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13
Designing and
Managing Services
Marketing Management, 13th ed
Chapter Questions
• How do we define and classify services
and how do they differ from goods?
• How do we market services?
• How can we improve service quality?
• How do service marketers create
strong brands?
• How can goods marketers improve
customer support services?
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The Mayo Clinic Considers All Aspects
of a Patient’s Experience
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What is a Service?
A service is any act of performance
that one party can offer another that is
essentially intangible and does not
result in the ownership of anything; its
production may or may not be tied to a
physical product.
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Service Sectors
Government
Private
nonprofit
Business
Retail
Manufacturing
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General Motors’ OnStar Service
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Categories of Service Mix
Pure tangible good
Good w/ accompanying services
Hybrid
Service w/ accompanying goods
Pure service
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Service Distinctions
•
•
•
•
•
Equipment-based or people-based
Service processes
Client’s presence required or not
Personal needs or business needs
Objectives and ownership
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Figure 13.2 Continuum of Evaluation
for Different Types of Products
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Distinctive Characteristics
of Services
Intangibility
Inseparability
Variability
Perishability
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Physical Evidence and Presentation
Place
People
Equipment
Communication material
Symbols
Price
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Disney Relies Upon Tangible Cues
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Blue Man Group Exhibits
Inseparability
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How to Increase Quality Control
Invest in good hiring and
training procedures
Standardize the
service-performance process
Monitor customer satisfaction
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Matching Demand and Supply
Demand side
• Differential pricing
• Nonpeak demand
• Complementary
services
• Reservation
systems
Supply side
• Part-time
employees
• Peak-time efficiency
• Increased consumer
participation
• Shared services
• Facilities for future
expansion
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Figure 13.3 A Blueprint for
Overnight Hotel Stay
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Consumer-Friendly Services
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Improving Service Quality
•
•
•
•
•
Listening
Reliability
Basic service
Service design
Recovery
• Surprising
customers
• Fair play
• Teamwork
• Employee research
• Servant leadership
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Figure 13.4 Root Causes
of Customer Failure
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Solutions to Customer Failures
• Redesign processes and redefine customer
roles to simplify service encounters
• Incorporate the right technology to aid
employees and customers
• Create high-performance customers by
enhancing their role clarity, motivation, and
ability
• Encourage customer citizenship where
customers help customers
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Figure 13.5 Three Types of Marketing
in Service Industries
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Table 13.1 Factors Leading to
Customer Switching Behavior
•
•
•
•
•
•
•
•
Pricing
Inconvenience
Core Service Failure
Service Encounter Failures
Response to Service Failure
Competition
Ethical Problems
Involuntary Switching
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Figure 13.6 Service-Quality Model
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Gaps That Cause Unsuccessful
Service Delivery
• Gap between consumer expectation and
management perception
• Gap between management perception and
service-quality specifications
• Gap between service-quality specifications
and service delivery
• Gap between service delivery and external
communications
• Gap between perceived service and
expected service
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Determinants of Service Quality
Reliability
Responsiveness
Assurance
Empathy
Tangibles
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Best Practices
• Strategic Concept
• Top-Management
Commitment
• High Standards
• Self-Service
Technologies
• Monitoring Systems
• Satisfying Customer
Complaints
• Satisfying
Employees
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Figure 13.7 Importance-Performance
Analysis
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Table 13.3 Customer Importance and
Performance Ratings
for an Auto Dealership
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Developing Brand Strategies
for Services
Choosing
Brand Elements
Establishing Image
Dimensions
Devising Branding
Strategy
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Customer Worries
Failure frequency
Downtime
Out-of-pocket costs
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Table 13.4 Top Customer
Service Providers
• USAA
• Four Seasons
Hotels
• Cadillac
• Nordstrom
• Wegman Food
Markets
• Edward Jones
• Lexus
• UPS
• Enterprise Rent-ACar
• Starbucks
• Ritz-Carlton
• Amica Insurance
• Southwest Airlines
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Marketing Debate
 Is service marketing different from
product marketing?
Take a position:
1. Product and service marketing are
fundamentally different.
or
2. Product and service marketing are highly
related.
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Marketing Discussion
 Colleges and universities can be
classified as service organizations.
 How can you apply the marketing
principles developed in this chapter
to your school?
 Do you have any advice as to how
it could become a better service
marketer?
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