CHAPTER 13

1. Nature of Services
1.1.Service Industries are everywhere
1.1.1. Definition: An act or performance that one party can offer to another
that is essentially intangible and does not result in the ownership of
anything
1.2.Examples: Government sector, Private non profit sector, Business sector,
Manufacturing sector & Retail sector
1.3.Categories of Service Mix (5 categories of offerings)
1.3.1. Pure intangible good: Soap, toothpaste etc
1.3.2. Tangible good with accompanying services: Aircond installation
1.3.3. Hybrid: Restaurants
1.3.4. Major service with accompanying minor goods and services: Air
transportation
1.3.5. Pure service: Baby sitting
1.4.Distinctive Characteristics
1.4.1. Intangibility
i.
Cannot be seen, tasted, felt, heard or smelled before they are
bought
ii.
Before purchase, need evidence of quality
iii.
Companies try to demonstrate service quality through evidence and
presentation. E.g. Hotel
iv.
Example of marketing tools to positioning tangible strategies
o
Place Clean and Tidy
o
People Enough manpower
o
Equipment State of the Art
o
Communication Material Should suggest efficiency and speed
o
Symbols name and symbol should suggest fast service
o
Price Rewards for slow service
v.
Brand Experience:o
Sensory
o
Affective
o
Behavioral
o
Intellectual
1.4.2. Inseparability
i.
Services are typically produced and consumed simultaneously
ii.
Provide-client interaction is a special feature of services marketing
iii.
Strategies which may be adopted is by:o
Work faster
o
Spending less time with each client
o
Seeing more clients
o
Train more service providers (manpower)

1.4.3. Variability
i.
Services are highly variable
ii.
Strategies to increase quality of service:o
Invest in good hiring and training procedures
o
Standardize the service performance process throughout the
organization
o
Monitor customer satisfaction
1.4.4. Perishability
i.
Strategies which can be adopted to overcome perishability on
demand side:o
Differential pricing Off peak price
o
Non peak demand can be used against competitors
o
Complementary services provide alternatives to customers
e.g. cocktail lounges in restaurants
o
Reservation systems
ii.
Strategies which can be adopted to overcome perishability on
supply side:o
Part time employees
o
Peak time efficiency
o
Increased consumer participation
o
Shared services
o
Facilities for future expansion
1.5.Shifting Customer Relationship
1.5.1. Customer Empowerment
i.
4 ways to turn customer empowerment into action
o
Asking what your customers want
o
Put ourselves in the customers shoes
o
Maintain good behavior-based data and insights
o
Dont underestimate the importance of using online surveys
and customer feedback
1.5.2. Customer Co-Production
i.
A jointly producing a product or service in collaboration with the
customer
1.6.Excellence in Services Marketing

1.7.Best
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1.8.Differentiating Services
1.8.1. Primary and Secondary Service Options
i.
Primary service package what customer expects
ii.
Secondary service features e.g. movies on aircraft, merchandise
for sale on aircraft, frequent flier program etc
1.8.2. Innovation with Services
i.
E.g. Online travel agents such as Expedia and Zuji offer customers
the opportunity to conveniently book travel at discount prices

1.9.Managing Service Quality

1.10.

Managing Customer Expectations

Reliabili
ty

Tangibl
es

Empath
y

5 Service
Quality
Determinan
ts

Respon
sivenes
s

Assuran
ce