Services and Other Intangibles:

Marketing the Product That Isn’t There

2

Chapter Objectives

• Describe the four characteristics of services• Understand how services can be classified along a

service continuum• Explain core and augmented services, marketing of

services on the Internet, and the elements of the service encounter

• Appreciate the importance of the three attributes of service quality to marketers: search qualities, experience qualities, and credence qualities

• Discuss the concepts of SERVQUAL and gap analysis• Explain the marketing of people, places, and ideas

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Real People, Real Choices

• Universal’s Theme Parks in Orlando (Robyn Eichenholz)

• How to plan for anticipated record-breaking attendance at Donna Summer in concert Option 1: don’t make any special plans for the event Option 2: create a plan to accommodate extremely large crowds Option 3: publicize the big expected turnout to let guests know

the event might be exceptionally crowded

4

Marketing What Isn’t There

• Intangibles: services and other experience-based products that cannot be touched

• Does marketing work for intangibles? Yes!

5

What Are Services?

• Services are acts, efforts, or performances exchanged from producer to user without ownership rights.

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Characteristics of Services

• Intangibility: can’t see, touch, or smell good service

• Perishability: can’t store a service for later sale or consumption Capacity management: firms adjust their services to

match supply with demand

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Characteristics of Services (cont’d)

• Variability: can’t standardize the same service performed by the same individual

• Inseparability: can’t separate production from consumptionService encounter: the interaction between the

customer and the service providerDisintermediation: eliminating the interaction between

customers and salespeople

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Classifying Services

• We can classify bywhether the service is performed directly on the

customer or on something the customer owns whether the service consists of tangible or intangible

actions

9

The Services Continuum

• Most products are a combination of goods and services

• Products vary in their level of tangibility.Tangible: salt, necktie, dog food Intangible: teaching, nursing, theaterBalanced products: fast food, television

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The Services Continuum (cont’d)

• Goods-dominated products

• Equipment- or facility-based services

• People-based services

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Core and Augmented Services

• Core service: the benefit a customer gets from the service

• Augmented service: core service plus additional services that enhance value

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Services on the Internet

• Anything that can be delivered can be sold on the Web --Banking and brokerage services --Software --Music --Travel services --Dating services --Career-related services --Medical care

13

The Service Encounter

• Social elements: employees and customers

• Physical elements: servicescapes and other intangibles

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Providing Quality Service: Service Quality Attributes

• Search qualities: examine before purchase

• Experience qualities: determine during or after consumption

• Credence qualities: evaluate after experiencing them (difficult to do)

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Measuring Service Quality

• SERVQUAL

• Gap analysis

• Critical incident technique

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Strategies for Developing and Managing Services

• Act fast to resolve a service failure.

• Identify potential failures and make recovery plans ahead of time.

• Train employees to listen for complaints and empower them to take action.

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The Future of Services

• New dominant logic for marketing

• Changing demographics

• Globalization

• Technological advances

• Shift to flow of information

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Marketing People

• Marketing peoplePoliticians Celebrities

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Marketing Places

• Marketing places Attempting to position a city, state, country, or other

locale so consumers choose the brand over competing destinations

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Marketing Ideas

• Marketing ideasGaining market share for a concept, philosophy,

belief, or issue

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Real People, Real Choices

• Universal’s Theme Parks in Orlando (Robyn Eichenholz)

• Robyn selected a combination of options 2 and 3 to alleviate crowding concerns and enhance the guest experience. In addition to enjoying themselves in the concert area,

guests partied in the streets and had a great evening.

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Marketing in Action Case:You Make the Call

• What is the decision facing XM Satellite Radio?

• What factors are important in understanding this decision situation?

• What are the alternatives?• What decision(s) do you recommend?• What are some ways to implement your

recommendation?

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Keeping It Real: Fast-Forward to Next Class Decision Time at Taco Bell

• Meet Danielle Blugrind, Director of Consumer and Brand Insights for Taco Bell.

• Competitors claimed they provided better fast-food value.

• The decision: How to update the Taco Bell value menu pricing.