MBS507 Strategic Marketing

Management
Designing & Managing Services

Best & Worst Service

Experience?

qutoofrestaurant.com

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

13-2

For discussion today

1.

2.
3.

4.
5.

How do we define and classify services and

how do they differ from goods?
What are the new services realities?
How can we achieve excellence in services
marketing?
How can we improve service quality?
How can goods marketers improve customer
support services?

What is a Service?
A service is 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.

Services are Everywhere

Continuum of Evaluation for

Different Types of Products
Figure 13.1

[can evaluate
before purchase]

[can evaluate
after purchase]

[hard to evaluate even

after consumption]

Most high in experience & credence risky

Rely on WOM, physical cues, loyal due to high switching costs

Categories of Service Mix

Pure tangible good

Good with accompanying services
Hybrid [equal parts goods & services]
Service with accompany goods
Pure service

Service Distinctions
1.
2.
3.
4.
5.

Equipment-based or people-based
Service processes
Clients presence required or not
Personal needs or business needs
Objectives [profit or nonprofit] and ownership [private or public]

waterlesscarwash.com; eisingerbrown.com

Distinctive Characteristics of Services

Intangibility
cannot be seen, tasted, felt, heard, or smelled before
purchase

Inseparability
cannot be separated from providers

Variability
depends on who provide them; when, where & how

Perishability
cannot be stored for later sale or use

Disneyland Paris

Intangibility
Inseparability
Variability
Perishability

Pic soruce: seafrance.org

[Demonstrate service quality through]

Physical Evidence and Presentation

1.
2.
3.
4.
5.
6.

Place [traffic flow, waiting line]

People [adequately staffed]
Equipment [look modern]
Communication material [distinct benefit]
Symbols [Name & symbol suggest benefit]
Price [use incentive]
To demonstrate a tangible
positioning, e.g. a fast bank

Begins with theme or benefit

Use physical evidence & presentation

Inseparability

Produced and consumed simultaneously

Provider is part of the service
Provider-client interaction

Variability

Depends on who, when, where

Standardize use blueprint, flowchart, look out for fail points
Service guarantees reduce perception of risk

Variability: Increase quality

control
1.

2.

3.

Invest in good hiring and training procedures

Standardise the service performance process
throughout the company; develop common
definitions of what is expected
Monitor customer satisfaction using
suggestion and complaint systems, customer
surveys, and comparison shopping

Increasing Quality Control

Blue print or flow chart SOP

Perishability

Fluctuating demand
Manage demand versus supply next slide

Matching Demand and Supply

Demand side
1. Differential pricing
2. Nonpeak demand

Supply side
1. Part-time employees
2. Peak-time efficiency

[grow]
3.

Complementary
services [alternatives for
waiting customers]

4.

Reservation systems

1. Segmented pricing non-preak

[focus on essential tasks]

3.

4.
5.

Increased consumer
participation
Shared services
Facilities for future
expansion

New Service Realities

CUSTOMER EMPOWERMENT: more sophisticated,

demand for self-select elements through unbundled
services; want control, communication (Internet), &
participation
CUSTOMER COPRODUCTION: Joint fulfillment of service;
perceives more value & stronger connection

Figure 13.3

Root Causes of Customer Failure

Servicescape - physical environment

Solutions to Customer Failures

1.

2.

3.

4.

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

1. Netflix 2. Comcast - software 3. Wireless phone reminders about overseas 4. Golf club behavior

Figure 13.4

Types of Marketing in Service Industries

training and motivating employees to serve

Best Practices
1.

Strategic Concept
[need-satisfaction, customer obsession]

2.

Top-Management Commitment
[to service, not just financial]

3.
4.
5.

High Standards [quality standards]

Self-Service Technologies
Monitoring Systems
[audit both firm & competitors performance]

6.

Satisfying Customer Complaints

[satisfiers & dissatisfiers]

7.

Satisfying Employees

Best practice

Ritz Carlton, Boston

Its unique culture starts

with a motto: "We are
ladies and gentlemen
serving ladies and
gentlemen."
One of its remarkable
policies is to permit
every employee to spend
up to $2,000 making any
single guest satisfied.

Figure 13.5

Importance-Performance Analysis

customers rated 14 service elements or attributes of an automobile dealers service department

Improving Service Quality

Listening
Reliability
Basic service
Service design
Recovery

10 key things to do

Surprising customers
Fair play
Teamwork
Employee research
Servant leadership

Figure 13.6

Service-Quality Model [Gaps]

Determinants of Service Quality

Reliability: ability to perform the promised service

dependably and accurately

Responsiveness: Willingness to help customers

and provide prompt service

Assurance: knowledge and courtesy of employees

and their ability to convey trust and confidence

Empathy: provision of caring, individualized attention

to customers

Tangibles: appearance of physical facilities,

equipment, personnel, and communication materials

Customer Worries
Failure frequency
Example: frequency of break down

Downtime
Example: speed of repair of machinery; provision of a loaner

Out-of-Pocket Costs
Example: expenditure on regular maintenance and repair costs

For Review and reflection

How do we define and classify services and

how do they differ from goods?
What are the new services realities?
How can we achieve excellence in services
marketing?
How can we improve service quality?
How can goods marketers improve customer
support services?

blog.ibs-b.hu

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