Transcript Ch 10 - International Business courses

Services and Other
Tangibles:
Marketing the Product
that Isn’t There
Chapter Ten
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
Chapter Objectives
 Describe the characteristics of
services and the ways marketers
classify services
 Appreciate the importance of service
quality to marketers
 Explain the marketing of people,
places, and ideas
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
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Real People, Real Choices:
Decision Time at the Philadelphia 76ers
 What is the best way to compile more
detailed information on the 76ers
customer base?
• Option 1: Phase in a CRM database
• Option 2: Send out surveys to season
ticket holders annually
• Option 3: Analyze the lifetime value of
customers
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
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Marketing What Isn’t There
 Intangibles:
Services and other experience-based
products that cannot be touched
• Example: concerts, tax preparation,
haircuts, medical diagnosis, etc.
 Does marketing work for intangibles?
Yes!
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What is a Service?
 Services:
Are acts, efforts, or performances
exchanged from producer to user
without ownership rights
 Services accounted for 75% of US
employment in 2010
 Services may target consumers and/or
businesses
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Characteristics of Services

Intangibility:

Perishability:

Variability:

• Can’t see, touch, or smell a service
• Can’t be stored for later sale or use
• Even the same service performed
by the same person will vary
Inseparability:
• It is impossible to separate the production of
a service from its consumption
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Characteristics of Services
 Service encounter:
The interaction between the customer
and the service provider
 Service encounter dimensions:
• Social contact dimension
• Physical dimension
 The quality of service is only as good
as its worst employee
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The Service Continuum
 The service continuum classifies
services based on:
• Whether the service is performed
directly on the customer or on some
possession that the customer owns
• Whether the service consists of
tangible or intangible actions
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The Services Continuum
 Most products are a combination of
goods and services
 Products vary in their level of
tangibility:
• Tangible: salt, necktie, dog food
• Intangible: teaching, nursing, theater
• Balanced products: fast food, television
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The Services Continuum
 Goods-dominated products include:
• Firms that sell tangible products still
provide support services
 Equipment- or facility-based services
include:
• Operational factors, locational factors,
and environmental factors are important
 People-based services include:
• Increasing in importance as people lack
the time or expertise to do on their own
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
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Core and Augmented Services
 Core service:
• The benefit a customer gets from the
service
 Augmented service:
• Core service plus additional services
that enhance value
• Augmented services help to
differentiate businesses from one
another
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
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The Service Encounter
 Physical elements of the service
encounter
• Servicescape:
Environment in which the service is
delivered and where the firm and
customer interact
• Servicescapes influence purchase
decisions, service quality evaluations,
and customer satisfaction
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The Service Encounter
 Web sites influence customer
perceptions
• First stop for many potential customers
• Poor navigation, unattractive sites offer
negative first impressions
• SEO (search engine optimization) is
critical for getting noticed
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Providing Quality Service
 Quality service ensures that customers
are satisfied with that for which they
have paid
 Satisfaction is based on customer
expectations
 Not all customers expect the same level
of service
 Not all customers can be satisfied
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Service Quality Attributes
 Search qualities:
• Characteristics that the consumer can
examine before purchase
 Experience qualities:
• Characteristics that buyers can
determine during or after consumption
 Credence qualities:
• Characteristics that are difficult to
evaluate even after they have been
experienced
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Measuring Service Quality
 Several methods of measuring service
quality exist:
• Mystery shoppers
• Lost customers
• SERVQUAL scale
• Gap analysis
• Critical incident technique
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Measuring Service Quality
 SERVQUAL scale (questionnaire)
measures customer perceptions of five
key dimensions as follows:
• Tangibles
• Reliability
• Responsiveness
• Assurance
• Empathy
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Measuring Service Quality
 Additional methods of measuring
service quality:
• Gap analysis measures the difference
between actual and expected service
quality
• Critical incident technique uses
customers’ complaints to identify
problems that lead to dissatisfaction
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Strategic Issues in Delivering
Service Quality
 Maximizing the likelihood that a
customer will use a service and
become a loyal user requires:
• Development of effective marketing
strategies
• Fast and appropriate responses to
service failures
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
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The Future of Services
 New dominant logic for marketing:
• Argues that service is the central core
deliverable in every exchange
 Services will continue to grow due to
several factors:
• Changing demographics
• Globalization
• Technological advances
• Proliferation of information
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Marketing People, Places, and
Ideas
 Politicians and celebrities are
commonly marketed as follows:
• Consultants “package” candidates or
celebrities
• Celebrities often rename themselves to
craft a “brand identity”
• Other techniques for selling celebrities:
The
pure selling approach
The product improvement approach
The market fulfillment approach
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Marketing People, Places, and
Ideas
 Place marketing strategies treat a city,
state, country, or other locale as a
brand
 The marketing mix creates an identity
• Example: Shreveport-Bossier shares
more characteristics with East Texas
than it does with New Orleans, and now
markets itself using the “Louisiana’s
Other Side" campaign
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
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Marketing People, Places, and
Ideas
 Marketing ideas include:
• Gaining market share for a concept,
philosophy, belief, or issue
Example:
Religious institutions market
ideas about faith
• Consumers often do not perceive the
value they receive when they conform
with an idea or fail to believe an idea is
worth its ultimate cost
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Real People, Real Choices:
Decision Made at the Philadelphia 76ers
 Lara chose option 1
• Why do you think Lara chose to
implement a CRM database?
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
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Keeping It Real: Fast-Forward to
Next Class Decision Time at Taco Bell



Meet Cosmo Kapoor, Manager of Food &
Beverage Operations at Disney’s
Epcot theme park in Orlando, Florida
Cosmo’s goal is to consistently deliver
immersive dining experiences for guests
visiting any Epcot restaurant.
The decision to be made:
How to maximize the number of guests
attending Epcot’s International Food and
Wine Festival in light of the gloomy
economic climate.
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
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photocopying, recording, or otherwise, without the prior
written permission of the publisher. Printed in the United
States of America
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.
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