Services Marketing

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Services Marketing

• Dr. David Andrus
• Lecture 1
• Exam 1

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THEMES OF MY PRESENTATION

• Services versus products
• Problems and marketing strategies for services
• Services marketing management

3
MARKETING ACTIVITIES

• Analyze situation and identify target markets
  based upon needs and wants.
• Determine marketing objectives and select
  marketing mix.
• Implement marketing mix and establish control and
  evaluation criteria.
• Monitor environment and alter mix to meet
  changing needs and wants.

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SERVICES VERSUS PRODUCTS

• Services are performances, deeds or efforts.
• Unique marketing challenges for services.
• Services are risky for clients.
• Intangible, perishable, variable, inseparable
• Satisfaction, value, and a client focus
• High quality, low prices, convenience, and
  service are desired by customers.

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SERVICE FIRMS LAG BEHIND MANUFACTURERS

• Less likely to have marketing dept. perform
  marketing mix activities.
• Less likely to have sales training and overall
  sales plan.
• Less likely to use marketing research and
  marketing consultants.
• More likely to handle advertising internally and
  spend less on marketing as a percent of gross
  sales.

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Examples of Service Industries

• Health Care
• hospital, medical practice, dentistry, eye care
• Professional Services
• accounting, legal, architectural
• Financial Services
• banking, investment advising, insurance
• Hospitality
• restaurant, hotel/motel, bed breakfast,
• ski resort, rafting
• Travel
• airlines, travel agencies, theme park
• Others
• hair styling, pest control, plumbing, lawn
  maintenance, counseling services, health club

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INTANGIBILITY

• Services are experienced when performed.
• Difficult for clients to understand.
• Difficult to display and communicate to clients.
• Quality is hard to determine for clients.
• Prices are difficult to set.

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Tangibility Spectrum
Salt
Soft Drinks
Detergents
Fast Food
Intangible Dominant
Tangible Dominant
Fast Food
Airlines
Consulting
Teaching
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SERVICE EVALUATION AND RISK

• Easy to Evaluate
• CLOTHING
• JEWELRY
• HOUSES
• RESTAURANT MEALS
• VACATION
• HAIRCUTS
• TELEVISION REPAIR
• LEGAL SERVICES
• AUTO REPAIR
• MEDICAL DIAGNOSIS
• Hard to Evaluate

Most Goods
Most Services
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MARKETING STRATEGIES FOR INTANGIBILITY

• Develop strong visual symbols for firm.
• Advertise a caring company that creates
  successful results.
• Present professional qualifications of staff in
  advertisements.
• Stress personal selling and post-purchase
  follow-up programs.

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INSEPARABILITY

• Client is required to participate in production.
• Service delivered is tied to a particular
  provider.
• Amount of service depends upon provider.
• Strong provider/client link can create capacity
  problems.

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MARKETING STRATEGIES FOR INSEPARABILITY

• Continual training about quality, policies, and
  production techniques.
• Multiple locations, web page, and e-mail with
  clients for convenience.
• Train in frontline service and complaint
  resolution.
• Production process is a marketing activity.
• Hire competent employees who know marketing.

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VARIABILITY

• Services are not always performed the same.
• Team selling can compound this problem.
• Variable quality raises perceived risk for
  client.
• Firms must reduce perceived risk.

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MARKETING STRATEGIES FOR VARIABILITY

• Standardize with automation of routine services
  to ensure quality.
• Spontaneity and flexibility are also important.
• Provide satisfaction guarantees for services.
• Deliver service in a group setting.

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PERISHABILITY

• Services cannot be inventoried, returned, or
  resold.
• Opportunity to sell services is quickly lost.
• Idle services during slow times represent revenue
  lost forever.

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MARKETING STRATEGIES FOR PERISHABILITY

• Increase personal selling for new clients during
  slow times.
• Increase selling new services to existing clients
  during slow times.
• Set higher fees at peak usage times and lower
  fees at nonpeak times.
• Use reservation system to sell services in
  advance.
• Cross-train personnel for surges in demand.

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ADDITIONAL 3PS OF SERVICE MIX

• Participants Everyone who plays a part in
  service delivery.
• Physical evidence The servicescape in which
  provider/clients interact.
• Process of service assembly Flow of activities
  through which the service is delivered.

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Products Versus Service Offerings

• Product
• Goods (mostly tangible)
• Guarantees and warranties
• Supplementary offerings
• Image and reputation
• Convenience of location, hours, credit, delivery,
  etc.

• The Service Offering
• Services (mostly intangible processes)
• Guarantees and warranties
• Supplementary offerings (processes)
• Image and reputation
• Convenience of location, hours, credit, delivery,
  etc.
• Participants, to the extent they must be present
  during service delivery

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Central Assumptions of Service Management

• Every organization is a service
• The primary purpose of the organization is to
  satisfy customers and to make a profit
• Customer requirements are constantly changing

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Guiding Principles for Service Marketing

• Improve service continuously.
• Concentrate on the areas most important to
  customer retention.
• Use customer satisfaction to expand revenues.
• Make sure service improvement efforts are
  financially accountable.
• Delight dont just satisfy the customer

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SERVICES MARKETING MANAGEMENT

• Focus on the marketing mix.
• Have client-oriented culture.
• Reward employees for outstanding service
  quality.
• Practice internal marketing to improve job
  satisfaction
• Have reputation for quality, speed, and
  sensitivity.