Download Essentials of Services Marketing, 2nd Edition

Essentials of Services Marketing,
2nd Edition
Chapter One – Introduction
to Services Marketing
Chapter 1 Outline
1.1
1.2
1.3
1.4
1.5
1.6
1.7
2
Why study services?
Powerful forces are transforming service markets
What are services?
Four broad categories of services
Challenges posed by services
The 7 Ps of services marketing
Framework for effective services marketing strategies
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1.1
Why study services?
3
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1.1 Why study services?
•
•
Services dominate most economies and are growing rapidly:
–
Services account for more than 60% of GDP worldwide (why?)
–
Almost all economies have a substantial service sector
–
Most new employment is provided by services
–
Strongest growth area for marketing
Understanding services offers you a personal competitive advantage
(How?)
4
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1.1 Why study services?
Contribution of Services Industries to Global GDP
5
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1.1 Why study services? (Find your home country)
Estimated Size of Service Sector in Selected Countries
6
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1.2
Powerful Forces Are Transforming Service Markets
7
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1.2 Powerful Forces Are Transforming Service Markets
Forces Transforming the Service Economy (1)
Social
Changes
Business
Trends
Advances in
IT
Government
Policies
Globalization
● Changes in regulations
● Privatization
● New rules to protect customers,
employees, and the environment
● New agreement on trade in services
8
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1.2 Powerful Forces Are Transforming Service Markets
Forces Transforming the Service Economy (2)
Social
Changes
Business
Trends
Advances in
IT
Government
Policies
Globalization
● Rising consumer expectations
● Greater affluence
● Personal Outsourcing
● Increased desire for buying experiences vs.
things
● Rising consumer ownership of high tech
equipment
● Easier access to more information
● Migration
● Growing but aging population
9
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1.2 Powerful Forces Are Transforming Service Markets
Forces Transforming the Service Economy (3)
Social
Changes
Business
Trends
Advances in
IT
Government
Policies
Globalization
● Push to increase shareholder value
● Emphasis on productivity and cost savings
● Manufacturers add value through service and
sell services
● More strategic alliances
● Focus on quality and customer satisfaction
● Growth of franchising
● Marketing emphasis by nonprofits
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1.2 Powerful Forces Are Transforming Service Markets
Forces Transforming the Service Economy (4)
Social
Changes
Business
Trends
Advances in
IT
Government
Policies
Globalization
● Growth of Internet
● Greater bandwidth
● Compact mobile equipment
● Wireless networking
● Faster, more powerful software
● Digitization of text, graphics, audio, video
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1.2 Powerful Forces Are Transforming Service Markets
Forces Transforming the Service Economy (5)
Social
Changes
Business
Trends
Advances in
IT
Government
Policies
Globalization
● More companies operating on transnational
basis
● Increased international travel
● International mergers and alliances
● “Offshoring” of customer service
● Foreign competitors invade domestic markets
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1.3
What are services?
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1.3 What are services?
Definition of Services
•
•
Services
–
are economic activities offered by one party to another
–
most commonly employ time-based performances to bring about
desired results
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;
–
normally do not take ownership of any of the physical elements
involved.
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1.4
Four broad categories of services
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1.4 Four broad categories of services – which of
these do you use regularly?
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1.5
Challenges posed by services
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1.5 Challenges posed by services
Differences, Implications, and Marketing-Related
Tasks (1) (Table 1.2)
Difference
Implications
 Most service products
cannot be inventoried
 Customers turned away
or capacity not used
 Intangible elements
usually dominate
value creation
 Harder to evaluate
service & distinguish
from competitors
 Services are often
difficult to visualize &
understand
 Greater risk &
uncertainty perceived
 Customers may be
involved in coProduction
 Interaction between
customer & provider;
but poor task execution
could affect satisfaction
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Marketing-Related Tasks
 Use pricing, promotion,
reservations to smooth
demand; work with ops to
manage capacity
 Emphasize physical clues,
employ metaphors and vivid
images in advertising
 Educate customers on
making good choices; offer
guarantees
 Develop user-friendly
equipment, facilities &
systems; train customers,
provide good support
1.5 Challenges posed by services
Differences, Implications, and Marketing-Related
Tasks (2) (Table 1.2)
Difference
Implications
 People may be part of
service experience
 Behavior of service
personnel & customers
can affect satisfaction
 Operational inputs and
outputs tend to vary
more widely
 Hard to maintain quality,
consistency, reliability
 Difficult to shield
customers from failures
Marketing-Related Tasks
 Recruit, train employees to
reinforce service concept
 Shape customer behavior
 Redesign for simplicity and
failure proofing
 Institute good service
recovery procedures
 Time factor often
assumes great
importance
 Time is money;
customers want service
at convenient times
 Find ways to compete on
speed of delivery; offer
extended hours
 Distribution may take
place through
nonphysical channels
 Electronic channels or
voice telecommunications
 Create user-friendly,
secure websites and free
access by telephone
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1.5 Challenges posed by services
Added by Physical, Intangible Elements Helps
Distinguish Goods (Products) and Services (Fig 1.14)
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1.6
The 7 Ps of services marketing
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1.6 The 7 Ps of services marketing
•
Product elements (Chapter 4)
•
Place and time (Chapter 5)
•
Price and other user outlays (Chapter 6)
•
Promotion and education (Chapter 7)
•
Process (Chapter 8)
•
Physical environment (Chapter 10)
•
People (Chapter 11)
Let’s watch the Wahoo’s Fish Taco videos with these 7ps in
mind. Take notes on each of these factors as you watch the
videos.
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1.7
Framework for effective services marketing
strategies
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1.7 Framework for effective services marketing
strategies
Overview
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