Hoang Thuy Linh BBUS15SERVICE MARKETINGREVISIONChap 1: The important of services marketing1. Definition of Service: A service is a deed, a performance, an effort (Rathmell 1966).Services are separated into core and supplementary and facilitating services. Together, these parts of a service make up the total experience.2. Services Characteristics Intangibility: A service cannot be seen, touched, held or put on a shelf. The intangible aspects of the service are those that cannot be physically perceived and whose performance is difficult to measure.The product is a process, a deed or a performance; therefore: For the customer: perceived risk is higher, harder to evaluate before (even during or after) the service For the marketer: hard to help customer visualize the product and differentiate it from the competitors.To tangibilise a service is to make it more concrete, physical real, thus enabling customers to understand it better. E.g.: collect recommendation from customer; provide tangible evidence (image, photo) and tangible things (souvenir) Simultaneity (inseparability): Mostly, the production and consumption of the service performance occur simultaneously ( at the same time)The provider and the customer are part of the service; they must interact for the service to happen, therefore: For the customer: some interaction with the service provider is necessary and sometimes the product is shared with other customers For the marketer: customers are co-producers (they help create the very product they consume, customers often act as co-producer in the service environment through informing the providers of their needs in the dyadic exchange).Service marketers must manage the customers role in the interaction for the service to be delivered effectively and efficiency. Heterogeneity (variability): It is hard for a service org. to standardize the quality of its service performance. It refers to the differing nature of services consumers need. Specifically this refers to the diversity of consumers and their needs in the service exchange. For the customer: consistency of product quality is always suspect, and service provider relationship is critical For the marketer: customization is an opportunity to satisfy different customers; and frontline operations and customer skills training are critical. Org. must recognize the importance of customer-service skill, therefore be creative in dealing with customers unique needs. Those org. able to respond quickly and flexibly to the changing needs of the consumer market are very successful. Perishability: Most services cannot be produced or stored before consumption, they exist only at the time of their production (hotel room) For the customer: product needs to be available and produced when necessary For the marketer: supply must match demand, otherwise opportunity to produce is lost, and the task is to manage rather than build demand. Answer the question of How to manage capacity and demand? How to control and make different promotion?Lovelock classificationOn a personOn a thing

Tangible actsE.g.: Health care, Hotel, Airline, Coffee shop- Intangibility: present tangible cues to the customer, less intangibility- Simultaneity: high involvement since the presence of customer is required- Heterogeneity: org. can standardize some part of the service.- Perishability: can manage demand and supplyE.g.: House cleaning, Appliance repair, landscaping services- Intangibility: provide tangible components- Simultaneity: no involvement- Heterogeneity: less involvement, the service is slightly different- Perishability: less involvement, can be booking in advance

Intangible actsE.g.: Education, Entertainment, Legal services- Intangibility: Highly intangibility- Simultaneity: less input from service producer and consumer to produce the service- Heterogeneity: less significant (service is more standardized)- Perishability: still be an issueE.g.: Financial and insurance services, Tax, Banking- Intangibility: intangible services- Simultaneity: less involvement, customer need not be presented- Heterogeneity: significant, customer have diverse needs, services can be customized in some parts. - Perishability: no involvement

Chapter 2: Frameworks for Managing the Customers Experience1. Service Components: Service workers: those who interact with customers (waiters or bank tellers) and those who contribute to the service delivery away from the customers sight (chefs, bank accountants) Service setting: the area where the service is provided to the customer (dining room, bank lobby) and areas of the organization which the customer normally has little access to (restaurant kitchen or bank vault). Service customers: The persons receiving the service (the diner or the depositor) and others who share the service setting with them. Some services require the customer to play a larger role than others, in that the customers commitment and involvement is vital to the success of the service experience. Service process: The sequence of activities necessary to deliver the service

2. Service Marketing mix Participants: are all people (customers and workers), who are involved in the service production Physical evidence: is the service environment and other tangible aspects of the service that facilitate or communicate the nature of the service Process: assembly is procedures and flow of activities that contribute to the delivery of the service Special Strategic Implications for ServiceParticipantsPhysical evidenceProcess

IntangibilityFrontline service personnel are part of the product. Customers can influence each others service experiences in shared servicesCustomer has no physical product to evaluate before consumption. Any means of reducing customers perceived risk must be usedProduct is a performance. The process is created and produced by personnel facilities and equipment

SimultaneityCustomers are co-producer and interact with the service provider. Service providers must be recruited, trained and have their roles carefully scripted so that customer participation is managed effectivelyCustomers evaluate the physical evidence in the process and outcome. All costumes and props are evaluated. Product outcome should be documented for customer evaluationConsumption and production are simultaneous and product is produced in real-time. Performance must be planned with techniques as blueprinting and dramatization

HeterogeneityThe product varied among customers and among providers. Backstage and frontstage employees should be motivated and compensated based on customer satisfactionPhysical evidence must be tailored to segments. Physical facilities and equipment can be divided and separated to accommodate different segmentsProcess can be customized or standardized, and varying levels of customer participation in different steps of the process (self-service) can be considered

PerishabilityCustomer demand and service providers supply must match. Peaks and valleys in demand fluctuation must be smoothed Capacity to produce is lost when staff, physical facilities and equipment are idle. Consider outsourcing, subcontracting during high demand or renting and leasing equipment and facilities during low demandProduct cannot be inventoried. Services can be bundled and priced attractively to maintain consistent level of demand for maximum profitability

3. Service as Theatre FrameworkThe services theatre framework involves the same theatrical elements as a stage production: actors, an audience, a setting, a frontstage, a backstage and a performance Actors (service workers) are those who work together to produce the service for an audience (customer) Setting (service environment) is where the action of service performance unfolds Performance is the dynamic result of the interaction of the actors, audience and setting Frontstage is the part of the service that is visible and apparent to the customer Backstage is the invisible, behind-the-scene activity that supports the frontstage

Comparison of different frameworks of the service encounter

General frameworkAdditional 3PsServuction frameworkTheatrical framewook

SettingPhysical evidenceInvisible areaVisible areaSetting: Backstage Frontstage

WorkersParticipantsContact personnelActors

CustomerParticipantsCustomer A (focal cus.)Customer B (other cus.)

Audience

ProcessProcess of service assemblyBundle of benefitsPerformance

Chap 4: Service provider and customer interaction

1. Customer involvementThere are indications that the development of an attitude towards a goods or services product is intrinsically linked to the level of customer involvement with the product or service. Customer involvement is a reflection of the relevance of the service to the customer.2. Customer and Staff interactionThe concept of affect and involvement are an inherent part of the individuals appraisal of satisfaction. Indeed, in services of extended duration the relationship between the customer and the provider is more likely to become boundary-open. Boundary-openness means that the relationship has developed over the service duration, which starts to resemble that of friends, and at this stage the service provider is expected to become involved with the customer and share feelingsIf the relationship between the service provider and the customer goes well and strengthens over the duration of the service, satisfaction is likely to increase and the customer is more likely to overlook any small hiccups that happened along the way. The opposite scenario can occur where extended exposure to an individual one dislikes or finds irritating increases dissatisfaction.

Chap 7: Designing the Service Setting1. What is the Service Setting?A service setting (or servicescape) has a significant impact on the process of service delivery and customers perceptions of the service. It includes all aspects of the physical environment in which the service provider and customer interact.The service setting design can affect the movement and interaction between customers and workers who are present. The scenery, equipment, dcor and other physical cues can help customers form an impression of an org. and its service offering.

Atmospherics are the factors of the physical environment, such as lighting, scent and sound that create the atmosphere associated with the physical service setting

2. Key consideration Duration of the service setting (i.e. how long does the customer spend in the service environment?). longer duration will create more influence on customer Service setting as an operational tool (efficiency of service delivery) the layout of the servicescape and its equipment can enhance or hinder service delivery (E.g.. a cluttered setting or one that relies on outdated equipment can keep workers from moving about with ease and can impede their task performance) Service setting as a service identifier (differentiation among competitors) the setting design can help differentiate a service (E.g.. Hard Rock Caf versus McDonalds). In some instances the service setting represents an organisations chief means of distinguishing itself and becomes the most important element in the services marketing mix the significance of service settings increases when targeting an intended market segment (E.g.. hotels) the design of the physical setting can be an effective positioning tool Service setting as an orientation tool (E.g.. mass transit systems) ~ education tool the design of service settings can facilitate or hinder the customers understanding of the service process simple dcor and open design allows customers to see and understand the service process and their role organizations that market new service concepts can rely upon various physical cues to communicate information about their service offerings (E.g.. signage, audio or visual aids) The appeal of the service setting (developing an approach environment in which the customer feels comfortable and willing to spend time Service setting as the workers home away from home (workers usually spend more time in the service environment that the customers therefore their needs must also be taken into account in designing the service setting). Balance between worker needs and those things that org. want to bring to customer

3. The Service Setting as a Marketing Tool Service organizations can use their physical environment as a marketing tool The service setting might be the services marketing-mix variable that best creates the organisations image. Service settings can accomplish a variety of marketing goals, such as communicating a new concept, repositioning an organisation in the eyes of its target market or attracting new market segments. Three issues are most focused on in relation to a settings design: Managing tangible evidence Frontstage vs. backstage decisions Experimenting with the service setting

4. Frontstage and backstage decisions Frontstage is the part of the service that is visible and apparent to the customer. Staffs behavior need to be formal Backstage is the invisible, behind-the-scene activity that supports the frontstage. It is more efficiency for staffs free to behave. Do not let customer any chance to enter the backstage. Sometimes it pays to move a backstage feature to frontstage (E.g.. an open kitchen) When certain aspects of the service generate considerable customer-perceived risk (E.g.. car repair) Adding an entertainment feature to the service delivery that becomes an indispensable part of the customers experience (E.g.. preparing meals in full view of patrons) Overcome perceived waiting time To reduce its susceptibility to service delivery problems = moving some of the service assembly, service personnel or setting features to the back region might be better able to control customers impressions of service excellence.

Chap 8: Creating Customer Value and Setting a Price1. Inelastic servicePrice/demand elasticity the economic assessment of demandSeveral conditions for inelastic demandE.g.: emergency/necessity services; unique value; lack of awareness of substitute service; shared costs; end-benefit

2. Yield management strategyThe objective of yield management is to maximize profits from the fixed operating assets labour, equipment and facilities Profits are maximized by increasing revenues and decreasing costs Offering a difference price at different times is an effective response to maximizing asset usageIt is related to Perishability, customers have different abilities and different purchasing patterns. Hence, firm has to manage the highest level (highest ability) of paying at different time. In some case with high fixed costs, firm has to cover them by serving more customers (fixed hotel rooms and fixed daily operation fees)

3. Additional Pricing Considerations Price bundling: means linking several service offerings or features into one attractive price to give different customer segments a packaged service offering (combo put several together instead of individual sales)In fact, customer may pay the same total amount but in individual service, the amounts they expect to pay are different. Using Price bundling can attract more demand that can increase the revenue. Positioning price/quality relationship Portfolio mix segments differ in price sensitivity Demand/capacity demand management tool Membership affinity benefits (discount for member/fluent purchasers) Customization higher priced tailored versions Participation lower price for customer effort

Chap 9: Integral Marketing Communications for Services1. Services and Integrated Marketing Communication Integrated marketing communications refers to the pursuit of a single positioning concept for an organization or its products This is achieved by planning, coordinating and unifying all its communication devices2. The Promotional Mix for ServicesThe services promotional mix consists of: Advertising: make customers aware and to influence their purchase decisions; achieving customers attention, interest, desire, action (AIDA) Sales promotions: create excitement and generate sales for a service organization in the short run. E.g. contests, premiums, discount sales, coupons and free sample, provide a short-term solution for a service organization to stand out from the competition.Sale promotions are used to generate consumer awareness of a new service, enable customers to try out the service, accommodate cyclical demand (change promotions to suit all climate and trends), enhance customers perception of the service and to provide a lot more information than advertising provides (add tangibility, giving customers something to hold on to), in order to increase sales within a specific period.Sale promotions are particularly well suited to stimulating demand for services with excess capacity. Personal selling: an attractive tool to use for providing information and persuading customers to buy complex or expensive services Publicity and public relations: present a range of promotional activities to different types of media in order to increase consumer awareness, persuade consumers by focusing on specific business information and influence opinions and behaviours of decision market in target consumer markets Direct mail Internal personnel branding

3. Guidelines for advertising services Provide tangible cues: in the ads, use spokespeople, show the service equipment or facilities or vital statistics and factual information enhance the customers perception and understanding of what service quality is on offer. Capitalize on word-of-mouth communication: consider using what media to create highly WOM. As Youtube which has a space to comment or easy to share link to others; hand materials such as keyholder, sticker, bookmark to customer to encourage WOM Make the service understood: employ symbols, logos or slogans that convey key aspects of firms offering Establish advertising continuity: (in the customers mind) use of well-understood and effective themes, symbols and other visual cues, emblazon the organizations logo across all types of physical evidence, stress similar service attributes over time Advertise to employees: employees see the same ads that customers see to understand what the customer might know about the organization. Hence it makes sense to design advertising communication. Promise what is possible: think carefully of the potential pitfall of over-promising and under-delivering. Need to base on the figures of this service. Be appealing and creative, but realistic and credible

4. The vividness of services advertisingA vividness strategy is an advertising approach for service offerings that uses concrete language, tangible objects, and dramatisation techniques to tangibilise the intangible

Interactive imagery uses pictorial representations, verbal associations and letter accentuations that combine an organisation's name and its service to establish a strong link between service name and performance in customers minds

Pictorial representations: Picture + Words Verbal associations: Different words in picture to explain the meaning Burger king, Pho 24 Letter accentuations: Word of feelingsYes Optus

Chap 10: Using Information Technologies in Services MarketingThe use of technology in services can be traced through: Lags: Many services are very people-intensive, hard to standardize and difficult to technologise Lulls: Digesting new technology takes time and many changes are more qualitative than quantitative Leaps: Organizational transformations are possible and nurturing of intellectual resources begins Roles of technology 1. Empowering employees Technology devices: Mobile phones, wireless PCs, bar code readers, PDAs Networking linking people together for ease of communication Phone and computer-based audio/video conferencing, Virtual Office Self-service machines (vending machines, automated teller machines) Computerised service delivery systems (E.g..: FedEx) Intelligent agents Service robots

2. Enabling the Interactive ExperienceTelecommunications technology enabled three phases of communications interactivity between the marketer and the customer Phase 1: one-way flow (radio, TV) Phase 2: partial interactivity (free-call phone numbers in radio and TV ads) Phase 3: fully interactive (interactive editions of newspapers, adaptive face-tracking systems etc)IT helps to improve interactive communication (or interactive experiences)

3. Capturing Customer InformationAdvances in information technology have allowed organisations to: collect large quantities of information about customers create and deliver customer services from mass marketing to targeting individuals (Peppers & Rogers 1996)Chap 11: Delivering Service Quality and Guaranteeing Services1. Service Quality Service quality from the providers perspective: means the degree to which the services features conform (be suitable) to the organisations specifications and requirements Service quality from the customers perspective: means how well the service meets or exceed customers expectations For the same level of product performance, different customers will perceive different level of quality Quality satisfaction customer loyalty: Quality leads to loyalty and longer customer relationships to the service provider Quality prizes

3 links connect the customer and the provider Service-delivery link: the interactive nature of the service and is strengthened through satisfying service encounters Customer-satisfaction link: the connection between the customers level of satisfaction and degree of loyalty to the service provider Customer-provider link: the mutually rewarding relationship between the customer and the service provider, resulting in the customers commitment to that service provider. How customers evaluate Service QualitySERVQUAL is a scale designed to measure customer perceptions of service quality along 5 key dimensions: Tangibles: physical facilities, equipment and appearance of personnel Reliability: Ability to perform the promised service dependably and accurately Responsiveness: Willingness to help customers and to provide prompt service Assurance: Knowledge and courtesy of employees and their ability to convey trust and confidence Empathy of the service provider: Caring, individualized attention the firm provides its customers.

2. Service Guarantee A service guarantee is a promise to compensate customers if the service delivery fails to meet established standards A guarantee forces the company to focus on customers sets standards for employees and customers try to keep the first promise generates feedback: if any difference happens between promise and delivery builds loyalty and discourages switching behaviour, Hart (1988) Three main types of Service Guarantee Unconditional guarantees (no criteria for circumstances under which a customer can claim a refund. If the customer is dissatisfied their money will be refunded without question. This covers both the tangible and intangible parts of the service) Strongest guarantees (are close to the unconditional guarantee but with a specified payout, and might provide a scale of refund according to the severity and nature of the problem) Specific guarantees (apply to measurable outputs e.g. lose 5 kg before Christmas or your money back)

Chap 12: Service Recovery Program1. The need for Service RecoveryService recovery is the effort an organisation expends to win back customers goodwill once it has been lost due to service failure.

2. The high cost of lost customer Losing a customer is expensive up to five times higher than retaining a loyal one Increasing an organisations retention rate by even 5% can increase profits by up to 85% Loyal customers are more familiar with using the service and thus do not require costly assistance. They also generate positive WOM, whereas a customer who switches might dissuade others from patronizing the organization Customer complaints should not be taken lightly All attempts should be made to win back customersSo, lead customer to complain: customer will complain when they find it is easy. Staffs may ask for any complain by some kinks of survey.What will you do when receiving customer complaint? The STEP to SERVICE RECOVERYi. Apology: when an organization becomes aware of customer dissatisfaction, someone should apologise. This act can go a long way to framing the customers perception of their value to the organization and helps pave the path for subsequent steps to regain their goodwillii. Urgent reinstatement: Urgent means the action is taken quickly, reinstatement means making an effort to correct the problem. This action sends the message that customer satisfaction is important to the organization. iii. Empathy: The organization must convey to the angered customer that it understands the extent to which the organization failed to meet their needs. Empathy means making the effort to comprehend why the customer is disappointed with the organization, more than simply acknowledging failureiv. Symbolic atonement: to make amends in some tangible way for the organisations failure, perhaps by offering a gift to communicate to the customer that the organization take responsibility for their disappointment and is willing pay a price for its failurev. Follow-up: give organization a chance to evaluate the recovery plan itself and identify where improvement are necessary (redesign to prevent the mistake to happen again)

Chap 13: Monitoring and Researching Service Success and Failure1. REASONS why Researching Service Success and Failure is necessary. Determining success or failure is a key focus of service performance measurementInformation about success or failure can be used to: Reward excellent performance Set priorities among process improvement options Preempt customers switching behavior In cases of extreme dissatisfaction and satisfaction, the customer is often very vocal in letting the organization and its employees know their feelings2. METHODSa. Observation techniques: Allow the researcher to gain a first-hand thorough picture of service phenomena, depending upon the specific technique selected. Can be human or mechanical (e.g. computer in the front door to count) Can be collected through direct (real-time) or indirect (after the event) observation Can be obtrusive or unobtrusive (related to ethical issue) All these forms can be combined concealed direct human observation is often a preferred research methodb. Mystery shopping (secret customer do observation) An unobtrusive method of gathering data in which people pose as bona-fide shoppers to observe and collect information about an organisations service performance Mystery shoppers are unknown to the staff and their presence is unexpected They submit questionnaires after their service experience which identify any service problemsc. Employee reports (input from the view of employee basing on their own position) Useful when a service organization needs feedback from its frontline or backstage employees Can provide insight unavailable from customer surveys (direct contact with customer) The staffs have a unique view about the service performance, including the process and backstage support. Employee report is effective only when a firm has good empowerment systemd. Survey methods (good way of promotion and communication) Surveys record large numbers of respondents for statistical testing of data with low costs Surveys ask several customers to evaluate a service transaction or assess their customers total relationship with the organization. Survey questions must be carefully worded to produce quality datae. Focus group Comprise 8-12 customers Led by a trained moderator Probe specific aspects of a service in depth Focus groups often reveal unexpected information and useful ideas for new services or improvements Participants must be carefully chosen to ensure they reflect the companys customer or non-user profilesf. Experimental field testing Method of offering new services or modifications to consumers on a limited scale Feedback from the experiment is then used to test the efficacy of the service concept and modify it if necessary Tests can range from testing brand new services to manipulating atmosphericsg. The critical-incident report A research method based on the analysis of critical incidents in service experiences of customers and frontline employees It allows customers and employees to articulate their own feelings, thoughts and behavior They are not forced into choosing a predetermined response to a situation Subjects responses are reviewed to identify patterns and details to critical incidentsh. Moment-of-truth impact analysisInvolves a combination of 3 measurements: It measures the customers expectations of the service organization at the contact point It identifies what the customer has experienced in the past that detracted from their perception of service excellence at that contact point It assessed that the customer has experienced in the past at that contact point that enhanced their perceptions of service excellenceThis research method can detect specific trouble spots that require attention and ultimately enable an organization to fashion a better service experience for its customers.

Chap 14: Developing marketing strategies for services1. Overview of Marketing strategies Marketing strategy is the process of adjusting controllable marketing factors to cope with or exploit uncontrollable environmental forces A carefully focused, customer-oriented strategy allows organisations to retain existing customers and acquire new ones even in bad economic times

Todays business: Stay within existing customers, provide no new service or new market, apply the service for all years Unserved opportunities: indentifying new customers that the organization might serve (market-expansion strategy) Unarticulated opportunities: looking for new needs their existing customers might have (product-expansion strategy) Unarticulated and unserved opportunities: simultaneously pursuing new customers with new service products (diversification strategy)

2. Scanning the External Business Environmental Reactive strategy is a slow response to environmental changes Proactive strategy is a rapid response to environmental changes Offensive strategies rapid responses employed to capture opportunities Defensive strategies rapid responses to protect the organisation from environmental threats

3. Developing the Service-Marketing Strategy Planning the strategy Determination of the service's objectives and the manner in which they will be accomplished Designing the strategy Careful specification of what it is that the organisation hopes to accomplish Implementing the strategy Developing a detailed timetable and itemised budget Controlling the strategy Continuous assessment and modification of the success of strategies

4. Positioning and Service Segmentation Positioning how marketers attempt to create favorable customer perceptions of their product in relation to all other products. Market segmentation The division of a heterogeneous market into homogeneous segments Market segments become target markets Understanding market segments is critical to the success of marketing strategy

5. Marketing Mix Strategy To reach a target market, marketers must design all elements of the services marketing mix, i.e. personnel, facilities, equipment etc The services-marketing approach should reflect the market segments needs and market position chosen by the organisation The service organisation needs to establish a clear image in the consumers minds of their service benefits

6. Strategic Challenges for Service Six strategy-related challenges affect most service industries:1) Performance Service performances must be carefully planned with such techniques as blueprinting, scripting and dramatisation 2) Demand Services must develop very flexible systems to make their service supply meet the demand 3) Employees Recruiting, training, compensating and motivating employees are essential strategic factors for services 4) Setting The setting is often the only tangible representation of the service organisation's quality 5) Customers Because most service organisations have more direct contact (than manufacturers) with customers, they must be very sensitive to customer needs 6) Service quality Numerous techniques are available to measure and improve service quality

7. Strategies for Sustainable Competitive Advantage Surpass your competition the term sur/petition was coined by Edward de Bono (1992) to describe his concept of surpassing the normal kinds of competition by surpassing competitors. Dramatise your performance The most effective service organisations learn to stage their performances Build relationships Strong customer relationships can lead to customer loyalty Harness technology Modern communication and transportation technology allow service organisations to operate in multiple countries, but maintain close contact with employees and customers Jazz your delivery Like great jazz musicians, great service organisations are great improvisers

Chap 15: Coping with Fluctuating Demand for Services1. The Nature of Service DemandDemand CycleE.g. of reasons for fluctuationE.g. of services

Hours of the dayWork schedules, business hours, regulations, types of shifts and types of employment by consumer, physiological needs and existence of other complementary activitiesCar parksRestaurants

Days of the weekWork hours, lifestyle, personal and social needs, needs of family and friendsCinemaNightclubs

Weeks or days of the monthPay period, timing of bills, opening hours and rules by service providerBanksCommunity services

Months or seasons of the yearPredictable weather patterns, local and national business rules and regulation, lifestyle, personal needsGovernment regulation, available facilities, complementary servicesSchool and tertiary education terms, employment regulationBeach or ski resorts

Income-tax preparationFamily or special group holidays

Holidays or special eventsCultural norms, religious celebrations, school and tertiary education holidayGovernment business regulationsTelephone services, festival, mass-participants eventsRetailing service

2. Managing Demand Fluctuations for Greater Profits

3. Chasing Demand to balance Service Capacitya. Service Capacity: has 3 aspects The physical facility in which the service is bought, performed, rendered (hotels, aeroplanes) The personnel who create the service and skill level (hairdresser, teachers, serving staffs) The equipment that enables the service to occur (computers) Most service organizations are capacity-constrained services (most capacity are fixed)Their productive capacity limits how many customers they can serve and the quality of service (difficult to manage capacity to deal with the change in demand)To manage capacity: cross-train: change in labour configuration: change in physical (e.g. put more plastic chair in a bus to serve more customer The key is to have enough capacity for when demand is high, but not so that it goes to waste when demand is low. Need the balance between capacity and demand.b. Chasing Demand Chase demand a way of striking a balance between capacity and demand by stretching or shrinking the organisations production capacity to meet fluctuating demand Optimum capacity the number of customers an organisation can handle effectively under ideal conditions4. Principle of waiting

5. Smoothing demand Smoothing demand means shifting patronage to times when a service's productive capacity is underused and discouraging patronage when its capacity is oversubscribed (change the service, change in strategies or organization) Strategies to increase demand include dropping prices during normally slow times (e.g. reduced holiday prices during off-peak times)Strategies to increase demand include: Dropping prices during normally slow times (e.g. reduced holiday prices during off-peak times) Altering the nature of the product ~ offer different services ( e.g. a ski resort offering outdoor activities during summer) Place or distribution modifications (e.g. a vet who uses house calls to fill slow times) Promotion Strategies to decrease demand during periods that exceed capacity are similar The goal is often to shift some of the demand to slower periods Demarketing (strategies of decreasing the demand) include promotion, price, product, place or distribution enticing people to use slower periods to manage service quality and profit for the organization

Chap 16: Thinking globally, acting locally Global trade in service is a reality in most countries, with sharp increases in trade volume and foreign investment in services in recent years. Measuring the service sectors global influence is complicated by several factors, including their intangibility, the multiple transactions involved in the purchase of services in other countries, the effect of changing social roles and lifestyles, and the difficulty of clear data collection. 1. Service and Culture4 cultural dimensions associated with international marketing services operations: Cultural orientation towards the natural environment Cultural orientation towards process and results of service activities Cultural orientation towards past, present and future time Cultural orientation towards people and human relationships

2. Patterns of Services Export An outbound service-export strategy involves sending the service provider to other countries An inbound service-export strategy involves bringing foreign customers to the service providers country A teleservice-export strategy refers to exporting services by delivering them electronically

3. Standardization vs. Adaption Standardisation refers to the strategy of selling the same service in the same manner around the world Adaptation refers to the strategy of tailoring service offerings to accommodate conditions in the local market