FUNDAMENTAL CHAPTER 3 DIFFERENCES BETWEEN GOODS AND SERVICES

INTANGIBILITY
Pick up the shoes Feel the quality of materials View specific style and color Sample the fit
VS.

Entitles the consumer to an experience Subjectively evaluated

FIGURE 3.1: MARKETING CHALLENGES AND SOLUTIONS PERTAINING TO INTANGIBILITY

Marketing Problems Services cannot be inventoried Lack of patent protection and can be easily copied Difficulty in displaying or explain to customers Difficulty in pricing strategies Possible Solutions Use of tangible clues to help tangibilize Use of personal sources of information Creation of a strong organizational image Utilize an activity-based costing approach

MARKETING PROBLEMS CAUSED BY INTANGIBILITY

1. Lack of service inventories
2. Not protected by patents

3. Not easily displayed or

communicated

4. Pricing is difficult

POSSIBLE SOLUTIONS FOR INTANGIBILITY

Use tangible clues/physical evidence

Quality furniture in a lawyers office Appearance of the personnel

Utilize personal sources of information

Family, friends, and other opinion leaders

Create a strong organizational image Utilize an activity-based costing approach

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FIGURE 3.2: MARKETING CHALLENGES AND SOLUTIONS PERTAINING TO INSEPARABILITY

Marketing Problems Possible Solutions

Physical connection of the service provide to the service Involvement of the customer in the production process Involvement of other customers in the production process Special challenges in mass production of services

Selecting and training public contact personnel

Effectively managing consumers Use of multisite location

MARKETING PROBLEMS CAUSED BY INSEPARABILITY Service provider is involved in the production process Customer is involved in the production process Other customers are involved in the production process (shared experience) The mass production of services presents special challenges
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CUSTOMER IS INVOLVED IN THE PRODUCTION PROCESS

Involvement may vary Impact on the type of service desired
cycle of service demand length of the delivery process

Service factory must be built with the customers presence in mind

OPINION QUESTION: If given the choice of dining at one of two new restaurants, would you select a restaurant that had no cars in the parking lot, or would you choose a restaurant down the street with a full parking lot?
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POSSIBLE SOLUTIONS FOR INSEPARABILITY

Selecting and training public contact personnel Develop strategies to manage consumers

Develop multi-site locations

FIGURE 3.3: HETEROGENEITYMARKETING CHALLENGES AND POSSIBLE SOLUTIONS

Marketing Problems Difficult to standardize service and quality control Possible Solutions Customization

Standardization

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MARKETING PROBLEMS CAUSED BY HETEROGENEITY

Standardization and quality control are difficult to achieve

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POSSIBLE SOLUTIONS FOR HETEROGENEITY

Customization Strategy Constructed to fit customers exact needs Standardization Strategy Faster Less expensive More consistent
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FIGURE 3.4: PERISHABILITYMARKETING CHALLENGES AND POSSIBLE SOLUTIONS

Marketing Problems Demand exceeds supply Demand exceeds optimal levels of supply Lower demand than optimal supply level Possible Solutions Possible Solutions Demand Supply Creative pricing Reservation system Shift to complementary services Part time employees Share capacity with other providers Prepare for expansion in advance

Nonpeak demand Utilize third parties

Customer participation
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MARKETING PROBLEMS CAUSED BY PERISHABILITY

Matching supply and demand Demand exceeds maximum available supply Demand exceeds optimum supply level Demand is below optimal levels of supply

Demand and supply are at optimal levels

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POSSIBLE SOLUTIONS FOR PERISHABILITY

Demand Strategies
Creative pricing Reservation systems Complementary services Developing nonpeak demand
utilizing nonpeak periods to prepare for peak periods appeal to different market segments with different demand patterns
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POSSIBLE SOLUTION FOR PERISHABILITY Supply Strategies

Utilize part-time employees Share capacity Prepare in advance for expansion Utilize third-parties Increase customer participation
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THE STRUCTURE OF THIS TEXT

An Overview of Services Marketing

The Tactical Services Marketing Mix

Implementing Successful Service Strategies

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FIGURE 3.5: OVERVIEW OF SERVICES MARKETING CHAPTERS

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