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Services Marketing

Services Marketing. chapter 9. Harcourt, Inc. Objectives. Understand increasing importance of services marketing Identify factors that influence customer service experience Discuss intangibility, inseparability, heterogeneity and perishability. Objectives.

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Services Marketing

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  1. Services Marketing chapter 9 Harcourt, Inc.

  2. Objectives • Understand increasing importance of services marketing • Identify factors that influence customer service experience • Discuss intangibility, inseparability, heterogeneity and perishability Dr. Rosenbloom

  3. Objectives • Define and discuss the importance of customer satisfaction • Discuss the five dimensions of service quality • Define and discuss customer retention strategies Dr. Rosenbloom

  4. Service Marketing is Unique! Marketing a car Versus Marketing a rental car Dr. Rosenbloom

  5. Definition of Services • A service is defined as deeds, efforts, or performances • Intangible • A good is defined as objects, devices, or things • Tangible Dr. Rosenbloom

  6. Types of Services Government Services Nonprofit Services For Profit Services Professional Services Police and Fire Protection Community Hospitals Legal Stylist IRS United Way Medical Movie Theater Car Wash Social Security American Red Cross Accounting Social Work Civic Organizations Landscaping Financial Public Transportation Credit Unions Airlines Education Dr. Rosenbloom

  7. Scale of Market Entities Intangible Dominant Tangible Dominant Dr. Rosenbloom

  8. Goods Benefits built into the product No customer-customer, customer-management interaction The Service Experience Dr. Rosenbloom

  9. Services Benefits in the experience created for the consumer Customers interact with staff, other customers The Service Experience Dr. Rosenbloom

  10. A Service Model Service Quality Profits Customer Satisfaction Customer Loyalty Dr. Rosenbloom

  11. A Service Model Service Quality Profits Customer Satisfaction Customer Loyalty Dr. Rosenbloom

  12. The Service Experience Servicescape Other Customers Service Providers Invisible Organization & Systems Customer Dr. Rosenbloom

  13. The Service Experience The Servicescape • The nonliving physical evidence used to create the service environment • Ambient conditions (room temperature, etc.), signs, symbols, and personal artifacts • Help base evaluations of service performance Dr. Rosenbloom

  14. The Service Experience The Servicescape Ambient Conditions Temperature Air Quality Noise Music Odors Signs, Symbols, Artifacts Layout Equipment Furnishings Space/Function Personal Artifacts Signage Style, Decor Dr. Rosenbloom

  15. The Service Experience Service Providers • Public face of a service firm • Consumption takes place where produced (unlike goods) • Impact of service providers • Complaints about service providers Dr. Rosenbloom

  16. The Service Experience ServiceProviders Apathy: DILLIGAD (Do I look like I give a damn) Brush-off: Dismisses the customer completely Coldness: Doesn’t care what the customer wants Condescension:You are the customer, you must be stupid Robotism: Customers are inputs to be processed Rulebook: Adheres to rules which make no sense Runaround: Passes off to another service provider Dr. Rosenbloom

  17. The Service Experience • Performance Standards • National Westminster Bank • $5 for a poor greeting • $50 for a non-response on a loan by 5 p.m. the next day • Wachovia Bank • The Sundowner Law - Get back to customers by 5:00pm or you’re fired Dr. Rosenbloom

  18. The Service Experience • Performance Standards • Stew Leonard’s Store Norwich, CT 1. The customer is always right. 2. If the customer is ever wrong, reread rule one. Dr. Rosenbloom

  19. The Service Experience • Performance Standards • L.L. Bean • The customer is the most important aspect of business and the focus of the company • The customer is not dependent on us • Interactions should profit both the customer and the company • The customer is not someone to match wits with or argue with Dr. Rosenbloom

  20. The Service Experience Other Customers • Enhance or detract from an individual’s service experience • Active influence (unruly customers, crying children, etc.) • Passive influence (customers who show up late for appointments, etc.) Dr. Rosenbloom

  21. The Service Experience Other Customers • Managing the behavior of customers • Early customers get first priority • Target specific age segments to minimize conflicts between age groups • Separate facilities for child-presence conditions, smokers, etc. Dr. Rosenbloom

  22. The Service Experience Invisible Organization and Systems • Infrastructure such as rules, regulations, and processes • Often invisible • Jim Kelly, CEO of UPS, attributes success to technology the customer seldom sees Dr. Rosenbloom

  23. The Service Experience Invisible Organization and Systems • Includes human content • Hiring, training, rewarding employees impacts customer service • UPS tries to build trust and teamwork through massive training programs, excellent compensation, and empowerment of employees Dr. Rosenbloom

  24. The Service Experience • Get Management Close to Customers • Sam Walton • Bill Marriott, Jr. Dr. Rosenbloom

  25. The Service Experience Marriott International McCann and Erickson Dr. Rosenbloom

  26. Differences Between Goods & Services • Primary difference (from which other differences arise) • Services cannot be felt, tasted, or touched • Goods evaluated objectively prior to purchase • Services evaluated subjectively prior to purchase Dr. Rosenbloom

  27. Differences Between Goods & Services • A movie evaluation includes: • Treatment of service providers • Behavior of other customers • Condition of servicescape Dr. Rosenbloom

  28. Touch Problem Use of brochures Specialized newsletter Meetings with Client Proposal resumes Client lists Top notch reports Mental Problem Buyer/Seller relationship Consulting/Other services Specialized markets Courses for the client Frequent follow up Differences Between Goods & Services Dr. Rosenbloom

  29. Differences Between Goods & Services Norwegian Cruise Lines Goodby, Silverstein & Partners Dr. Rosenbloom

  30. Differences Between Goods & Services • Can not separate production from the consumer • The customer is involved in the production process • Other customers are involved in the production process Dr. Rosenbloom

  31. Differences Between Goods & Services • Goods are: Produced Purchased Consumed Dr. Rosenbloom

  32. Differences Between Goods & Services • Services are: Purchased Produced Consumed Dr. Rosenbloom

  33. Differences Between Goods & Services • Service can not be stored or returned Dr. Rosenbloom

  34. Differences Between Goods & Services • Geographic limitation: • Products • Services Buyer Seller Seller Buyer Dr. Rosenbloom

  35. Differences Between Goods & Services • Service providers in constant contact with customers • Critical Incident - interaction between customer and service provider • Opportunity for gain/loss in customer satisfaction Dr. Rosenbloom

  36. Differences Between Goods & Services • Interpersonal training required • Provide training to employees • Manage customers to limit negative interaction Dr. Rosenbloom

  37. Differences Between Goods & Services • Leads to problems when there is • Inadequate task standardization • An absence of goal setting Dr. Rosenbloom

  38. Differences Between Goods & Services • Variability Hershey’s - No variability • Things to control Location variance Employee variance Time variance Dr. Rosenbloom

  39. Differences Between Goods & Services • Variability inherent in service delivery process • Services occur in real time with no chance to intercept problems • Quality control measures are often too late Dr. Rosenbloom

  40. Differences Between Goods & Services • Combat heterogeneity with • Selection of the “right people” • Training, training, training • Mystery shoppers • Awards for performance Dr. Rosenbloom

  41. Differences Between Goods & Services • Services not sold cease to exist • Unoccupied hotel rooms cannot be stored • Services cannot be separated by time and place from consumers • Marketing and operations must interact to be effective Dr. Rosenbloom

  42. Differences Between Goods & Services • Manage Demand • Differential Pricing • Developing Non-Peak Demand • Complimentary Services • Reservation Systems Dr. Rosenbloom

  43. Differences Between Goods & Services • Manage Supply • Part-Time Employees • Peak-Time Efficiency Routines • Increase Customer Participation Dr. Rosenbloom

  44. A Service Model Service Quality Profits Customer Satisfaction Customer Loyalty Dr. Rosenbloom

  45. The Quest for Customer Satisfaction • What is Customer Satisfaction? • Achieved with effective management of customer perceptions and expectations • Measured by expectancy disconfirmation approach Dr. Rosenbloom

  46. The Quest for Customer Satisfaction • Consumers evaluate services by comparing expectations to perceptions Dr. Rosenbloom

  47. The Quest for Customer Satisfaction • Expected service < performance = satisfied customer • Expected service > performance = unsatisfied customer • Expected service is a ƒ(past experiences, marketing communications, peers, etc.) • Performance = ƒ(expected service, perceived service) Dr. Rosenbloom

  48. The Quest for Customer Satisfaction • Top Customer Service Performers Dr. Rosenbloom

  49. Meeting or Exceeding Customer Expectations Dr. Rosenbloom

  50. Managing Expectations Dr. Rosenbloom

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