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 What are Services?

î: productive-unproductive labour«did not

contribute to wealth.


: Immaterial products«simultaneous
prod. & consumption.
 

! !"performances, offering desired results
(expected value) to customers in exchange for their
money, time and efforts. The value comes from
access to a variety of value-creating elements rather
than from transfer of ownership.
 èxamples of Service Industries
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 Why Study Services?
India¶s services sector has matured considerably during
the last few years and has been globally recognized for
its high growth and development. India ranks 15th in
Services output and provides 23% of total workforce.

There has been rapid growth in the services exports, up

from US $ 19.1 billion to US $ 73 billion in 2006-07.

Services sector account for about 56% of India¶s GDP.

India¶s share in worldwide service exports is expected to
almost triple itself from current 2.3 % to 6 % by 2012, if
the present annual growth rate of 28% has been
maintained.
 Tangibility Spectrum
 

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½arketing Challenges: due to
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 Services are Different
  

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Tangible Intangible Services cannot be inventoried.
Services cannot be patented.
Services cannot be readily displayed or communicated.
Pricing is difficult.
Standardized Heterogeneous Service delivery and customer satisfaction depend on
employee actions.
Service quality depends on many uncontrollable factors.
There is no sure knowledge that the service delivered
matches what was planned and promoted.
Production Simultaneous Customers participate in and affect the transaction.
separate from production and Customers affect each other.
consumption consumption èmployees affect the service outcome.
Decentralization may be essential.
½ass production is difficult.
Nonperishable Perishable It is difficult to synchronize supply and demand with
services.
Services cannot be returned or resold.
èxpanded ½arketing ½ix for Services

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 èxpanded ½arketing ½ix for Services
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‡ èxplain what services are and identify service

trends.
‡ èxplain the need for special services marketing
concepts and practices.
‡ Outline the basic differences between goods
and services and the resulting challenges for
service businesses.
‡ Introduce the service marketing triangle.
 

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‡ Search Qualities
± attributes a consumer can determine prior to
purchase of a product
‡ èxperience Qualities
± attributes a consumer can determine after
purchase (or during consumption) of a
product
‡ Credence Qualities
± characteristics that may be impossible to
evaluate even after purchase and
consumption
 Continuum of èvaluation for Different
Types of Products

   
  



èasy to evaluate
Difficult to evaluate

High in search High in experience High in credence

qualities qualities qualities
Stages in Consumer Decision ½aking and
èvaluation of Services
Categories in Consumer Decision-½aking
and èvaluation of Services
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Discussions:

‡ Services: Search versus èxperience versus

Credence Properties?
‡ Services: Categories in the Decision-making
Process and Framework of the Chapter
‡ The Role of Culture in Services
Gaps ½odel of Service Quality
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 Gaps ½odel of Service Quality
‡ Customer Gap:
± difference between expectations and
perceptions
‡ Provider Gap 1: Between customer
expectations & company perceptions of
customer expectations
± not knowing what customers expect
- Inadequate mktg research orientation
- Lack of upward communication
- Insufficient relationship focus
- Inadequate service recovery
 Gaps ½odel of Service Quality
‡ Provider Gap 2:
Between cust-driven service designs
and standards & ½gmt. perceptions of
cust. expectations
± not having the right service designs and
standards
- Poor service design
- Absence of customer-driven standards
- Inappropriate physical evidence and
servicescape.
 Gaps ½odel of Service Quality
‡ Provider Gap 3:
Between cust-driven service designs
and standards & service delivery
± not delivering to service standards
- Deficiencies in human resource policies
- Customers who do not fulfill roles
- Problems with service intermediaries
- Failure to match supply and demand
 Gaps ½odel of Service Quality
‡ Provider Gap 4:
Between service delivery & external
communications to customers
± not matching performance to promises
- Lack of integrated services marketing
communications
- Ineffective management of customer
expectations
- Over-promising
- Inadequate horizontal communications
The Customer Gap

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Discussions:

‡ Difference between customer expectations and

perceptions.
‡ How to minimize the 4-GAP¶s in èntertainment
Sector like ½ovie Theater.
‡ Can Provider gap 4 be closed before closing
rest three provider gaps.
 

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‡ Search Qualities
± attributes a consumer can determine prior to
purchase of a product
‡ èxperience Qualities
± attributes a consumer can determine after
purchase (or during consumption) of a
product
‡ Credence Qualities
± characteristics that may be impossible to
evaluate even after purchase and
consumption
 Continuum of èvaluation for Different
Types of Products

   
  



èasy to evaluate
Difficult to evaluate

High in search High in experience High in credence

qualities qualities qualities
Stages in Consumer Decision ½aking and
èvaluation of Services
Categories in Consumer Decision-½aking
and èvaluation of Services
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Discussions:

‡ Services: Search versus èxperience versus

Credence Properties?
‡ Services: Categories in the Decision-making
Process and Framework of the Chapter
‡ The Role of Culture in Services
Possible Levels of Customer èxpectations
Dual Customer èxpectation Levels






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‡ Discuss controllable and uncontrollable sources
of customer expectations.
‡ Distinguish between customers¶ global
expectations of their relationships and their
expectations of the service encounter.
‡ Acknowledge that expectations are similar for
many different types of customers.