Lecture 8 : Services Marketing Flashcards
Nature and Characteristics of a Service
Intangibility
Inseparability
Variability
Perishability
Intangibility
Services are intangible, i.e. cannot be seen, tasted, felt, heard, or smelled before they are bought. The buyer has to have faith in the service provider.
e.g. dental treatment by dentist, cruise package marketed by cruise operator.
Inseparability
A service cannot exist separately from its providers, whether they are persons or machines.
e.g. surgery performed by surgeon, vacation cruise package provided by cruise liner
and crew.
Variability
Services are highly variable and depend heavily on who provides them, and when and where they are provided.
e.g. “faith healers” against certified doctors, liner service against fly-by-night tramp.
Perishability
Services cannot be stored, i.e. services have an expiry deadline. If services are not consumed at the appropriate instance, it becomes worthless.
e.g. either cruise liner or container ship leaving on schedule and passengers/cargo are late and do not leave with the ship.
Marketing Strategies
Service-Profit Chain
Managing Service Differentiation
Managing Service Quality
Managing Service Productivity
Service-Profit Chain
company profits with employee and customer satisfaction
focus their attention to both their customers and their employees as they are interlinked and interact with each other
Satisfied and productive service employees
Satisfied and loyal customers
Internal service quality
Greater service value
Healthy service profits and growth
Types of Service Marketing
Company -> Customer = External
Company -> Employees = Internal
Employees-> Customers = Interactive
Managing Service Differentiation
Develop differentiated offer, delivery and image
Managing Service Quality
Empower front-line employees
Become “Customer obsessed”
Develop high service quality standards
Watch service performance closely.
Managing Service Productivity
Train current and new employees
Increase quantity without decreasing quality
Utilise technology
Relationship Marketing
build long-term connections between the company and its customers
develop brand and firm loyalty
Works well for services where transactions tend to be continuous, and the switching cost for customers are high.
Personal Interaction with service personel is critical
Six Markets Model
Consumer Markets
* Potential customers and advocates of the firm’s services.
* primary focus of relationship marketing.
Supplier Markets
* Marketing by organisation’s suppliers, e.g. suppliers assist in the marketing effort.
Referral Markets
* Marketing by advocates. Regarded as the best form of relationship marketing.
Recruitment Markets
* Potential employees.
Influence Markets
* Key organisations that have an impact on the relationship between the firm and the customer markets, e.g. MPA
Internal Markets
* Employees and personnel within the organisation
Transaction vs Relationship Marketing: Transaction Marketing
Focus on single sale
Orientation on product features
Short timescale
Little emphasis on customer service
Limited customer commitment
Moderate customer contact
Quality is primarily a concern of production
Transaction vs Relationship Marketing: Relationship Marketing
Focus on customer retention
Orientation on product benefits
Long timescale
High customer service emphasis
High customer commitment
High customer contact
Quality is the concern of all
