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

2. Chapter Objectives Describe the four characteristics of services
Understand how services can be classified along a service continuum
Explain core and augmented services, marketing of services on the Internet, and the elements of the service encounter
Appreciate the importance of the three attributes of service quality to marketers: search qualities, experience qualities, and credence qualities
Discuss the concepts of SERVQUAL and gap analysis
Explain the marketing of people, places, and ideas

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

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

5. 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

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

7. Classification of Services by Inputs and Tangibility
Figure 10.1

8. The Services Continuum

9. The Services Continuum (cont’d)
Goods-dominated products
Equipment- or facility-based services
Operational factors (Clear signs)
Locational factors
Environmental factors
People-based services

10. Core and Augmented Services
Core service: the benefit a customer gets from the service
Augmented service: core service plus additional services that enhance value
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11. Services on the Internet
Anything that can be delivered can be sold on the Web
--Banking and brokerage services
--Software
--Music
--Travel services
--Career-related services
--Medical care

12. 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?

13. The Service Encounter Social elements: employees and customers
Physical elements: servicescapes and other intangibles

14. 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)

15. 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

16. Measuring Service Quality
SERVQUAL
Tangibles, Reliability, Responsiveness, Assurance, Empathy.
Gap analysis
Expectations & Mgr perception
Mgr perception & quality standards
Quality standards & service delivery
Standards & consumer expectations
Expected and actual service
Critical incident technique
A method for measuring service quality in which marketers use customer complaints to identify critical incidents – specific face-to-face contacts between consumer and service providers that cause problems and lead to dissatisfaction.

17. Strategies for Developing and Managing Services
Act fast to resolve a service failure.
Identify potential failures and make recovery plans ahead of time.
Train employees to listen for complaints and empower them to take action.

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

19. Marketing People
Marketing people
Politicians
Celebrities

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

21. Marketing Ideas Marketing ideas
Gaining market share for a concept, philosophy, belief, or issue
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22. 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.