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9fms pp12
9fms pp12
9fms pp12
9fms pp12
9fms pp12
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9fms pp12
9fms pp12
9fms pp12
9fms pp12
9fms pp12
9fms pp12
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9fms pp12

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  • 1. Chapter 12 Services Marketing and Customer Relationships Sommers  Barnes Ninth Canadian Edition Presentation by Karen A. Blotnicky Mount Saint Vincent University, Halifax, NS Copyright © 200 1 by McGraw-Hill Ryerson Limited
  • 2. Chapter Goals
    • To gain an understanding of:
      • The nature and importance of services
      • Characteristics of services and their marketing implications
      • Issues related to the planning and marketing of services
      • The four Rs of services marketing
      • The relationship marketing approach
      • The impact of technology in providing services
    12 -
  • 3. The Nature of Services
    • regardless of the “product”, there is a services component to the offerings of all firms
    • in some cases, a service is the principal purpose of the transaction, as in the rental of a car, a haircut, or legal services -- we refer to this as the core service
    • in others, service is performed in support of the sale of a tangible product -- these are referred to as supplementary services
    12 -
  • 4. Goods and Services Continuum
    • There are two classes of services.
      • Services that are the main purpose of a transaction —renting a truck to move.
      • Services that supplement the sale of a tangible good — for example, an information hotline for computer software.
    • The focus here is primarily on identifiable, intangible services that are the main object of a transaction designed to provide want-satisfaction to customers; supplementary services growing in importance, however.
    12 -
  • 5. 12 - Canned foods Ready- made clothes Auto- mobiles Draperies, Carpets Rest- aurant meals Repairs: auto, house, landscaping Air travel Insurance, Consulting, Teaching MOSTLY GOODS MOSTLY SERVICES The Goods-Services Continuum
  • 6. Importance of Services
    • Three-fourths of the Canadian labour force is employed in service industries.
    • Over 70% of the nation’s gross national product is produced by services.
    • From 1986 to 2000, virtually all new jobs will be in the service industries.
    • Huge growth in personal services as well as business services.
    12 - Copyright © 1998 by The McGraw-Hill Companies, Inc.
  • 7. Characteristics of Services
    • intangibility : difficult to sample and to evaluate
    • inseparability : difficult to separate services from the service provider; mainly direct sales; staff are essential to the delivery of quality services
    • heterogeneity : virtually every service is different; very difficult to standardize quality
    • perishability : those not sold can not be stored
    • fluctuating demand : demand for some services fluctuates by season, or even by time of day
    12 -
  • 8. Strategic Services Management
    • intangibility generally makes the marketing of services a challenge
    • understanding how people buy services and the segments that exist is just as important
    • knowing more about the value of customer segments is important -- some are more valuable than others
    • knowing what they value so that service levels can be tailored is also important
    12 -
  • 9. Strategic Product Implications
    • service organizations have to plan the introduction of new services and the management of the life cycle
    • the core service can be enhanced through the addition of supplementary services, thereby creating added value
    • the life cycle of services has to be managed
    • the branding of a service can be difficult as the customer often has nothing tangible to show
    12 -
  • 10. Managing Service Quality
    • Quality is hard to define, measure, control, and communicate
    • Quality is defined by the consumer
    • It’s important to measure customer satisfaction with an organization’s service quality.
    • Customers see five important components:
      • Core service must measure up.
      • Quality of service , meeting expectations.
      • Technical aspects of delivery.
      • Interaction with people who deliver service.
      • Affective dimensions : How customers feel.
    12 -
  • 11. Pricing Services
    • The characteristics of perishability, inability to store, and fluctuating demand for services create pricing challenges.
    12 -
    • Pricing Strategies include:
      • Discount strategies: Cheaper by the week.
      • A variable pricing strategy: Kids eat free, movies cheaper on Tuesdays.
      • Price competition.
  • 12. Distribution of Services
    • because most services are tied directly to a specific service provider, most have been distributed directly to customers
    • with advancing technology, many firms are now delivering services through machines
    • channels of distribution are necessarily short; some firms use one agent intermediary, such as insurance, real estate, and travel agents
    • some firms use franchises to distribute services
    12 -
  • 13. Promotion of Services
    • customer contact personnel represent the main channel of customer communication
    • service providers must ensure that each service encounter is a positive one if customers are to develop a positive image
    • many professional service firms are now permitted to advertise
    • other elements of the promotional mix are used, including publicity and community affairs
    12 -
  • 14. Four Rs of Service Marketing
    • Retention
    • Referrals
    • Relationships
    • Recovery
    12 -
  • 15. The Changing Environment for Services
    • The boom in the service economy, reduced regulation has created an increase in competition.
    • Major focus on increased productivity, efficiency
      • Work on people aspects of business:
        • Education, training programs
      • Change technology:
        • Computer-based technologies used.
      • Restructure jobs.
    • Bottom line: People are key to success!
    12 -
  • 16. Other Considerations in Marketing Services
    • Impact of Technology:
      • Remember, not everyone likes impersonal technology
    • Performance Measurement:
      • Larger firms can use market share, etc.
      • Customer perceptions are essential.
    • Prospects for Growth:
      • It is very likely that services will continue to take an increasing share of the consumer dollar.
      • The use of marketing programs in all services is expected to increase considerably.
    12 -
  • 17. Future Service Profitability
    • Impacted by:
      • Focusing on the right priorities
      • Increasing service quality
      • Investing in problem solving
      • Being fair to customers
      • Investing in leadership development
    12 -

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