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MARKETING MANAGEMENT
12th edition
13
Designing and
Managing
Services
Kotler
Keller
Chapter Questions
• What are the characteristics of products and how
can they be classified?
• How can companies differentiate products?
• How can a company build and manage its
product mix and product lines?
• How can companies combine products to create
strong co-brands or ingredient brands?
• How can companies use packaging, labeling,
warranties, and guarantees as marketing tools?
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IBM has moved
from a goods
business to a
service business
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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.
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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
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•
•
•
•
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 13.1 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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Mayo Clinic’s Tangible Cues
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Blue Man Group includes 33
different performers
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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 13.2 A ServicePerformance Process Map
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Consumer-Friendly Services
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Figure 13.3 Holistic Marketing for
Services
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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 13.4 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 13.5 Tracking Customer
Service Performance
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Table 13.3 Customer Importance and
Performance Ratings for an Auto Dealership
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Figure 13.6
Importance-Performance Analysis
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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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Marketing Debate
 Is Service Marketing Different
From Product Marketing?
Take a position:
1. Product and service marketing are
fundamentally different.
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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