Service mktg

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Service mktg

  1. 1. Copyright © 2001 by Harcourt, Inc.. All rights reserved. Requests for permissions to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida 32887-6777. INTERNATIONAL MARKETING 6e Services Marketing Chapter 17
  2. 2. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-2 Differences Between Services and Goods  Definitions and distinctions • Goods are physical objects, devices, or things. • Services are deeds, performances, or actions. • Goods are fixed in form and require physical distribution; services are delivered as problem solutions on or off-site. • The main difference between goods and services is intangibility. Services are generally more intangible, personalized, and perishable.
  3. 3. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-3 Linkage between Services and Goods  Goods and services complement one another. Goods frequently require servicing after their purchase.  Goods and services are marketed in varying packages or combinations to targeted customer groups  Customer groups have differing perspectives on the features and provision of services.
  4. 4. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-4 Stand-Alone Services  Services compete with goods and compete with other services (e.g., video rentals).  Services are intangible and perishable, presenting problems in matching service capacity to variations in demand.  Consumption of services requires provider and customer involvement.  Service consistency is required.
  5. 5. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-5 Tangible/Intangible Offerings of Airlines Vehicle Transport Service Frequency Food and Drinks Transport Transport Distribution Price Airlines Intangible Tangible Source: Adapted from G. Lynn Shostack, “Breaking Free from Product Marketing, “ in Services Marketing, ed. Christopher H. Lovelock (Englewood Cliffs, NJ: Prentice-Hall, 1984), 40.
  6. 6. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-6 Problems with Services  Market transparency • Consumers have difficulty in evaluating services because customers may use (or require )the same service in different way.  Service heterogeneity • Services vary in their content and quality of delivery as customer requirements change.  Cultural sensitivity • Services are delivered directly to the customer, making them potentially more culturally sensitive than products.
  7. 7. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-7 The Role of Services  In the U.S. economy • The service sector produces 77% of U.S. GNP and employs 80% of the workforce. • Financial and technical services exporting and importing are both growing rapidly.  In the world economy • Services are the fastest growing world trade sector • International services contribute more than half of GNP in many industrial nations. • Trade in services is about 25% of all world trade.
  8. 8. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-8 Global Transformation of Services  Reduced governmental regulation • Transportation, banking, and telecommunications  Decreased regulation by industry groups.  Technological advances are opening up and increasing worldwide service trade opportunities.  Both labor-intensive and technology-intensive services are expanding into global markets.
  9. 9. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-9 International Trade Problems in Services  Data collection problems • The quality of data collected on the service trade is poor due to the difficulty of quantifying and tracking the delivery of services. • Services lack of homogeneity for transparency, making comparisons and the measurement of the effects of services in global markets difficult .
  10. 10. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-10 Regulation of Services Trade  U.S. disincentives to international services • State and federal regulations are formidable barriers to entry.  Governmental justification for entry barriers • National Security • Economic Security • Protection of infant industries  Obstacles to service trade abroad • barriers to entry • performance • Discriminatory and nondiscriminatory regulations
  11. 11. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-11 Governmental Responses to Services Problems  Trade liberalization developments • OECD code on invisible transactions (1950’s) • GATT and the Tokyo Round • The Government Procurement Code • Subsidies and Countervailing Measures Code • The Uruguay Round and the General Agreement on Trade in Services (GATS)
  12. 12. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-12 Corporate Involvement in Services Marketing  Typical International Services • Banking and financial services • Construction, design, and engineering services • Legal and accounting services • Communication services • Teaching and training services • Management consulting
  13. 13. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-13 Starting to Market Services Internationally  For services tied to complementary goods“ • Follow the path of the good in the market.  For services independent of goods • Identify market situations abroad similar to the domestic market where the application of services expertise presents opportunities for market entry and expansion.  Identify and understand transition points • Domestic and economics changes in foreign countries can create the need for services expertise.
  14. 14. Copyright © 2001 by Harcourt, Inc. All rights reserved. 17-14 International Services Marketing  Strategic Implications • Identify the nature and the aim of the service offering core. • Communicate the performance of the service on both the mass level and the personal level. • Train organizational personnel to convey the spirit, values, and attitudes of the corporation. • Address issues of service pricing and financing. • Consider the distribution implications of international services.

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