Chapter 13
Developing
Marketing
Strategies for
Services
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Objectives
1. To provide an overview of marketing strategy in
service organizations
2. To describe the process of scanning the service
environment and examine how the external
environment affects the service sector
3. To explain the process of planning a service’s
marketing strategy
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Objectives (cont’d)
4. To examine the tasks of positioning and
segmentation for the service organization
5. To present the unique strategy challenges facing
service organizations
6. To convey the importance of service strategies
for competitive advantage
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Outline
I.
II.
Introduction
Overview of Marketing Strategy in Service
Organizations
III. Scanning the Environment
IV. Planning the Services Marketing Strategy
V. Positioning and Service Segmentation
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Outline (cont’d)
VI. Marketing Mix Strategy
VII. Strategic Challenges for Services
VIII. Service Strategies for Competitive Advantage
IX. Summary and Conclusion
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Overview of Marketing
Strategy in Service Organizations
• Marketing strategy is the process of adjusting
controllable marketing factors to cope with or
exploit uncontrollable environmental forces.
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Overview of Marketing
Strategy in Service Organizations
(cont’d)
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Scanning the Environment
• Environmental scanning is the process of
carefully monitoring external environments for
changes that pose threats or opportunities to
the service organization.
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Scanning the Environment
(cont’d)
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Scanning the Environment
(cont’d)
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Scanning the Environment
(cont’d)
• Reactive strategy is a slow response to environmental
changes.
• Proactive strategy is a rapid response to
environmental changes.
• Hyperactive strategy is a hasty response to
environmental changes.
• Defensive strategies are rapid responses used to
protect the organization from environmental threats.
• Offensive strategies are rapid responses employed to
capture opportunities.
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Scanning the Environment
(cont’d)
• Economic and competitive environment
– Rapid growth of the service economy is a major
source of progress in most countries
• Ethical and legal environment
– Ethics concern personal and professional codes
of values
– Laws vary greatly across service industries and
countries
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Scanning the Environment
(cont’d)
• Social, cultural, and demographic environment
– Service industries have often been slow to respond
to changing customer tastes and preferences
• Technology environment
– Technology is arguably the strongest force shaping
the external environment of services
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Planning the Services
Marketing Strategy
• Planning the strategy – Determination of the
service's objectives and manner in which they
will be accomplished
• Designing the strategy – Careful specification
of what it is that the organization hopes to
accomplish
• Implementing the strategy – Developing a
detailed timetable and itemized budget
• Controlling the strategy - Continuous
assessment and modification of the success
of strategies
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Positioning and
Service Segmentation
• Positioning is how marketers attempt to create
favorable customer perceptions of their product
in relation to all other products.
• Market segmentation is the division of a
heterogeneous market into homogeneous
segments.
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Marketing Mix Strategy
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Strategic Challenges for
Services
1. Leadership – The strongest service
organizations are those where the top
management has established a core set of
service values and carefully cultivated and
protected those values through conversations
with employees and customers.
2. Employees – Recruiting, training,
compensating, and motivating employees are
essential strategic factors for services
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Strategic Challenges
for Services (cont’d)
3. Customers – Because most service
organizations have more direct contact (than
manufacturers) with customers, they must be
very sensitive to customer needs
4. Performance – Service performances must be
carefully planned with such techniques as
blueprinting, scripting, and dramatization
5. Demand – Services must develop very flexible
systems to make their service supply meet the
demand
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Strategic Challenges
for Services (cont’d)
6. Setting – The setting is often the only tangible
representation of the service organization's
quality
7. Service Quality – Numerous techniques are
available to measure and improve service
quality
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Strategic Challenges
for Services (cont’d)
• The upside-down organization inverts the
typical organizational chart by putting frontline
personnel at the top, middle management in
the middle, and the CEO at the bottom.
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Service Strategies for
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.
• Dramatize Your Performance – The most
effective service organizations learn to stage
their performances.
• Build Relationships – Strong customer
relationships can lead to customer loyalty.
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Service Strategies for
Competitive Advantage (cont’d)
• Harness Technology – Modern communication
and transportation technologies allow service
organizations to operate in multiple countries
but maintain close contact with employees and
customers.
• Jazz Your Delivery – Like great jazz musicians,
great service organizations are great
improvisers.
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Web Sites
• Forbes
(http://www.forbes.com), p 191
• IBM
(http://www.ibm.com), p. 192
• Starbucks
(http://www.starbucks.com), p. 193
• iTunes
(http://www.apple.com/itunes/), p. 194
• McDonald’s
(http://www.mcdonalds.com), p. 194
• A&P Grocery Store
(http://www.aptea.com), p. 195
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Web Sites (cont’d)
• Sears
(http://www.sears.com), p. 196
• Wal-Mart
(http://www.walmart.com), p. 196
• Microsoft
(http://www.microsoft.com), p. 197
• FedEx
(http://www.fedex.com), p. 197
• CNN
(http://www.cnn.com), p. 197
• Hard Rock Cafe
(http://www.hardrock.com), p. 197
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Web Sites (cont’d)
• Furniture.com
(http://www.furniture.com), p. 197
• IBM’s CityOne Video
(http://www.youtube.com/watch?v=Tmf0ugQrDF), p. 200
• Disney World
(http://www.disney.com), p. 202
• Seaworld
(http://www.seaworld.com), p. 202
• Ritz-Carlton Hotels
(http://www.ritzcarlton.com), p. 206
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Web Sites (cont’d)
• Facebook
(http://www.facebook.com), p. 206
• Wikipedia
(http://www.wikipedia.org), p. 206
• Amazon.com
(http://www.amazon.com), p. 206
• Planet Hollywood
(http://www.planethollywood.com), p. 207
• IKEA
(http://www.ikea.com), p. 207
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Web Sites (cont’d)
• Frugal Fannie’s
(http://www.frugalfannies.com), p. 207
• Southwest Airlines
(http://www.southwest.com), p. 208
• Harley-Davidson
(http://www.harley-davidson.com), p. 209
• Nordstrom
(http://www.nordstrom.com), p. 210
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