Services are difficult for customers to evaluate and rely more on experience and credence qualities than search qualities. As a result, customers rely more on word-of-mouth, price, personnel, and physical cues to judge quality. They are also highly loyal to providers who satisfy them. For service providers, the key tasks are competitive differentiation, maintaining service quality, and improving productivity. Service quality is based on whether customer expectations are met or exceeded. It can be improved by ensuring reliability, responsiveness, assurance, empathy, and attention to tangibles. Productivity can be improved by training workers, standardizing processes, reducing needs through products, empowering customers, and leveraging technology.

1. MARKETING OF SERVICES

3. • Search qualities- characteristics a buyer can evaluate
before purchase
• Experience qualities – characteristics the buyer can
evaluate after purchase and consumption.
• Credence qualities – characteristics the buyer
normally finds hard to evaluate even after
consumption.

4. Services are high in experience and credence
qualities, therefore there is more risk in
purchase. This has a number of consequences.
- Services consumers generally rely on word of
mouth rather than advertising.
- They rely heavily on price, personnel and
physical cues to judge quality
- They are highly loyal to service providers who
satisfy them.

5. Service Providers face three tasks..
• Competitive differentiation
• Service Quality
• Productivity

6. Managing Differentiation
Service marketers frequently complain about the difficulty of
differentiating services. However services can be
differentiated. The alternative to price competition is to
develop a differentiated..
- Offering
- Delivery
- Image

7. • Offering
Primary service package (what customers expect)
Secondary service features (additional offering)
Eg. Airliners introducing movies, air-to-ground telephone services etc.
Challenge: most service offerings and innovations are easily copied.
• Faster and Better Delivery
Three levels of differentiation –
- reliability
- resilience
- innovativeness
It is harder to duplicate a superior distribution system than to copy a
competitor’s advertising campaign.
• Image
Differentiate through symbols and branding.

8. SERVICE QUALITY

9. Service quality – the single most researched area in
services marketing to date.
The basic principles that underlie the concept of service
quality indicate certain features.
• It is more difficult for customers to evaluate the
quality of services than the quality of goods.
• Service quality is based on customers’ perception of
the outcome of the service and their evaluation of
the process by which the service was performed.
• Service quality perceptions result from a comparison
of what the customer expected before the service
and the perceived level of service received.

10. Components of Service quality
Gronroos (1984)
• Technical quality (quality of the core service delivered)
• Functional quality (how the service is delivered or performed)
• Corporate image (focuses on the actual service
performance, the surroundings in which the service was
provided and the image conveyed by service providers. The
focal point of service organizations is to influence customers
to remember the corporate image, as organizations intend
them to remember it)

11. Dimensions of Quality
• Reliability
• Responsiveness
• Assurance
• Empathy
• Tangibles

13. Managing Productivity
There are seven approaches to improving service productivity
• Have service providers work more skillfully. The company can hire
and foster more skillful workers through better selection and
training.
• Increase the quantity of service by surrendering some quality.
Doctors working for some HMOs have moved toward handling
more patients and giving less time to each patient.
• “Industrialize the service” by adding equipment and standardizing
production. Levitt recommended that companies adopt a
“manufacturing attitude” toward producing services, as
represented by McDonald’s assembly-line approach to fast food
retailing, culminating in the “technological hamburger”.
• Reduce or make obsolete the need for a service by inventing a
product solution, the way the wash-and-wear shirt reduced the
need for commercial laundries, and certain antibiotics reduced the
need for tuberculosis sanitariums.

14. Managing productivity contd…
• Design a more effective service. How-to-quit-smoking clinics
may reduce the need for expensive medical services later on.
Hiring paralegal workers reduces the need for more expensive
legal professionals.
• Present customers with incentives to substitute their own
labor for company labor. Banks have turned their customers
into tellers, gas stations have turned customers into gas
pumpers.
• Harness the power of technology to give customers access to
better service and make service workers more productive.
Companies that use their web sites to empower customers
can lessen workloads, capture valuable data, and increase the
value of their businesses.