Marketing 3023 Dr Hopkins Exam 2 Review Fall 2015 Foundations for Service Marketing Guest Speaker Factors Contributing to Service Growth Aging Population Baby Boomers o Longer life expectations o Implications Increased leisure time High per capita income o Discretionary income Changing social and cultural values Service the application of specialized competences skills knowledge through deeds processes performances for the benefit of another entity or the entity itself self service Examples deeds efforts or performance Consumer Evaluation Process Search Qualities Attributes attributes a consumer can determine prior to purchase Examples color style price feel hardness smell Experience Qualities Attributes attributes a consumer can only determine after purchase or during consumption Examples taste wear ability Credence Qualities Attributes Characteristics that may be impossible to evaluate even after purchase and consumption Examples medical legal services Intangibility Lack of physical substance Services cannot be seen felt tasted or touched in the same manner that goods can be served Services cannot be readily displayed or communicated 1 2 Services cannot be easily inventoried 3 Services cannot be easily patented 4 Pricing is difficult challenging Perishability a service cannot be saved its unused capacity cannot be reserved it cannot be inventoried Implications of Perishability difficult to synchronize supply demand long term short term services cannot be returned or resold Five Dimensions of Service Quality 1 Reliability ability to perform the promised service dependably accurately Providing service as promised at the promised time 2 Assurance confidence towards in the firms knowledge courtesy of employees their ability to inspire trust Employees who have the knowledge to answer questions Making customers feel safe in their transactions 3 Empathy caring individualized attention the firm provides to its customers Employees who understand the needs of their customers Employees who deal with customers in caring fashion 4 Responsiveness willingness to help customers provide prompt service Readiness to respond to customer s requests 5 Tangibles appearance of physical facilities equipment written materials appearance of personnel Modern equipment visually appealing facilities Employees appearance Visually appealing material associated with the service The P s of Services 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 Differences between Goods Services Implications Goods Tangible Services Intangible Goods Standardized Services Heterogeneous Production is Separate from Consumption Simultaneous Production Consumption Services cannot be inventoried Services cannot be easily patented Services cannot be inventoried or communicated Pricing is difficult Implications Service delivery customer satisfaction depend on employee customer actions Service quality depends on many uncontrollable actions There is no sure knowledge that the service delivered matches what was planned promoted Customers participate in affect the transaction Customers affect each other Employees affect the service outcome Decentralization may be essential Mass production is difficult Nonperishable Perishable It is difficult to synchronize supply demand with services Services cannot be returned or resold Market Segmentation Day 6 Is the process of dividing up a market into smaller groups called segments o The groups are designed to have similar wants needs o The idea is that firms can use their marketing mix to tailor products for the different groups Cluster Analysis most sales potential Firms can plot the segments against their core competencies target the groups with the Firms can develop new products or reposition old ones to target lucrative groups of o 45 of NFL Fans are women o Female fantasy footballers doubled in 2011 Targeting consumers Targeting Strategies 1 Undifferentiated Entire market is target market 1 marketing mix Homogenous market similar needs Single mass market One approach for all 2 Differentiated 3 Concentrated Two or more segments more than 1 marketing mix Several well defined markets different approach for each Single market segment 1 marketing mix Several well defined markets one approach for each particular market Segmentation Bases 1 Demographics Describe characteristics of a population o Gender age ethnicity education religion Iphones 2 Geographic Region city size urban rural religion McDonald s 3 Psychographics 4 Behavioristic Personality motives lifestyles Usage volume benefits loyalty price sensitivity Use Related Segmentation Usage Rate Awareness Status o Heavy users medium users light users non users o Unaware aware interested enthusiastic Brand Loyalty o None some strong VALS Puts it All Together The Value Lifestyle Survey Helps classify based on psychological characteristics that are o Correlated with purchasing behavior o Related to key demographics Firms to Know Nielsen s Claritas Provides market research target marketing Offers Prism a geo demographic segmentation tool Prism data can be helpful in choosing a store location purchasing targeted advertising direct mail Sales Forecast The amount of a product a company expects to sell during a specific period at a specified level of marketing activities expense o Forecasting methods can be scientific or arbitrary vary in complexity o Depends on cost product market characteristics time span purpose of forecast historical sales data many other variables Time Series Analysis using historical sales data to discover patterns in the firm s sales such as Trend Analysis using aggregate sales data from many years to determine general Cycle Analysis analyzing sales for 3 to 5 years to assess consistent fluctuations Seasonal Analysis analyzing daily weekly or monthly sales to assess seasonal trends influences Regression Analysis independent variables Predicting sales based on finding a relationship between past sales one or more o Also requires the use of historical sales data
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