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Chapter #1 Chapter #1 Presentation Transcript

  • Chapter 1 Introduction to Services Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • CHAPTER 1 Introduction to Services • What are services? • Why services marketing? • Service and Technology • Characteristics of Services Compared to Goods • Services Marketing Mix • Staying Focused on the Customer Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Objectives for Chapter 1: Introduction to Services Explain what services are and identify important trends in services. Explain the need for special services marketing concepts and practices and why the need has developed and is accelerating. Explore the profound impact of technology on services. 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. Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Examples of Service Industries Health Care  Hospital, medical practice, dentistry, eye care Professional Services  Accounting, legal, architectural Financial Services  Banking, investment advising, insurance Hospitality  Restaurant, hotel/motel, bed and breakfast  Ski resort, rafting Travel  Airline, travel agency, theme park Others  Hair styling, pest control, plumbing, lawn maintenance, counseling services, health club, interior design Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • FIGURE 1.1 Contributions of Service Industries to Canadian Gross Domestic Product Text Text Text Text Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Four Distinctions in Services Service industries and companies Services and products Customer service Derived service Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Figure 1.2 Tangibility Spectrum Salt  Soft Drinks  Detergents  Automobiles  Cosmetics  Fast-food Outlets  Intangible DominantTangible Dominant Fast-food Outlets  Advertising Agencies  Airlines  Investment Management  Consulting  Teaching Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Service Sector Contribution to SelectedTABLE 1.1 Economies Worldwide Country Percent of GDP Attributed to Services Bahamas 90 United States 79 Japan 74 United Kingdom 73 France 73 Canada 71 Sweden 69 Australia 68 Germany 68 Singapore 67 Brazil 51 India 48 China 33 Source: The World Factbook 2004, published by the Central Intelligence Agency, www.cia.go/cia/publications/factbook/geos Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Why Study Services Marketing? Service-based economies Service as a business imperative in manufacturing and IT Deregulated industries and professional service needs Services marketing is different Service equals profits Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Service and Technology Potential for new service offerings New ways to deliver service Enabling both customers and employees Extending the global reach of services The Internet Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Characteristics of ServicesCompared to Goods Intangibility Heterogeneity Simultaneous Production and Perishability Consumption Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Implications of Intangibility Services cannot be inventoried Services cannot be easily patented Services cannot be readily displayed or communicated Pricing is difficult Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Implications of Heterogeneity Service delivery and customer satisfaction depend on employee and customer actions Service quality depends on many uncontrollable factors There is no sure knowledge that the service delivered matches what was planned and promoted Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Implications of Simultaneous Production and Consumption Customers participate in and affect the transaction Customers affect each other Employees affect the service outcome Decentralization may be essential Mass production is difficult Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Implications of Perishability It is difficult to synchronize supply and demand with services Services cannot be returned or resold Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Challenges for Services Defining and improving quality Designing and testing new services Communicating and maintaining a consistent image Accommodating fluctuating demand Motivating and sustaining employee commitment Coordinating marketing, operations, and human resource efforts Setting prices Finding a balance between standardization versus personalization Ensuring the delivery of consistent quality Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Traditional Marketing Mix All elements within the control of the firm that communicate the firm’s capabilities and image to customers or that influence customer satisfaction with the firm’s product and services:  Product  Price  Place  Promotion Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Expanded Mix for Services –The 7 Ps Product Price Place Promotion People  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. Process  The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems. Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • WestJet: Aligning People, Processesand Physical Evidence Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Ways to Use the 7 Ps Overall strategic assessment How effective is a firm’s services marketing mix? Is the mix well-aligned with overall vision and strategy? What are the strengths and weaknesses in terms of the 7 Ps? Copyright © 2007 McGraw-Hill Ryerson Limited.,
  • Ways to Use the 7 Ps Specific service implementation Who is the customer? What is the service? How effectively does the services marketing mix for a service communicate its benefits and quality? What changes/ improvements are needed? Copyright © 2007 McGraw-Hill Ryerson Limited.,