4362ch1 Sp10


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  • 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
  • 4362ch1 Sp10

    1. 1. Ch. 1 – Understanding Services Marketing<br />Relationships among Company, Customer, Competition:<br />
    2. 2. 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 />
    3. 3. 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 />
    4. 4. Degree of Tangibility<br />salt<br /><br />soft drinks<br /><br />detergents<br /><br />automobiles<br /><br />cosmetics<br /><br />fast-food<br />Intangible<br />Dominant<br /><br />Tangible<br />Dominant<br /><br /><br />fast-food<br /><br />advertising<br />agencies<br /><br />airlines<br /><br />investment<br />management<br /><br />consulting<br />teaching<br />
    5. 5. 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 />
    6. 6. 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 />
    7. 7. 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 />
    8. 8. 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 />
    9. 9. 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 />
    10. 10. Characteristics of Services Vs. Goods<br />Rental/Access – Services provide temporary possession or access instead of ownership<br />