Services and Other Intangibles: Marketing the Product That Isn’t There

Chapter Objectives Describe the four characteristics of services Understand how services can be classified along a service continuum Explain core and augmented services, marketing of services on the Internet, and the elements of the service encounter Appreciate the importance of the three attributes of service quality to marketers: search qualities, experience qualities, and credence qualities Discuss the concepts of SERVQUAL and gap analysis Explain the marketing of people, places, and ideas

Marketing What Isn’t There Intangibles: services and other experience-based products that cannot be touched Does marketing work for intangibles? Yes!

What Are Services? Services are acts, efforts, or performances exchanged from producer to user without ownership rights.

Characteristics of Services Intangibility: can’t see, touch, or smell good service Perishability: can’t store a service for later sale or consumption Capacity management: firms adjust their services to match supply with demand

Characteristics of Services (cont’d) Variability: can’t standardize the same service performed by the same individual Inseparability: can’t separate production from consumption Service encounter: the interaction between the customer and the service provider Disintermediation: eliminating the interaction between customers and salespeople

Classification of Services by Inputs and Tangibility Figure 10.1

The Services Continuum

The Services Continuum (cont’d) Goods-dominated products Equipment- or facility-based services Operational factors (Clear signs) Locational factors Environmental factors People-based services

Core and Augmented Services Core service: the benefit a customer gets from the service Augmented service: core service plus additional services that enhance value INDOOR CLIMBING WALL AT UNIVERSITY OF HOUSTON

Services on the Internet Anything that can be delivered can be sold on the Web --Banking and brokerage services --Software --Music --Travel services --Career-related services --Medical care

Discussion Why are first impressions formed about a service on the Internet so important? What can a service firm do to ensure a favorable first impression online?

The Service Encounter Social elements: employees and customers Physical elements: servicescapes and other intangibles

Providing Quality Service: Service Quality Attributes Search qualities: examine before purchase Experience qualities: determine during or after consumption Credence qualities: evaluate after experiencing them (difficult to do)

Discussion Sometimes service quality may not meet customers’ expectations. --What problems have you experienced with quality in the delivery of the following services? A restaurant meal An airline flight Automobile repairs Your college education

Measuring Service Quality SERVQUAL Tangibles, Reliability, Responsiveness, Assurance, Empathy. Gap analysis Expectations & Mgr perception Mgr perception & quality standards Quality standards & service delivery Standards & consumer expectations Expected and actual service Critical incident technique A method for measuring service quality in which marketers use customer complaints to identify critical incidents – specific face-to-face contacts between consumer and service providers that cause problems and lead to dissatisfaction.

Strategies for Developing and Managing Services Act fast to resolve a service failure. Identify potential failures and make recovery plans ahead of time. Train employees to listen for complaints and empower them to take action.

The Future of Services New dominant logic for marketing Changing demographics Globalization Technological advances Shift to flow of information

Marketing People Marketing people Politicians Celebrities

Marketing Places Marketing places Attempting to position a city, state, country, or other locale so consumers choose the brand over competing destinations

Marketing Ideas Marketing ideas Gaining market share for a concept, philosophy, belief, or issue LICKGLOBALWARMING.COM MADD

Marketing Plan Exercise Select a familiar service such as a bank, an airline, or even your university. Develop strategies for creating a servicescape that will be a positive influence on customers’ purchase decisions, their evaluations of service quality, and their ultimate satisfaction with the service.