Business Services

1. Business Services Lecture 7

2. Consumer Business Organizational Behavior Organization Demand Analysis Business Segmentation Targeting Positioning Product Channel Promotion Price Managing Products & Innovation Supply Chain Promotional Tools Distribution Business Relationship Business Services Implementing Evaluation and Review

3. Can you see anything on this slide? Service is invisible

4. DEFINITION OF BUSINESS SERVICES • any act or performance that is • essentially intangible • does not result in the ownership of anything • examples include • accounting services • transportation • insurance, advertising and promotion etc

5. GROWING IMPORTANCE OF BUSINESS SERVICES Business Services Account for • 80% of employment; and • 76% of the gross domestic product in USA Selling copier + consultancy services

6. Business Service Marketing • E-Business • Internet is • creating new business models; • creating different ways for doing businesses • Outsourcing • Trend for outsourcing is increasing • e.g. cafeteria, warehousing, etc • Total quality management practice and downsizing drive encourage outsourcing • Can Marketing be outsourced?

7. Can Marketing be outsourced?

8. Business Service Marketing • Innovations/Advancement of Technology • New services attract an increasing demand on business services • Service innovations include • security systems • waste management • advertising • Increase in Production Output even though the number of manufacturing labor has reduced • due to specialization of labour; and/or • increase in economic activities • As a result, increase in demand IT, advertising, logistics…

9. DIFFERENCE BETWEENBUSINESS SERVICES AND PRODUCT SERVICES • Business Services (Pure Services) • stand-alone, not necessarily associated with a physical product • e.g. insurance, market research, etc

10. Business Service Marketing • Product Services (Product Support Services) • not stand-alone, wide range of service elements associated with a physical product • e.g. repair and maintenance, installation, on-time delivery, etc

11. Business Service Marketing UNIQUE BUSINESS SERVICE FEATURES • Intangibility • Exists at a point along the tangible-intangible continuum • Important to evaluate which elements of the offering dominate • Business services are intangible-dorminant, though may carry tangible properties • e.g. management seminars, management consulting services

12. Unique Business Service Feature

13. Unique Business Services Features

14. Business Service Marketing • Simultaneous Production and Consumption • Business services are consumed while they are produced • e.g. delivering services, tutoring services, etc • Buyers’ perception of firm’s service quality heavily depends on the INTERACTION taking place • Careful selection on individual service providers assumes great importance

15. Business Service Marketing • Variability • Service offerings can hardly be standardized • Service heterogeneity (differences) may be due to the service provider’s • biases • educational background • attitudes • The more labour element involved => the less uniform the output

16. Business Service Marketing • Perishability (損耗性) • Business services cannot be stored • Time and knowledge - major elements to sell • Carefully evaluate the service demand to achieve the most cost effective allocation of time • Justified capacity - a balance between cost and service

17. Business Service Marketing • Non-Ownership • Business service cannot be owned • Payment for a service = payment for the use of, access to, or hire of items  rise of rental businesses • Articulate benefits of non-ownership, e.g. reduction in number of staff required, overhead saving, etc Office rental is a service. You don’t own the place You only buy the right to use it within a contracted period.

18. MARKETING STRATEGIES • Segmentation • Achieve economies generated by experience curve effect • Service segments - narrower because of customized services => microsegmentation is used • Service segments - focus on managing buyers’ expectation => service quality expectation used for segmentation • Service segments’ total demand - made up of demand from numerous individual segments

19. Business Service Marketing • Service Packages • refer to product dimension of services • concept of service • range of services • quality and level of services • services uniqueness • Physical evidence - by the creation of tangible cues

20. Product dimension of services

21. How to show to other countries that the food you cook is internationally acceptable standard and safe to eat? rYou Add Tangible Cue to show your quality

22. Physical evidence • Logo • Uniform • Inspection record in elevators • Satisfaction guarantee • Doctors’ certificate • Graduation certificate to show that you have completed the diploma

23. Business Service Marketing • Service Pricing • Managing demand • Pricing is used to manage the fluctuating demand • Pricing is used to align demand with capacity available • E.g. off-peak pricing schemes • Premium pricing during peak period or during urgency. • Lower price for off peak

24. Service Pricing in Business Service Marketing • Service bundling • refers to the practice of marketing two or more services in a package for a special price • Two types of service bundling • Pure bundling – one menu for all • Pricewaterhouse: Accounting + consulting • Mixed bundling – can select from menu and purchased individually • A doctor can provide its health inspection at a single rate, or charge each service separately on company accounts. • Attracting new business • crossing selling • attract new customers

25. Service Promotion in Business Service Marketing • Service Promotion • Communication with employees • Service personnel play a key role in reducing risk associated with service quality • Emphasis on employees’ responsibilities and management’s expectations • Word-of-mouth • Influenced by colleagues, peers, professionals • E.g. use opinion leaders, expert… as spokespersons.

26. Service Promotion in Business Service Marketing • Developing tangible cues • To translate the image of intangible attributes into something more concrete • e.g. logos, uniforms, etc • Operating personnel as salesperson • Marketing and operating personnel are inseparable. • E.g. chef needs to visit the clients to listen to the customer’s need and sell.

27. Business Service Marketing • Service Distribution • Direct sales • Service intermediaries (e.g. agents, brokers) • Franchising • Three more “Ps” to Service Marketing • Personnel • Physical facilities • Process management

28. Play 勝在營銷 Chapter 10, Part 1 on Service Watch the video and answer the quizes

29. Quiz Answer on 咀香園 Click here to disclose the answers. • Consultation service. • Apply modern management concept. • Pure service. • Intangible because the service is knowledge transfer, no physical asset is involved. • Will be very different. McDonald will advise it to apply supply chain management to control the supply quality and price and use cheap labour. • 咀香園practised the modern concept while learning from the consultant. • The consultancy service ends when the contract ends. • SRS owns the knowledge. • Service package is production management, brand building, and staff training.

30. Summary • Define business services • Recognize the growing importance of business services • Distinguish between business services and product services • Understand the unique business service features • Explain the marketing strategies for managing different services markets