13

Designing and Managing Services

Marketing Management, 13 th ed

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 Hall 13-2

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 Hall 13-3

Service Sectors

• Government • Private nonprofit • Business • Manufacturing • Retail Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-4

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 Hall 13-5

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 Hall 13-6

Distinctive Characteristics of Services

• Intangibility • Inseparability • Variability • Perishability Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-7

Physical Evidence and Presentation

• Place • People • Equipment • Communication material • Symbols • Price Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-8

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 Hall 13-9

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 Hall 13-10

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 Hall 13-11

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 Hall 13-12

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 Hall 13-13

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 Hall 13-14

Determinants of Service Quality

• Reliability • Responsiveness • Assurance • Empathy • Tangibles Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-15

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 Hall 13-16

Developing Brand Strategies for Services

• Choosing brand elements • Establishing image dimensions • Devising branding strategy Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-17

Customer Worries

• Failure frequency • Downtime • Out-of-pocket costs Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-18

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 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13-19