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Definition of services Characteristics The Services Marketing Triangle: The Service Marketing Mix SerQual and Gaps Model.
Services Marketing
Service is any activity or benefit that one party can offer to another that is essentially intangible does not result in the ownership of anything. Its production may or may not be tied to a physical product.. A Service is a type of a product. a deed performed by one party for another
Discussions about the marketing of goods apply to services as well. Services have special characteristics that make them different than products E.g. Banking services, Educational services, Advertising services, Marketing Research, Consultancy services, Air lines Hotels, Tourism, Health services, Entertainment Services (Films etc.)
Defining and improving quality Communicating and testing new services Communicating and maintaining a consistent image
The company must consider major services characteristics, they are 1) Intangibility. 2) Inseparability. Simultaneous Production and consumption. 3) Variability. Lack of Standardization. 4) Perishability. Not Inventorable.
And Ownership cannot be transferred.
Figure 1-1
Tangibility Spectrum
Salt
Intangibility
Heterogeneity
Perishability
Services Characteristics
1) Intangibility:
Service intangibility means that services cannot be seen, tasted, felt, heard, or smelled before they are bought. Therefore the services marketers task is to make the services tangible in one are more ways by people, place , equipments, and communication material.
2) Inseparability: Production and Consumption. Services inseparability means that services cannot be separated from their providers or people or machines. Provider-client interaction is a special feature of services marketing. So the service provider has to use his time efficiently. E.g. doctor, teacher
Sources: K. Douglas Hoffman and John E. G. Bateson, Essentials of Services Marketing, (Fort Worth: Dryden Press, 1997) pp. 25-38; Valerie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations (New York: Free Press, 1990); and Leonard L. Berry and A. Parasuraman, Marketing Services: Competing Through Quality (New York: Free Press, 1991), p. 5.
Service Perishability means that services cannot be stored for later use or sale. Doctors charged for missed appointments because the service value existed only at that point and disappeared when the patient did not show up. Service firms can use several strategies for producing a better match between demand and supply.
Heterogeneity
Client-Based Relationships
Sources: K. Douglas Hoffman and John E. G. Bateson, Essentials of Services Marketing, (Fort Worth: Dryden Press, 1997) pp. 25-38; Valerie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations (New York: Free Press, 1990); and Leonard L. Berry and A. Parasuraman, Marketing Services: Competing Through Quality (New York: Free Press, 1991), p. 5.
External Marketing
setting the promise
Employees
delivering the promise
Customers
Interactive Marketing Interactive Marketing
1) Internal Marketing:
Means that that the service firm must effectively train and motivate its customer- contact employees (frontline) and all the supporting service people to work as a team to provide customer satisfaction. E.g. Marriot Hotels. (customers, employees &stakeholders)
2) Interactive Marketing: means that perceived service quality depends heavily on the quality of the buyers-seller interaction. The customer judges service quality not only based on technical quality, but also on functional quality( Concern and inspire confidence). Service companies face three major marketing tasks A) Competitive differentiation: Differentiating offer, delivery and image. B) Managing service Quality: Identify the expectation of the customers. Harder to define service quality. c) Managing Productivity: With cost rising rapidly, service firms are under great pressure to increase service productivity by adding assembly line and designing more effective services.
3) External Marketing: means companies effort towards customers to attract and retain them by various marketing mixes and strategies. That is different services and prices for different types of customers.
People because of the simultaneity of production and consumption in services the CE staff occupy the key position in influencing customers perceptions of product quality. In fact the service quality is inseparable from the quality of service provider. An important marketing task is to set standards to improve quality of services provided by employees and monitor their performance.
Without training and control employees tend to be variable in their performance leading to variable service quality. Training is crucial so that employees understand the appropriate forms of behaviour and trainers adopt the best practises.
6) PHYSICAL EVIDENCE:
As services are intangible, service firms has to give importance to make the service visible. Therefore they have to give importance to appearance, Equipments( Computers) Machines, Building ( Banks), Physical Facilities and Employee Uniform etc. Physical evidence this is the environment in which the service is delivered and any tangible goods that facilitate the performance and communication of the service. Customers look for clues to the likely quality of a service also by inspecting the tangible evidence. For example, prospective customers may look to the design of learning materials, the appearance of facilities, staff, etc.
7) PROCESS:It includes activities sequence, Quality Management, Customer Participation and delivery Process. Order processing ( order receiving to service delivery and Service Encounters). Process this means procedures, mechanism and flow of activities by which a service is acquired. Process decisions radically affect how a service is delivered to customers. The services includes several processes e.g. first contact with customers, administrative procedure regarding course delivery, preparation, delivery and evaluation of the courses.
Health Care
hospital, medical practice, dentistry, eye care accounting, legal, architectural banking, investment advising, insurance restaurant, hotel/motel, bed & breakfast, ski resort, rafting
Hospitality
Travel
Others:
Service Providers
service providers have product lines and product mixes as well examples Mastercard insurance telephone services cable services ISPs - internet service providers Airlines, Banks
Gap between management perceptions and consumer expectations Gap between management perceptions and service quality specifications Gap between service quality specifications and service delivery Gap between service delivery and external communication Gap between expected service and perceived service
Moments of truth
It is the customer service encounter Every positive or negative experience of the consumer would have fall-out on the overall service experience
Giving quality service is an expensive business Not every consumer is willing to pay extra for service quality Service providers would have to find their optimum service quality/cost ratios Can technology substitute part of the labour content? Can customers substitute part of the labour content? Making services obsolete by product innovations
Discuss
Should we have different Strategies for Marketing of Goods and Services? All Marketers Must Be Service Marketers!
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