1. Developing Marketing Strategies for Services

2. Copyright © Houghton Mifflin Company. All rights reserved.13 - 2 Definition of Marketing Strategy The process of adjusting controllable marketing factors to cope with or exploit uncontrollable environmental forces.

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4. Copyright © Houghton Mifflin Company. All rights reserved.13 - 4 Definition of Product Life Cycle The pattern of a product’s sales over its lifetime. It passes through four stages: Introduction Growth Maturity Decline.

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6. Copyright © Houghton Mifflin Company. All rights reserved.13 - 6 Definition of Environmental Scanning The process of carefully monitoring external and internal environments for changes that pose threats or opportunities to the service organization.

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9. Copyright © Houghton Mifflin Company. All rights reserved.13 - 9 Definitions of Reactive and Proactive Strategies Reactive strategy is a slow response to environmental changes. Proactive strategy is a rapid response to environmental changes. Defensive strategies – rapid responses to protect the organization from environmental threats. Offensive strategies – rapid responses employed to capture opportunities.

10. Copyright © Houghton Mifflin Company. All rights reserved.13 - 10 The External Services Environment Economic and competitive environment – Rapid growth of the service economy throughout the world. Ethical and legal environment Ethics concern personal and professional codes of values. Laws vary greatly across service industries and countries.

11. Copyright © Houghton Mifflin Company. All rights reserved.13 - 11 The External Services Environment (cont’d) Social, cultural, and demographic environment Service industries have often been slow to acknowledge importance of responding to changing customer tastes and preferences. Technology environment Technology is arguably the strongest force shaping the external environment of services.

12. Copyright © Houghton Mifflin Company. All rights reserved.13 - 12 Planning the Services Marketing Strategy Planning the strategy Determination of the service's objectives and manner in which they will be accomplished. Designing the strategy Careful specification of what it is that the organization hopes to accomplish.

13. Copyright © Houghton Mifflin Company. All rights reserved.13 - 13 Planning the Services Marketing Strategy Implementing the strategy Developing a detailed timetable and itemized budget. Controlling the strategy Continuous assessment and modification of the success of strategies.

14. Copyright © Houghton Mifflin Company. All rights reserved.13 - 14 Positioning and Segmentation Positioning How marketers attempt to create favorable customer perceptions of their product in relation to all other products. Market segmentation The division of a heterogeneous market into homogeneous segments.

15. Copyright © Houghton Mifflin Company. All rights reserved.13 - 15 Six Strategic Challenges for Services 1.Performance – Service performances must be carefully planned with such techniques as blueprinting, scripting, and dramatization. 2.Demand – Services must develop very flexible systems to make their service supply meet the demand. 3.Employees – Recruiting, training, compensating, and motivating employees are essential strategic factors for services.

16. Copyright © Houghton Mifflin Company. All rights reserved.13 - 16 Six Strategic Challenges for Services (cont’d) 4.Setting – The setting is often the only tangible representation of the service organization's quality. 5.Customers – Because most service organizations have more direct contact (than manufacturers) with customers, they must be very sensitive to customer needs. 6.Service quality – Numerous techniques are available to measure and improve service quality.

17. Copyright © Houghton Mifflin Company. All rights reserved.13 - 17 Service Strategies for Competitive Advantage Surpass Your Competition The term sur/petition was coined by Edward de Bono (1992) to describe his concept of surpassing the normal kinds of competition by surpassing competitors. Dramatize Your Performance The most effective service organizations learn to stage their performances. Build Relationships Strong customer relationships can lead to customer loyalty.

18. Copyright © Houghton Mifflin Company. All rights reserved.13 - 18 Service Strategies for Competitive Advantage (cont’d) Harness Technology Modern communication and transportation technology allow service organizations to operate in multiple countries, but maintain close contact with employees and customers. Jazz Your Delivery Like great jazz musicians, great service organizations are great improvisers.

19. Copyright © Houghton Mifflin Company. All rights reserved.13 - 19 Strategy Implementation Issues Internal obstacles Organizational culture Weak incentives Vision thing Infighting – short-term vs. long-term goals External obstacles Inertia Resistance to change Competition Helpful “do-gooders” Government, organizations, citizens

20. Copyright © Houghton Mifflin Company. All rights reserved.13 - 20 Strategy Implementation Issues (cont’d) Managing people The difficulty of driving change Managing budgets Understanding expenses and investments Underestimating revenues Overestimating costs Managing timetables Anticipating needs Contingency planning - what ifs Creating habits of success

21. Copyright © Houghton Mifflin Company. All rights reserved.13 - 21 Source: Adapted from Pfeffer & Sutton (1999) Solving the Implementation Trap – Taking Action Hands-on leadership. Plain language, simple concepts. Ask “how,” not just “why.” Strong control mechanisms to close the loop! Experience is the best teacher.