CHAPTER 14 Designing and Managing Services Copyright 2016

CHAPTER 14 Designing and Managing Services Copyright © 2016 Pearson Education, Inc. 14 -

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, Inc. 14 -2

CHARACTERISTICS OF SERVICES Intangibility Inseparability Variability Perishability Copyright © 2016 Pearson Education, Inc. 14 -3

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, Inc. 14 -4

INSEPARABILITY • Services are typically produced and consumed simultaneously Copyright © 2016 Pearson Education, Inc. 14 -5

VARIABILITY • The quality of services depends on who provides them, when and where, and to whom – As such, services are highly variable Copyright © 2016 Pearson Education, Inc. 14 -6

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, Inc. 14 -7

ACHIEVING EXCELLENCE IN SERVICES MARKETING • Marketing excellence Copyright © 2016 Pearson Education, Inc. 14 -8

BEST PRACTICES OF TOP SERVICE COMPANIES Strategic concept Satisfying customer complaints Topmanagement commitment High standards Monitoring systems Profit tiers Copyright © 2016 Pearson Education, Inc. 14 -9