What do instagram and lambo have in common?
Both companies are worth about a billion dollars. But Instagram is primarily a service, and Lambo is a product
Are services growing?
What are 4 reasons services matter?
1. Services are growing
2. Lead to customer retention and loyalty
3. Service leads to profits
4. Services help manufacturing companies differentiate themselves
How does service lead to cust retention?
Cust satisfaction and loyalty driven by service excellence
Why does service lead to very high profits?
Can provide high profit margins and growth potential than products
For automobile dealers, how does services lead to profits?
After-sale services and parts account for nearly 80% of all revenue opportunities
How is tangibility a spectrum?
Salt for exampe is very tangible,
Fast-food is in the middle
Teaching is intangible
What is a SERVICE?
Includes every interaction between any customer and anyone representing the ecompany including:
-billing and accounting personnel
-receptionists and schedulers
-management and executives
What can all these mean?
product such as MBA
service value add for goods
Service embedded in a tangible product
What makes a service intangible?
They are performed, not produced!
It means it cannot be touched or physically examined
What are the marketing implications of intangibility? (3 things)
Using tangible symbols to communicate benefits of service
apply branding straategies to differentiate
offer samples to allow them to experience beforehand
What is SIMULTANEITY?
What is an implication
Production and consumption of services are often simultaneous. Such as getting haircut
sometimes called inseparability
The implication is that services cannot be seperated from the person that performs them
What is the marketing implication of simultaneity?
aBecause they cannot be separated from the preson that performs them, service provider=service
Atmospherics such as where the service is performed plays an important role
Quality of entire service performed is
What is heterogeneity?
This is when services are slightly different each time they are performed
sometimes called inconsistency
cannot be standardized to the extent that goods can be
What are the marketing implications of heterogeneity?
The quality of service depends upon:
provider, client, and situation
Traning, standards are important
empahise personalized nature of service
What is perishability?
Means services cannot be stored? No shelf life, cannot be returned or resold
Sometimes called inventory restrictions
What is the marketing implications of perishability?
Use price and promotion to match supply and demand
- hire part time employees
- self-service strategies
such as barista cant presell, but instead must sell one at a time
What three things are services evaluated on?
1. search qualities
2. Experience qualities
3. Credence qualities
For service evaluation, what are the search qualities?
These can be assessed before purchase and are easy to evaluaate, but they are often not present of low presense
For service evaluation, what are the experience qualities?
These can be assessed only after purchase, but are more difficult to evaluate.
Service tend to be high in experience qualities, such as you will absolutely know after your haircut if you will like it or not
For service evaluation, what are the credence qualities?
These cannot be evaluated, even after purchase and consumption.
An example is surgery, you don't really know, or is very difficult to evaluate.
For the 3 service evaluation metrics, which are high in service and which are low?
Usually services are high in experience and credence qualities, but not search qualities
What are 9 challenges for services marketing?
1. Defining and improving quality
2. Designing and testing a new sercie
3. Communicating a consistent image for yourself
4. accomodating fluctauting demand
5. Motivating and sustaining employee committment
6. Coordinating marketing, operations, and HR
7. Setting prices
8. Finding a balance between standardization versus personalization
9. Ensuring the delivery of consistent quality
What are the 7 P's?
6. Physical evidence
Describe people of the 7Ps
It is all human actors who oplay part in service delivery, and influence buyers perception. Also customers, and other people in environment
Describe the physical evidence part of 7Ps?
IT is the environment in hwich the service is delivered and where the firm and customer interact, and any tangible coponents that facilitate performance and quality
Describe last part of 7Ps
Look it up
Is there opportunity about services industry?
Yup, many have a hard time doing it. And it has a negative vibe in the US, but there is a big opportunity for any comany that can successfully pull it off
deeds, processes, and performances provide by one entity or person for another entity or person
What is SERVICE AS A PRODUCT?
wide range of intangible product offerings such as Cossette selling campaigns and petsmart selling shampoo services
Is Customer service free?
usually, and it should not be confused with services provided for sale by the company
What is Derived service?
This is a big different way to look at services, and says that everything is service. So even tangible razor provides shaving service
In 2009, how much of employement and GDP was service based in the US?
Why are traditional product based companies now focusing on services? 3 things
1. Price and margin pressure on goods (like amazon to retail)
2. Customer demand for services
3. Services have higher profit margins than products
4. Can be differentiator in highly competitive markets
Specific demand for service marketing concepts has come from where?
Deregulated industries and professional services
Is services profitable?
YES! the Service-profit chain is large and in charge with customer satisfaction creating huge profits
What are some explanations as to why there is a decline in customer satsifaction with services?
- Many customers getting less esrvice cause of tiered service based on profitbaility
- Self service is decreasing human interaction
- Many tech based services are poorly designed and hard to use
- Customer service expectations are super high now
- Organizations becoming to lean to offer good service
- Talented workers don't stay as frontline service people for long
- Many companies tell employees about good customer esrvice, but don't properly train them
Is the internet a service?
What are 4 characteristics of goods?
- Production seperate from consumption
What are the 4 characteristics of services?
3. Simultaneous production and consumption
What are some marketing implications of services being intangible?
Cannot be inventoried, so unused rooms in the winter will just sit there
Cannot be easily patented, can be copied
Cannot be easily communicated to customers
CCost of a "unit of service" is hard to determine
What are the marketing implications of heterogeneity?
Well, depending on current demand, factors in environment, how fresh service providor etc, the service quality will always fluctaute, and it's hard to deliver in consistent manner
What is a marketing implicaton for simulatenaous production and consumption?
Well customer sees all processes, which could be negative or positive. Such as seeing the subway girl wipe her snot with her gloves than make your sandwich
What is a marketing implicatoin with perishability?
Since they really cant forecast utilization and demand perfectly, they have to be away of services performed at what time. Also if something goes bad like a bad haircut, it can't be returned so the haircutter is going to need to know how to restore goodwill
For the extended marketing mix, what is the people?
These are all human actors involved. So employees, you, and other customers
For the extended marketing mix, what is the Physical evidence?
This is the environment in which service is delivered. So like Lydias needles and chair and whatnot and her studio itself
For the extended marketing mix, what is the process?
The service delivery and operating systems. So McDonalds is a good example of one that is very defined