Ch. 1 – Understanding Services Marketing

Relationships among Company, Customer, Competition:

Services

• Services: deed, performance, or effort

•Services are not things, yet they often rely on things for their performance

•Provides added value (e.g., convenience, amusement, timeliness, comfort, or health) that are essentially intangible

What are Services?You pay for hotel room.You pay for the physical therapist to work on your knee.You pay to see a movie.

1. No ownership

2. What are you paying for? Value

Degree of Tangibility

TangibleDominant

IntangibleDominant

saltsoft drinks

detergentsautomobiles

cosmetics

advertisingagencies

airlinesinvestment

managementconsulting

teaching

fast-food

fast-food

What are the tangible and intangible components provided by a hotel?

TANGIBLE• Furniture• Lighting• Cleanliness• Carpeting• Parking spaces

Key determinant of whether product should be classified as product or service: tangibility

INTANGIBLEInteraction with front deskAnticipate needsPrompt replyTraining received by staff

Characteristics of Services Vs. Goods

Intangibility – most services cannot be seen, touched, held, or put on a shelf.

Implications:• Greater perceived risk in purchasing• Need to add tangible elements

Characteristics of Services Vs. Goods

Inseparability – for most services, production and consumption of service occur simultaneously. Customers may be involved in co-production.

Implications:• Manage customer roles in the service

interaction• Employees affect the service outcome

Characteristics of Services Vs. Goods

Variability – difficult to standardize the quality of service performance

Implications:• Difficult to provide consistently excellent

service• Recognize importance of customer service

skills. Service is a live performance

Characteristics of Services Vs. Goods

Perishability – Most services cannot be produced and stored before consumption. They exist only at the time of their production.

Implications:• Customers may be turned away or have to

wait. We dislike waiting

Characteristics of Services Vs. Goods

Rental/Access – Services provide temporary possession or access instead of ownership