Aspects of Sm

8/8/2019 Aspects of Sm

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The nature and importance of services

Characteristics of services and their marketing

implications

Issues related to the planning and marketing of services

The four Rs of services marketing

The relationship marketing approach

The impact of technology in providing services


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It is the part of the product or the full product

for which the customer is willing to see value

and pay for it.


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` It is intangible.

` It does not result in ownership.

` It may or may not be attached with a physical product


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` Core Service

principal purpose of the transaction, as in the rental of a car,a haircut, or legal services

` Supplementary services

service is performed in support of the sale of a tangibleproduct


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Pure Tangible good: Soap, tooth paste, salt

Tangible good with accompanying services: cars,

electronics, computers

Hybrid: Restaurants, Hotels

Major service with accompanying minor goods

and services:Airline

Pure service: teaching, baby sitting, lawyer


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Goods Services Resulting implications

Tangible Intangible Services cannot be

inventoried

Readily displayed

Cannot be patented

Standardized Heterogeneity Depends on many

uncontrollable factors

Production separate from

consumption

Simultaneous production

and consumption

Customer participate in

and affect the

transactions

Decentralization may berequired

Nonperishable Perishable Services cannot be

resold or returned

Difference between Goods and Services


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Canned

foods

Ready-

madeclothes

Auto-

mobiles

Draperies,

Carpets

Rest-

aurantmeals

Repairs:

auto, house,landscaping

Air

travel

Insurance,

Consulting,Teaching

MOSTLY GOODS MOSTLY SERVICES

The Goods-Services

Continuum


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` Three-fourths of the Canadian labour forceis employed in service industries.

` Over 70% of the nations gross national

product is produced by services.` From 1986 to 2000, virtually all new jobs

will be in the service industries.

` Huge growth inpersonal servicespersonal services as well as

business services.business services.


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12 - 9

` intangibility: difficult to sample and to evaluate

` inseparability: difficult to separate services from theservice provider; mainly direct sales; staff are essential tothe delivery of quality services

` heterogeneity: virtually every service is different; verydifficult to standardize quality

` perish ability:: those not sold can not be stored

` fluctuating demand: demand for some servicesfluctuates by season, or even by time of day


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Demographic changes

Social changes

Economic changes

Technology

Political and legal

Policy changes


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` Degree of involvement

` People processing

` Possession processing

` Mental stimulus processing

`

Information processing


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` Equipment-based/ people-based

` Clients presence

` Personal need/ Business need

` Objective

`

Ownership


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` Intangibility : Doctors

` Variability: Different employees of the same

bank

` Perish ability of output: airlines in vacations

` Simultaneous production and consumption:

singers, dancers, barber


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` No ownership

Customers obtain temporary rentals, hiring of personnel, or access tofacilities and systems

Pricing often based on time

Customer choice criteria may differ for renting vs. purchase--mayinclude convenience, quality of personnel

` Services cannot be inventoried after production

Service performances are temporary

Exception: some information-based output can be recorded inelectronic/printed form and re-used many times

Balancing demand and supply may be vital marketing strategy

Key to profits

eed to determine whetherbenefits are perishable or durable


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` Customers may be involved in production process

Customer involvement includes self-service and cooperation

Customer behavior and competence can help or hinder productivity, so

marketers need to educate/train customers

Changing the delivery process may affect role played by customers

Design service facilities, equipment, and systems with customers in mind:

user-friendly, convenient locations/schedules

` Intangible elements dominate value creation

Understand value added by labor and expertise of personnel

Effective HR management Make highly intangible services more concrete by creating and

communicating physical images or metaphors and tangible clues


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` Other people are often part of the service product

Frontline service personnel reflect both marketing and operational criteria

Recognize that appearance and behavior of other customers which influence

service experience positively or negatively

Avoid inappropriate mix of customer segments at same time

Manage customer behavior (the customer is notalways right!)

` Greater variability in operational inputs and outputs

Must work hard to control quality and achieve consistency

Seek to improve productivity through standardization

Need to have effective service recovery policies in place because it is moredifficult to shield customers from service failures


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` Often di

fficult

for customers to evaluate services

Educate customers to help them make good choices, avoid risk

Tell customers what to expect, what to look for

Encourage positive word-of-mouth from satisfied customers

` Time factor assumes great importance

Offer convenience of extended service hours up to 24/7 Understand customers time constraints and priorities

Minimize waiting time

` Distribution channels take different forms

Tangible activities must be delivered through physical channels

Use electronic channels to deliver intangible, information-basedelements instantly and expand geographic reach


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` Desired services

`Adequate Services

` Zone of tolerance


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Expected Services

Perceived Services

Customer gap (Zone of tolerance)


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` Type of Service

` ature of relation

` Service delivered

` Type of demand and supply

` Customize service and exercise judgment


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` Necessary evil

` Labor intensive and less productive

` Less revenue

` Growth linked` Marketing service is not different

` Growth: eliminates jobs in manufacturing sector

Aspects of Sm

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