Module 1: Introduction to Services Marketing
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Module 1: Introduction to Services Marketing
Why Study Services?
What are Services?
The Marketing Challenges Posed by Services
The Expanded Marketing Mix Required for Services
Why Study Services?
Why Study Services? (1)
Services dominate economy in most nations
Understanding services offers you personal competitive advantages
Importance of service sector in economy is growing rapidly:
Services account for more than 60 percent of GDP worldwide Almost all economies have a substantial service sector Most new employment is provided by services Strongest growth area for marketing
Why Study Services? (3)
Powerful forces are transforming service markets
Government policies, social changes, business trends, advances in IT, internationalization
These forces are reshaping
Demand Supply The competitive landscape Customers’ choices, power, and decision making
Factors Stimulating Transformation of the Service Economy (1)
Government
Policies
Business
Trends
Social
Changes
Advances in
IT
Globalization
Changes in regulations
Privatization
New rules to protect customers, employees, and the environment
New agreement on trade in services
Factors Stimulating Transformation of the Service Economy (2)
Government
Policies
Business
Trends
Social
Changes
Advances in
IT
Globalization
Rising consumer expectations
More affluence
More people short of time
Increased desire for buying experiences versus things
Rising consumer ownership of high tech equipment
Easier access to information
Immigration
Growing but aging population
Factors Stimulating Transformation of the Service Economy (3)
Government
Policies
Business
Trends
Social
Changes
Advances in
IT
Globalization
Push to increase shareholder value
Emphasis on productivity and cost savings
Manufacturers add value through service and sell services
More strategic alliances and outsourcing
Focus on quality and customer satisfaction
Growth of franchising
Marketing emphasis by nonprofits
Factors Stimulating Transformation of the Service Economy (4)
Government
Policies
Business
Trends
Social
Changes
Advances in
IT
Globalization
Growth of the Internet
Greater bandwidth
Compact mobile equipment
Wireless networking
Faster, more powerful software
Digitization of text, graphics, audio, video
Factors Stimulating Transformation of the Service Economy (5)
Government
Policies
Business
Trends
Social
Changes
Advances in
IT
Globalization
More companies operating on transnational basis
Increased international travel
International mergers and alliances
“Offshoring” of customer service
Foreign competitors invade domestic markets
Transformation of the Service Economy
Government
Policies
Business
Trends
Social
Changes
Advances in
IT
Globalization
Innovation in service products & delivery systems, stimulated by better technology
Customers have more choices and exercise more power
Success hinges on: Understanding customers and competitors Viable business models Creation of value for customers and firm
New markets and product categories Increase in demand for services More intense competition
What Are Services?
Defining Services
Services
Are economic activities offered by one party to another Most commonly employ time-based performances to bring
about desired results in: ― recipients themselves― objects or other assets for which purchasers have
responsibility
In exchange for their money, time, and effort, service customers expect to obtain value from
Access to goods, labor, facilities, environments, professional skills, networks, and systems
But they do not normally take ownership of any of the physical elements involved
Service Products versus Customer Service and After-Sales Service
A firm’s market offerings are divided into core product elements and supplementary service elements
Is everyone in service? Need to distinguish between: Marketing of services Marketing goods through added-value service
Good service increases the value of a core physical good
After-sales service is as important as pre-sales service for many physical goods
Manufacturing firms are reformulating and enhancing existing added-value services to market them as stand-alone core products
Challenges Posed by Services
Services Pose Distinctive Marketing Challenges
Marketing management tasks in the service sector differ from those in the manufacturing sector
The eight common differences are:1. Most service products cannot be inventoried
2. Intangible elements usually dominate value creation
3. Services are often difficult to visualize and understand
4. Customers may be involved in co-production
5. People may be part of the service experience
6. Operational inputs and outputs tend to vary more widely
7. The time factor often assumes great importance
8. Distribution may take place through nonphysical channels
What are marketing implications?
Differences, Implications, and Marketing-Related Tasks (1) (Table 1.1)
Difference
Most service products
cannot be inventoried
Intangible elementsusually dominatevalue creation
Services are oftendifficult to visualizeand understand
Customers may beinvolved in co-production
Implications
Customers may beturned away
Harder to evaluateservice and distinguishfrom competitors
Greater risk anduncertainty perceived
Interaction betweencustomer and provider; but poor task execution could affect satisfaction
Marketing-Related Tasks
Use pricing, promotion, and
reservations to smooth demand; work with ops to manage capacity
Emphasize physical clues, employ metaphors and vivid images in advertising
Educate customers onmaking good choices; offer guarantees
Develop user-friendlyequipment, facilities, and systems; train customers, provide good support
Implications
Behavior of servicepersonnel and customerscan affect satisfaction
Hard to maintain quality, consistency, reliability
Difficult to shield customers from failures
Time is money; customers want serviceat convenient times
Electronic channels or voice telecommunications
Difference
People may be part of
service experience
Operational inputs and
outputs tend to vary more widely
Time factor often assumes great importance
Distribution may take place through nonphysical channels
Marketing-Related Tasks
Recruit, train employees to
reinforce service conceptShape customer behavior
Redesign for simplicity andfailure proofing
Institute good service recovery procedures
Find ways to compete on speed of delivery; offer extended hours
Create user-friendly,secure websites and freeaccess by telephone
Differences, Implications, and Marketing-Related Tasks (2) (Table 1.1)
The 8Ps of Services Marketing
Product Elements
Place and Time
Price and Other User Outlays
Promotion and Education
Process
Physical Environment
People
Productivity and Quality
Fig 1.9 Working in Unison: The 8Ps of Services Marketing
Related Documents
