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Designing and Managing Services
Marketing Management, 13th ed
13
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-2
Chapter Questions
• How do we define and classify services and how do they differ from goods?
• How do we market services?
• How can we improve service quality?
• How do services marketers create strong brands?
• How can goods marketers improve customer support services?
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-3
What is a Service?
A service is any act of performance that one party can offer another that is
essentially intangible and does not result in the ownership of anything; its production may or may not be tied to a
physical product.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-4
Service Sectors
• Government
• Private nonprofit
• Business
• Manufacturing
• Retail
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-5
Categories of Service Mix
• Pure tangible good
• Good with accompanying services
• Hybrid
• Service with accompany goods
• Pure service
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-6
Service Distinctions
• Equipment-based or people-based
• Service processes
• Client’s presence required or not
• Personal needs or business needs
• Objectives and ownership
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-7
Distinctive Characteristics of Services
• Intangibility
• Inseparability
• Variability
• Perishability
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-8
Physical Evidence and Presentation
• Place
• People
• Equipment
• Communication material
• Symbols
• Price
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-9
How to Increase Quality Control
• Invest in good hiring and training procedures
• Standardize the service-performance process
• Monitor customer satisfaction
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-10
Matching Demand and Supply
Demand side• Differential pricing• Nonpeak demand• Complementary
services• Reservation
systems
Supply side• Part-time
employees• Peak-time efficiency• Increased consumer
participation• Shared services• Facilities for future
expansion
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-11
Improving Service Quality
• Listening• Reliability• Basic service• Service design• Recovery
• Surprising customers
• Fair play• Teamwork• Employee research• Servant leadership
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-12
Solutions to Customer Failures
• Redesign processes and redefine customer roles to simplify service encounters
• Incorporate the right technology to aid employees and customers
• Create high-performance customers by enhancing their role clarity, motivation, and ability
• Encourage customer citizenship where customers help customers
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-13
Table 13.1 Factors Leading to Customer Switching Behavior
• Pricing
• Inconvenience
• Core Service Failure
• Service Encounter Failures
• Response to Service Failure
• Competition
• Ethical Problems
• Involuntary Switching
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-14
Gaps that Cause Unsuccessful Service Delivery
• Gap between consumer expectation and management perception
• Gap between management perception and service-quality specifications
• Gap between service-quality specifications and service delivery
• Gap between service delivery and external communications
• Gap between perceived service and expected service
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-15
Determinants of Service Quality
• Reliability
• Responsiveness
• Assurance
• Empathy
• Tangibles
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-16
Best Practices
• Strategic Concept
• Top-Management Commitment
• High Standards
• Self-Service Technologies
• Monitoring Systems
• Satisfying Customer Complaints
• Satisfying Employees
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-17
Developing Brand Strategies for Services
• Choosing brand elements
• Establishing image dimensions
• Devising branding strategy
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-18
Customer Worries
• Failure frequency
• Downtime
• Out-of-pocket costs
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hal l 13-19
Table 13.4 Top Customer Service Providers
• USAA• Four Seasons
Hotels• Cadillac• Nordstrom• Wegman Food
Markets• Edward Jones
• Lexus• UPS• Enterprise Rent-a-
Car• Starbucks• Ritz-Carlton• Amica Insurance• Southwest Airlines
