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Introduction to
Services Marketing
How Important is the Service Sector in
Our Economy?
Health Care
hospital, medical practice, dentistry, eye care
Professional Services
accounting, legal, architectural
Financial Services
banking, investment advising, insurance
Hospitality
restaurant, hotel/motel, bed & breakfast,
ski resort, rafting
Travel
airlines, travel agencies, theme park
Others:
hair styling, pest control, plumbing, lawn maintenance,
counseling services, health club
Internal Services
Includes:
accounting and payroll administration
recruitment and training
legal services
transportation
catering and food services
cleaning and landscaping
Setting prices
Standardization versus personalization
Marketing Relevant
Differences Between
Goods and Services
Defining the Essence of a Service
physical possessions
intangible assets
Defining the Essence of a Service
Heterogeneity
No Ownership
Intangibility
Simultaneous
Production Perishability
and
Consumption
Distinguishing Characteristics of Services
(Table 1.1) (Lovelock)
Tangible
Dominant Fast-food
Outlets
Advertising
Agencies
Airlines
Investment
Management
Consulting
Teaching
Marketing Implications - 1
No ownership
Customers obtain temporary rentals, hiring of personnel, or access to facilities
and systems
Pricing often based on time
Customer choice criteria may differ for renting vs. purchase--may include
convenience, quality of personnel
Can’t own people (no slavery!) but can hire expertise and labor
Hi
Salt
Soft drinks
CD Player
Golf clubs
New car
Tangible Elements
Tailored clothing
Furniture rental
Fast food restaurant
Plumbing repair
Office cleaning
Health club
Airline flight
Retail banking
Insurance
Weather forecast
Lo Intangible Elements Hi
Marketing Implications - 3
People-processing services
require customers to visit the
“service factory,” so:
Think of facility as a “stage” for service
performance
Design process around customer
Choose convenient location
Create pleasing appearance, avoid
unwanted noises, smells
Consider customer needs--info,
parking, food, toilets, etc.
Implications of Service Processes:
(3) Evaluating Alternative Delivery Channels
Potential solutions:
- Manage demand
- Manage capacity
Implications of Service Processes:
(5) Applying Information Technology
Involvement in service
delivery often entails
contact with other people
Managers should be
concerned about employees’
appearance, social skills,
technical skills
Other customers may enhance
or detract from service
experience--need to manage
customer behavior
Services are Different Table 1-2 (Bitner, Zeithaml)
Goods
Tangible
Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, “Problems and Strategies in Services
Marketing,” Journal of Marketing 49 (Spring 1985): 33-46.
The Services Marketing Triangle Figure 1-5 (Bitner, Zeithaml)
Company
(Management)
Internal External
Marketing Marketing
“enabling the “setting the
promise” promise”
Guarantees
The 7Ps:
(2) Place and Time
Content
information, advice
persuasive messages
customer education/training
The 7Ps:
(4) Price and Other User Outlays
Operations Marketing
Management Management
Customers
Human Resources
Management