Service Marketing L10 Flashcards
(29 cards)
What is a service?
- Diversity of services makes them difficult to define
- Lovelock and Wright (1999) “ a service is an act or performance offered by one party to another”
How are services the rental of goods?
- Payment made for using or accessing something - usually for a defined period of time instead of buying it outright
- Allows participation in network systems that individuals and organisations could not afford
What do firms need to distinguish between?
- Marketing of services - when the service is the core product
- Marketing through service -when the good service increases the value of the core physical good
What is a supplementary service (where the product may be a physical one)?
- May include pre-sales and after sales advice
- Training
- Installation
- Maintenance
- Removal
- Warranty
What is customer service?
A series of actions to enhance customer satisfaction and experience especially when purchasing goods. Usually free. Isn’t the actual experience being marketed.
What are the five broad categories within non ownership framework?
- Rented goods and services
- Defined space and place rentals
- Labour and expertise rentals
- Access to shared physical environments
- Access to and usage of systems and networks
How are services classified?
- People processing
- Possession processing
- Mental stimulus processing
- Information processing
What are people processing services?
Customers must:
- Physically enter the service factory
- Cooperate actively with the service operation
Managers should think about the process and output from the customer’s perspective
- To identify created and non financial costs: time, mental and physical effort
What are possession processing services?
- Customer involvement is limited
- Less physical involvement
- Production and consumption are separable
- When someone does something to your product
- Trust is very important; product needs to be looked after
- Need to use physical evidence to reduce customer anxiety
What are mental stimulus processing services?
Ethical standards required:
- Customers might be manipulated
- Ethics very important
Physical presence of recipients not required.
Core content of services is information based e.g education
What are information processing services?
- Most intangible form of service
- May be transformed
- Line between information processing and mental stimulus processing may be unclear
Why study services?
- Account for more than 60% GDP worldwide
- All economies have a substantial service sector
- New employment provided by services
- Strongest growth area for marketing
- Taxation system not as strong in developing countries so service sector doesn’t look as big as it is
Which countries have the largest service sector and which have the smallest?
97% Jersey’s GDP is from services. 95% Cayman Islands. 92% Hong Kong.
45% Chile. 41% Indonesia. Saudi Arabia 35%.
What are examples of services?
- Hospitality
- Travel, tourism
- Medical care, counselling
- Diet and weight reducing centers
- Consulting services
- Accounting and finance
- Cleaning
- Repair
- Education
Why is it significant that most new jobs are generated by services?
- Fastest growth expected in knowledge based industries
- Significant training and educational qualifications required
- Will be lost to lower cost countries
What are the powerful forces transforming service markets?
- Demand
- Supply
- The competitive landscape
- Customer’s choice, power and decision making
What is causing the transformation of the service economy?
- Social changes: affluence, expectations, desire for experiences, immigration
- Government policies: privatisation, regulation changes
- Business trends: push to increase shareholder value, growth of franchising, productivity
- Advances in IT: internet, mobile equipment, wireless networking
- Globalisation: MNCs, travel, offshoring
What are the consequences of the drivers of transformation?
- New markets and product categories
- Increase in demand for services
- More intense competition
and subsequently….
Innovation in service product and delivery systems, more choice for customers
What doe success hinge on in the service industry?
- Understanding customers and competitors
- Viable business models
- Creation of value for customers and firm
What is the extended product mix in services?
- Product
- price
- Place
- Promotion
- People
- Processes
- Physical evidence
What are the characteristics of services?
- Lack of ownership
- Intangibility: use reputation, word of mouth, evidence to reduce anxiety
- Simultaneous production and consumption
- Heterogeneity - difficult to be consistent
- Perishability - cannot store a service
What challenges to services pose?
- Marketing management tasks in the service sector differ from those in the manufacturing sector
What are the eight differences outlines by Lovelock and Wirtz?
Most service products cannot be inventories - customers may have to wait
Intangible elements dominate value creation = risk
Customers involved in co production - poor task execution may spoil service
People may be a part of the service experience - shapes it
Operational inputs and output tend to vary more widely - hard to maintain consistency
Time - scarce resource
Distribution mat take place through non physical channels
What is satisfaction according to Oliver (1981)?
A summary psychological state resulting from the surrounding expectations which are coupled with the consumer’s prior feelings about the consumption experience
