1. Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
2. A Note on the
 These PowerPoint slides contain selected exhibits,
figures, and tables from the chapters as well as
objectives for the chapters. For some chapters, we
include extra lecture slides and in-class exercises that
we have compiled and used in our classes. The lecture
slides are not intended to provide full outlines or
complete lectures for the chapters, but rather may be
used selectively to enhance class sessions.
3. Part 1
4. Introduction to Services
 What are Services?
 Why Service Marketing?
 Service and Technology
 Characteristics of Services
 Service Marketing Mix
 Staying Focused on the Customer
5. Objectives for Chapter 1:
Introduction to Services
 Explain what services are and identify important trends in services.
 Explain the need for special service marketing concepts and practices and
why the need has developed and is accelerating.
 Explore the profound impact of technology on service.
 Outline the basic differences between goods and services and the
resulting challenges and opportunities for service businesses.
 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.
6. Examples of Service Industries
 Health Care
 hospital, medical practice, dentistry, eye care
 Professional Services
 accounting, legal, architectural
 Financial Services
 banking, investment advising, insurance
 restaurant, hotel/motel, bed & breakfast
 ski resort, rafting
 airline, travel agency, theme park
 hair styling, pest control, plumbing, lawn maintenance, counseling services, health
club, interior design
7. Contributions of Service Industries to
U.S. Gross Domestic Product
8. Tangibility Spectrum
9. Why Service Marketing?
Services dominate U.S. and worldwide
Service as a business imperative in goods-
Deregulated industries and professional service
Service marketing is different
Service leads to profits
10. Percent of U.S. Labor Force by Industry
11. Percent of U.S. Gross Domestic
Product by Industry
12. Examples of Goods Companies that are
Expanding into Services
13. Eight Central Paradoxes of Technological
14. Characteristics of Services
Compared to Goods
15. Comparing Goods and Services
16. Implications of Intangibility
Services cannot be inventoried
Services cannot be easily patented
Services cannot be readily displayed or
Pricing is difficult
17. Implications of Heterogeneity
Service delivery and customer satisfaction
depend on employee and customer actions
Service quality depends on many uncontrollable
There is no sure knowledge that the service
delivered matches what was planned and
18. Implications of Simultaneous Production
Customers participate in and affect the
Customers affect each other
Employees affect the service outcome
Decentralization may be essential
Mass production is difficult
19. Implications of Perishability
It is difficult to synchronize supply and demand
Services cannot be returned or resold
20. Search, Experience, and Credence Qualities
21. Challenges and Questions for Service
 Defining and improving quality
 Designing and testing new services
 Communicating and maintaining a consistent image
 Accommodating fluctuating demand
 Motivating and sustaining employee commitment
 Setting prices
 Organizing to facilitate strategic and tactical decision-making
 Finding a balance between standardization and personalization
 Protecting new service concepts from competitors
 Communicating quality and value to customers
 Ensuring the delivery of consistent quality service
22. Traditional Marketing Mix
Elements an organization controls that can be
used to satisfy or communicate with customers:
23. Expanded Mix for Services – The 7 Ps
 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.
 Physical Evidence
 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.
 The actual procedures, mechanisms, and flow of activities by which the service is
delivered—the service delivery and operating systems.
24. Expanded Marketing Mix for Services
25. Ways to Use the 7 Ps
 How effective is a firm’s
service marketing mix?
 Is the mix well-aligned with
overall vision and strategy?
 What are the strengths
and weaknesses in terms
of the 7 Ps?
 Who is the customer?
 What is the service?
 How effectively does the
service marketing mix for a
service communicate its
benefits and quality?
 What changes/
improvements are needed?