Chapter 14

Services Marketing

Objectives
Understand nature and importance of services
Identify characteristics of services that
differentiate them from goods
Describe how the characteristics of services
influence development of marketing mixes for
services
Understand importance of service quality and
explain how to deliver exceptional service
quality
Explore nature of nonprofit marketing
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The Nature and

Importance of Services
Services as products
Relationship to economic growth
and lifestyle
Business services
Theater framework

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Characteristics of Services
Intangibility not perceived by the senses
or physically possessed

Inseparability being produced and

consumed simultaneously

Perishability unused services cant be

used at a future time

AUA Presentation, Hallas, 21 November 2005, p.1

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The Tangibility Continuum

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Characteristics of Services

(contd)

Heterogeneity variation in quality

Client-based Relationships interactions
resulting in satisfied customers who use a
service repeatedly

Customer contact the necessary level of

interaction between provider and customer to
deliver the service
Customer Contact Association
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Developing and
Managing Mixes for Services

K. Douglas Hoffman and John E. G. Bateson, Services Marketing: Concepts, Strategies, and Cases,
3rd ed. (Cincinnati: Thomson/South-Western, 2006); Valarie A. Zeithaml, A. Parasuraman, and
Leonard L. Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations
(New York: Free Press, 1990); Leonard L. Berry and A. Parasuraman, Marketing Services:
Competing through Quality (New York: Free Press, 1991), p. 5.

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Development Of Services
Core Service- basic
Supplementary Service- differentiates
from bundle of competitors
Customization vs. Standardization
Dilemma
Acceptable quality
Efficient manner
Satisfy customer needs
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Intangibility
And Service Delivery
Promises raise expectations
Personnel
Physical facility
High-contact employees

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Distribution Of Services
Providers facility
Customer home/business
Arms length
Marketing channel
Direct
Short

Equipment supported
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Promotion Of Services
Intangibility
Tangible cues
Promote

Price
Guarantees
Performance documentation
Availability
Training/certification

Personal selling
Word-of-Mouth
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Pricing Of Services
Performance
Time
Demand-based
Indicator of quality- paint and pricing (scroll
3/4 down page)
Market conditions

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Service Quality
Customers perception of how well a service
provider meets or exceeds their expectations.

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Search Qualities
Tangible attributes (of product) such as color,
style, size, feel, fit that can be evaluated prior
to purchase.

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Experience Qualities
Attributes, such as taste, satisfaction, or
pleasure, which can be assessed only during
purchase and consumption of a service.

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Credence Qualities
Attributes that customers may be unable
to evaluate even after purchasing and
consuming a service.

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Dimensions Of Service Quality

Adapted from Leonard L. Berry and A. Parasuraman, Marketing Services: Competing through Quality (New York: Free Press, 1991 ); Valarie A. Zeithaml, A.
Parasuraman, and Leonard L. Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations (New York: Free Press, 1990); A.
Parasuraman, Leonard L. Berry, and Valarie A. Zeithaml, An Empirical Examination of Relationships in an Extended Service Quality Model, Marketing Science
Institute Working Paper Series, Report no. 90112 (Cambridge, MA: Marketing Science Institute, 1990), p. 29.

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Delivering
Exceptional Service Quality
Analysis of customer expectations
Zone of tolerance

Service Quality Specifications

Goals and commitment

Employee Performance
Evaluation and compensation

Management of Service Expectations

Realistic expectation; word-of-mouth
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Service Quality Model

Adapted from A. Parasuraman, Leonard L. Berry, and Valarie A. Zeithaml, An Empirical Examination of Relationships in an Extended Service Quality Model,
Marketing Science Institute Working Paper Series, Report no. 90112, 1990. Reprinted by permission of Marketing Science Institute, and the authors.

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Nonprofit Marketing
Activities conducted to achieve some goal
other than ordinary business goals such as
profit, market share, or return on investment
Muscular Dystrophy Association

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How Is Nonprofit
Marketing Different?
Not considered a business
Greater opportunity for creativity
Difficult to measure performance
Sometimes controversial
Provide body of knowledge

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Nonprofit Marketing Objectives

Change values
Financial contribution
Donation of services
Shaped by nature of exchange and goals

United Way

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Developing Nonprofit
Marketing Strategies
Target Markets
Target
Client
General

Develop Market Mix

Product = abstract ideas/concepts

Distribution = right media
Promotion = multiple methods
Pricing = fixed and variable costs

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Opportunity Cost
The value of the benefit given up by
selecting one alternative over another.

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