitive reasons (9%)
Developed relationships
with competitors (5%)
No reason (3%)
Companies should always have a plan to
handle service failures.