Services Marketing

Copyright 2001 McGraw-Hill Ryerson Limited 12 - 1

The Nature of Services

regardless of the product, there is a services component to the offerings of all firms in some cases, a service is the principal purpose of the transaction, as in the rental of a car, a haircut, or legal services -- we refer to this as the core service in others, service is performed in support of the sale of a tangible product -- these are referred to as supplementary services
Copyright 2001 McGraw-Hill Ryerson Limited 12 - 2

Characteristics of services
Intangibility Inseparability Perishability Variability Client Relationship
Copyright 2001 McGraw-Hill Ryerson Limited

 intangibility: difficult to sample and to evaluate inseparability: difficult to separate services from the service provider; mainly direct sales; staff are essential to the delivery of quality services

Characteristics of Services

Copyright 2001 McGraw-Hill Ryerson Limited

12 - 4

 heterogeneity: virtually every service is different; very difficult to standardize quality perishability: those not sold can not be stored fluctuating demand: demand for some services fluctuates by season, or even by time of day
Copyright 2001 McGraw-Hill Ryerson Limited 12 - 5

Strategic Services Management intangibility generally makes the marketing of services a challenge understanding how people buy services and the segments that exist is just as important

Copyright 2001 McGraw-Hill Ryerson Limited

12 - 6

knowing more about the value of customer segments is important -- some are more valuable than others knowing what they value so that service levels can be tailored is also important
Copyright 2001 McGraw-Hill Ryerson Limited 12 - 7

Pricing Services
The characteristics of perishability,
demand for services create pricing challenges. Pricing Strategies include:
Discount

inability to store, and fluctuating

the week. A variable pricing strategy: Kids eat free, movies cheaper on Tuesdays.
Copyright 2001 McGraw-Hill Ryerson Limited

strategies: Cheaper by

12 - 8

Distribution of Services
because most services are tied directly to a specific service provider, most have been distributed directly to customers with advancing technology, many firms are now delivering services through machines channels of distribution are necessarily short; some firms use one agent intermediary, such as insurance, real estate, and travel agents some firms use franchises to distribute services
Copyright 2001 McGraw-Hill Ryerson Limited 12 - 9

Promotion of Services
customer contact personnel represent the main channel of customer communication service providers must ensure that each service encounter is a positive one if customers are to develop a positive image many professional service firms are now permitted to advertise other elements of the promotional mix are used, including publicity and community affairs
Copyright 2001 McGraw-Hill Ryerson Limited 12 - 10

The three additional Ps of Service Marketing

People Physical evidence Process

Copyright 2001 McGraw-Hill Ryerson Limited

 Gap between management perceptions and consumer expectations Gap between service quality specifications and service delivery Gap between service delivery and external communication Gap between expected service and perceived service
Copyright 2001 McGraw-Hill Ryerson Limited

Managing Service quality

In services, the last experience remains uppermost in your mind. Therefore, it is not enough to be good, you have to be consistently good
Copyright 2001 McGraw-Hill Ryerson Limited