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?