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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 services marketers create
strong brands?
• How can goods marketers improve
customer support services?
13-2
What is a Service?
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.
13-3
Service Sectors
Government
Private
nonprofit
Business
Retail
Manufacturing
13-4
Categories of Service Mix
Pure tangible good—soup, salt
Good w/ accompanying services—
cell phones
Hybrid--restaurants
Service w/ accompanying goods-airplane
Pure service--babysitting
13-5
Service Distinctions
• Equipment-based (automatic car washers)
or people-based (window washing,
accounting services)
• Service processes (restaurants have
cafeteria-style, fast-food, buffet)
• Client’s presence required (brain surgery)
or not (car repair)
• Personal needs or business needs
• Service Providers--Objectives (profit or
nonprofit) and ownership (private or public)
13-6
Continuum of Evaluation for Different Types
of Products
13-7
Distinctive Characteristics of
Services
Intangibility
Inseparability
Variability
Perishability
13-8
Physical Evidence and
Presentation
Place —exterior and interior
People —sufficient number of people
Equipment —computers, copying machine
Communication material —printed materials
Symbols —names and symbols
Price
13-9
Mayo Clinic’s Tangible Cues
13-10
Matching Demand and Supply
Demand side
Supply side
• Differential pricing—shift
some demand from peak
to off-peak periods
• Nonpeak demand—can
be cultivated
• Complementary
services—alternatives to
waiting
• Reservation systems—
way to managed the
demand level
• Part-time employees—can
serve at peak demand
• Peak-time efficiency —
perform only essential tasks
during peak periods
• Increased consumer
participation—can be
encouraged to participate
• Shared services—several
providers can use
• Facilities for future
expansion—good
investment
13-11
Blue Man Group includes 33
different performers
13-12
Improving Service Quality
• Listening—understand
what customer really wants
• Reliability—must be a
service priority
• Basic service—keep
promises
• Service design—holistic
view and manage details
• Recovery—satisfy
customers who encounter a
service problem
•
•
•
•
•
13-13
Surprising customers —
exceeding customer
expectations
Fair play—make special efforts
to demonstrate to customers
and employees
Teamwork—enables large
organizations to deliver service
with care and attentiveness
Employee research----to
reveal why service problem
occur and how to solve
problems
Servant leadership—develop
service quality corporate culture
Consumer-Friendly Services
13-14
Holistic Marketing for Services
• External Marketing—the normal work of
preparing, pricing, distributing, and promoting
the service to the customer
• Internal Marketing—training and motivating
employees to serve customers well
• Interactive Marketing—employees’ in
serving the client; technical (successful
solution to problem or question) and
functional (concern and inspire confidence)
13-15
How to Increase Quality Control
Invest in good hiring and training procedures
Standardize the service-performance process
Monitor customer satisfaction
13-16
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
13-17
General Motors’ OnStar Service
13-18
Factors Leading to Customer Switching
Behavior
•
•
•
•
•
•
•
•
Pricing
Inconvenience
Core Service Failure
Service Encounter Failures
Response to Service Failure
Competition
Ethical Problems
Involuntary Switching
13-19
IBM has moved
from a goods
business to a
service
business
13-20
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
13-21
Determinants of Service Quality
Reliability—
dependably and accurately
Responsiveness—
provide prompt service
Assurance—
convey trust and confidence
Empathy—caring, individualized
attention to customers
Tangibles—physical facilities,
Equipment, personnel
13-22
Best Practices
•
•
•
•
•
•
•
Strategic Concept—customer
obsessed
Top-Management Commitment
—to service
High Standards—reliability,
resilience, and innovativeness
Self-Service Technologies—
convenience in service
Monitoring Systems—audit
service performance
Satisfying Customer Complaints
—empower employees
Satisfying Employees—customer
orientation to employees
13-23
Tracking Customer Service
Performance
13-24
Customer Importance and Performance Ratings for
an Auto Dealership
13-25
Developing Brand Strategies for
Services
Choosing Brand Elements
—name, logo, symbols,
characters, slogans
Establishing Image
Dimensions—brand personality
Devising Branding Strategy
— portfolio, positioning, targeting
13-26
Customer Worries
Failure frequency
(reliability)
Downtime
(service dependability)
Out-of-pocket costs
(regular maintenance and
Repair costs)
13-27
Top Customer
Service Providers
• Four Seasons
Hotels
• Cadillac
• Nordstrom
• Starbucks
13-28
• Lexus
• UPS
• Enterprise Rent-aCar
• Ritz-Carlton
• Southwest Airlines