Professional Documents
Culture Documents
Service Marketing Full Presentation
Service Marketing Full Presentation
Service Marketing Full Presentation
SM
Chapter 1
INTRODUCTION
TO
SERVICES
Objectives for Chapter 1:
Introduction to Services
Explain what services are and identify service trends
Explain the need for special services marketing
concepts and practices
Outline the basic differences between goods and
services and the resulting challenges for service
businesses
Introduce the service marketing triangle
Introduce the expanded services marketing mix
Introduce the gaps model of service quality
Introduction
Services are deeds,processes and performance
Intangible, but may have a tangible component
Generally produced and consumed at the same time
Need to distinguish between SERVICE and
CUSTOMER SERVICE
Challenges for Services
Defining and improving quality
Communicating and testing new services
Communicating and maintaining a consistent
image
Motivating and sustaining employee commitment
Coordinating marketing, operations and human
resource efforts
Setting prices
Standardization versus personalization
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
airlines, travel agencies, theme park
Others:
hair styling, pest control, plumbing, lawn maintenance, counseling
services, health club
Figure 1-1
Tangibility Spectrum
Salt
Soft Drinks
Detergents
Automobiles
Cosmetics Fast-food
Outlets
Intangible
Dominant
Tangible
Dominant Fast-food
Outlets
Advertising
Agencies
Airlines
Investment
Management
Consulting
Teaching
Figure 1-2
Percent of
U.S. Labor Force by Industry
80
70
Percent of GDP
60
50
40
30
20
10
0 Services
1929 1948 1969 1977 1984 1996 Manufacturing
Mining & Agriculture
Year
Source: Survey of Current Business, April 1998, Table B.8, July 1988, Table 6.6B, and
July 1992, Table 6.4C; Eli Ginzberg and George J. Vojta, “The Service Sector of the U.S.
Economy,” Scientific American, 244,3 (1981): 31-39.
Figure 1-3
Percent of U.S. Gross Domestic
Product by Industry
80
Percent of GDP
70
60
50
40
30
20
10
0
1948 1959 1967 1977 1987 1996 Services
Manufacturing
Year Mining & Agriculture
Source: Survey of Current Business, August 1996, Table 11, April 1998, Table
B.3; Eli Ginzberg and George J. Vojta, “The Service Sector of the U.S.
Economy,” Scientific American, 244,3 (1981): 31-39.
Differences Between Goods and
Services
Intangibility Heterogeneity
Simultaneous
Production Perishability
and
Consumption
Implications of Intangibility
Services cannot be inventoried
Services cannot be patented
Services cannot be readily displayed
or communicated
Pricing is difficult
Implications of Heterogeneity
Service delivery and customer satisfaction depend on
employee actions
Service quality depends on many uncontrollable
factors
There is no sure knowledge that the service delivered
matches what was planned and promoted
Implications of Simultaneous Production
and Consumption
Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, “Problems and Strategies in Services Marketing,”
Journal of Marketing 49 (Spring 1985): 33-46.
Figure 1-5
The Services Marketing Triangle
Company
(Management)
Internal External
Marketing Marketing
“enabling the “setting the
promise” promise”
Technology
Providers Customers
Product
Price
Place
Promotion
People
Process
Physical Evidence
Table 1-3
Expanded Marketing Mix for Services
Other tangibles
Ways to Use the 7 Ps
CUSTOMER Expected
Service
Customer
Gap
Perceived
Service
External
COMPANY Service Delivery Communications
GAP 4 to Customers
GAP 1 GAP 3
Customer-Driven Service
Designs and Standards
GAP 2
Company Perceptions of
Consumer Expectations
Part 1 Opener
Gaps Model of Service Quality
Customer Gap:
difference between expectations and
perceptions
Provider Gap 1:
not knowing what customers expect
Provider Gap 2:
not having the right service designs and
standards
Provider Gap 3:
not delivering to service standards
Provider Gap 4:
not matching performance to promises
Part 1 Opener
The Customer Gap
Expected
Service
GAP
Perceived
Service
Part 1 Opener
Provider Gap1 : Not knowing what
customers expect:
CONSUMER BEHAVIOR
IN SERVICES
Consumer Behavior in Services
Overview the generic differences in consumer behavior
between services and goods
Introduce the aspects of consumer behavior that a
marketer must understand in five categories of consumer
behavior:
Information search
Evaluation of service alternatives
Service purchase and consumption
Postpurchase evaluation
Role of culture
Consumer Evaluation
Processes for Services
Search Qualities
attributes a consumer can determine prior to
purchase of a product
Experience Qualities
attributes a consumer can determine after purchase
(or during consumption) of a product
Credence Qualities
characteristics that may be impossible to evaluate
even after purchase and consumption
Figure 2-1
Continuum of Evaluation for
Different Types of Products
Most Most
Goods Services
Easy to evaluate
Difficult to evaluate
Clothing
Jewelry
Furniture
Houses
Automobiles
Restaurant meals
Vacations
Haircuts
Child care
Television repair
Legal services
Root canals
Auto repair
Medical diagnosis
{
{
High in search
qualities
High in experience High in credence
qualities qualities
{
Figure 2-2
Categories in Consumer
Decision-Making and Evaluation of Services
Information Evaluation of
Search Alternatives
Use of personal sources Evoked set
Perceived risk Emotion and mood
Information Evaluation of
Search Alternatives
Use of personal sources Evoked set
Perceived risk Emotion and mood
Culture
Values and attitudes
Manners and customs
Material culture
Aesthetics
Educational and social
institutions
Authenticity
Caring
Control Courtesy
Formality
Friendliness
Personalization
Promptness
SM
Chapter 2 contd..,
CUSTOMER
EXPECTATIONS OF
SERVICES
Objectives for Chapter 3:
Customer Expectations of Service
Recognize that customers hold different types of
expectations for service performance
Discuss controllable and uncontrollable sources of
customer expectations
Distinguish between customers’ global expectations of their
relationships and their expectations of the service
encounter
Acknowledge that expectations are similar for many
different types of customers
Delineate the most important current issues surrounding
customer expectations
DEFINITIONS
Customers have different expectations re services – or
expected service
Desired service – customer hopes to receive
Adequate service – the level of service the customer
may accept
Zone of
Tolerance
Adequate Service
Figure 3-2
The Zone of Tolerance
Desired Service
Zone of
Tolerance
Adequate Service
Figure 3-3
Zones of Tolerance VARY for
Different Service Dimensions
Desired Service
Level
of
Expectation Zone of Desired
Tolerance Desired Service
Service
Adequate Service
Zone
of
Tolerance
Adequate
Adequate Service
Service
First-Time Service
Outcome
Process
Recovery Service
Outcome
Process
LOW HIGH
Expectations
Source: Parasuraman, Berry and Zeithaml (1991)
Figure 3-5
Factors that Influence
Desired Service
Enduring Service
Intensifiers
Desired
Service
Personal Needs
Zone
of
Tolerance
Adequate
Service
Personal needs include physical, social,
psychological categories
Desired
Perceived Service Service
Alternatives
Zone
of
Tolerance
Self-Perceived
Service Role Adequate
Service
Situational
Factors
Transitory service intensifiers – temporary – a
computer breakdown will be less tolerated at financial
year-ends
Perceived service alternatives
Perceived service role of customer
Situational factors
Figure 3-7
Factors that Influence
Desired and Predicted Service
Explicit Service
Promises
Implicit Service
Promises
Desired Word-of-Mouth
Service
Zone
Past Experience
of
Tolerance
Adequate Predicted
Service Service
SM
Chapter 2 Contd..,
CUSTOMER
PERCEPTIONS OF
SERVICE
Customer Perceptions of Service
Provide you with definitions and
understanding of customer satisfaction and
service quality
Show that service encounters or the
“moments of truth” are the building blocks of
customer perceptions
Highlight strategies for managing customer
perceptions of service
Figure 4-1
Customer Perceptions of
Service Quality and
Customer Satisfaction
Reliability Situational
Factors
Responsiveness Service
Quality
Assurance
Customer
Empathy Satisfaction
Product
Quality
Tangibles
Personal
Price Factors
Factors Influencing
Customer Satisfaction
Product/service quality
Product/service attributes or features
Consumer Emotions
Attributions for product/service success or failure
Equity or fairness evaluations
Outcomes of
Customer Satisfaction
100%
Loyalty (retention)
80%
60%
40%
20%
0%
Very Dissatisfied Neither Satisfied Very
dissatisfied satisfied nor satisfied
dissatisfied
Satisfaction measure
Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
Service Quality
Assurance:
Tangibles:
Empathy:
Responsiveness:
SERVQUAL Attributes
ASSURANCE
Employees who instill confidence in
customers
Making customers feel safe in their
transactions
RELIABILITY Employees who are consistently courteous
Employees who have the knowledge to
Providing service as promised answer customer questions
Dependability in handling customers’
service problems EMPATHY
Performing services right the first time Giving customers individual attention
Providing services at the promised time Employees who deal with customers in a
Maintaining error-free records caring fashion
Having the customer’s best interest at heart
Employees who understand the needs of
RESPONSIVENESS their customers
Convenient business hours
Keeping customers informed as to
when services will be performed TANGIBLES
Prompt service to customers Modern equipment
Willingness to help customers Visually appealing facilities
Readiness to respond to customers’ Employees who have a
requests neat, professional
appearance
Visually appealing materials
associated with the service
The Service Encounter
A Service Encounter
Cascade for a Hotel Visit
Check-In
Check-In
Bellboy
BellboyTakes
Takesto
toRoom
Room
Restaurant
Restaurant Meal
Meal
Request
RequestWake-Up
Wake-Up Call
Call
Checkout
Checkout
Figure 4-5
A Service Encounter
Cascade for an Industrial
Purchase
Sales
SalesCall
Call
Delivery
Deliveryand
andInstallation
Installation
Servicing
Servicing
Ordering
Ordering Supplies
Supplies
Billing
Billing
Critical Service Encounters Research
Recovery: Adaptability:
Employee Response Employee Response
to Service Delivery to Customer Needs
System Failure and Requests
Coping: Spontaneity:
Employee Response Unprompted and
to Problem Customers Unsolicited Employee
Actions and Attitudes
Recovery
DO DON’T
Acknowledge problem Ignore customer
Explain causes Blame customer
Apologize Leave customer to fend
Compensate/upgrade for him/herself
Lay out options Downgrade
Take responsibility Act as if nothing is
wrong
Adaptability
DO DON’T
Recognize the Promise, then fail to
seriousness of the need follow through
Acknowledge Ignore
Anticipate Show unwillingness to
Attempt to accommodate try
Explain rules/policies Embarrass the customer
Take responsibility Laugh at the customer
Exert effort to Avoid responsibility
accommodate
Spontaneity
DO DON’T
Take time Exhibit impatience
Be attentive Ignore
Anticipate needs Yell/laugh/swear
Listen
Steal from or cheat a
Provide information
customer
(even if not asked) Discriminate
Treat customers fairly
Treat impersonally
Show empathy
Acknowledge by name
Coping
DO DON’T
Listen Take customer’s
Try to accommodate dissatisfaction
Explain personally
Let customer’s
Let go of the customer
dissatisfaction affect
others
Figure 4-6
Evidence of Service from the
Customer’s Point of View
Contact employees
Customer
him/herself
Operational flow of
activities
Other customers
People
Steps in process
Flexibility vs.
standard
Technology vs.
human Process Physical Tangible
Evidence communication
Servicescape
Guarantees
Technology
SM
Part 2
LISTENING TO
CUSTOMER
REQUIREMENTS
Provider GAP 1
CUSTOMER
Expected
Service
GAP 1
Company
COMPANY Perceptions of
Consumer
Expectations
Part 2 Opener
SM
Chapter 3
UNDERSTANDING
CUSTOMER
EXPECTATIONS AND
PERCEPTIONS THROUGH
MARKETING RESEARCH
Understanding Customer Expectations
and Perceptions through
Marketing Research
Present the types of and guidelines for marketing
research in services
Show the ways that marketing research information
can and should be used for services
Describe the strategies by which companies can
facilitate interaction and communication between
management and customers
Present ways that companies can and do facilitate
interaction between contact people and management
Common Research Objectives
for Services
To identify dissatisfied customers
To discover customer requirements or expectations
To monitor and track service performance
To assess overall company performance compared to
competition
To assess gaps between customer expectations and
perceptions
To gauge effectiveness of changes in service
To appraise service performance of individuals and teams
for rewards
To determine expectations for a new service
To monitor changing expectations in an industry
To forecast future expectations
Figure 5-1
Criteria for An Effective Services Research Program
Includes
des Quantitative
lu ve
Inc litati h Research Includes
a c
Qu esear Perceptions
R and
Expectations
Occurs of
Customers
with
Appropriate Research Includes
Frequency Measures
Objectives of
Loyalty or
Behavioral
Measures Intentions
Priorities
or C ost
Importance n ces of
la e
Includes Ba Valu ion
Statistical and rmat
o
Validity Inf
When Necessary
Portfolio of Services Research
Research Objective Type of Research
Identify dissatisfied customers to attempt recovery;
identify most common categories of service failure Customer Complaint
for remedial action
Solicitation
Assess company’s service performance compared to
competitors; identify service-improvement priorities; track “Relationship” Surveys
service improvement over time
8
O O O O
O
6
Low
Leverage
Attributes to Maintain Attributes to De-emphasize
LOW
HIGH
Performance
SM
Chapter 3 contd..,
BUILDING
CUSTOMER
RELATIONSHIPS
Objectives for Chapter 6:
Building Customer Relationships
Assumptions
Income
Expected Customer Lifetime
Average Revenue (month/year)
Other Customers convinced via WOM
Employee Loyalty??
Expenses
Costs of Serving Customer Increase??
A Loyal Customer is One Who...
Shows Behavioral Commitment
buys from only one supplier, even though other options
exist
increasingly buys more and more from a particular
supplier
provides constructive feedback/suggestions
Exhibits Psychological Commitment
wouldn’t consider terminating the relationship--
psychological commitment
has a positive attitude about the supplier
says good things about the supplier
Customer Loyalty Exercise
wrong segment
difficult customers
Strategies for Building Relationships
Foundations:
Excellent Quality/Value
Careful Segmentation
Bonding Strategies:
Financial Bonds
Social & Psychological Bonds
Structural Bonds
Customization Bonds
Relationship Strategies Wheel
Figure 6-1
Customer Goals of
Relationship Marketing
Enhancing
Retaining
Satisfying
Getting
Figure 6-3
Underlying Logic of Customer Retention Benefits to
the Organization
Customer Satisfaction
Employee Loyalty
Figure 6-5
Steps in Market Segmentation and
Targeting for Services
IV.
Excellent
Quality II.
Joint Structural Personal
Investments and Social Relationships
Bonds
Value Bonds
Anticipation Customer
/ Innovation Intimacy
Mass
Customization
SM
Chapter 7
SERVICE RECOVERY
Objectives for Chapter 7:
Service Recovery
Unhappy Customers’
Repurchase Intentions
19%
Complaints Not Resolved
46%
54%
Complaints Resolved
70%
Service Failure
Act Quickly
Service
Learn from
Lost Custom
Recovery
Strategies
ers
y
air l
F
Le s
er
Re arn f om
co r o m
ve u st
ry
Ex tC
pe ea
ri en Tr
ce
s
Pricing
• High Price
• Price Increases
• Unfair Pricing
• Deceptive Pricing Figure 7-6
Causes Behind Service Switching
Inconvenience
• Location/Hours
• Wait for Appointment
• Wait for Service
Competition
• Found Better Service
Ethical Problems
• Cheat
• Hard Sell
• Unsafe
• Conflict of Interest
Involuntary Switching
• Customer Moved Source: Sue Keaveney
• Provider Closed
Service Guarantees
Unconditional
The guarantee should make its promise unconditionally -
no strings attached.
Meaningful
It should guarantee elements of the service that are
important to the customer.
The payout should cover fully the customer's
dissatisfaction.
Easy to Understand and Communicate
For customers - they need to understand what to expect.
For employees - they need to understand what to do.
Easy to Invoke and Collect
There should not be a lot of hoops or red tape in the way
of accessing or collecting on the guarantee.
Source: Christopher W.L. Hart, “The Power of Unconditional Guarantees,” Harvard Business Review, July-August, 1988, pp. 54-62.
Why a Good Guarantee Works
generates feedback
ALIGNING STRATEGY,
SERVICE DESIGN
AND STANDARDS
Provider GAP 2
CUSTOMER
COMPANY Customer-Driven
Service Designs and
Standards
GAP 2
Company
Perceptions of
Consumer
Expectations
Part 3 Opener
SM
Chapter 8
SERVICE DEVELOPMENT
AND DESIGN
Service Development and Design
Oversimplification
Incompleteness
Subjectivity
Biased Interpretation
Figure 8-2
New Service Development Process
h Business Strategy Development or Review
Front End
h Idea Generation
Planning
Screen ideas against new service strategy
h Concept Development and Evaluation
Test concept with customers and employees
h Business Analysis
h Postintroduction Evaluation
Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal 1997.
Figure 8-3
Markets
Offerings Current Customers New Customers
Existing
SHARE BUILDING MARKET
Services
DEVELOPMENT
New
Services SERVICE DIVERSIFICATION
DEVELOPMENT
Figure 8-4
Service Mapping/Blueprinting
A tool for simultaneously depicting the service
process, the points of customer contact, and the
evidence of service from the customer’s point of
view.
Process
line of interaction
SUPPORT PROCESSES
Express Mail Delivery Service
Truck Truck
Packaging Packaging
Forms Forms
EVIDENCE
CONTACT PERSON CUSTOME PHYSICAL
Hand-held Hand-held
Computer Computer
Uniform Uniform
Driver
Picks Deliver
Up Pkg. Package
Customer
Service
Order
Airport Fly to
Dispatch
Receives Sort Unload Load
Driver Fly to
& Loads Center & On
Destinatio Sort Truck
SUPPORT
Load on
PROCESS
Airplane
n
Sort
Packages
Overnight Hotel Stay
Bill
EVIDENCE
CUSTOMER PHYSICAL
Desk
Hotel Cart for Desk Elevators Cart for Room Menu Delivery Food Lobby
Exterior Bags Registration Hallways Bags Amenities Tray Hotel
Parking Papers Room Bath Food Exterior
Lobby Appearance Parking
Key
Arrive Give Bags Call Check out
Go to Receive Sleep Receive
at to Check in Room Eat and
Room Bags Shower Food
Hotel Bellperson Service Leave
SUPPORT PROCESS (Back Stage) (On Stage)
CONTACT PERSON
Greet and
Process Deliver Deliver Process
Take
Registration Bags Food Check Out
Bags
Take
Take Bags Food
to Room Order
Step
Step11 Step
Step22 Step
Step33 Step
Step44 Step
Step55 Step
Step66
Map Map Add
Identify
Identifythe
the Identify
Identifythe
the Mapthethe Map Link
Link Add
process to customer process contact
contact customer evidence
evidence
process to customer process customer
from employee ofofservice
be
beblue-
blue- oror fromthe
the employee and
andcontact
contact service
printed. customer customer’s actions,
actions, person atateach
each
printed. customer customer’s person
point onstage customer
segment.
segment. pointofof onstage activities
activitiestoto customer
view. and
andback-
back- needed action
action
view. needed
stage.
stage. support step.
step.
support
functions.
functions.
Application of Service Blueprints
Operations Management
rendering the service as
System Technology
promised
providing necessary tools:
managing fail points
system specifications
training systems
quality control personal preference databases
SM
Chapter 4
CUSTOMER-DEFINED
SERVICE STANDARDS
Objectives for Chapter 9:
Customer-defined Service Standards
Total 10% Installation Delivery Interval Meets Needs (30%) Average Order Interval
Quality Does Not Break (25%) % Repair Reports
Installed When Promised (10%) % Installed On Due Date
15% Repair
No Repeat Trouble (30%) % Repeat Reports
Fixed Fast (25%) Average Speed Of Repair
15% Billing Kept Informed (10%) % Customers Informed
Service
Quality
Figure 9-2
Getting to Actionable Steps
Requirements: Diagnosticity:
Concrete High
Figure 9-3
Process for Setting
Customer-Defined Standards
1. Identify Existing or Desired Service Encounter Sequence
2.2.Translate
TranslateCustomer
CustomerExpectations
ExpectationsInto
IntoBehaviors/Actions
Behaviors/Actions
3.3.Select
SelectBehaviors/Actions
Behaviors/Actionsfor
forStandards
Standards
Measure by Measure by
Audits or Hard 5.5.Develop Transaction-
DevelopFeedback
Feedback Soft
Operating Data Mechanisms Based Surveys
Mechanisms
6.6.Establish
EstablishMeasures
Measuresand
andTarget
TargetLevels
Levels
8.8. Update
UpdateTarget
TargetLevels
Levelsand
andMeasures
Measures
HIGH 10.0
Importance/Performance Matrix
Improve Maintain
Does whatever it takes to
correct problems (9.26, 7.96)
Delivers on promises specified in proposal/contract (9.49, 8.51)
Gets project within budget, on time (9.31, 7.84)
Completes projects
correctly, on time (9.29, 7.68)
Gets price we originally agreed upon (9.21, 8.64)
Tells me cost ahead of time (9.06, 8.46)
9.0
Provides equipment that operates as vendor said it would (9.24, 8.14)
Gets back to me when
Takes responsibility for their mistakes (9.18, 8.01)
promised (9.04, 7.63)
Delivers or installs on
Importance promised date (9.02, 7.84)
8.0
LOW 7.0
HIGH
8.0 9.0 10.0
Performance
Figure 9-5
Linkage between Soft Measures and
Hard Measures for Speed of
Complaint Handling
S
A 10
T 9
I 8
Large Customers
S 7
F 6 Small Customers
A 5
C 4
T 3
I 2
O 1
N 0
2 4 6 8 12 16 20 24
WORKING HOURS
Figure 9-6
Aligning Company Processes
with Customer Expectations
Customer Expectations
48 Hours
Customer
Process
Blueprint Report Lost Receive New
Card Card
Company
Process Company Sequential Processes
Blueprint
A
A B
B C
C D
D EE FF G
G H
H
Lost Card New Card
Reported 40 Days Mailed
SM
Chapter 08
PHYSICAL EVIDENCE
AND THE SERVICESCAPE
Objectives for Chapter 10:
Physical Evidence and the Servicescape
DELIVERING AND
PERFORMING SERVICE
Provider GAP 3
CUSTOMER
Service Delivery
COMPANY
GAP 3
Customer-Driven
Service Designs and
Standards
Part 4 Opener
SM
Chapter 05
EMPLOYEES’ ROLES IN
SERVICE DELIVERY
Objectives for Chapter 11:
Employees’ Roles in Service Delivery
External Environment
Internal Environment
Figure 11-4
Sources of Conflict for
Boundary-Spanning Workers
Hire for
r Service
fo Competencies B
Pr e t
te t
pe es and Service Em efer he
m B le p l re d
Co the op Inclination oy
Pe er
Str ard nd
Te nte kills
Tr nica tive
Re ure a
ch rac
Hire the
ain l
I S
Pr ervic g
fo and
ide e
Right People
n
rs
w
as
r
Me
ov
S
Develop
Customer-
Employees
Empower
Employees
Customers
Deliver
Best
as
Service Service
People Delivery Quality
Em th any’
wo e
rk
Inc ee
am ot
Provide
plo e
Te rom
Co Visio
lu d s i n
y
Needed Support
mp n
P
e
De Systems
Se velo
s
re
or rvic p asu al
i
Int ente -
e
Provide Me tern e
Pr ern d In rvic y
oc Supportive Se alit
es al
se
s Technology Qu
and
Equipment
Service Culture
CUSTOMERS’ ROLES IN
SERVICE DELIVERY
Objectives for Chapter 12:
Customers’ Roles in Service Delivery
Productive Resources
Contributors to
Quality and
Satisfaction
Competitors
Customers as Productive Resources
“partial employees”
contributing effort, time, or other resources to the
production process
customer inputs can affect organization’s productivity
key issue:
should customers’ roles be expanded? reduced?
Customers as Contributors to
Service Quality and Satisfaction
1 2 3 4 5 6
Gas Station Illustration
1. Customer pumps gas and pays at the pump with automation
2. Customer pumps gas and goes inside to pay attendant
3. Customer pumps gas and attendant takes payment at the pump
4. Attendant pumps gas and customer pays at the pump with automation
5. Attendant pumps gas and customer goes inside to pay attendant
6. Attendant pumps gas and attendant takes payment at the pump
Figure 12-3
Effective
Define Customer
Customer Recruit, Educate,
Participation and Reward
Jobs
Customers
Manage the
Customer
Mix
Strategies for Enhancing
Customer Participation
MANAGING DEMAND
AND CAPACITY
Objectives for Chapter 14:
Managing Demand and Capacity
Explain:
the underlying issue for capacity-constrained services
the implications of capacity constraints
the implications of different types of demand patterns on
matching supply and demand
Lay out strategies for matching supply and demand through:
shifting demand to match capacity or
flexing capacity to meet demand
Demonstrate the benefits and risks of yield management strategies
Provide strategies for managing waiting lines
Understanding Capacity Constraints and
Demand Patterns
Source: Christopher H. Lovelock, “Classifying Services to Gain Strategic Marketing Insights,” Journal of Marketing, 47, 3 (Summer 1983): 17.
Table 14-2
What is the Constraint on Capacity?
MANAGING SERVICE
PROMISES
Provider GAP 4
CUSTOMER
Part 5 Opener
SM
Chapter 07
ROLE OF MARKETING
COMMUNICATION
Objectives for :
Integrated Services
Marketing Communications
Approaches for
Integrating Services Marketing Communication
Manage
Customer
Expectations
Goal:
Manage Delivery Improve
Service greater than Customer
Promises or equal to Education
promises
Manage
Internal
Marketing
Communication
Figure 15-4
Approaches for
Managing Service Promises
Goal:
Create Coordinate Offer Delivery
Effective Make
External Realistic Service greater than
Services Communication Guarantees or equal to
Communications Promises
promises
Figure 15-8
Approaches for
Managing Customer Expectations
Offer Choices
Create Tiered-Value
Offerings
Goal:
Delivery
greater than
or equal to
promises
Figure 15-9
Approaches for
Improving Customer Education
Teach
Customers
Prepare Confirm Clarify to Avoid
Goal: Performance Expectations
Delivery Customers Peak
for the to Standards after the Sale Demand
greater than Service
or equal to Periods
Process and
promises
Seek Slow
Periods
Figure 15-10
Approaches for Managing
Internal Marketing Communications
Goal:
Delivery
greater than
or equal to
promises
Create Effective
Vertical
Communications
Create Effective
Horizontal
Communications
Align Back
Office Personnel
w/ External Customers
Create
Cross-Functional
Teams
SM
Chapter 17
Service
Quality
? Profits
Figure 17-2
Offensive Marketing Effects of
Service on Profits
Service
Quality
Profits
Market
Share
Reputation Sales
Price
Premium
Figure 17-3
Defensive Marketing Effects of
Service on Profit
Costs
Volume of Margins
Service Customer
Purchases
Word of
Mouth
Profits
Figure 17-5
Perceptions of Service, Behavioral
Intentions and Profits
Costs
Volume of Margins
Purchases
Customer
Retention Price
Behavioral Premium
Service Intentions
Word of
Mouth
Profits
Sales
Figure 17-6
Most Profitable
What segment spends more with
Customers us over time, costs less to maintain,
Best
Customers spreads positive word of mouth?
Other
Customers What segment costs us in
time, effort and money yet
does not provide the return
Least Profitable we want? What segment is
Customers difficult to do business with?
Figure 17-7
Most Profitable
What segment spends more with
Customers Platinum us over time, costs less to maintain,
spreads positive word of mouth?
Gold
Iron
Service
Encounter
Service Behavioral Customer
Quality Intentions Retention Profits
Service
Encounter
Service
Encounter
Figure 17-9
Sample Measurements for the
Balanced Scorecard
Financial Measures
Price Premium
Volume Increases
Value of Customer
Referrals
Customer Value of Cross Sales
Perspective Long-term Value of Operational
Customer Perspective:
Service Perceptions
Service Expectations Right first time (% hits)
Right on time (% hits)
Perceived Value
Responsiveness (% on
Behavioral Intentions: time)
Innovation and
% Loyalty Learning Perspective Transaction time (hours,
% Intent to Switch days)
# Customer Number of new products Throughput time
Referrals Return on innovation Reduction in waste
# Cross Sales Process quality
Employee skills
# of Defections Time to market
Time spent talking to
customers
Price
Premium
Service Customer
Quality Retention
Word of
Mouth Profits
Market
Share
Sales
Offensive
Marketing Reputation
Price
Premium