Introduction

Question 1

Define services

Answer 1

Services are marketable goods that are linked to the use of competencies (potential orientation). Within the production process, internal and external factors are combined (process orientation), which results in benefits for the customer (outcome orientation).

Question 2

Explain the services characteristics (3) and service quality with its services marketing implications.

Answer 2

1. Services providers capabilities (Potential quality): CANNOT be EVALUATED before the buying decision (e.g., dentist, shipcruise)
   - > SM Implication: PROOF of the service provider’s capabilities (e.g., credentials, secure back) (e.g mensa following guidelines of the german institute of community catering to ensure potential quality)
2. External factors integration (process quality):
   i. Establishing CONSISTENCY in quality within providers, time and across delivery (e.g., customers reviews) (e.g mensa to ensure consistency in quality there are regular Food control and inspections, audits)
   ii. Customers are INVOLVED the production of the service they buy (e.g students must be physically present to receive the service of food serving and the use of the dinning area, students are involved in the service provided by the mensa)
   - > SM Implication: Customer orientation of all internal factors involved in service processes (tangible environment, employees, technologies), STANDARDIZATION as much as possible! (e.g qualitiy of food, environment of the dinning area and process of payments in mensa are standardized)
3. Intangibility (outcome quality): Services are intangible; they cannot be seen, felt, tasted or touched before the purchase decision
   - > SM Implication: Visualizing the benefit for the customer

a. Transport: Production & consumption happen at the same place and time and cannot be separated. Service can not be transported (e.g., Massage, haircut, dvd, e-learning)(e.g if students eat at the mensa. the mensa is providing a space for eating that cannot be transported)
- > SM Implication: CONQUEST TIME AND SPACE. (e.g enough seats, tables, clean spaces, employees and dishes to provide the service)

b. Storage: 4 different scenarios:
1. Demand exceeds maximum available supply,-> Service operations not able to handle demand anymore, results in long waiting times .
2. Demand exceeds OPTIMUM supply level, -> firm’s personnel and operations are not able to deliver service effectively, firm may loose control of quality that is delivered.
3. Demand is below optimal level of supply, resources are underutilized, Operating costs increase.
4. Demand and supply are at optimal level.
- >SM Implication: ALIGNING supply and demand
(e. g Mensa avoid the loss of control quality and the increase of operating costs. mensa has demand and supply are at the optimal level as there are always students in mensa during meal time but there are usually sits available, students can enjoy the high service quality there.)

Question 3

what are the problems besides service characteristics-related problems?

Answer 3

● Services cannot be easily patented

● Pricing is difficult

● Service quality depends on many uncontrollable factors (e.g. airline delays because of snowstorm)

● Customers affect each other

● Mass production is difficult

Question 4

what are the Ps of traditional consumer goods marketing and what are the required Expanded Marketing Mix?

Answer 4

4 P’s of traditional consumer goods marketing: Product, Place, Price, Promotion
7 P’s of services marketing (extended mix) : Product, Place, Price, Promotion, People, Processes, Physical Evidence