Introduction to ServicesExamples of Service IndustriesFigure 1.2 Tangibility SpectrumExercise - What are the tangible and intangible components provided by a hotel?Why Services Marketing? (pp. 8-15)Perception: Service Stinks! (pp. 12-15)Paradoxes and Dark Side of Technology and Service (p. 20-21)Table 1.2 Goods versus ServicesCharacteristics of Services Compared to GoodsSlide 10Slide 11Slide 12Slide 13Traditional Marketing MixExpanded Mix for Services -- The 7 PsTable 1.3 Expanded Marketing Mix for ServicesChallenges for Services1ChapterChapterIntroduction to ServicesIntroduction to ServicesServices (p. 4): ________________________• include all economic activities whose output is not a physical product or construction, • is generally consumed at the time it is produced, • provides added value in forms (such as convenience, amusement, timeliness, comfort, or health) that are essentially intangible© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinExamples of Service IndustriesExamples 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© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinFigure 1.2Tangibility SpectrumFigure 1.2Tangibility SpectrumTangibleDominantIntangibleDominantSaltSoft DrinksDetergentsAutomobilesCosmeticsAdvertisingAgenciesAirlinesInvestmentManagementConsultingTeachingFast-foodOutletsFast-foodOutlets© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinExercise - What are the tangible and intangible components provided by a hotel?Exercise - What are the tangible and intangible components provided by a hotel?TANGIBLEFurnitureLightingCleanlinessCarpetingParking spacesINTANGIBLE© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinWhy Services Marketing?(pp. 8-15)Why Services Marketing?(pp. 8-15)Better services mean higher profits:Rapid changes in technologyIncreasing competitionMore demanding customers© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinPerception: Service Stinks! (pp. 12-15)Perception: Service Stinks! (pp. 12-15)1. Increasing use of self-service and technology-based service – _____________________________2. Technology-based services hard to implement – failures and poorly designed systems3. Customer expectations are higher because of excellent service received from some companies – ___________ ______________________________________ 4. Delivering consistent, high quality service is not easy, but companies promise it5. etc.© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinParadoxes and Dark Side of Technology and Service (p. 20-21)Paradoxes and Dark Side of Technology and Service (p. 20-21)Some customers are not interested or ready to use technologyEmployees are often reluctant to accept and integrate technology into their work lifeTechnology infusion means loss of human contactPayback in technology investments is often uncertain© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinTable 1.2Goods versus ServicesTable 1.2Goods versus ServicesSource: A. Parasuraman, V.A. Zeithaml, and L. L. Berry, “A Conceptual Model of Service Quality and Its Implications for Future Research,” Journal of Marketing 49 (Fall 1985), pp. 41–50.© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinCharacteristics of ServicesCompared to GoodsCharacteristics of ServicesCompared to GoodsIntangibilityPerishabilitySimultaneousProductionandConsumptionHeterogeneity© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinCharacteristics of Services Compared to GoodsCharacteristics of Services Compared to GoodsIntangibility – services cannot be seen, felt, tasted, or touched in the same manner that you can sense tangible goodsImplications:Services cannot be readily displayed or communicated - therefore, difficult for consumers to assessNeed to add ___________________________________© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinCharacteristics of Services Compared to GoodsCharacteristics of Services Compared to GoodsHeterogeneity – no two services will be precisely alikeImplications:Service delivery and customer satisfaction depend on __________ and _____________ actionsService quality depends on many _____________ factorsNeed to ___________________ service© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinCharacteristics of Services Compared to GoodsCharacteristics of Services Compared to GoodsSimultaneous Production and Consumption – most services are sold first, then produced and consumed simultaneouslyImplications:________________ participate in and affect the transactionCustomers affect each other_________________ affect the service outcomeMass production is difficult© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinCharacteristics of Services Compared to GoodsCharacteristics of Services Compared to GoodsPerishability – services cannot be saved, stored, resold, or returnedImplications:It is difficult to _____________ supply and demand with servicesServices cannot be ________________________© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinTraditional Marketing MixTraditional Marketing MixAll elements within the control of the firm that communicate the firm’s capabilities and image to customers or that influence customer satisfaction with the firm’s product and services: Product Price Place Promotion© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinExpanded Mix for Services --The 7 PsExpanded 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