Copyright © 2007 McGraw-Hill Ryerson Limited., Examples of Service Industries  Health Care  hospital, medical practice, dentistry, eye care  Professional Services  accounting, legal, architectural  Financial Services  banking, investment advising, insurance  Hospitality  restaurant, hotel/motel, bed & breakfast  ski resort, rafting  Travel  airline, travel agency, theme park  Others  hair styling, pest control, plumbing, lawn maintenance, counseling services, health club, interior design

Copyright © 2007 McGraw-Hill Ryerson Limited., A Services View of Marketing Getting beyond the marketing mix Product and price are not enough Service - a strategic competitive advantage Treatment is as important as the product Service differentiates and adds value

Copyright © 2007 McGraw-Hill Ryerson Limited., Different Perspectives  SERVICES: All economic activities whose output is not a physical product  Service industries (e.g., transportation, shipping, lodging, health care, etc.)  Services as “products” (IT consulting by IBM/Dell/HP, service insurance by Sony, etc.)  Customer service (answering questions, handling complaints, taking orders, etc. Typically no charge)  Service derives from use of products (e.g., computers provide information services)

Copyright © 2007 McGraw-Hill Ryerson Limited., Tangibility Spectrum Tangible Dominant Intangible Dominant Salt Soft Drinks Detergents Automobiles Cosmetics Advertising Agencies Airlines Investment Management Consulting Teaching Fast-food Outlets Fast-food Outlets Figure 1.2

Copyright © 2007 McGraw-Hill Ryerson Limited., Characteristics of Service(s)  Intangibility  Heterogeneity  Simultaneous production/consumption  Perishability

Copyright © 2007 McGraw-Hill Ryerson Limited., Implications of Intangibility  Services can not be inventoried  Services can not be easily patented  Services can not be readily displayed or communicated (quality)  Pricing is difficult

Copyright © 2007 McGraw-Hill Ryerson Limited., Implications of Heterogeneity  Service delivery and customer satisfaction depend on employee and customer actions  Service quality depends on many uncontrollable factors  There is no sure knowledge that the service delivered matches what was planned and promoted

Copyright © 2007 McGraw-Hill Ryerson Limited., Implications of Simultaneous Production and Consumption  Customers participate in and affect the transaction  Customers affect each other  Employees affect the service outcome  Decentralization may be essential  Mass production is difficult

Copyright © 2007 McGraw-Hill Ryerson Limited., Implications of Perishability  It is difficult to synchronize supply and demand with services  Services can not be returned or resold  Services can not be put in inventory

Copyright © 2007 McGraw-Hill Ryerson Limited., Add to the Mix  More than the conventional marketing mix  People  All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment.  Physical Evidence  The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.  Process  The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems.