Chapter 13 Managing Service Products Why Study Service Marketing Services account for roughly 75 of the U S GDP Percent of US GDP attributed to services is consistently rising compared to manufacturing which is at a decline Factors Contributing to Service Growth o Aging Population Baby Boomers terms of retirement plan o Increased leisure time o High per capita income Discretionary income o Changing social and cultural values Longer Life expectancies health care or financial services in Ex people want to spend their time off going to a restaurant Ex trend in celebrating birthdays at restaurants This matters because employers will be asking are you relevant Is your skill set relevant The percent of people working in the service industry is increasing We will most likely be working in these fields in the near future Service companies ex Publix Disney chick fil a What is a service The old view customer service center service wrench time guy who comes to fix the Laundromat technician The new view the application of specialized competences skills and knowledge through deeds processes and performances for the benefit of another entity or the entity itself self service Service includes every interaction between any customer and anyone representing the company including o Ex interacting with sales people at a car dealership or a receptionist at a o The new view wants to know how to manage every encounter with the hotel customer o Ex a phone providers product are performances deeds and efforts Selling expertise to consumers Through advertising they have to display the goal behind their service Goods objects devices or things Services deeds efforts or performances Service characteristics 1 Intangibility Consumer Evaluation Processes for Services o Services lack physical substance primary difference between goods and services o Services cannot be seen felt tasted or touched in the same manner that goods can be sensed This changes criteria of evaluation for service consumption For instance Goods can be relatively easily evaluated in an objective way prior to consumption search attributes this is rarely the case for services o Services cannot be readily displayed or communicated cannot be easily inventoried cannot be easily patented pricing is difficult challenging o Search Qualities Attributes attributes a consumer can determine prior to purchase e g color style price feel hardness smell Ex when you go and buy a sneaker at foot locker you try it on and assess it this is search qualities Assessment prior to buying color smell feeling o Experience Qualities Attributes attributes a consumer can only determine after purchase or during consumption e g taste wearability Ex can only assess taste after you eat it only know if the hotel was a good stay after you stay there o Credence Qualities Attributes characteristics that may be impossible to evaluate even after purchase and consumption e g medical and legal services Ex you trust in a doctor but you don t know if it s the best medical service same with car repair you expect the best but you don t have the technical knowledge You don t have the skills to assess the services Heterogeneity the variation in consistency from one service transaction to the next o Services occur in real time little to no chance to intercept problems o No performance is the same as another performance o Location variance ex service performance varies with different Starbucks o Employee variance ex different interaction with Jane vs john for whatever reason Jane on Monday is different than Jane on Tuesday o Customer variance ex Customers are very different low maintenance vs high maintenance customers have different service experiences Implications of Heterogeneity o Service quality depends on many uncontrollable factors o Service delivery and customer satisfaction depend on employee o There is no sure knowledge that the service delivered matches what was customer actions planned and promoted o It is impossible for a service operation to achieve 100 perfect quality on an ongoing basis which underlines the specific importance of management approaches e g recruiting training quality assurance tools Inseparability simultaneous production and consumption o The service provider s physical connection to the service being provided Often Provider must be physically present to deliver service Employee satisfaction and customer satisfaction are directly related consumption process o The customer s involvement in a the service production and b service o The involvement of other customers in the service production process Ex if someone doesn t turn off their cellphone in a movie it ruins the service experience for everyone o Human interaction customer co produces the service Ex when you go to a dentist the first thing the doctor will ask is Perishability A service cannot be saved its unused capacity cannot be reserved what s wrong and it cannot be inventoried o Implications of perishability Difficult to synchronize supply and demand with services long term short term Services cannot be returned or resold Ex hotwire once this plane is gone the revnue for the seat is gone In a hotel once the night is over the opportunity for revenue for that room is gone How is Service Marketing Different Expanded Marketing Mix for Services the 7 P s o 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 o Product Place Price Promotion o 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 As a manager carefully manage the people who deliver the service the employees how do I recruit the right people and how do I develop them How can I make sure the customer plays his or her part o 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 Servicescapes The stage on which the services deliver How is that environment looking How should it look o Process The actual procedures mechanisms and flow of activities by which the service is delivered the service delivery and operating systems Can think of yourself as a writer dictating what happens on a stage where the employees and customers are your actors Why
View Full Document
Unlocking...