part three: the marketing mix
CHAPTER 7
SERVICE PRODUCTS
an opening challenge
You are the marketing manager for a company that makes
office furniture. Despite being one of the best recognised
brands in your home, business-to-business market, you
have recently lost a couple of big orders to a foreign rival
whose prices are much lower. To make matters worse, their
furniture is just as well designed and as good quality as
yours. Their brand name is as well recognised too. The
production manager has shown that there is no way your
company can match their low prices. You need a way to
make customers value your products more highly.
What are the possibilities?
agenda
•
•
•
•
•
•
the services sector
the nature of services
the 7Ps
service quality
branding services
service recovery
definitions
‘A service is an activity which benefits recipients
even though they own nothing extra as a result.’
(Masterson and Pickton, 2010: 241)
‘[A service is] The production of an essentially
intangible benefit, either in its own right or as a
significant element of a tangible product,
which through some form of exchange,
satisfies an identified need.’ (Palmer, 2005: 2–3)
some service product examples
• personal
– hairdressing
– nail bars
• medical
– dentistry
– physiotherapy
• business
– consultancy
– maintenance
• financial
– banking
– insurance
• electronic
– shopping
– gaming
– social networking
• leisure
– leisure centres
– sports facilities
• hospitality
– hotels
– restaurants
• cleaning
• car servicing
service sector growth
• more employment in knowledge-based industries
• consumers have more leisure time and so demand more
leisure services
• popularity of outsourcing services
• redundant workers setting up their own small
businesses, often consultancy, training and coaching
• complex modern products requiring support services
• the service element is often the key way to differentiate
goods
the intangibility of services
AQ – re-set figure type
total service product model
AQ – re-set figure type
services
• are intangible
• have benefits
• are time and place dependent
– cannot be stored or transported
• are often inconsistent
– especially personal services, e.g. hairdressing
• cannot be owned
• the service provider is part of the service
• the consumer is part of the service
service convenience
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•
•
•
•
decision convenience
access convenience
transaction convenience
benefit convenience
post-benefit convenience
(Berry et al., 2002)
services marketing mix
the 7Ps
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•
•
•
•
•
•
product
promotion
place
price
people
process
physical evidence
people
• the face of a service business
– skills are often what you are selling
• a key determinant of success
– skills, attitudes, efficiency
• relationship marketing
• in overseas markets, use expatriates
or locals?
physical evidence
• most services have a tangible
element
– peripheral products
• house style and livery
• facilities
• ambience
process
• how service is provided
– e.g. self-service or table service
• customer journey
– e.g. through webpages
• bookings and order processing
• customer enquiries
• integration
– problems of outsourcing
• quality control standards
servicescapes
‘The environment in which the service is
assembled and in which the seller and
customer interact, combined with tangible
commodities that facilitate performance or
communication of the service.’ (Bitner and
Booms, 1981: 56)
luxury servicescape:
the Orient Express
(photo courtesy of Dave Pickton)
online servicescapes
• the website
• the situation in which they are used
– home or office or internet cafe?
– hardware
– operating system
(http://online.sagepub.com/)
service quality
• know that service intangibility increases
perceived risk
– cannot usually return a service
• reassure customers in advance of service
delivery
• build trust
SERVQUAL
• quality of tangibles
– physical evidence
• service reliability
– how dependable is the service?
• service provider responsiveness
– speed of response and helpfulness
• customer assurance
– confidence in the service offering
• staff empathy
– good customer understanding
(Parasuraman et al., 1988)
branding services
• emphasise the tangible
• add value
• harder to be consistent
– largely dependent on people
• can’t be sure of quality in advance
service recovery
• things go wrong more frequently with services
• bad service encounters can lead to
–
–
–
–
customer complaints
expensive corrections
loss of business
bad word of mouth
• a complaint is an opportunity to provide great
service
• recover well, and customers are even happier
summary
• there are 7Ps in services marketing
• customers perceive services as risky
– inconsistent
– unpredictable
– and therefore harder to brand
• some services are more product-reliant
– e.g. restaurants, retail
• some services are more skill-reliant
– e.g. photography, car cleaning
• good service recovery is essential
references
• Berry, L.L., Seiders, K. and Grewal, D. (2002) ‘Understanding service
convenience’, Journal of Marketing, 66 (3): 1–17.
• Booms, B.H. and Bitner, M.J. (1981) ‘Marketing strategies and
organization structures for service firms’, in J.H. Donnelly and W.R.
George (eds) Marketing of Services. Chicago: American Marketing
Association, pp. 51–67.
• Masterson, R. and Pickton, D. (2010) Marketing: An Introduction, 2nd
edn. London: SAGE.
• Palmer, A. (2005) Principles of Services Marketing, 4th edn.
Maidenhead: McGraw-Hill.
• Parasuraman, A., Zeitham, V.A. and Berry, L.B. (1988) ‘SERVQUAL: a
multiple-item scale for measuring consumer perceptions of service
quality’, Journal of Retailing, 64 (1): 12–40.