Services Marketing

The physical goods—service continuum Pure Service Pure Good Clothing Carpets Machinery Software design Marketing research Psychotherapy

Characteristics of services IntangibilityInseparability VariabilityPerishability Service characteristics

Characteristics of services Inseparability VariabilityPerishability Service characteristics Intangibility a deed, performance or effort difficulty in evaluation use tangible cues benefits on non- ownership

Characteristics of services VariabilityPerishability Service characteristics Inseparability simultaneous production and consumption importance of service provider selection, training and rewarding of staff avoid inter-customer conflict Intangibility

Characteristics of services IntangibilityInseparability Perishability Service characteristics Variability standardisation difficult selection, training and rewarding of staff evaluation systems use of reliable equipment

Characteristics of services IntangibilityInseparabilityVariability Service characteristics Perishability consumption cannot be stored match supply and demand use of part-time staff multi-skilling participation by consumers differential pricing stimulation of off-peak demand comfortable waiting area reservation system

Managing services 1.Managing customer relationships. 2.Managing service quality. 3.Managing service productivity. 4.Managing service staff.

Managing customer relationships Benefits for the organization Increased purchases Lower cost Lifetime value of a customer Sustainable competitive advantage Word of mouth Employee satisfaction and retention Benefits for the customer Risk and stress reduction Higher-quality service Avoidance of switching costs Social and status benefits

Developing customer retention strategies Internal marketing Targeting customers for retention Bonding Customer retention Promise fulfillment Building trust Service recovery

Barriers to the matching of expected and perceived service levels Barriers misconceptions inadequate resources inadequate delivery exaggerated promises Expected servicePerceived service

Tesco Tesco targets new mums by meeting their needs and expectations.

Managing service productivity 1.Technology. 2.Customer involvement in production. 3.Balancing supply and demand.

Managing service staff ‘Moments of truth’ crucial. High levels of customer service requires: - selection of suitable staff. - training and socialization. - empowerment. - motivation. - evaluation.

Positioning for services Services marketing mix Target customer needs Positioning Target segment Differential advantage

Positioning for services Services marketing mix Positioning Target segment Differential advantage accessibility reliability credibility security responsiveness courtesy competence confidence wide selection value prestige guarantees credit comfort privacy technical advice speed Target customer needs

Positioning for services Target customer needs Positioning Target segment Differential advantage price promotion place product people physical evidence process Services marketing mix

HSBC HSBC’s Plus account offers customers extra services, such as preferential rates, insurance and discounts on travel and entertainment for a monthly fee.

Target and halo customers Target customers Halo customers

Achieving differentiation in service quality Customers’ perception of your performance on criterion Target area Underperformance Overkill High Low High Value of criterion to customers

Retailing: Major store & non-store types Catalogue stores Discount houses Convenience store Category killers Specialty shops Mail order Department stores Automatic vending Supermarkets Retailers (the final link with the consumer) Online retailers

Theories of retail evolution Wheel of retailing Theories of Retail Evolution Retail Accordion Retail life cycle

Retail Evolution: Wheel of retailing 4. New outlet enters resembles #1 1. Outlet starts with low price low margin low status Time passes 2. Outlet now has higher prices higher margins higher status 3. Outlet now has Still higher prices Still higher margins Still higher status

Key retailing marketing decisions Retail positioning Retailing marketing decisions Store location Product assortment and services Price Store atmosphere

Retailing differentiation Process innovation Total innovation Non-innovation Product innovation Process differentiation Source; Davies, G. and N. Sanghavi (19993) Is the Category Killer a Significant Innovation? Product differentiation

Characteristics of non-profit marketing Education vs. meeting current needs Non-profit marketing characteristics Multiple publics Measurement of success and conflicting objectives Public scrutiny

Oxfam Oxfam urges the public to be ‘Humankind’ and buy from its clothing shops to raise money for the charity.

Marketing procedures for non-profit organizations 1.Targeting marketing and differentiation. 2.Developing a marketing mix.

Core Reading Core reading to support this topic can be found in Chapter 22 of your recommended text