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Chapter
Introduction to Services
What are services? Why services marketing? Characteristics of Services Compared to Goods Services Marketing Mix
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Professional Services
accounting, legal, architectural
Financial Services
banking, investment advising, insurance
Hospitality
restaurant, hotel/motel, bed & breakfast ski resort, rafting
Travel
airline, travel agency, theme park
Others
hair styling, pest control, plumbing, lawn maintenance, counseling services, health club, interior design
McGraw-Hill/Irwin 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Figure 1.2
Tangibility Spectrum
Salt
Intangible Dominant
Tangible Dominant
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Traditional marketing course has more focus on manufacturing and packaged goods (like P&G, Unilever, General Foods) There is a need for Marketing concepts specifically for Services Service initiatives and promoting service quality leads to competitive advantage and so to profits Customer satisfaction index for services is declining
McGraw-Hill/Irwin 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Figure 1.1
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Source: Inside Sams $100 Billion Growth Machine, by David Kirkpatrick, Fortune, June 14, 2004, p 86. 2006 The McGraw-Hill Companies, Inc. All rights reserved.
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Table 1.2
Source: A. Parasuraman, V.A. Zeithaml, and L. L. Berry, A Conceptual Model of Service Quality and Its Implications for Future Rese arch, Journal of Marketing 49 (Fall 1985), pp. 4150.
McGraw-Hill/Irwin 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Intangibility
Heterogeneity
Perishability
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Implications of Intangibility
Services cannot be inventoried
Services cannot be easily patented
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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
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Implications of Perishability
It is difficult to synchronize supply and demand with services
Services cannot be returned or resold
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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 deliveredthe service delivery and operating systems.
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Table 1.3
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Chapter
Figure 2.1
Expected service
Customer Gap
Perceived service
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Provider Gap 1: Not knowing what customers expect Provider Gap 2: Not selecting the right service designs and standards Provider Gap 3: Not delivering to service standards Provider Gap 4: Not matching performance to promises
Customer Perceptions
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Figure 2.2
Gap 1
Figure 2.3
Gap 2
Poor service design Unsystematic new service development process Vague, undefined service designs Failure to connect service design to service positioning Absence of customer-driven standards Lack of customer-driven service standards Absence of process management to focus on customer requirements Absence of formal process for setting service quality goals Inappropriate physical evidence and servicescape Failure to develop tangibles in line with customer expectations Servicescape design that does not meet customer and employee needs Inadequate maintenance and updating of the servicescape
Figure 2.4
Gap 3
Service Delivery
McGraw-Hill/Irwin 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Figure 2.5
Gap 4
Figure 2.6
Expected Service
Perceived Service
Service Delivery External Communications to Customers
COMPANY
Gap 3 Gap 1 Gap 2
Gap 4
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The Customer Gap Chapter 3 Consumer Behavior in Services Chapter 4 Customer Expectations of Service Chapter 5 Customer Perceptions of Service Gap 1 Not Knowing What Customers Expect (The Knowledge Gap) Chapter 6 Listening to Customers through Research Chapter 7 Building Customer Relationships Chapter 8 Service Recovery Gap 2 Not Having the Right Service Quality Designs and Standards (The Service Design and Standards Gap) Chapter 9 Service Development and Design Chapter 10 Customer-Defined Service Standards Chapter 11 Physical Evidence and the Servicescape Gap 3 Not Delivering to Service Standards (The Service Performance Gap) Chapter 12 Employees Roles in Service Delivery Chapter 13 Customers Roles in Service Delivery Chapter 14 Delivering Service through Intermediaries and Electronic Channels Chapter 15 Managing Demand and Capacity Gap 4 Not Matching Performance to Promises (The Communication Gap) Chapter 16 Integrated Services Marketing Communications Chapter 17 Pricing of Services
2006 The McGraw-Hill Companies, Inc. All rights reserved.
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