School of International Business

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School of International Business BA (HONS)
Business Studies with Specialisms MKT301 LECTUR
ER Jacqueline Doherty
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School of International Business BA (HONS)
Business Studies with Specialisms MKT301 LECTURE
9 (b) Services
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• Lecture Outline
• Growth Importance of Services
• Characteristics
• Classification
• Mtkg Strategies for Services
• Non-Business Marketing
• Non Profit Marketing

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4 Ps Product - People
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Services

• A service is an intangible product involving a
  deed, a performance or an effort that cannot be
  physically possessed.
• Although many products contain both tangible and
  intangible attributes, intangible dominant
  products are typically considered services.

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Growth Importance of services

• In the UK and in Europe, as in the United States,
  the importance of services in the economy is
  growing.
• Economic prosperity has been a major catalyst for
  consumer services growth, leading to an increase
  in financial services, travel, entertainment and
  personal care.
• Business or industrial services have prospered as
  well, including repairs and maintenance,
  consulting and professional advice, installation,
  equipment leasing, marketing research,
  advertising, temporary office personnel and
  caretaking services.

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Characteristics of Services

• Services have four basic characteristics (1)
  intangibility, (2) inseparability of production
  and consumption, (3) perishability and (4)
  heterogeneity.
• Intangibility is an inherent quality of services
  that are performed and therefore cannot be
  tasted, touched, seen, smelled or possessed.
• In relation to production and consumption,
  inseparability is a characteristic of services
  that means they are produced at the same time as
  they are consumed.

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Characteristics of Services

• Perishability is a characteristic of services
  whereby unused capacity in one time period cannot
  be stockpiled or inventoried for future time
  periods.
• Heterogeneity is a variability in the quality of
  service because services are provided by people,
  and people perform inconsistently.

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Classification of Services

• Services can be meaningfully analysed by using a
  five category classification scheme
• (1) type of market,
• (2) degree of labour intensiveness,
• (3) degree of customer contact,
• (4) skill of service provider and
• (5) goal of the service provider.

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Classification of Services

• Services can be viewed in terms of the market or
  type of customer they serveconsumer or
  industrial.
• Services such as child care, education and hair
  dressing are labour intensive, while other
  services, such as telecommunications, fitness
  centres and public transport, are more equipment
  intensive.

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Classification of Services

• High contact services, such as healthcare,
  hotels, estate agencies and restaurants,
  generally involve actions that are directed
  towards individuals.
• Professional services tend to be more complex and
  more highly regulated than non-professional
  services.
• Services can be classified according to the goal
  of the service providerprofit or non-profit.

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Developing Mktg Strategies for Services

• Strategic considerations
• Marketers must develop the right service for the
  right people at the right price, in the right
  place with the right positioning and image.
• Marketers must then communicate with consumers so
  that they are aware of the need satisfying
  services available to them.
• The key aspects of effective target marketing and
  of managing the implementation of the determined
  marketing strategy apply strongly to the
  marketing of services.
• One of the unique challenges services marketers
  face is matching supply and demand.

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Differential Advantage in Services

• A differential advantage, or competitive edge, is
  something desired by the customer that only one
  companynot its rivals can offer.
• Achieving and sustaining a differential advantage
  is more difficult for services due to the
  intangibility of the service product and the
  central role of people in its delivery.

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Differential Advantage in Services

• Due to the difficulty in establishing a
  differential advantage in services, it is
  increasingly important for businesses to do the
  following
• Identify well defined target market segments.
• Evaluate competitors service offerings and
  marketing programmes.
• Research customers satisfaction levels
• Reinforce and communicate any differential
  advantage through branding and promotional
  campaigns.

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Extended marketing mix for services

• The standard marketing mix comprises the 4Ps
  product, promotion, price and place/distribution.
  
• These plus three additional elements, process,
  physical evidence (ambience) and peoplealso
  known as the 7Psform the extended marketing
  mix for services

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Service Quality

• Service quality is defined as customers
  perception of how well a service meets or exceeds
  their expectations.
• Customer evaluation of service quality
• Five dimensions that consumers use when
  evaluating service quality include (1) tangibles,
  (2) reliability, (3) responsiveness, (4)
  assurance and (5) empathy.
• One of the most important factors in customer
  judgements of service quality is service
  expectations, which involves impressions from
  past experiences, word-of-mouth communication and
  the companys advertising.

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Service Quality

• To increase the likelihood of providing high
  quality service, a service company must
  understand the four service quality factors (1)
  understanding customer expectations, (2)
  establishing service quality specifications, (3)
  controlling employee performance and (4) managing
  service expectations.
• Service companies must set realistic expectations
  about the service they can provide.

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Non Business Marketing

• Non-business marketing includes activities
  conducted by individuals and organisations to
  achieve some goal other than the ordinary
  business goals of profits, market share or return
  on investment.
• Non-business marketing can be divided into two
  categories non-profit organisation marketing and
  social marketing.

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Non Business Marketing

• Non-profit organisation marketing is the
  application of marketing concepts and techniques
  to organisations such as hospitals and colleges.
• Social marketing is the development of programmes
  designed to influence the acceptability of social
  ideas, such as recycling or the regeneration of
  deprived inner city areas.
• In non-business marketing, the objects of
  exchange may not be specified in financial terms.

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Non Profit Marketing

• Why is non profit marketing different?
• Whereas the chief beneficiary of the business
  enterprise is whoever owns or holds shares in it,
  in theory the only beneficiaries of a
  non-business organisation are its clients, its
  members or the public at large.
• Non-business marketing offers a greater
  opportunity for creativity than most business
  organisations enjoy.
• Non-business organisations may be controversial.
  
• Marketing does not attempt to state what an
  organisations goals should be or to debate the
  issue of non-business versus business goals.

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Non Business Marketing Objective

• The basic aim of non-business organisations is to
  obtain a desired response from a target market.
• Non-business marketing objectives are shaped by
  the nature of the exchange and the goals of the
  organisation.
• Non-business marketing objectives should state
  the rationale for an organisations existence.

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• Lecture Outline
• Growth Importance of Services
• Characteristics
• Classification
• Mtkg Strategies for Services
• Non-Business Marketing
• Non Profit Marketing