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Transcript of McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Service Products, Services,...
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Service Products, Services, Intangibility, Inseparability, Service Products, Services, Intangibility, Inseparability, Perishability, Off Peak Pricing, Client Relationship, Customer Perishability, Off Peak Pricing, Client Relationship, Customer
Effort, Uniformity, Tangibles, Reliability, Responsiveness, Effort, Uniformity, Tangibles, Reliability, Responsiveness, Assurance, Empathy, Internal Marketing, ContinualAssurance, Empathy, Internal Marketing, Continual
The Marketing of ServicesThe Marketing of Services
Chapter 12Chapter 12
Key TermsKey Terms
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
ServicesServices
Service Products – A bank loan or home security Service Products – A bank loan or home security that are intangiblethat are intangible
Services – Activities by sellers and others that Services – Activities by sellers and others that accompany the sale of a product and that aid in its accompany the sale of a product and that aid in its exchange or its utilizationexchange or its utilization
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Important Characteristics of Important Characteristics of ServicesServices
Intangibility – Without physical dimensions or Intangibility – Without physical dimensions or characteristicscharacteristics
Inseparability – Service and seller are inseparableInseparability – Service and seller are inseparable Perishability and Fluctuating demand – Seasonal, Perishability and Fluctuating demand – Seasonal,
days, time of day, vacant seats, waiting time on days, time of day, vacant seats, waiting time on phonephone Off-peak pricingOff-peak pricing
Client Relationship – Similar to customer Client Relationship – Similar to customer relationship but typically more intenserelationship but typically more intense
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Important Characteristics of Important Characteristics of ServicesServices
Customer Effort – Customer involvement is at a Customer Effort – Customer involvement is at a greater degree in production of many types of greater degree in production of many types of servicesservices
Uniformity – Quality of services can vary more than Uniformity – Quality of services can vary more than the quality of goodsthe quality of goods
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Unique Characteristics Unique Characteristics Distinguishing Services from GoodsDistinguishing Services from Goods
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Quality ServiceQuality Service
Quality service generally suffers due to the gap Quality service generally suffers due to the gap betweenbetween Consumer expectations and management Consumer expectations and management
perceptions of the consumer expectationsperceptions of the consumer expectations Management perceptions of consumer expectations Management perceptions of consumer expectations
and firm’s service quality specificationsand firm’s service quality specifications Service quality specifications and actual service Service quality specifications and actual service
qualityquality Actual service delivery and external communications Actual service delivery and external communications
about the serviceabout the service
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Quality ServiceQuality Service
Determinants of service quality includeDeterminants of service quality include TangiblesTangibles ReliabilityReliability ResponsivenessResponsiveness AssuranceAssurance EmpathyEmpathy
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Customer Satisfaction MeasurementCustomer Satisfaction Measurement
Understand the expectations and requirements of the Understand the expectations and requirements of the customer customer
Determine how well your company and its major Determine how well your company and its major competitors are delivering these expectations and competitors are delivering these expectations and requirementsrequirements
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Customer Satisfaction Customer Satisfaction Measurement (CSM) – ResearchMeasurement (CSM) – Research
Common aspectsCommon aspects Marketing and sales personnel primarily responsible for Marketing and sales personnel primarily responsible for
designing CSM programsdesigning CSM programs Top management and the marketing function championed Top management and the marketing function championed
the programsthe programs Combination of qualitative and quantitative research Combination of qualitative and quantitative research
methodsmethods Evaluations included both the company’s and Evaluations included both the company’s and
competitor’s satisfaction performancecompetitor’s satisfaction performance
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Customer Satisfaction Customer Satisfaction Measurement (CSM) – ResearchMeasurement (CSM) – Research
Results of all research were made available to Results of all research were made available to employees, but not to customersemployees, but not to customers
Research was performed on continual basisResearch was performed on continual basis Customer satisfaction was incorporated into the Customer satisfaction was incorporated into the
strategic focus of the companystrategic focus of the company Commitment to increasing service quality and customer Commitment to increasing service quality and customer
satisfaction from employees at all levels within the satisfaction from employees at all levels within the organizationorganization
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
The Importance of Internal MarketingThe Importance of Internal Marketing
Critical componentsCritical components Careful selection process in hiring frontline employeesCareful selection process in hiring frontline employees Clear and concrete message conveying a particular Clear and concrete message conveying a particular
service strategyservice strategy Significant modeling by managersSignificant modeling by managers Energetic follow-through processEnergetic follow-through process Emphasis on teaching employees to have good Emphasis on teaching employees to have good
attitudesattitudes Emphasis should be placed on the word continualEmphasis should be placed on the word continual
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Obstacles in Service MarketingObstacles in Service Marketing
Four reasons for the lack of innovative marketing on Four reasons for the lack of innovative marketing on the part of service marketersthe part of service marketers Limited view of marketingLimited view of marketing Lack of strong competitionLack of strong competition Lack of creative managementLack of creative management No obsolescenceNo obsolescence
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Service ChallengeService Challenge
Constantly develop new services that will better meet Constantly develop new services that will better meet customer needscustomer needs
Improve on quality and variety of existing servicesImprove on quality and variety of existing services Provide and distribute services in a manner that best Provide and distribute services in a manner that best
serves the customerserves the customer
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
BankingBanking
Banking is becoming an increasingly technology-Banking is becoming an increasingly technology-driven businessdriven business Home baking systemsHome baking systems
Banks have also learnt the value of bundling servicesBanks have also learnt the value of bundling services ATM transactionsATM transactions Interest bearing checking accountsInterest bearing checking accounts
Most banks target some marketing activities towards Most banks target some marketing activities towards senior citizenssenior citizens
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Health CareHealth Care
Health Maintenance Organization – Alternative Health Maintenance Organization – Alternative delivery systems delivery systems BenefitsBenefits
Ability to have all ailments treated at one facilityAbility to have all ailments treated at one facility Payment of fixed fees for servicesPayment of fixed fees for services Encouragement of preventive versus remedial treatmentsEncouragement of preventive versus remedial treatments
Success of HMO has inspired similar programs for Success of HMO has inspired similar programs for dental and eye caredental and eye care
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
InsuranceInsurance
Insurance industry offers several new products and Insurance industry offers several new products and servicesservices
Distribution of insurance services have increasedDistribution of insurance services have increased Availability of travel auto insurance through AAAAvailability of travel auto insurance through AAA Group insurance written through employers and labor Group insurance written through employers and labor
unionsunions
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
TravelTravel
Airline industries have been the leaders in the use of Airline industries have been the leaders in the use of technologytechnology Use of Internet sites to dispense flight and fare Use of Internet sites to dispense flight and fare
informationinformation Technology helps airlines to make strategic pricing Technology helps airlines to make strategic pricing
decisions through the use of yield managementdecisions through the use of yield management Use of elaborate computer programs enable Use of elaborate computer programs enable
managers to determine customer segmentsmanagers to determine customer segments
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Implications for Service MarketersImplications for Service Marketers
Sum total of marketing mix elements represents the Sum total of marketing mix elements represents the total impact of the firm’s marketing strategytotal impact of the firm’s marketing strategy
Services must be made available to prospective usersServices must be made available to prospective users Varying service bundles, new technology, and Varying service bundles, new technology, and
alternative means of distributing the service enable alternative means of distributing the service enable targeted marketingtargeted marketing