Chapter 11

Services Marketing

Chapter 12 Objectives
1. Discuss the importance of services to the 1. Discuss the importance of services to the economy. economy. 2. Discuss the differences between services 2. Discuss the differences between services and goods. and goods. 3. Describe the components of service quality 3. Describe the components of service quality and the gap model of service quality. and the gap model of service quality. 4. Develop marketing mixes for services. 4. Develop marketing mixes for services. 5. Discuss relationship marketing in services. 5. Discuss relationship marketing in services.

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

Service Industries
Government Sector Courts, hospitals, military services, police, fire departments, post office, schools Private Nonprofit Sector Museums, charities, churches, colleges, foundations, and hospitals Business Sector Airlines, banks, hotels, insurance companies, law firms, real estate firms.

Categories of Service Mix

Pure tangible good soap or toothpaste. No services accompany the product Tangible good w/services the more technologically sophisticated (computers) more dependent on customer services (repairs, training, installation advice) Hybrid equal parts service/goods, restaurants Major service w/minor good Airlines Pure service the offering consists primarily of a service, massage

How Services Differ from Goods

Intangibility Intangibility

Characteristics Characteristics That That Distinguish Distinguish Services Services

Inseparability Inseparability

Heterogeneity Heterogeneity

Perishability Perishability

How Services Differ from Goods

Evaluating Services Evaluating Services vs. Goods vs. Goods
Services have Services have fewer fewer Search Qualities Search Qualities Services have Services have more more Experience Qualities Experience Qualities

Services have Services have Credence Qualities Credence Qualities

Service Quality
Reliability Reliability

Responsiveness Responsiveness

Components for Components for Evaluating Evaluating Service Quality Service Quality

Assurance Assurance

Empathy Empathy

Tangibles Tangibles

The Gap Model of Service Quality

Customer
Expected Service Expected Service

GAP 5
Perceived Service Perceived Service

Provider

Service Delivery Service Delivery

GAP 4 Communication

Communication with Customers with Customers

GAP 3 GAP 1
Quality Specifications Quality Specifications

GAP 2
Mgmt perception Mgmt perception

Marketing Mixes for Services

People People Processing Processing

Product (Service) Strategy

Possession Possession Processing Processing Information Information Processing Processing

Core and Supplementary Services

Advice and information

Problem solving

Order taking

Billing statements

Overnight transportation and delivery of packages

Supplies

Tracing

Documentation

Pickup

Mass Customization
High

Customization

Customized Focus

MassCustomization

Low

Standardized Focus

High

Cost

Low

Distribution Strategy
Convenience Convenience

Number of Outlets Number of Outlets Direct vs. Indirect Direct vs. Indirect Distribution Distribution Location Location

ocus forDistribution Strategies ocus forDistribution Strategies

Scheduling Scheduling

Promotion Strategy
Stress tangible cues

Service Promotion Strategies

Use personal information sources

Create a strongorganizational ima

Engage in postpurchase communication

Price Strategy
Define unit of Define unit of service consumption service consumption

Pricing Challenges

Determine if multiple Determine if multiple elements are bundled elements are bundled Major trend: service Major trend: service unbundling unbundling