Chapter 1 Introduction

1. Why Study Services?

1.1. Services dominate most economies and are growing rapidly:

a. Services account 64% of GDP worldwide
b. Almost all economies have a substantial service sector
c. Most new employment is provided by services
d. Strongest growth area for marketing
1.2. Understanding services offers you a personal competitive advantage
1.3. Most new jobs are generated by services
a. Fastest growth expected in knowledge-based industries
b. Significant training and educational qualifications required, but
employees will be more highly compensated
c. Will service jobs be lost to lower-cost countries? Yes, some service jobs can be
exported
1.4. Powerful forces are transforming service markets
a. Government policies
b. social changes
c. business trends
d. advances in IT
e. internationalization
1.5. Forces that reshape:
a. Demand
b. Supply
c. The competitive landscape
d. Customers’ choices, power, and decision making

2. What are Services?

2.1. Five broad categories within non-ownership framework of which two or more may be
combined：
a. Rented goods services
b. Defined space and place rentals
c. Labor and expertise rentals
d. Access to shared physical environments
e. Access to and usage of systems and networks
2.2. Definition of Services：
a. Services are economic activities offered by one party to another
b. most commonly employ time-based performances to bring about desired results
c. In exchange for their money, time, and effort, service customers expect to obtain
value from access to goods, labor, facilities, environments, professional skills,
networks, and systems;
d. normally do not take ownership of any of the physical elements involved.
2.3. Marketing of services – when service is the core product
2.4. Marketing through service – when good service increases the value of a core physical
 good
2.5. 4 Categories of Services：

a. People Processing
 Customers must physically enter the service factory and cooperate actively with
the service operation
 Managers should think about process and output from the customer’s
perspective to identify benefits created and non-financial costs: Time, mental
and physical effort
 Involvement is limited
 Less physical involvement
 Production and consumption are separable 生产与消费分离
b. Mental Stimulus Processing
 Ethical standards required: Customers might be manipulated 所需的道德标准：客
户可能会被操纵
Physical presence of recipients not required
Core content of services is information-based ----Can be ‘inventoried’
c. Information Processing
 Most intangible form of service
 May be transformed Into enduring forms of service output
 Line between information processing and mental stimulus processing may be
unclear

3. Marketing Challenges Posed by Services

3.1. Marketing management tasks in the service sector differ from those in the
manufacturing sector
3.2. Eight common differences between services and goods but they do not apply equally to
all services
 Most service products cannot be inventoried
 Intangible elements usually dominate value creation
  Services are often difficult to visualize & understand
 Customers may be involved in co-production
 People may be part of service experience
 Operational inputs and outputs tend to vary more widely
 Time factor often assumes great importance
 Distribution may take place through nonphysical channels

4. Extended Marketing Mix Required for Services

4.1. Marketing can be viewed as:
a. A strategic and competitive thrust pursued by top management
b. A set of functional activities performed by line managers
c. A customer-driven orientation for the entire organization
4.2. Marketing is only function to bring operating revenues into a business; all other
functions are cost centers
4.3. The “7 Ps” of services marketing are needed to create viable strategies for meeting
customer needs profitably
5. Integration of Marketing with Other Management Functions 营销与其他管理功能的整合
Three management functions play central and interrelated roles in meeting needs of service
customers

6. Developing Effective Service Marketing Strategies

7. Summary
7.1. Why Study Services?
Services dominate the economy in many nations. The majority of jobs are created in the service
sector.
7.2. What are Services?
Services are a form of rental (not ownership). They are performances that bring about a desired
result.
7.3. Unique Characteristics
Services are often intangible, difficult to visualize and understand, and customers may be
involved in co-production.
7.4. Extended Marketing Mix
Product, Place & Time, Price, Promotion & Education, Process, Physical Environment, People

Chapter 2 Consumer Behavior in a Services Context

Customer Decision Making: The Three-Stage Model of Service Consumption

1. Pre-purchase Stage
1.1. Customers seek solutions to aroused needs
 a. Decision to buy or use a service is triggered by need arousal 购买或使用服务的决定
是由需求唤醒触发的
b. Triggers of need:
 Unconscious minds (e.g., personal identity and aspirations)
 Physical conditions (e.g., hunger )
 External sources (e.g., a service firm’s marketing activities)
c. Consumers are then motivated to find a solution for their need
d. Evoked set is derived from past experiences or external sources
e. Alternatives then need to be evaluated before a final decision is made

1.2. Evaluating a service may be difficult

a. Search attributes 服务属性 help customers evaluate a product before purchase
b. Experience attributes cannot be evaluated before purchase
c. Credence attributes are those that customers find impossible to evaluate confidently
even after purchase and consumption

1.3. Uncertainty about outcomes Increases perceived risk

a. Functional – unsatisfactory performance outcomes 功能性 - 不令人满意的绩效结
果
b. Financial – monetary loss, unexpected extra cost 财务 - 金钱损失，意外的额外费
用
c. Temporal – wasted time, delays leading to problems 暂时的——浪费时间，延误导
致问题
d. Physical – personal injury, damage to possessions 身体 – 人身伤害、财物损坏
e. Psychological – fears and negative emotions
f. Social – how others may think and react
g. Sensory – unwanted impact on any of five senses 感官 – 对五种感官中的任何一
种产生不利影响

1.4. What risk reduction strategies can service suppliers develop?

a. Free trial (for services with high experience attributes)
b. Advertise (helps to visualize)
c. Display credentials
d. Use evidence management (e.g., furnishing, equipment etc.)
e. Offer guarantees
f. Encourage visit to service facilities
g. Give customers online access about order status
 1.5. Understanding customers’ service expectations
a. Customers evaluate service quality by comparing what they expect against what they
perceive (Situational and personal factors also considered)
b. Expectations of good service vary from one business to another, and differently
positioned service providers in same industry
c. Expectations change over time

1.6. Components of customer expectations

a. Desired Service Level
b. Adequate Service Level
c. Predicted Service Level
d. Zone of Tolerance: Acceptable range of variations in service delivery

1.7. Making a service purchase decision

a. Purchase Decision: Possible alternatives are compared and evaluated, whereby the
best option is selected
 Simple if perceived risks are low and alternatives are clear
 Complex when trade-offs increase
b. Trade-offs are often involved

2. Service Encounter Stage 服务相遇阶段

2.1. Service encounters range from high- to low-contact
a. Service encounter – a period of time during which a customer interacts directly with
the service provider 服务相遇——客户直接与服务提供商互动的一段时间
b. High-Contact Services
 Customers visit service facility and remain throughout service delivery
 Active contact
 Includes most people-processing services
c. Low-Contact Services
 Little or no physical contact
 Contact usually at arm’s length through electronic or physical distribution channels
 Facilitated by new technologies

2.2. Understanding the servuction 服务 system

 Visible front stage and invisible backstage 服务系统：前台可见，后台不可见
2.3. Theatrical Metaphor 戏剧隐喻 for service delivery: An integrative perspective
a. Service facilities
b. Personnel
c. Role and script theories
3. Post-Encounter Stage
3.1. Evaluation of service performance
a. Positive disconfirmation (better)
b. Confirmation (same)
c. Negative disconfirmation (worse)

3.2. Future intentions

Chapter 3: Positioning Services in Competitive Markets

1. Focus Strategies for Services
1.1. Opportunities
1.2. Risks
1.3. Market focused
1.4. Service focused
1.5. Unfocused:
a. Broad markets with wide range of services
b. Many service providers fall into this category
c. Danger – becoming a “jack of all trades and master of none”

2. Market Segmentation
2.1. Firms vary widely in their abilities to serve different types of customers
2.2. A market segment is composed of a group of buyers sharing common characteristics,
needs, purchasing behavior, and consumption patterns
2.3. Target segments should be selected with reference to
a. Firm’s ability to match or exceed competing offerings directed at the same segment
b. Not just profit potential

3. Service Attributes and Levels

3.1. Developing Right Service Concept for a Specific Segment: Individuals may set different
priorities according to:
a. Purpose of using the service
b. Who makes decision
c. Timing of use
d. Whether service is used alone or with a group
e. Composition of that group
3.2. Important vs. Determinant Attributes
a. Consumers usually choose between alternative service offerings based on perceived
differences between them
b. Attributes that distinguish competing services from one another are not necessarily
 the most important ones
c. Determinant attributes determine buyers’ choices between competing alternatives
 service characteristics that are important to purchasers
 customers see significant differences between competing alternatives on these
attributes
3.3. Establishing Service Levels
a. Make decisions on service levels – level of performance firm plans to offer on each
attribute
b. Can often segment customers according to willingness to trade off price versus
service level:
 Price-insensitive customers willing to pay relatively high price for high levels of
service
 Price-sensitive customers look for inexpensive service with relatively low
performance

4. Positioning Distinguishes a Brand from its Competitors

4.1. Must establish position for firm or product in minds of customers
4.2. Position should be distinctive, providing one simple, consistent message
4.3. Position must set firm/product apart from competitors
4.4. A company cannot be all things to all people – must focus its efforts

5. Developing an Effective Positioning Strategy

5.1. Market Analysis
a. Focus on overall level and trend of demand and geographic locations of demand
b. Look into size and potential of different market segments
c. Understand customer needs and preferences and how they perceive the competition
5.2. Internal Corporate Analysis
a. Identify organization’s resources, limitations, goals, and values
b. Select limited number of target segments to serve
5.3. Competitor Analysis
a. Understand competitors’ strengths and weaknesses
b. Anticipate responses to potential positioning strategies
6. Using Positioning Maps to Analyze Competitive Strategy
7. Changing Competitive Positioning
7.1. Firm may have to make significant change in existing position: Revising service
characteristics; redefining target market segments; abandoning certain products;
withdrawing from certain market segments
7.2. Improving negative brand perceptions may require extensive redesign of core product
7.3. Repositioning introduces new dimensions into positioning equation that other firms
cannot immediately match
8. Summary
8.1. Focus Strategies:
a. Fully focused
b. Service focused
 c. Market focused
d. Unfocused
8.2. Market Segmentation – buyers share common characteristics, needs, purchasing
behavior & consumption patterns
8.3. Service attributes – determinant attributes are often the ones most important to
customers
8.4. Positioning links:
a. Market Analysis
b. Internal Analysis
c. Competitive Analysis
8.5. Positioning maps are useful for plotting competitive strategy:
a. Identify potential competitive responses
b. Help executives to visualize strategy

Chapter 7
1. Role of Marketing Communications
2. Challenges of Services Communications
3. Marketing Communications Planning
4. The Marketing Communications Mix
5. Role of Corporate Design
6. Integrating Marketing Communications