Services and Other Intangibles:
Marketing the Product That Isn’t There
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Chapter Objectives
• Describe the four characteristics of services• Understand how services can be classified along a
service continuum• Explain core and augmented services, marketing of
services on the Internet, and the elements of the service encounter
• Appreciate the importance of the three attributes of service quality to marketers: search qualities, experience qualities, and credence qualities
• Discuss the concepts of SERVQUAL and gap analysis• Explain the marketing of people, places, and ideas
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Real People, Real Choices
• Universal’s Theme Parks in Orlando (Robyn Eichenholz)
• How to plan for anticipated record-breaking attendance at Donna Summer in concert Option 1: don’t make any special plans for the event Option 2: create a plan to accommodate extremely large crowds Option 3: publicize the big expected turnout to let guests know
the event might be exceptionally crowded
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Marketing What Isn’t There
• Intangibles: services and other experience-based products that cannot be touched
• Does marketing work for intangibles? Yes!
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What Are Services?
• Services are acts, efforts, or performances exchanged from producer to user without ownership rights.
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Characteristics of Services
• Intangibility: can’t see, touch, or smell good service
• Perishability: can’t store a service for later sale or consumption Capacity management: firms adjust their services to
match supply with demand
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Characteristics of Services (cont’d)
• Variability: can’t standardize the same service performed by the same individual
• Inseparability: can’t separate production from consumptionService encounter: the interaction between the
customer and the service providerDisintermediation: eliminating the interaction between
customers and salespeople
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Classifying Services
• We can classify bywhether the service is performed directly on the
customer or on something the customer owns whether the service consists of tangible or intangible
actions
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The Services Continuum
• Most products are a combination of goods and services
• Products vary in their level of tangibility.Tangible: salt, necktie, dog food Intangible: teaching, nursing, theaterBalanced products: fast food, television
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The Services Continuum (cont’d)
• Goods-dominated products
• Equipment- or facility-based services
• People-based services
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Core and Augmented Services
• Core service: the benefit a customer gets from the service
• Augmented service: core service plus additional services that enhance value
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Services on the Internet
• Anything that can be delivered can be sold on the Web --Banking and brokerage services --Software --Music --Travel services --Dating services --Career-related services --Medical care
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The Service Encounter
• Social elements: employees and customers
• Physical elements: servicescapes and other intangibles
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Providing Quality Service: Service Quality Attributes
• Search qualities: examine before purchase
• Experience qualities: determine during or after consumption
• Credence qualities: evaluate after experiencing them (difficult to do)
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Measuring Service Quality
• SERVQUAL
• Gap analysis
• Critical incident technique
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Strategies for Developing and Managing Services
• Act fast to resolve a service failure.
• Identify potential failures and make recovery plans ahead of time.
• Train employees to listen for complaints and empower them to take action.
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The Future of Services
• New dominant logic for marketing
• Changing demographics
• Globalization
• Technological advances
• Shift to flow of information
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Marketing People
• Marketing peoplePoliticians Celebrities
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Marketing Places
• Marketing places Attempting to position a city, state, country, or other
locale so consumers choose the brand over competing destinations
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Marketing Ideas
• Marketing ideasGaining market share for a concept, philosophy,
belief, or issue
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Real People, Real Choices
• Universal’s Theme Parks in Orlando (Robyn Eichenholz)
• Robyn selected a combination of options 2 and 3 to alleviate crowding concerns and enhance the guest experience. In addition to enjoying themselves in the concert area,
guests partied in the streets and had a great evening.
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Marketing in Action Case:You Make the Call
• What is the decision facing XM Satellite Radio?
• What factors are important in understanding this decision situation?
• What are the alternatives?• What decision(s) do you recommend?• What are some ways to implement your
recommendation?
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Keeping It Real: Fast-Forward to Next Class Decision Time at Taco Bell
• Meet Danielle Blugrind, Director of Consumer and Brand Insights for Taco Bell.
• Competitors claimed they provided better fast-food value.
• The decision: How to update the Taco Bell value menu pricing.
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