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Chapter 12 Services and Non-profit Marketing. © 2006 The McGraw-Hill Companies, Inc. All rights...
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Transcript of Chapter 12 Services and Non-profit Marketing. © 2006 The McGraw-Hill Companies, Inc. All rights...
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Services Defined
A service is the .............of applying human or mechanical efforts to .................
A service involves a .........., ............or ...........that can not be physically possessed.
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Services Defined
A service is the result of applying human or mechanical efforts to people or objects.
A service involves a deed, performance or effort that can not be physically possessed.
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Services contribute to our economy- GREATLY
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
0
10
20
30
40
50
60
70
80
1929 1948 1969 1977 1984 1999
Per
cent
of U
.S. L
abor
For
ce
Source: Survey of Current Business, April 1998, Table B.8, July 1988, Table 6.6B, and July 1992, Table 6.4C; Eli Ginzberg and George J. Vojta, “The Service Sector of the U.S. Economy,” Scientific American, 244,3 (1981): 31-39.
Year
Services Manufacturing Mining & Agriculture
Percent of U.S. Labor Force by Industry
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
The Service Product Continuum
Most offerings lie somewhere in the middle
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Services Marketing Differs from Product Marketing
Heterogeneous
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Implications of IntangibilityServices cannot be _________________
Services cannot be easily ___________
Services cannot be _________________
Pricing is _________________
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Implications of HeterogeneityService delivery and customer satisfaction
depend on _________________
Service quality depends on many _________________
There is no sure knowledge that the service delivered matches what was planned and promoted
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Implications of Simultaneous Production and Consumption
Customers participate in and affect the transaction
Customers affect each other
Employees affect the service outcome
Decentralization may be essential
_________________ is difficult
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Implications of PerishabilityIt is difficult to synchronize supply and
demand with services
Services cannot be _________________
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Service Quality is more difficult to determine than goods quality: we need:
Ability to perform the promised service dependably and accurately.
Knowledge and courtesy of employees and their ability to inspire trust and confidence.
Physical facilities, equipment, and appearance of personnel.
Caring, individualized attention the firm provides its customers.
Willingness to help customers and provide prompt service.
Tangibles
Reliability
R…………………
A…………..
E…………..
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Service Failures
What are your experiences of horrible customer service?
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Service recovery paradox
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PerceivedService
Expected Service
CUSTOMER
COMPANY
CustomerGap
Gap 1
Gap 2
Gap 3
External Communications
to CustomersGap 4ServiceDelivery
Customer-Driven Service Designs and
Standards
Company Perceptions of Consumer Expectations
Gaps Model of Service Quality/Extra
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
How to Give Horrible Service(Service Gaps)
1. Don’t listen to what your customers want (i.e., only listen to your CEO or wallet)- customer gap
2. Don’t act on customers’ wants3. Hire people without skills or a care, and don’t
train them4. Tell the customer whatever they want to hear
(i.e., overpromise and underdeliver)5. Don’t meet (or barely meet) customers’
expectations (i.e., ignore people and insult their intelligence)=Customer Gap
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Expanded Mix for Services --The 7 PsProductPricePlacePromotionPeople
All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment.
Physical Evidence The environment in which the service is delivered and where the
firm and customer interact, and any tangible components that facilitate performance or communication of the service.
Process The actual procedures, mechanisms, and flow of activities by
which the service is delivered—the service delivery and operating systems.
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
ACSI and Annual Percentage Growthin S&P 500 Earnings
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Customer Satisfaction and Customer Loyalty
Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Excellentservice
and value
1. Financial
bonds
2.Socialbonds
4. Structural
bonds
3. Customization
Bonds
Volume and frequency rewards
Bundling and cross selling
Stable pricing
Social bonds among
customers
Personal relationships
Continuous relationships
Customer intimacy
Mass customization
Anticipation/ innovation
Sharedprocesses
and equipment
Joint investments
Integrated information
systems
How to create relationships (loyalty) in Services
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Services and ProfitNot all services are for profitNon profit services and organizations are a
large part of societyWhat nonprofits can you think of?
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Non-Profit MarketingNon-profits are over 20% of U.S. economic
activityGovernment taxes> housing, healthcare, or
food costsHard to service someone who doesn’t want
it (e.g., AA, gambling help)Must complement (vs. compete with) for
profit businesses