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Designing and Managing Services

Marketing Management, 13th ed

Chapter Questions
How do we define and classify services and how do they differ from goods? How do we market services? How can we improve service quality? How do services marketers create strong brands? How can goods marketers improve customer support services?
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-2

IBM has moved from a goods business to a service business

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What is a Service?

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.

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Service Sectors

Government

Private nonprofit

Business

Retail

Manufacturing
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General Motors OnStar Service

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Categories of Service Mix

Pure tangible goodsoup, salt
Good w/ accompanying services cell phones Hybrid--restaurants Service w/ accompanying goods-airplane Pure service--babysitting
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Service Distinctions
Equipment-based (automatic car washers) or people-based (window washing, accounting services) Service processes (restaurants have cafeteria-style, fast-food, buffet) Clients presence required (brain surgery) or not (car repair) Personal needs or business needs Service Providers--Objectives (profit or nonprofit) and ownership (private or public) Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-8

Continuum of Evaluation for Different Types of Products

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Distinctive Characteristics of Services

Intangibility Inseparability
Variability Perishability
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Physical Evidence and Presentation

Place exterior and interior
People sufficient number of people
Equipment computers, copying machine
Communication material printed materials

Symbols names and symbols

Price
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Mayo Clinics Tangible Cues

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Blue Man Group includes 33 different performers

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How to Increase Quality Control

Invest in good hiring and training procedures

Standardize the service-performance process Monitor customer satisfaction

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Consumer-Friendly Services

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Matching Demand and Supply

Demand side
Differential pricingshift some demand from peak to off-peak periods Nonpeak demandcan be cultivated Complementary servicesalternatives to waiting Reservation systems way to managed the demand level

Supply side
Part-time employeescan serve at peak demand Peak-time efficiency perform only essential tasks during peak periods Increased consumer participationcan be encouraged to participate Shared servicesseveral providers can use Facilities for future expansiongood investment
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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Improving Service Quality

Listeningunderstand what customer really wants Reliabilitymust be a service priority Basic servicekeep promises Service designholistic view and manage details Recoverysatisfy customers who encounter a service problem
Surprising customers exceeding customer expectations Fair playmake special efforts to demonstrate to customers and employees Teamworkenables large organizations to deliver service with care and attentiveness Employee research----to reveal why service problem occur and how to solve problems Servant leadershipdevelop service quality corporate culture
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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Holistic Marketing for Services

External Marketingthe normal work of preparing, pricing, distributing, and promoting the service to the customer Internal Marketingtraining and motivating employees to serve customers well Interactive Marketingemployees in serving the client; technical (successful solution to problem or question) and functional (concern and inspire confidence)
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-18

Holistic Marketing for Services

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Solutions to Customer Failures

Redesign processes and redefine customer roles to simplify service encounters Incorporate the right technology to aid employees and customers Create high-performance customers by enhancing their role clarity, motivation, and ability Encourage customer citizenship where customers help customers
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-20

Factors Leading to Customer Switching Behavior

Pricing Inconvenience Core Service Failure Service Encounter Failures Response to Service Failure Competition Ethical Problems Involuntary Switching
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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Gaps that Cause Unsuccessful Service Delivery

Gap between consumer expectation and management perception Gap between management perception and service-quality specifications Gap between service-quality specifications and service delivery Gap between service delivery and external communications Gap between perceived service and expected service
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Determinants of Service Quality

Reliability dependably and accurately Responsiveness provide prompt service Assurance convey trust and confidence Empathycaring, individualized attention to customers

Tangiblesphysical facilities, Equipment, personnel

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Best Practices

Strategic Conceptcustomer obsessed Top-Management Commitment to service High Standardsreliability, resilience, and innovativeness Self-Service Technologies convenience in service Monitoring Systemsaudit service performance Satisfying Customer Complaints empower employees Satisfying Employeescustomer orientation to employees

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Tracking Customer Service Performance

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Customer Importance and Performance Ratings for an Auto Dealership

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Developing Brand Strategies for Services

Choosing Brand Elements name, logo, symbols, characters, slogans Establishing Image Dimensionsbrand personality Devising Branding Strategy brand hierarchy and portfolio, positioning, targeting

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Customer Worries
Failure frequency (reliability) Downtime (service dependability)
Out-of-pocket costs (regular maintenance and Repair costs)
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Top Customer Service Providers

USAA Four Seasons Hotels Cadillac Nordstrom Wegman Food Markets Edward Jones Lexus UPS Enterprise Rent-aCar Starbucks Ritz-Carlton Amica Insurance Southwest Airlines

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

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