KSU MKTG 25010 - CHAPTER 12: MANAGING SERVICES

Unformatted text preview:

CHAPTER 12: MANAGING SERVICESI. LEVELS OF SERVICEa. CORE/PRIMARY SERVICESi. The major activity of a business or nonprofitii. Investment services provide the usage of a brokerage account to buy/sell stock1. Ex: Charles Schwab, eTradeb. Ancillary Servicesi. Expected or optional supplements to the primary purchase1. Ex: Supermarket carryout, Valet Parking, Free Parkingii. Expected in B2B Marketing1. Prompt delivery2. Favorable credit terms3. Responsive (24/7) Customer ServiceII. SERVICES AS VALUEa. Consumers and Organizational Buyers Want:i. Quality productsii. Right priceiii. Qualified sales personneliv. Maximum benefitsv. Minimum effortvi. Low wait timesvii. VALUE!b. Casual Dining Industry stopped providing “value”i. Competition from “fast-casual” chains are stealing customersii. Checks average from $10-$23iii. Ex: Panera, Chipotle, Panda Express, Zaxby’s Five GuysIII. VALUEa. An intangible concept often defined in terms of…i. Exceptional customer serviceii. Exceptional product qualityiii. Value-based pricesIV. COMPETITIVE POSITIONINGa. Service Image is conveyed by the firm’s “service products”i. Dimensions used should be those valued by the customersb. What DO consumers want in casual dining?i. Stand for something unique1. Cheesecake Factory (Large Portions)2. Outback (High quality grilled Steak)3. Olive Garden (Tuscan-like ambience)ii. Lower Pricesiii. Better Food (ex: Ruby Tuesday’s)iv. Improved Service (ex: Chili’s)1. Slow service, discourteous staff, professional uniformsv. Better-Looking Stores (ex: Ruby Tuesday’s)vi. Get Kid-FriendlyV. SERVICE LEADERSHIP OR FOLLOW THE LEADER?a. Will you set the service standard or wait for competitors to set the standard and then follow their lead?VI. BENEFITS OF EXCEPTIONAL CUSTOMER SERVICEa. Exceptional customer service can differentiate you from competitorsi. Services attract and keep customersii. Services and recover lost salesiii. Service quality is related to customer satisfactioniv. Customer service usually leads to a profitable Return on Investment in the long-runVII. How consumers purchase/evaluate servicesa. The Purchase Processi. Search Properties: What consumers can judge prior to purchasea. Easiest to Evaluateb. Price, Location, Appearance of Physical Facility, Paperwork, Interactions with Staffc. HIGH: clothing, jewelry, furniture, houses, Automobilesii. Experience Properties: Attributes discernable only after the service experiencea. Hardest to evaluateb. Physical comfort, staff concern, wait timec. HIGH: restaurant meals, vacations, haircuts, childcareiii. Credence Properties: Attributes inferred from a subjective evaluation of the entire processa. HIGH: TV repair, legal services, root canal, auto repair, medical diagnosisVIII. THE SERVICE DESIGN PROCESSa. Customer Targets (What do they want?)b. Nature of the Servicei. Complex: substantial support services and highly qualified customer contact people (medicine, investments)ii. Less Complex: Substantial “up front” design effort (automated services [ex: ATM])c. Pricing (Who is the Target?)i. How much and how often do you buy?ii. Ex: T. G. I. Friday’s Loyalty Programiii. What is this type of service?iv. Can a fee be justified?d. Costsi. Wagesii. Physical facilitiesiii. Technology and equipmentiv. Honoring warranties and guaranteese. Degree of Complexity/Uncertaintyi. When the service/product is complex or customers are uncertain about the purchase. They may need:1. Extensive sales assistance2. Demonstrations3. Service guarantees4. After-sale assistance5. Pre-purchase informationf. Marketer’s Resourcesi. Smaller marketers may need to outsource some customer services to save costsii. When to use customer service outsourcing1. Significant Growth2. Save money3. Testing & Learning4. Variable Volume5. Business Model Shiftsg. Number of Servicesi. Focus on services which make a difference in consumers’ purchase decisionsii. Remember, customers may be willing to pay some or all of the cost of desired servicesh. Level of Servicei. Full service to self-serve1. What does your market/target customer call for?2. What can you support?IX. SERVICE DELIVERYa. Top-Management Commitmentb. Treat customers as internal customers (ex: Disney)c. View service as a “performance”d. Ensure service recoveryX. SUCCESSFUL SERVICE RECOVERYa. Know the costs of losing a customeri. For every customer that bothers to complain, there are 26 others that stay silentii. The average wronged customer will tell 8-16 peopleiii. 91% of happy customers will never purchase your services againiv. It costs about 5X as much to attract a new customer than to keep an old oneb. Listen to the customer – get them to talkc. Anticipate potential failuresd. Act fast!e. Train Employeesf. Empower the front lineg. Close the Loop – get back to the customerXI. CHEF RAMSEY’S CARDINAL RULEa. Put customers first, make them feel really special, and build a sense of loyaltyb. Unhappy customers destroy reputations!XII. THE EVOLVING WORLD OF PRODUCTa. Before 1940s: A world of Commodityb. 1940s-1980s: A World of Product Brandingc. 1980s-1990s: A World of Servicesd. 1990s-2010s: A World of Experiences [Charismatic Experiences]CHAPTER 13: BUILDING THE PRICE FOUNDATIONI. NATURE AND IMPORTANCE OF PRICEa. Price: the money or other considerations (including other goods/services) exchanged for the ownership or use of a good or serviceb. Importance of Price: Price is the only thing we do that isn’t an expense (Price is REVENUE)c. Barter: the practice of exchanging goods and services for other goods and services rather than moneyd. Price Equation: Final Price = List Price – (Incentives + Allowances) + Extra FeesII. Price as a indicator of valuea. Value: the ratio of perceived benefits to priceb. Value = Perceived Benefits / Pricec. Price cannot exceed the perceived value of the attributes being offeredd. Value-Pricing: practice of simultaneously increasing product and service benefits while maintaining or decreasing pricei. But what happens if/when costs rise?e. Value Pricing is not necessarily inexpensivei. PCs have seen collapsing prices as competition has become strongii. Low-Prices PCs are the fastest growing segmentiii. Solutions: adding features and services that add valueIII. Price in the Marketing Mixa. Profit Equation: Profit = Total Revenue – Total Costb. = (Unit Price x Q. Sold) – (Fixed Cost + Variable Cost)IV. Six Steps in Setting Price1. Identify Pricing Objectives and Constraints a.


View Full Document

KSU MKTG 25010 - CHAPTER 12: MANAGING SERVICES

Documents in this Course
Notes

Notes

8 pages

Notes

Notes

2 pages

Chapter 1

Chapter 1

11 pages

Question

Question

34 pages

Test 1

Test 1

53 pages

Chapter 7

Chapter 7

11 pages

Marketing

Marketing

123 pages

Load more
Download CHAPTER 12: MANAGING SERVICES
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view CHAPTER 12: MANAGING SERVICES and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view CHAPTER 12: MANAGING SERVICES 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?