ServicesMarketingCopyright©HoughtonMifflinCompany.Allrightsreserved.PowerPointPresentationbyCharlieCook13PartThreeProductDecisionsCopyright©HoughtonMifflinCompany.Allrightsreserved.13–2ChapterLearningObjectives•Tounderstandthenatureandimportanceofservices•Toidentifythecharacteristicsofservicesthatdifferentiatethemfromgoods•Todescribehowthecharacteristicsofservicesinfluencethedevelopmentofmarketingmixesforservices•Tounderstandtheimportanceofservicequalityandexplainhowtodeliverexceptionalservicequality•ToexplorethenatureofnonprofitmarketingCopyright©HoughtonMifflinCompany.Allrightsreserved.13–3ChapterOutline•TheNatureandImportanceofServices•CharacteristicsofServices•DevelopingandManagingMarketingMixesforServices•ServiceQuality•NonprofitMarketingCopyright©HoughtonMifflinCompany.Allrightsreserved.13–4TheNatureandImportanceofServices•Service–Anintangibleproductinvolvingadeed,performance,oreffortthatcannotbephysicallypossessed–Applicationofhumanand/ormechanicaleffortsdirectedatpeopleorobjects•ServiceFacts(U.S.)–Serviceindustriesaccountforover50%ofGDP.–Serviceindustriesemploy80%ofnonfarmworkers.–Morethanhalfofnewbusinessesareservicefirms.–Serviceshaveincreasedintandemwiththelong-termgrowthoftheU.S.economy.Copyright©HoughtonMifflinCompany.Allrightsreserved.13–5CharacteristicsofServices•Intangibility–Servicesareactionsthathavenopermanentphysicalqualitiesasopposedtogoodswhichcanbetouchedandpossessedovertime.•InseparabilityofProductionandConsumption–Theproductionofaservicecannotbeseparatedfromitsconsumptionbythecustomer.•Servicesareproduced,sold,andconsumedallatthesametime.•Perishability–Servicescannotbeproducedaheadoftimeandstoreduntilneeded.Copyright©HoughtonMifflinCompany.Allrightsreserved.13–6TheTangibilityContinuumFIGURE13.1Copyright©HoughtonMifflinCompany.Allrightsreserved.13–7CharacteristicsofServices(cont’d)•Heterogeneity–Variationinthequalityofservicesdeliveredbyindividualsandorganizations•Client-BasedRelationships–InteractionsthatresultinsatisfiedcustomerswhouseaservicerepeatedlyovertimeCopyright©HoughtonMifflinCompany.Allrightsreserved.13–8CharacteristicsofServices(cont’d)•CustomerContact–Thelevelofinteractionbetweentheserviceproviderandthecustomernecessarytodelivertheservice•High-contactservicesrequirethecustomertobepresentduringtheproductionoftheservice.•Highcontactservicesrequirewell-trainedandmotivatedservicepersonnel.•Low-contactservicesdonotrequirethecustomer’scontinuouspresencewhiletheserviceiscarriedout.Copyright©HoughtonMifflinCompany.Allrightsreserved.13–9Copyright©HoughtonMifflinCompany.Allrightsreserved.13–10Copyright©HoughtonMifflinCompany.Allrightsreserved.13–11DevelopingandManagingMarketingMixesforServices•DevelopmentofServices–Packageorbundleofservicesconsistsof•coreservicesthataretheexpectedbasicserviceexperience.•supplementaryservicesthatdifferentiatetheservicebundlefromthoseofothercompetitors.•“Basic,”“Standard,”and“Deluxe”servicecombinationsarecustom-tailoredtoconsumers’specificneeds.Copyright©HoughtonMifflinCompany.Allrightsreserved.13–12DevelopingandManagingMarketingMixesforServices(cont’d)•DevelopmentofServices(cont’d)–Effectivedeliveryofservices•Segmentthepleasureandcombinethepain•Getbadexperiencesoutofthewayassoonaspossible•Buildcommitmentthroughchoice•Giveritualtoconsumers•FinishstrongCopyright©HoughtonMifflinCompany.Allrightsreserved.13–13DevelopingandManagingMarketingMixesforServices(cont’d)•DistributionofServices–Customerscometoaservicefacility.–Servicesarebroughttotheconsumer.–Servicesareprovidedat“arm’slength”,withnoface-to-facecustomercontact.Copyright©HoughtonMifflinCompany.Allrightsreserved.13–14DevelopingandManagingMarketingMixesforServices(cont’d)•DistributionofServices–Marketingchannelsaretypicallyshortanddirect,withnoorfewintermediaries.–Inseparabilityofservicerequiresafocusonservicedemand/supplymanagement(e.g.,schedulingofservicedelivery).–Accessibilitytoservicesisincreasedbysubstitutingautomatedequipmentforcontactpersonnel.Copyright©HoughtonMifflinCompany.Allrightsreserved.13–15DevelopingandManagingMarketingMixesforServices(cont’d)•PromotionofServices—OvercomingtheIntangibilityofServices–Providingtangible(symbolic)cues/images–Promotingprice,guarantees,availability,personnel–Usingconcrete,specificlanguageinadvertising–Usingpersonalsellingandword-of-mouthadvertising–OfferingservicesonatrialbasisCopyright©HoughtonMifflinCompany.Allrightsreserved.13–16DevelopingandManagingMarketingMixesforServices(cont’d)•PricingofServices–Performanceofspecifictasks—carwashing–Amountoftimetocompletetheservice—babysitting–Variablepricingbasedonthelevelofdemand;highpriceatpeakdemand,lowerpriceswhendemandslackens—airlineseats–Bundlingofservicesrequiresdecisionsonunit,combination,orseparatepricing—telephoneservices–Pricingasanindicatorofqualityisusedwhenconsumershavenoothercuestoindicatequality.Copyright©HoughtonMifflinCompany.Allrightsreserved.13–17ServiceQualityModelFIGURE13.2Source:“ServiceQualityModel,”adaptedfromA.Parasuraman,LeonardL.Berry,andValarieA.Zeithaml,“AnEmpiricalExaminationofR