MRKT 55030: SERVICES MARKETING

WEEK 1: The Concept of Services & Service-based Organizations

Dr. Okey Peter ONYIA

TODAYS OUTLINE:

Class introductions. Intended Learning Outcomes (ILOs). Highlights of the course contents (Syllabus). Highlights of the coursework assessments. The Concept of Services. The Importance of Services in the Global Economy. First Night Assignment discussions. Service-industry Categories and Serviceorganizations. Next lecture pre-work.

Intended Learning Outcomes (ILOs): At the end of this session, you should be able to: Effectively use the course syllabus. Explore and discuss the Concept of Services. Appraise the role and importance of services in the global economy and why we should study services. Analyze the nature, characteristics, and valueadding objectives of Service-organizations.

INTRODUCTION:

(Me)
Dr. Okey Peter ONYIA
(BA Hon., MBA, MPhil., PGD, PG-Cert., PhD)
Associate Professor of Marketing & Chair, School of Business Faculty Research Committee

Office Room: Harmon Hall 221 (School of Business & Entrepreneurship) Office Telephone: 636-949-4556 Email: oonyia@lindenwood.edu Availability: Tue., Wed. & Fri. (4 6pm)

INTRODUCTION:

(You)

NAME

A BIT ABOUT YOU

WHY LINDENWOOD?

WHY MBA/MARKETING?

HOW MIGHT THIS COURSE HELP IN YOUR PRESENT/FUTURE CAREER?

Highlights of the Course Syllabus:

Week 1 2 3 4 5 Topic The Concept of Services and Service-based Organizations. Service Offerings and Technology-aided Service Delivery. Service Quality and the Gaps Model Assessing an Organizations Service Delivery Strategy. Customer Expectations and Perceptions of Service Offerings. Assignments/Exams

FNA: JAN 09 JAN 16 Quiz 1 (topics 1-3): JAN 23 JAN 30 Mid-term Exam: FEB 06

Delivering and Performing Service the Roles of the 3 New Ps of Marketing (People, Process, and Physical Evidence) in Service Delivery. Mid-term Exam (covering topics 1- 5) Employees and Customers Roles in Service Delivery and Management of Customer Demands.

FEB 13

Highlights of the course syllabus contd.:

Week 7 Topic Assignment due: Written-report submission Customer Relationship Management, ServiceRecovery, and Innovative Customer-Service Design. Assignments/Exams

Quiz 2 (topics 4-7): FEB 20

Assignment due: Power-point presentations Using Research to Measure Customers Expectations and the Impacts of Service Quality (i.e., Returns on Investment in Service Quality).
Integrated Services Marketing Communications. Final Exam (covering topics 1 9; i.e., it will be a comprehensive exam)

FEB 27

Final Exam: MAR 06

Highlights of the Coursework Assessment:

Progressive Assessment: The learning outcomes of the course will be assessed progressively in 7 ways, as follows: First Night Assignment - 15 points max Attendance (9 contact days) - 45 points max (5 points per day) 2 in-class quizzes - 40 points max (20 points each) 1 group presentation assignment - 50 points max 1 group written-report assignment - 50 points max Mid-term exam - 50 points max Final Exam - 50 points max 300 maximum points Grading Scheme: 270 - 300 points (90 100%) = A 240 - 269 points (80 89%) = B 209 - 239 points (70 79%) = C 0 - 208 points or less (0 69%) = F

GROUP TERM-PAPER AND PRESENTATION ASSIGNMENT BRIEFS:

GROUP PROJECT ASSIGNMENT: In small project groups of 5 6 students each, you are expected to accomplish the following project as a group: 1. As a group, select one company from each of the three categories of service-oriented marketers below:
(A) BANKS: (i) US Bank branch (iv) Bank of America branch (vii) Commerce Bank branch (x) Pulaski Bank branch (xiii) First National Bank branch (B) RESTAURANTS: (ii) McDonalds restaurant (v) Starbucks restaurant (viii) Taco Bell restaurant (xi) Applebees restaurant (xiv) Pizza Hut restaurant (C) MOBILE PHONE RETAIL STORES: (iii) Boost Mobile store (vi) Sprint retail store (ix) Radio Shack store (xii) Verizon retail store (xv) AT&T retail store

2. Write and submit a 2,500-word group written-assignment in a report format (due: Feb 20)based on: a) Observe and describe the physical and ambient atmosphere of the internal servicescape of each outlet, and critically analyze how the layout and ambience might affect (or affects) customers overall service experience in that outlet. b) Observe and record how the waiting time, service duration, and interactions of the service employees with customers affect the moods, attitudes, and behaviors of the customers in general. c) Let each member of your group patronize at least one of the three service delivery outlets. Discuss your personal impressions about your own service experience at the outlet with your group, and let those impressions form part of the groups critical analysis and rating of the overall service quality of that service provider. d) On a scale of 0 to 10 (zero being the lowest and ten being the highest score), what score will you (as a group) give to the overall service quality of each marketer based on your groups collective estimation of the overall customer satisfaction level of the marketers services? e) Then, explain in detail the reasons for the score your group has given to each marketer and also your groups overall critical analysis of the effects that their servicescape and employees attitudes have had on their overall service quality . 3. Also, prepare a 15-minute group power-point presentation with no more than 10 slides (to be presented in-class on Feb 27) covering the summary of the main points, objectives, and initial findings of your project. All presentations will be made in-class
on the designated due-date above. Absenteeism will result in full grade-points loss, as no missed presentation will be held on any other day.

4. IMPORTANT NOTICE:

(A) Upload one electronic copy of your groups written-report into the Turnitin assignment file that I have created on the Blackboard, and also send me one copy as an email attachment on or before FEBRUARY 20, 2013. (B) Use only the APA citation/referencing style as discussed in class. Example is on the Blackboard.

First Night Assignment:

Group Discussions on the First Night Write-ups:

Lets form the small project and discussion

groups. In your small groups, take turns in presenting the highlights of your own paper to your group members. (15 minutes) At the end, each group is to summarize the main points of all their papers in bullet points and present to the class. (3 minutes per group)

FNA Assessment:

15 MAXIMUM POINTS:
FOR ONLY THOSE WHO HAVE DONE THE FIRST NIGHT ASSIGNMENT AS OF TODAY:

10 POINTS FOR WRITING IT.

5 POINTS FOR DISCUSSING IT

IN-CLASS.

The Services Concept:

What Are Services?
Historical background:
Smith (1776): Services are different from goods

because they are perishable. (Adam Smith, Wealth of Nations, 1776)

Say (1803): Services are immaterial. Its consumption

cannot be separated from its production. (Jean Baptiste Say,

Land as a Factor of Production, 1803)

Modern perspective: Services offer benefits without change of ownership.

Example: Rental of goods is Service :
(a) Payment made for accessing or using something belonging to someone else for a defined period of time instead of buying it outright.

(b) Allows participation in network systems that individual persons and organizations might not afford to own on their own.

The Services Concept:

What Are Services?
Five broad service-concepts within the non-ownership framework. Two or more may be combined.

Goods & Services rentals

Defined Space and Place rentals

Labor and Expertise rentals

Access to shared physical environments

Access to and usage of systems and networks

Definition of Services:
Services

Are valuable deeds,

processes, and performances offered by the provider to customers, and whose output is not physical or tangible. economic activities, the performance of which provides added value (such as convenience, amusement, comfort, health, education, solutions, timeliness, etc.) with specific desired results.

Are usually time-based

Definition of Services

contd:

In exchange for their money,

time, and effort, service customers expect to obtain value from the access to goods, labor, facilities, places, environments, professional skills, networks, and systems for an agreed period of time. In many cases, the customers do not take ownership of any of the physical elements involved in the service offerings.

Two Broad Categories of Services:

Product manufacturers customer service operations (pre-sale, sales-, and post-sale customer services):

Aeroplane, Ship, Boat, Motorcycle, Photocopier, Tools, Computer, Motor-vehicle, Tractor, Lawn-mower, Airconditioner, and Power-generator manufacturers/sellers provide supplementary and technical services associated with the products they sell.
Service-based Industry operations (their entire business operations are mostly services): Hotels, Phone-line carriers, Internet and Cable TV providers, Banks, Insurance companies, Party organizers, Call-centers, Tax consultants, etc., all sell services.

Another way of Categorizing Services

Source: Lovelock and Wirtz, 2010)

Group Discussions: Where do we categorize electricity, water, & gas supply companies? Why?
Take about 5 minutes to discuss and answer the above questions in your group. Suggest more examples of offerings that may be difficult to categorize as pure products or pure services.

Examples of Service Industries:

Health Care Services:
Hospitals, medical practice, dentistry, eye care services

Professional Services:
Accounting, legal, architectural, and tax consultancy firms

Financial Services:
Banking, insurance, and investment services

Hospitality Services:
Hotels, motels, restaurants, pubs, ski resorts, casinos, rafting clubs, etc.

Travel/Tourism & Amusement Services:

Airlines, cruise boats, travel agencies, theme parks, golf clubs, etc.

Communication Services:
Land & mobile phone lines, Internet connection, Cable TV, Movie rentals, online games providers, call-centers, business centers/cyber-cafs, etc.

Others:
Colleges, hair saloon, pest control, plumbing, landscaping, counseling, health club, house renovation, interior design, party organizing, etc.

Issues relating to Service-Offerings versus Customer-Services:

1. There's need to distinguish between: A. Marketing of services when service is the core intangible product being sold. (Service Offerings). B. Marketing through services when good customerservice increases the value of the core physical product being sold. (Customer Services).
2. Some manufacturers reformulate and enhance existing added-value services to market them as stand-alone core products E.g., selling customers an insurance on a mobile phone or microwave oven they just purchased. 3. Some service-firms also re-package and offer aspects of their services as if they were real products E.g., various insurance policies, banking products, lease-to-buy offerings (i.e., hire-purchase of vehicles and machines), etc.

Intangible elements of services create more value

Source: Zeithaml, Bitner & Gremler, 2013)

Why do we have to study Services Marketing?

Why Service Marketing?

The contribution of services to GDP exceeds all other
sectors in the U.S. and most other economies of the world.

Services dominate job creation for the labor force of most

countries in the world, and has been growing rapidly.

Service is a vital necessity even in physical goods sales and

marketing.

Theres a huge need for deregulated industries and

professional services in every free-market economy.

Services marketing is different from products marketing

(features & functions versus feelings & experiences).

Services are added-values, and lead to increased profits and

rapid economic growth.

Computers and the Internet have revolutionized the world

and ushered in an explosion of assorted service businesses.

Contributions of Service Industry Categories to the U.S. GDP (2007):

Business Services 12%

Transport, Utilities & Communications 9%

Wholesale & Retail Trade 12%

SERVICES

Source: US Bureau of Economic Analysis, Industry Economics Accounts, 2007

Contributions of Service Industries to the U.S. GDP (2009)

Source: Survey of Current Business (2009 stats)

Percent of U.S. Labor Force by Industry (1929 2009)

Source: Zeithaml, Bitner & Gremler, 2013)

Percent of U.S. Gross Domestic Product by Industry (48 09)

(Source: Zeithaml, Bitner and Gremler, 2013)

A morgue in the name of self-help?

Imagine a big retail store with no sales-associates or assistants, and no cashiers!!

Service is
when we enjoy the human touch in business dealings.

New Ways to deliver Service:

Computerization

Automation

Internet

Technology
Facilitates service business innovations and service delivery

Article Reading & Group Discussion:

In your small groups, read and discuss the following articles in the textbook: 1. Exhibit 1.1 (Page 11)

2. Global Feature (Page 18)

Discuss your answers to these two questions in your group and present your summary to the class: 1. Why and how are people important in service-based businesses? 2. What caused the migration of servicejobs overseas and how can it be reversed without damaging international trade relations and the global economy?
(10 minutes)

Next class pre-work:

Topic: Service offerings; Technologyaided service delivery; and Organizational service culture. Read up all of: chapters 1 and 11 of the textbook. Find and bring to class: One example of a service-companys mission/vision statement (Note: Bring it hand-written or
typed, but not one from the course textbook).