Chapter 12Characteristics of Services

Intangibility: unable to touch, taste, smell, see, or hear purchase

People who undergo plastic surgery cannot see the result purchase

we decide to spend our money, we will judge the company, product, people, etc. on tangible aspects

Characteristics of Services

Intangibility: Implications

Stress the tangible aspects of the service; emphasize benefits of purchasing the service; understand the ______________ of tangible aspects.

Characteristics of Services

Inseparability: service is created and consumed simultaneously; both buyer and seller are present when service is provided

Customers may have strong provider preferences

Characteristics of Services

Inseparability: Implications

Higher pricing in line with the service provider’s limited time

Work with larger groups/work faster

Train more service providers

Characteristics of Services

Variability: because they depend on _____ provides them and and they are provided, services are highly variable

One employee is cheerful and efficient, while another standing a few feet away is unpleasant and slow

Characteristics of Services

Variability: Implications

• Invest in good hiring and training procedures

• Standardize service performance process throughout organization

• Monitor customer satisfaction:

Characteristics of Services

Perishability: services cannot be stored; once an airplane takes off or a movie starts, any unsold seats cannot be held for future sale.

Characteristics of Services

Perishability: Implications (p. 231)

Demand-Side Strategies: charge different prices during different times/days to stimulate demand during slow periods

Supply-Side Strategies: coordinate staffing and distribution for peak and slack times

Strategies for Service Firms

External marketing: the normal work to prepare, price, distribute, and promote the service to customers-

Interactive marketing: employees’ skill in serving the client-

Internal marketing: work to train and motivate employees to serve the customers well-

Ritz Carlton

Philosophy: to take care of customers, you must first take care of those who take care of customers.

Satisfied employees deliver high service value, which then creates satisfied customers. Satisfied customers, in turn, create sales and profits for the company

Managing Differentiation

Differentiated offer: innovative features that set one company’s offer apart from competitors offer

Delivery: more reliable customer contact people, superior physical environment where service is delivered, or superior delivery process

Images: symbols and branding

Managing Service Quality

Service quality is based on differences (gaps) in the expectations, perceptions, and experiences regarding the encounter between service provider and consumer

Managing Service Quality

1.“Customer obsessed” and high quality standards

2: Monitoring Systems: regularly audit service performance - comparison shopping, customer surveys, suggestion, and complaint forms, etc.

Manage Service Productivity(p. 238 -239)

Minimize cost, yet improve productivity. How?

1. More skillful workers

2. Increase quantity of service by surrendering some quality

Manage Service Productivity(p. 238 -239)

3. Present customers with incentives to substitute their own labor for company labor

4. Use technology to give better service and make service workers more productive