Services and Other Intangibles:

Marketing the Product That Isn’t There

2

Chapter Objectives

• 4 characteristics of services• service continuum• core and augmented services, • marketing of services

on the Internet,

• service encounter

3

Chapter Objectives

• service quality to marketers: search qualities, experience qualities, credence qualities

• SERVQUAL

• Gap Analysis

• marketing of people, places, and ideas

4

Marketing What Isn’t There

• Intangibles: services and other experience-

based products that cannot be touched

• Does marketing work for intangibles? Yes!

5

What Are Services?

• Services are:

• acts, efforts, or performances

• exchanged from producer to user • without ownership rights.

6

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

7

Characteristics of Services (cont’d)

•Variability: can’t standardize the same service performed by the same individual

8

Characteristics of Services (cont’d)

• 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 How???

9

Services by: Inputs & Tangibility

Figure 10.1

10

The Services Continuum•

Figure 10.2

11

The Services Continuum (cont’d)

• Goods-dominated products

• Equipment- or facility-based services

• People-based services

12

Core and Augmented Services

• Core service: the benefit a customer gets from the service

• Augmented service: core service + added services that enhance

value

INDOOR CLIMBING WALL AT

UNIVERSITY OF HOUSTON

13

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

14

The Service Encounter

• Social elements: employees and customers

• Physical elements: Service-scapesother intangibles

15

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

16

Measuring Service Quality

• SERVQUAL

• Gap analysis

• Critical incident technique

17

Strategies for Developing and Managing Services

• Act fast to resolve a service failure.

• Identify potential failures

• make recovery plans ahead of time.

18

Strategies for Developing and Managing Services

• Train employees to listen for complaints

• empower them to take action.

19

The Future of Services

• New dominant logic for marketing

• Changing demographics

• Globalization

• Technological advances

• Shift to flow of information

20

Marketing People

• Marketing peoplePoliticians

Celebrities

21

Marketing Places

• Marketing placesAttempting to position a city, state, country, or

other locale so consumers choose the brand over

competing destinations

22

Marketing Ideas

• Marketing ideasGaining market share for a concept, philosophy, belief, or

issue

LICKGLOBALWARMING.COM MADD

23

Then end

24

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

25

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

26

Group Activity

• Pick a sport and define the core service its sporting event provides at your university/college.

27

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?

28

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?

29

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 mealAn airline flightAutomobile repairsYour college education

30

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

31

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.

32

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

33

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?

34

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.

35

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?

36

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.