© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin MANAGING SERVICES 12 C HAPTER

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Describe four unique elements of services. Recognize how services differ and how they can be classified. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Understand the way in which consumers purchase and evaluate services. Develop a customer contact audit to identify service advantages. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Understand the important role of internal marketing in service organizations. Explain the role of the four Ps in the services marketing mix. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin THE HARD ROCK CAFÉ KNOWS WHAT YOU WANT: AN EXCEPTIONAL EXPERIENCE MANAGING SERVICES

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Four I’s of Services Intangibility Inconsistency Inseparability Inventory  Idle production capacity Idle production capacity The Service Continuum THE UNIQUENESS OF SERVICES

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Classifying Services Delivery by People or Equipment THE UNIQUENESS OF SERVICES

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Classifying Services (cont) Profit or Nonprofit Organizations Government Sponsored or Not THE UNIQUENESS OF SERVICES

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What are the four I’s of services? A: Intangibility, Inconsistency, Inseparability, Inventory.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. Would inventory carrying costs for an accounting firm with certified public accountants be: a) high, b) medium, or c) low? A: High

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 3. To eliminate service inconsistencies, companies rely on _____________ and _______. standardization Concept Check training

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Purchase Process  Search properties  Experience properties  Credence properties HOW CONSUMERS PURCHASE SERVICES

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Assessing Service Quality  Gap Analysis Gap Analysis HOW CONSUMERS PURCHASE SERVICES

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Customer Contact and Relationship Marketing  Customer contact audit Customer contact audit A Customer’s Car Rental Activities  Relationship marketing HOW CONSUMERS PURCHASE SERVICES

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What are the differences between search, experience, and credence properties? A: Search properties can be determined before purchase, experience properties can only be assessed during or after consumption. Credence properties may be impossible to evaluate even after purchase and consumption.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 2. Hertz created its differential advantage at the points of __________________ in their customer contact audit. customer interaction Concept Check

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Internal marketing Product (Service) Exclusivity Branding Capacity Management Pricing  Off-peak pricing Off-peak pricing Place (Distribution) Promotion MANAGING THE MARKETING OF SERVICES

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin  Deregulation  Technological development SERVICES IN THE FUTURE

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 1. Matching demand with capacity is the focus of ________ management. capacity Concept Check

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. How does a movie theater use off-peak pricing? A: Movie theaters reduce prices for matinees and often for weekdays.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. What factors will influence future changes in services? A: Deregulation and technological development.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Intangible activities, benefits, or satisfactions that an organization provides to consumers in exchange for money or something else of value. Services

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Four unique elements to services: intangibility, inconsistency, inseparability, and inventory. Four I’s of Service

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin When the service provider is available but there is no demand. Idle Production Capacity

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A range from the tangible to the intangible or good-dominant to service-dominant offerings available in the marketplace. Service Continuum

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin An evaluation tool that compares expectations about a service offering to the actual experience a consumer has with the service. Gap Analysis

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A flowchart of the points of interaction between customer and service provider. Customer Contact Audit

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers. Internal Marketing

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Integrating the service component of the marketing mix with efforts to influence consumer demand. Capacity Management

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Charging different prices during different times of the day or days of the week to reflect variations in demand for the service. Off-Peak Pricing