Chapter 1: What are services?

Simultaneous Production and Consumption

- Customers participate in and affect the transaction - Customers affect each other - Employees affect the service outcome - Decentralization may be essential - Mass production is difficult ex. haircut, airlines

S-D Logic Foundational Premise 8

A service-centered view is inherently customer oriented and relational. Because service is defined in terms of customer-determined benefit and co-created it is inherently customer oriented and relational.

Perishability

Cannot be returned or resold

S-D Logic Foundational Premise 2

Indirect exchange masks the fundamental basis of exchange. Because service is provided through complex combinations of goods, money, and institutions, the service basis of exchange is not always apparent.

Heterogenity

Service delivery and customer satisfaction depend on employee and customer actions, service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted because people are not standardized

S-D Logic Foundational Premise 1

Service is the fundamental basis of exchange. The application of operant resources (knowledge and skills), "service," as defined in S-D logic, is the basis for all exchange. Service is exchanged for service.

Intangibility

Services cannot be inventoried, be easily patented, be readily displayed or communicated, & pricing is difficult

S-D Logic Foundational Premise 7

The enterprise cannot deliver value, but only offer value proposition. Enterprises can offer their applied resources for value creation and collaboratively (interactively) create value following acceptance of value propositions, but can not create and/or deliver value independently.

Services Marketing Mix: Physical Evidence

The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service. Things to think about: Facility design, equipment, and signage Employee dress Web pages, business cards, invoices, etc.

Service Dominant Logic

Vargo and Lusch: organizations, markets, and society are fundamentally concerned with exchange of service—the applications of competences (knowledge and skills) for the benefit of a party.

Services

the application of specialized competences (skills and knowledge), through deeds, processes, and performances for the benefit of another entity or the entity itself (self-service)"

S-D Logic Foundational Premise 5

All economies are service economies. Service (singular) is only now becoming more apparent with increased specialization and outsourcing.

Services Marketing Mix: People

All human actors who play a part in service delivery and thus influence the buyer's perceptions ex. employees, customers, other customers Things to think about: Employee recruitment, training, motivation Customer education and training

S-D Logic Foundational Premise 9

All social and economic actors are resource integrators.

S-D Logic Foundational Premise 4

Operant resources are the fundamental source of competitive advantage. The comparative ability to cause desired change drives competition.

S-D Logic Foundational Premise 10

Value is always uniquely and phenomenologically determined by the beneficiary.

S-D Logic Foundational Premise 3

Goods are a distribution mechanism for service provision. Goods (both durable and non-durable) derive their value through use - the service they provide.

Services Marketing Mix: Process

The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems. Things to think about: Standardized or customized flow of activities Number of steps (simple vs. complex) Customer involvement

S-D Logic Foundational Premise 6

The customer is always a co-creator of value. Implies value creation is interactional.