* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download KK_13_2010_fall
Affiliate marketing wikipedia , lookup
Neuromarketing wikipedia , lookup
Pricing strategies wikipedia , lookup
Food marketing wikipedia , lookup
Social media marketing wikipedia , lookup
Ambush marketing wikipedia , lookup
Product planning wikipedia , lookup
Target audience wikipedia , lookup
Marketing communications wikipedia , lookup
Marketing research wikipedia , lookup
Customer experience wikipedia , lookup
E-governance wikipedia , lookup
Multi-level marketing wikipedia , lookup
Youth marketing wikipedia , lookup
Customer relationship management wikipedia , lookup
Viral marketing wikipedia , lookup
Guerrilla marketing wikipedia , lookup
Integrated marketing communications wikipedia , lookup
Digital marketing wikipedia , lookup
Marketing channel wikipedia , lookup
Marketing mix modeling wikipedia , lookup
Marketing plan wikipedia , lookup
Target market wikipedia , lookup
Advertising campaign wikipedia , lookup
Customer engagement wikipedia , lookup
Customer satisfaction wikipedia , lookup
Multicultural marketing wikipedia , lookup
Marketing strategy wikipedia , lookup
Street marketing wikipedia , lookup
Green marketing wikipedia , lookup
Direct marketing wikipedia , lookup
Global marketing wikipedia , lookup
Service blueprint wikipedia , lookup
MARKETING MANAGEMENT BY KOTLER AND KELLER (12TH ED.) LECTURE NOTES Chapter 13. DESIGNING AND MANAGING SERVICES Çetin Yurt A service is any act or performance that one party can offer to 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. Manufacturers, distributors, and retailers can provide value-added services or simply excellent customer service to differentiate themselves. NATURE OF SERVICES The Bureau of Labor Statistics reports that the service-producing sector will continue to be the dominant employment generator in the economy, adding 20.5 million jobs by 2010. Employment in the service-producing sector is expected to increase by 19 percent over the 2000-2010 period, whereas manufacturing employment is expected to increase by only 3 percent. In fact, manufacturing's share of total jobs is expected to decline from 13 percent in 2000 to 11 percent in 2010. These numbers and others have led to a growing interest in the special problems of marketing services. It is everywhere when you come to think about it Government sector; hospitals, military service, police and fire departments, postal service…. Private nonprofits sector; Museum, colleges, foundations, charities, Business sector; Airlines, banks, hotels, insurance companies, law firms, plumbing repair companies…. Manufacturing sector; computer operators, accountants and legal staff Retail sector; cashiers, clerks, salespeople, customer service representatives… Categories of service mix: A company's offerings often include some services. The service component can be a minor or a major part of the total offering. Five categories of offerings can be distinguished: Pure tangible goods: The offering consists primarily of a tangible good such as soap, toothpaste, or salt. No services accompany the product. Tangible good with accompanying service: The offering consists of a tangible good accompanied by one or more services. Hybrid: The offering consists of equal parts of goods and services. For example, people patronize restaurants for both food and service Major good with accompanying services: The offering consists of a major service along with additional services or supporting goods. For example, airline passengers buy transportation. Pure service: The offering consists primarily of a service. Examples include baby-sitting, psychotherapy, and massage. Distinctive Characteristics of Services: Services have four distinctive characteristics that greatly affect the design of marketing programs: intangibility, inseparability, variability, and perishability. Intangibility; Unlike physical products, services cannot be seen, tasted, felt, heard, or smelled before they are bought. The person getting a face-lift cannot see the results before the purchase, and the patient in the psychiatrist's office cannot know the exact outcome. 1. Place - The exterior and interior should have clean lines. The layout of the desks and the traffic flow should be planned carefully. Waiting lines should not get overly long. 2. People- Personnel should be busy. There should be a sufficient number of employees to manage the workload. 3. Equipment- Computers, copying machines, desks should be and look "state of the art." 4. Communication material - Printed materials—text and photos—should suggest efficiency and speed. 5. Symbols - The name and symbol should suggest fast service. 6. Price - The bank could advertise that it will deposit $5 in the account of any customer who waits in line for more than five minutes. Inseparability; Services are typically produced and consumed simultaneously. This is not true of physical goods, which are manufactured, put into inventory, distributed through multiple resellers, and consumed later. If a person renders the service, then the provider is part of the service. Because the client is also present as the service is produced, provider-client interaction is a special feature of services marketing. Variability; Because services depend on who provides them and when and where they are provided, they are highly variable. Some doctors have an excellent bedside manner; others are less patient with their patients. Here are three steps service firms can take to increase quality control. 1. Invest in good hiring and training procedures. 2. Standardize the service-performance process throughout the organization. 3. Monitor customer satisfaction. Perishability; Services cannot be stored. Perish ability is not a problem when demand is steady. When demand fluctuates, service firms have problems. For example, public transportation companies have to own much more equipment because of rush-hour demand than if demand were even throughout the day. Some doctors charge patients for missed appointments because the service value exists only at that point. Several strategies can produce a better match between demand and supply in a service business. On the demand side: Differential pricing Nonpeak demand Complementary Reservation systems THE MARKETING INTELLIGENCE SYSTEM (MIS) At one time, service firms lagged behind manufacturing firms in their use of marketing because they were small, or they were professional businesses that did not use marketing, or they faced large demand or little competition. A Shifting Customer Relationship Holistic Marketing for Services Because service encounters are complex interactions affected by multiple elements, adopting a holistic marketing perspective is especially important. The service outcome, and whether or not people will remain loyal to a service provider, is influenced by a host of variables. Keaveney identified more than 800 critical behaviors that cause customers to switch services. These behaviors can be placed into one of eight categories. Holistic marketing for services requires external, internal, and interactive marketing. External marketing describes the normal work of preparing, pricing, distributing, and promoting the service to customers. Internal marketing describes training and motivating employees to serve customers well. MANAGING SERVICE QUALITY The service quality of a firm is tested at each service encounter. If retail clerks are bored, cannot answer simple questions, or are visiting with each other while customers are waiting, customers will think twice about doing business again with that seller. Customer Expectations Customers form service expectations from many sources, such as past experiences, word of mouth, and advertising. In general, customers compare the perceived service with the expected service. If the perceived service falls below the expected service, customers are disappointed. If the perceived service meets or exceeds their expectations, they are apt to use the provider again. Successful companies add benefits to their offering that not only satisfy customers but surprise and delight Them. Delighting customers is a matter of exceeding expectations. Parasuraman, Zeithaml, and Berry formulated a service-quality model that highlights the main requirements for delivering high service quality. The model, shown in Figure identifies five gaps that cause unsuccessful delivery: 1. 2. 3. 4. 5. Gap between consumer expectation and management perception Gap between management perception and service-quality specification Gap between service-quality specifications and service delivery Gap between service delivery and external communications Gap between perceived service and expected service Based on this service-quality model, these researchers identified the following five determinants of service quality, in order of importance. 1. Reliability -The ability to perform the promised service dependably and accurately. 2. Responsiveness -The willingness to help customers and to provide prompt service. 3. Assurance -The knowledge and courtesy of employees and their ability to convey trust and confidence. 4. Empathy -The provision of caring, individualized attention to customers. 5. Tangibles -The appearance of physical facilities, equipment, personnel, and communication materials. Best Practices of Service-Quality Management Various studies have shown that well-managed service companies share the following common practices: a strategic concept, a history of top-management commitment to quality, high standards, self-service technologies, systems for monitoring service performance and customer complaints, and an emphasis on employee satisfaction. MANAGING SERVICE BRANDS Differentiating Services Service marketers frequently complain about the difficulty of differentiating their services. The deregulation of several major service industries—communications, transportation, energy, banking—has resulted in intense price competition. To the extent that customers view a service as fairly homogeneous, they care less about the provider than the price. Primary service package Secondary service features Developing Brand Strategies for Services Developing brand strategies for a service brand requires special attention to choosing brand elements, establishing image dimensions, and devising the branding strategy. Choosing brand elements Establishing image dimensions Devising branding strategy MANAGING PRODUCT SUPPORT SERVICES Thus far we have focused on service industries. No less important are product-based industries that must provide a service bundle. Manufacturers of equipment—small appliances, office machines, tractors, mainframes, airplanes—all have to provide product support services. Identifying and Satisfying Customer Needs The company must define customer needs carefully in designing a service support program. Customers have three specific worries - - They worry about reliability and failure frequency. A farmer may tolerate a combine that will break down once a year, but not two or three times a year. They worry about downtime. The longer the downtime, the higher the cost. The customer counts on the seller's service dependability—the seller's ability to fix the machine quickly, or at least provide a loaner. They worry about out-of-pocket costs. How much does the customer have to spend on regular maintenance and repair costs? Postsale Service Strategy The quality of customer service departments varies greatly. At one extreme are departments that simply transfer customer calls to the appropriate person or department for action, with little follow-up. At the other extreme are departments eager to receive customer requests, suggestions, and even complaints and handle them expeditiously. SUMMARY To carry out their analysis, planning, implementation, and control responsibilities, marketing managers need a marketing information system (MIS) An MIS has three components: (a) an internal records system, which includes information on the order-to-payment cycle and sales reporting systems; (b) a marketing intelligence system, a set of procedures and sources used by managers to obtain everyday information about pertinent developments in the marketing environment; and (c) a marketing research system that allows for the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation. Many opportunities are found by identifying trends (directions or sequences of events that have some momentum and durability) and megatrends (major social, economic, political, and technological changes that have long-lasting influence). Within the rapidly changing global picture, marketers must monitor six major environmental forces: demographic, economic, social-cultural, natural, technological, and political-legal. In the demographic environment, marketers must be aware of worldwide population growth; changing mixes of age, ethnic composition, and educational levels; the rise of nontraditional families; large geographic shifts in population; and the move to micromarketing and away from mass marketing. In the economic arena, marketers need to focus on income distribution and levels of savings, debt, and credit availability. In the social-cultural arena, marketers must understand people's views of themselves, others, organizations, society, nature, and the universe. They must market products that correspond to society's core and secondary values, and address the needs of different subcultures within a society. In the natural environment, marketers need to be aware of raw materials shortages, increased energy costs and pollution levels, and the changing role of governments in environmental protection. In the technological arena, marketers should take account of the accelerating pace of technological change, opportunities for innovation, varying R&D budgets, and the increased governmental regulation brought about by technological change. In the political-legal environment, marketers must work within the many laws regulating business practices and with various special-interest groups. DEBATE One of the widely debated issues in developing marketing programs that target certain age groups is how much consumers change over time. Some marketers maintain that age differences are critical and that the needs and wants of a 25-year-old in 2002 are not that different from those of a 25-year-old in 1972. Others dispute that contention and argue that cohort and generation effects are critical and that marketing programs must therefore suit the times. Take a position: Age differences are fundamentally more important than cohort effects versus Cohort effects can dominate age differences.