CHAPTER 13

1. Nature of Services1.1. Service Industries are everywhere

1.1.1.Definition: An act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything

1.2. Examples: Government sector, Private non profit sector, Business sector, Manufacturing sector & Retail sector

1.3. Categories of Service Mix (5 categories of offerings)1.3.1.Pure intangible good: Soap, toothpaste etc1.3.2.Tangible good with accompanying services: Aircond installation1.3.3.Hybrid: Restaurants1.3.4.Major service with accompanying minor goods and services: Air transportation1.3.5.Pure service: Baby sitting

1.4. Distinctive Characteristics1.4.1.Intangibility

i. Cannot be seen, tasted, felt, heard or smelled before they are boughtii. Before purchase, need evidence of quality

iii. Companies try to demonstrate service quality through evidence and presentation. E.g. Hotel

iv. Example of marketing tools to positioning tangible strategieso Place Clean and Tidyo People Enough manpowero Equipment State of the Arto Communication Material Should suggest efficiency and speedo Symbols name and symbol should suggest fast serviceo Price Rewards for slow service

v. Brand Experience:-o Sensoryo Affectiveo Behavioralo Intellectual

1.4.2.Inseparabilityi. Services are typically produced and consumed simultaneously

ii. Provide-client interaction is a special feature of services marketingiii. Strategies which may be adopted is by:-

o Work fastero Spending less time with each cliento Seeing more clientso Train more service providers (manpower)

1.4.3.Variabilityi. Services are highly variable

ii. Strategies to increase quality of service:-o Invest in good hiring and training procedureso Standardize the service –performance process throughout the organizationo Monitor customer satisfaction

1.4.4.Perishabilityi. Strategies which can be adopted to overcome perishability on demand side:-

o Differential pricing Off peak price o Non peak demand can be used against competitorso Complementary services provide alternatives to customers e.g. cocktail

lounges in restaurantso Reservation systems

ii. Strategies which can be adopted to overcome perishability on supply side:-o Part time employeeso Peak time efficiencyo Increased consumer participationo Shared serviceso Facilities for future expansion

1.5. Shifting Customer Relationship1.5.1.Customer Empowerment

i. 4 ways to turn customer empowerment into actiono Asking what your customers wanto Put ourselves in the customers’ shoeso Maintain good behavior-based data and insightso Don’t underestimate the importance of using online surveys and customer

feedback1.5.2.Customer Co-Production

i. A jointly producing a product or service in collaboration with the customer1.6. Excellence in Services Marketing

1.7. Best practices of Top Service Companies

1.8. Differentiating Services1.8.1.Primary and Secondary Service Options

i. Primary service package what customer expectsii. Secondary service features e.g. movies on aircraft, merchandise for sale on

aircraft, frequent flier program etc1.8.2.Innovation with Services

i. E.g. Online travel agents such as Expedia and Zuji offer customers the opportunity to conveniently book travel at discount prices

Strategic Concept

Top Management Commitment

High Standards

Profit Tiers

Monitoring Systems

Satisfying Customer

Complaints

1.9. Managing Service Quality

1.10. Managing Customer Expectations

5 Service Quality Determinants

Reliability

Responsiveness

AssuranceEmpathy

Tangibles