Service marketing Flashcards
Why is service marketing important?
Every organisation that aims to deliver value should & will do it through a service. Firms should have some service element to their offerings, as this is where most of the value is created. Services may include: delivery service, sales (people who communicate the value offering), call centers, and improved consumer knowledge of a product through online services.
What are some of the contextual factors that contributed to the growing interest in services marketing?
- The relative growth of service industries to other sectors of the economy
- The deregulation of many service industries.
- Intensification of competition in service industries
- Changing demographic and socio-economic profiles of society
- The increase in firms use of the co-creation business model
What are the 4 intrinsic factors/properties of services that physical goods don’t have?
- intangibility
- inseparability
- variability
- perishability
What is intangibility?
The core offering of a service company - its performances - are intangible, not tangible objects. Service is a performance. We cannot see, feel or touch services. Services are evaluated or perceived subjectively prior to the purchase of a good (looking at previous experience, other people’s experience, or credence attributes). Whereas, goods are evaluated objectively prior to its purchase, through aspects of consumer behaviour such as search, experience and credence properties (e.g. test before you buy).
What is inseparability?
Refers to the inseparability of production and consumption. Services are first sold (or bought), then produced and consumed simultaneously (“in-the-moment”). Whereas, physical goods are first produced, then sold and then consumed.
What is variability?
There is increased/high degree of variability and inconsistency in service, as there is a high degree of human interaction and intangibility. There will be variability and inconsistency from the same service employee at different points in time, from one service employee to another, and from one customer to another. There may be some days that an employee is a better service provider than others. Firms would like to reduce variability, and some attempt to manage and reduce variability through pre-determined scripts.
What is perishability?
Services cannot be saved or inventoried. An employee’s potential for service cannot be locked away for another day. There are fluctuations in demand, but almost no fluctuations in the supply.
What are the augmented toolkit of service marketing that helps in solving problems that physical goods don’t have?
- physical evidence
- participants
- process
What is physical evidence?
environment in which the service is assembled or administered, and where the firm and the customer interact. The physical attributes of the retail space is hugely powerful. It drives the perception of the quality or value of the service.
What is participants/people?
includes all human actors (employees and customers) who play an essential role in service delivery. Employees and customers’ expertise and emotional intelligence.
What is the traditional mind set for service organisation?
where there are set guidelines in terms of how employees deliver service to customers. This reflects inflexibility, and results in lower employee satisfaction, which will in turn reflect lower customer satisfaction.
What is market-focused mind set for service quality and recovery?
where managers are supporting, facilitating, enabling and empowering employees to make decisions on the boundary. This is a better way, because employees are on the boundary of customer service, whereas those higher up in the organisation are not (they don’t deal with them directly on a day-to-day basis) - “frontline” or “boundary spanning” employees. Thus, employees seem to be more important in the organisational hierarchy - they (not managers) are responsible for & responsive to customers’ value perception of service.
What is process?
Processes includes actual procedures, mechanisms and flow of activities by which the service is delivered. Processes help to reduce variability by directly dealing with it.
What is a service blueprint?
a consultant technique used for services marketing when service is failing and customer satisfaction is low (due to a fundamental breakdown in the way service occurs). Firms can map the service process in terms of the interface (boundaries). These linkages help diagnose and prevent breakdowns in service. Managers should focus their attention on fixing these breakdowns, and eliminating unnecessary steps & stages.
How do we bring employees into the marketing process in service context?
It is employees who deliver the value/service. They are involved in interactive marketing (responsible for delivering the promise), as well as internal marketing (responsible for enabling the promise). So firms must rely heavily on employees, more than they rely on physical goods manufactured.
