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Marketing Management Text and Cases

Excel Books23-1

Marketing of

Services

23Chapter

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Characteristics of Services

Typical characteristics of services include

1. Intangibility

2. Inseparability ofproduction and consumption

3. Heterogeneity

4. Perishability

5. Client-based relationship

6. Customer contact.

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Service

Characteristics

Intangibility Difficult to evaluate, Marketer sells a promise, Difficult to

advertise, Difficult to justifyprices, Goods augmented with

intangible services.

Inseparability Activities of service production and consumption are

simultaneous, Consumers must participate in production.

Consumer does not take physical possession of service, Role of

service provider critical.

Heterogeneity Considerable variation in man-based service quality, Quality

control difficult, Difficult to standardise service delivery.

Perishability Services cannot be stored. Very difficult to balance supply and

demand, Unused capacity lost for ever, Considerable variation in

demand.

Client-Based

Relationship

Success depends on satisfied customers in the long-run,

Customer relationship maintenance is critical. Retaining a groupof satisfied customers essential.

Customer

Contact

Service providers commitment critical to delivery, High-level of

employee training and motivation essential to success, Service

marketers try to change high-contact services into low-contact

services without affecting customer satisfaction.

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Classification of Services

Despite considerable diversity, services can also be classified on the basis of

different categories:

Type of market.

Degree of labour intensiveness.

Degree of customer contact.

Skill of service provider.

Goal of service provider.

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The

Service

Continuum

Education Ad

Agency

Health

Care

Air

Travel

Restaurant Retail

Store

Autos House Sugar

Tangible(Good-Dominant)

Intangible(Service-Dominant)

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Developing Marketing Strategies for Services

Marketing mix for services is an extended one and includes 7Ps.

Three more Ps for service products marketing and include people, physical

evidence, and process.

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People of a service organisation involved in production and delivery ofservices are a vital element of the marketing mix.

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Physical evidence reduces the risk perception by customers byoffering tangible evidence of the promised service delivery.

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Process is of critical importance to consumers in high-contact services.

Service marketers can choose among different processes to deliver their

services to consumers.

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Services Involve

Three Types of

MarketingCompany

InternalMarketing ExternalMarketing

Employees Consumers

InteractiveMarketing

ChildcareServices

FinancialServices

AirTravel

Services

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Service Quality and Differentiation

Service quality as the customers perception of how well a service meets or

exceeds their expectations.

Customer Satisfaction = Perceived Delivered Service Expected Service

Service Quality Evaluation

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Model of

Service-

Quality

Word-of-MouthCommunications

Personal Needs Past Experience

Expected

Service

Perceived Service

Service Delivery(including pre and

post-delivery contacts

ExternalCommunicationsto Consumers

Translation ofPerceptions intoService-QualitySpecifications

Management'sPerceptionsof ConsumerExpectations

CONSUMER

MARKETER

GAP3

GAP5

GAP

4

GAP1

GAP

2

(Source: Slightly modified from

A. Prasuraman, Valarie A.

Zeithaml, and Leonard

L. Berry, A Conceptual Model

ofService Quality and Its

Implications for Future

Research, Journal of

Marketing, Fall 1985).

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Marketing of Services

Monitoring Service Performance

Service companies can use several methods to monitor their

performance, such as ghost shopping, putting in place an efficient system

of receiving consumer complaints and suggestions, and conducting

surveys etc.