Services and Other Intangibles: Marketing the Product That Isn’t There

Chapter Objectives • Describe the four characteristics of services • Understand how services can be classified along a service continuum • Explain core and augmented services, marketing of services on the Internet, and the elements of the service encounter • Appreciate the importance of the three attributes of service quality to marketers: search qualities, experience qualities, and credence qualities • Discuss the concepts of SERVQUAL and gap analysis • Explain the marketing of people, places, and ideas 2

Real People, Real Choices • Universal’s Theme Parks in Orlando (Robyn Eichenholz) • How to plan for anticipated record-breaking attendance at Donna Summer in concert  Option 1: don’t make any special plans for the event  Option 2: create a plan to accommodate extremely large crowds  Option 3: publicize the big expected turnout to let guests know the event might be exceptionally crowded 3

Marketing What Isn’t There • Intangibles: services and other experience-based products that cannot be touched • Does marketing work for intangibles? Yes!

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What Are Services?

• Services are acts, efforts, or performances exchanged from producer to user without ownership rights.

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Characteristics of Services • Intangibility: can’t see, touch, or smell good service • Perishability: can’t store a service for later sale or consumption  Capacity management: firms adjust their services to match supply with demand 6

Characteristics of Services (cont’d) • Variability: can’t standardize the same service performed by the same individual • Inseparability: can’t separate production from consumption  Service encounter: the interaction between the customer and the service provider  Disintermediation: eliminating the interaction between customers and salespeople 7

Classifying Services • We can classify by  whether the service is performed directly on the customer or on something the customer owns  whether the service consists of tangible or intangible actions 8

The Services Continuum • Most products are a combination of goods and services • Products vary in their level of tangibility.

 Tangible: salt, necktie, dog food  Intangible: teaching, nursing, theater  Balanced products: fast food, television 9

The Services Continuum (cont’d) • Goods-dominated products • Equipment- or facility-based services • People-based services 10

Core and Augmented Services • Core service: the benefit a customer gets from the service • Augmented service: core service plus additional services that enhance value 11

Services on the Internet • Anything that can be delivered can be sold on the Web  --Banking and brokerage services  --Software  --Music  --Travel services  --Dating services  --Career-related services  --Medical care 12

The Service Encounter • Social elements: employees and customers • Physical elements: servicescapes and other intangibles 13

Providing Quality Service: Service Quality Attributes • Search qualities: examine before purchase • Experience qualities: determine during or after consumption • Credence qualities: evaluate after experiencing them (difficult to do) 14

Measuring Service Quality • SERVQUAL • Gap analysis • Critical incident technique 15

Strategies for Developing and Managing Services • Act fast to resolve a service failure.

• Identify potential failures and make recovery plans ahead of time.

• Train employees to listen for complaints and empower them to take action.

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The Future of Services • New dominant logic for marketing • Changing demographics • Globalization • Technological advances • Shift to flow of information 17

Marketing People • Marketing people  Politicians  Celebrities 18

Marketing Places • Marketing places  Attempting to position a city, state, country, or other locale so consumers choose the brand over competing destinations 19

Marketing Ideas • Marketing ideas  Gaining market share for a concept, philosophy, belief, or issue 20

Real People, Real Choices • Universal’s Theme Parks in Orlando (Robyn Eichenholz) • Robyn selected a combination of options 2 and 3 to alleviate crowding concerns and enhance the guest experience.

 In addition to enjoying themselves in the concert area, guests partied in the streets and had a great evening.

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Marketing in Action Case: You Make the Call • What is the decision facing XM Satellite Radio?

• What factors are important in understanding this decision situation?

• What are the alternatives?

• What decision(s) do you recommend?

• What are some ways to implement your recommendation?

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Keeping It Real: Fast-Forward to Next Class Decision Time at Taco Bell • Meet Danielle Blugrind, Director of Consumer and Brand Insights for Taco Bell.

• Competitors claimed they provided better fast-food value.

• The decision: How to update the Taco Bell value menu pricing. 23