Benefits without ownership. Many services provide durable value for customers (eg, education)
Benefits without ownership. Although you didn’t receive a transfer of ownership, you received something of value. Specifically, we receive value in the form of rental. Rented goods services: boat, car, wedding gowns, tux; Space/place: hotel room, airline seat, a suite in an office building, storage container at a warehouse; Labor & expertise: hire someone to do work you will not do yourself (clean the house), hire someone who has expertise/skills (car repair, surgery, legal matter); Implications of renting: there’s a market for renting durable goods instead of selling them; time plays a critical role in most services (when renting your services, you charge different rates—this creates value through higher revenues and profits
Make services tangible through emphasis on physical cluesVivid images in advertising, brandingEducate customers to make good choices, explain what to look for, document performance, offer guarantees
Manage customer roles in the service interaction-- Develop user-friendly equipment, facilities, and systems-- Train customers to perform effectively; provide customer supportEmployees affect the service outcome-- Appearance, attitude, and behavior of service personnel and other customers may affect satisfaction-- Recruit, train, and reward employees to reinforce service quality-- Target the right customers at the right times, shape their behavior
Difficult to provide consistently excellent service-- Set quality standards based on customer expectationsDifficult to shield customers from results of service failures-- Institute good service recovery procedures
Effectively manage supply and demand of servicesSmooth demand through promotions, dynamic pricing, and reservationsWork with operations to adjust capacity-- Find ways to compete on speed of delivery, offer extended service hours
Services<br />Services:deed, performance, or effort<br />• Services are not things, yet they often rely on things for their performance <br />• Provides added value (e.g., convenience, amusement, timeliness, comfort, or health) that are essentially intangible <br />
What are Services?<br />You pay for hotel room.<br />You pay for the physical therapist to work on your knee.<br />You pay to see a movie.<br />No ownership<br />What are you paying for? Value<br />
What are the tangible and intangible components provided by a hotel?<br />INTANGIBLE<br />Interaction with front desk<br />Anticipate needs<br />Prompt reply<br />Training received by staff<br />TANGIBLE<br />Furniture<br />Lighting<br />Cleanliness<br />Carpeting<br />Parking spaces<br />Key determinant of whether product should be classified as product or service: tangibility<br />
Characteristics of Services Vs. Goods<br />Intangibility – most services cannot be seen, touched, held, or put on a shelf.<br />Implications:<br />Greater perceived risk in purchasing<br />Need to add tangible elements<br />
Characteristics of Services Vs. Goods<br />Inseparability– for most services, production and consumption of service occur simultaneously. Customers may be involved in co-production.<br />Implications:<br />Manage customer roles in the service interaction<br />Employees affect the service outcome<br />
Characteristics of Services Vs. Goods<br />Variability– difficult to standardize the quality of service performance<br />Implications:<br />Difficult to provide consistently excellent service<br />Recognize importance of customer service skills. Service is a live performance<br />
Characteristics of Services Vs. Goods<br />Perishability – Most services cannot be produced and stored before consumption. They exist only at the time of their production.<br />Implications:<br />Customers may be turned away or have to wait. We dislike waiting<br />
Characteristics of Services Vs. Goods<br />Rental/Access – Services provide temporary possession or access instead of ownership<br />
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