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
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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 consumption
 Service encounter: the interaction between the
customer and the service provider
 Disintermediation: eliminating the interaction between
customers and salespeople
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Classifying Services
• We can classify by
 whether the service is performed directly on the
customer or on something the customer owns
 whether the service consists of tangible or intangible
actions
8
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, theater
 Balanced products: fast food, television
9
The Services Continuum (cont’d)
• Goods-dominated products
• Equipment- or facility-based services
• People-based services
10
Core and Augmented Services
• Core service: the benefit a customer gets
from the service
• Augmented service: core service plus
additional services that enhance value
11
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
13
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)
14
Measuring Service Quality
• SERVQUAL
• Gap analysis
• Critical incident technique
15
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.
16
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 people
 Politicians
 Celebrities
18
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
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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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