Characteristics of SERVICES

David Holdford, RPh, MS, PhDProfessor, School of PharmacyVirginia Commonwealth University

That Make Them Difficult to Market

2

Slides to Accompany Chapter 7 of “Marketing for Pharmacists”

3

Learning ObjectivesDefine: services, value-added services, pure services, core services, facilitating services, and supporting services

Describe characteristics of services that differentiate them from products

Discuss how the characteristics of services make them difficult to market

Describe service categorization methods that can be used to develop strategic insights into the provision of pharmacist services

List marketing strategies for dealing with the unique characteristics of services

DEFINING SERVICES

SERVICES ARE…

6

PERFORMANCES

7

That may or may notaccompany a tangible

product

8

Those that accompany a tangible product are called “value-added

services”

9

Those that do not are called “pure services”

10

Services Benefit CustomersCore services are those that are absolutely essential for the customer to receive a core benefit

Facilitating services are necessary for the use of core services

Supporting services are not essential but can increase the value of the core service and differentiate it from the services of competitors

LEVELS OF SERVICES

Service performances consist of collections of interactions that can be described on different levels

11

12

LEVELS OF SERVICESService Acts: discrete interactions occurring between provider and customer (Touchpoints, Moments of Truth)

Service Episodes: series of acts over time between the provider and customer

Total Service Experience: series of episodes provided over time (often described as a customer's journey)

Service Relationships: Sum of acts, episodes, and experiences between businesses and customers

13

Levels of Service PerformanceService Relationship

Service Experience (With MTM)

Service Episode

(Followup Visit)

Act

(Intervene

and/or

referral)

Act (Assess

Changes in

Health)

Act (Review

Changes in

Therapy)

Service Episode

(Initial Visit)

Act

(Intervene

and/or

Referral)

Act

(Develop

Personal

Med

Record)

Act (Med

Therapy

Review)

Service Experience (With Rx Dispensing)

Service Episode (Refill

Rx For Hypertensive

Drug)

Act

(Handling

Insurance

Issue)

Act (Pick

up)

Act

(Reminder

Call)

Service Episode (New

Rx For Oral Antibiotic)

Act (Pick Up

And

Counsel)

Act (Wait

For Rx To Be

Filled)

Act (Drop

Off Rx)

Touchpoints and Moments of Truth

CHARACTERISTICS UNIQUE TO SERVICES

15

4 I’sIntangible

Inconsistent

Inventory

Inseparable

16

Characteristic Challenge

IntangibilityService quality is difficult for customers to assessServices are difficult for marketers to display or describeAssigning value and pricing is difficult

Inconsistency Employee actions determine the quality of servicesService quality depends on many uncontrollable factorsThe actual service delivered often does not match what was planned and promoted

Inseparability Customers participate in and influence the service deliveredCustomers influence each others’ service experience

Inventory Many services cannot be stored for later useIt is hard to synchronize supply and demand with servicesSome services cannot be saved, returned, or resoldOnce some services are delivered, they are lost

Challenges in Marketing Services

17

Classifying Pharmacy Services (traditional)Services Associated with a Tangible Producto Prescription v. Nonprescription medicationso New prescriptions v. Refillso Specialty medicine or Unique administration requirements (e.g., IV, IM)o Complementary and herbal medicineo Durable medical equipment, home testing equipment, and diagnostics

Services Provided to Specific Populationso Geriatric, Pediatrico Women’s healtho Disease-specific

Services Associated with a Practice Settingo Hospital: Centralized services v. Decentralized serviceso Independent v. Chain v. Mass merchandiser v. Grocery storeo Mail order or Interneto Long-term care, home health

18

New Ways of Classifying Services

Classification Variables in Classification

Tangibility of Product/Service Mix Product or Service Orientation?

Focus of Services Directed at People or Things?

Need for Customer to be Physically Present Face-to-Face or Distance Service Delivery?

Need for Customer to be Mentally Present Engaged or Not Engaged?

Pharmacist/Patient Relationship Formal or Informal?

Nature of Service Provided Discrete or Continuous?

Room for Customization and Judgment Standardized or Customized?

Professionalism of Services Professional or Non-professional?

19

Levels of Service Performance

20

Pharmacist Services Classified by the Nature of the Service Act

Action Type Directed at People Directed at ThingsTangible Services directed at people’s

bodies- Vaccinations- Blood pressure monitoring- Cholesterol testing- Diabetes screening

Services directed at goods and other physical possessions- Drug dispensing- OTC counseling- Durable medical equipment- Herbal medicines- Veterinary medicine- Mail order pharmacy

Intangible Services directed atpeople’s minds- Patient education- Drug information services- Alternative medicine

Services directed at intangible assets- Drug insurance design- Pharmacy benefit management- Drug-use review

STRATEGIES FOR MARKETING SERVICES

Use tangible clues to the quality of your services

Lighting, cleanliness, neatness of pharmacy

Dress, appearance, & body language of pharmacist

22

Provide something tangible

23

24

Take advantage of word-of-mouth promotional communications

Ask customers to recommend

Use opinion leaders

Be so good that they want to recommend you

25

Emphasize the professional nature of pharmacist services

Build and maintain trust in patients

26

27

28

29

Establish and maintain a strong image in the mind of customers

Build & maintain strong relationships with customers

30

SummaryThe pharmacy profession needs to look

beyond their current ways of practice and explore how other businesses serve customers.

Pharmacists can learn by emulating the best practices of businesses outside of Pharmacy

SEE ‘MARKETING FOR

PHARMACISTS FOR

MORE DETAILS

D HOLDFORD