1. Service Marketing

2. Service Economy
An economic system or sector based on buying and selling of services
Financial services
Health services
Hospitality
Retail
Human Services
Education
Information technology
Knowledge-based economy
Research
Technology
Consulting

3. Services Defined
The American Marketing Association & the Asia Marketing Federation define services as follows:
Service products, such as a bank loan or home security, that are intangible, or at least substantially so
Services, as a term, is also used to describe activities performed by sellers and others that accompany the sale of a product and that aid in its exchange or its utilization

4. Services as a Percentage of GDP
United States
About 80% of GDP
Projected to increase to 82%
Finance, insurance, real estate
Singapore
About 66% of GDP
Projected to increase to 72%
Financial services and information technology

5. Service Characteristics
Intangibility
No physical characteristics (may have a tangible component)
Cannot be inventoried
Cannot be patented
Cannot be readily displayed
Inseparability
Unable to separate service from provider
Produced and consumed at the same time
Perishability
Services are perishable
Services cannot be returned or resold
Airlines: Output is perishable at the time it is produced

6. Service Characteristics
Pricing strategy can be used to address these problems
Off peak pricing consists of charging different prices during different times in days in order to stimulate demand during slow periods.
Ryanair

7. Service Characteristics
Customer involvement
Higher in production of many types of services
Airlines – internet reservations
Quality of services more varied than the quality of goods
Production process is complex for airlines
Activities of many departments have to come together at the right time in the right way

8. Service Characteristics
Client participation
Two marketing challenges:
Customer is uncertain about how genuine the professional’s concern for his or her satisfaction is.
Even high-quality service delivery by the professional can lead to dissatisfied customers.
Airlines must convey a caring attitude
Address complaints quickly & positively
Passenger does headstand on plane

9. Quality Service Subjective
Expectations, perceptions, and experiences differ between the service provider and consumer.
Service gaps
The gap between consumer expectations and management perceptions of consumer expectations.
The gap between management perceptions of consumer expectations and the firm’s service quality specifications.
The gap between service quality specifications and actual service quality.
The gap between actual service delivery and external communications about the service.

10. Service Marketing Difficulties
Defining and improving quality
Communicating and testing new services
Maintaining a consistent image
Motivating and sustaining employee commitment
Setting prices
Standardization versus personalization
Source:

11. Internal Marketing Internal Marketing Service quality
Marketing the firm and its policies to employees as if they were customers
Service quality
Customer satisfaction depends on employee actions
Essential to have customer-oriented, frontline people
Uncertain as to whether the service delivered match the service expected as a result of the firm’s promotion

12. Services Marketing Triangle
Source:

13. Customer Satisfaction
Research on customer satisfaction measurement (CSM) focuses on:
Understanding the expectations and requirements of the customer
Determining how well your company and its major competitors are delivering these expectations and requirements

14. Seven Ps for Services Traditional marketing mix Expanded marketing mix
4 Ps – product, place, price and promotion
Expanded marketing mix
Building customer relationships through
People
Employees, customers, communicating culture and values, employee research
Processes
Facility design, equipment, signage, employee dress
Physical Evidence
Flow of activities, number of steps, level of customer involvement
Source:

15. Seven Ps for Services Who is the customer? What is the service?
Effectiveness of the services marketing mix to communicate benefits and quality
What changes or improvements are needed?
Source:

16. Service in the Travel Industry
Airline industries have been the leaders in the use of technology
Use of Internet sites
Technology helps airlines to make strategic pricing decisions through the use of yield management
Use of elaborate computer programs enable managers to determine customer segments