Services Marketing Concepts PDF

Services: The nature of services: All products contain both tangible and intangible elements Thus products should be marketed with such combinations in mind Services are dominated by the intangible elements of the total product What is a service? A service is the result of the appli...

Services: The nature of services: All products contain both tangible and intangible elements Thus products should be marketed with such combinations in mind Services are dominated by the intangible elements of the total product What is a service? A service is the result of the application of human and/or mechanical efforts to people or objects( (e.g. entertainment, education or a medical examination) Any act, performance or experience that one party can offer to another that is mainly intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product Provided through the application of intellectual or physical efforts to a person or physical object Inseparability of Production and Consumption: Inseparability - the quality of being produced and consumed at the same time Production of a service cannot be separated from its consumption by customers Customers must be present at the consumption of the service and cannot take the service home Implies a shared responsibility between the customer and service provider (co-created) Implications: ○ Direct sale only channel ○ Limits of scale of operation (automation)  ○ Can customise Perishability: The inability of unused service capacity to be stored for future use Service marketers face several hurdles in trying to balance supply and demand ○ Good marketers can handle the supply-demand problem through production scheduling and inventory techniques Supply and demand can be balanced by: ○ Stimulating demand e.g. cheaper movie tickets on Tuesdays ○ Restricting demand ○ Increasing or decreasing supply capacity ○ Special product offerings ○ Reservation systems ○ Flexible pricing can be used (yield management) Heterogeneity: Variation is quality Because the nature of human behaviour, it is very difficult for service providers to maintain a consistent quality of service delivery ○ Although many servic3 problems are one-time events that cannot be predicted or controlled ahead of time, employee training and the establishment of standard procedure can help increase consistency and reliability Heterogeneity usually increases as the degree of labour intensiveness increases ○ Equipment-based services have greater homogeneity than people-based services Key strategies to overcome heterogeneity include: ○ Develop service delivery system or automate ○ Manage customer expectations ○ Invest heavily in staff training ○ Quality control (e.g. mystery shoppers) Creating marketing mixes for services: Development of services ○ Services are offered as a bundle consisting of core service and supplementary service ○ Services are offered as a standardised package ○ 'tangibilising' the tangible component of services Pricing of services ○ Prices are set based on different variables The performance of specific tasks Time Level of demand ○ Price is often used as indicator of quality Distribution of services ○ Short and direct marketing channels ○ Many firms have changed a high-contact service into a low-contact one ○ Changing the delivery of services has created some problems with customer attitudes and perceptions Promotion of services ○ Typically includes tangible cues that symbolise the service (brand names, logos) Promotional strategies to suggest benefits of services (make more tangible) ○ Visualisation ○ Association ○ Physical representation ○ documentation The expanded marketing mix: Also known as the extended marketing mix, the expanded marketing mix, or 8ps comprises the traditional 4ps plus; ○ People ○ Physical evidence ○ Processes ○ Partnerships People: ○ The actors involved with the process/experience when it takes place ○ Also know as participants = the 'human' aspect of products, services or experiences Co-creation: Occurs when the customer takes an active role in the experience and drives the experience according to their own preferences or values There is no experience without customer participation in the planned processes Personnel: Employees are the 'face of the company' The right staff, suitable trained in a functional work environment can enhance the customers overall impression of a company Staff/customer interaction in the 'moment of truth'  ○ Each interaction test the employers skills and training around customer service processes ○ It is central to the customer degree of satisfaction with the goods and services purchased ○ A disastrous service experience can be 'rescued' by a sympathetic staff member Aesthetic/emotional labour Customer-to-customer (C2C) interaction: Services and experiences are consumed in the presence of other customers Occurs when two or more customers share the consumption experience The evaluation of the service or experience is influenced by the presence of these other customers ○ Direct versus indirect impact ○ Positive versus negative impact Minimising negative interactions: ○ Position ○ Use layout and staff training ○ Establish minimum standards ○ Empower staff to monitor Physical evidence: The tangible and intangible clues the customer may observe (e.g. maintaining tidy gardens outside the factory) Important for validation of the quality of services or experiences and positioning Buildings, grounds and other physical assets - in services context known as the servicescape Atmospherics: A compelling and engaging atmosphere can communicate a company's image Current trends include use of music, scent and lighting to control and influence the customers perception Processes: The flow and progress of the customers when they engage with the product or the company. The process should result ina. Performance that exceeds expectations (functional expectations and customer service expectations) ○ Queuing is very important, as is the impartial control of waiting times (fair procedures) ○ Sensitivity and privacy and confidentiality of customer - company interactions ○ Digital technology and the service process Consider whether we can make the service process steps fast, cheaper or more efficient Mapping the customer experience: Customer journey - the total product/service experience  ○ Visual tool that helps businesses understand what a customer goes through when buying a product or service Touch points - when and how customers interact with the company or staff members (buying the product, waiting for delivery) Each touch point is an opportunity for the customer to form opinions and attitudes about a company's products or services Managers plan the total customer experience around these touch points