CHAPTER 11 Designing and Managing Services Copyright 2016

LEARNING OBJECTIVES 1. 2. 3. 4. 5. How can services be defined and classified,

THE NATURE OF SERVICES • Service – Any act or performance one party can

CATEGORIES OF SERVICE MIX • A pure tangible good • A tangible good with

SERVICE DISTINCTIONS ü Equipment- or people-based ü Different processes of delivery ü Some need

FIGURE 14. 1 EVALUATION CONTINUUM FOR PRODUCT TYPES Copyright © 2016 Pearson Education Ltd.

CHARACTERISTICS OF SERVICES Intangibility Inseparability Variability Perishability Copyright © 2016 Pearson Education Ltd. 14

INTANGIBILITY • Services cannot be seen, tasted, felt, heard, or smelled Physical evidence and

INTANGIBILITY Copyright © 2016 Pearson Education Ltd. 14 -9

INSEPARABILITY • Services are typically produced and consumed simultaneously Copyright © 2016 Pearson Education

VARIABILITY • The quality of services depends on who provides them, when and where,

PERISHABILITY • Services cannot be stored • Strategies to match demand & supply On

FIGURE 14. 2 BLUEPRINT FOR OVERNIGHT HOTEL STAY Copyright © 2016 Pearson Education Ltd.

NEW SERVICES REALITIES • A shifting customer relationship – Customer empowerment & coproduction –

ACHIEVING EXCELLENCE IN SERVICES MARKETING • Marketing excellence Copyright © 2016 Pearson Education Ltd.

ACHIEVING EXCELLENCE IN SERVICES MARKETING • Technology and service delivery – The Internet allows

BEST PRACTICES OF TOP SERVICE COMPANIES Strategic concept Topmanagement commitment Satisfying customer complaints High

FIGURE 14. 4 IMPORTANCE-PERFORMANCE ANALYSIS Copyright © 2016 Pearson Education Ltd. 14 -18

DIFFERENTIATING SERVICES • Primary and secondary service options • Innovation with services Copyright ©

MANAGING SERVICE QUALITY • Customer switching behavior factors ü Pricing ü Inconvenience ü Core

FIGURE 14. 5 SERVICE-QUALITY MODEL Copyright © 2016 Pearson Education Ltd. 14 -21

IMPROVING SERVICE QUALITY • • • Listening Reliability Basic service Service design Recovery •

SERVQUAL SCALE Copyright © 2016 Pearson Education Ltd. 14 -23

EXTENDING THE SERVICEQUALITY MODEL • Dynamic process model of improved service quality perceptions –

INCORPORATING SELFSERVICE TECHNOLOGIES • SSTs can: – Make transactions more accurate – Make transactions

MANAGING PRODUCTSUPPORT SERVICES • Three types of customer worries Failure frequency Downtime Out-of-pocket costs

POSTSALE SERVICE STRATEGY • Customer-service evolution • The customer-service imperative Copyright © 2016 Pearson

Copyright © 2016 Pearson Education Ltd. 14 -28

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LEARNING OBJECTIVES 1. 2. 3. 4. 5. How can services be defined and classified, and how do they differ from goods? What are the new services realities? How can companies achieve excellence in services marketing? How can companies improve service quality? How can goods marketers improve customersupport services? Copyright © 2016 Pearson Education Ltd. 14 -2

THE NATURE OF SERVICES • Service – Any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything Copyright © 2016 Pearson Education Ltd. 14 -3

CATEGORIES OF SERVICE MIX • A pure tangible good • A tangible good with accompanying services • A hybrid • A major service with accompanying minor goods/services • A pure service Copyright © 2016 Pearson Education Ltd. 14 -4

SERVICE DISTINCTIONS ü Equipment- or people-based ü Different processes of delivery ü Some need client’s presence ü Meets personal or business need ü Differs in objectives and ownership Copyright © 2016 Pearson Education Ltd. 14 -5

INTANGIBILITY • Services cannot be seen, tasted, felt, heard, or smelled Physical evidence and presentation tools: ü Place ü People ü Equipment ü Communication material ü Symbols ü Price Copyright © 2016 Pearson Education Ltd. 14 -8

PERISHABILITY • Services cannot be stored • Strategies to match demand & supply On demand side • Differential pricing • Nonpeak demand • Complementary services • Reservation services On supply side • Part-time employees • Peak-time efficiency routines • Increased consumer participation • Shared services • Facilities for future expansion Copyright © 2016 Pearson Education Ltd. 14 -12

ACHIEVING EXCELLENCE IN SERVICES MARKETING • Technology and service delivery – The Internet allows for true interactivity, customerspecific and situational personalization, and realtime adjustments of the firm’s offerings Copyright © 2016 Pearson Education Ltd. 14 -16

BEST PRACTICES OF TOP SERVICE COMPANIES Strategic concept Topmanagement commitment Satisfying customer complaints High standards Monitoring systems Profit tiers Copyright © 2016 Pearson Education Ltd. 14 -17

MANAGING SERVICE QUALITY • Customer switching behavior factors ü Pricing ü Inconvenience ü Core service failure ü Service encounter failures ü Response to service failure ü Competition ü Ethical problems ü Involuntary switching Copyright © 2016 Pearson Education Ltd. 14 -20

IMPROVING SERVICE QUALITY • • • Listening Reliability Basic service Service design Recovery • Surprising customers • Fair play • Teamwork • Employee research • Servant leadership Copyright © 2016 Pearson Education Ltd. 14 -22

EXTENDING THE SERVICEQUALITY MODEL • Dynamic process model of improved service quality perceptions – Increasing customer expectations of what the firm will deliver – Decreasing customer expectations of what the firm should deliver Copyright © 2016 Pearson Education Ltd. 14 -24

INCORPORATING SELFSERVICE TECHNOLOGIES • SSTs can: – Make transactions more accurate – Make transactions more convenient – Make transactions faster – Reduce costs Copyright © 2016 Pearson Education Ltd. 14 -25