Chapter 12 book notes

The uniqueness of services

Services intangible activities or benefits (such as airline trips, financial
advice, or automobile repair) that an organization provides to satisfy
customers needs in exchange for money or something else of value
The four Is of services
Intangibility
Inconsistency
Inseparability
Inventory
Intangibility services are intangible, this means that they cant be
held, touched or seen before the purchase or decision
Inconsistency developing, pricing, promoting, and delivering
services is challenging because they quality of a service is often
inconsistent
Inseparability the consumer cannot separate the deliverer of the
service from the service itself
Inventory inventory of services is different from that of goods;
with services, inventory carrying costs are more subjective and are
related to idle production capacity (when the service provider is
available but there is no demand).
The Service Continuum
What companies bring to the market ranges from the tangible to the
intangible or good-dominant to service-dominant offerings
Classifying Services
Can be classified in several ways according to whether
They are delivered by people or equipment
They are profit or non-profit
They are government sponsored
How Consumers Purchase Services
The Purchase Process
Services such as restaurants and child care have experience properties,
which can be discerned only after purchase or during consumption
Services provided by specialized professionals such as medical diagnoses
and legal services have credence properties or characteristics that the
consumer may find impossible to evaluate even after purchase or
consumption
To reduce the uncertainty created by these properties, service
consumer turn to personal sources of information such as early
adopters, opinion leaders, and reference group members during the
purchase decision process
Assessing Service Quality
Differences between the consumers expectations and experience are
identified through GAP ANALYSIS ( this type of analysis asks consumers to

assess their expectations and experiences on dimensions of service

quality)
Customer Contact and Relationship Marketing
Consumers judge services on the entire sequence of steps that make up
the service process
To focus on these steps a firm can develop a CUSTOMER CONTACT
AUDIT a flowchart of the points of interaction between consumer and
service provider
Relationship Marketing
The contact between a service provider and a customer represents a
service encounter that is likely to influence the customers assessment of
the purchase
Managing the Marketing of Services
In addition to the four Ps, the services marketing mix includes PEOPLE,
PHYSICAL ENV., PROCESS, and PRODUCTIVITY (the 8 Ps of services
marketing)
Product (service)
An important aspect of the product concept is branding because
services are intangible, and more difficult to describe, the brand name
or identifying a logo of the service organization is particularly
important when a consumer makes a purchase decision
Price
In service businesses, price is referred to in many ways (because of the
intangible nature of services, price is often perceived by consumers as
a possible indicatory of the quality of the service)
Many service businesses use OFF-PEAK PRICING consists of charging
different prices during different times of the day or during different
days of the week to reflect variations in demand for the service
Place (distribution)
Major factor in developing a service marketing strategy because of the
inseparability of services from the producer
Promotion
The value of promotion, especially advertising, for many services is to
show consumers the benefits of purchasing the service
People
Many services depend on people for the creation and delivery of the
customer service experience
Internal marketing based on the notion that a service organization
must focus on its employees, or internal market, before successful
programs can be directs at customers
Customer Experience management (CEM) the process of
managing the entire customer experience with the company
Physical Environment

The appearance of the environment in which the service is delivered

and where the firm and customer interact can influence the customers
perception of the service
Process
Refers to the actual procedures, mechanisms, and flow of activities by
which the service is created and delivered
Productivity
Most services have a limited capacity due to the inseparability of the
service from the service provider and the perishable nature of the
service
CAPACITY MANAGEMENT integrating the service component of the
marketing mix with efforts to influence consumer demand