Lovelock ppt chapter_01.ppt

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  • Hi, thank you for sharing this. Could you send me the other chapters? My email address is smassignment2016@gmail.com. It'd be very helpful for me. Thanks before
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  • Hi is there any chance to get the questions for the chapters of Lovelock?
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  • hı ı need this book questions? please can you send me
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  • Hı can can one send me all the slides of this book service marketing 7e on this email wiseshany@gmail.com
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  • Dear sir,
    I am much appreciating you if i could have share from you on chapter 2 till chapter 8 ( service marketing 7e, )

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    pheakdey.gsky@gmail.com
    Pheakdey
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Lovelock ppt chapter_01.ppt

  1. 1. Services Marketing 7e, Global Edition! Chapter 1:! New Perspectives On! !Marketing in the! ! !Service Economy!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 1
  2. 2. Overview of Chapter 1!   Why Study Services?!   What are Services?!   Marketing Challenges Posed by Services!   Extended Marketing Mix Required for Services!   Integration of Marketing with Other Management Functions!   Developing Effective Service Marketing Strategies!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 2
  3. 3. Why Study Services?!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 3
  4. 4. Why Study Services?!   Services dominate most economies and are growing rapidly:! è  Services account for more than 60% of GDP worldwide! è  Almost all economies have a substantial service sector! è  Most new employment is provided by services ! è  Strongest growth area for marketing! !   Understanding services offers you a personal competitive advantage!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 4
  5. 5. Services Dominate the Global Economy! Contribution of Service Industries to GDP Globally! Manufacturing 32%" Services 64%" Agriculture 4%" Source: The World Factbook 2008, Central Intelligence Agency" !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 5
  6. 6. Estimated Size of Service Sector
 in Selected Countries" Jersey (97%), Cayman Islands (95%), Hong Kong (92%)! Bahamas (90%), Bermuda ( 89%), Luxembourg (86%)! USA (79%), Fiji (78%), Barbados (78%), France (77%), U.K. (76%)! Japan (72%), Taiwan (71%), Australia (71%), Italy (71%)! Canada (70%), Germany (69%), Israel (67%) ! South Africa (65%), Brazil (66%), Poland (66%)! Turkey (63%), Mexico (62%) Argentina (57%), Russia (55%)! Malaysia (46%), Chile (45%) Indonesia (41%), China (40%)! Saudi Arabia (35%)! Services as Percent of GDP 10 20 30 40 50 60 70 80 90 Source: The World Factbook 2008, Central Intelligence Agency" !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 6
  7. 7. Value Added by Service Industry 
 Categories to U.S. GDP! Business Services 12% " Transport, Utilities & Communications " 9% " SERVICES! " Wholesale & Retail Trade 12% "Source: US Bureau of Economic Analysis, Industry Economics Accounts, 2007 "!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 7
  8. 8. NAICS Codes of Newer Service
 Industries Not Profiled By SIC! v  Casino Hotels" v  HMO Medical Centers" v  Continuing Care Retirement v  Industrial Design Services" Communities" v  Investment Banking and Securities v  Diagnostic Imaging Centers" Dealing" v  Diet and Weight Reducing Centers" v  Management Consulting Services" v  Environmental Consulting" v  Satellite Telecommunications" v  Golf Courses, Country Clubs" v  Telemarketing Bureaus" v  Hazardous Waste Collection" v  Temporary Help Services"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 8
  9. 9. Statistical Classification of Economic Activities in the European Community! Ø  ISIC International Standard Industrial Classification Rev.4 ! Ø  United Nations Statistics Division, http://goo.gl/2hGBE! Ø  European Commission, Eurostat: European Statistics! Ø  NACE Rev.2 Statistical classification of economic activities in the European Community ! Ø  RAMON System, Metadata, Link NACE!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 9
  10. 10. NAICS: New Way to Classify &
 Analyze the Service Economy "  NAICS—North American Industry Classification System! è  Classifies industries in the economic statistics of USA, Canada & Mexico! è  Replaces old SIC codes in USA! è  Captures huge array of new service industries, each with its own NAICS code!  NAPCS—North American Product Classification System! è  Assigns codes to thousands of service products! è  Particularly useful for looking at rented goods services! !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 10
  11. 11. Why Study Services? !   Most new jobs are generated by services! è  Fastest growth expected in knowledge-based industries! è  Significant training and educational qualifications required, but employees will be more highly compensated! è  Will service jobs be lost to lower-cost countries? Yes, some service jobs can be exported!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 11
  12. 12. Changing Structure of Employment as Economies Develop ! Agriculture! Services! Employment! Share of ! Industry! Time, per Capita Income! Source: IMF, 1997" "Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 12
  13. 13. Why Study Services? !   Powerful forces are transforming service markets! è  Government policies, social changes, business trends, advances in IT, internationalization!   Forces that reshape:! è  Demand! è  Supply! è  The competitive landscape! è  Customers’ choices, power, and decision making!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 13
  14. 14. Transformation of the 
 Service Economy! Social! Business ! Advances ! Changes ! Trends! In IT! Government ! Globalization! Policies! §  New markets and product categories" §  Increase in demand for services" §  More intense competition" Innovation in service products & delivery systems, stimulated by better technology " Customers have more choices and exercise more power " Success hinges on:" §  Understanding customers and competitors "" §  Viable business models" §  Creation of value for customers and firm" Increased focus on services marketing and management !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 14
  15. 15. Factors Stimulating Transformation of the Service Economy ! Social! Business ! Advances ! Changes ! Trends! In IT! Government ! Globalization! Policies! §  Changes in regulations" §  Privatization" §  New rules to protect customers, employees, and the environment " §  New agreement on trade in services"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 15
  16. 16. Factors Stimulating Transformation of the Service Economy ! Social! Business ! Advances ! Changes ! Trends! In IT! Government ! Globalization! Policies! §  Rising consumer expectations" §  More affluence" §  More people short of time" §  Increased desire for buying experiences vs. things" §  Rising consumer ownership of high tech equipment" §  Easier access to information" §  Immigration" §  Growing but aging population "Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 16
  17. 17. Factors Stimulating Transformation of the Service Economy ! Social! Business ! Advances ! Changes ! Trends! In IT! Government ! Globalization! Policies! §  Push to increase shareholder value" §  Emphasis on productivity and cost savings" §  Manufacturers add value through service and sell services" §  More strategic alliances and outsourcing" §  Focus on quality and customer satisfaction" §  Growth of franchising" §  Marketing emphasis by nonprofits"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 17
  18. 18. Factors Stimulating Transformation of the Service Economy ! Social! Business ! Advances ! Changes ! Trends! In IT! Government ! Globalization! Policies! §  Growth of Internet" §  Greater bandwidth" §  Compact mobile equipment" §  Wireless networking" §  Faster, more powerful software" §  Digitization of text, graphics, audio, video"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 18
  19. 19. Factors Stimulating Transformation of the Service Economy ! Social! Business ! Advances ! Changes ! Trends! In IT! Government ! Globalization! Policies! §  More companies operating on transnational basis" §  Increased international travel" §  International mergers and alliances" §  “Offshoring” of customer service" §  Foreign competitors invade domestic markets"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 19
  20. 20. What are Services?!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 20
  21. 21. What Are Services? !   The historical view! è  Smith (1776): Services are different from goods because they are perishable ! è  Say (1803): As services are immaterial, consumption cannot be separated from production!   A fresh perspective: Benefits without Ownership! è  Rental of goods: ! (a) Payment made for using or accessing something – usually for a defined period of time – instead of buying it outright and! !(b) Allows participation in network systems that individuals and organizations could not afford! !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 21
  22. 22. What Are Services? ! !Five broad categories within non-ownership framework of which two or more may be combined ! Rented goods Defined space Labor and services! and place rentals" expertise rentals" Access to shared Access to and physical usage of systems environments" and networks "Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 22
  23. 23. Definition of Services! Services are economic activities offered by one party to another. Often time-based, performances bring about desired results to recipients, objects or other assets for which purchasers have responsibility. ! In exchange for money, time and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved.! !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 23
  24. 24. Definition of Services!   Services ! è  are economic activities offered by one party to another ! è  most commonly employ time-based performances to bring about desired results!   In exchange for their money, time, and effort, service customers expect to obtain value from! è  access to goods, labor, facilities, environments, professional skills, networks, and systems; ! è  normally do not take ownership of any of the physical elements involved. ! !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 24
  25. 25. Value Creation is Dominated by Intangible Elements!Physical Elements !High! Salt " Detergents" CD Player " Wine" Golf Clubs " New Car " Tailored clothing" Plumbing Repair " Fast-Food Restaurant " Health Club " Airline Flight " Landscape Maintenance" Consulting" Life Insurance" Internet Banking Low High Intangible Elements!Source; Adapted from Lynn Shostack"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 25
  26. 26. Service Products vs. Customer Service & After-Sales Service!   A firm’s market offerings are divided into core product elements and supplementary service elements!   Need to distinguish between:! è  Marketing of services – when service is the core product! è  Marketing through service – when good service increases the value of a core physical good!   Manufacturing firms are reformulating and enhancing existing added-value services to market them as stand- alone core products!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 26
  27. 27. Service – A Process Perspective!   Differences exist amongst services depending on what is being processed (and nature processing)!   Classification of services into! è  People processing! è  Possession processing! è  Mental stimulus processing! è  Information processing!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 27
  28. 28. 4 Categories of Services!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 28
  29. 29. People Processing!   Customers must:! è  physically enter the service factory! è  cooperate actively with the service operation!   Managers should think about process and output from ! ! the customerʼs perspective ! è  to identify benefits created and non-financial costs: Time, mental and physical effort!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 29
  30. 30. Possession Processing!   Involvement is limited!   Less physical involvement!   Production and consumption are separable! Installation, maintaining, repairing, improving, removal and disposal -!  The entire value-adding chain of activities that may take place during the lifetime of the object!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 30
  31. 31. Mental Stimulus Processing!   Ethical standards required:! è  Customers might be manipulated!   Physical presence of recipients not required!   Investment of time and a degree of mental effort!   Core content of services is information-based! è  Can be ʻinventoriedʼ!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 31
  32. 32. Information Processing!   Most intangible form of service!   May be transformed:! è  Into enduring forms of service output!   Line between information processing and mental ! ! ! stimulus processing may be unclear: information-based services!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 32
  33. 33. Marketing Challenges Posed by Services!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 33
  34. 34. Services Pose Distinctive Marketing Challenges !   Marketing management tasks in the service sector differ from those in the manufacturing sector.!   Eight common differences between services and goods but they do not apply equally to all services! What are marketing implications of these differences?!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 34
  35. 35. Differences, Implications, and 
 Marketing-Related Tasks " Difference! Implications! Marketing-Related Tasks! ! ! ! §  Most service products! §  Customers may be! §  Use pricing, promotion, ! cannot be inventoried! turned away! reservations to smooth ! ! demand; work with ops to ! ! manage capacity ! ! ! §  Intangible elements! §  Harder to evaluate! §  Emphasize physical clues, ! usually dominate! service & distinguish! employ metaphors and vivid ! value creation! images in advertising! from competitors! ! ! ! §  Services are often! §  Greater risk &! §  Educate customers on! difficult to visualize &! uncertainty perceived! making good choices; offer ! understand! ! guarantees! ! ! §  Interaction between! §  Develop user-friendly! §  Customers may be! customer & provider; ! equipment, facilities & ! involved in co-! poor task execution ! systems; train customers, ! production! could affect satisfaction! provide good support! ! " " !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 35
  36. 36. Differences, Implications, and 
 Marketing-Related Tasks " Difference! Implications! Marketing-Related Tasks! ! ! ! §  People may be part of ! §  Behavior of service! §  Recruit, train employees to ! service experience! personnel & customers! reinforce service concept! ! can affect satisfaction! §  Shape customer behavior! ! ! ! §  Operational inputs and! §  Hard to maintain quality,! §  Redesign for simplicity and! outputs tend to vary ! consistency, reliability ! failure proofing! more widely! §  Difficult to shield ! §  Institute good service ! customers from failures! recovery procedures! ! ! §  Time factor often ! §  Time is money; ! §  Find ways to compete on ! assumes great ! customers want service! speed of delivery; offer ! importance! at convenient times! extended hours! ! ! ! §  Distribution may take ! §  Electronic channels or ! §  Create user-friendly,! place through ! voice communications! secure websites and free! access by telephone! nonphysical channels! ! " ! " " " !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 36
  37. 37. Extended Marketing Mix for Services!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 37
  38. 38. Services Require 
 An Extended Marketing Mix!   Marketing can be viewed as:! è  A strategic and competitive thrust pursued by top management! è  A set of functional activities performed by line managers! è  A customer-driven orientation for the entire organization!   Marketing is only function to bring operating revenues into a business; all other functions are cost centers!   The “7 Ps” of services marketing are needed to create viable strategies for meeting customer needs profitably!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 38
  39. 39. The 7Ps of Services Marketing!   Traditional Marketing Mix Applied to Services! è  Product ! è  Place and Time! è  Price! è  Promotion and Education!   Extended Marketing Mix for Services ! è  Process! è  Physical Environment! è  People!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 39
  40. 40. Integration of Marketing with Other Management Functions !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 40
  41. 41. Marketing to be Integrated with Other Management Functions " Three management functions play central and interrelated roles in meeting needs of service customers! Operations ! Marketing ! Management" Management" Customers! ! Human Resources ! Management "Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 41
  42. 42. Developing Effective Service Marketing Strategies !Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 42
  43. 43. Overview of Framework! Understanding Service Products, Consumers and Markets! Part I: Chapters 1-3! Applying the 4 Pʼs of Marketing to Services! Part II: Chapters 4-7! The Extended Services Marketing Mix for Managing the Customer Interface! Part III: Chapters 8-11! Implementing Profitable Service Strategies! Part IV: Chapters 12-15!Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 43
  44. 44. Framework - Part I! Understanding Service Products, Consumers, and Markets! " Chapter 1 "New Perspectives on Marketing in the Service Economy" Chapter 2 "Consumer Behavior in a Services Context" Chapter 3 "Positioning Services in Competitive Markets"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 44
  45. 45. Framework - Part II! Applying the 4 Pʼs of Marketing to Services! " Chapter 4 "Developing Service Products: Core and Supplementary " " "Elements" Chapter 5 "Distributing Services through Physical and Electronic " " "Channels" Chapter 6 "Setting Prices and Implementing Revenue Management" Chapter 7 "Promoting Services and Educating Customers"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 45
  46. 46. Framework - Part III! The Extended Services Marketing Mix for Managing the Customer Interface! " Chapter 8 "Designing and Managing Service Processes" Chapter 9 "Balancing Demand and Productive Capacity" Chapter 10 "Crafting the Service Environment" Chapter 11 "Managing People for Service Advantage"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 46
  47. 47. Framework - Part IV! Implementing Profitable Service Strategies! " Chapter 12 "Managing Relationships and Building Loyalty" Chapter 13 "Complaint Handling and Service Recovery" Chapter 14 "Improving Service Quality and Productivity" Chapter 15 "Striving for Service Leadership"Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 47
  48. 48. Summary! Services dominate Why Study Unique Services are often the economy in many Services?" Characteristics " intangible, difficult to nations. The majority visualize and understand, of jobs are created in and customers may be the service sector. " involved in co-production." " " CHAPTER 1! Services are a form of rental (not Product, Place & Time, Price, Promotion & ownership). They are Extended Education, Process, performances that What are Marketing Physical Environment, bring about a desired Services?" Mix People" result. " "Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 48

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