Services Marketing

1
Services Marketing

• Exam 1
• Lecture 3

2
Themes Of My Presentation

• Components of a service
• Risk and consumer information processing
• Transformation to a service economy

3
The Four Components of a Service
Service Delivery
Service Product
Physical Product
Service Environment
4
Physical Product

• Whatever the organization transfers to the
  customer that can be touched.
• Tangible and physically real.
• Examples of physical product houses,
  automobiles, computers, books, and food.

5
Service Product

• Core performance purchased by customer flow of
  events which provides desired outcome.
• Experience apart from transfer of physical goods
  includes interactions with providers.

6
Service Environment

• Physical backdrop that surrounds service
  servicescape.
• Influences customers response to critical
  incidents -service events that result in
  customer dissatisfaction or delight.
• Signals intended market segment and positions
  organization

7
Three Elements To Manipulatethe Service
Environment

• Ambient conditions- includes lighting and
  background music.
• Spatial Layout
• Signs and Symbols

8
Service Delivery

• What actually happens when customers buy a
  service.
• Service delivery is how service works in actual
  practice.
• Most services are decentralized.
• Actual service delivery is much more
  geographically dispersed and harder to monitor.

9
Components of Service Industry Examples
Physical Product
Service Product
Service Environment
Service Delivery
Industry
The Car
Title transfer Warranty Loans
Showroom Grounds Car lot
Auto
Test drive Repair time Negotiation
Shampoo,etc. Food
Messages Shuttle Wake-up calls
The room Pool Lobby
Hotel
Front desk Room clean Promptness
Retail Store
Goods
Assistance Credit Inventory
Sales floor
Knowledge Friendliness Speed
10
RISK AND INFORMATION

• Search properties evaluated by purchaser before
  sale.
• More intangible services posses greater number of
  experience qualities, properties evaluated during
  purchase
• Credence qualities -when buyer may not be able to
  evaluate until after purchase.
• Most services possess experience and credence
  qualities. Marketers must lower buyer risks.

11
Complexity of Product Evaluation
Most Goods
Most Services
Clothing
Jewelry Furniture Houses Autos Food
Haircuts TV Repair Medical
HighCredence- Experience Qualities
High Search Qualities
12
SERVICE ADS

• Employees have historically disliked advertising
  services.
• Clients have a positive attitude about
  professional advertisements.
• Clients think ads give valuable information and
  help them make better choices.

13
RESEARCH ON SERVICE ADS

• Most frequently used tools are yellow pages(61),
  newspaper ads(37), seminars(35),
  brochures(28), radio ads(14), and TV ads (3).
• Most effective ads were billboards, radio ads, TV
  ads, and newspaper ads.
• External marketing services used are
  consultants(8), ad agency (7), and research
  firms (2).

14
Transformation to Services

• Developed economies evolved from emphasizing
  physical goods to intangible services.
• Percentage of workers in service sector in 1900
  was 30
• Percentage of workers in service sector in 2000
  is 78
• 42 of work force is providing some form of
  personal service

15
Economic Impact of Services

• The service sector accounts for 73 of the United
  States gross domestic product (GDP) and 67 of
  Canadas GDP
• The majority of industries in the U.S. economy do
  not produce, they perform

16
Global Service Sector Employment

• 78 in United States
• 73 in Great Britain
• 62 in Japan
• 57 in Germany

17
Impact on Labor

• Increase in service employment is directly
  related to new service jobs.
• Between 1980 and 1990, 80 percent of new jobs
  developed in service industries.
• 90 of new jobs between 1990 and 2000 were
  service related.
• By 2005, 12 of U.S. workers will be in
  manufacturing.

18
Growth of Services Due to Demographics

• A chain reaction occurring that facilitates
  growth of services.
• Consumers have less time to accomplish their
  roles.
• Time-pressured consumers prefer time-saving
  services such as restaurants, laundry services,
  and hairstyle shops.

19
Growth of Services Due to Demographics

• U.S. population is getting older.
• Besides health-care services, other service
  industries will benefit from the aging
  population.
• Over-50 age group controls 77 of the nations
  assets and 50 of discretionary income.

20
Effect of Deregulation

• Between 1980-1992
• U.S. airlines decreased from 36 to 12
• The number of trucking companies that failed
  during the 1980s was more than the previous 45
  years combined
• Commercial banks declined by 14

21
Deregulation and Service Knowledge

• Deregulation produced need for knowledge about
• Customer Service
• Customer Retention
• Image Enhancement
• Transforming Public Contact Personnel into
  Marketing Oriented Personnel

22
Business Services

• Fastest growing service sector in terms of sales
  and establishments
• The most dramatic increases in growth include

-Advertising -Credit reporting -Mail and
Copying -Building Maintenance -Equipment rental
-Temporary help services -Computer
Services -Detective Agencies -Security guards
23
Hospitality Industry

• Generates 300 billion in revenues and employs 6
  million people.
• Food service is largest and most diverse.
• 1 out of 3 meals is eaten outside of home. Food
  service provides half of all meals
• Competition is intense

24
Service Sector

• The service sector dominates the U.S. economy and
  will continue to do so.
• Services in Japan, Great Britain, Canada, France,
  Italy and Germany account for 50 of their GDP.
• In the U.S., service sector has increased its
  contribution to GDP by more than 300 over the
  past 30 years.
• Majority of industries in our economy do not
  produce -they perform.

25
Health Care Professional Services

• Business services, health care, and professional
  services account for two-thirds of all service
  firms.
• Accounting, engineering, research, and management
  consulting firms have created an 18
  billion-a-year industry

26
Travel and Tourism Industry

• Generates 2 trillion worldwide revenues.
• U.S. tourism employs 4.7 million, who receive 50
  billion in wages and salaries.
• Vegas and other gaming destinations are
  experiencing tremendous growth.
• Meeting and convention industry generates 56
  billion annually.