The document discusses key concepts around services marketing. It defines what a service is, outlines differences between goods and services, and introduces an expanded services marketing mix. Specifically, it notes that a service is an intangible activity or benefit one party offers another. It also discusses the seven Ps of the expanded marketing mix for services - product, price, place, promotion, people, physical evidence, and process. The document emphasizes the importance of customer focus in services.

2. • 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 service.
• 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.

3.  Service is a technical after-sale function that is provided by
the service department.
Old:
Service =
wrench time
Old view of service =
Customer Service Center

4.  Service includes every interaction between any customer
and anyone representing the company, including:
Dealers
Salespeople
Receptionists
and
Schedulers
Management
and Executives
Service
Employees
Billing and
Accounting
Personnel
Web site and
any e-channel
Interaction

5. Service as a product
Customer service
Services as value
add for goods
Service embedded in
a tangible product

6. Kodak

8. https://www.deere.com/en/

10. • A service is defined as any activity or benefit that one party
can offer to another which is essentially intangible and does
not result in the ownership of anything.
• The same general principles of marketing apply to both
products and services, but services have characteristics that
mean that instead of four P's, there are seven in a services
marketing mix.

11. • A service is any activity or benefit that one party can
offer to another which is essentially intangible and does
not result in the ownership of anything. Its production
may or may not be tied to a physical product.

12. Services can provide higher profit margins
and growth potential than products
Customer satisfaction and loyalty are driven
by service excellence
Services can be used as a differentiation
strategy in competitive markets

13.  Health Care
 hospital, medical practice, dentistry, eye care
 Professional Services
 accounting, legal, architectural
 Financial Services
 banking, investment advising, insurance
 Hospitality
 restaurant, hotel/motel, bed & breakfast
 ski resort, rafting
 Travel
 airline, travel agency, theme park
 Others
 hair styling, pest control, plumbing, lawn maintenance, counseling services,
health club, interior design

14. • Most company offerings to customers contain an element of
service and this is illustrated by the service continuum.
• The dichotomy between physical goods and intangible services
is an oversimplification; these are not discrete categories. Most
business theorists see a continuum with pure service at one
endpoint and pure commodity goods at the other endpoint.
Most products fall between these two extremes.

15. • Pure tangible goods
– toothpaste
• Tangible goods accompanied by one or more service
– computer and warranty
• Hybrid offer consists of equal parts of goods and
services
– restaurants
• Service with accompanying minor goods
– air travel
• Pure service
– haircut

17. • Services cannot be inventoried
• Services cannot be easily patented
• Services cannot be readily displayed or communicated
• Service providers need to manage the evidence by
providing evidence of the benefits
• Intangibility is the dominant characteristic of services
and is defined as the lack of tangible assets which can
be seen, touched or smelled prior to purchase.

18. Marketing implications ‹
• Great marketing skills in tangibilising intangible offerings, i.e., in
surrounding them with “hard” peripheral attributes ‹
• Technical superiority and long term vision in new service
development, in order to protect a service from its non-
patentability ‹
• Special pricing know-how, i.e., what is the cost of a service? ‹
• Creative communications skills, i.e., what message to
communicate?

19.  It refers to the potential for high variability in the performance and the quality of
services, caused by the interaction between the service employee and the
customer ‹
 The performance of the employees delivering one same service varies:
• •
Between different hour zones of the day
• •
From employee to employee •
• From service company to service company
 Not all customers play their role at the service encounter in a homogenous and
predictable way ‹
 Heterogeneity is particularly the case with labor intensive and high-contact
services ‹
Heterogeneity is less visible in technology-based services

20. Marketing implications ‹
• Need to develop service blueprints (Shostack, 1977), i.e., a production line approach
to the servuction process ‹
• Ability to find a balance between standardization and personalization during service
delivery
• ‹
Ability for real time detection of which side of the encounter causes service failure ‹
• Need for a mechanism of timely service recovery ‹
• Skillful selection and motivation of appropriate front-line employees „
Criticism to the adequacy of heterogeneity as a line of demarcation between goods
and services ‹
• Not all services are heterogeneous, not all goods are homogeneous

21. • The production process of services has been called
“servuction” process (Eiglierand Langeard, 1977) ‹
• The customer is present when the service is produced ‹
• The customer plays a role in the servuction and the delivery
process ‹
• Customers interact with one another during the servuction
process and may be affected (positively or negatively) by
this interaction
• Inseparability refers to the simultaneous production and
consumption of a service, thus it is often difficult to separate the
service provider from the service performance.

22.  Mass production of services is difficult, if possible at all ‹
 No significant economies can be earned from centralization of operations, since the
service must be produced at the convenience of customers (temporal and physical) ‹
 Service quality depends highly on what happens in real time, i.e., during the service
encounter ‹
 Since customers have a vital role in the servuction and delivery process, the service
provider needs great skills to train them how to play their role ‹
 The service provider must prove excellence each time the service is produced ‹
 The service provider needs skills in order to tackle disruptions in the servuction
process, caused by problem customers

23.  It refers to the fact that services cannot be saved, stored, resold or returned
‹
Difficulties in synchronizing supply and demand for services
 „
Marketing implications ‹
• Need for developing an as accurate as possible demand forecasting mechanism
• Need for a creative plan for capacity utilization ‹
• Need for the implementation of strategies and actions to accommodate malcontent
customers from non-returnable services „
 Criticism to the adequacy of perishability as a line of demarcation between goods and
services ‹
• “Under conditions of fierce competition and financial stringency, the impact on profit of
unsold stocks is as severe for manufacturers of fast moving consumer goods as it is for
the service industry” (Middleton, 1983)

26. • The link between an Organization and its
customers is the external marketing
process. External marketing represents the
promises which organizations make to
their customers with reference to products
or services they offer. Organizations make
promises to customers concerning their
offerings and how delivery of the offerings
will be conducted.
• The external communication activities of the
service provider play a key role in the
formation of customers’ expectations,
because their expectations are affected by
the service provider’s direct and indirect
marketing messages..

27. • The interactive marketing process is
about keeping the promises made by
the Organization to the customer along
with delivering a quality service the
customer. Interactive marketing is the
actual contact between the service
employees and the customers and is
called the “ moment of truth” or service
encounter.
• It is the decisive moment in the service
process where organizations actually
show what they can do and how they
meet the set expectations.

28. • The marketing process that enables service
marketers to deliver promise to customers is
called internal marketing. Through internal
marketing, the organization reveals that it consists
of individuals and departments who are
considered to be each other’s customers.
• Employees do not only provide a service to the
external customers but also to each other within the
organization. Promises are easy to make, but unless
organizations have internal system in place to ensure
the delivery thereof, service processes cannot
succeed. The success of internal service system is
dependent on the relationship between the
Organization and the employees.

29. • The impact of Technology on all the
dimensions of service delivery has
brought about the expansion of the
service triangle to include technology.
• Changes in Information Technology offer
opportunities to Organizations to perform
services in such ways that the customers’
physical presence is not always compulsory.
• A multitude of new service concepts has
explodes onto the market because of the
advances of information – based
technology.
• The Internet has made it possible for
customers to access services via their
computers and to some extent replace,
and enhance the services of traditional
sellers.

30. 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

31.  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.

33.  „
People ‹
 All humans who play a role in service delivery and who influence the
perceptions of customers (Zeithamland Bitner, 1996) •
• Service delivery employees (front-line staff) •
• The general staff of the service company •
• The customer •
• The other customers that are present in the servuction and delivery process
„
 Physical Evidence ‹
 The setting where the service is delivered (Zeithamland Bitner, 1996) •
• Where the service company and the customer interact •
• Any tangible components that facilitate performance or communication of
the service

34.  Process ‹
 The actual procedure, mechanisms and flow of activities through which a
service is delivered (Zeithamland Bitner, 1986) ‹
 The dimensions of a process’s efficiency and effectiveness:
• •
Length: the number of steps that participants have to follow in order to
effect service delivery •
• Duration: the time that elapses from the first to the last activity of the
service delivery process
• •
Logistical effectiveness: the degree of smoothness in the flow of the
steps of the service delivery process