Designing and Managing Services Marketing Management, 13 th ed 13

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-2 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?

13-3 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.

13-4 Service Sectors Government Private nonprofit Manufacturing Business Retail

13-5 Categories of Service Mix Pure tangible good—soup, salt Good w/ accompanying services— cell phones Hybrid--restaurants Service w/ accompanying goods-- airplane Pure service--babysitting

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-6 Service Distinctions Equipment-based (automatic car washers) or people-based (window washing, accounting services) Service processes (restaurants have cafeteria-style, fast-food, buffet) Client’s presence required (brain surgery) or not (car repair) Personal needs or business needs Service Providers--Objectives (profit or nonprofit) and ownership (private or public)

13-7 Continuum of Evaluation for Different Types of Products

13-8 Distinctive Characteristics of Services Intangibility Inseparability Variability Perishability

13-9 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

13-10 Mayo Clinic’s Tangible Cues

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Matching Demand and Supply Demand side Differential pricing—shift some demand from peak to off-peak periods Nonpeak demand—can be cultivated Complementary services—alternatives to waiting Reservation systems— way to managed the demand level Supply side Part-time employees—can serve at peak demand Peak-time efficiency — perform only essential tasks during peak periods Increased consumer participation—can be encouraged to participate Shared services—several providers can use Facilities for future expansion—good investment

13-12 Blue Man Group includes 33 different performers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Improving Service Quality Listening—understand what customer really wants Reliability—must be a service priority Basic service—keep promises Service design—holistic view and manage details Recovery—satisfy customers who encounter a service problem Surprising customers — exceeding customer expectations Fair play—make special efforts to demonstrate to customers and employees Teamwork—enables large organizations to deliver service with care and attentiveness Employee research----to reveal why service problem occur and how to solve problems Servant leadership—develop service quality corporate culture

13-14 Consumer-Friendly Services

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Holistic Marketing for Services External Marketing—the normal work of preparing, pricing, distributing, and promoting the service to the customer Internal Marketing—training and motivating employees to serve customers well Interactive Marketing—employees’ in serving the client; technical (successful solution to problem or question) and functional (concern and inspire confidence)

13-16 How to Increase Quality Control Invest in good hiring and training procedures Monitor customer satisfaction Standardize the service-performance process

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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

13-18 General Motors’ OnStar Service

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

13-20 IBM has moved from a goods business to a service business

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

13-22 Determinants of Service Quality Reliability— dependably and accurately Responsiveness— provide prompt service Assurance— convey trust and confidence Empathy—caring, individualized attention to customers Tangibles—physical facilities, Equipment, personnel

13-23 Best Practices Strategic Concept—customer obsessed Top-Management Commitment —to service High Standards—reliability, resilience, and innovativeness Self-Service Technologies— convenience in service Monitoring Systems—audit service performance Satisfying Customer Complaints —empower employees Satisfying Employees—customer orientation to employees

13-24 Tracking Customer Service Performance

13-25 Customer Importance and Performance Ratings for an Auto Dealership

13-26 Developing Brand Strategies for Services Choosing Brand Elements —name, logo, symbols, characters, slogans Establishing Image Dimensions—brand personality Devising Branding Strategy — portfolio, positioning, targeting

13-27 Customer Worries Failure frequency (reliability) Downtime (service dependability) Out-of-pocket costs (regular maintenance and Repair costs)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Top Customer Service Providers Four Seasons Hotels Cadillac Nordstrom Starbucks Lexus UPS Enterprise Rent-a- Car Ritz-Carlton Southwest Airlines

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Study Question 1 Which of the following would be an example of a hybrid service? A.University B.Professor C.Restaurant D.Soap manufacturer E.Airline

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Study Question 2 Services vary as to whether they are equipment based or ________. A.service based B.people based C.process based D.historical based E.none of the above

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Study Question 3 Unlike physical goods, services are produced and ________ simultaneously. A.launched B.consumed C.created D.maximized E.none of the above

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Study Question 4 Services depend on who provides them and when and where they are provided. They are highly ________. A.suspect B.variable C.consistent D.substandard E.none of the above

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Study Question 5 Services cannot be stored. This concept is unique to service marketers and is called ________. A.standardization B.heterogeneity C.perishability D.intangibility E.none of the above