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Services Marketing
The service sector
More than half of our GDP (59 – 60%) is accounted for from the services sector
This sector dominates with the best jobs, best talent and best incomes
What is a Service?A service is any act of performance that one party can offer another that is essentially intangible and does not result in the ownership of anything; its production may or may not be tied to a physical product.
Kotler
What is services?
It is the part of the product or the full product for which the customer is willing to see value and pay for it.
Services should meet Personal needs – haircuts, tuition, Business needs – courier services, office
cleaning services, delivering fresh flowers
Categories of Service Mix Pure tangible good Good with accompanying services Hybrid Service with accompany goods Pure service
The Nature of Services
regardless of the “product”, there is a services component to the offerings of all firms
in some cases, a service is the principal purpose of the transaction, as in the rental of a car, a haircut, or legal services -- we refer to this as the core servicecore service
in others, service is performed in support of the sale of a tangible product -- these are referred to as supplementary servicessupplementary services
Cannedfoods
Ready-madeclothes
Auto-mobiles
Carpets Rest-aurantmeals
Repairs: auto, house, landscaping
Airtravel
Insurance,Consulting,Teaching
MOSTLY GOODS MOSTLY SERVICES
The Goods-Services Continuum
The service Is intangible. does not result in ownership. may or may not be attached with a physical
product
Services Unique characteristic - 1
INTANGIBILITY
Customer is unable to experience the ‘product’ prior to ‘purchase’
Services Unique characteristic - 2
PERISHABILITY
Can’t be stored
Services Unique characteristic - 3
INSEPERABILITY
Production & consumption
happen at the same place and cannot be separated
Services Unique characteristic - 4
VARIABILITY
Difficulty in establishing consistency in quality across Providers or within providers across Time across Delivery Centers
Distinctive Characteristics of Services Intangibility - difficult to sample and to evaluate Inseparability - difficult to separate services from the
service provider; mainly direct sales; staff are essential to the delivery of quality services
Variability - every service is different; very difficult to standardize quality
Perishability - those not sold can not be stored
fluctuating demand -fluctuating demand - demand for some services fluctuates by season, or even by time of day
Difference between physical goods and servicesPhysical goods Services
tangible intangible
homogeneous heterogeneous
Production and distribution are separated from consumption
Production, distribution and consumption are simultaneous processes
A thing An activity or process
Core value processed in factory Core value produced in the buyer-seller interaction
Customers do not participate in the production process
Customers participate in production
Can be kept in stock Cannot be kept in stock
Transfer of ownership No transfer of ownership
The three additional ‘P’s of Service Marketing (7Ps) People Physical evidence Process
Managing Service Quality Quality is hard to define, measure, control, and communicate Quality is defined by the consumer It’s important to measure customer satisfaction with an
organization’s service quality. Customers see five important components:
Core serviceCore service must measure up. Quality of serviceQuality of service, meeting expectations. Technical aspectsTechnical aspects of delivery. InteractionInteraction with people who deliver service. Affective dimensionsAffective dimensions:: How customers feel.
Qualities of services Search qualities Experience qualities Credence qualities
Differentiation in services Offering Faster and better delivery Image
Managing Service quality Gap between management perceptions and
consumer expectations Gap between management perceptions and
service quality specifications Gap between service quality specifications and
service delivery Gap between service delivery and external
communication Gap between expected service and perceived
service
Patient Expectations Good Medical Care Good Nursing Care Less Waiting Time Excellent Hospitality Personal Attention Courteous Behavior Affordable Charges
Cleanliness Good Coordination Cooperation among the
Staff Discipline Communication &
Information Transparency in
charges and procedures
Determinants of service quality Reliability – delivering on promises Responsiveness – willing to help Assurance – inspiring trust and confidence Empathy – individualizing customers Tangibles- physical representation
Improving Service Quality Listening Reliability Basic service Service design Recovery
Surprising customers Fair play Teamwork Employee research Servant leadership
instant of truth
Every positive or negative experience of the consumer would have fall-out on the overall service experience
In services, the last experience remains uppermost in your mind. Therefore, it is not enough to be
good, you have to be consistently good
Service quality is directly proportional to employee
satisfaction
When customers visit a service firm
Their satisfaction will be influenced by Encounters with service personnel Appearance and features of service
facilities – exterior and interior Interactions with self service equipment Characteristics and behavior of other
customers
Customer Service Expectations Desired Service – the ‘wished for’ service Adequate Service – the service that would
be acceptable
Zone of Tolerance
Difference between the desired service and the adequate service
Service Encounter Themes Recovery Adaptability Spontaneity Coping
RecoveryDon’t
Ignore customer Blame customer Leave customer to
fend for himself Downgrade Act as if nothing is
wrong ‘pass the buck’
Do Acknowledge
problem Explain causes Apologies Compensate/upgrade Lay out options Take responsibility
AdaptabilityDon’t
Promise and fail to keep them
Show unwillingness to try
Embarrass the customer
Laugh at the customer Avoid responsibility
Do Recognize the
seriousness Acknowledge Anticipate Accommodate Adjust Explain rules/policies
SpontaneityDon’t
Exhibit impatience Yell/laugh/swear Steal from customers Discriminate Ignore
Do Take time Be attentive Anticipate needs Listen Provide information Show empathy
CopingDon’t
Take customer’s dissatisfaction personally
Let customer’s dissatisfaction affect others
Do Listen Try to accommodate Explain Let go of the
customer
Satisfied employees will produce satisfied customers
Morale Motivation Mood