designing and managing services
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Designing and Managing ServicesTRANSCRIPT
To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 12©2003 Prentice Hall, Inc.
Chapter 12Chapter 12
Designing and Managing Designing and Managing ServicesServices
PowerPoint by Karen E. JamesPowerPoint by Karen E. JamesLouisiana State University - ShreveportLouisiana State University - Shreveport
To accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 12©2003 Prentice Hall, Inc.
ObjectivesObjectives
Learn how services are defined and classified.
Understand how service firms improve their competitive differentiation, service quality, and productivity.
Identify how goods-producing companies can improve their customer support services.
To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 12©2003 Prentice Hall, Inc.
Nature of ServicesNature of Services
The Service Industry includes the:
– Government sector– Private nonprofit sector– Business sector– Manufacturing sector
To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 12©2003 Prentice Hall, Inc.
Nature of ServicesNature of Services
Service Mix Categories:
– Pure tangible good: no services– Tangible good with accompanying
services– Hybrid: equal parts service and goods– Major service with accompanying minor
goods and services– Pure service
To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 12©2003 Prentice Hall, Inc.
Nature of ServicesNature of Services
Characteristics
Intangibility
Inseparability
Variability
Perishability
Cannot be touched, seen, tasted, heard, or smelled before purchase
Lack of trial means higher consumer risk
Consumers rely on cues to draw quality inferences
Marketers must try to “tangibilize the intangible”
To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 12©2003 Prentice Hall, Inc.
Nature of ServicesNature of Services
Characteristics
Intangibility
Inseparability
Variability
Perishability
Services are produced and consumed at the same time (air travel)
Service providers and sometimes other customers become part of the service (restaurant)
Strong preferences for service providers exist
To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 12©2003 Prentice Hall, Inc.
Nature of ServicesNature of Services
Characteristics
Intangibility
Inseparability
Variability
Perishability
Service providers vary with respect to attitudes, skills, mood, etc. Even the same provider may give different service on a different day.
Quality control is critical:
– Hiring the right people– Standardizing service– Monitoring satisfaction
To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 12©2003 Prentice Hall, Inc.
Nature of ServicesNature of Services
Characteristics
Intangibility
Inseparability
Variability
Perishability
Services can not be inventoried or otherwise stored
Capacity / demand management is critical:
– Demand side strategies
– Supply side strategies
To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 12©2003 Prentice Hall, Inc.
Nature of ServicesNature of Services
Demand-side strategies– Use differential
pricing– Cultivate nonpeak
demand– Develop
complementary services
– Install reservation systems
Supply-side strategies– Hire part-time
employees– Introduce peak-time
efficiency routines– Increase consumer
participation– Plan facilities for
future expansion– Share services
To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 12©2003 Prentice Hall, Inc.
Marketing StrategiesMarketing Strategies
People, physical evidence, and process must be considered in addition to the 4 “P’s” when creating external marketing plans.
Successfully delivering a service often depends on staff being trained via internal marketing efforts.
To accompany A Framework for Marketing Management, 2nd Edition Slide 11 in Chapter 12©2003 Prentice Hall, Inc.
Marketing StrategiesMarketing Strategies
Interactive marketing refers to the employees’ skill in serving the client.
Customers judge a service by its:
– Technical quality– Functional quality
Search qualities, experience qualities and credence qualities are evaluated by customers.
To accompany A Framework for Marketing Management, 2nd Edition Slide 12 in Chapter 12©2003 Prentice Hall, Inc.
Marketing StrategiesMarketing Strategies
Marketing Tasks
Managing differentiation
Managing service quality
Managing productivity
Can not differentiate on price alone
Innovative features
Delivery system
– Reliability– Resilience– Innovativeness
Image and branding
To accompany A Framework for Marketing Management, 2nd Edition Slide 13 in Chapter 12©2003 Prentice Hall, Inc.
Marketing StrategiesMarketing Strategies
Marketing Tasks
Managing differentiation
Managing service quality
Managing productivity
The service quality model identifies five gaps that can cause service delivery failure
Service companies that successfully address these gaps follow common practices
To accompany A Framework for Marketing Management, 2nd Edition Slide 14 in Chapter 12©2003 Prentice Hall, Inc.
Marketing StrategiesMarketing Strategies
Consumer expectations and management perceptions
Management perception and service-quality specification
Service-quality specifications and service delivery
Service delivery and external communications
Service Delivery Failure Results from Gaps Between:
Service-quality specifications and service delivery
To accompany A Framework for Marketing Management, 2nd Edition Slide 15 in Chapter 12©2003 Prentice Hall, Inc.
Marketing StrategiesMarketing Strategies
A strategic concept
Commitment from top-management
High standards
Firm and customer monitoring systems
Well-Managed Service Firms Share These Characteristics
Satisfaction of employees and customers
To accompany A Framework for Marketing Management, 2nd Edition Slide 16 in Chapter 12©2003 Prentice Hall, Inc.
Marketing StrategiesMarketing Strategies
Marketing Tasks
Managing differentiation
Managing service quality
Managing productivity
Have service providers work more skillfully
Decrease service quality, increase service quantity
Industrialize the service
Reduce need for service
Design a more effective service
Give customers incentives to serve themselves
Use technology
To accompany A Framework for Marketing Management, 2nd Edition Slide 17 in Chapter 12©2003 Prentice Hall, Inc.
Managing Product Support Managing Product Support ServicesServices
Product support services are often sources of competitive advantage
When designing service support programs, marketers must consider key customer concerns:
– Failure frequency– Downtime duration– Out-of-pocket expenses
To accompany A Framework for Marketing Management, 2nd Edition Slide 18 in Chapter 12©2003 Prentice Hall, Inc.
Managing Product Support Managing Product Support ServicesServices
Marketers must design appealing and competitive service offerings that will attract customers. Service offerings should include:
– Facilitating services– Value-augmenting services– Optional service contracts