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© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
By Wilson, Zeithaml and Bitner
Chapter 1
Services Marketing
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Objectives for chapter 1:Introduction to services
Explain what services are and identify important trends in services.
Explain the need for special services marketing concepts and practices and why the need has developed and is accelerating.
Explore the profound impact of technology on service.
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Objectives for chapter 1:Introduction to services (continued)
Outline the basic differences between goods and services and the resulting challenges and opportunities for service businesses.
Introduce the expanded marketing mix for services and the philosophy of customer focus, as powerful frameworks and themes that are fundamental to the rest of the text.
Introduce the servuction system model and the concept of the services triangle
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Examples of service industries
Healthcare Hospital, medical practice, dentistry, eye care
Professional Services Accounting, legal, architectural
Financial Services Banking, investment advising, insurance
Hospitality Restaurant, hotel/motel, bed & breakfast Ski resort, rafting
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Examples of service industries (continued)
Travel Airline, travel agency, theme park
Others Hair styling, pest control, plumbing, lawn maintenance,
counseling services, health club, interior design
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Figure 1.2
Tangibility spectrum
TangibleDominant
IntangibleDominant
SaltSoft Drinks
DetergentsAutomobiles
Cosmetics
Advertisingagencies Airlines
InvestmentManagement
Consulting
Teaching
Fast-foodoutlets
Fast-foodoutlets
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Insert Table 1.1 from text% of GDP attributable to service
2006
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Why study Services Marketing?
Service-based economies Service as a business imperative in
manufacturing and IT Deregulated industries and professional service
needs Services marketing is different Service equals profits Service and technology
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
How technology has influenced the development of services
Provided the potential for new service offerings Offering new ways to deliver service Enabling customers and employees Extending the global reach of services The Internet is a service The paradoxes and dark side of technology and
service
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Table 1.2
Eight central paradoxes of technological products
Source: D. G. Mick and S. Fournier, “Paradoxes of Technology: Consumer Cognizance, Emotions, and Coping Strategies,” Journal of Consumer Research 25 (September 1998), pp. 123–47.
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Table 1.3
Goods versus services
Source: A. Parasuraman, V.A. Zeithaml, and L. L. Berry, “A Conceptual Model of Service Quality and Its Implications for Future Research,” Journal of Marketing 49 (Fall 1985), pp. 41–50.
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Characteristics of servicescompared to goods
Intangibility
Perishability
Simultaneousproduction
andconsumption
Heterogeneity
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Implications of intangibility
Services cannot be inventoried
Services cannot be easily patented
Services cannot be readily displayed or communicated
Pricing is difficult
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Implications of heterogeneity
Service delivery and customer satisfaction depend on employee and customer actions
Service quality depends on many uncontrollable factors
There is no sure knowledge that the service delivered matches what was planned and promoted
© 2008 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
Mass production is difficult
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Implications of perishability
It is difficult to synchronize supply and demand with services
Services cannot be returned or resold
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Challenges for services
Defining and improving quality Designing and testing new services Communicating and maintaining a consistent
image Accommodating fluctuating demand Motivating and sustaining employee
commitment
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Challenges for services (continued)
Coordinating marketing, operations, and human resource efforts
Setting prices Finding a balance between standardization
versus personalization Ensuring the delivery of consistent quality
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
The Services Marketing triangle
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Traditional marketing mix
All elements within the control of the firm that communicate the firm’s capabilities and image to customers, or that influence customer satisfaction with the firm’s product and services: Product Price Place Promotion
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Expanded mix for servicesThe 7 Ps
Product Price Place Promotion People
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.
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Expanded mix for servicesThe 7 Ps (continued)
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.
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Table 1.4
Expanded marketing mix for services
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
The servuction system model