Chapter 13 - Services Marketing PDF

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Chapter 13: Services Marketing ● Home sourcing: a practice whereby customer contact jobs are outsourced into workers’ homes. ● Business services have grown, they include support and maintenance, consulting, installation, equipment leasing, marketing research, advertising, temporary office personnel, and janitorial services. ● Services have six basic characteristics: intangibility, inseparability of production and consumption, perishability, heterogeneity, client-based relationships, and customer contact. ○ Intangibility: the characteristic that a service is not physical and cannot be perceived by the senses. Intangible, service-dominant products such as education or health care are clearly service products. ● Inseparability: the quality of being produced and consumed at the same time. For example, an airline flight is produced and consumed at the same time. ● Perishability: the inability of unused service capacity to be stored for future use. Example: empty seats on an airline flight ● Heterogeneity: variation in quality. Services delivered by people are susceptible to this. Training should offer ways that will help employees provide quality service consistently to customers, thus mitigating the issue of heterogeneity. ● Client-based relationships: interactions that result in satisfed customers who use a service repeatedly over time. A “client” and not just a customer because of a long term relationship of

trust and loyalty that has been developed. ● Customer contact: the level of interaction between provider and customer needed to deliver the service. High-level contact services include health care, real estate, and legal services. High contact services generally involve actions directed toward people, who must be present during production. ○ A fundamental precept of customer contact is that satisfed employees lead to satisfed customers. ● A core service is the basic service experience or commodity that a customer expects to receive. A supplementary service supports the core service and is used to differentiate the service bundle from those of competitors. ● As noted earlier, intangibility makes experiencing a service prior to purchase difficult, if not impossible in some cases. ● Because of heterogeneity and intangibility of services, word of mouth communication is particularly important in service promotion. ● Off-peak pricing is the practice of reducing prices or services used during slow periods in order to boost demand. This is why the price of a matinee move is generally lower than the same movie being shown at a later time. ● Service quality: customers’ perceptions of how well a service meets or exceeds their expectations ● Evaluation of a good is much easier because all goods possess search qualities, tangible atributes

like color, style, size, feel, or ft that can be evaluated prior to purchase. ● Experience qualities: atributes that can be assessed only during purchase and consumption of a service. Examples: restaurants and vacations ● Credence qualities: atributes that customers may be unable to evaluate even afer purchasing and consuming a service. ● 5 dimensions consumers use when evaluating service quality: tangibility, reliability, responsiveness, assurance, and empathy. ○ Of the 5, reliability is the most important in determining customer evaluations of service quality. ● A service company must consider the 4 factors that affect service quality: (1) analysis of customer expectations (2) service quality specifcations (3) employee performance (4) management of service expectations ● Customers usually have two levels of expectations: desired and acceptable. The difference between these two levels of expectations is called the customers’ zone of tolerance. ● Non-proft marketing: marketing activities conducted to achieve some goal other than ordinary business goals such as proft, market share, or return on investment ○ Non-proft marketing is divided into two categories: nonproft organization marketing and social marketing. ○ Non-proft organization marketing is the use of marketing concepts and techniques by

organizations whose goals do not include making profts. Social marketing promotes social causes, such as AIDS research or recycling. ● Non-proft marketing objectives are shaped by the nature of the exchange and the goals of the organization. These objectives should state the rationale for the organization’s existence. ● Target public: a collective of individuals who have an interest in or a concern about an organization, product, or social cause ● Client publics: direct consumers of a product of a nonproft organization ● General publics: indirect consumers of a product of a nonproft organization ● Opportunity cost: the value of the beneft given up by choosing one alternative over another...