1. Slides prepared by Angela Tasevski
Chapter 9
Services marketing strategies
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

2. Slides prepared by Angela Tasevski
What is a service?
Services are separately identifiable activities that satisfy customer needs or wants through essentially intangible benefits, either in their own right, or as a significant element of a tangible product.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

3. Slides prepared by Angela Tasevski
Characteristics of services
The service and the creator–seller of the service are often inseparable.
Services are variable (or heterogeneous).
Services are highly perishable, and cannot be stored, and the demand for services fluctuates.
Services are intangible. It is impossible for customers to sample a service, but intangibility is reduced using:
visual clues
association
organisational image
documentation.
Service
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

4. Different ways of classifying services
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

5. Slides prepared by Angela Tasevski
Segmenting services
Service segmentation is fundamentally the same process as that for a physical good, with two points of difference:
customisation of the service
delivery of the service.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

6. Slides prepared by Angela Tasevski
Branding services
The first step in branding is to select a good
brand name.
The brand should be:
relevant
distinctive.
easy to pronounce and remember
adaptable to any additional services.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

7. Managing service quality
Measure the current quality of the service, i.e. ‘the customer’s requirements’.
Measure the service gap, i.e. ‘the difference between customer expectation of the service and perception of the service received’.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

8. Slides prepared by Angela Tasevski
The service gap
The difference between what the customer expects and what they receive:
the knowledge gap—customer’s knowledge
the standards gap—organisation’s standard
the delivery gap—the actual delivery experience
the communications gap—the advertising promise.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

9. Slides prepared by Angela Tasevski
Pricing services
cost-plus pricing for services
The cost of product plus a percentage mark-up.
demand-based pricing of services
The price customers are likely to be prepared to pay.
competition-based pricing of service
What other suppliers are charging for the same type of product.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

10. Distribution strategies
Location: The primary consideration is that services are supplied by a person (service provider) and assume the ‘characteristic of inseparability’.
Location is a key marketing decision about where to locate the service for easy access to the customer, and how to bring the two people together.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

11. Slides prepared by Angela Tasevski
Promotion of services
To overcome intangibility factors, effective service promotion should:
use tangible symbols: real people in service
show the service encounter: staff interacting positively with customers.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

12. Slides prepared by Angela Tasevski
Promotion of services
Relationship marketing is a major promotional tool:
Avoid over-promising, as it increases the service gap.
Build word-of-mouth (WoM) promotion— a positive experience will spread through WoM.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

13. Slides prepared by Angela Tasevski
Levels of retention strategies for services marketers
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

14. The services marketing mix: People (1 of the other 3Ps)
People: Front-line staff manage the service encounter by the critical incidents, which determine customer satisfaction with the overall service encounter.
Boundary spanning: Can create problems for front-line staff—who are usually the link between the service and its customers.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

15. Creating customer service-focused management
Top management
Middle management
Customer-service staff
Customers
Traditional organisational structure
Customer-service focused organisational structure
Customers
Customer-service staff
Middle management
Top management
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

16. Slides prepared by Angela Tasevski
People
The right contact staff: Recruit those with the right attitude and ‘service personality’.
Empower contact staff: Front-line staff need the authority to make decisions.
Reward staff for service delivery: Have reward schemes that ‘work’ as acknowledgement.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

17. The services marketing mix: Physical evidence (1 of the other 3Ps)
Physical evidence: Aims to offset the intangibility of the service.
This incorporates tangibles such as:
location and building exterior
interior design and décor
stationery, uniforms and promotional material.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

18. Slides prepared by Angela Tasevski
Servicescapes
The physical evidence used to influence the responses and behaviour of customers and staff.
Servicescapes have three elements:
stimuli—the tangible elements
customers and staff who receive the stimuli
responses—stimuli response or outcome.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

19. Slides prepared by Angela Tasevski
Servicescape model
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

20. The services marketing mix: Process (1 of the other 3Ps)
Process is the operational system or method used to ‘actually’ deliver the service.
Service providers need to:
Commit to one approach or the other.
Separate standardised and customised services.
Create flexibility capacity.
Increase the amount of customer participation.
Smooth the peaks and troughs in demand.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

21. Slides prepared by Angela Tasevski
Blueprinting
Buleprinting allows for the service process to be broken down into discrete steps and assessed against time and cost elements.
Blueprinting is done in the form of a flowchart of activities.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

22. Model of customer service blueprint
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski

23. Marketing for not-for-profit sector
The not-for-profit sector can also be considered as part of the services market, e.g. churches, museums, hospitals and charities.
The not-for-profit organisation often needs to develop strategies to consider two or more target markets that involve the clients for the services and the public and private suppliers of funds and other resources.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix
Slides prepared by Angela Tasevski