This document discusses key aspects of designing and managing services. It begins by defining a service as an intangible act that does not result in ownership. Services are then categorized along a continuum from pure tangible goods to pure services. The document outlines four distinctive characteristics of services: intangibility, inseparability, variability, and perishability. It also discusses challenges in matching demand and supply for services and introduces models for improving service quality and addressing customer failures. The document concludes by listing determinants of high service quality such as reliability, responsiveness, and empathy.

1. Framework for Marketing Management
11
Designing and
Managing Services
1

2. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-2
Chapter Questions
 How do we define and classify services and
how do they differ from goods?
 What are the new services realities?
 How can we improve service quality?
 How can goods marketers improve customer
support services?

3. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-3
What is a Service?
A service is 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.

4. Services are Everywhere
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5. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-5
Categories of Service Mix
 Pure tangible good
 Good with accompanying services
 Hybrid
 Service with accompany goods
 Pure service

6. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-6
Service Distinctions
 Equipment-based or people-based
 Service processes
 Client’s presence required or not
 Personal needs or business needs
 Objectives and ownership

7. Figure 11.1 Continuum of
Evaluation for Different Types of
Products
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8. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-8
Distinctive Characteristics
of Services
Intangibility
Inseparability
Variability
Perishability

9. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-9
Physical Evidence and
Presentation
 Place
 People
 Equipment
 Communication material
 Symbols
 Price

10. Inseparability
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11. Variability
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12. Perishability
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13. Matching Demand and Supply
Demand side
 Differential pricing
 Nonpeak demand
 Complementary
services
 Reservation systems
Supply side
 Part-time employees
 Peak-time efficiency
 Increased consumer
participation
 Shared services
 Facilities for future
expansion
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14. New Service Realities
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15. Figure 11.2 Root Causes of
Customer Failure
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16. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-16
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

17. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-17
Best Practices
 Strategic Concept
 Top-Management Commitment
 High Standards
 Self-Service Technologies
 Monitoring Systems
 Satisfying Customer Complaints
 Satisfying Employees

18. Figure 11.3 Service-Quality Model
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19. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-19
Determinants of Service Quality
 Reliability
 Responsiveness
 Assurance
 Empathy
 Tangibles

20. For Review
 How do we define and classify services and
how do they differ from goods?
 What are the new services realities?
 How can we improve service quality?
 How can goods marketers improve customer
support services?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-20