Chapter 1Introduction to Services
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Marketing Definition
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
--American Marketing Association
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Examples of Service Industries
Professional Services
Others:
ã 2005 - Dwayne D. Gremler
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“Goods” and “Services”
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What are services?
Long Definition:
Services “include all economic activities whose output is not a physical product or production,
is generally consumed at the time it is produced, and provides added value in forms (such as convenience, amusement, timeliness, comfort, or health) that are essentially
intangible concerns of its first purchaser.”
ã 2005 - Dwayne D. Gremler
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Competing Strategically through Service
OUT-OF-THE box customer service:
Innovative, Cutting Edge Services:
innovation, technology
(not necessarily totally new invention but a new service approach)
Value Added, Revenue producing service: Applicable for mostly nonservice industries, when can’t compete with manufactured products. (IBM) HARLEY Club)
A service culture that Differentiates: Employer of choice & Provider of Choice.
ã 2005 - Dwayne D. Gremler
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Percent of U.S. Labor Force by Industry
Figure 1.3
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Percent of U.S. Gross Domestic Product by Industry
Figure 1.4
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U.S. Gross Domestic Product (in 2003)
Source: Inside Sam’s $100 Billion Growth Machine, by David Kirkpatrick, Fortune, June 14, 2004, p 86.
Figure 1.1
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Goods vs. Services
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ã 2005 - Dwayne D. Gremler
Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, “Problems and Strategies in Services Marketing,”
Journal of Marketing 49 (Spring 1985): 33-46.
Table 1.2
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Pricing is difficult
Service quality depends on many uncontrollable factors
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Customers affect each other
Decentralization may be essential
Mass production is difficult
It is difficult to synchronize supply and demand with services
Demand forecasting is required
Services Marketing Mix
traditional marketing mix:
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People
may be involved in production
can facilitate or inhibit service performance
can impact service encounters via their attitude, behavior…….
ã 2005 - Dwayne D. Gremler
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Process
the actual procedures, mechanisms, and flow of activities by which the service is delivered
includes:
Examples:
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Physical Evidence
examples:
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Table 1.3 (Continued)
PEOPLE
Communicating