CHAPTER 10 Services and Other Intangibles: Marketing the Product That Isnt There

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CHAPTER 10Services and Other Intangibles
Marketing the Product That Isnt There
M A R K E T I N G
Real People, Real Choices Fourth Edition
Michael R. Solomon Greg W. Marshall
Elnora W. Stuart
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Chapter Objectives

• Describe the four characteristics of services
• Understand how services differ from goods
• Explain how marketers create and measure service
  quality
• Explain marketing strategies for services
• Explain the marketing of people, places, and ideas

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Not-for-Profit Marketing

• Not-for-profits know marketing is key to success

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What is a Service?

• Services are acts, efforts, or performances
  exchanged from producer to user without ownership
  rights
• Consumer services
• Business services

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Business Services
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Characteristics of Services
Intangibility
Perishability
Variability
Inseparability
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Perishability
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Tangible Benefits
MasterCard emphasizes the tangible benefits
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Figure 10.1 Classification of Services
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Figure 10.2 Goods/Services Continuum
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The Goods/ Services Continuum

• Good-Dominated Products - tangible products
  supported by supporting services
• automobiles, home appliances, electronics
• Equipment or Facility-Based Services - heavy
  reliance on both equipment and personnel
• hospitals, tanning salons, health clubs
• People-Based Services
• decorators, realtors

Video Starbucks and its focus on service
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Core and Augmented Services

• Core service is a benefit that a customer gets
  from the service
• Augmented services are additional offerings that
  differentiate the firm
• Example Airline transportation
• Core travel
• Augmented services frequent flier miles, sky
  caps, in-flight entertainment services, and
  Internet access

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Core versus Augmented Components

• Augmented services often attract customers

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Services on the Internet

• Banking/ brokerages
• Software
• Music
• Travel

• Dating
• Career development
• Distance learning
• Medical care

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The Service Encounter
Social Contact
Economic
Production
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Customer Rage

• Checkout counter rage
• Pub rage
• ATM rage

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Exceeding Expectations
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Servicescapes

• Elaborate servicescapes underscore claims of
  luxury

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Dimensions of Service Quality

• Search qualities - characteristics of a product
  that the consumer can examine prior to purchase
• Experience qualities - characteristics that
  customers can determine during or after
  consumption
• Credence qualities - attributes we find difficult
  to evaluate even after weve experienced them

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Figure 10.3 Service Experience Blueprint
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Measuring Service Quality

• Gap Analysis - measurement tool that gauges the
  difference between a customers expectation of
  service quality and what actually occurred
• Critical Incident Technique - company collects
  and closely analyzes very specific customer
  complaints to identify critical incidents

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Gap Analysis

• Gap between consumer expectations and management
  perceptions
• Gap between management perception and quality
  standards set by the firm
• Gap between established quality standards and
  service delivery
• Gap between service quality standards and
  consumer expectations
• Gap between expected service and perceived service

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Service Failure and Recovery

• When services do fail, recover fast!
• Apologize
• Resolve the problem
• Do not further inconvenience the customer
• Analyze what happened to eliminate future failures

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Strategies for Services

• Targeting Defining the Service Customer or
  Audience
• Positioning Defining the Service to Customers

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The Future of Services

• Changing demographics
• Globalization
• Technological advances
• Shift to flow of information

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• Services that were once unimaginable will be part
  of our future

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Strategies for Marketing People_1

• Pure selling approach - an agent presents a
  clients qualifications to potential buyers
  until he finds one who is willing to act as an
  intermediary
• Product improvement approach - the agent works
  with the client to modify certain characteristics
  that will increase market value persons image
  changes to conform to what is currently in demand

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The Stages of Madonna
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Strategies for Marketing People_2

• Market fulfillment approach - agent scans the
  market to identify unmet needs. Then agent finds
  a person that meets qualifications and develops
  product
• Manufactured stars
• N-Sync, The Spice Girls, New Kids on the Block

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Marketing People

• People may serve many roles as celebrities

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Marketing Places

• Place marketing strategies treat a city, state,
  country, or other locale as a brand and attempt
  to position this location so that consumers
  choose to visit
• Example
• The New York Miracle

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Marketing Places
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Marketing Ideas

• Idea marketing is about gaining market share for
  a concept, philosophy, belief, or issue
• Examples
• Sexual responsibility
• Drinking responsibly
• Nissans Food from the Hood
• Newmans Own

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Marketing Religion
Religious organizations can use
marketing strategies to grow their organizations
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Issues for Discussion_1

• What problems have you experienced with quality
  in the delivery of the following services? What
  do you think is the reason for the poor quality?
• A restaurant meal
• An airline flight
• Automobile repairs
• Your college education

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Issues for Discussion_2

• Internet dating services may present some dangers
  for those who use them. Who do you think uses
  Internet dating services? What should the
  services do to protect their clients?
• What are some ways that marketing has helped our
  political process? What are some ways the
  marketing of politicians might have an adverse
  effect on our government?

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Issues for Discussion_3

• What are some ways that non-profit and religious
  organizations market themselves that are similar
  to and different from marketing by for-profits?
• Why do you think developed countries are
  primarily service economies? Is this a good thing
  or bad thing for a country? Do you think the
  trend will continue?