Services and Other Intangibles: Marketing the Product That Isn’t There

1. Services and Other Intangibles: Marketing the Product That Isn’t There

2. Chapter Objectives • Describe the four characteristics of services • Understand how services can be classified along a service continuum • Explain core and augmented services, marketing of services on the Internet, and the elements of the service encounter • Appreciate the importance of the three attributes of service quality to marketers: search qualities, experience qualities, and credence qualities • Discuss the concepts of SERVQUAL and gap analysis • Explain the marketing of people, places, and ideas

3. Marketing What Isn’t There • Intangibles: services and other experience-based products that cannot be touched • Does marketing work for intangibles? Yes!

4. What Are Services? • Services are acts, efforts, or performances exchanged from producer to user without ownership rights.

5. Characteristics of Services • Intangibility: can’t see, touch, or smell good service • Perishability: can’t store a service for later sale or consumption Capacity management: firms adjust their services to match supply with demand

6. Characteristics of Services (cont’d) • Variability: can’t standardize the same service performed by the same individual • Inseparability: can’t separate production from consumption • Service encounter: the interaction between the customer and the service provider • Disintermediation: eliminating the interaction between customers and salespeople

7. Classification of Services by Inputs and Tangibility Figure 10.1

8. The Services Continuum

9. The Services Continuum (cont’d) • Goods-dominated products • Equipment- or facility-based services • Operational factors (Clear signs) • Locational factors • Environmental factors • People-based services

10. INDOOR CLIMBING WALL AT UNIVERSITY OF HOUSTON Core and Augmented Services • Core service: the benefit a customer gets from the service • Augmented service: core service plus additional services that enhance value

11. Services on the Internet • Anything that can be delivered can be sold on the Web • --Banking and brokerage services • --Software • --Music • --Travel services • --Career-related services • --Medical care

12. Discussion • Why are first impressions formed about a service on the Internet so important? • What can a service firm do to ensure a favorable first impression online?

13. The Service Encounter • Social elements: employees and customers • Physical elements: servicescapes and other intangibles

14. Providing Quality Service: Service Quality Attributes • Search qualities: examine before purchase • Experience qualities: determine during or after consumption • Credence qualities: evaluate after experiencing them (difficult to do)

15. Discussion • Sometimes service quality may not meet customers’ expectations. --What problems have you experienced with quality in the delivery of the following services? A restaurant meal An airline flight Automobile repairs Your college education

16. Measuring Service Quality • SERVQUAL • Tangibles, Reliability, Responsiveness, Assurance, Empathy. • Gap analysis • Expectations & Mgr perception • Mgr perception & quality standards • Quality standards & service delivery • Standards & consumer expectations • Expected and actual service • Critical incident technique • A method for measuring service quality in which marketers use customer complaints to identify critical incidents – specific face-to-face contacts between consumer and service providers that cause problems and lead to dissatisfaction.

17. Strategies for Developing and Managing Services • Act fast to resolve a service failure. • Identify potential failures and make recovery plans ahead of time. • Train employees to listen for complaints and empower them to take action.

18. The Future of Services • New dominant logic for marketing • Changing demographics • Globalization • Technological advances • Shift to flow of information

19. Marketing People • Marketing people Politicians Celebrities

20. Marketing Places • Marketing places Attempting to position a city, state, country, or other locale so consumers choose the brand over competing destinations

21. LICKGLOBALWARMING.COM MADD Marketing Ideas • Marketing ideas • Gaining market share for a concept, philosophy, belief, or issue

22. Marketing Plan Exercise • Select a familiar service such as a bank, an airline, or even your university. • Develop strategies for creating a servicescape that will be a positive influence on customers’ purchase decisions, their evaluations of service quality, and their ultimate satisfaction with the service.