1. M A R K E T I N G
Real People, Real Choices
Fourth Edition
CHAPTER 10 Services and Other Intangibles: Marketing the Product That Isn’t There

2. Marketing an experience (not a product)
Are all products just tangibles or are their elements of intangibles attached to them?
Selling a car
Selling toothpaste
Selling a college education
Selling a product is a short-sighted perspective; selling an experience is an enlightened perspective

3. What is a Service?
Services are acts, efforts, or performances exchanged from producer to user without ownership rights
Consumer services
Business services
In 2004, service industry jobs – 835 of all employment and over 67% of US GDP

4. Characteristics of Services
Intangibility
Cannot see, touch, smell service
Physical cues to service
Perishability
Cannot store a service for later use
Performance = consumption
Pricing adjustment to influence demand

5. Characteristics of Services
Variability
Same service rendered by the same person at two different times may vary
Marketing response – standardize, service guarantees
Inseparability
Production = consumption
Focus on the service encounter
Bad service encounters are avoided by disintermediation

6. The Goods/ Services Continuum
Good-Dominated Products - tangible products accompanied 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
wardrobe consultants, decorators, realtors

7. 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

8. Services on the Internet
Banking/ brokerages
Software
Music
Travel
Dating
Career development
Distance learning
Medical care

9. The Service Encounter
Consumer comes into contact with the organization
The “moment of truth”
Two dimensions
Quality of the social contact
“Servicescapes” – physical evidence of service quality

10. Service Quality
Subjective assessment based on customer’s expectations
Expectations > delivery = disservice
Expectations < delivery = excellent service E.g. Jet Blue and expectations from a low – cost airline

11. 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 we’ve experienced them

12. Measuring Service Quality
Gap Analysis - measurement tool that gauges the difference between a customer’s expectation of service quality and what actually occurred
Critical Incident Technique - company collects and closely analyzes very specific customer complaints to identify critical incidents
CI are those complaints that are most likely to result in dissatisfaction

13. 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

14. 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
Front line employees empowerment

15. Strategies for Services
Targeting: Defining the Service Customer or Audience
Positioning: Defining the Service to Customers

16. The Future of Services
Increasing service component in products
Marketing experiences not products
Greater use of the internet in marketing
Increasing globalization – logistical and transportation services have a great future
Outsourcing services
Information exchange

17. Strategies for Marketing People
Pure selling approach – an agent presents a client’s qualifications to potential “buyers” until he finds one who is willing to buy
Product improvement approach – the agent works with the client to modify certain characteristics that will increase market value; person’s image changes to conform to what is currently in demand (e.g. Madonna, Paris Hilton)

18. Strategies for Marketing People
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

19. 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:
Mauritius & Grey Advertising

20. Marketing Ideas
Idea marketing is about gaining market share for a concept, philosophy, belief or issue
Examples:
Do churches market their faith and philosophy?
Do consultants peddle their ideas?
“Anti-smoking”, “Anti-drug”, “Responsible drinking and driving” campaigns