Designing and Managing Services

Take away.
How do we define and classify services
and how do they differ from goods?
How do we market services?
How can we improve service quality?

The Mayo Clinic Considers All Aspects

of a Patients Experience

What is a Service?
A service is any act of performance
that one party can offer another that is
essentially intangible and does not
result in the ownership of anything; its
production may or may not be tied to a
physical product.

Service Sectors

Government

Private
nonprofit

Business

Retail
Manufacturing

General Motors OnStar Service

Categories of Service Mix

Pure
Pure tangible
tangible good
good
Good
Good w/
w/ accompanying
accompanying services
services
Hybrid
Hybrid
Service
Service w/
w/ accompanying
accompanying goods
goods
Pure
Pure service
service

Continuum of Evaluation for Different

Types of Products

Distinctive Characteristics
of Services
Intangibility
Inseparability
Variability
Perishability

Physical Evidence and Presentation

Place
People
Equipment
Communication material
Symbols
Price

Disney Relies Upon Tangible Cues

How to Increase Quality Control

Invest in good hiring and
training procedures
Standardize the
service-performance process
Monitor customer satisfaction

Matching Demand and Supply

Demand side
Differential pricing
Nonpeak demand
Complementary
services
Reservation
systems

Supply side
Part-time
employees
Peak-time efficiency
Increased consumer
participation
Shared services
Facilities for future
expansion

A Blueprint for
Overnight Hotel Stay

Improving Service Quality

Listening
Reliability
Basic service
Service design
Recovery

Surprising
customers
Fair play
Teamwork
Employee research
Servant leadership

Root Causes
of Customer Failure

Solutions to Customer Failures

Redesign processes and redefine customer
roles to simplify service encounters
Incorporate the right technology to aid
employees and customers
Create high-performance customers by
enhancing their role clarity, motivation, and
ability
Encourage customer citizenship where
customers help customers

Three Types of Marketing in Service

Industries

Factors Leading to Customer

Switching Behavior

Pricing
Inconvenience
Core Service Failure
Service Encounter Failures
Response to Service Failure
Competition
Ethical Problems
Involuntary Switching

Service-Quality Model

Gaps That Cause Unsuccessful

Service Delivery
Gap between consumer expectation and
management perception
Gap between management perception and
service-quality specifications
Gap between service-quality specifications
and service delivery
Gap between service delivery and external
communications
Gap between perceived service and
expected service

Determinants of Service Quality

Reliability
Responsiveness
Assurance
Empathy
Tangibles

Best Practices

Strategic Concept
Top-Management
Commitment
High Standards
Self-Service
Technologies
Monitoring Systems
Satisfying Customer
Complaints
Satisfying
Employees

Importance-Performance Analysis

Customer Importance and

Performance Ratings
for an Auto Dealership

Marketing Debate
Is service marketing different from
product marketing?
Take a position:
1. Product and service marketing are
fundamentally different.
or
2. Product and service marketing are highly
related.