Recl 3p40 Lecture 4
Services Marketing- pgs. 6-9 in textbook
The Nature of Services:
-tourism, a lot of it is services
Services: identifiable, intangible activities that are the main object of a transaction
designed to provide want-satisfaction to customers.
-Regardless of the “product” there is a services aspect to the offerings of all firms
ie. Buy a computer and there is a helpline to offer services
A Service: can be the principal purpose of the transaction this is referred to as the core
service. Example- a day at the spa, accommodation, transportation
-Can be performed in support of the sale of a tangible product-these are referred to as
supplementary services. Ex-helpline for software, buy sporting equipment, help with
fitting
73% of Canada’s GDP is of services
Marketing in Service Organisations
-marketing historically focused on tangible products
-many service organisations are in the not-for profit sector and have not been particularly
marketing-oriented or customer-focused.
-Service industries have become much more competitive in recent years, technology has
made it difficult to compete on tangible products.
Ie. Not a lot of differences between products, so end up competing with supplementary
services
-Service is now seen to offer competitive advantage
Services versus Customer Service:
-Services (as defined previously) are deeds, processes and performances
-Customer Service is the service provided in support of a company’s core
products/services:
-Answering questions, taking orders, handling complaints, scheduling maintenance or
repairs.
Characteristics of Services
-Inherent differences between goods and services exist
-Result in unique, or at least different, management challenges for service providers
Intangibility: because services are performances or actions rather than objects, they
cannot be seen, felt, tasted or touched in the same manner that we can sense tangible
goods.
Marketing implications: cannot be inventoried.
Classic example: hotel- a room not filled one night, cannot bank that room for later, that
space is gone forever
-cannot be easily displayed, so quality cannot be easily assessed.
-Actual costs of a “unit of service” are hard to determine.
The tangibility Spectrum:
-The broad definition of services implies that intangibility is a key determinant of
whether an offering is or is not a service
-But, very few services are purely intangible and very few products are totally tangible.
-Instead, services tend to be more intangible than products
-And, products tend to be more tangible than services.
The Goods-Services Continuum
Mostly Goods _____________________________________Mostly Services
Canned foods, ready-made clothes, auto-mobiles, carpets, restaurant meals(Middleservice for food making, and the service but also the food itself), repairs-auto, house,
landscaping, air travel(mostly a service getting you from point A to B, but tangible
aspects such as food served, television, etc.), insurance, consulting, teaching.
Hetergeneity
-because services are performances, frequently produced by humans, no two services will
be precisely alike.
-cannot standardize a service
-Employees may differ in their performance (day to day or even hour to hour).
-Also, no two customers are precisely alike-each will have unique demands or experience
the service in a unique way.
-service also depends on the way a customer is able to articulate their needs and wants,
because its hard to help them if they are not willing to express their needs
-Marketing implications: ensuring consistent quality is challenging
-very difficult to standardise quality
Perishability
-services cannot be saved, stored, resold or returned.
-marketing implications: inability to inventory services, we can’t save them up
-Demand forecasting and creative planning for capacity utilisation are important (and
challenging).-so think how many people are going to want the service on Monday, in the
future, don’t want over or under estimate
-Need strong recovery strategies when things do go wrong (because service cannot
typically be returned).
Insepability
-Simultaneous production and consumption
-goods are produced, then sold, then consumed.
-Services are sold, then produced and consumed simultaneously.
-Customer may be present during production (and may take part in production) and may
interact with other customers (and affect each others experiences)
-gets very complicated and difficult to deal with
-Marketing Implications: problem customers- such as someone listening to headphones in
a lecture
-mass production is difficult (if not impossible)
-customer may affect outcome (+ or -)
Ex- overdemanding , intoxicated patron- disrupts other customers and affects experience.
Customers enhance experience, ie at sporting events
Fluctuating Demand
-demand for some services fluctuates by season, or by time of day
-True also for products but services have additional factor of perishability
-If demand increases you need to have more service providers, therefore more employees
at certain times of day.
Expanded Mix for Services
-Four are the same as product marketing:
-Product/service
-Price
-Place
-Promotion
Three Additions (unique to services)
-People
-Physical evidence
-Process
The 7 P’s of Service Marketing
1. People-All human actors who play a part in service delivery and thus influence the
buyer’s perceptions: