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07-Nov-17
1
Copyright © 2016 Pearson Education Ltd. 14-1
Chapter
14
Designing and
Managing Services
Copyright © 2016 Pearson Education Ltd. 14-2
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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Copyright © 2016 Pearson Education Ltd. 14-3
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
Copyright © 2016 Pearson Education Ltd. 14-4
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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Copyright © 2016 Pearson Education Ltd. 14-5
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
Copyright © 2016 Pearson Education Ltd. 14-6
Figure 14.1
Evaluation Continuum for Product
Types
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Copyright © 2016 Pearson Education Ltd. 14-7
Characteristics
of Services
Intangibility
Inseparability
Variability
Perishability
Copyright © 2016 Pearson Education Ltd. 14-8
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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Copyright © 2016 Pearson Education Ltd. 14-9
Intangibility
Copyright © 2016 Pearson Education Ltd. 14-10
Inseparability
• Services are typically produced and
consumed simultaneously
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Copyright © 2016 Pearson Education Ltd. 14-11
Variability
• The quality of
services depends
on who provides
them, when and
where, and to
whom
– As such, services
are highly variable
Copyright © 2016 Pearson Education Ltd. 14-12
Perishability
• Services cannot be stored
• Strategies to match demand & supply
On demand side
• Differential pricing
• Nonpeak demand
• Complementary services
• Reservation services
On supply side
• Part-time employees
• Peak-time efficiency routines
• Increased consumer
participation
• Shared services
• Facilities for future expansion
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Copyright © 2016 Pearson Education Ltd. 14-13
Figure 14.2Blueprint for Overnight Hotel Stay
Copyright © 2016 Pearson Education Ltd. 14-14
New Services Realities
• A shifting customer
relationship
– Customer
empowerment &
coproduction
– Satisfying employees
as well as customers
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Copyright © 2016 Pearson Education Ltd. 14-15
Achieving Excellence
In Services Marketing• Marketing excellence
Copyright © 2016 Pearson Education Ltd. 14-16
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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Copyright © 2016 Pearson Education Ltd. 14-17
Best Practices of Top Service
Companies
Strategic
concept
Top-
management
commitment
High
standards
Profit tiersMonitoring
systems
Satisfying
customer
complaints
Copyright © 2016 Pearson Education Ltd. 14-18
Figure 14.4Importance-Performance Analysis
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Copyright © 2016 Pearson Education Ltd. 14-19
Differentiating Services
• Primary and
secondary service
options
• Innovation with
services
Copyright © 2016 Pearson Education Ltd. 14-20
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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Copyright © 2016 Pearson Education Ltd. 14-21
FIGURE 14.5
SERVICE-QUALITY MODEL
Copyright © 2016 Pearson Education Ltd. 14-22
Improving
Service Quality
• Listening
• Reliability
• Basic service
• Service design
• Recovery
• Surprising
customers
• Fair play
• Teamwork
• Employee research
• Servant leadership
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Copyright © 2016 Pearson Education Ltd. 14-23
SERVQUAL SCALE
Copyright © 2016 Pearson Education Ltd. 14-24
Extending the Service-Quality
Model• 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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Copyright © 2016 Pearson Education Ltd. 14-25
Incorporating Self-Service
Technologies
• SSTs can:
– Make transactions more
accurate
– Make transactions more
convenient
– Make transactions faster
– Reduce costs
Copyright © 2016 Pearson Education Ltd. 14-26
Managing Product-Support
Services• Three types of customer worries
Failure frequency
Downtime
Out-of-pocket costs
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Copyright © 2016 Pearson Education Ltd. 14-27
POSTSALE SERVICE STRATEGY
• Customer-service evolution
• The customer-service imperative
Copyright © 2016 Pearson Education Ltd. 14-28