1. Designing and Managing Services Marketing Management, 13 th ed 13

2. Chapter Questions How do we define and classify services and how do they differ from goods? How do we market services? How can we improve service quality? How do services marketers create strong brands? How can goods marketers improve customer support services? 13-2

3. What is a Service? 13-3 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.

4. Service Sectors 13-4 Government Private nonprofit Manufacturing Business Retail

5. Categories of Service Mix 13-5 Pure tangible good—soup, salt Good w/ accompanying services— cell phones Hybrid--restaurants Service w/ accompanying goods-- airplane Pure service--babysitting

6. Service Distinctions Equipment-based (automatic car washers) or people-based (window washing, accounting services) Service processes (restaurants have cafeteria-style, fast-food, buffet) Client’s presence required (brain surgery) or not (car repair) Personal needs or business needs Service Providers--Objectives (profit or nonprofit) and ownership (private or public) 13-6

7. Continuum of Evaluation for Different Types of Products 13-7

8. Distinctive Characteristics of Services 13-8 Intangibility Inseparability Variability Perishability

9. Physical Evidence and Presentation 13-9 Place —exterior and interior People —sufficient number of people Equipment —computers, copying machine Communication material —printed materials Symbols —names and symbols Price

10. Mayo Clinic’s Tangible Cues 13-10

11. Matching Demand and Supply Demand side Differential pricing—shift some demand from peak to off-peak periods Nonpeak demand—can be cultivated Complementary services—alternatives to waiting Reservation systems— way to managed the demand level Supply side Part-time employees—can serve at peak demand Peak-time efficiency — perform only essential tasks during peak periods Increased consumer participation—can be encouraged to participate Shared services—several providers can use Facilities for future expansion—good investment 13-11

12. Blue Man Group includes 33 different performers 13-12

13. Improving Service Quality Listening—understand what customer really wants Reliability—must be a service priority Basic service—keep promises Service design—holistic view and manage details Recovery—satisfy customers who encounter a service problem Surprising customers — exceeding customer expectations Fair play—make special efforts to demonstrate to customers and employees Teamwork—enables large organizations to deliver service with care and attentiveness Employee research----to reveal why service problem occur and how to solve problems Servant leadership—develop service quality corporate culture 13-13

14. Consumer-Friendly Services 13-14

15. Holistic Marketing for Services External Marketing—the normal work of preparing, pricing, distributing, and promoting the service to the customer Internal Marketing—training and motivating employees to serve customers well Interactive Marketing—employees’ in serving the client; technical (successful solution to problem or question) and functional (concern and inspire confidence) 13-15

16. How to Increase Quality Control 13-16 Invest in good hiring and training procedures Monitor customer satisfaction Standardize the service-performance process

17. 13-17 Solutions to Customer Failures Redesign processes and redefine customer roles to simplify service encounters Incorporate the right technology to aid employees and customers Create high-performance customers by enhancing their role clarity, motivation, and ability Encourage customer citizenship where customers help customers

18. General Motors’ OnStar Service 13-18

19. 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

20. IBM has moved from a goods business to a service business 13-20

21. 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

22. Determinants of Service Quality 13-22 Reliability— dependably and accurately Responsiveness— provide prompt service Assurance— convey trust and confidence Empathy—caring, individualized attention to customers Tangibles—physical facilities, Equipment, personnel

23. Best Practices Strategic Concept—customer obsessed Top-Management Commitment —to service High Standards—reliability, resilience, and innovativeness Self-Service Technologies— convenience in service Monitoring Systems—audit service performance Satisfying Customer Complaints —empower employees Satisfying Employees—customer orientation to employees 13-23

24. Tracking Customer Service Performance 13-24

25. Customer Importance and Performance Ratings for an Auto Dealership 13-25

26. Developing Brand Strategies for Services 13-26 Choosing Brand Elements —name, logo, symbols, characters, slogans Establishing Image Dimensions—brand personality Devising Branding Strategy — portfolio, positioning, targeting

27. Customer Worries 13-27 Failure frequency (reliability) Downtime (service dependability) Out-of-pocket costs (regular maintenance and Repair costs)

28. Top Customer Service Providers Four Seasons Hotels Cadillac Nordstrom Starbucks Lexus UPS Enterprise Rent-a- Car Ritz-Carlton Southwest Airlines 13-28