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Chapter1 dw

  1. 1. By Wilson, Zeithaml and Bitner Chapter 1 Services Marketing
  2. 3. Objectives for chapter 1: Introduction to services <ul><li>Explain what services are and identify important trends in services. </li></ul><ul><li>Explain the need for special services marketing concepts and practices and why the need has developed and is accelerating. </li></ul><ul><li>Explore the profound impact of technology on service. </li></ul>
  3. 4. Objectives for chapter 1: Introduction to services (continued) <ul><li>Outline the basic differences between goods and services and the resulting challenges and opportunities for service businesses. </li></ul><ul><li>Introduce the expanded marketing mix for services and the philosophy of customer focus, as powerful frameworks and themes that are fundamental to the rest of the text. </li></ul><ul><li>Introduce the servuction system model and the concept of the services triangle </li></ul>
  4. 5. Examples of service industries <ul><li>Healthcare </li></ul><ul><ul><li>Hospital, medical practice, dentistry, eye care </li></ul></ul><ul><li>Professional Services </li></ul><ul><ul><li>Accounting, legal, architectural </li></ul></ul><ul><li>Financial Services </li></ul><ul><ul><li>Banking, investment advising, insurance </li></ul></ul><ul><li>Hospitality </li></ul><ul><ul><li>Restaurant, hotel/motel, bed & breakfast </li></ul></ul><ul><ul><li>Ski resort, rafting </li></ul></ul>
  5. 6. Examples of service industries (continued) <ul><li>Travel </li></ul><ul><ul><li>Airline, travel agency, theme park </li></ul></ul><ul><li>Others </li></ul><ul><ul><li>Hair styling, pest control, plumbing, lawn maintenance, counseling services, health club, interior design </li></ul></ul>
  6. 7. Figure 1.2 Tangibility spectrum Tangible Dominant Intangible Dominant Salt Soft Drinks Detergents Automobiles Cosmetics Advertising agencies Airlines Investment Management Consulting Teaching Fast-food outlets Fast-food outlets            
  7. 8. Insert Table 1.1 from text % of GDP attributable to service 2006
  8. 9. Why study Services Marketing? <ul><li>Service-based economies </li></ul><ul><li>Service as a business imperative in manufacturing and IT </li></ul><ul><li>Deregulated industries and professional service needs </li></ul><ul><li>Services marketing is different </li></ul><ul><li>Service equals profits </li></ul><ul><li>Service and technology </li></ul>
  9. 10. How technology has influenced the development of services <ul><li>Provided the potential for new service offerings </li></ul><ul><li>Offering new ways to deliver service </li></ul><ul><li>Enabling customers and employees </li></ul><ul><li>Extending the global reach of services </li></ul><ul><li>The Internet is a service </li></ul><ul><li>The paradoxes and dark side of technology and service </li></ul>
  10. 11. Table 1.2 Eight central paradoxes of technological products Source : D. G. Mick and S. Fournier, “Paradoxes of Technology: Consumer Cognizance, Emotions, and Coping Strategies,” Journal of Consumer Research 25 (September 1998), pp. 123–47.
  11. 12. Table 1.3 Goods versus services Source : A. Parasuraman, V.A. Zeithaml, and L. L. Berry, “A Conceptual Model of Service Quality and Its Implications for Future Research,” Journal of Marketing 49 (Fall 1985), pp. 41–50.
  12. 13. Characteristics of services compared to goods Intangibility Perishability Simultaneous production and consumption Heterogeneity
  13. 14. Implications of intangibility <ul><li>Services cannot be inventoried </li></ul><ul><li>Services cannot be easily patented </li></ul><ul><li>Services cannot be readily displayed or communicated </li></ul><ul><li>Pricing is difficult </li></ul>
  14. 15. Implications of heterogeneity <ul><li>Service delivery and customer satisfaction depend on employee and customer actions </li></ul><ul><li>Service quality depends on many uncontrollable factors </li></ul><ul><li>There is no sure knowledge that the service delivered matches what was planned and promoted </li></ul>
  15. 16. Implications of simultaneous production and consumption <ul><li>Customers participate in and affect the transaction </li></ul><ul><li>Customers affect each other </li></ul><ul><li>Employees affect the service outcome </li></ul><ul><li>Decentralization may be essential </li></ul><ul><li>Mass production is difficult </li></ul>
  16. 17. Implications of perishability <ul><li>It is difficult to synchronize supply and demand with services </li></ul><ul><li>Services cannot be returned or resold </li></ul>
  17. 18. Challenges for services <ul><li>Defining and improving quality </li></ul><ul><li>Designing and testing new services </li></ul><ul><li>Communicating and maintaining a consistent image </li></ul><ul><li>Accommodating fluctuating demand </li></ul><ul><li>Motivating and sustaining employee commitment </li></ul>
  18. 19. Challenges for services (continued) <ul><li>Coordinating marketing, operations, and human resource efforts </li></ul><ul><li>Setting prices </li></ul><ul><li>Finding a balance between standardization versus personalization </li></ul><ul><li>Ensuring the delivery of consistent quality </li></ul>
  19. 20. The Services Marketing triangle
  20. 21. Traditional marketing mix <ul><li>All elements within the control of the firm that communicate the firm’s capabilities and image to customers, or that influence customer satisfaction with the firm’s product and services: </li></ul><ul><ul><li>Product </li></ul></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Place </li></ul></ul><ul><ul><li>Promotion </li></ul></ul>
  21. 22. Expanded mix for services The 7 Ps <ul><li>Product </li></ul><ul><li>Price </li></ul><ul><li>Place </li></ul><ul><li>Promotion </li></ul><ul><li>People </li></ul><ul><ul><li>All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment. </li></ul></ul>
  22. 23. Expanded mix for services The 7 Ps (continued) <ul><li>Physical evidence </li></ul><ul><ul><li>The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service. </li></ul></ul><ul><li>Process </li></ul><ul><ul><li>The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems. </li></ul></ul>
  23. 24. Table 1.4 Expanded marketing mix for services
  24. 25. The servuction system model

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