Transcript Services - School of Management

SCHOOL OF MANAGEMENT
SEMESTER 1 2012/2013
AMW342 SERVICES MARKETING
ASSOCIATE PROFESSOR DR. AZIZAH OMAR
Lecture:
Venue:
Room:
Thursday
DK - R
PhD/MA Office, Level 1
School of Management
Tel:
04 653 888 ext.2889
Email:
[email protected]
http://www.management.usm.my/azizahomar
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Part 1
FOUNDATIONS
FOR SERVICES
MARKETING
1-2
Chapter
Introduction to Services
1
 What are Services?
 Why Service Marketing?
 Service and Technology
 Characteristics of Services
 Service Marketing Mix
 Staying Focused on the Customer
1-3
Objectives for Chapter 1:
Introduction to Services
 Explain what services are and identify important trends in services.
 Explain the need for special service marketing concepts and practices and
why the need has developed and is accelerating.
 Explore the profound impact of technology on service.
 Outline the basic differences between goods and services and the
resulting challenges and opportunities for service businesses.
 Introduce the expanded marketing mix for services and the philosophy of
customer focus as powerful frameworks and themes that are
fundamental to the rest of the text.
1-4
Examples of Service Industries
 Health Care
 hospital, medical practice, dentistry, eye care
 Professional Services
 accounting, legal, architectural
 Financial Services
 banking, investment advising, insurance
 Hospitality
 restaurant, hotel/motel, bed & breakfast
 ski resort, rafting
 Travel
 airline, travel agency, theme park
 Others
 hair styling, pest control, plumbing, lawn maintenance, counseling services, health
club, interior design
1-5
Contributions of Service Industries to
U.S. Gross Domestic Product
1-6
Where the Money in Manufacturing Is: Services
Personal Computers
annual cost of
PC use: $6,259
The sale of a
product accounts
for only a small
portion of overall
revenues.
Providing
services to
customers is
where the real
money is.
100%
network administration
80%
network
technical support
Locomotives
total annual cost of rail
operations: $29 billion
yard operations,
railroad administration,
other
nonproductive operations
by end user (downtime,
file management, etc.)
40%
administration
20%
average annual household
expenditure: $6,064
other
finance
repair
network equipment
60%
Automobiles
insurance
train operations
gas
Infrastructure
freight car services
used car purchase
technical support
desktop hardware
locomotive services
new car purchase
locomotives
0%
total expenditure:
5X product costs
total expenditure:
21X product costs
total expenditure:
5X product costs
Source: GartnerGroup, Association of American Railroads, Federal Highway Administration Office of Highway
Information Management. (Railroad expenditures are for Class 1 railroads.)
Tangibility Spectrum
1-8
Why Service Marketing?
 Services dominate U.S. and worldwide
economies
 Service as a business imperative in goodsfocused businesses
 Deregulated industries and professional service
needs
 Service marketing is different
 Service leads to profits
1-9
Percent of U.S. Labor Force by Industry
1-10
Percent of U.S. Gross Domestic
Product by Industry
1-11
Examples of Goods Companies that are
Expanding into Services
Boeing
1-12
Services in Malaysia
1.
2.
3.
4.
5.
Advertising
Agency Services
Assurance Services
Auction
Brokerage, Intermediary
Service
6. Business Travel Services
7. Certification, Inspection &
Credit Management
8. Computer & Information
Technology Services
9. Construction Services
10. Consulting
11. Corporate Register & Transfer
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
Design Services
Education & Training
Financial Services
Insurance
International Settlement
Services
Internet Service
Labour & Employment
Law Services
Leasing Services
Logistics Services
Other Business Services
Eight Central Paradoxes of Technological
Products
1-14
Characteristics of Services
Compared to Goods
Intangibility
Simultaneous
Production
and
Consumption
Heterogeneity
Perishability
1-15
Comparing Goods and Services
1-16
Implications of Intangibility
 Services cannot be inventoried
 Services cannot be easily patented
 Services cannot be readily displayed or
communicated
 Pricing is difficult
1-17
Implications of Heterogeneity
 Service delivery and customer satisfaction
depend on employee and customer actions
 Service quality depends on many uncontrollable
factors
 There is no sure knowledge that the service
delivered matches what was planned and
promoted
1-18
Implications of Simultaneous Production
and Consumption
 Customers participate in and affect the
transaction
 Customers affect each other
 Employees affect the service outcome
 Decentralization may be essential
 Mass production is difficult
1-19
Implications of Perishability
 It is difficult to synchronize supply and demand
with services
 Services cannot be returned or resold
1-20
Search, Experience, and Credence Qualities
1-21
Challenges and Questions for Service
Marketers
 Defining and improving quality
 Designing and testing new services
 Communicating and maintaining a consistent image
 Accommodating fluctuating demand
 Motivating and sustaining employee commitment
 Setting prices
 Organizing to facilitate strategic and tactical decision-making
 Finding a balance between standardization and personalization
 Protecting new service concepts from competitors
 Communicating quality and value to customers
 Ensuring the delivery of consistent quality service
1-22
Traditional Marketing Mix
Elements an organization controls that can be
used to satisfy or communicate with customers:




Product
Price
Place
Promotion
1-23
Expanded Mix for Services – The 7 Ps




Product
Price
Place
Promotion
 People
 All human actors who play a part in service delivery and thus influence the buyer’s
perceptions: namely, the firm’s personnel, the customer, and other customers in
the service environment.
 Physical Evidence
 The environment in which the service is delivered and where the firm and
customer interact, and any tangible components that facilitate performance or
communication of the service.
 Process
 The actual procedures, mechanisms, and flow of activities by which the service is
delivered—the service delivery and operating systems.
1-24
Expanded Marketing Mix for Services
1-25
Ways to Use the 7 Ps
Overall Strategic
Assessment
 How effective is a firm’s
service marketing mix?
 Is the mix well-aligned with
overall vision and strategy?
 What are the strengths
and weaknesses in terms
of the 7 Ps?
Specific Service
Implementation
 Who is the customer?
 What is the service?
 How effectively does the
service marketing mix for a
service communicate its
benefits and quality?
 What changes/
improvements are needed?
1-26
Case Study 1
Read the articles given and prepare your case
analysis.
1. Contributions of Service Industries to
Malaysia Gross Domestic Product.
2. Percent of Malaysian Labor Force by Industry.
3. Percent of Malaysia Gross Domestic
Product by Industry.
Thank You For
Your Time