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A FRAMEWORK for MARKETING MANAGEMENT

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Presentation on theme: "A FRAMEWORK for MARKETING MANAGEMENT"— Presentation transcript:

1 A FRAMEWORK for MARKETING MANAGEMENT
Chapter 11 Designing and Managing Services Kotler Keller Cunningham

2 © Copyright 2008 Pearson Education Canada
Chapter Questions How are services defined and classified? How are services marketed, and how can service quality be improved? How do services marketers create strong brands? How can goods-producing firms improve customer support services? © Copyright 2008 Pearson Education Canada

3 Profile: Canadian Marketing Excellence ING DIRECT CANADA
Would Canadians trust a financial services company with no physical offices as a place to deposit their money? ING Direct Canada was willing to bet on it. Originated in “Save your money” Infamous ads- “out here you have no real power” No physical branches and low overheads, able to pay higher interest rates and cut service charges © Copyright 2008 Pearson Education Canada

4 Service A service is 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 © Copyright 2008 Pearson Education Canada

5 © Copyright 2008 Pearson Education Canada
Service In Canada Service industry in Canada now accounts for 69% of GDP (2005) Employs more than 12 million people, compared with 4 million working in goods- producing sector Basis of competition shifted to superior performance, on-time delivery, and quicker resolution of complaints © Copyright 2008 Pearson Education Canada

6 Private nonprofit sector
Nature of Services Government sector Private nonprofit sector Manufacturing sector Service industry sectors Business sector Retail sector © Copyright 2008 Pearson Education Canada

7 © Copyright 2008 Pearson Education Canada
Service Distinctions Equipment-based or people-based Service processes Client’s presence required or not Personal needs or business needs Objectives and ownership © Copyright 2008 Pearson Education Canada

8 Figure 11.1 Continuum of Evaluation for Different Types of Products
© Copyright 2008 Pearson Education Canada

9 Categories of Service Mix
Pure service; no tangible good Major service with minor good Hybrid: equal parts goods and service Tangible goods with some services Pure tangible good; no service Milk Computer and warranty Meal at restaurant Hair Styling Legal advice © Copyright 2008 Pearson Education Canada

10 © Copyright 2008 Pearson Education Canada
Nature of Services Cannot be sensed before purchase Lack of trial means higher consumer risk Consumers rely on cues to draw quality inferences Marketers must try to “tangibilize the intangible” Characteristics Intangibility Inseparability Variability Perishability © Copyright 2008 Pearson Education Canada

11 Physical Evidence and Presentation
Place People Equipment Communication Symbols Price © Copyright 2008 Pearson Education Canada

12 © Copyright 2008 Pearson Education Canada
Nature of Services Characteristics Intangibility Inseparability Variability Perishability Services are produced and consumed at the same time (air travel) Service providers and sometimes other customers become part of the service (restaurant) Strong preferences for service providers exist © Copyright 2008 Pearson Education Canada

13 © Copyright 2008 Pearson Education Canada
Nature of Services Quality control is critical Hiring the right people Standardizing service Monitoring satisfaction Characteristics Intangibility Inseparability Variability Perishability © Copyright 2008 Pearson Education Canada

14 © Copyright 2008 Pearson Education Canada
Nature of Services Services cannot be inventoried or otherwise stored Capacity/demand management is critical Demand-side strategies Supply-side strategies Characteristics Intangibility Inseparability Variability Perishability © Copyright 2008 Pearson Education Canada

15 Matching Demand and Supply
Demand Side Differential pricing Non-peak demand Complementary services Reservation systems Supply Side Part-time employees Peak-time efficiency Increased consumer participation Shared services Facilities for future expansion © Copyright 2008 Pearson Education Canada

16 Table 11.2 Factors Leading to Customer Switching Behaviour
Pricing Inconvenience Core service failure Service encounter failures Response to service failure Competition Ethical problems Involuntary switching © Copyright 2008 Pearson Education Canada

17 Figure 11.2 Types of Marketing in Service Industries
© Copyright 2008 Pearson Education Canada

18 Differentiating Services
Primary service package Secondary service features © Copyright 2008 Pearson Education Canada

19 Pizza Pizza Differentiates on Customer Profiling
© Copyright 2008 Pearson Education Canada

20 Developing Brand Strategies for Services
Choosing brand elements Establishing image dimensions Devising branding strategy © Copyright 2008 Pearson Education Canada

21 Figure 11.2 Service-Quality Model
© Copyright 2008 Pearson Education Canada

22 Gaps that Cause Unsuccessful Service Delivery
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 © Copyright 2008 Pearson Education Canada

23 © Copyright 2008 Pearson Education Canada
Marketing Strategies Mystery shoppers can be used to identify service quality gaps. Which one(s)? © Copyright 2008 Pearson Education Canada

24 © Copyright 2008 Pearson Education Canada
Best Practices Strategic concept Top-management commitment High standards Self-service technologies Monitoring systems Satisfying customer complaints Satisfying employees © Copyright 2008 Pearson Education Canada

25 © Copyright 2008 Pearson Education Canada
Customer Worries Failure frequency Downtime Out-of-pocket costs © Copyright 2008 Pearson Education Canada

26 Managing Product Support Services
Facilitating services Optional service contracts Value-augmenting services © Copyright 2008 Pearson Education Canada

27 For Discussion Colleges and universities can be
classified as service organizations. How could your school become a better service marketer? © Copyright 2008 Pearson Education Canada

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