managing services ● professor chip besio ● cox school of business ● southern methodist...
TRANSCRIPT
Managing Services
●Professor Chip Besio●Cox School of Business●Southern Methodist University
CONSUMER WANT AUTHENTIC EXPERIENCES!
Services are now a larger part of the U.S. gross domestic product (GDP)
THE UNIQENESS OF SERVICESTHE FOUR I’S OF SERVICES
Four I’s of Services• Intangibility – Cannot perceive with 5 senses
• Inseparability – cannot separate from provider
• Inconsistency – can vary with each occasion
• Inventory – in people based services, inventory goes home each night
The result - Idle Production Capacity
Singapore Airlines, American Express, and AllstateWhat 4 I’s of services element?
Inventory carrying costs of services depend on the cost of employees and equipment
THE UNIQENESS OF SERVICESTHE CONTINUUM & CLASSIFICATION OF SERVICES
Service Continuum
Classifying Services
• Delivery by People or Equipment
• Profit or Nonprofit Organizations
• Government Sponsored
The service continuum shows how offerings can vary in their balance of goods and services
Services can be classified as equipment-based or people-based
Red Cross, Unicef, andSusan G. Komen Race for the Cure
What is the classification of each service?
HOW CONSUMERSPURCHASE SERVICES
The Purchase Process
• Search Properties
• Experience Properties
• Credence Properties
Consumers use search, experience, and credence properties to evaluate services
The five dimensions of service quality
HOW CONSUMERSPURCHASE SERVICES
Customer Contact andRelationship Management
• Customer Contact Audit
• Service Encounters
• A Customer’s Car Rental Activities
• Relationship Marketing
Customer contact audit for a car rental agency (green boxes = customer activity; orange boxes = employee activity)
MANAGING THE MARKETING OF SERVICESTHE EIGHT Ps OF SERVICES
Eight Ps of Services Marketing
Product (Service)
• Branding
Price
• Off-Peak Pricing
MANAGING THE MARKETING OF SERVICESTHE EIGHT Ps OF SERVICES
Place (Distribution)
Promotion
• Publicity
• Public Service Announcements (PSAs)
MANAGING THE MARKETINGOF SERVICES
People• Internal Marketing
• Customer Experience Management (CEM)
Physical Environment
Process
Productivity
• Capacity Management
Different prices and packages help match demand to capacity
● Price plays two essential roles regarding
the pricing of services: 1. To affect consumer perceptions and 2. To be used in capacity management.
● Off-peak pricing consists of charging different prices during different times of the day or days of the week to reflect variations in demand for the service.
MANAGING THE MARKETINGOF SERVICES -PRICING
●Place or distribution is a major factor in developing a service marketing strategy because of the inseparability of services from the producer.
●As competition grows, the value of convenient location becomes more important.
●The availability of electronic distribution through the World Wide Web now provides global coverage for travel services, banking, entertainment, and many other information-based services.
MANAGING THE MARKETINGOF SERVICES -PLACE
●In most cases promotional concerns of services are similar to those of products.
●The value of promotion (advertising) is to stress:●availability●location●consistent quality●and efficient, courteous ●service
Heart by-pass Surgery
20% discount forweekend
procedures
MANAGING THE MARKETINGOF SERVICES -PROMOTION
MANAGING THE MARKETINGOF SERVICES -PROMOTION
PROFESSIONAL SERVICES●A Supreme Court case in 1976 struck down
constraints by professional organizations to constrain the advertising of professional services, specifically the American Medical Association and the American Bar Association.
●Although opposition to advertising still remains in some professional groups, the barriers to promotion are being broken down, mostly in response to competitive pressures.
MANAGING THE MARKETINGOF SERVICES -PROMOTION
●Publicity has played a major role in the promotional strategies of nonprofit services and some professional services.
●Many nonprofit groups have relied on Public Service Announcements (PSAs) as the foundation of their media plan because they are free.
USING MARKETING DASHBOARDSAre JetBlue’s Flights Profitably Loaded?
Airline Operating Income (Loss) per Available Seat Flown One Mile (ASM)
Operating Income (Loss)Flown ASM
= Yield Load Factor Š Operating Expense
LO6
Technological Advances
• Mobility
• Convergence
Expanding Global Economy
SERVICES IN THE FUTURE
• Personalization
• Collaboration