PSDM12

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Services Marketing

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Service Package

Service

Experience

Explicit Services

Implicit Services

Supporting Facility

Facilitating

GoodsInformation

2-2

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A More Elaborate View:

The Service Package

Supporting Facility: The physical resources thatmust be in place before a service can be sold.

Examples are golf course, ski lift, hospital, airplane.

Facilitating Goods: The material consumed by thebuyer or items provided by the consumer.

Examples are food items, legal documents, golfclubs, medical history.

Information: Operations data or information that isprovided by the customer to enable efficient andcustomized service.

Examples are patient medical records, seatsavailable on a flight, customer preferences, locationof customer to dispatch a taxi.

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The Service Package (cont.) Explicit Services: Benefits readily observable by

the senses. The essential or intrinsic features.

Examples are quality of meal, attitude of thewaiter, on-time departure.

Implicit Services: Psychological benefits or

extrinsic features which the consumer may sense

only vaguely.

Examples are privacy of loan office, security of a

well lighted parking lot.

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Services Marketing Mix

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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

Working in Unison: The

8Ps of ServicesMarketing

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(1) Product Elements

Embrace all aspects of service performance thatcreate value

Core product responds to customers primary

need Array of supplementary service elements

Help customer use core product effectively

Add value through useful enhancements

Planning marketing mix begins with creating aservice concept that:

Will offer value to target customers

Satisfy their needs better than competing

alternatives

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(2) Place and Time

Delivery decisions: Where, When, How

Geographic locations served

Service schedules

Physical channels

Electronic channels

Customer control and convenience

Channel partners/intermediaries

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(3) Price and Other User Outlays

Marketers must recognize t

hat customer outlaysinvolve more than price paid to seller

Traditional pricing tasks:

Selling price, discounts, premiums

Margins for intermediaries (if any) Credit terms

Identify and minimize other costs incurred byusers:

Additional monetary costs associated with service usage(e.g., travel to service location, parking, phone,

babysitting, etc.)

Time expenditures, especially waiting

Unwanted mental and physical effort

Negative sensory experiences

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(4) Promotion and Education Informing, educating, persuading, reminding

customers

Marketing communication tools Media elements (print, broadcast, outdoor, retail, the

Internet, etc.)

Personal selling, customer service Sales promotion

Publicity/PR

Imagery and recognition

Branding Corporate design

Content Information, advice

Persuasive messages

Customer education/training

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(5) Process

How firm does things may be as important as whatit does

Customers often actively involved in processes, especiallywhen acting as co-producers of service

Process involves choices of method and sequence inservice creation and delivery

Design of activity flows

Number and sequence of actions for customers

Nature of customer involvement

Role of contact personnel

Role of technology, degree of automation

Badly designed processes waste time, create poor

experiences, and disappoint customers

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(6) Physical Environment

Design servicescape andprovide tangible evidence ofservice performances

Create and maintain physicalappearances

Buildings/landscaping

Interior design/furnishings

Vehicles/equipment

Staff grooming/clothing

Sounds and smells

Other tangibles

Manage physical cuescarefully can have profoundimpact on customerimpressions

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(7) People

Interactions between customers and contact personnelstrongly influence customer perceptions of service quality

The right customer-contact employees performing tasks well

Job design Recruiting

Training

Motivation

The right customers for firms mission Contribute positively to experience of other customers

Possessor can be trained to have needed skills (co-production)

Can shape customer roles and manage customer behavior

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(8) Productivity and Quality

Productivity and quality must workhand in hand

Improving productivity key to reducing costs

Improving and maintaining quality essential for building

customer satisfaction and loyalty

Ideally, strategies should be sought to improve both

productivity and quality simultaneouslytechnology

often th

e key Technology-based innovations have potential to create high

payoffs

But, must be user friendly and deliver valued customer benefits

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Strategic Service Classification

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Classifying Services Through

Structural Positioning

Classifications:

1. The Nature of the Service Act

2. Relationship withCustomers

3. Customization and Judgment

4. Nature ofDemand and Supply

5. Method of Service Delivery

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Nature of the Service Act

The service act can be considered across twodimensions: who or what is the direct

recipient of the service, and the tangiblenature of the service. This creates fourpossible classifications: (1) tangible actions directed to the customer, such

as passenger transportation and personal care;

(2) tangible actions directed at the customerspossessions, such as laundry cleaning and

janitorial services;

(3) intangible actions directed at the customersintellect, such as entertainment; and

(4) intangible actions performed on the customers

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Direct Recipient of the Service

Nature of

the Service Act People Things

Peoples bodies: Physical possessions:

Health care Freight transportation

Passenger transportation Repair and maintenance

Tangible actions Beauty salons Veterinary care

Exercise clinics Janitorial services

Restaurants Laundry and dry cleaning

Peoples minds: Intangible assets:

Education Banking

Intangible actions Broadcasting Legal services

Information services Accounting

Theaters Securities

Museums Insurance

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Relationship with CustomersRelationship with Customers

Type of Relationship between Service Organization and Its Customers

Nature of

Service Delivery Membership relationship No formal relationship

Insurance Radio station

Telephone subscription Police protection

Continuous delivery Electric Utility Lighthouse

of service Banking Public Highway

Long-distance phone calls Restaurant

Theater series tickets Pay phone

Discrete transactions Transit pass Toll highway

SamsWholesale Club Movie theater

Airline frequent flyer Public transportation

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Customization and JudgmentCustomization and JudgmentExtent to Which Service Characteristics Are Customized

Extent to Which Personnel

Exercise Judgment in Meeting

Customer Needs High Low

Surgery Preventive health programs

High Taxi services Education (large classes)

Gourmet restaurant Family restaurant

Telephone service Public transportation Hotel services Spectator sports

Low Retail banking Movie theater

Cafeteria Institutional food service

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Nature of Demand and Supply

Nature of Demand and Supply

Extent of Demand Fluctuation overTime

Extent to which Supply

Is Constrained Wide Narrow

Electricity Insurance

Peak demand can Telephone Legal services

usually be met Police emergency Banking

without a major delay Hospital maternity unit Laundry and dry cleaning

Tax preparation Fast food restaurantPeak demand regularly Passenger transportation Movie theater

exceeds capacity Hotels and motels Gas station

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Method of Service DeliveryMethod of Service DeliveryAvailability of Service Outlets

Nature of Interaction

between Customer and

Service Organization Single site Multiple site

Customer travels to Theater Bus service

service organization Barbershop Fast-food chain

Service provider Taxi Mail delivery

travels to customer Pest control service AAA emergency repairs

Taxi

Transaction is at Credit card company Broadcast network

arms length Local TV station Telephone company

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Qualities of services Search qualities

Experience qualities

Credence qualities

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Consumer Evaluation Processes for Services

Consumer Evaluation Processes for Services

Search Qualities

attributes a consumer can determine prior toattributes a consumer can determine prior to

purchase of a productpurchase of a product Experience Qualities

attributes a consumer can determine after purchaseattributes a consumer can determine after purchase

(or during consumption) of a product(or during consumption) of a product

Credence Qualities

characteristics that may be impossible to evaluatecharacteristics that may be impossible to evaluate

even after purchase and consumptioneven after purchase and consumption

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Continuum of Evaluation forContinuum of Evaluation for

Different Types of ProductsDifferent Types of Products

Difficult to evaluateDifficult to evaluateEasy to evaluateEasy to evaluate

High in search

qualities

High in experience

qualities

High in credence

qualities

MostMost

GoodsGoods

MostMost

ServicesServices

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Xpresso Lube Facility

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Xpresso Lubes Service Package Supporting Facility

Facilitating Goods

Information

Explicit Services

Implicit Services

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Xpresso Lubes Distinctive

Service Characteristics Intangibility

Perishability

Heterogeneity

Simultaneity

Customer Participation in the Service Process

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Xpresso Lubes Service

Classification Nature of the service act

Relationship with customers

Customization and judgement

Nature of demand and supply

Method of service delivery

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BeyondXpresso Lube

What elements ofXpresso Lubes location

contribute to its success?

Given the example ofXpresso Lube, what

other services could be combined to add

value for the customer?

PSDM12

Documents