MARKETING MANAGEMENT12th edition

13 Designing and

ManagingServices

Kotler Keller 13-2

Chapter Questions

• What are the characteristics of products and how can they be classified?

• How can companies differentiate products?• How can a company build and manage its

product mix and product lines?• How can companies combine products to create

strong co-brands or ingredient brands?• How can companies use packaging, labeling,

warranties, and guarantees as marketing tools?

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IBM has moved from a goods business to a service business

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Service

Any act of performance that oneparty can offer another that is

essentially intangible and does notresult in the ownership of anything;

its production may or may notbe tied to a physical product.

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Service Sectors

GovernmentPrivate

nonprofit

ManufacturingBusiness Retail

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General Motors’ OnStar Service

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Categories of Service Mix

Pure tangible good

Good w/ accompanying services

Hybrid

Service w/ accompanying goods

Pure service

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Service Distinctions

• Equipment-based or people-based• Service processes• Client’s presence required or not• Personal needs or business needs• Objectives and ownership

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Figure 13.1 Continuum of Evaluation for Different Types of Products

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Distinctive Characteristics of Services

Intangibility

Inseparability

Variability

Perishability

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Physical Evidence and Presentation

Place

People

Equipment

Communication material

Symbols

Price13-12

Mayo Clinic’s Tangible Cues

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Blue Man Group includes 33 different performers

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How to Increase Quality Control

Invest in good hiring and training procedures

Monitor customer satisfaction

Standardize the service-performance process

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Matching Demand and SupplyDemand side• Differential pricing• Nonpeak demand• Complementary

services• Reservation

systems

Supply side• Part-time employees• Peak-time efficiency• Increased consumer

participation• Shared services• Facilities for future

expansion

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Figure 13.2 A Service-Performance Process Map

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Consumer-Friendly Services

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Figure 13.3 Holistic Marketing for Services

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Table 13.1 Factors Leading to Customer Switching Behavior

• Pricing• Inconvenience• Core Service Failure• Service Encounter Failures• Response to Service Failure• Competition• Ethical Problems• Involuntary Switching

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Figure 13.4 Service-Quality Model

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Gaps that Cause Unsuccessful Service Delivery• Gap between consumer expectation and

management perception• Gap between management perception and

service-quality specifications• Gap between service-quality specifications

and service delivery• Gap between service delivery and external

communications• Gap between perceived service and

expected service13-22

Determinants of Service Quality

Reliability

Responsiveness

Assurance

Empathy

Tangibles

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Best Practices• Strategic Concept• Top-Management

Commitment• High Standards• Self-Service

Technologies• Monitoring Systems• Satisfying Customer

Complaints• Satisfying Employees

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Figure 13.5 Tracking Customer Service Performance

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Table 13.3 Customer Importance and Performance Ratings for an Auto Dealership

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Figure 13.6 Importance-Performance Analysis

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Developing Brand Strategies for Services

Choosing Brand Elements

Establishing ImageDimensions

Devising BrandingStrategy

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Customer Worries

Failure frequency

Downtime

Out-of-pocket costs

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Marketing Debate

Is Service Marketing Different From Product Marketing?

Take a position:1. Product and service marketing are fundamentally different.2. Product and service marketing are highlyrelated.

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Marketing Discussion

Colleges and universities can be classified as service organizations.How can you apply the marketing

principles developed in this chapterto your school? Do you have anyadvice as to how it could become

a better service marketer?