Service Marketing

stage 3

evolution of marketing from product to services *Market-Orientation Stage* "make what you can sell" variety in markets and products employs full marketing mix (4P's) focused on customer needs/satisfaction--->(profitability>volume) most typical current orientation

stage 1

evolution of marketing from product to services *Product-Orientation Stage* "make all you can" demands exceed available supply all that is made can be sold focus on engineering and generating output, not the customer

stage 2

evolution of marketing from product to services *Sales-orientation Stage* "sell all you can make" supply frequently exceeds demand focus is on promotion/pricing; objective is to sell entire inventory hard-sell techniques create stereotype of pushy/annoying salesperson

stage 4

evolution of marketing from product to services *Service dominant stage* "make it together with the customers" service industries gain more and more importance "intangible product features" *hospitality sector

service marketing triangle

3 interlinked groups that work together to develop, promote/deliver service to the satisfaction of the customer

GAP model

4 potential gaps: *knowledge gap* (Hospitals generally don't know what customers expect) *service design/standard gap* (Hospitals generally do not select the right service design and standards) *service performance gap* (Hospitals generally don't deliver to service standards) *communication gap* (Hospitals generally don't match service performance that they have promised to their customers) ----> these gaps can lead to a final and most serious gap: the difference between what customers expected and what they perceived was delivered

Service organizations

(companies) are dependent on their employees therefore they: recruit, train, support, and retain good service employees employees must have skills, abilities, and positive attitude

characteristics of services vs goods

*GOODS*: tangible, standardized, production separate from consumption and nonperishable *SERVICES*: intangible (services can't be inventoried, readily displayed, patented) heterogeneity (service quality depends on many uncontrollable factors) simultaneous production and consumption (customers participate in and affect transactions) perishable (services cannot be resold or returned)

component of service market concept

*distribution* (the availability/accessibility of service offerings to customers. Availability from the customers' point of view signifies that services are on hand when they want them Accessibility is the relative ease with which customers can conduct service processes with the service providers)

internal marketing

*enables the employee to deliver promises made to the customer* AND is the result of the activities the company must carry on to train, motivate, and reward its employees (deliver promises)

characteristics of services

*intangibility* (can't physically hold) *inseparability* (unable to be separated or treated separately) *variability* (liable to change) *perishability* ("time frame") airplane tickets/hotel room *ownership* (you don't own the service provider- creates numerous challenges for service marketers to attract new customers and retain current customers)

component of service market concept

*people* (the companies employees (internal customers), the buyers (external customers), and other customers - who play a part in service delivery/influence the buyers' perception of choice in the service environment)

component of service market concept

*physical evidence* (the environment in which the employee delivers the service and where the customers and the company interact, as well as any tangible component that facilitates performance or communication of the service

component of service market concept

*price* (price level that is low enough for the exchange to represent good value to customers, but high enough to allow service providers to achieve their financial objectives)

component of service market concept

*process* (the actual procedures, mechanisms, and flow of activities by which services are delivered) Customers judge services on the operational flow or on the actual delivery of the service

component of service market concept

*promotions* (4 parts:advertising, sales promotions, public relations, and personal selling) with the promotion of services, there is a greater need to emphasise the tangible elements of services such as packaging, brand name, corporate image, service delivery, and service employees

component of service market concept

*service offerings* (*product- anything that an organization offers to customers that might satisfy a need, whether it is tangible or intangible)

external marketing

*takes place between the company and the customer*, efforts are made to set up customers expectations, make promises to the customer regarding what is to be delivered. ANYTHING that communicates to the customer before service delivery (setting promises)

interactive marketing

*the actual contact between employees and customers* AND represents the fulfillment of the promise made by the company (keeping promises)

zone of tolerance

The extent to which customer recognizes and are willing to accept this variation of performance of hospitals, they may vary across providers, across employees of same provider It is the range where customer does not particularly notice service performance of your hospitals. Hospital administration must try to perform better than the best during this time period ----> generates customer loyalty, footfall, brand image and profit maximization

the role of services

a dominant feature in the service industry. The continuous shift to an information society lead to an INCREASE in service demand from customers ****meaning that organizations no longer regard services as an option but rather as a necessity to gain a competitive advantage.

service

any act or performance, 1 party can offer to another, that is intangible and doesn't result in ownership of anything ***all economic activities whose out-put is NOT a physical product, consumed at the same time it is produced AND provides added value (such as convenience, amusement, timeliness, comfort and health) that ARE intangible

essential dimensions in service quality

customers assessment of service quality: *reliability* (the ability to perform the promised service dependably and accurately) *responsiveness* (the willingness of service providers to help customers and provide them with prompt service) *assurance* (experienced in the employees' knowledge, courtesy, and ability to inspire trust and confidence) *empathy* (stipulates the caring, individualised attention given to customers) *tangibles* (the appearance of physical facilities, equipment, employees, and written materials)

service mix concept

developed because of the limitation of the traditional marketing mix components in their applications to services The limitations of the traditional marketing mix have lead to exploitation by service marketers of additional components which services can utilise to satisfy and communicate with customers, resulting in the adoption of the service mix (people, process and physical evidence have the advantage that they can be fully controlled by the company)

the success of service

relies on the success of the interaction between the employees and customers ---> the interaction is the MOST vivid impression the customer has of the service quality *customers perceive service in the terms of: quality, customer satisfaction and value AND each customer have their own individual expectations