Managing services

1. Designing and
Managing Services
Marketing Management, 13th ed
13

2. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-2
Chapter Questions
• How do we define and classify services
and how do they differ from goods?
• How do we market services?
• How can we improve service quality?
• How do services marketers create
strong brands?
• How can goods marketers improve
customer support services?

3. 13-3
IBM has moved
from a goods
business to a
service
business

4. 13-4
What is a Service?
Any act of performance that one
party can offer another that is
essentially intangible and does not
result in the ownership of anything;
its production may or may not
be tied to a physical product.

5. 13-5
Service Sectors
Government
Private
nonprofit
Manufacturing
Business Retail

6. 13-6
General Motors’ OnStar
Service

7. 13-7
Categories of Service Mix
Pure tangible good—soup, salt
Good w/ accompanying services—
cell phones
Hybrid--restaurants
Service w/ accompanying goods--
airplane
Pure service--babysitting

8. 13-8
Continuum of Evaluation for Different
Types of Products

9. 13-9
Distinctive Characteristics of
Services
Intangibility
Inseparability
Variability
Perishability

10. 13-10
Physical Evidence and Presentation/ solution for the
intangibility/ Marketing strategies for Intangibility
problems of services.
Place —exterior and interior
People —sufficient number of people
Equipment —computers, copying machine
Communication material —printed materials
Symbols —names and symbols
Price

11. 13-11
Mayo Clinic’s Tangible Cues

12. 13-12
Blue Man Group includes 33
different performers

13. 13-13
How to Increase Quality Control/ solutions
to the Variability problems of services/
marketing strategies for Variability
Invest in good hiring and training procedures
Monitor customer satisfaction
Standardize the service-performance process

14. 13-14
Consumer-Friendly Services

15. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-15
Matching Demand and Supply/ Solution to
perishability problem/ Marketing Strategies for
services Perishability problem.
Demand side
• Differential pricing—shift
some demand from peak
to off-peak periods
• Nonpeak demand—can
be cultivated
• Complementary
services—alternatives to
waiting
• Reservation systems—
way to managed the
demand level
Supply side
• Part-time employees—can
serve at peak demand
• Peak-time efficiency —
perform only essential tasks
during peak periods
• Increased consumer
participation—can be
encouraged to participate
• Shared services—several
providers can use
• Facilities for future
expansion—good
investment

16. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-16
Improving Service Quality
• Listening—understand
what customer really wants
• Reliability—must be a
service priority
• Basic service—keep
promises
• Service design—holistic
view and manage details
• Recovery—satisfy
customers who encounter a
service problem
• Surprising customers —
exceeding customer
expectations
• Fair play—make special efforts
to demonstrate to customers
and employees
• Teamwork—enables large
organizations to deliver service
with care and attentiveness
• Employee research----to
reveal why service problem
occur and how to solve
problems
• Servant leadership—develop
service quality corporate culture

17. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-17
Holistic Marketing for Services/
services marketing Strategies
• External Marketing—the normal work of
preparing, pricing, distributing, and promoting
the service to the customer
• Internal Marketing—training and motivating
employees to serve customers well
• Interactive Marketing—employees’ in
serving the client; technical (successful
solution to problem or question) and
functional (concern and inspire confidence)

18. 13-18
Holistic Marketing for Services

19. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-19
Solutions to Customer Failures
• Redesign processes and redefine customer
roles to simplify service encounters
• Incorporate the right technology to aid
employees and customers
• Create high-performance customers by
enhancing their role clarity, motivation, and
ability
• Encourage customer citizenship where
customers help customers

20. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-20
Factors Leading to Customer
Switching Behavior
• Pricing
• Inconvenience
• Core Service Failure
• Service Encounter Failures
• Response to Service Failure
• Competition
• Ethical Problems
• Involuntary Switching

22. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-22
Gaps that Cause Unsuccessful
Service Delivery
• Gap between consumer expectation and
management perception
• Gap between management perception and
service-quality specifications
• Gap between service-quality specifications
and service delivery
• Gap between service delivery and external
communications
• Gap between perceived service and
expected service

23. Closing the gaps
• Gap 1: Learn what customers expect
• Gap 2: Establish the right service quality
standards
• Gap 3: Ensure that service performance
meets standards
• Gap 4: Ensure that delivery matches
promises

24. 13-24
Determinants of Service
Quality
Reliability—
dependably and accurately
Responsiveness—
provide prompt service
Assurance—
convey trust and confidence
Empathy—caring, individualized
attention to customers
Tangibles—physical facilities,
Equipment, personnel

25. 13-25
Customer Importance and Performance
Ratings for an Auto Dealership

26. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-26
Study Question 1
• Which of the following would be an
example of a hybrid service?
• University
• Professor
• Restaurant
• Soap manufacturer
• Airline

27. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-27
Study Question 2
• Services vary as to whether they are
equipment based or ________.
• service based
• people based
• process based
• historical based
• none of the above

28. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-28
Study Question 3
• Unlike physical goods, services are
produced and ________
simultaneously.
• launched
• consumed
• created
• maximized
• none of the above

29. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-29
Study Question 4
• Services depend on who provides them
and when and where they are provided.
They are highly ________.
• suspect
• variable
• consistent
• substandard
• none of the above

30. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-30
Study Question 5
• Services cannot be stored. This
concept is unique to service marketers
and is called ________.
• standardization
• heterogeneity
• perishability
• intangibility
• none of the above