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 Patient’s 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

Private
Government
nonprofit

Business Retail
Manufacturing

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 General Motors’ OnStar Service

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 Categories of Service Mix

Pure tangible good

Good w/ accompanying services

Hybrid

Service w/ accompanying goods

Pure service
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 Service Distinctions

• Equipment-based or people-based
• Service processes
• Client’s 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 Supply side

• Differential pricing • Part-time
• Nonpeak demand employees
• Complementary • Peak-time efficiency
services • Increased consumer
• Reservation participation
systems • 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 • Surprising
• Reliability customers
• Basic service • Fair play
• Service design • Teamwork
• Recovery • 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 • Lexus
• Four Seasons • UPS
Hotels • Enterprise Rent-A-
• Cadillac Car
• Nordstrom • Starbucks
• Wegman Food • Ritz-Carlton
Markets • Amica Insurance
• Edward Jones • 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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