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Intro to services
 

Intro to services

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    Intro to services Intro to services Presentation Transcript

    • Module 1: Introduction to Services Marketing
      • Why Study Services?
      • What are Services?
      • The Marketing Challenges Posed by Services
      • The Expanded Marketing Mix Required for Services
    • Why Study Services?
    • Why Study Services? (1)
      • Services dominate economy in most nations
      • Understanding services offers you personal competitive advantages
      • Importance of service sector in economy is growing rapidly:
        • Services account for more than 60 percent of GDP worldwide
        • Almost all economies have a substantial service sector
        • Most new employment is provided by services
        • Strongest growth area for marketing
    • Why Study Services? (3)
      • Powerful forces are transforming service markets
        • Government policies, social changes, business trends, advances in IT, internationalization
      • These forces are reshaping
        • Demand
        • Supply
        • The competitive landscape
        • Customers’ choices, power, and decision making
    • Factors Stimulating Transformation of the Service Economy (1)
      • Changes in regulations
      • Privatization
      • New rules to protect customers, employees, and the environment
      • New agreement on trade in services
      Government Policies Business Trends Social Changes Advances in IT Globalization
    • Factors Stimulating Transformation of the Service Economy (2)
      • Rising consumer expectations
      • More affluence
      • More people short of time
      • Increased desire for buying experiences versus things
      • Rising consumer ownership of high tech equipment
      • Easier access to information
      • Immigration
      • Growing but aging population
      Government Policies Business Trends Social Changes Advances in IT Globalization
    • Factors Stimulating Transformation of the Service Economy (3)
      • Push to increase shareholder value
      • Emphasis on productivity and cost savings
      • Manufacturers add value through service and sell services
      • More strategic alliances and outsourcing
      • Focus on quality and customer satisfaction
      • Growth of franchising
      • Marketing emphasis by nonprofits
      Government Policies Business Trends Social Changes Advances in IT Globalization
    • Factors Stimulating Transformation of the Service Economy (4)
      • Growth of the Internet
      • Greater bandwidth
      • Compact mobile equipment
      • Wireless networking
      • Faster, more powerful software
      • Digitization of text, graphics, audio, video
      Government Policies Business Trends Social Changes Advances in IT Globalization
    • Factors Stimulating Transformation of the Service Economy (5)
      • More companies operating on transnational basis
      • Increased international travel
      • International mergers and alliances
      • “ Offshoring” of customer service
      • Foreign competitors invade domestic markets
      Government Policies Business Trends Social Changes Advances in IT Globalization
    • Transformation of the Service Economy Government Policies Business Trends Social Changes Advances in IT Globalization Innovation in service products & delivery systems, stimulated by better technology Customers have more choices and exercise more power
      • Success hinges on:
      • Understanding customers and competitors
      • Viable business models
      • Creation of value for customers and firm
      • New markets and product categories
      • Increase in demand for services
      • More intense competition
    • What Are Services?
    • Defining Services
      • Services
        • Are economic activities offered by one party to another
        • Most commonly employ time-based performances to bring about desired results in:
          • recipients themselves
          • objects or other assets for which purchasers have responsibility
      • In exchange for their money, time, and effort, service customers expect to obtain value from
        • Access to goods, labor, facilities, environments, professional skills, networks, and systems
        • But they do not normally take ownership of any of the physical elements involved
    • Service Products versus Customer Service and After-Sales Service
      • A firm’s market offerings are divided into core product elements and supplementary service elements
      • Is everyone in service? Need to distinguish between:
        • Marketing of services
        • Marketing goods through added-value service
      • Good service increases the value of a core physical good
      • After-sales service is as important as pre-sales service for many physical goods
      • Manufacturing firms are reformulating and enhancing existing added-value services to market them as stand-alone core products
    • Challenges Posed by Services
    • Services Pose Distinctive Marketing Challenges
      • Marketing management tasks in the service sector differ from those in the manufacturing sector
      • The eight common differences are:
        • Most service products cannot be inventoried
        • Intangible elements usually dominate value creation
        • Services are often difficult to visualize and understand
        • Customers may be involved in co-production
        • People may be part of the service experience
        • Operational inputs and outputs tend to vary more widely
        • The time factor often assumes great importance
        • Distribution may take place through nonphysical channels
      • What are marketing implications?
    • Differences, Implications, and Marketing-Related Tasks (1) ( Table 1.1)
      • Difference
      • Most service products
      • cannot be inventoried
      • Intangible elements
      • usually dominate
      • value creation
      • Services are often
      • difficult to visualize
      • and understand
      • Customers may be
      • involved in co-
      • production
      • Implications
      • Customers may be
      • turned away
      • Harder to evaluate
      • service and distinguish
      • from competitors
      • Greater risk and
      • uncertainty perceived
      • Interaction between
      • customer and provider;
      • but poor task execution
      • could affect satisfaction
      • Marketing-Related Tasks
      • Use pricing, promotion, and
      • reservations to smooth
      • demand; work with ops to
      • manage capacity
      • Emphasize physical clues,
      • employ metaphors and vivid
      • images in advertising
      • Educate customers on
      • making good choices; offer
      • guarantees
      • Develop user-friendly
      • equipment, facilities, and
      • systems; train customers,
      • provide good support
    • Differences, Implications, and Marketing-Related Tasks (2) ( Table 1.1)
      • Implications
      • Behavior of service
      • personnel and customers
      • can affect satisfaction
      • Hard to maintain quality,
      • consistency, reliability
      • Difficult to shield
      • customers from failures
      • Time is money;
      • customers want service
      • at convenient times
      • Electronic channels or
      • voice telecommunications
      • Difference
      • People may be part of
      • service experience
      • Operational inputs and
      • outputs tend to vary
      • more widely
      • Time factor often
      • assumes great
      • importance
      • Distribution may take
      • place through
      • nonphysical channels
      • Marketing-Related Tasks
      • Recruit, train employees to
      • reinforce service concept
      • Shape customer behavior
      • Redesign for simplicity and
      • failure proofing
      • Institute good service
      • recovery procedures
      • Find ways to compete on
      • speed of delivery; offer
      • extended hours
      • Create user-friendly,
      • secure websites and free
      • access by telephone
    • The 8Ps of Services Marketing
      • Product Elements
      • Place and Time
      • Price and Other User Outlays
      • Promotion and Education
      • Process
      • Physical Environment
      • People
      • Productivity and Quality
      Fig 1.9 Working in Unison: The 8Ps of Services Marketing