13

Designing and
Managing Services

Marketing Management, 13th ed

Chapter Questions
How do we define and classify services
and how do they differ from goods?
How do we market services?
How can we improve service quality?
How do service marketers create
strong brands?
How can goods marketers improve
customer support services?
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The Mayo Clinic Considers All Aspects

of a Patients Experience

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What is a Service?
A service is any act of performance
that one party can offer another that is
essentially intangible and does not
result in the ownership of anything; its
production may or may not be tied to a
physical product.

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Service Sectors

Government

Private
nonprofit

Business

Retail
Manufacturing

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General Motors OnStar Service

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Categories of Service Mix

Pure
Pure tangible
tangible good
good
Good
Good w/
w/ accompanying
accompanying services
services
Hybrid
Hybrid
Service
Service w/
w/ accompanying
accompanying goods
goods
Pure
Pure service
service
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Service Distinctions

Equipment-based or people-based
Service processes
Clients presence required or not
Personal needs or business needs
Objectives and ownership

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Figure 13.2 Continuum of Evaluation

for Different Types of Products

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Distinctive Characteristics
of Services
Intangibility
Inseparability
Variability
Perishability
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Physical Evidence and Presentation

Place
People
Equipment
Communication material
Symbols
Price
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Disney Relies Upon Tangible Cues

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Blue Man Group Exhibits

Inseparability

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How to Increase Quality Control

Invest in good hiring and
training procedures
Standardize the
service-performance process
Monitor customer satisfaction

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Matching Demand and Supply

Demand side
Differential pricing
Nonpeak demand
Complementary
services
Reservation
systems

Supply side
Part-time
employees
Peak-time efficiency
Increased consumer
participation
Shared services
Facilities for future
expansion

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Figure 13.3 A Blueprint for

Overnight Hotel Stay

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Consumer-Friendly Services

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Improving Service Quality

Listening
Reliability
Basic service
Service design
Recovery

Surprising
customers
Fair play
Teamwork
Employee research
Servant leadership

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Figure 13.4 Root Causes

of Customer Failure

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Solutions to Customer Failures

Redesign processes and redefine customer
roles to simplify service encounters
Incorporate the right technology to aid
employees and customers
Create high-performance customers by
enhancing their role clarity, motivation, and
ability
Encourage customer citizenship where
customers help customers
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Figure 13.5 Three Types of Marketing

in Service Industries

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Table 13.1 Factors Leading to

Customer Switching Behavior

Pricing
Inconvenience
Core Service Failure
Service Encounter Failures
Response to Service Failure
Competition
Ethical Problems
Involuntary Switching

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Figure 13.6 Service-Quality Model

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Gaps That Cause Unsuccessful

Service Delivery
Gap between consumer expectation and
management perception
Gap between management perception and
service-quality specifications
Gap between service-quality specifications
and service delivery
Gap between service delivery and external
communications
Gap between perceived service and
expected service
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Determinants of Service Quality

Reliability
Responsiveness
Assurance
Empathy
Tangibles
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Best Practices

Strategic Concept
Top-Management
Commitment
High Standards
Self-Service
Technologies
Monitoring Systems
Satisfying Customer
Complaints
Satisfying
Employees

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Figure 13.7 Importance-Performance

Analysis

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Table 13.3 Customer Importance and

Performance Ratings
for an Auto Dealership

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Developing Brand Strategies

for Services

Choosing
Brand Elements
Establishing Image
Dimensions
Devising Branding
Strategy
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Customer Worries
Failure frequency
Downtime
Out-of-pocket costs

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Table 13.4 Top Customer

Service Providers
USAA
Four Seasons
Hotels
Cadillac
Nordstrom
Wegman Food
Markets
Edward Jones

Lexus
UPS
Enterprise Rent-ACar
Starbucks
Ritz-Carlton
Amica Insurance
Southwest Airlines

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Marketing Debate
Is service marketing different from
product marketing?
Take a position:
1. Product and service marketing are
fundamentally different.
or
2. Product and service marketing are highly
related.
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Marketing Discussion
Colleges and universities can be
classified as service organizations.
How can you apply the marketing
principles developed in this chapter
to your school?
Do you have any advice as to how
it could become a better service
marketer?
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