Chapter 12 Characteristics of Services Intangibility: unable to touch, taste, smell, see, or hear purchase People who undergo plastic surgery cannot see the result purchase we decide to spend our money, we will judge the company, product, people, etc. on tangible aspects

Characteristics of Services Intangibility: Implications Stress the tangible aspects of the service; emphasize benefits of purchasing the service; understand the ______________ of tangible aspects.

Characteristics of Services Inseparability: service is created and consumed simultaneously; both buyer and seller are present when service is provided Customers may have strong provider preferences

Characteristics of Services Inseparability: Implications Higher pricing in line with the service provider’s limited time Work with larger groups/work faster Train more service providers

Characteristics of Services Variability: because they depend on _____ provides them and and they are provided, services are highly variable One employee is cheerful and efficient, while another standing a few feet away is unpleasant and slow

Characteristics of Services Variability: Implications Invest in good hiring and training procedures Standardize service performance process throughout organization Monitor customer satisfaction:

Characteristics of Services Perishability: services cannot be stored; once an airplane takes off or a movie starts, any unsold seats cannot be held for future sale.

Characteristics of Services Perishability: Implications (p. 231) Demand-Side Strategies: charge different prices during different times/days to stimulate demand during slow periods Supply-Side Strategies: coordinate staffing and distribution for peak and slack times

Strategies for Service Firms External marketing: the normal work to prepare, price, distribute, and promote the service to customers- Interactive marketing: employees’ skill in serving the client- Internal marketing: work to train and motivate employees to serve the customers well-

Ritz Carlton Philosophy: to take care of customers, you must first take care of those who take care of customers. Satisfied employees deliver high service value, which then creates satisfied customers. Satisfied customers, in turn, create sales and profits for the company

Managing Differentiation Differentiated offer: innovative features that set one company’s offer apart from competitors offer Delivery: more reliable customer contact people, superior physical environment where service is delivered, or superior delivery process Images: symbols and branding

Managing Service Quality Service quality is based on differences (gaps) in the expectations, perceptions, and experiences regarding the encounter between service provider and consumer

Managing Service Quality 1.“Customer obsessed” and high quality standards 2: Monitoring Systems: regularly audit service performance - comparison shopping, customer surveys, suggestion, and complaint forms, etc.

Manage Service Productivity (p ) Minimize cost, yet improve productivity. How? 1.More skillful workers 2.Increase quantity of service by surrendering some quality

Manage Service Productivity (p ) 3.Present customers with incentives to substitute their own labor for company labor 4.Use technology to give better service and make service workers more productive