Managing services

Designing and
Managing Services
Marketing Management, 13th ed
13

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-2
Chapter Questions
• How do we define and classify services
and how do they differ from goods?
• How do we market services?
• How can we improve service quality?
• How do services marketers create
strong brands?
• How can goods marketers improve
customer support services?

13-3
IBM has moved
from a goods
business to a
service
business

13-4
What is a Service?
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.

13-5
Service Sectors
Government
Private
nonprofit
Manufacturing
Business Retail

13-6
General Motors’ OnStar
Service

13-7
Categories of Service Mix
Pure tangible good—soup, salt
Good w/ accompanying services—
cell phones
Hybrid--restaurants
Service w/ accompanying goods--
airplane
Pure service--babysitting

13-8
Continuum of Evaluation for Different
Types of Products

13-9
Distinctive Characteristics of
Services
Intangibility
Inseparability
Variability
Perishability

13-10
Physical Evidence and Presentation/ solution for the
intangibility/ Marketing strategies for Intangibility
problems of services.
Place —exterior and interior
People —sufficient number of people
Equipment —computers, copying machine
Communication material —printed materials
Symbols —names and symbols
Price

13-11
Mayo Clinic’s Tangible Cues

13-12
Blue Man Group includes 33
different performers

13-13
How to Increase Quality Control/ solutions
to the Variability problems of services/
marketing strategies for Variability
Invest in good hiring and training procedures
Monitor customer satisfaction
Standardize the service-performance process

13-14
Consumer-Friendly Services

Matching Demand and Supply/ Solution to
perishability problem/ Marketing Strategies for
services Perishability problem.
Demand side
• Differential pricing—shift
some demand from peak
to off-peak periods
• Nonpeak demand—can
be cultivated
• Complementary
services—alternatives to
waiting
• Reservation systems—
way to managed the
demand level
Supply side
• Part-time employees—can
serve at peak demand
• Peak-time efficiency —
perform only essential tasks
during peak periods
• Increased consumer
participation—can be
encouraged to participate
• Shared services—several
providers can use
• Facilities for future
expansion—good
investment

Improving Service Quality
• Listening—understand
what customer really wants
• Reliability—must be a
service priority
• Basic service—keep
promises
• Service design—holistic
view and manage details
• Recovery—satisfy
customers who encounter a
service problem
• Surprising customers —
exceeding customer
expectations
• Fair play—make special efforts
to demonstrate to customers
and employees
• Teamwork—enables large
organizations to deliver service
with care and attentiveness
• Employee research----to
reveal why service problem
occur and how to solve
problems
• Servant leadership—develop
service quality corporate culture

Holistic Marketing for Services/
services marketing Strategies
• External Marketing—the normal work of
preparing, pricing, distributing, and promoting
the service to the customer
• Internal Marketing—training and motivating
employees to serve customers well
• Interactive Marketing—employees’ in
serving the client; technical (successful
solution to problem or question) and
functional (concern and inspire confidence)

13-18
Holistic Marketing for Services

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

Factors Leading to Customer
Switching Behavior
• Pricing
• Inconvenience
• Core Service Failure
• Service Encounter Failures
• Response to Service Failure
• Competition
• Ethical Problems
• Involuntary Switching

Gaps that Cause Unsuccessful
Service Delivery
• Gap between consumer expectation and
management perception
• Gap between management perception and
service-quality specifications
• Gap between service-quality specifications
and service delivery
• Gap between service delivery and external
communications
• Gap between perceived service and
expected service

Closing the gaps
• Gap 1: Learn what customers expect
• Gap 2: Establish the right service quality
standards
• Gap 3: Ensure that service performance
meets standards
• Gap 4: Ensure that delivery matches
promises

13-24
Determinants of Service
Quality
Reliability—
dependably and accurately
Responsiveness—
provide prompt service
Assurance—
convey trust and confidence
Empathy—caring, individualized
attention to customers
Tangibles—physical facilities,
Equipment, personnel

13-25
Customer Importance and Performance
Ratings for an Auto Dealership

Study Question 1
• Which of the following would be an
example of a hybrid service?
• University
• Professor
• Restaurant
• Soap manufacturer
• Airline

Study Question 2
• Services vary as to whether they are
equipment based or ________.
• service based
• people based
• process based
• historical based
• none of the above

Study Question 3
• Unlike physical goods, services are
produced and ________
simultaneously.
• launched
• consumed
• created
• maximized

Study Question 4
• Services depend on who provides them
and when and where they are provided.
They are highly ________.
• suspect
• variable
• consistent
• substandard

Study Question 5
• Services cannot be stored. This
concept is unique to service marketers
and is called ________.
• standardization
• heterogeneity
• perishability
• intangibility

Managing services

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