How are goods & services different? Most services contain some element of goods. Goods are the object, a service is the effort, performance or deed A product can be either a good or a service
Purchasing a service is often more personal than purchasing A product. Bad service sticks in people’s minds! Any examples of bad service? Good service?
All retailers are classified as being in the services sector. Service retailers in Australia are growing faster than product retailers
Services have four unique characteristics: Intangibility Inseparability Heterogeneity Perishability
Intangibility When a consumer buys a service, or a tangible product that has a service element, they are buying an experience
Inseparability The connection between the service provider, the customer’s involvement in the service, and the involvement of other customers.
Heterogeneity This is the lack of ability to control the quality and consistency of a service before it reaches a customer.
Perishability Services can’t be stored, and if they are not sold one day they cant be kept to be sold later.
Services are usually a high involvement purchase. This is because there is usually a high level of personalisation. For this reason, many service organisations put great emphasis on employee training, evaluation and motivation
Although a service is intangible, the P of ‘place’ still plays a major tole in marketing. Where should the service be in order to effectively reach the target market? And to strengthen the brand?
Guidelines for advertising services There are common guidelines for advertising services, which relate back to the four unique characteristics
Develop a word of mouth network Consumers of services often look to personal sources for information Use testimonials Use promotions that award the recruitment of friends
Promise what is possible Customers prepare expectations to actual service delivery Don’t overpromise!
Tangibilise the intangible Make the service more concrete through use of tangible symbols, recommendations, years of establishment etc
Feature the relationship A key element of services is the relationship between provider & customer Illustrate the inseparability
Reduce fears about inconsistency Use of testimonials, word of mouth, years of service
Focus on relevant factors What do people want from your service? Make that a focal point of your communications
Show the service as a series of events Consumers often view services as a series of events Look at marketing from a series of events perspective
The ‘halo’ effect In services, first impressions are everything This can include phone contact, signage, store layout etc
In service situations, the atmosphere created is important. Use sight appeals (furniture, colour) sound appeals (to set mood, Inform) touch appeals or scent appeals
The People Problem People make up the most of the product of every service firm And they involve customers as co-producers Both can cause problems. Like what?
How do you fix the employee problem? Training Empowerment Enfranchisement (empowerment plus performance based compensation)
How do you fix the customer problem? Do you think customers are becoming too demanding? So how do you manage customers?
Occupy waiting times Communicate with customers Understand customer habits Empower staff to deal with customer complaints Respond to complaints quickly
Examples? Good or bad service experiences in fashion retail?