Professional Documents
Culture Documents
Course Overview:
UTS Business: Marketing
Text Book Details
Services Marketing: Integrating Customer
Focus Across the Firm
Valarie Zeithaml
Mary Jo Bitner
Dwayne Gremler
2009. Fifth Edition.
McGraw Hill
Available at the Co‐Op Book Shop
24706 Strategic Services Marketing:
Lecture 1: Course Welcome & Services Marketing Fundamentals
Anouche Newman
Course Overview: Course Overview:
The SSM Teaching Team Assessment (1)
Course Overview: Course Overview:
Contacting the SSM Teaching Team & UTSOnline Group Project Activities Timeline
1
Course Overview: Course Overview:
Assessment (2) Lecture and workshop slides: distribution policy
(see ‘Program’ on pages 3‐4 of the 24706 Subject Outline)
MSE
Weeks 5-7
Weeks 1-4 Chapter 7: Building customer relationships
Chapter 9: Service innovation and design
Chapter 1: Introduction to service Chapter 10: Customer‐Defined Service Standards
Chapter 2: The Gaps model of service quality Chapter 11: Physical evidence and the servicescape FE
Chapter 3: Consumer behavior in services
Chapter 4: Customer expectations of service Chapter 8: Service recovery
Chapter 5: Customer perceptions of service Chapter 9: Service innovation and design
Chapter 12: Employees’ roles in service delivery
Chapter 13: Customers’ roles in service delivery
Chapter 14: Delivering service through intermediaries and
electronic channels
Chapter 15: Managing demand and capacity
Chapter 16: Integrated marketing communications
Chapter 17: Pricing of services
NOTE: Chapters 6 and 18 are not explicitly discussed in lectures. However,
Week 9-11
we suggest that you read both to extend your understanding of this subject
(Source: World Factbook 2008)
2
The Service Sector in Australia What are ‘services’? (3)
According to DFAT, the service sector Electricity, gas and water supply A way of thinking… Service as a Process
accounts for 70% of Australia's Construction
economic activity Wholesale trade Firms adopting a services perspective Based on differences in nature of
Retail trade approach do not have to be service firms service act (tangible/intangible) and
Banking, insurance, and finance Accommodation, cafes and (Grönroos, 2000) who or what is direct recipient of
Restaurants service (people/possessions), there
Media and entertainment Transport and storage Services, defined in a broad sense, are are four categories of services:
Communication Services the key to success in the marketplace,
Tourism, retail, food, and beverage Finance and insurance regardless of whether the core offering People processing
Property and business services is a service or manufactured product
The government sector Health and Community services Possession processing
Education
Source: www.dfat.gov.au/facts/service_sector.html Government administration / defence NOTE: This idea is more formally Mental stimulus processing
captured in the notion of Service‐
Cultural and recreational services
Dominant Logic, which is discussed
Personal and other services later in the lecture Information processing
What is marketing? “acts, performances and experiences…”
(McColl‐Kennedy, 2003, p. 3)
Marketing is the process of planning and
executing the conception, pricing,
promotion, and distribution of ideas, “deeds, processes and performances…”
goods, and services to create exchanges (Zeithaml et al. 2006, p. 4)
that satisfy individual and organisational
objectives
“Activities, benefits and satisfactions,
(American Marketing Association) which are offered for sale or are
provided in connection with the sale of
goods”
(American Marketing Association)
3
Service as a Process (3) The Evolution of the Services Marketing Literature (2)
Services are about VALUE The Evolution of the Services Marketing Literature (3)
The Evolution of the Services Marketing Literature (1) Services Dominant Logic
4. Future
? A mindset for a unified understanding
of the purpose and nature of
organisations, markets and society.
All of marketing needs to “break
free” from the goods and
manufacturing‐based model ‐ that is,
3. Walking Erect goods‐dominant (G‐D) logic.
Focuses on the exchange of service ‐
the applications of competences S‐D logic embraces concepts of the
(knowledge and skills) for the benefit of a value‐in‐use and co‐creation of value
party. rather than the value‐in‐exchange
and embedded‐value concepts of G‐D
2. Scurrying About Service is exchanged for service; all logic.
firms are service firms; all markets are
centered on the exchange of service, and Firms should market with
all economies and societies are service customers, not market to customers
based.
1. Crawling Out
Adapted from: Fisk, R.P., Brown, S.W. and Bitner, M.J., (1993), “Tracking The Evolution of the Services Marketing
Literature,” Journal of Retailing, 69 (Spring), 61-103. Source: Vargo, Stephen L. and Lusch, Robert F. (2004). ‘Evolving to a new dominant logic for
marketing.’ Journal of Marketing, Vol. 68 (January), pp. 1‐17.
4
Why is services marketing different? (1) The IHIP Framework: Heterogeneity
Goods are tangible, services are intangible (INTANGIBILITY)
Goods are standarised, services are heterogenous (variable) (HETEROGENITY)
Goods are produced then consumed, services are often consumed as they
are being produced (INSEPERABILITY)
Goods can be inventoried, services cannot (PERISHABILITY)
NOTE: This is referred to as the ‘IHIP framework’
For many services the customer and service
Lovelock, Wirtz and Chew (2008) identify eight differences between marketing representative need to be at the same place
management tasks in the service sector and from those in the manufacturing at the same time
sector:
1. Most service products cannot be inventoried (perishability)
2. Intangible elements usually dominate value creation (intangibility)
3. Services are often difficult to visualize and understand (intangibility)
i f diffi l i li d d d (i ibili )
4. Customers may be involved in co‐production (inseparability)
5. People may be part of the service experience (inseparability)
6. Operational inputs and outputs tend to vary more widely (heterogeneity)
7. The time factor often assumes great importance
8. Distribution may take place through non‐physical channels
Intangibility makes it difficult for a customer Services cannot be stored; the service
to evaluate a service itself cannot always be returned
5
The IHIP Framework: Intangibility Challenges The IHIP Framework: Perishability Challenges
Services involve a form of rental, Five broad categories within non
offering benefits without transfer of ownership framework:
ownership
1. Rented goods services
Include rental of goods
2. Defined space and place rentals
Marketing tasks for services differ
from those involved in selling goods and 3. Labor and expertise rentals
transferring ownership
4. Access to shared physical environments
(Lovelock & Gummesson 2004)
5. Systems and networks: access
and usage
The IHIP Framework: Heterogeneity and Separability Challenges An Alternative View: Rental
The ‘Rental/Non-Ownership’
/ Non-Ownership ViewView
(1) (2)
6
An Alternative
The Services Marketing
View: Rental
Mix / Non-Ownership View (1) An Alternative
Applying the 4Ps
View:
to Services:
Rental / Non-Ownership
Promotion View (1)
An Alternative
Applying the 4Ps
View:
to Services:
Rental / Non-Ownership
Product and Place
View (1) An Alternative
The Services Marketing
View: Rental
Triangle
/ Non-Ownership View (1)
Company
Product Place (and Time) (Management)
Service products are at the heart of Service distribution can take place
services marketing strategy through physical and non‐physical
channels Internal Marketing External Marketing
Marketing mix begins with creating Some firms can use electronic channels
service concept that offers value to deliver all (or at least some) of their Vertical Communications Sales Promotion
Horizontal Communications
Horizontal Communications Public Relations
Public Relations
service elements Direct Marketing
Service product consists of core and
supplementary elements: Info‐based services can be delivered
almost instantaneously electronically
• Core products meet primary Delivery Decisions: Where, When, How
needs Employees or Customers
Time is of great importance as
Technology Interactive Marketing
• Supplementary elements are customers are physically present
value‐added enhancements Convenience of place and time become Personal Selling; Customer Service Centre
important determinants of effective Service Encounters; Servicescapes
service delivery
An Alternative
Applying the 4Ps
View:
to Services:
Rental / Non-Ownership
Price View (1) An Alternative
The Services Marketing
View: Rental
Mix:/ Process
Non-Ownership
(1) View (1)
Price (and other costs) Process
Firm’s perspective: pricing generates income and creates profits The actual procedure, mechanisms and
flow of activities through which service is
Customer’s perspective, pricing is key part of costs to obtain wanted benefits
delivered
Customer costs involve more than price paid to seller
Length – number of steps
Identify and minimise non‐monetary costs incurred by users: Duration – time it takes
Additional monetary costs associated with service usage Logistical effectiveness – smoothness in
delivery
Time expenditures, especially waiting
Unwanted mental and physical effort Service delivery may follow a standardised
procedure that comprises a number of
Negative sensory experiences activities. These activities can occur
Revenue management is an important part of pricing frontstage (in view of the customer) or
backstage (not seen by the customer)
7
An Alternative
The Services Marketing
View: Rental
Mix:/ Process
Non-Ownership
(1) View (1) An Alternative
Using the 7Ps for
View:
Services
RentalStrategy
/ Non-Ownership View (1)
How effective is a firm’s services Who is the customer?
marketing mix?
What is the service?
Is the mix well‐aligned with overall
vision and strategy? How effectively does the services
marketing mix for a service
What are the strengths and communicate its benefits and quality?
weaknesses in terms of the 7Ps?
What changes/ improvements are
needed?
An Alternative
The Services Marketing
View: Rental
Mix:/ Physical
Non-Ownership
Evidence
View (1) An Alternative
Services Marketing:
View: Some
RentalKey
/ Non-Ownership
Challenges View (1)
An Alternative
The Services Marketing
View: Rental
Mix:/ People
Non-Ownership View (1) An Alternative
Further ReadingView:
(1) Rental / Non-Ownership View (1)
People Vargo, S.L. And Akaka, A. (2009). Service‐Dominant Logic as a Foundation for
Service Science: Clarifications, Service Science. Vol. 1, No.1, pp. 32‐41
All humans who play a role in service
delivery and who influence the perceptions
Vargo, S.L. and Lusch, R.F., (2008). Why "service" ? Journal of the Academy of
of customers
Marketing Science. Vol. 36, pp. 25‐38.
Service delivery employees (front‐line staff)
Chesbrough, H. (2005). Towards a new science for services. Harvard Business
General staff of the service company
General staff of the service company
Review, February, pp. 43‐44.
The customer
Other customers present in the
Lovelock, C., and Gummesson, E. (2004). Whither services marketing? In search of
production and delivery process
new paradigms and fresh perspectives. Journal of Service Research. Vol. 7 (August),
pp. 20‐41.
The human nature of services marketing
necessitates a focus on people as part of
Vargo, S.L. and Lusch, R.F. (2004). The four service marketing myths. Journal of
the service management process
Service Research. Vol. 6 (May), pp. 324‐335.
8
An Alternative
Further ReadingView:
(2) Rental / Non-Ownership View (1)
Vargo, S.L. and Lusch, R.F. (2004). Evolving to a new dominant logic for marketing.
Journal of Marketing, Vol. 68 (January), pp. 1‐17.
Shostack, G.L. (1977). Breaking free from product marketing. Journal of Marketing,
Vol. 41 (April), pp. 73‐80.
Berry, L. (1980). Services marketing is different. Business Week, Vol. 30, (3),pp. 24‐
29.
Next Lecture:
Tuesday 08 March 2011
The Gaps Model of Service Quality
Consumer Behaviour
Text references: Chapters 2 and 3
NOTE: Don’t forget to download and
familiarise yourself with the eReading
familiarise yourself with the eReading
for Workshop 1 (Week 2)