Marketing Nathalie Dens
Services and relationship marketing
Characteristics of services
= any act/performance offered by one party to another that is essentially intangible
Consumption of the service ≠ transfer of ownership even though the service process may be
attached to a physical product
- Important
o 46% of the U.S. GDP
a larger part than goods
GDP = gross domestic product
o Increase of 200% since 2000
more demand for existing ones and more interest in new ones
Dedicated concierge services, digital concierge services with AI chatbots,
Virgin Galactic, Fitness at the airport…
- Intangibility
= cannot be readily displayed, seen, tasted, felt, heard or smelt before they are bought
o = Performance
rather than an object, difficult to evaluate before consumption, increased
uncertainty
o Evidence mgt
= trying to give an idea of the benefits of using the service
= make services more tangible by showing related ‘features’
o Use substitute cues
o Quality-related cues
Intrinsic cues
very specific to a product/service, drawn
Extrinsic cues
surrounds the ‘service product’ and can be changed relatively easily
=> price, country-of-origin, brand, etc.
- Inventory
= perishability
= services are manufactured and consumed simultaneously, cannot be stored either prior to
or after the service encounter
o Demand fluctuations
Pay for missed appointments, differential pricing, reservation system, shared
services,…
- Inconsistency
= variability
= services depend on who provides them, when, where and how
o Quality difficult to control
o Competences, attitude, purpose = pride
=> invest in recruiting the right employees and provide excellent training
=> empower employees to take action
=> motivate staff by providing employee incentives
=> increase visibility of service employees and accountability to customers
1
, Marketing Nathalie Dens
- Inseparability
= services are consumed at the point at which they are produced so service delivery cannot
be separated or split out of service provision or service consumption
o Customers
participate actively in co-producing service, often in the presence of other customers
o Provider-customer interaction
special feature, customer is present as service is produced
o Value
is created in the provider-customer interaction (co-creation)
o Demand rises
particularly difficult
Ration limited supply by high prices
Learn to work with larger groups (e.g., bigger site)
Increase productivity
Train more service providers
- Lack of ownership
- Final remarks
o Difficult to protect
e.g. yoga everywhere
o All employees involved
e.g. sales, administration
o Physical surroundings matter
e.g. hotel atmosphere
o Often trust relationship
e.g. doctor
o Importance of word-of-mouth
e.g. dentist
Service processes:
series of sequential actions that lead to predetermined outcome
Service encounter:
period of time during which a customer interacts directly with a service
Key dimensions
- Evaluation by consumers
o Tangible products
=> search properties (color, size, style…)
o Intangible products/services
=> experience properties (discerned only after purchase/use)
o Services provided by specialized professionals
=> credence properties (difficult to evaluate even after purchase/use)
o Credence proposition
more focus on trust, commitment, expertise and competence, turning to personal
sources of info (early adopters, opinion leaders…)
2
Services and relationship marketing
Characteristics of services
= any act/performance offered by one party to another that is essentially intangible
Consumption of the service ≠ transfer of ownership even though the service process may be
attached to a physical product
- Important
o 46% of the U.S. GDP
a larger part than goods
GDP = gross domestic product
o Increase of 200% since 2000
more demand for existing ones and more interest in new ones
Dedicated concierge services, digital concierge services with AI chatbots,
Virgin Galactic, Fitness at the airport…
- Intangibility
= cannot be readily displayed, seen, tasted, felt, heard or smelt before they are bought
o = Performance
rather than an object, difficult to evaluate before consumption, increased
uncertainty
o Evidence mgt
= trying to give an idea of the benefits of using the service
= make services more tangible by showing related ‘features’
o Use substitute cues
o Quality-related cues
Intrinsic cues
very specific to a product/service, drawn
Extrinsic cues
surrounds the ‘service product’ and can be changed relatively easily
=> price, country-of-origin, brand, etc.
- Inventory
= perishability
= services are manufactured and consumed simultaneously, cannot be stored either prior to
or after the service encounter
o Demand fluctuations
Pay for missed appointments, differential pricing, reservation system, shared
services,…
- Inconsistency
= variability
= services depend on who provides them, when, where and how
o Quality difficult to control
o Competences, attitude, purpose = pride
=> invest in recruiting the right employees and provide excellent training
=> empower employees to take action
=> motivate staff by providing employee incentives
=> increase visibility of service employees and accountability to customers
1
, Marketing Nathalie Dens
- Inseparability
= services are consumed at the point at which they are produced so service delivery cannot
be separated or split out of service provision or service consumption
o Customers
participate actively in co-producing service, often in the presence of other customers
o Provider-customer interaction
special feature, customer is present as service is produced
o Value
is created in the provider-customer interaction (co-creation)
o Demand rises
particularly difficult
Ration limited supply by high prices
Learn to work with larger groups (e.g., bigger site)
Increase productivity
Train more service providers
- Lack of ownership
- Final remarks
o Difficult to protect
e.g. yoga everywhere
o All employees involved
e.g. sales, administration
o Physical surroundings matter
e.g. hotel atmosphere
o Often trust relationship
e.g. doctor
o Importance of word-of-mouth
e.g. dentist
Service processes:
series of sequential actions that lead to predetermined outcome
Service encounter:
period of time during which a customer interacts directly with a service
Key dimensions
- Evaluation by consumers
o Tangible products
=> search properties (color, size, style…)
o Intangible products/services
=> experience properties (discerned only after purchase/use)
o Services provided by specialized professionals
=> credence properties (difficult to evaluate even after purchase/use)
o Credence proposition
more focus on trust, commitment, expertise and competence, turning to personal
sources of info (early adopters, opinion leaders…)
2
