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Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 1
SERVICES MARKETING BUSE 3004
Solomon Habtay
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 2
Course Outline 2009Overview of Services Marketing
Why Study Services Marketing?
What are Services?
The Differences in Marketing Management between the Services and the manufacturing sector
The Expanded Marketing Mix Required for Services
The Objective of the Course
Questions
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 3
Why study services? Services Dominate the Economy
Services, 68% Agriculture, Forestry, Mining, Fishing, 2.3%
Manufacturing and Construction,
17.3%
Government, 12.4% (mostly Services)
INSIGHTS
Private sector service industries account for over two-thirds of GDP
Adding government services, total is almost four-fifths of GDP
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 4
Why study services? Service Industries
Advertising
Financial services
Insurance
Telecom
Airlines
Entertainment
Healthcare
Security services
Tourism
Hotels
Education
Diet and Weight Reducing Centers
Management Consulting Services
Environmental Consulting
Telemarketing
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 5
Why study services? Transformation of the Service Economy
Government
Policies
Business
Trends
Social
Changes
Advances in
IT
Globalization
The only way of long term survival is innovation!!!
But innovation is not easy!!!!
Success hinges on: Understanding customers and competitors (Part I 10 Feb) Creation of value for customers and firm (Part III) Viable business model innovation (Part IV)
Product life cycles are getting shorter Strategy life cycles are getting shorter More intense competition
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 6
Defining Services
Services
Are economic activities offered by one party to another Most commonly employ time-based performances to bring
about desired results in: ― recipients themselves― objects or other assets for which purchasers have
responsibility
In exchange for their money, time, and effort, service customers expect to obtain value from
Access to goods, labor, facilities, environments, professional skills, networks, and systems
But they do not normally take ownership of any of the physical elements involved
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 7
What Are Services?
The historical view Goes back over 200 years to Adam Smith and Jean-Baptiste
Say Different from goods because they are perishable (Smith 1776) Consumption cannot be separated from production, services
are intangible (Say 1803)
A fresh perspective: Services involve a form of rental, offering benefits without transfer of ownership Include rental of goods Marketing tasks for services differ from those involved in
selling goods and transferring ownership
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 8
Services Pose Distinctive Marketing Challenges
Marketing management tasks in the service sector differ from those in the manufacturing sector
The eight common differences are:1. Most service products cannot be inventoried
2. Intangible elements usually dominate value creation
3. Services are often difficult to visualize and understand
4. Customers may be involved in co-production
5. People may be part of the service experience
6. Operational inputs and outputs tend to vary more widely
7. The time factor often assumes great importance
8. Distribution may take place through nonphysical channels
What are the marketing challenges for services?
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 9
ProductProduct PlacePlace
The target marketThe target market
PricePrice PromotionPromotion
Walker, O.C., Mullins, J. W., Boyd, H. W., & Larreche, J.C. (2006). Marketing Strategy, 5 th Ed. New York. McGraw-Hill, pp. 153-169.
The 4Ps
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 10
The 8Ps of Services Marketing (Course outline)
Product Elements 16 Feb
Service innovation
Promotion and Education 17 Feb
Promoting the value proposition
Positioning services 23 Feb
Place and Time 24 Feb
Service value chain
Process 2 March
Designing and managing services process
Productivity and Quality 3 March
Servqual
Balancing demand and productivity 9 March
Managing relationship 10 Mar
Price and Other User Outlays 16 Mar
Physical Environment (Chapter 10)
People 23 March
Managing people for service advantage
Organizing for change management 24 March
Working in Unison: The 8Ps of Services Marketing
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 11
The Objective of the Course:To develop your analytical skills on how to:
Analyze market opportunities
Pursue services value innovation
Design and manage profitable business models
Implement effective strategies for managing profitable businesses
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 12
Individual Assignment: Research Paper Format and Marking Criteria
Structure Mark
Introduction Study background Problem statement
10%
Literature review (relevance) 10%
Empirical analysis (application) 20%
Findings/conclusions 10%
Recommendation 10%
Research methodology 20%
Academic content (originality, quality, citations, references)
20%
Total 100%
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 13
Performance Evaluation
Component Mark
Group of 4 = 7 case studies (Top 5) Submission on each tutorial day
25%
Individual assignment: Final submission date 31 March, 2009
15%
Final exam 60%
Total 100%
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 14
Text Book
SERVICES MARKETING
PEOPLE, TECHNOLOGY, STRATEGY, 6ed (2007)
CHRISTOPHER LOVELOCK AND JOCHEN WIRTZ
It's important you buy this book because:
It is the best book in services marketing theories and applications
Includes relevant readings materials Contains all case studies for your group assignments & tutorial
discussions Provides the topic and theoretical framework for your individual
research paper Exam questions will come from the book and reading materials 66 books available at the West Campus book store
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 15
WebCIT/Blackboard
Reading material and notes are available at:
http://ignite.wits.ac.za
Log in to the Black Board Learning System
Using your student No. BUSE3004 Services Marketing Go to: Student View
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 16
BUSE3004 Time Table
Mon 08:00 – 08:45
LB 144
09:00 – 09:45
LB 144
Tues 10:15- 11:00
LB 145
11:15-12:00
LB 145
Wed 12:30 – 13:15 Tut
CB128
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 17
CONSULTATION TIMES
Monday 14:00 – 15:00pm
Tuesday 14:00 - 15:00pm
Other times by appointment
NCB, Office No. 208Office Tel: 011-7178085
Email: [email protected]
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 18
Questions