Chapter 10Module 1

Chapter 10Services and intangible market offerings

Chapter Objectives1. Describe the characteristics of services and the

ways marketers classify services.2. Appreciate the importance of service quality to

marketers.3. Explain the marketing of people, places, and

ideas.

Suppose an airline was considering eliminating pilot uniforms (in favor of suits).

As a member of the airline’s marketing department, would you support or object to eliminating uniforms?

Services &

Intangibles

All services are intangibles, but not all

intangibles are services.

Both services and other intangibles can

be branded and marketed.

ConcertsHair cuts

Government Museums

ZooCar washNail salonChurch

Health careLegal

What’s a service?A service: intangible products (acts of effort) that are exchanged directly from the producer to the receiver (purchaser).

The service provider is inseparable from the service, making the service encounter a primary component.

The service sector is growing because it is more cost effective (Outsourcing).

intangibiliintangibilityty

perishabiliperishabilityty

variabilityvariability inseparabilinseparabilityity

We cannot see, touch, or smell it.

We cannot store a service for later use. The service outcome can never be exactly replicated.

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Chapter 10Module 2

Is the customer or his possession the recipient?

Augmented Augmented ServiceService

The service continuumMost products: are a combination of tangible and

intangible market offerings, i.e., they are both product and service.

Core Core serviceservice

Housecleaning

Includes deep-steam cleaning of carpets Type of restaurant?

Pause: Short Activity

List and describe the core and augmented services of each of the following:•A personal trainer•An accountant•A drycleaner•A public swimming pool• Your personal banker

The Service EncounterA service encounter: is especially important for offerings high on the service continuum.... Remember, the service provider is inseparable from the service itself!A service encounter: is influenced by both the person & the physical surroundings. Ever been in a dirty waiting room? This environment is called the servicescape, and includes all components of the environment: parking lot, waiting room, restroom, music, lighting, etc...

Servicescapes: can have positive influences on purchase decisions, upselling, service evaluations, satisfaction with service delivery, repeat business, word of mouth, etc....

Pause: Short TaskAssume you are a marketing consultant for a local bank. There is a great deal of local competition in the banking industry.

List and describe the challenges the bank faces as a service provider.

Then, come up with one tactic to address each challenge to give your bank a competitive advantage or point of differentiation.

intangibiliintangibilityty

perishabiliperishabilityty

variabilityvariability inseparabiinseparabilitylity

Measure Service Quality

SERVQUAL: A survey instrument that measures consumers’ perceptions of service quality in terms of: Tangibles - facilities, servicescapeReliability - received what was promised?Responsiveness - willingness to help customersAssurance - knowledge and courtesyEmpathy - caring and attention given

GAP ANALYSIS: measuring the difference between expectations and actual experiences in the service encounter.

CRITICAL INCIDENCE: An analysis of specific complaints that result in dissatisfaction.

SERVQUAL

On a 7-pt scale - (disagree-agree)

1. ACME has up-to-date equipment2. ACME employees are well dressed and neat.3. ACME is dependable4. ACME provides services at the time it promises to do so.5. ACME is dependable6. You can trust ACME employees7. ACME employees are polite., etc...

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Chapter 10 Module 3

Marketing the Intangibleex: marketing places

Marketing the Intangibleex: marketing ideas

Service RecoveryResolving Customer Dissatisfaction: Is a strategic issue.

Firms must take quick action to resolve the problem.

Who is good at service recovery?

Service Future

The service industry: - Is the largest employer of any other type of industry. - Is the fastest growing as services are going global and populations are aging.- Is being expanded due to technological capabilities.

End Chapter 10