Download Services Marketing Strategies

Services marketing
strategies
Chapter 9
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-1
What is a service?
Definition:
• Services are separately identifiable activities
that satisfy customer needs or wants
through essentially intangible benefits, either
in their own right or as a significant element
of a tangible product.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-2
Characteristics of services
• The service and the creator–seller of the service
are often inseparable.
• Services are variable (or heterogeneous).
• Services are highly perishable, cannot be stored,
and the demand for services fluctuates.
• Services are intangible. It is impossible for
customers to sample a service, but intangibility is
reduced using: – Visual clues.
– Association.
– Organisation image.
– Documentation.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
Service
9-3
Segmenting services
Service segmentation is fundamentally
the same process as that for a physical good,
with 2 points of difference:
• Customisation of the service.
• Delivery of the service.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-4
Branding services
The first step in branding is to select a good
brand name.
The brand should be:
• Relevant.
• Distinctive.
• Easy to pronounce and remember.
• Adaptable to any additional services.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-5
Managing service quality
• Measure the current quality of the service:
‘The customer’s requirements’.
• Measure the service gap:
‘Difference between customer expectation
of the service and perception of the
service received’.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-6
The service gap
The difference between what the customer expects
and what they receive:
• The knowledge gap: Customer’s knowledge.
• The standards gap: Organisation’s standard.
• The delivery gap: The actual delivery experience.
• The communications gap: Advertising promise.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-7
Pricing services
• Cost-plus pricing for services.
–
Cost of product plus a percentage mark-up.
• Demand-based pricing of services.
–
The price customers are likely to be prepared to pay.
• Competition-based pricing of service.
–
What other suppliers are charging for the same
type of product.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-8
Distribution strategies
• Location: The primary consideration is that
services are supplied by a person (service
provider) and assume the ‘characteristic of
inseparability’.
• Location is a key marketing decision about
where to locate the service for easy access
to the customer and how to bring the two
people together.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-9
Promotion of services
To overcome intangibility factors, effective service
promotion should:
• Use tangible symbols: real people in service.
• Show the service encounter: staff interacting
positively with customers.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-10
Promotion of services
Relationship marketing is a major promotional tool:
• Avoid over-promising, as it increases the
service gap.
• Build word-of-mouth (WoM) promotion:
a positive experience will spread through WoM.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-11
Levels of retention strategies
for services marketers
Fig 9.2 p 279
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-12
The services marketing mix:
People (1 of the other 3Ps)
• People: Front-line staff manage the service
encounter by the critical incidents, which
determine customer satisfaction with the overall
service encounter.
• Boundary spanning: Can create problems for
front-line staff — usually the link between the
service and its customers.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-13
Creating customer service-focused
management
Top management
Traditional
organisational
structure
Customerservice focused
organisational
structure
Middle management
Customer-service staff
Customers
Customers
Customer-service staff
Middle management
Top management
Fig 9.3 p 280
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-14
People
• The right contact staff: Recruit those with the
right attitude and ‘service personality’.
• Empower contact staff: Front-line staff need the
authority to make decisions.
• Reward staff for service delivery: Have reward
schemes that ‘work’ as acknowledgement.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-15
The services marketing mix:
Physical evidence (1 of the other 3Ps)
• Physical evidence: Aims to offset the intangibility
of the service.
• This incorporates tangibles such as:
–
Location and building exterior.
–
Interior design and décor.
–
Stationery, uniforms and promotional material.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-16
Servicescapes
• The physical evidence used to influence
the responses and behaviour of customers
and staff.
• Servicescapes have 3 elements:
–
–
–
Stimuli — the tangible elements.
Customers and staff who receive the stimuli.
Responses — stimuli response or outcome.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-17
The services marketing mix:
Process (1 of the other 3Ps)
• Process is the operational system or method
used to ‘actually’ deliver the service.
• Service providers need to:
–
–
–
–
–
Commit to one approach or the other.
Separate standardised and customised services.
Create flexibility capacity.
Increase the amount of customer participation.
Smooth the peaks and troughs in demand.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-18
Blueprinting
• Buleprinting allows for the service process
to be broken down into discrete steps and
assessed against time and cost elements.
• Blueprinting is done in the form of a flowchart
of activities.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
9-19