Services and Other
Intangibles:
Marketing the Product
That Isn’t There
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
3
Marketing What Isn’t There
• Intangibles: services and
other experience-based
products that cannot be
touched
• Does marketing work for
intangibles? Yes!
4
What Are Services?
• Services are acts,
efforts, or
performances
exchanged from
producer to user
without ownership
rights.
5
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
6
Characteristics of Services (cont’d)
• Variability: can’t standardize the same
service performed by the same individual
• Inseparability: can’t separate production
from consumption
 Service encounter: the interaction between the
customer and the service provider
 Disintermediation: eliminating the interaction between
customers and salespeople
7
Classification of Services by
Inputs and Tangibility
Figure 10.1
8
The Services Continuum
•
Figure 10.2
9
The Services Continuum (cont’d)
• Goods-dominated
products
• Equipment- or facilitybased 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
INDOOR CLIMBING
WALL AT
UNIVERSITY OF HOUSTON
11
Group Activity
• Pick a sport and define the
core service its sporting
event provides at your
university/college.
12
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
13
Discussion
• Why are first impressions formed about a
service on the Internet so important?
• What can a service firm do to ensure a
favorable first impression online?
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Discussion
• Internet dating services,
while popular, may
present some dangers
for those who use them.
--Who do you think uses
Internet dating services?
--What, if anything, should
these services do to
protect their clients?
15
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)
JET BLUE AIRLINES
17
Discussion
• Sometimes service quality
may not meet customers’
expectations.
--What problems have you
experienced with quality in the
delivery of the following
services?
A restaurant meal
An airline flight
Automobile repairs
Your college education
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Measuring Service Quality
• SERVQUAL
• Gap analysis
• Critical incident
technique
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Discussion
• What “service” do providers such as
MySpace.com convey?
• What core and augmented services do
they offer?
• How should users evaluate the quality of
MySpace.com’s service?
MYSPACE.COM
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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.
21
The Future of Services
•
•
•
•
•
New dominant logic for marketing
Changing demographics
Globalization
Technological advances
Shift to flow of information
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Individual Activity/Discussion
• You are a customer for a
college education, a very
expensive service product.
--Develop a list of
recommendations for your
school for improving the
delivery of its service.
23
Marketing People
• Marketing people
Politicians
Celebrities
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Discussion
• There has been much recent
criticism about the way
politicians are marketed.
--What are some ways such
marketing has helped our
political process?
--What are some ways it might
have an adverse effect on our
government?
SENATOR HILLARY
RODHAM CLINTON
25
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 ideas
 Gaining market share for a concept, philosophy,
belief, or issue
LICKGLOBALWARMING.COM
MADD
27
Discussion
• Many not-for-profit and
religious organizations have
found they can become more
successful by marketing their
ideas.
--What are some ways these
organizations market
themselves that are similar
to, and different from,
marketing by for-profit
businesses?
28
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.
UNIVERSAL STUDIOS THEME PARK
29
Marketing Plan Exercise
• Select a familiar service such as a bank,
an airline, or even your university.
• Develop strategies for creating a
servicescape that will be a positive
influence on customers’ purchase
decisions, their evaluations of service
quality, and their ultimate satisfaction with
the service.
30
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?
31
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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