·
BEM 120
, Chapter 1 Service Marketing in Perspective
Service marketing as an exchange process •
⑨ Core Services with accompanying Minor Goods and Services (airline=
transport is core service but offers meals [tangibles] and luggage services/
Def: The complete process whereby the organization identifies the
hostess on plane [intangible]
expectations of their target market and finds innovative ways to satisfy the
•
⑳ Pure Services (medical, accounting, legal, travel agencies etc)
important needs of their customers.
Micro environment: mission and vision statements, competencies, capabilities Classification of Services
and objectives. Classification Level 1: Means of Delivery
Equipment-based Services
Market environment: customers, competitors, suppliers and intermediaries. ~
•
⑮
divided into automated services and services provided by skilled/unskilled providers
Macro environment: economic, political, legal, social, natural, technological •
&
Quality of equipment and ability of staff to use equipment determine quality of service
and international environments. People-based Services
-
•
&
performed by unskilled/skilled/professional staff
• Quality of service determined by the training, knowledge and motivation of staff
Service marketing mix/ 7 P’s
⑨
Product (technical outcome of the service or the “what” of the service)
Service Delivery
- anything offered by organization to potential customers (tangible or intangible)
Physical Evidence Unskilled Labor
Automated
- intangible nature of service therefore hard to judge before consumption ATM, automated car washers,
Garden services, video rentals,
hospitality services
People (the staff) vending machines
- service industry staff act as marketers as they effect quality of service
Equipment based People based
Process (the “how” service is provided)
services
& D
services
- the experience of the customer
Place (distribution decisions) Operated Skilled Provides Professional
- unique to the service Airlines, X-rays Lawyers, consultants,
Skilled Labor
accountants, doctors
Pricing (cover costs of service) Recruiting repairs, plumbing
Monitored Unskilled Providers
services, computer services
- charges, rents, commission, tuition, fees, fares, rates, premiums etc Cinema theaters, dry cleaning
Promotion (marketing communication strategies)
- To influence knowledge, attitude and behaviour
Classification Level 2: Degree of dependence on customer presence
• Some services require customer to be here (medical) while others can be done without
Defining Services
⑨
the customer (car repairs)
Def: an act or performance that one party can offer another that is •
⑤
If customer is present: create a pleasant service environment (helps evaluate service
essentially intangible and does not result in the ownership of anything. quality)
Its production may or may not be tied to a physical product. - Eg: music, decor, lighting
2
• If customer not present: organization can optimize processes/procedures to meet
Degrees of tangibility
Eme
S
needs of employees and operational process
•
⑳
-
Pure Tangible Goods: actual products (toothpaste, salt)
•
⑳ Tangible Goods with accompanying Services (car sold with premium Classification Level 3: Personal VS Business Use
plan)
•
&
Personal= hairdresser
• Hybrid Service Offers: equal parts tangible products and intangible
• Business= service bought by business to produce something else of economic benefit
⑨
&
services (meal at News Cafe while enjoying live music)
•
&
Both= eg airlines, low prices=personal, convenience for short notice trips=business
, Distinguishing features of service
1. Intangibility : services often impossible to taste, smell, feel, see or hear Solutions:
Marketing Problems: • stressing tangible cues (as signs of evidence of quality of service: staff
• cannot be stored uniforms, interior of store, communications used etc)
• Cannot be patented • Personal sources of information by stimulating positive word-of-mouth
• Complicates communication process (nothing to “show”) (“refer a friend”)
• No physical goods to determine cost from • Encouraging employees to communicate with customers
• Create strong corporate image (reduces risk perceived by customer)
2. Inseparability: services often produced/delivered/consumed all at once
Marketing Problems: Solutions:
• service provider’s physical connection to service offered (provider is part of • Effective selection and training of contact staff
quality evaluation) • Effective customer management (limits conflict)
• Involvement of customer (designed to accommodate customer presence) • Support for frontline staff (can erase lines of visibility and
• Interaction amongst customers (occurs during simultaneous production and allow service delivery to occur in front of customer)
consumption of service)
• Challenge surrounding mass production (service provider directly linked to
service produced and customer presence can slow down process)
Solutions:
3. Heterogeneity: it is often difficult, if not impossible, to completely • Customization (takes place when the service offering is adapted
standardize service delivery according to an individual customer’s specific needs and
instructions
Marketing Problems: • Standardization (training contact staff to deliver the service in a
• service standardization and quality control are difficult to achieve consistent, tightly prescribed manner and by standardizing the
(staff/customers are different, mood changes etc) service delivery process and procedures
4. Perishability: services are perishable , inventory holding in the same Solutions:
manner as tangible goods, is impossible • Demand side= differential pricing during peak/off peak times (lower prices
during off peak times), specials for non peak times, complementary
Marketing Problems:
services to waiting customers (coffee etc)
• Scenario 1= higher demand than available supply (long waiting periods)
• Supply side= part time employees to assist during peak times, peak time
• Scenario 2= lower demand than supply (resources underutilized)
efficiency routines (breakfast only served during certain hours), Increased
• Scenario 3= supply and demand at optimal level
customer participation in service delivery (Wakkaberry- customers make
for self), shared services (sharing equipment during non peak times),
facilities for future expansion can be developed
BEM 120
, Chapter 1 Service Marketing in Perspective
Service marketing as an exchange process •
⑨ Core Services with accompanying Minor Goods and Services (airline=
transport is core service but offers meals [tangibles] and luggage services/
Def: The complete process whereby the organization identifies the
hostess on plane [intangible]
expectations of their target market and finds innovative ways to satisfy the
•
⑳ Pure Services (medical, accounting, legal, travel agencies etc)
important needs of their customers.
Micro environment: mission and vision statements, competencies, capabilities Classification of Services
and objectives. Classification Level 1: Means of Delivery
Equipment-based Services
Market environment: customers, competitors, suppliers and intermediaries. ~
•
⑮
divided into automated services and services provided by skilled/unskilled providers
Macro environment: economic, political, legal, social, natural, technological •
&
Quality of equipment and ability of staff to use equipment determine quality of service
and international environments. People-based Services
-
•
&
performed by unskilled/skilled/professional staff
• Quality of service determined by the training, knowledge and motivation of staff
Service marketing mix/ 7 P’s
⑨
Product (technical outcome of the service or the “what” of the service)
Service Delivery
- anything offered by organization to potential customers (tangible or intangible)
Physical Evidence Unskilled Labor
Automated
- intangible nature of service therefore hard to judge before consumption ATM, automated car washers,
Garden services, video rentals,
hospitality services
People (the staff) vending machines
- service industry staff act as marketers as they effect quality of service
Equipment based People based
Process (the “how” service is provided)
services
& D
services
- the experience of the customer
Place (distribution decisions) Operated Skilled Provides Professional
- unique to the service Airlines, X-rays Lawyers, consultants,
Skilled Labor
accountants, doctors
Pricing (cover costs of service) Recruiting repairs, plumbing
Monitored Unskilled Providers
services, computer services
- charges, rents, commission, tuition, fees, fares, rates, premiums etc Cinema theaters, dry cleaning
Promotion (marketing communication strategies)
- To influence knowledge, attitude and behaviour
Classification Level 2: Degree of dependence on customer presence
• Some services require customer to be here (medical) while others can be done without
Defining Services
⑨
the customer (car repairs)
Def: an act or performance that one party can offer another that is •
⑤
If customer is present: create a pleasant service environment (helps evaluate service
essentially intangible and does not result in the ownership of anything. quality)
Its production may or may not be tied to a physical product. - Eg: music, decor, lighting
2
• If customer not present: organization can optimize processes/procedures to meet
Degrees of tangibility
Eme
S
needs of employees and operational process
•
⑳
-
Pure Tangible Goods: actual products (toothpaste, salt)
•
⑳ Tangible Goods with accompanying Services (car sold with premium Classification Level 3: Personal VS Business Use
plan)
•
&
Personal= hairdresser
• Hybrid Service Offers: equal parts tangible products and intangible
• Business= service bought by business to produce something else of economic benefit
⑨
&
services (meal at News Cafe while enjoying live music)
•
&
Both= eg airlines, low prices=personal, convenience for short notice trips=business
, Distinguishing features of service
1. Intangibility : services often impossible to taste, smell, feel, see or hear Solutions:
Marketing Problems: • stressing tangible cues (as signs of evidence of quality of service: staff
• cannot be stored uniforms, interior of store, communications used etc)
• Cannot be patented • Personal sources of information by stimulating positive word-of-mouth
• Complicates communication process (nothing to “show”) (“refer a friend”)
• No physical goods to determine cost from • Encouraging employees to communicate with customers
• Create strong corporate image (reduces risk perceived by customer)
2. Inseparability: services often produced/delivered/consumed all at once
Marketing Problems: Solutions:
• service provider’s physical connection to service offered (provider is part of • Effective selection and training of contact staff
quality evaluation) • Effective customer management (limits conflict)
• Involvement of customer (designed to accommodate customer presence) • Support for frontline staff (can erase lines of visibility and
• Interaction amongst customers (occurs during simultaneous production and allow service delivery to occur in front of customer)
consumption of service)
• Challenge surrounding mass production (service provider directly linked to
service produced and customer presence can slow down process)
Solutions:
3. Heterogeneity: it is often difficult, if not impossible, to completely • Customization (takes place when the service offering is adapted
standardize service delivery according to an individual customer’s specific needs and
instructions
Marketing Problems: • Standardization (training contact staff to deliver the service in a
• service standardization and quality control are difficult to achieve consistent, tightly prescribed manner and by standardizing the
(staff/customers are different, mood changes etc) service delivery process and procedures
4. Perishability: services are perishable , inventory holding in the same Solutions:
manner as tangible goods, is impossible • Demand side= differential pricing during peak/off peak times (lower prices
during off peak times), specials for non peak times, complementary
Marketing Problems:
services to waiting customers (coffee etc)
• Scenario 1= higher demand than available supply (long waiting periods)
• Supply side= part time employees to assist during peak times, peak time
• Scenario 2= lower demand than supply (resources underutilized)
efficiency routines (breakfast only served during certain hours), Increased
• Scenario 3= supply and demand at optimal level
customer participation in service delivery (Wakkaberry- customers make
for self), shared services (sharing equipment during non peak times),
facilities for future expansion can be developed
