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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? 13-2 IBM has moved from a goods business to a service business 13-3 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. 13-4 Service Sectors Government Private nonprofit Business Retail Manufacturing 13-5 General Motors’ OnStar Service 13-6 Categories of Service Mix Pure tangible good Good w/ accompanying services Hybrid Service w/ accompanying goods Pure service 13-7 Service Distinctions • • • • • Equipment-based or people-based Service processes Client’s presence required or not Personal needs or business needs Objectives and ownership 13-8 Figure 13.1 Continuum of Evaluation for Different Types of Products 13-9 Distinctive Characteristics of Services Intangibility Inseparability Variability Perishability 13-10 Physical Evidence and Presentation Place People Equipment Communication material Symbols Price 13-11 Mayo Clinic’s Tangible Cues 13-12 Blue Man Group includes 33 different performers 13-13 How to Increase Quality Control Invest in good hiring and training procedures Standardize the service-performance process Monitor customer satisfaction 13-14 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 13-15 Figure 13.2 A ServicePerformance Process Map 13-16 Consumer-Friendly Services 13-17 Figure 13.3 Holistic Marketing for Services 13-18 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 13-19 Figure 13.4 Service-Quality Model 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 Responsiveness Assurance Empathy Tangibles 13-22 Best Practices • Strategic Concept • Top-Management Commitment • High Standards • Self-Service Technologies • Monitoring Systems • Satisfying Customer Complaints • Satisfying Employees 13-23 Figure 13.5 Tracking Customer Service Performance 13-24 Table 13.3 Customer Importance and Performance Ratings for an Auto Dealership 13-25 Figure 13.6 Importance-Performance Analysis 13-26 Developing Brand Strategies for Services Choosing Brand Elements Establishing Image Dimensions Devising Branding Strategy 13-27 Customer Worries Failure frequency Downtime Out-of-pocket costs 13-28 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. 13-29 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? 13-30