Services and Other Intangibles: Marketing the Product That Isn’t There

4 characteristics of services service continuum Chapter Objectives 4 characteristics of services service continuum core and augmented services, marketing of services on the Internet, service encounter

Chapter Objectives service quality to marketers: SERVQUAL Gap Analysis search qualities, experience qualities, credence qualities SERVQUAL Gap Analysis marketing of people, places, and ideas

Marketing What Isn’t There Intangibles: services and other experience-based products that cannot be touched Does marketing work for intangibles? Yes!

What Are Services? Services are: acts, efforts, or performances exchanged from producer to user without ownership rights.

Characteristics of Services Intangibility: can’t see, touch, or smell good service Perishability: can’t store a service for later sale or consumption Capacity management: firms adjust their services to match supply with demand

Characteristics of Services (cont’d) Variability: can’t standardize the same service performed by the same individual

Characteristics of Services (cont’d) Inseparability: can’t separate production from consumption Service encounter: the interaction between the customer and the service provider Disintermediation: eliminating the interaction between customers and salespeople How???

Services by: Inputs & Tangibility Figure 10.1

The Services Continuum Figure 10.2

The Services Continuum (cont’d) Goods-dominated products Equipment- or facility-based services People-based services

Core and Augmented Services Core service: the benefit a customer gets from the service Augmented service: core service + added services that enhance value INDOOR CLIMBING WALL AT UNIVERSITY OF HOUSTON

Services on the Internet Anything that can be delivered can be sold on the Web --Banking and brokerage services --Software --Music --Travel services --Dating services --Career-related services --Medical care

Social elements: Physical elements: The Service Encounter employees and customers Physical elements: Service-scapes other intangibles

Providing Quality Service: Service Quality Attributes Search qualities: examine before purchase Experience qualities: determine during or after consumption Credence qualities: evaluate after experiencing them (difficult to do) JET BLUE AIRLINES

Measuring Service Quality SERVQUAL Gap analysis Critical incident technique

Strategies for Developing and Managing Services Act fast to resolve a service failure. Identify potential failures make recovery plans ahead of time.

Strategies for Developing and Managing Services Train employees to listen for complaints empower them to take action.

The Future of Services New dominant logic for marketing Changing demographics Globalization Technological advances Shift to flow of information

Marketing People Marketing people Politicians Celebrities

Marketing Places Marketing places Attempting to position a city, state, country, or other locale so consumers choose the brand over competing destinations

Marketing ideas Marketing Ideas Gaining market share for a concept, philosophy, belief, or issue LICKGLOBALWARMING.COM MADD

Then end

Real People, Real Choices Universal’s Theme Parks in Orlando (Robyn Eichenholz) How to plan for anticipated record-breaking attendance at Donna Summer in concert Option 1: don’t make any special plans for the event Option 2: create a plan to accommodate extremely large crowds Option 3: publicize the big expected turnout to let guests know the event might be exceptionally crowded

Real People, Real Choices Universal’s Theme Parks in Orlando (Robyn Eichenholz) Robyn selected a combination of options 2 and 3 to alleviate crowding concerns and enhance the guest experience. In addition to enjoying themselves in the concert area, guests partied in the streets and had a great evening. UNIVERSAL STUDIOS THEME PARK

Group Activity Pick a sport and define the core service its sporting event provides at your university/college.

Discussion Why are first impressions formed about a service on the Internet so important? What can a service firm do to ensure a favorable first impression online?

Discussion Internet dating services, while popular, may present some dangers for those who use them. --Who do you think uses Internet dating services? --What, if anything, should these services do to protect their clients?

Discussion Sometimes service quality may not meet customers’ expectations. --What problems have you experienced with quality in the delivery of the following services? A restaurant meal An airline flight Automobile repairs Your college education

Discussion What “service” do providers such as MySpace.com convey? What core and augmented services do they offer? How should users evaluate the quality of MySpace.com’s service? MYSPACE.COM

Individual Activity/Discussion You are a customer for a college education, a very expensive service product. --Develop a list of recommendations for your school for improving the delivery of its service.

Discussion There has been much recent criticism about the way politicians are marketed. --What are some ways such marketing has helped our political process? --What are some ways it might have an adverse effect on our government? SENATOR HILLARY RODHAM CLINTON

Discussion Many not-for-profit and religious organizations have found they can become more successful by marketing their ideas. --What are some ways these organizations market themselves that are similar to, and different from, marketing by for-profit businesses?

Marketing Plan Exercise Select a familiar service such as a bank, an airline, or even your university. Develop strategies for creating a servicescape that will be a positive influence on customers’ purchase decisions, their evaluations of service quality, and their ultimate satisfaction with the service.

Marketing in Action Case: You Make the Call What is the decision facing XM Satellite Radio? What factors are important in understanding this decision situation? What are the alternatives? What decision(s) do you recommend? What are some ways to implement your recommendation?

Keeping It Real: Fast-Forward to Next Class Decision Time at Taco Bell Meet Danielle Blugrind, Director of Consumer and Brand Insights for Taco Bell. Competitors claimed they provided better fast-food value. The decision: How to update the Taco Bell value menu pricing.