Slides prepared by Angela Tasevski Chapter 9 Services marketing strategies Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski What is a service? Services are separately identifiable activities that satisfy customer needs or wants through essentially intangible benefits, either in their own right, or as a significant element of a tangible product. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Characteristics of services The service and the creator–seller of the service are often inseparable. Services are variable (or heterogeneous). Services are highly perishable, and cannot be stored, and the demand for services fluctuates. Services are intangible. It is impossible for customers to sample a service, but intangibility is reduced using: visual clues association organisational image documentation. Service Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Different ways of classifying services Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Segmenting services Service segmentation is fundamentally the same process as that for a physical good, with two points of difference: customisation of the service delivery of the service. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Branding services The first step in branding is to select a good brand name. The brand should be: relevant distinctive. easy to pronounce and remember adaptable to any additional services. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Managing service quality Measure the current quality of the service, i.e. ‘the customer’s requirements’. Measure the service gap, i.e. ‘the difference between customer expectation of the service and perception of the service received’. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski The service gap The difference between what the customer expects and what they receive: the knowledge gap—customer’s knowledge the standards gap—organisation’s standard the delivery gap—the actual delivery experience the communications gap—the advertising promise. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Pricing services cost-plus pricing for services The cost of product plus a percentage mark-up. demand-based pricing of services The price customers are likely to be prepared to pay. competition-based pricing of service What other suppliers are charging for the same type of product. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Distribution strategies Location: The primary consideration is that services are supplied by a person (service provider) and assume the ‘characteristic of inseparability’. Location is a key marketing decision about where to locate the service for easy access to the customer, and how to bring the two people together. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Promotion of services To overcome intangibility factors, effective service promotion should: use tangible symbols: real people in service show the service encounter: staff interacting positively with customers. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Promotion of services Relationship marketing is a major promotional tool: Avoid over-promising, as it increases the service gap. Build word-of-mouth (WoM) promotion— a positive experience will spread through WoM. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Levels of retention strategies for services marketers Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

The services marketing mix: People (1 of the other 3Ps) People: Front-line staff manage the service encounter by the critical incidents, which determine customer satisfaction with the overall service encounter. Boundary spanning: Can create problems for front-line staff—who are usually the link between the service and its customers. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Creating customer service-focused management Top management Middle management Customer-service staff Customers Traditional organisational structure Customer-service focused organisational structure Customers Customer-service staff Middle management Top management Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski People The right contact staff: Recruit those with the right attitude and ‘service personality’. Empower contact staff: Front-line staff need the authority to make decisions. Reward staff for service delivery: Have reward schemes that ‘work’ as acknowledgement. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

The services marketing mix: Physical evidence (1 of the other 3Ps) Physical evidence: Aims to offset the intangibility of the service. This incorporates tangibles such as: location and building exterior interior design and décor stationery, uniforms and promotional material. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Servicescapes The physical evidence used to influence the responses and behaviour of customers and staff. Servicescapes have three elements: stimuli—the tangible elements customers and staff who receive the stimuli responses—stimuli response or outcome. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Servicescape model Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

The services marketing mix: Process (1 of the other 3Ps) Process is the operational system or method used to ‘actually’ deliver the service. Service providers need to: Commit to one approach or the other. Separate standardised and customised services. Create flexibility capacity. Increase the amount of customer participation. Smooth the peaks and troughs in demand. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Slides prepared by Angela Tasevski Blueprinting Buleprinting allows for the service process to be broken down into discrete steps and assessed against time and cost elements. Blueprinting is done in the form of a flowchart of activities. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Model of customer service blueprint Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski

Marketing for not-for-profit sector The not-for-profit sector can also be considered as part of the services market, e.g. churches, museums, hospitals and charities. The not-for-profit organisation often needs to develop strategies to consider two or more target markets that involve the clients for the services and the public and private suppliers of funds and other resources. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix Slides prepared by Angela Tasevski