13-1 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. CHAPTER SERVICES: THE INTANGIBLE PRODUCT 13

13-2 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. LEARNING OBJECTIVES Describe how the marketing of services differs from the marketing of products. Discuss the four gaps in the Service Gap Model. Examine the five service quality dimensions. Explain the zone of tolerance. Identify three service recovery strategies. Services: The Intangible Product LO1 LO2 LO3 LO4 LO5

13-3 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Services Marketing Differs from Product Marketing Factors differentiating services from goods InseparableHeterogeneousPerishableIntangible

13-4 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Intangible  Requires using cues to aid customers  Atmosphere is important to convey value  Images are used to convey benefit of value ©Mark Richards/PhotoEdit.

13-5 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Inseparable Production and Consumption  Production and consumption are simultaneous  Little opportunity to test a service before use  Lower risk by offering guarantees or warranties

13-6 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Heterogeneous TechnologyTrainingAutomation Courtesy Geek Housecalls, Inc.

13-7 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Perishable How are each of these perishable services? John Foxx/Getty ImagesPhotoLink/Getty ImagesCourtesy Geek Housecalls, Inc.

13-8 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. CHECK YOURSELF 1.What are the four marketing elements that distinguish services from products? 2.Why can’t we separate firms into just service or just product sellers?

13-9 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. The Knowledge Gap: Understanding Customer ExpectationsKnowledge Gap Marketing research: understanding customers Evaluating service quality Understanding customer expectations The Knowledge Gap

13-10 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Understanding Customer Expectations Expectations are based on knowledge and experienceExpectations vary according to type of serviceExpectations vary depending on the situation versus Mel Curtis/Getty ImagesKim Steele/Getty Images

13-11 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Evaluating Service QualityService Quality The appearance of physical facilities, equipment, personnel, and communication materials. TANGIBLES The caring, individualized attention provided to customers. EMPATHY The knowledge of and courtesy by employees and their ability to convey trust and confidence ASSURANCE The willingness to help customers and provide prompt service. RESPONSIVENESS The ability to perform the service dependably and accurately. RELIABILITY

13-12 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. The Standards Gap: Setting Service StandardsStandards Gap Developing systems to ensure high-quality service Developing systems to ensure high-quality service Setting standards for quality Royalty-Free/CORBIS

13-13 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. The Delivery Gap: Delivering Service QualityDelivery Gap Reduce delivery gaps Empowering employees Provide support & incentives Use of technology

13-14 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. The Communications Gap: Communicating the Service PromiseCommunications Gap Manage customer expectations Promise only what you can deliver Communicate service expectations J.D. Power & Associate Getty Images

13-15 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. CHECK YOURSELF 1.Explain the four service gaps identified by the Gaps Model. 2.List at least two ways to overcome each of the four service gaps.

13-16 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Service Recovery Increase Service Recovery Listen to the customer Resolve problems quickly Provide a fair solution

13-17 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. CHECK YOURSELF 1.Why is service recovery so important to companies? 2.What can companies do to recover from a service failure?

13-18 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Return to slide The communications gap refers to the difference between the actual service provided to customers and the service that the firm’s promotion program promises. Glossary

13-19 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Return to slide The delivery gap is the difference between the firm’s service standards and the actual service it provides to customers. Glossary

13-20 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Return to slide The knowledge gap reflects the difference between customers’ expectations and the firm’s perception of those customer expectations. Glossary

13-21 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Return to slide A service is any intangible offering that involves a deed, performance, or effort that cannot be physically possessed. Glossary

13-22 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Return to slide Service quality is the customers’ perceptions of how well a service meets or exceeds their expectations. Glossary

13-23 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Return to slide The standards gap is the difference between the firm’s perceptions of customers’ expectations and the service standards it sets. Glossary

13-24 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Return to slide A voice-of-customer (VOC) program collects customer inputs and integrates them into managerial decisions. Glossary

13-25 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Return to slide A zone of tolerance is the area between customers’ expectations regarding their desired service and the minimum level of acceptable service. Glossary