1 Source: Robert Morris University, Service Marketing

Key Concepts 2  Service Culture  Intangibility  Inseparability  Variability  Perishability  Internal marketing  Interactive marketing  Making the service product Tangible  Trade dress  Physical evidence  Point of encounter

The Service Culture 3 A Service Culture indicates that, for everyone in the provider organization, Customer Satisfaction is the top priority and that service provider activities demonstrably contribute to the business objectives of the Customer.

The Service Culture 4 Service Culture: A culture that supports customer service through policies, procedures, reward systems, and actions.  Service culture can be implemented:  Through employee communication  Through company policies  Through personal actions

Characteristics Intangible Inseparable Variable Perishable 5

Intangibility Services can not be seen, tasted, felt, heard, or smelled. Tangible evidences reduce uncertainty High risk associated with services. Lack of tangibility after the experience Companies should create memorable guest experiences Tangibles provide signals as to the quality of the intangible service. Exterior and Interior design Uniforms of employees 6

Inseparability  Customer-contact employees are part of the product  Other customers become part of service  The employee becomes part of service  The customer and the employee interact with the service delivery system.  Customers and employees must understand the service delivery system.  Select, hire and train customers.  Select and train contact employees  Empower employees 7

Variability Services are highly variable Services are produced and consumed simultaneously. Service consistency depends on the service provider’s skill. Fluctuating demand makes it difficult to deliver consistent quality. Lack of consistency a major source of customer disappointment. Guest expectations are different. Train contact and non-contact employee 8

Perishability  Lack of ability to inventory – services can not be stored  Capacity and demand must be successfully managed  If services are to maximize revenue, they must manage capacity and demand.  Change customer use pattern (Hourly, daily, seasonally)  Cross-train employees  Involve customer in the service delivery system 9

Management Strategies for Service Business 10  Service firms use marketing to position themselves strongly in chosen target markets.  In a service business the customer and frontline service employee interact to create service  Service providers must work to interact effectively with customers to create superior value.  Successful service companies focus their attention on both their employees and customers.

Interactive Marketing Interactive Marketing: buyer-seller interaction Perceived service quality depends heavily on the quality of the buyer-seller interaction during the service encounter. technical quality functional quality The customer judges service quality not just on technical quality (the quality of the food) but also its functional quality (the service provided in the restaurant). 11

Tangible Strategies for Service Business Promotional material Employees’ appearance, and uniforms Physical environment Building exteriors Equipment Furniture and fixture Signs 12

Service Business Consistency  Consistency is one of the key factor in the success of a service business.  Basically, this means that customers receive the service they expect without unwanted surprises.  Many factors work against consistency  100% satisfaction guarantee  On-going Customer rating system 13