MAR 3023 Ch. 13 Exam 2

Services marketing is different! service characteristics

Goods-objects, devices, or things Services- deeds, efforts, performance. advertisement must show the goal of service

why study services?

U.S GDP- service industry contributes approx. 75%. a sustainable trend over time, of U.S GDP not just the U.S first world countries have the same phenomenon, service industry increasing we have a service based economy

Perishability

a service cannot be saved, its unused capacity cannot be reserved and it cannot be inventoried (Ex: Hotwire: exist as a function of services being perishable, empty flights and hotel room, better to fill hotel room for cheaper then empty) difficult to synchronize supply and demands with services (long term/short term). services cannot be returned or resold

Reliability

ability to perform the promised service dependably and accurately. providing service as promised at the promised time

People

all human actors who play a part in service delivery and thus influence the buyer's perceptions, namely the firm's personnel, the cusotmer, and other cusotmers in the service environemtn

tangibles

appearance of physical facilities equipment, written materials, and appearance of personnel modern equipment. visually appearing facilities. employees appearance. visually appealing materials associated with eh service it has to be a managerial though process and decision (flight attendant work uniform)

What is service (The New View)

application of specialized competencies (skills and knowledge), through deeds, processes, and performances, for the benefit of another entity or the entity itself (self service) starting point: includes every interaction between any customer and anyone representing the company

experience qualities/ attributes (intangibility)

attributes a consumer can only determine after purchase or during consumption. (must eat food first to determine if good, must stay at hotel for night to determine rating)

empathy

caring, individualized, attention to the firm provides to its customer employees wh understand the needs of their customers employers who deal with customers in a caring situation

Credence Qualities/Attributes (intangibility)

characteristics that may be impossible to evaluate even after purchase and consumption ex: medical and legal services, auto repair. high in this attribute.

assurance

knowledge and courtesy of employee and their ability to inspire trust and confidence towards/in the firm employees who have the knowledge to answer customer question, making customers feel safe in their transactions

Why do we care? (key question)

relevance, is our skill set relevant.. in the job market? approximately 80% of U.S Labor Force is in the service industry

Service Characteristic #1 (intangibility)

services lack physical substance (primary difference between goods and services) services cannot be seen, felt, tasted, or touched in the same manner that goods can be sensed. this changes criteria of evaluation for service consumption. for instance: goods can be relatively easily evaluated in an objective way prior to consumption, this cannot be down for services -search -experience -credence

Inseparability

simultaneous production and consumption the service provider's physical connection to the service being provided Ex: doctor asks what's wrong, but customer can influence experience. cellphone left on during movie. -Often: provider must be physically present to deliver service. -employee satisfaction and customer satisfaction are directly related. the customer involvement in (a) the service production. (b) service consumption process. the involvement of other customers in the service production process

What is service (the old view)

technical after-sale function that is provided by the service department call customer service centers wrench time- who fix appliances

process

the actual procedures, mechanisms and flow of activities by which services is delivered- the service delivery and operation system

Relationship between satisfaction and Loyalty

the big bang for your buck. (happens between 4 and 5 on the scale) Xerox, customers who were highly satisfied were more than 6x more likely to repurchase

physical evidence

the environment in which the service is delivered and where the firm and and customer interact and any tangible component that facilitate performance or communication of the service (servicescapes)

search qualities/ attributes (intangibility)

trying a new sneaker at foot locker. attributes a consumer can determine prior to purchase (color, style, price, feel, smell)

heterogeneity

variation in consistency from one service transactions to the next. services occur in 'real time" -little/no chance to intercept problems sources of variation (location, employee, customer) service quality depends on mnay uncontrollable factors: delvivery and customer satisfaction depend on employee and customer actions there is no sure knowledge that the service delivered matches what was planned and promoted. it is impossible for a service operation to achieve 100% perfect quality on an ongoing basis (which underlines the specific importance of management approaches)

responsiveness

willingness to help customers and provide prompt service readiness to respond to customers request

Is services marketing different? (PPP)

yes. we need a different marketing approach. expanded service marketing mix. (4 +3=7) People, Physical Evidence, Process

Why/ What factors contributing to service growth

-aging population (baby boomers) more leisure time, -higher per capita income (discretionary income), -changing social/cultural values

What do managers care?

1. outcomes of satisfaction 2. increased customer retention 3. positive words of mouth communication 4. increased revenue

service quality (RAERT)

5 dimensional phenomenon, (Relationship between customer satisfaction and loyalty in competitive industries) 1. Reliability 2.assurance 3. empathy 4. responsiveness 5.tangibles increased customer retention, positive word of mouth communication increased revenues