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MKT 346: Marketing of Services Dr. Houston

MKT 346: Marketing of Services Dr. Houston. Chapter 1: Introduction to Services Marketing. Why Study Services?. Services Dominate the Economy in Most Nations Most New Jobs are Generated by Services. Transforming the Service Economy. Government Policies. Business Trends. Social

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MKT 346: Marketing of Services Dr. Houston

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  1. MKT 346: Marketing of ServicesDr. Houston Chapter 1: Introduction toServices Marketing

  2. Why Study Services? • Services Dominate the Economy in Most Nations • Most New Jobs are Generated by Services

  3. Transforming the Service Economy Government Policies Business Trends Social Changes Globalization Advances in IT Five Major Forces Are Transforming The Service Economy

  4. Transforming the Service Economy Social Changes Government Policies Business Trends Globalization • New markets and product categories • Increase in demand for services • More intense competition Advances in IT Innovation in service products & delivery systems, stimulated by better technology Customers have more choices and exercise more power Success hinges on: • Understanding customers and competitors • Viable business models • Creation of value for customers and firm

  5. What Do Services Involve? • Services involve: • A form of rental • Benefits without transfer of ownership • Customers pay for the temporary right to: • Hire the labor and expertise of personnel • Obtain access to facilities and networks

  6. Five Broad Categories of Non-Ownership Framework • Rented goods and services • Defined space and place rentals • Labor and expertise rentals • Access to shared physical environments • Systems and networks (access and usage)

  7. Four Categories Of Services (Fig 1.10)

  8. Defining Services • Activities, processes, and performances offered by one party to another • In exchange for money, time, and/or effort

  9. Eight Distinctive Challenges of Marketing Services • Intangibility • Difficult to visualize and understand • Cannot be stored (perishability) • Co-produced with customers • Service personnel and customers play key role • Service experience varies widely • Time factor is very important • Distribution can be through non-physical channels

  10. Services Require An Expanded Marketing Mix • Marketing can be viewed as: • A strategic and competitive direction • A set of functional activities • A customer-driven orientation • Marketing is the only function that brings operating revenues into a business • All other functions are cost centers

  11. Expanded Services Marketing Mix:The Seven Ps of Services Marketing • Product elements (Chapter 4) • Place and time (Chapter 5) • Price and other user outlays (Chapter 6) • Promotion and education (Chapter 7) • Process (Chapter 8) • Physical environment (Chapter 10) • People (Chapter 11)

  12. Framework For Developing Effective Service Marketing Strategies Applying the 4 Ps to Services Part II: Chapters 4 - 7 Managing the Customer Interface Part III: Chapters 8 - 11 Implementing Profitable Service Strategies Part IV: Chapters 12 - 15 Understanding Service Products, Consumers & Markets Part I: Chapters 1 - 3

  13. MKT 346 Chapter 1 Key Concepts • Why study services? • Eight common differences/special challenges of services (versus products) • Seven Ps of services marketing • Defining services • Five major forces transforming service economy • What are services? • Five broad categories within service non-ownership framework • Four broad categories of service

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