Marketing service management Market demand and forecasting Marketing service management Services management and quality

Aims To investigate how are services defined and classified To identify how services differ from goods To assess what service quality all about? Aims

. Services management (1). An overview . Services management (1). . Service quality (2).

. Marketing of services rather than products Services Marketing . Marketing of services rather than products . Referred to as being 'intangible‘ . Emphasis upon service rather than product Example = Financial, educational & leisure services Marketing variants

Kotler on Marketing Every business is a service business. Does your service put a smile on the customer’s face? Kotler, P., Keller, K, Brady, M., Goodman, M. and T. Hansen (2012) Marketing Management, 2nd Edition, London: Pearson.

Every business is a service business.

Differing business sectors Government sector Private Non-profit sector / charity Manufacturing sector # Service sector

What has facilitated the growth in the service sector Quality of life changes Technology Deregulation Services Growth Franchising growth Competition Need for specialization Privatization

Contrasting Goods & Services Intangibles Customer/Provider relationship Service encounter – “moment of truth” Simultaneous production & consumption No storage/inventory Service quality control

Goods and services

Service An idea, task, experience, or activity that can be exchanged for value to satisfy the needs and wants of consumers and businesses. Kotler, P., Keller, K, Brady, M., Goodman, M. and T. Hansen (2012) Marketing Management, 2nd Edition, London: Pearson.

The Nature of Services Categories of Service Mix Pure tangible good (table) Hybrid, tangible goods with accompanying services (table with after care service) Pure service (banking)

The Nature of Services Characteristics of Services Intangibility Service positioning strategy can be made tangible through: Place People Equipment Communication material Symbols Price (see next slide for example)

Making it all tangible Place People Equipment Communication material Symbols Price

Intangibility made tangible by reassuring logos.

Intangibility made tangible by reassuring logos. Five minute exercise. Can you think of any logos can imply reassurance and security. What is it particularly about the companies logo that facilitates this.

Kotler on Marketing Every business is a service business. Does your service put a smile on the customer’s face? Kotler, P., Keller, K, Brady, M., Goodman, M. and T. Hansen (2012) Marketing Management, 2nd Edition, London: Pearson.

The Nature of Services Variability (different, changeable) Quality control by: Good hiring and training procedures. Service blueprint. Monitoring customer satisfaction.

The Nature of Services Perishability Managing demand by:- Differential pricing Nonpeak demand Complementary services Reservation systems Part-time employees Peak-time efficiency Increased consumer participation Shared services Facilities for future expansion

Marketing Strategies for Service Firms Three Additional Ps (we already know of McCarthy's 4p’s) (1964) (product, price, promo & place). People Physical evidence Process McCarthy, E. J.(1964), Basic Marketing. IL. Homewood. Booms, B & Bitner, M. (1981) Marketing Strategies and Organizational Structures for Service Firms. In J.H. Donnelly, W.R. George (Eds.), Marketing of Services. Chicago. , American Marketing Association.

Marketing Strategies for Service Firms Service Companies face three tasks: Competitive differentiation Service quality Productivity Palmer, A. (2011). Principles of Services Marketing, 6th Edition, London: McGraw Hill.

Marketing Strategies for Service Firms Five determinants of service quality Reliability Responsiveness Assurance Empathy Tangibles Palmer, A. (2011). Principles of Services Marketing, 6th Edition, London: McGraw Hill.

Managing Product Support Services Customers have major worries Reliability and failure frequency Out-of-pocket costs of maintenance and repair Palmer, A. (2011). Principles of Services Marketing, 6th Edition, London: McGraw Hill.

Service quality Beauty is in the eye of the beholder, so is quality. A quality item to you, might not be a quality item to me.

Is this quality Can you think of an item that you would describe as being a quality item. Please list its attributes.

Service quality What is service quality ? Service quality is a term which describes a comparison of expectations with performance (Anon).

Service quality SQ is associated with:- understanding and improving operational processes identifying problems quickly / systematically establishing valid and reliable service performance measures measuring customer satisfaction measuring other performance outcomes

Dimensions of service quality (1) Ten determinants which may influence the appearance of a gap were described by Parasuraman, Zeithaml and Berry 1985) Competence is the possession of the required skills and knowledge to perform the service. Courtesy refers to factors such as politeness, respect, consideration and friendliness of the contact personnel; consideration for the customer's property and a clean and neat appearance of contact personnel. Credibility refers to factors such as trustworthiness, belief and honesty. It involves having the customer's best interests at prime position. It may be influenced by company name, company reputation and the personal characteristics of the contact personnel. Security represents the customer being free from danger, risk or doubt including physical safety, financial security and confidentiality. Access refers to approachability and ease of contact. For example, convenient office operation hours and locations. Communication means both informing customers in a language they are able to understand and also listening to customers. Knowing the customer means making an effort to understand the customer's individual needs, providing individualized attention, recognizing the customer when they arrive and so on. Tangibles are the physical evidence of the service, for instance, the appearance of the physical facilities, tools and equipment used to provide the service; the appearance of personnel and communication materials and the presence of other customers in the service facility. Reliability is the ability to perform the promised service in a dependable and accurate manner. The service is performed correctly on the first occasion, the accounting is correct, records are up to date and schedules are kept. Responsiveness refers to the readiness and willingness of employees to help customers in providing prompt timely services, for example, mailing a transaction slip immediately or setting up appointments quickly. Parasuraman, Valarie, A. Zeithaml, A & Berry, L. (1985) A Conceptual Model of Service Quality and Its Implications for Future Research. Journal of Marketing. Vol. 49, No. 4 pp. 41-50

Dimensions of service quality (2) Competence = professional staff. Courtesy = hello sir. Credibility = yes all our goods are fully refundable. Security = if its broken sir, we will replace it, all our payment systems are secure and safe. Access hours and location = accessibility 24 hours a day. Communication = yes sir I will call you back in 5 mins. Knowing the customer = hello sir, I see here you phoning form the UK. Tangibles = uniform, staff appearance, toilets. Reliability = yes sir it will arrive tomorrow at 10am. Responsiveness = to customer needs.

Dimensions of service quality (3) Tangibles = uniform, staff appearance, toilets etc.

Dimensions of service quality Using the ten determinants of service quality as described by Parasuraman, Zeithaml and Berry (1985) Pick one organisation (public, private or voluntary) and review its ability to provide for its client / customer base using the 10 determinants.

Conclusion Service management and service quality are inextricably linked. By correctly managing service provision, good service quality should emerge. Highly motivated staff are key to this process.

Service related Baron, S., Conway, T. and G. Warnaby (2010). Relationship Marketing: A Consumer Experience Approach, London: Sage. Gronroos, C. (2007) Services Management and Marketing : Customer Management in Service Competition, 3rd Edition, London: John Wiley. Porter, M.E. (1985) Competitive advantage: Creating and sustaining superior performance, New York: Free Press.

Related reading Achrol, R, S. and Kotler, P (2006) ‘The Service-Dominant Logic for Marketing: A Critique’, in R.F. Lusch and S.L. Vargo (eds) The Service-Dominant Logic of Marketing: Dialog, Debate, and Directions, pp. 320–333. Armonk, NY: ME Sharpe. Grönroos, C. (2006) ‘What Can a Service Logic Offer Marketing Theory?’, in R.F. Lusch and S.L. Vargo (eds) The Service-Dominant Logic of Marketing: Dialog, Debate, and Directions, pp. 354–364. Armonk, NY: ME Sharpe . Karmakar, U.(2004) Will you survive the services revolution? Harvard Bus. Rev. 82(6):100–107. Normann, R.(2001) Rethinking Business. Chichester: Wiley . Vargo, S. & Lusch, R. (2004) ‘The Four Services Marketing Myths: Remnants from a Manufacturing Model’ , Journal of Service Research 6(4): 324–335