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  1. Slide 12-1

  2. CHAPTER MANAGING SERVICES Slide 12-2

  3. AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO: • Describe the four unique elements of services. • Recognize how services differ and how they can be classified. • Explain how consumers purchase and evaluate services. Slide 12-3

  4. AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO: • Develop a customer contact audit to identify service advantages. • Discuss the important role of internal marketing in service organizations. • Explain the role of the four I’s in the services marketing mix. Slide 12-4

  5. THE UNIQUENESS OF SERVICES • Services • The Four I’s of Services • Intangibility • Inconsistency • Inseparability • Inventory • Idle Production Capacity Slide 12-6

  6. FIGURE 12-1 Importance of services in the U.S. gross domestic product (GDP) Slide 12-7

  7. FIGURE 12-AThe 4 I’s of services Slide 12-8

  8. FIGURE 12-2 Inventory carrying costs of services Slide 12-11

  9. THE UNIQUENESS OF SERVICES • The Service Continuum Slide 12-12

  10. FIGURE 12-3 Service continuum Slide 12-13

  11. MARKETING NEWSNET Sports Gets a Gold Medal—in Marketing! Slide 12-14

  12. THE UNIQUENESS OF SERVICES • Classifying Services • Delivery by People or Equipment • Profit or Nonprofit Organizations • Government Sponsored Slide 12-15

  13. FIGURE 12-4 Service classifications Slide 12-16

  14. WEB LINK Nonprofit Organizations Are Becoming Marketing Experts InternetNonprofitCenter About Slide 12-19

  15. Concept Check 1. What are the four I’s of service? A: intangibility, inconsistency, inseparability, and inventory Slide 12-20

  16. Concept Check 2. Would inventory carrying costs for an accounting firm with certified public accountants be (a) high, (b) low, or (c) nonexistent? A: (a) high because the inventory cost of a service is the cost of paying the person used to provide the service: the salary of the accountant. Slide 12-21

  17. Concept Check 3. To eliminate service inconsistencies, companies rely on _____________ and _______. • standardization • training Slide 12-22

  18. HOW CONSUMERSPURCHASE SERVICES • The Purchase Process • Search Properties • Experience Properties • Credence Properties Slide 12-23

  19. FIGURE 12-5 How consumers evaluate goods and services Slide 12-24

  20. HOW CONSUMERSPURCHASE SERVICES • Assessing Service Quality • Gap Analysis Slide 12-25

  21. FIGURE 12-6 Dimensions of service quality Slide 12-26

  22. HOW CONSUMERSPURCHASE SERVICES • Customer Contact and Relationship Marketing • Customer Contact Audit • A Customer’s Car Rental Activities • Relationship Marketing Slide 12-28

  23. FIGURE 12-7Customer contact audit for a car rental (green shaded boxes indicate customer activity) Slide 12-29

  24. Concept Check 1. What are the differences between search, experience, and credence properties? A: Search properties can be determined before purchase. Experience properties can only be assessed during or after consumption. Credence properties may be impossible to evaluate even after purchase and consumption. Slide 12-30

  25. Concept Check 2. Hertz created its differential advantage at the points of _________________ in their customer contact audit. • customer interaction Slide 12-31

  26. MANAGING THEMARKETING OF SERVICES • Internal Marketing • Product (Service) • Exclusivity • Branding • Capacity Management Slide 12-32

  27. FIGURE 12-8 Managing capacity in a hotel Slide 12-34

  28. MANAGING THEMARKETING OF SERVICES • Price • Off-Peak Pricing • Place (Distribution) • Promotion Slide 12-35

  29. SERVICES IN THE FUTURE • Technology Advances • The Global Economy Slide 12-38

  30. Concept Check 1. Matching demand with capacity is the focus of _______ management. • capacity Slide 12-40

  31. Concept Check 2. How does a movie theater use off-peak pricing? A: Movie theaters reduce prices for matinees and often for weekday shows. Slide 12-41

  32. Concept Check 3. What factors will influence future changes in services? A: Technology and the global economy. Slide 12-42

  33. BRAND NEWS YOU CAN USE GOING ONLINE Slide 12-43

  34. Going Online • 1.Go to the American Marketing Association’s website (marketingpower.com) andThe Journal of Services Marketing website (emeraldinsight.com) to read articles of interest on services.What publications are available regarding the topic you selected? AMA JSM Slide 12-44

  35. Going Online • 2.Describe two insights you obtained from the summaries of the publications. AMA JSM Slide 12-45

  36. HOW WALT DISNEYSTARTED THEEXPERIENCE ECONOMY SUPPLEMENTALLECTURE NOTE 12-1 Slide 12-46

  37. SPORTS MARKETING SURPRISES SUPPLEMENTALLECTURE NOTE 12-2 Slide 12-47

  38. WHAT’S NEWIN THE FUTURE? CYBERSERVICES! SUPPLEMENTALLECTURE NOTE 12-3 Slide 12-48

  39. PHILADEPHIAPHILLIES, INC.:SPORTS MARKETING 101 VIDEO CASE 12 Slide 12-49

  40. VIDEO CASE 12 Philadelphia Phillies TABLE 1Sources of revenues for the Philadelphia Phillies Slide 12-51

  41. VIDEO CASE 12 Philadelphia Phillies • 1.(a) What is the “product” thatthe Phillies market? (b) What “products” are the Phillies carefulnot to market? Slide 12-52

  42. VIDEO CASE 12 Philadelphia Phillies • 2.How does the “quality” dimension in marketing the Philadelphia Phillies differ from that in marketing a consumer product such as a breakfast cereal or cake mix? Slide 12-53

  43. VIDEO CASE 12 Philadelphia Phillies • 3.When David Montgomery talks about reducing the “inventory of seats” in the new versus old stadium, what does he recognize as (a) advantages and (b) disadvantages? Slide 12-54

  44. VIDEO CASE 12 Philadelphia Phillies • 4.Considering all five elements ofthe promotional mix (advertising, personal selling, public relations, sales promotion, and direct marketing), what specific promotional activities should the Phillies use? Which should beused off-season? On-season? Slide 12-55

  45. VIDEO CASE 12 Philadelphia Phillies • 5.What kind of special promotion gift days (with premiums) and event days(no premiums) can the Phillies use to increase attendance by targeting these segments: (a) 14 and under,(b) 15 and over, (c) other special fan segments, and (d) all fans? Slide 12-56

  46. DIGITALTHINK:MARKETINGE-LEARNING SERVICES APPENDIX D CASE D-12 Slide 12-57

  47. APPENDIX D CASE D-12 DigitalThink • 1.What are (a) the advantages and(b) the disadvantages of DigitalThink’s technology-based instruction over conventional classroom-based educational services? Slide 12-58

  48. APPENDIX D CASE D-12 DigitalThink • 2.Given your answer to question 1 above, (a) what are the key criteria DigitalThink should use in identifying prospective customers for its service, (b) what market segments meet your criteria, and (c) what are possible sales objections these segments might have that you have to address? Slide 12-59

  49. APPENDIX D CASE D-12 DigitalThink • 3.Suppose a large international hotel chain asks DigitalThink to make a proposal to train its thousands of front desk clerks and receptionists. (a) How would you design an e-learning program to train them how to check in a customer? (b) How can DigitalThink demonstrate the points of difference or benefits to the hotel chain of its technology-based instruction to obtain a contract to design ane-learning program? Slide 12-60

  50. Services Services are intangible activities or benefits that an organization providesto consumers in exchange money or something else of value. Slide 12-61