1. Agenda for Day One Welcome and Introduction Why are you here ?
Discuss course outline
Introduction to the subject

2. Background to Services Marketing
Growing number of school graduates are recruited in service industries.
Service sector as a percentage of Gross National Product is substantial and has grown significantly in most countries including Ghana.
Inadequacy of manufacturing or product based Marketing models
Services Marketing course seeks to teach students the concepts, frameworks and analytical procedures that are best suited to examine and resolve challenges faced by managers in service businesses.

3. Course Objectives
Explain important concepts, principles, theories, models and tools of services marketing and apply them to specific business cases.
Explain the frameworks for developing service policy and service marketing strategy and apply the frameworks in developing service policies and service marketing strategies.
This course will give an exposure and opportunity to apply the concepts and principles that successful service businesses use to achieve customer satisfaction and profitable performance.

4. Learning Outcomes Create a service policy
Appraise service delivery and quality of organizations and recommend remedies for delivering outstanding service.
Craft a service marketing strategy or plan.

5. Teaching/Learning Activities
“ Learning is not a spectator sport. Students do not learn much just by sitting in class listening to teachers, memorizing pre-packaged assignments, and spitting out answers. They must talk about what they are learning, write about it, relate it to past experiences, apply it to their daily lives. They must make what they learn part of themselves.” (Chickering and Gamson, 1987, p. 3)
“One must learn by doing the thing, for though you think you know it—you have no certainty until you try” (Sophocles, 5th c. B.C.)

6. Teaching/Learning Activities
Achieve Active Learning Bonwell and Eison (1991) describe active learning as “ involving students in doing things and thinking about the things they are doing.” “Doing” refers to activities such as debates, simulations, guided design, group problem solving and case studies. “Thinking” refers to reflections about the meaning of what students learn or about learning process itself

7. Learning Activities for Holistic, Active Learning
Getting Information & Ideas
Experience
Reflection
Lectures
Textbooks
Articles
Guest Speakers
Doing
Case Studies
Tutorials
Role Play
Team Projects/Assignment
Fair
Observing
Industrial Visit
Stories: Films/Oral
Mystery Shopping
Reflection Papers
Journaling

8. Ashesi University COURSE TITLE : SERVICES MARKETING
SEMESTER : SECOND, 2011/2012
MODULE 8: Introduction to Services Marketing
Lecturer: Ebow Spio

9. Learning Objectives Explain service and services marketing
Understand the growing role of the service sector in the economy
Appreciate marketing challenges associated with services relative to goods
Build a case for an expanded marketing mix for services
Explain the framework for developing and implementing service marketing strategies

10. Defining Services
“ Something that can be bought and sold but that cannot be dropped on your foot” The Economist
“ The production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange, satisfies an identified need” Palmer 2007
“ A service is an activity or series of activities of a more or less intangible nature that normally take place in interactions between the customer and the service employee or systems of the provider, which are provided as solutions to customer needs or problems” Hinson 2004
“Services are deeds, processes, and performance provided or coproduced by one entity or person for another entity or person” Zeithaml et al
“Services are deeds, processes, and performance provided or coproduced by one entity or person for another entity or person” Zeithaml et al

11. Defining Services Services
Are economic activities offered by one party to another
Most commonly employ time-based performances to bring about desired results to:
recipients themselves
objects or other assets for which purchasers have responsibility
In exchange for their money, time, and effort, service customers expect to obtain value from
Access to goods, labor, facilities, environments, professional skills, networks, and systems
But they do not normally take ownership of any of the physical elements involved
Fresh new perspective—services is distinguished as benefits without ownership. Five broad categories within the non-ownership framework:
Rented goods services—provides customers with temporary right to exclusive use of physical good e.g. tractors, hiring car etc.
Defined space and place rentals—obtain a defined portion of a larger space and sharing its use with other customers, under varying degrees of privacy.
Labor and expertise rentals—hire others to work that they would either choose not to do, or lack the necessary expertise and tools to do.
Access to shared physical environments—may be located indoors or outdoors or a combination e.g. museums, theme parks, golf courses, gym, zoos, trade shows etc.
Systems and networks: access and usage—rent the right to participate in specified networks like telecommunications, utilities, etc.

12. Estimated Size of Service Sector in Selected Countries
Cayman Islands (95%), Jersey (93%)
Bahamas (90%), Bermuda ( 89%)
Luxembourg (83%)
Panama (80%), USA (79%)
Japan (74%), France (73%), U.K. (73%), Canada (71%)
Mexico (69%), Australia (68%), Germany (68%)
Poland (66%), South Africa (65%)
Israel (60%), Russia (58%), S. Korea (56%)
Argentina (53%), Brazil (51%)
India (48%)
China (40%)
Saudi Arabia (33%)
Services as Percent of GDP 10 20 30 40 50 60 70 80 90

13. Ghana :GDP & Labour Composition
GDP Composition
Labour Force Composition
Sector
2006 Est.
2010 Est.
Agriculture
33.6 %
29.9 %
Industry
25.1 %
18.6 %
Services
41.2 %
51.4 %
Sector
2005 Est.
Agriculture
56 %
Industry
15 %
Services
29 %

14. Services Pose Distinctive Marketing Challenges
Marketing management tasks in the service sector differ from those in the manufacturing sector
The eight common differences are:
Most service products cannot be inventoried
Intangible elements usually dominate value creation
Services are often difficult to visualize and understand
Customers may be involved in co-production
People may be part of the service experience
Operational inputs and outputs tend to vary more widely
The time factor often assumes great importance
Distribution may take place through nonphysical channels
What are marketing implications?
Since services are deeds or performances they cannot be put in stock for sale later. Services are transitory and perishable.
Intangible elements usually dominate value creation. Creating physical clues and strong brand associations helps to make services more tangible.
Customers are not able to visualize the the experience in advance of purchase or to understand what they will getting especially if they buying it for the first time.
Customers may be involved in co-production. Customers need to cooperate with service personnel in services such as hair salon, teaching, supermarkets, hospital service, working out at the gym etc.
People may be part of the service experience; Service personnel and other customers. Service personnel need to possess good interpersonal as well as technical skills. Other customers need to be educated to be polite and considerate of other customers.
Service execution often differs among employees, between the same employee and different customers, and even from time of day to another.
Main services are delivered in real time while customers are physically present. Increasingly busy customers expect service to be available when it suits them, rather than when it suits the supplier.
Distribution may take place through nonphyical channels e.g. Distance Learning. Banks have multiple channels e.g. branch, ATM, Telephone or Internet.

15. Differences, Implications, and Marketing-Related Tasks (1) (Table 1.1)
Most service products
cannot be inventoried
Intangible elements
usually dominate
value creation
Services are often
difficult to visualize
and understand
Customers may be
involved in co-
production
Implications
turned away
Harder to evaluate
service and distinguish
from competitors
Greater risk and
uncertainty perceived
Interaction between
customer and provider;
but poor task execution
could affect satisfaction
Marketing-Related Tasks
Use pricing, promotion, and
reservations to smooth
demand; work with ops to
manage capacity
Emphasize physical clues,
employ metaphors and vivid
images in advertising
Educate customers on
making good choices; offer
guarantees
Develop user-friendly
equipment, facilities, and
systems; train customers,
provide good support

16. Differences, Implications, and Marketing-Related Tasks (2) (Table 1.1)
Behavior of service
personnel and customers
can affect satisfaction
Hard to maintain quality,
consistency, reliability
Difficult to shield
customers from failures
Time is money;
customers want service
at convenient times
Electronic channels or
voice telecommunications
Difference
People may be part of
service experience
Operational inputs and
outputs tend to vary
more widely
Time factor often
assumes great
importance
Distribution may take
place through
nonphysical channels
Marketing-Related Tasks
Recruit, train employees to
reinforce service concept
Shape customer behavior
Redesign for simplicity and
failure proofing
Institute good service
recovery procedures
Find ways to compete on
speed of delivery; offer
extended hours
Create user-friendly,
secure websites and free
access by telephone

17. Value Added by Physical, Intangible Elements Helps Distinguish Goods and Services (Fig 1.6)
Physical Elements
High
Salt
Detergents
CD Player
Wine
Golf Clubs
New Car
Tailored clothing
Fast-Food Restaurant
Plumbing Repair
Health Club
Airline Flight
Landscape Maintenance
Consulting
Life Insurance
Internet Banking
Low
Intangible Elements
High
Source; Adapted from Lynn Shostack

18. The 8Ps of Services Marketing
Product Elements
Place and Time
Price and Other User Outlays
Promotion and Education
Process
Physical Environment
People
Productivity and Quality
Collectively these elements represent the ingredients required to create viable strategies for meeting customer needs profitably in a competitive marketplace
Fig 1.9 Working in Unison: The 8Ps of Services Marketing

19. The 8Ps of Services Marketing: (1) Product Elements
Embrace all aspects of service performance that create value
Core product responds to customer’s primary need
Array of supplementary service elements
Help customer use core product effectively
Add value through useful enhancements
Planning marketing mix begins with creating a service concept that:
Will offer value to target customers
Satisfy their needs better than competing alternatives

20. The 8Ps of Services Marketing: (2) Place and Time
Delivery decisions: Where, When, How
Geographic locations served
Service schedules
Physical channels
Electronic channels
Customer control and convenience
Channel partners/intermediaries

21. The 8Ps of Services Marketing: (3) Price and Other User Outlays
Marketers must recognize that customer outlays involve more than price paid to seller
Traditional pricing tasks:
Selling price, discounts, premiums
Margins for intermediaries (if any)
Credit terms
Identify and minimize other costs incurred by users:
Additional monetary costs associated with service usage (e.g., travel to service location, parking, phone, babysitting, etc.)
Time expenditures, especially waiting
Unwanted mental and physical effort
Negative sensory experiences

22. The 8Ps of Services Marketing: (4) Promotion and Education
Informing, educating, persuading, reminding customers
Marketing communication tools
Media elements (print, broadcast, outdoor, retail, the Internet, etc.)
Personal selling, customer service
Sales promotion
Publicity/PR
Imagery and recognition
Branding
Corporate design
Content
Information, advice
Persuasive messages
Customer education/training

23. The 8Ps of Services Marketing: (5) Process
How firm does things may be as important as what it does
Customers often actively involved in processes, especially when acting as co-producers of service
Process involves choices of method and sequence in service creation and delivery
Design of activity flows
Number and sequence of actions for customers
Nature of customer involvement
Role of contact personnel
Role of technology, degree of automation
Badly designed processes waste time, create poor experiences, and disappoint customers

24. The 8Ps of Services Marketing: (6) Physical Environment
Design servicescape and provide tangible evidence of service performances
Create and maintain physical appearances
Buildings/landscaping
Interior design/furnishings
Vehicles/equipment
Staff grooming/clothing
Sounds and smells
Other tangibles
Manage physical cues carefully— can have profound impact on customer impressions

25. The 8Ps of Services Marketing: (7) People
Interactions between customers and contact personnel strongly influence customer perceptions of service quality
The right customer-contact employees performing tasks well
Job design
Recruiting
Training
Motivation
The right customers for firm’s mission
Contribute positively to experience of other customers
Possess—or can be trained to have— needed skills (co-production)
Can shape customer roles and manage customer behavior

26. The 8Ps of Services Marketing: (8) Productivity and Quality
Productivity and quality must work hand in hand
Improving productivity key to reducing costs
Improving and maintaining quality essential for building customer satisfaction and loyalty
Ideally, strategies should be sought to improve both productivity and quality simultaneously—technology often the key
Technology-based innovations have potential to create high payoffs
But, must be user friendly and deliver valued customer benefits

27. Marketing Must Be Integrated with Other Management Functions (Fig 1
Three management functions play central and interrelated roles in meeting needs of service customers
Customers
Operations
Management
Marketing
Human Resources

28. A Framework For Developing Effective Service Marketing Strategies: Overview
Understanding Customer Needs, Decision Making, and Behavior in Service Encounters
Building the Service Model
Managing the Customer Interface
Value Proposition – specified package of benefits and solution, emphasizing key points of difference relative to competing alternatives ad how to it proposes to deliver them to target customers.
Implementing Profitable Service Strategies

29. Key Points The role of services sector
Service sector dominates economy in most nations, many new industries
The service concept and its definition:
Services create benefits without transfer of ownership
Most employ time-based performances to bring about desired results in recipients or in assets for which they have responsibility
Customers expect value from access to goods, facilities, labor, professional skills, environments, networks & systems in return for money, time, effort
Services present distinctive marketing challenges relative to goods, requiring:
Expanded marketing mix comprising 8Ps instead of traditional 4Ps
Integration of marketing function with operations and human resources

30. Tutorial Assignments
1. A debate “In today’s world, every firm is a service firm” 2. What is so distinctive about services marketing that it requires a special approach, set of concepts, and body of knowledge?