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Chapter 14

Chapter 14. Designing and Managing Services. Learning Objectives. How can services be defined and classified, and how do they differ from goods? What are the new services realities? How can companies achieve excellence in services marketing? How can companies improve service quality?

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Chapter 14

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  1. Chapter 14 Designing and Managing Services

  2. Learning Objectives • How can services be defined and classified, and how do they differ from goods? • What are the new services realities? • How can companies achieve excellence in services marketing? • How can companies improve service quality? • How can goods marketers improve customer-support services?

  3. The Nature of Services • Service • Any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything

  4. Categories ofService Mix • A pure tangible good • A tangible good with accompanying services • A hybrid • A major service with accompanying minor goods/services • A pure service

  5. Service distinctions • Equipment- or people-based • Different processes of delivery • Some need client’s presence • Meets personal or business need • Differs in objectives and ownership

  6. Figure 14.1Evaluation Continuum for Product Types

  7. Characteristicsof Services Intangibility Inseparability Variability Perishability

  8. Intangibility • Services cannot be seen, tasted, felt, heard, or smelled • Physical evidence and presentation tools: • Place • People • Equipment • Communication material • Symbols • Price

  9. Intangibility

  10. Inseparability • Services are typically produced and consumed simultaneously

  11. Variability • The quality of services depends on who provides them, when and where, and to whom • As such, services are highly variable

  12. Perishability • Services cannot be stored • Strategies to match demand & supply • On demand side • Differential pricing • Nonpeak demand • Complementary services • Reservation services • On supply side • Part-time employees • Peak-time efficiency routines • Increased consumer participation • Shared services • Facilities for future expansion

  13. Figure 14.2Blueprint for Overnight Hotel Stay

  14. New Services Realities • A shifting customer relationship • Customer empowerment & coproduction • Satisfying employees as well as customers

  15. Achieving ExcellenceIn Services Marketing • Marketing excellence

  16. Achieving ExcellenceIn Services Marketing • Technology and service delivery • The Internet allows for true interactivity, customer-specific and situational personalization, and real-time adjustments of the firm’s offerings

  17. Best Practices of Top Service Companies Strategic concept Top-management commitment High standards Satisfying customer complaints Monitoring systems Profit tiers

  18. Figure 14.4Importance-Performance Analysis

  19. Differentiating Services • Primary and secondary service options • Innovation with services

  20. Managing Service Quality • Customer switching behavior factors • Pricing • Inconvenience • Core service failure • Service encounter failures • Response to service failure • Competition • Ethical problems • Involuntary switching

  21. Figure 14.5service-quality model

  22. ImprovingService Quality • Listening • Reliability • Basic service • Service design • Recovery • Surprising customers • Fair play • Teamwork • Employee research • Servant leadership

  23. SERVQUAL scale

  24. Extending the Service-Quality Model • Dynamic process model of improved service quality perceptions • Increasing customer expectations of what the firm will deliver • Decreasing customer expectations of what the firm should deliver

  25. Incorporating Self-ServiceTechnologies • SSTs can: • Make transactions more accurate • Make transactions more convenient • Make transactions faster • Reduce costs

  26. Managing Product-Support Services • Three types of customer worries Failure frequency Downtime Out-of-pocket costs

  27. Postsale Service Strategy • Customer-service evolution • The customer-service imperative

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