1. What is Service Marketing

Question 1

Extended Marketing Mix for Services

Answer 1

• Product: physical good features, quality
• Place: locations, channels, storage
• Promotion: advertising, incentives, salespeople
• Price: price level, flexibility, discounts
• People: FLEs, recruiting, training
• Physical evidence: tangible cues to assess quality
• Process: flow of activities, steps

Question 2

Characteristics of Services

Answer 2

• Intangibility
• Inseparability
• Variability
• Perishability
• Ownership

Question 3

Intangibility and Implications

Answer 3

• “can’t be dropped on foot”
• Emphasis on processes
• Can only assess after consumption
• Higher perceived risk -> stress tangible cues
• Emphasis on WOM

Question 4

Inseparability and Implications

Answer 4

• Production and consumption can’t be separated
• Consumers as co-producers of service
• Quality control more difficult
• Implications for accessibility of services

Question 5

Variability and Implications

Answer 5

• Each producer-consumer encounter unique
• Little opportunity for quality control to maintain consistency, difficult to present image of consistent quality
• Easy to adapt to specific individual needs

Question 6

Perishability and Implications

Answer 6

• Services can’t be stored
• If capacity not used, opportunity to sell is lost
• Supply and demand must be matched carefully, mismatch can impact consumer directly
• Implications for pricing and yield management

Question 7

Ownership and Implications

Answer 7

• Services can’t be owned
• Buyers buy process rather than outcome
• Impacts for design of channels of distribution
• Higher perceived risk
• Returns difficult