CHAPTER ONE

Services Marketing

What is a service?

One definition of a service:Activities, deeds, or other basic intangibles

offered for sale to consumers in exchange for money or something else of value.

Examples of Service Industries

Health Care Hospital, medical practice, dentistry, eye care

Professional Services Accounting, legal, architectural, consulting

Financial Services Banking, investment advising, insurance

Hospitality Restaurant, hotel/motel, bed and breakfast Ski resort, rafting

Travel Airline, travel agency, theme park

Others Hair styling, pest control, plumbing, lawn maintenance,

counseling services, health club, interior design

Product-Service Continuum

Sugar Restaurant

University

Education

Pure Tangible

Good

Pure Service

Tangibility Spectrum

TangibleDominant

IntangibleDominant

SaltSoft Drinks

DetergentsAutomobiles

Cosmetics

AdvertisingAgencies

AirlinesInvestment

ManagementConsulting

Teaching

Fast-foodOutlets

Fast-foodOutlets

Figure 1.2

Characteristics of Services Compared to Goods

Intangibility

Perishability

SimultaneousProduction

andConsumption

Heterogeneity

Implications of Intangibility

Services cannot be inventoried

Services cannot be easily patented

Services cannot be readily displayed or communicated

Pricing is difficult

Implications of Heterogeneity

Service delivery and customer satisfaction depend on employee and customer 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

Customers participate in and affect the transaction

Customers affect each other

Employees affect the service outcome

Decentralization may be essential

Mass production is difficult

Implications of Perishability

It is difficult to synchronize supply and demand with services

Services cannot be returned or resold

Challenges for Services

Defining and improving qualityDesigning and testing new servicesCommunicating and maintaining a consistent imageAccommodating fluctuating demandMotivating and sustaining employee commitmentCoordinating marketing, operations, and human resource

effortsSetting pricesFinding a balance between standardization versus

personalizationEnsuring the delivery of consistent quality

Service and Technology

Potential for new service offerings

New ways to deliver service

Enabling both customers and employees

Extending the global reach of services

The Internet

What’s Happening?

Facebook in the news! http://www.technewsworld.com/story/69950.html

Expanded Mix for Services –The 7 Ps

ProductPricePlacePromotionPeople

All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment.

Physical Evidence The environment in which the service is delivered and

where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.

Process The actual procedures, mechanisms, and flow of activities

by which the service is delivered—the service delivery and operating systems.

Ways to Use the 7 Ps

Overall strategic assessment (of the firm)How effective is a firm’s services marketing mix?Is the mix well-aligned with overall vision and strategy?What are the strengths and weaknesses in terms of the 7

Ps?Specific service implementationWho is the customer? Why would this be important?What is the service?How effectively does the services marketing mix for a

service communicate its benefits and quality?What changes/ improvements are needed?