2. Chapter 14 Services Marketing

3. Objectives Understand nature and importance of services
Identify characteristics of services that differentiate them from goods
Describe how the characteristics of services influence development of marketing mixes for services
Understand importance of service quality and explain how to deliver exceptional service quality
Explore nature of nonprofit marketing

4. The Nature and Importance of Services
Services as products
Relationship to economic growth and lifestyle
Business services
Theater framework

5. Characteristics of Services
Intangibility – not perceived by the senses or physically possessed
Inseparability – being produced and consumed simultaneously
Perishability – unused services can’t be used at a future time
AUA Presentation, Hallas, 21 November 2005, p.1

6. The Tangibility Continuum

7. Characteristics of Services (cont’d)
Heterogeneity – variation in quality
Client-based Relationships – interactions resulting in satisfied customers who use a service repeatedly
Customer contact – the necessary level of interaction between provider and customer to deliver the service
Customer Contact Association

8. Developing and Managing Mixes for Services
K. Douglas Hoffman and John E. G. Bateson, Services Marketing: Concepts, Strategies, and Cases, 3rd ed. (Cincinnati: Thomson/South-Western, 2006); Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations (New York: Free Press, 1990); Leonard L. Berry and A. Parasuraman, Marketing Services: Competing through Quality (New York: Free Press, 1991), p. 5.

9. Development Of Services
Core Service- basic
Supplementary Service- differentiates from bundle of competitors’
Customization vs. Standardization
Dilemma
Acceptable quality
Efficient manner
Satisfy customer needs

10. Intangibility And Service Delivery
Promises raise expectations
Personnel
Physical facility
High-contact employees

11. Distribution Of Services
Provider’s facility
Customer home/business
“Arm’s length”
Marketing channel
Direct
Short
Equipment supported

12. Promotion Of Services Intangibility Tangible cues Promote
Price
Guarantees
Performance documentation
Availability
Training/certification
Personal selling
Word-of-Mouth

13. Pricing Of Services Performance Time Demand-based
Indicator of quality- paint and pricing (scroll 3/4 down page)
Market conditions

14. Service Quality
Customers’ perception of how well a service provider meets or exceeds their expectations.

15. Search Qualities
Tangible attributes (of product) such as color, style, size, feel, fit that can be evaluated prior to purchase.

16. Experience Qualities
Attributes, such as taste, satisfaction, or pleasure, which can be assessed only during purchase and consumption of a service.

17. Credence Qualities
Attributes that customers may be unable to evaluate even after purchasing and consuming a service.

18. Dimensions Of Service Quality
Adapted from Leonard L. Berry and A. Parasuraman, Marketing Services: Competing through Quality (New York: Free Press, 1991 ); Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations (New York: Free Press, 1990); A. Parasuraman, Leonard L. Berry, and Valarie A. Zeithaml, “An Empirical Examination of Relationships in an Extended Service Quality Model,” Marketing Science Institute Working Paper Series, Report no. 90–112 (Cambridge, MA: Marketing Science Institute, 1990), p. 29.

19. Delivering Exceptional Service Quality
Analysis of customer expectations
Zone of tolerance
Service Quality Specifications
Goals and commitment
Employee Performance
Evaluation and compensation
Management of Service Expectations
Realistic expectation; word-of-mouth

20. Service Quality Model
Adapted from A. Parasuraman, Leonard L. Berry, and Valarie A. Zeithaml, “An Empirical Examination of Relationships in an Extended Service Quality Model,” Marketing Science Institute Working Paper Series, Report no. 90–112, Reprinted by permission of Marketing Science Institute, and the authors.

21. Nonprofit Marketing
Activities conducted to achieve some goal other than ordinary business goals such as profit, market share, or return on investment
Muscular Dystrophy Association

22. How Is Nonprofit Marketing Different?
Not considered a business
Greater opportunity for creativity
Difficult to measure performance
Sometimes controversial
Provide body of knowledge

23. Nonprofit Marketing Objectives
Change values
Financial contribution
Donation of services
Shaped by nature of exchange and goals
United Way

24. Developing Nonprofit Marketing Strategies
Target Markets
Target
Client
General
Develop Market Mix
Product = abstract ideas/concepts
Distribution = right media
Promotion = multiple methods
Pricing = fixed and variable costs

25. Opportunity Cost
The value of the benefit given up by selecting one alternative over another.