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Services marketing v3


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Services marketing v3

  1. 1. Services Marketing Guest Lecturer Binus Friday, 14 February 2014
  2. 2. • Why Services Marketing • The ICT Services Continuum • Technological Paradox • Evidence of Services • Evaluation of Services and Decision Making • Service Quality • Relationship Marketing • Service Failure and Service Recovery • Servicescape • Managing Customer Expectation
  3. 3. Service Economy • The relative importance of service in a product offering. • The service economy in developing countries is mostly concentrated in financial services, hospitality, retail, health, human services, information technology and education. • Products today have a higher service component than in previous decades. • In the management literature this is referred to as the servitization of products. • Virtually every product today has a service component to it.
  4. 4. • Services dominate countries and worldwide economies • Services are growing dramatically • Service leads to customer satisfaction, retention and loyalty • Service leads to profits • Services help companies differentiate themselves
  5. 5. total expenditure: 5X product costs total expenditure: 21X product costs total expenditure: 5X product costs 100% 80% 60% 40% 20% 0% annual cost of PC use: $6,259 total annual cost of rail operations: $29 billion average annual household expenditure: $6,064 Personal Computers Locomotives Automobiles The sale of a product accounts for only a small portion of overall revenues. Providing services to customers is where the real money is. Source: GartnerGroup, Association of American Railroads, Federal Highway Administration Office of Highway Information Management. (Railroad expenditures are for Class 1 railroads.)
  6. 6. Clothing Jewelry Furniture Houses Automobile Restaurant Vacation Haircut Child Care Television repair Legal Services Root Canal Auto Repair Medical Diagnostics High in Search High in Experience High in Credence Source : Valerie Zeithaml, “How Consumer Evaluation Differ between Goods and Services”
  7. 7. Hardware Hardware and Software Consultation
  8. 8. Source : D.G. Mick and S. Fournier, “Paradoxes of Technology : Consumer Cognizance, Emotions and Coping Strategies”, Journal of Consumer Research 25 (September 1998), pp. 123-147.
  9. 9. Expected service Perceived service ---------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------- External communications to customers - Lack of integrated service mkt communications - Inefficient management of customer - Over Promising - Inadequate horizontal communicationsexpectations Actual Service delivery - Deficiencies in human resource policies - Failure to match supply and demad - Customer not fulfilling roles - Problems with intermediaries/ channels ------------------------------------------------------------------------------ --------------------------------------------------------------------------------- Customer driven service designs and standarts - Poor service design - Absence of customer defined standarts - Inappropriate physical evidence and servicescape --------------------------------------------------------------------------------------- Company’s understanding of customer expectations - Inadequate research - Lack of upward communication - Insufficient relationship focus - Inadequate service recovery
  10. 10. • How are we doing overall in meeting or exceeding customer expectations? • How are we doing overall in closing the four company gaps? • Which gaps represent our strengths and where are our weaknesses?
  11. 11. Need Recognition Information Search Evaluation of Alternatives Purchase Consumer Choice Consumer Experience Post Experience Evaluation
  12. 12. • is the “moment of truth” • occurs any time the customer interacts with the firm • can potentially be critical in determining customer satisfaction and loyalty • types of encounters: • remote encounters, phone encounters, face-to-face encounters • is an opportunity to: • build trust • reinforce quality • build brand identity • increase loyalty
  13. 13. Customer Benefits Confidence Benefits Social Benefits Special Treatment Benefits Relationship Bonds Financial Bonds Social Bonds Customization Bonds Structural Bonds Switching Barriers Customer Inertia Switching Costs Core Service Provision Satisfaction Perceived Service Quality Perceived Value Strong Customer Relationship (Loyalty) Firm Benefits Economic Benefits Customer Behavior Benefits Human Resource Management Benefits Relationship Drivers Outcomes
  14. 14. Platinum Gold Iron Lead Most profitable customers Least profitable customers
  15. 15. Source: TARP Worldwide., 2007
  16. 16. 1 2 3 4 7 6 5 Zone of Tolerance Service Failure Service Recovery Process
  17. 17. Do the job right at the first time Effective complaint handling Increase satisfaction and loyalty Identify complaints • Conduct research • Monitor complaints • Develop complaints as opportunity culture Resolve complaints effectively • Develop effective strategy • Training in complain handling Learn from recovery experiences Conduct root cause analysis
  18. 18. 1. Act fast 2. Acknowledge the customer’s feelings 3. Don’t argue with the customer 4. Empathize with the customer 5. Clarify the truth and sort out the cause 6. Give customer the benefit of doubt 7. Propose the steps needed to solve the problem 8. Keep customers informed of the progress 9. Consider compensations 10. Continue to regain customer goodwill 11. Self check the system and improve it Source: TARP Worldwide., 2007
  19. 19. the environment in which • the service is performed, delivered, and consumed • where the firm and customer interact • combined with tangible commodities that facilitate performance or communication of the service Consider impact on customer response, particularly perceptions, evaluations and assessment For example : patient examination room in a doctor’s office restaurant seating, furnishing, pictures, lighting, background music
  20. 20. Goal: Delivery greater than or equal to promises
  21. 21.