Transcript Chapter 11
Marketing Chapter 11 Marketing Services Gilbert A. Churchill, Jr. J. Paul Peter Products, such as bank loans or home security, that are intangible or substantially so. Slide 11-1 Services Receipts 1,800 1,700 1,600 Services Receipts (in billions) 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 1967 1972 1977 1982 1987 Year Source: Statistical Abstract of the United States (1996), p. 783. 1991 1994 Slide 11-2 The Economic Importance of Services Jobs in Great Britain Jobs in Germany 43% 27% Jobs in Japan 38% 43% 73% 62% 57% Jobs in U.S. in 1992 Jobs in U.S. in 2005 21% 18% Goods Producing Service Producing 82% 79% Source: Arlington Star Telegram, September 2, 1996, p. B9. Slide 11-3a Table 11.1 Characteristics that Distinguish Services from Goods Characteristic Services Goods Client relationship Services often involve an ongoing personal relationship. Especially when dealing with a doctor, lawyer, etc. Goods often involve an impersonal, short-term relationship, although relationship strength and duration are increasing. Perishability Services can be used only at the time they are offered. Goods can be placed in inventory for use at another time. Intangibility The customer owns only memories or outcomes, such as greater knowledge or styled hair. The customer owns objects that can be used, resold, or given to others. Slide 11-3b Table 11.1 Characteristics that Distinguish Services from Goods Characteristic Services Goods Inseparability Services often cannot be separated from the person providing them. Goods typically are produced and sold by different people. Customer effort Customer can be more involved in production of services. Customer’s involvement may be limited to buying completed product and using it. Uniformity Because of inseparability and high involvement, each service may be unique, with the quality likely to vary. Variations in quality and variance from standards can be corrected before customers purchase products. Slide 11-4 Goods/Service Continuum Mostly Tangible Goods Lumber Computer with Service Contract Restaurant Dinner Oil Change Maid Service Mostly Intangible Services Slide 11-5 Categorizing Services by Means of Delivery Equipment Based People Based America Online Kelly Services Slide 11-6 The Marketing Environment for Services Economic Environment Competitive Environment P P Political and Legal Environment TM Technological Environment P P Social Environment Natural Environment The same dimensions of the marketing environment that affects goods also affects marketers of services Slide 11-7 The Marketing Mix for Services: Product Standardized Goods Customized Services Camping Equipment Camping Trips Identical for each Customer Varies by Customer Slide 11-8 The Marketing Mix for Services: Pricing Tools – Massachusetts Highway Department Road Use Fees – Yellowstone Park Entrance Rent – Kroger Center Office Space Fare – Taxi Ride Rate – Marriott Hotel Room Tuition – Harvard Degree Slide 11-9 Table 11.3 The Marketing Mix for Services: Placement TYPE of Interaction DESCRIPTION Nature Availability ofEXAMPLE Service between Outlets ProductCustomer and Service Single Site Multiple Sites Organization Customer goes to service organization Theater Barbershop Bus service Fast-food chain Service organization comes to customer Lawn care service Pest Control service Taxi service Mail Delivery Emergency repair service Customer and service organization transact at arm’s length (by mail or electronic communications Credit card company Broadcast TV Local TV station network Telephone company Sources: Reprinted from Christopher H. Lovelock, Services Marketing, 2nd ed. (Englewood Cliffs, N.J.: Prentice Hall, 1991), p. 33. An earlier version of this figure appeared in Christopher H. Lovelock, “Classifying Services to Gain Strategic Marketing Insights,” Journal of Marketing (Summer 1983), p. 18. Slide 11-10 Table 11.3 The Marketing Mix for Services: Promotion Promotion Advertising Personal Selling Intangibles require promotion to explain what the service is and how it will benefit the buyer. Slide 11-11 Types of Nonprofit Organizations Public Cultural - local, state, federal governments, post office museums, symphonies, libraries, and operas Education - school, colleges, universities Religious - churches, temples, mosques Philanthropic - foundations, charities, Social causes - environmental, consumerism Slide 11-12 Characteristics that Distinguish Services from Goods Decisions Difficulties Product Can not adjust product to increase marketability Market complex ideas - with no direct benefit to donor (e.g.,MADD) Range of involvement can be low (don’t litter) to high (stop smoking) Price Indirect payment through taxes - public parks and libraries Break even pricing (Post office) or below cost pricing (university) Place Need to provide better time and place utility (e.g., salvation army; museums go on tour, universities provide better schedules) Promotion Many can not do it all all (because its illegal or lack of resources) Public Service Advertisement (PSA) - an announcement that promotes the message (“a public service message from the ad council”)