Chapter 12 Designing and Managing Services

1. Chapter 12 Designing and Managing Services To accompany A Framework for Marketing Management, 2nd Edition

2. Nature of Services GovernmentSector Service Industry Sectors Private Nonprofit Sector ManufacturingSector Business Sector To accompany A Framework for Marketing Management, 2nd Edition

3. Nature of Services Service Mix Categories Pure service; no tangible good Major service with minor good Hybrid: equal part goods and service Tangible goods with some services Pure tangible good; no service Milk Computer & Warranty Meal atRestaurant Hair Styling LegalAdvice To accompany A Framework for Marketing Management, 2nd Edition

4. Characteristics Intangibility Inseparability Variability Perishability Cannot be touched, seen, tasted, heard, or smelled before purchase Lack of trial means higher consumer risk Consumers rely on cues to draw quality inferences Marketers must try to “tangibilize the intangible” Nature of Services To accompany A Framework for Marketing Management, 2nd Edition

5. Characteristics Intangibility Inseparability Variability Perishability Services are produced and consumed at the same time (air travel) Service providers and sometimes other customers become part of the service (restaurant) Strong preferences for service providers exist Nature of Services To accompany A Framework for Marketing Management, 2nd Edition

6. Characteristics Intangibility Inseparability Variability Perishability Service providers vary with respect to attitudes, skills, mood, etc. Even the same provider may give different service on a different day. Quality control is critical: Hiring the right people Standardizing service Monitoring satisfaction Nature of Services To accompany A Framework for Marketing Management, 2nd Edition

7. Characteristics Intangibility Inseparability Variability Perishability Services can not be inventoried or otherwise stored Capacity / demand management is critical: Demand side strategies Supply side strategies Nature of Services To accompany A Framework for Marketing Management, 2nd Edition

8. Nature of Services Demand-Side Strategies Develop Complimentary Services Cultivate Nonpeak Demand Use Differential Pricing Install Reservation System To accompany A Framework for Marketing Management, 2nd Edition

9. Nature of Services Supply-Side Strategies Plan facilities for future expansion Introduce peak-time efficiency routines ImportantCharacteristics Increase consumer participation Hire part-time employees Share services To accompany A Framework for Marketing Management, 2nd Edition

10. Marketing Strategies Figure 12-2:Three Types of Marketing in Service Industries To accompany A Framework for Marketing Management, 2nd Edition

11. Marketing Tasks Managing differentiation Managing service quality Managing productivity Can not differentiate on price alone Innovative features Delivery system Reliability Resilience Innovativeness Image and branding Marketing Strategies To accompany A Framework for Marketing Management, 2nd Edition

12. Marketing Tasks Managing differentiation Managing service quality Managing productivity The service quality model identifies five gaps that can cause service delivery failure Service companies that successfully address these gaps follow common practices Marketing Strategies To accompany A Framework for Marketing Management, 2nd Edition

13. Marketing Strategies Characteristics of Well-Managed Service Firms Commitment from top management Firm and customer monitoring system ImportantCharacteristics Satisfaction of employees and customers A strategic concept High standards To accompany A Framework for Marketing Management, 2nd Edition

14. Marketing Tasks Managing differentiation Managing service quality Managing productivity Have service providers work more skillfully Decrease service quality, increase service quantity Industrialize the service Reduce need for service Design a more effective service Give customers incentives to serve themselves Use technology Marketing Strategies To accompany A Framework for Marketing Management, 2nd Edition

15. Managing Product Support Services • Product support services are often sources of competitive advantage • When designing service support programs, marketers must consider key customer concerns: • Failure frequency • Downtime duration • Out-of-pocket expenses To accompany A Framework for Marketing Management, 2nd Edition

16. Managing Product Support Services Facilitating Services Optional Service Contracts Components Value-Augmenting Services Designing Service Offerings To accompany A Framework for Marketing Management, 2nd Edition