Marketing Service Organ is at Ions

8/3/2019 Marketing Service Organ is at Ions

1/40

G U J K I N G

Marketing Service

Organisations


2/40

Overview

Defining services

Understanding the services economy

The service sector in Australia

Mega-trends and the service sector: Professional services

Characteristics of services

Marketing implications


3/40

Gujking Assessment

Service Watch individual assignment: 4 September

Report (1,000) words & presentation (10 mins)

Group Case Study assignment: 30 October

Written summary (500 words) & presentation (40 mins)

Service Encounter assignment: 17 November

Report (2,500) plus attachments


4/40

Defining services?

Any act, performance or experience that one partycan offer another; one that is essentially intangible,and does not result in the ownership of anything. Itsproduction may or may not be tied to a physicalproduct

Lovelock (2004)


5/40

Other service concepts

Service industries and companies: Classified within the service sector whose core product is

service

Service as products: Represent the wide range of intangible product offerings that

customers value and pay for. Sold by service and non-servicecompanies

Customer Service: Service provided in support of companys core products

(typically not charged for)

Hidden services: Another way of thinking about products and services


6/40

The dominance of tangible versus intangibleelements in goods and services


7/40

The Services sector in Australia

Distribution services: Wholesale and retail trade, transport and storage and

communications

Social services:

Health and community services, education and governmentadministration and defence

Producer services: Property and business services, finance and insurance

Personal services:

Accommodation, cafes and restaurants, personal and otherservices, cultural and recreational services

Utilities and construction services: Electricity, gas and water, and construction


8/40

The service sector in Australia Services dominate economic growth in Australia

Account for more than three quarters ofeconomys output

4 out of every 5 jobs are in the services sector Services also provide essential inputs, eg

communications and transport, into nearlyeverything Australia produces

ITR (2001) Industry Brief Services Sector


9/40

Australias service sector

Accounts for 76% of GDP

Property and business services is largest serviceindustry (14% of economys output)

Retail trade is the biggest service employer (15% ofeconomys jobs)

Travel services was the sectors biggest export earner(10%+ of economys exports)


10/40

Australias service sector

Service sector output grew at a trend annual rate of3.6% over period 1975 2001

Communications was the fastest growing service

industry (8.4%) Property and business services exhibited the highest

employment growth (5.8%)

Access Economics (2001b)


11/40

Australias service sector: the future

Service output is expected to grow over next 5 10years at similar rates

Highest growth industries: communications,property & business services, finance & insurance,transport and storage


12/40


13/40

Factors responsible for the transformation ofthe service economy

Business trends (e.g. Relaxation ofprofessional association standards, Marketing

emphasis by non profit organisations,Outsourcing of non-core services, Services qualitymovement, Franchising and service chains)

Advances in technology(Convergence ofcomputers and telecommunications,Miniaturisation, Digitalisation, Enhanced software)

M t t P


14/40

Mega-tren s mpact ng on Pro ess onaServices Firms

Client sophistication

Governance

Connectivity

Transparency Modularisation

Globalisation

Commoditisation


15/40

Characteristics of ServicesCompared to Goods

Intangibility

Perishability

SimultaneousProduction

andConsumption

Heterogeneity


16/40

Implications of Intangibility

Services cannot be inventoried

Services cannot be easily patented

Services cannot be readily displayed orcommunicated

Pricing is difficult


17/40

Implications of Heterogeneity

Service delivery and customer satisfaction depend onemployee and customer actions

Service quality depends on many uncontrollablefactors

There is no sure knowledge that the service delivered

matches what was planned and promoted

li i f Si l d i d


18/40

Implications of Simultaneous Production andConsumption

Customers participate in and affect the transaction

Customers affect each other

Employees affect the service outcome

Decentralization may be essential

Mass production is difficult


19/40

Implications of Perishability

It is difficult to synchronize supply and demand withservices

Services cannot be returned or resold


20/40

Challenges for Services

Defining and improving quality Designing and testing new services

Communicating and maintaining a consistentimage

Accommodating fluctuating demand

Ensuring the delivery of consistent quality


21/40

Challenges for Services (cont.)

Motivating and sustaining employee commitment

Coordinating marketing, operations, and humanresource efforts

Setting prices Finding a balance between standardization versus

personalization


22/40

Further challenges for services managers

Differentiation and competitive advantage may bedifficult to achieve

Marketing orientation is still relatively new to manymanagers

Operations management, rather than marketing,continues to dominate

Customer service management and marketing is oftenin the hands of lower paid subordinates, possibly in

multiple locations Limited data on competitive performance is available

Problems in determining costs for pricing purposes


23/40

Traditional Marketing Mix

All elements within the control of the firm thatcommunicate the firms capabilities and image tocustomers or that influence customer satisfaction

with the firms product and services:

Product

Price

Place

Promotion

E d d Mi f S i


24/40

Expanded Mix for Services --The 7 Ps

PeopleAll human actors who play a part in service delivery and thus

influence the buyers perceptions: namely, the firms personnel, thecustomer, and other customers in the service environment.

Physical Evidence The environment in which the service is delivered and where the

firm and customer interact, and any tangible components thatfacilitate performance or communication of the service.

Process The actual procedures, mechanisms, and flow of activities by which

the service is deliveredthe service delivery and operating systems.


25/40

An expanded marketing mix for services

Customers PricePlace &Time

Promotion

Product(Service)People

Process

PhysicalEvidence

Customers PricecustomersPlace,Cyber-space& Time


26/40

Table 1.3

Expanded Marketing Mix for Services


27/40

Ways to Use the 7 Ps

Overall StrategicAssessment

How effective is a firmsservices marketing mix?

Is the mix well-alignedwith overall vision andstrategy?

What are the strengths

and weaknesses in termsof the 7 Ps?

Specific ServiceImplementation

Who is the customer?

What is the service?

How effectively does theservices marketing mix fora service communicate itsbenefits and quality?

What changes/improvements areneeded?


28/40

Internal

marketing

Traditional

marketing

Organisation

Employees Customers

Satisfaction; Quality;Brand Loyalty

Relationshipmanagement

A framework for analysing servicesmarketing


29/40

Managing the 7Ps Requires Collaboration betweenMarketing, Operations, and HR Functions (Fig. 1.14)

Customers

OperationsManagement MarketingManagement

Human ResourcesManagement


30/40

Models of service quality

The evolution of


31/40

The evolution ofservice quality

Disconfirmation of expectations

The Nordic model

The Gaps model of service quality & SERVQUAL The three component model

Integrating perspectives


32/40

Disconfirmation of expectations (Oliver 1980)


33/40

The Nordic model(Gronroos 1990)

Represents the service experience on the basis offunctional and technical elements

Technical quality refers to what the customer receivesfrom the service

Functional quality refers to service delivery

Model emphasises companies must be careful whatthey promise

The SERVQUAL dimensions


34/40

The SERVQUAL dimensions Perceived Service Quality

(Parasuraman, Zeithaml & Berry 1988)

Reliability(dependability, accurate performance)

Assurance (competence, courtesy, credibility & security) Tangibles (appearance of physical elements)

Empathy(easy access, good communications & customerunderstanding)

Responsiveness (promptness & helpfulness)


35/40

SERVQUAL


36/40

SERVQUAL (cont.)


37/40

The Gaps model of service quality(Zeithaml,Parasuraman & Berry 1990)


38/40

The three-component model Rust & Oliver(1994)

Source:Rust & Oliver, 1994. p. 11


39/40

Hierarchical model


40/40

Model Advantages Disadvantages

Disconfirmationof expectations Takes into consideration expectations as wellas actual perceptions The use of expectations in measuring servicequality has currently come under a lot of

criticism in the literature

Nordic model

(Gronroos) Focuses on the service outcome and process,that is, what the customer receives from theservice and how the service is delivered

Does not explicitly consider the impact of the

physical environment of the service setting on

service quality perceptions. Uses the

disconfirmation of expectations model as a

basis

Servqual/Gaps Identifies a number of areas important toservice quality assessment. Has been widely

used in the literature and in practice

Uses gap scores as derived from the

disconfirmation of expectations model. Does

not have an outcome orientation does not

measure service outcome perceptions

Three-

component

modelExtends Gronroos model to include the physical

environment. Has received increasing support

in the literature

Some three-component models are still based

on disconfirmation. Not well tested in the

literature.

Integrated

model

Looks at service quality in a new light. Provides

a more sensitive analysis by looking at the

different tiers of service quality dimensions

Has not been well tested in the literature as it is

a new model. Needs more research to test its

usefulness

Marketing Service Organ is at Ions

Documents

Transcript of Marketing Service Organ is at Ions