Chapter

14
Designi
ng and Services
Managing

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Learning Objectives
1. How can services be defined and classified, and how
do they differ from goods?
2. What are the new services realities?
3. How can companies achieve excellence in services
marketing?
4. How can companies improve service quality?
5. How can goods marketers improve customer-
support services?

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 The Nature of Services

• Service
– Any act or performance one party can offer to
another that is essentially intangible and does
not result in the ownership of anything

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 Categories of
Service Mix
• A pure tangible good A
• tangible good with
accompanying services
• A hybrid
• A major service with
accompanying minor
goods/services
• A pure service

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 Service distinctions

✓ Equipment- or people-based
✓ Different processes of delivery
✓ Some need client’s presence
✓ Meets personal or business need
✓ Differs in objectives and ownership

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 FFigure 114.•
EEva I ua tion 1 PProd u ct Types
Con ti 1n u um
•

for

Most services

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High in Search High in Experience High in Credence
Qualities Qualities Qualities
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 Characteristics
of Services

Intangibility

Inseparability

Variability

Perishability

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 Intangibility
• Services cannot be seen, tasted, felt, heard, or
smelled
Physical evidence and presentation tools:
✓ Place
✓ People
✓ Equipment
✓ Communication material
✓ Symbols
✓ Price

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 Intan g bilit y
TABLE Dimensions of Brand Experience
14.1

Sensor
y
• This brand makes a strong impression on my visual sense or
• other senses.
• I find this brand interesting in a
sensory way.
Affectiv
This brand does not appeal to my
e• This
senses.
brand induces feelings and
• sentiments.
• I do not have strong emotions for this
brand.
Behavior
This brand is an emotional brand.
al
• I engage in physical actions and behaviors when I use
• this brand.
• This brand results in bodily
experiences.
I nteII
This brand is not action-oriented.
ectual
• I engage in a lot of thinking when I encounter
• this brand.
• This brand does not make me think.
This brand stimulates my curiosity and problem
solving.

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 Inseparability

• Services are typically produced and consumed

simultaneously

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 Variability
• The quality of
services depends on
who provides them,
when and where,
and to whom
– As such, services
are highly variable

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 Perishability

• Services cannot be stored

• Strategies to match demand & supply

On demand side On supply side

• Differential pricing • Part-time employees
• Nonpeak demand • Peak-time efficiency routines
• Complementary services • Increased consumer
• Reservation services participation
• Shared services
• Facilities for future
expansion
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 FF·igur e 14.
B u epnrint fo20r Overni g t Ho0 t e Ss t ay
•

Desk Bill
Registratio Deliver Desk
n Elevator Room y Tray Lobb
Hotel Cart for Papers
Lobby s Care Amenitie Food y
Exterior Bags Key Hallway for s Bath Menu Appearance Foo Hotel
Parkin
Parking s Room Bags d Exteri
g
or
Arrive Give Bags Receiv Sleep CallRoo Receiv Checkou
Checkl Goto Ea
at to e Showe m e t
n Room t
Hote Bellperson Bags r Servic Foo and
l e d leave

Line of
Interaction
Delive Proces
r s
Food CheckO
ut

Line of
Visibility

Take Take
Bags to Food
Room Order

Line of Internal
Interaction
Registrati Prepar Registrati
on e on
System Foo System
d

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 New Services Realities

• A shifting customer
relationship
– Customer
empowerment &
coproduction
– Satisfying employees
as well as customers

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 A hi e in gEExc ell ce
In Se e
•
Marketin g
• Marketing excellence
Company

Internal External
Marketing

Cleaning/ Financial/ Restaurant

maintenanc banking industry
e services
services

Employees Interactive Customers

Marketing

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 Achieving Excellence
In Services Marketing
• Technology and service
delivery
– The Internet allows for true
interactivity, customer-
specific and situational
personalization, and real-
time adjustments of the
firm’s offerings

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Best Practices of Top Service
Companies
Top-
Strategic
management
concept
commitment

Satisfying High
customer standar
complaint ds
s
Monitoring
Profit tiers
systems

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 FF·igur e
Im portan ce-14.
P e 4 for mance A allysis
Extremely Important
A. Concentrate here B. Keep up the good work
1
2
3
4
5
6
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C. Low priority D. Possible overkill

Slightly Important

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 Differentiating Services

• Primary and secondary

service options
• Innovation with
services

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 Managing Service Quality
• Customer switching behavior factors

✓ Pricing
✓ Inconvenience
✓ Core service failure
✓ Service encounter failures
✓ Response to service failure
✓ Competition
✓ Ethical problems
✓ Involuntary switching

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 FIGURE 14.5
SERVICE-QUALITY MODEL

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 Improving
Servic e Quality
• Listening • Surprising customers
• Reliability • Fair play
• Basic service • Teamwor
• Service design • Employee
k research
• Recovery • Servant leadership

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 SERVQUAL SCALE
TABLE SERVQUAL Attributes
14.4
Reliabili Empat
ty
• Providing service as promised hy
• Giving customers individual attention
• Dependability in handling customers' service • Employees who deal with customers in a
• problems • caring fashion
• Performing services right the • Having the customer's best interests at heart
first time Employees who understand the needs of
• •
Providing services at the their customers
• promised time Convenient business hours
Maintaining error-free records
Responsiven Tangibl
essEmployees who have the es
• Keeping customer informed as to when services will • Modern equipment
knowledge
• be to answer customer
performed • Visually appealing facilities
questions
• Prompt service to customers • Employees who have a neat, professional
• Willingness to help customers • appearance
Readiness to respond to customers' requests Visually appealing materials associated with
Assuran the service
ce
• Employees who instill confidence in
customers
•
Making customers feel safe in their
•
transactions
Employees who are consistently
courteous
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 Extending the Servi ce-Quality
M odel
• Dynamic process model of improved service
quality perceptions
– Increasing customer expectations of what the
firm will deliver
– Decreasing customer expectations of what
the firm should deliver

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 Incorporating S elf-Service
Technologies
• SSTs can:
– Make transactions more
accurate
– Make transactions more
convenient
– Make transactions faster
– Reduce costs

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 Managing Produ ct-Support
Services
• Three types of customer worries

Failure frequency

Downtime

Out-of-pocket costs

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 POSTSALE SERVICE STRATEGY

• Customer-service evolution
• The customer-service imperative

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Copyright © 2016 Pearson Education Ltd. 14-28