Chapter 13: Services Marketing

Growth and importance of services-
-service: effort performance or deed that cannot be possessed; usually provided through the application of human and or mechanical efforts directed at ppl or objects
-service is dominated by the intangible aspect
-not to be confused with customer service that adds value to product, however service goods can also have customer service
-customers rely more on brand image as a cue for quality
Importance of services
-the marketing of services can be challenging, because services are intangible products as opposed to goods which are physical and tangible objects
Homesourcing
-a practice whereby customer contact jobs are outsourced into worker’s homes
Service growth
-US has been experiencing a long stretch of economic growth
-led to increase in ppl wanting more, different things
-ppl dont want to do certain things and now want to do other certain things
Characteristics of services
-services are marketed differently from goods
-six basic characteristics
1. intangibility
2. inseparability of production and consumption
3. perishability
4. heterogeneity
5. client-based relationships
6. customer contact
Intangibility
-the characteristic that a service is not physical and cannot be perceived by the senses
-ie. knowledge from school
-hard to have a pure good. all products are on a spectrum of tangible and intangible
-customer service is intangible aspect of good
Inseperability
-the quality of being produced and consumed at the same time
-products are produced, serviced, and consumed at the same time ie. air flight
-goods can be bought and stored for later use
-customers and service providers must be present at the same time and must work together to receive full benefit of service
-thus ppl expect to be served in certain ways
Perishability
-the inability of unused capacity to be stored for future use
-ie. empty seats on plane, day old basketball tickets
Heterogenity
-variation in quality
-goods can be mechanized to uphold a lvl of performance however human nature does not guarantee a consistent quality
-varies from day to day, hour to hour, person to person within organization
-however, training and establishment of standard procedures can help provide consistency
Client-Based relationships
-interactions that result in satisfied customers who use a service repeatedly over time
-lawyers, accountants, advisers call customers clients and maintain close, long term relationships
-word of mouth is important factor bc it draws in other customers to maintain consumers on an ongoing basis
Customer contact
-the level of interaction between provider and customer needed to deliver the service
-high customer contact usually has service directed at ppl
-thus it is required for customer to go to production facility which may be a major component in the overall evaluation of service
-high contact:employees are crucial. high satisfaction of employees result in high quality performance
-ie. Ritz encourages employee to be confident about decisions and empowers them
Developing and managing marketing mixes for services
-characteristics of services make it a challenge for service marketers in developing and managing marketing mixes for services
-look at four p’s
1. Development of Services
-services offered by organization is usually in a bundle with core services and supplementary services
-core service is basic service experience or commodity a customer expects to receive
-heterogeneity makes it hard to standardize service but has advantage to service marketers: they can customize it in a way to meet customer’s specific needs
-dilemma: how to provide service at acceptable quality in an efficient and economic manner and still satisfy individual needs
-solved by offering standardized packages and offering other “premier” packages
-intangibilty makes it hard for customers to know what to expect; solve by adding tangible cues of quality such as nice looking facility and uniformed professionals
2. Distribution of Services
-some go to service provider facility, others come to customer’s home or business(lawncare)
-others are at “arm’s-length” meaning no face to face contact occurs with customer ie. tv, online, phone services
-marketing channels for service are usually direct and short meaning producer delivers service straight to consumers
-very concerned with inventory management due to characteristics of inseperability and customer contact
-hard to balance supply and demand; uses appointments and reservations as approaches for scheduling delivery of services
-to make delivery more accessible and increase supply of services, firms are turning to automated services with less customer contact
3. Promotion of services
-intangibility of service makes it a challenge to promote bc you cant depict actual performance
-promotion depends on tangible cues that symbolizes service (Allstate cupped hands: protected, trustworthy) makes customer understand intangible attributes
-to make more tangible ads often show pics of facilities, personnel and equipment
-concrete specific language to make more tangible in customers mind
-careful not to promise too much so customer expectations arent too high
-personnel selling of services is important bc personal influence can help customers visualize the service
Pricing of Services
-services should be priced with consumer price sensitivity, the nature of the transaction and its costs in mind
-prices established in several different bases
-performance of specific task (pest-control, carpet cleaning, health consultations)
-time (lawyers, piano teachers, counselors)
-demand based pricing
-some sevices are very demand sensitive in that many customers may want it at a particular time “peak demand” ie. airline
-customers can get better deals by purchasing on non-peak times
-bc of intangibility customers rely heavily on price as an indicator of quality
Service Quality
-customers perception of how well a service meets or exceeds their expectations
-completely dependent on end-user
-hard to determine bc of intangible nature
Search Quality
-tangible attributes that can be judged prior to the purchase of a product
-goods have but not services
Experience qualities
-attributes that can be assessed only during purchase and consumption of a service
Credence Qualities
-attributes that customer’s may be unable to evaluate even after purchasing and consuming the product ie. surgeries, car maintenance
Five dimensions of service quality
1.tangibles
2.reliability
3.responsiveness
4.assurance
5. empathy
-reliability is most important
tangibles
-physical evidence of services
-appearance of facility
-appearance of service personnel
-tools or equipments used
-ie. clean doctor’s office
Reliability
-consistency and dependability in performing the service

-accuracy of billing or recordkeeping
-performing services when promised

Responsiveness
-willingness or readiness of employees to provide the service
Assurance
-knowledge/competence of employees and ability to convey confidence and trust

-company name and rep

Empathy
-caring and individual attention provided by employees
Delivering Exception Service Quality–
-must assess four factor of service quality
1. analysis of customer expectations
2. service quality specifications
3. employee performance
4 management of service ecpectations
Analysis of customer expectations
-first need to understand cus. expec. to meet or exceed expectations
-2 lvls of expectations desired (satisfied) and acceptable (adequate)
-the diff. of two levels know as “zone of tolerance”
-surveys and comment cards, ask employees
Service Quality specifications
-specify how services are going to enacted to meet needs
Employee Performance
-contact employees can perform well if they are trained effectively to understand the job
Management of Service expectations
-cant promise too much but you have to promise bc service is intangible
-make sure to deliver on expectations
nonprofit marketing
-marketing activities conducted to achieve some goal other than ordinary business goals such as profit etc
-objective is to get a desired response from target: change in views, financial donations, or volunteer
Target Public
-a collective of individuals who have an interest in or concern about an organization, products, or social cause
Client Public
-direct consumers of a nonprofit organization ie. student in university
General Public
-Indirect consumers of a product of a nonprofit organization