Transcript Why Service Marketing?

McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
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Part 1
FOUNDATIONS
FOR SERVICES
MARKETING
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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
1-4
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.
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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 goodsfocused businesses
 Deregulated industries and professional service
needs
 Service marketing is different
 Service leads to profits
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Percent of U.S. Labor Force by Industry
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Percent of U.S. Gross Domestic
Product by Industry
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Examples of Goods Companies that are
Expanding into Services
Boeing
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Eight Central Paradoxes of Technological
Products
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Characteristics of Services
Compared to Goods
Intangibility
Simultaneous
Production
and
Consumption
Heterogeneity
Perishability
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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
Assessment
 How effective is a firm’s
service marketing mix?
 Is the mix well-aligned with
overall vision and strategy?
 What are the strengths
and weaknesses in terms
of the 7 Ps?
Specific Service
Implementation
 Who is the customer?
 What is the service?
 How effectively does the
service marketing mix for a
service communicate its
benefits and quality?
 What changes/
improvements are needed?
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