Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 1.E-Business. Beyond creating new business, the Internet is creating new business models and driving organizations to do business in fundamentally different ways. 2.Outsourcing. The trend is to outsource functions and services that are not the company’s core expertise. 3.Innovations. New services, never considered ten years ago, are stimulating increasing services demand. 4.Manufacturing growth. Manufacturing output is still growing despite the decline in the number of manufacturing employees. Growth of Business Services

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Services in the Business-to-Business Market Two distinct groups: 1.Products supported by services The wide range of service elements that accompany the physical product are frequently as important as the technical solutions offered by the product itself. 2.Pure services Those that are marketed in their own right without necessarily being associated with a physical product.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 1.Pre-establish a relationship with a client. Professional Service Firms Marketing Programs 2.Advance its reputation as a leader in the field. 3.Strengthen its relationships with existing clients.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Services are Different Deeds Processes Performances Services are intangibility

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Provides a useful tool for understanding the product-service definitional problem. The continuum suggest that there are very few pure products or pure services. Business Product-Service Classification Based on Tangibility

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Business services are those market offerings that are intangible-dominant. Few services are totally intangible--they often contain elements with tangible properties. Unique Service Characteristics

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Customers focus on five dimensions in evaluating service quality. Among these dimensions, reliability--delivery on promises-- is the most important to customers. The Dimensions of Service Quality

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Customer Satisfaction and Loyalty Customer-Linking Processes 1.The basic elements of the product or service that customers expect all competitors to provide. 2.Basic support services, such as technical assistance or training. 3.A recovery process for quickly fixing product or service problems. 4.Extraordinary services that so excel in solving customers’ unique problems or in meeting their needs that they make the product or service seem customized.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 1.Encompasses the procedures, policies, and processes that a firm uses to resolve customer service problems promptly and effectively. 2.Service providers who satisfactorily resolve service failures often see that their customer’s level of perceived service quality rises. Service Recovery

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Key Elements of the Service Marketing Mix Target segments must be selected, and then a marketing mix must be tailored Development of service packages PricingPromotionDistribution

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Segmentation First, service segments are often narrower. Second, service segmentation focuses on what they business buyers expect as opposed to what they need. Third, segmenting service markets helps the firm to adjust service capacity more effectively.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations The service package can be thought of as the product dimension of service. The service package must consider some factors that are unique to services-- the personnel, the physical product, and the process of providing the service. Conceptualizing the Service Product

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations A major stumbling block to creating and launching a new service is the difficulty in “tangibilizing” the service concept. Traditional approaches, such as product prototyping, do not work effectively with services because it is hard to prototype services that are often customized for individual buyers. Steps for Enhancing the New Service Development Process

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations New Service Projects That Succeed The Customized, Expert Service: These new services are relatively straightforward and inexpensive but are customized to fit the needs and operating systems of client firms. The Planned, Pioneering Venture: These are first-to- market services that are unique, complex, and expensive. The Improved Service Experience: Represented here are equipment-based improvements made to a current service offering that increase the speed and reliability of the service process.

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations New Service Projects That Fail The Peripheral, Low Market Potential Service: These new services tend to be peripheral to the firm’s core offerings, fail to provide added value to the customer, and enter a market with very limited potential. The Poorly Planned “Industrialized” Clone: These are complex new services that rely on “hard” technology for their production and delivery.