Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter...

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix

Slides prepared by: Joe Rosagrata

9-1

Chapter 9

Services marketing strategies



9-2

What is a service?

Definition:• Services are separately identifiable activities

that satisfy customer needs or wants through essentially intangible benefits, either in their own right or as a significant element of a tangible product.



9-3

Characteristics of services

• The service and the creator–seller of the service are often inseparable.

• Services are variable (or heterogeneous).• Services are highly perishable, cannot be stored,

and the demand for services fluctuates. • Services are intangible. It is impossible for

customers to sample a service, but intangibility is reduced using:

Service– Visual clues.– Association.– Organisation image.– Documentation.



9-4

Segmenting services

Service segmentation is fundamentally the same process as that for a physical good, with 2 points of difference:

• Customisation of the service.• Delivery of the service.



9-5

Branding services

The first step in branding is to select a good brand name.

The brand should be:• Relevant.• Distinctive.• Easy to pronounce and remember.• Adaptable to any additional services.



9-6

Managing service quality

• Measure the current quality of the service: ‘The customer’s requirements’.

• Measure the service gap: ‘Difference between customer expectation of the service and perception of the service received’.



9-7

The service gap

The difference between what the customer expects and what they receive:

• The knowledge gap: Customer’s knowledge.• The standards gap: Organisation’s standard.• The delivery gap: The actual delivery experience.• The communications gap: Advertising promise.



9-8

Pricing services

• Cost-plus pricing for services.– Cost of product plus a percentage mark-up.

• Demand-based pricing of services.– The price customers are likely to be prepared to pay.

• Competition-based pricing of service.– What other suppliers are charging for the same

type of product.



9-9

Distribution strategies

• Location: The primary consideration is that services are supplied by a person (service provider) and assume the ‘characteristic of inseparability’.

• Location is a key marketing decision about where to locate the service for easy access to the customer and how to bring the two people together.



9-10

Promotion of services

To overcome intangibility factors, effective service promotion should:

• Use tangible symbols: real people in service.• Show the service encounter: staff interacting

positively with customers.



9-11

Promotion of services

Relationship marketing is a major promotional tool: • Avoid over-promising, as it increases the

service gap.• Build word-of-mouth (WoM) promotion:

a positive experience will spread through WoM.



9-12

Levels of retention strategies for services marketers

Fig 9.2 p 279



9-13

The services marketing mix: People (1 of the other 3Ps)

• People: Front-line staff manage the service encounter by the critical incidents, which determine customer satisfaction with the overall service encounter.

• Boundary spanning: Can create problems for front-line staff — usually the link between the service and its customers.



9-14

Creating customer service-focused management

Customer-service focused organisational structure

Top management

Middle management

Customer-service staff

Customers

Customers

Customer-service staff

Middle management

Top management

Fig 9.3 p 280

Traditional organisational structure



9-15

People

• The right contact staff: Recruit those with the right attitude and ‘service personality’.

• Empower contact staff: Front-line staff need the authority to make decisions.

• Reward staff for service delivery: Have reward schemes that ‘work’ as acknowledgement.



9-16

The services marketing mix: Physical evidence (1 of the other 3Ps)

• Physical evidence: Aims to offset the intangibility of the service.

• This incorporates tangibles such as: – Location and building exterior.

– Interior design and décor.

– Stationery, uniforms and promotional material.



9-17

Servicescapes

• The physical evidence used to influence the responses and behaviour of customers and staff.

• Servicescapes have 3 elements:– Stimuli — the tangible elements.

– Customers and staff who receive the stimuli.

– Responses — stimuli response or outcome.



9-18

The services marketing mix: Process (1 of the other 3Ps)• Process is the operational system or method

used to ‘actually’ deliver the service.• Service providers need to:

– Commit to one approach or the other.– Separate standardised and customised services.– Create flexibility capacity.– Increase the amount of customer participation.– Smooth the peaks and troughs in demand.



9-19

Blueprinting

• Buleprinting allows for the service process to be broken down into discrete steps and assessed against time and cost elements.

• Blueprinting is done in the form of a flowchart of activities.

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter...

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