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Service marketing

Dr. Close. Service marketing. Services are HUGE!. Service is a deed, a performance, or effort that can’t be physically possessed You will likely work in services I work in services (education and research) The most job growth is in services (here, education, healthcare, casinos, finance)

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Service marketing

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  1. Dr. Close Service marketing

  2. Services are HUGE! • Service is a deed, a performance, or effort that can’t be physically possessed • You will likely work in services • I work in services (education and research) • The most job growth is in services (here, education, healthcare, casinos, finance) • Vegas thrives on services

  3. Services are… • Intangible • Inseparable • Heterogeneous • Perishable • Harder to search for (experience or credence goods)

  4. Unique Characteristics Distinguishing Services from Goods

  5. Importance of Services • Tradeoffs: • Desire: high service and low price (difficult for companies to do) • Choosing a service level: • Too low: consumers go elsewhere (FedEx/Kinkos: constantly searching for ways to improve service) • Too high: customers will not pay • What services do you just refuse to pay for?

  6. Service Quality (SERVQUAL) To be a good provider, I better be… • Reliable • Responsive • Trustworthy • Knowledgeable • Empathetic • Incorporating Tangibles (just being a few of these things won’t cut it…)

  7. Service Quality Experiences What are your experiences of horrible customer service? & What elements of SERVQUAL did they miss?

  8. Quality Service Gaps • Quality service generally suffers due to the gap between • Consumer expectations and management perceptions of the consumer expectations • Management perceptions of consumer expectations and firm’s service quality specifications • Service quality specifications and actual service quality • Actual service delivery and external communications about the service

  9. How to Give Horrible Service • Don’t listen to what your customers want (i.e., only listen to your CEO or wallet) • Don’t act on customers’ wants • Hire people without skills or a care, and don’t train them • Tell the customer whatever they want to hear (i.e., overpromise and underdeliver) • Don’t meet (or barely meet) customers’ expectations (i.e., ignore people and insult their intelligence)

  10. Relationships in Service • Attract, develop and retain clients • Satisfaction is not enough; instill more loyalty (attitudinal and behavioral) • Going to the competition = cheating on you

  11. How to Instill Relationships in Service Industries • Pricing incentives for loyal customers • Nonpricing incentives for loyal customers (e.g., airline points) • Build social or emotional bonds (e.g., sponsor a UNLV game) • Build structural bonds (e.g., Amex or BMW concierege services)

  12. Service Strategy • Service as process (people, possession, mental stimulus, or information processing) • Core versus supplementary services • Customization versus standardization

  13. Obstacles in Service Marketing • Four reasons for the lack of innovative marketing on the part of service marketers • Limited view of marketing • Lack of strong competition • Lack of creative management • No obsolescence

  14. Service Challenge • Constantly develop new services that will better meet customer needs • Improve on quality and variety of existing services • Provide and distribute services in a manner that best serves the customer

  15. Banking • Banking is becoming an increasingly technology-driven business • Home baking systems • Banks have also learnt the value of bundling services • ATM transactions • Interest bearing checking accounts • Most banks target some marketing activities towards senior citizens

  16. Health Care • Health Maintenance Organization – Alternative delivery systems • Benefits • Ability to have all ailments treated at one facility • Payment of fixed fees for services • Encouragement of preventive versus remedial treatments • Success of HMO has inspired similar programs for dental and eye care

  17. Insurance • Insurance industry offers several new products and services • Distribution of insurance services have increased • Availability of travel auto insurance through AAA • Group insurance written through employers and labor unions

  18. Travel • Airline industries have been the leaders in the use of technology • Use of Internet sites to dispense flight and fare information • Technology helps airlines to make strategic pricing decisions through the use of yield management • Use of elaborate computer programs enable managers to determine customer segments

  19. Implications for Service Marketers • Sum total of marketing mix elements represents the total impact of the firm’s marketing strategy • Services must be made available to prospective users • Varying service bundles, new technology, and alternative means of distributing the service enable targeted marketing

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