Lovelock PPT Ch01 ServMark5e

PowerPoint
to accompany
Chapter 1
New perspectives on marketing in the service economy
Objectives
Explain how services are defined. Describe how services contribute to a countrys economy. Identify the powerful forces that are transforming service markets. Describe the key characteristics that distinguish services from goods. Explain how services create value for consumers. Describe ways of categorising services. Identify the key components of a service operations system. Describe the expanded marketing mix for services.
Copyright 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781442517011/Lovelock/Services Marketing/5th edition
Introduction
Service sector is the engine of economic growth in developed and most developing countries today Services (rather than manufactured goods) are becoming the mainstream focus of marketing Every day you use a vast array of services
Figure 1.2 Growth in consumption of services since 1950
Defining services
Any act, performance or experience that one party can offer to another Essentially intangible and does not result in the ownership of anything Processes (economic activities) that provide time, place, form, problem solving or experiential value to the receiver Something that may be bought or sold but cannot be dropped on your foot
I
Airline
Table 1.1 Examples of diversity of services

Consumer services Business services Accountancy Architecture Engineering Legal services Management consulting Printing Insurance Telecommunications IT consulting Logistics consulting Marketing research
Banking and finance Insurance Medical Telecommunications Hotel Restaurant Opera/theatre Football match House cleaning Transportation
Its all about value creation
Value comes from a variety of value-creating elements rather than transfer of ownership Firms must create and deliver services that are perceived (by customers) to provide value Choose the value Create the value Communicate value
Figure 1.3 Framework for developing and delivering customer value
Communicate value
The value creation and delivery process
Advertising, PR, selling, web service encounters Chapters 8, 11, 12 Create the value
Choose the value Segments, positioning, market focus, unique value proposition Chapters 2 and 3
Service quality, price, customer service, website, channel strategy Chapters 47, 9, 10, 13, 14
Services: Intangible elements dominate value creation
Services typically have both tangible and intangible elements How much value is created by the service elements of the total package in a competitive marketplace? Service products versus customer service and after-sales service
Figure 1.4 Relative value added by physical versus intangible elements
Powerful forces transforming the service economy
The hollowing out effect Deregulation and privatisation Social changes Professional services and franchises
Differences between goods and services (1)
Most service products cannot be inventoried Intangible elements usually dominate value creation Services are often difficult to visualise and evaluate Customers may be involved in co-production People are often part of the service experience
Differences between goods and services (2)
Operational inputs and outputs tend to vary more widely The time factor often assumes great importance Distribution may take place through nonphysical channels
How do services differ from one another?
The degree of tangibility/intangibility of service processes Who or what is the direct recipient of service processes? The place of service delivery Customisation versus standardisation Relationships with customers Discrete versus continuous services High contact versus low contact
Categorising service processes
Tangible actions to peoples bodies (people processing) Tangible actions to goods and other physical possessions (possession processing) Intangible actions directed at peoples minds (mental-stimulus processing) Intangible actions directed at intangible assets (information processing)
Service as a system
Service operations system: can be divided into those involving the actors (or service personnel) and those involving the stage set (or physical facilities, equipment and other tangibles). Service delivery system: concerned with where, when and how the service product is delivered to the customer. Service marketing system: all the different ways in which the customer may encounter or learn about the service organisation.
Figure 1.6 The service business as a system
Figure 1.7 The service marketing system for a high-contact service
Figure 1.8 The service marketing system for a low-contact service
An expanded marketing mix for services
People: direct, personal interaction between customers and the firms personnel or employees for the service to be manufactured and delivered. Physical evidence (tangible cues): servicescape such as physical layout of the service facility, ambience, background music and seating comfort. Process of service production: required to manufacture and deliver the service.
Figure 1.9 An expanded marketing mix for services
The interdependence of marketing, operations and IT and human resources
Operations and information Technology management
Marketing management
Customers
Human Resources management
PowerPoint
to accompany
Chapter 1
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Figure 1.2 Growth in consumption of services since 1950

Table 1.1 Examples of diversity of services

Its all about value creation

Figure 1.3 Framework for developing and delivering customer value

The value creation and delivery process

Services: Intangible elements dominate value creation

Figure 1.4 Relative value added by physical versus intangible elements

Powerful forces transforming the service economy

Differences between goods and services (1)

Differences between goods and services (2)

How do services differ from one another?

Categorising service processes

Figure 1.6 The service business as a system

Figure 1.7 The service marketing system for a high-contact service

Figure 1.8 The service marketing system for a low-contact service

An expanded marketing mix for services

Figure 1.9 An expanded marketing mix for services

The interdependence of marketing, operations and IT and human resources

Operations and information Technology management

Human Resources management

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