Services Marketing

Introduction to
Services Marketing
BSBA SM 4A
Genita, Joyce Ann
Libre, Nina Joy
Maik, Marielle Anne

What are Services?

Put in a most simple term, services are deeds, processes
and performance. The services are non tangible things that
can be touched, seen and felt but are rather intangible
deeds and performance.
All economic activities whose output is not a physical or
construction, is generally consumed at the time it is
produced, and provides added value in forms that are
essentially intangible concerns of its first purchaser.

Lovelocks Classification of Service

Services Directed at Peoples Bodies
Service in this category require the recipient to be
physically present within the service system.
Example: You need to sit in the train, visit the
dentist's surgery, lie in the massage table in order
to receive the service.

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Lovelocks Classification of
Service
Services Directed at Peoples Minds
Services in this category do not require the
customer to be present when the service is being
delivered, although they need to be present at the
start and end of the service.
Example: Laundry and dry cleaning may
collect the clothes from the customer and the
customer may never seethe services premises

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Lovelocks Classification of
Service
Services Directed at Peoples Minds
Services directed at peoples minds include
services such as education, the arts, professional
advice, news and information.
Example: Internet and any broadcasting
technologies.

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Lovelocks Classification of
Service
Services Directed at Peoples Intangible
Possessions
Service such as banking, insurance and
accountancy can be delivered with very little
direct interaction between the customer and the
organization.
Example: Insurance

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Tangibility Spectrum
The broad definition of services implies that
intangibility is a key determined of whether an
offering is a service. Although this is true, it is
also true that very few products are purely
intangible or totally tangible. Instead, services
tend to be more intangible than manufactured
products, and manufactured tend to be more
tangible than services.

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New Ways to Deliver Service

In addition to providing opportunities for new
service offerings, technologies is providing
vehicles for delivering existing service in more
accessible, convenience, product ways.
Technology also facilitates transaction by
offerings direct vehicle for making purchases.
Finally, specifically internet, provides an easy
way for customers to learn and research.

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Enabling Both Customers and

Employees
Technology enables both customers and
employees to be more effective in getting
and providing service. Through self
service technologies, customers can serve
themselves more effectively.

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Internet is a Service
An interesting way to look at the influence of
technology is to realize that the internet is just
one big service. All the business and
organization that operates on the internet are
essentially providing service whether they are
giving information, performing basic customer
service function or facilitating transaction.

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The Paradoxes and Dark Side of

Technology and Service
Although there is clearly great potential for
technology to support and enhance services,
there are potential negative outcomes as well.
Customer concerns about privacy and
confidentiality raise major issues for firms as
they seek to learned about interact directly with
customers through the internet.

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Characteristics of Services Impacting on

Marketing Activities
Goods

Service

Results Implication

Tangible

Intangible

Service cannot be inventories

Service cannot be easily patented
Service cannot be readily displayed or communicated

Standardized

heterogeneous

Service delivery and customers satisfaction depend on

employee and customers action
Service quality depends on many uncontrollable factors
There is no sure knowledge that the service delivered matches
what was planned and promoted

Production
separate from
consumption

Inseparatibility
simultaneous
production and
consumption

-Customers participate in and affect the transaction

-customers affect each other
-Employees affect the service outcome
-Decentralization may be essential
-Mass production is difficult

Nonperishable

Perishable

It is difficult to synchronies supply and demand with service

Services cannot be returned or resold
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Services as Products
Represent a wide range intangible product
offerings that customers value for pay in the
market place.
SERVICE PRODUCT are sold by service
companies and by none service companies such
as manufacturers and technology companies .

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Services as Experiences
The term Experience Economy was first
described in an article published in1998 by pine
and Gilmore . The article argued that service
companies would evolve from simply providing
a service to creating memorable events for their
costumers , with the memory of the experience
becoming the product .

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Customer Service
Is also critical aspect of what we mean by
SERVICE customer services is the service
provided in support of a company's core
products.

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Service Dominating Logic

Is yet another way to look what service means.
In the article JOURNAL OF MARKETING
Steve Vargo and Bob Lusch argue for a new
dominant logic for marketing that suggests that
all products and physical goods are valued for
the service they provide.

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Service Marketing Is Different

Over time, business people have realised that
marketing and managing services presents
issues and challenges not faced in the marketing
of products . A service businesses began to turn
to marketing and decide to employ marketing
people , they naturally recruited from the best
marketers in the world.
- Procter & Gamble ,General Foods and
Kodak .

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Service Marketers
Responded to these forces and began to
work across disciplines and with
academics and business practitioners
from around the world to develop and
document marketing practices .

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Marketing Science Institute

Suggests that corporate strategies focused
on customer satisfaction , revenue
generation , and services quality may
actually be more profitable than strategies
focused on cost-cutting or strategies that
attempt to do both simultaneously .

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Research From The Harvard

Business School Build
A case for the Service-profit chain; linking
internal service and employee satisfaction to
customer value and ultimately to profits .
Important key to these success - is that the
right strategies are chosen and that these
strategies are implemented appropriately and
well.

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Service and Technology

Information Technology
Is currently shaping the field and profoundly
influencing the practice of service marketing.

Potential For New Service Offering

How dramatically different your word would be
without these basic technology services.

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Resulting Marketing
Implications
Intangibility
The most basic distinguishing characteristics of
services is intangibility . Because services are
performances or actions rather than objects , they
cannot be seen. Felt , tasted or touched in the same
manner that you can sense tangible goods.

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Resulting Marketing Implications

Heterogeneity
Also results because no two customers are precisely
alike; each will have unique demands or experience
the service in a unique way . Thus, the heterogeneity
connected with services is largely the result of human
interaction and all of the vagaries that accompany it.
Because services are heterogeneous across time,
organizations and people ensuring consistent service
quality is challenging. Quality actual depends on
many factors that cannot be fully controlled by the
service.
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Resulting Marketing
Implications
Inseparability
Also means that customers will frequently
interact with each other during the service
production process and thus may affect
each others experiences.

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Resulting marketing
implication

Because services are often produced and

consumed at the same time, mass
production is difficult. The quality of
service and customer satisfaction will be
highly dependent on what happens in real
time including actions and employees and
the interactions between employees and
customers.

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Resulting Marketing
Implications
Perishability
Refers to the fact that services cannot be
saved, stored, resold or returned.
A primary issue that marketers face in
relation to service perishability is the
inability to hold stock. Demand forecasting
and creative planning for capacity utilization
re therefore important and challenging
decisions areas.
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Services Marketing Triangle

Insert

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Services Marketing Mix

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Expanded Mix for Services

People
All human actors who play a part in service delivery
and thus influence the buyers perceptions: namely,
the firms personnel, the customer, and other
customers in the service environment.

Physical Evidence
The environment in which the service is delivered
and where the firm and customer interact, and any
tangible components that facilitate performance or
communication of the service.

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Expanded Mix for Services

Process
The actual procedures, mechanisms, and
flow of activities by which the service is
delivered the service delivery and
operating systems.

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The Servuction System Model

Invisible Organization and Systems
Inanimate
Environment

Service Personnel

Other
Customer
Customer

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Staying Focused on the Customer

From the firms point of view, all strategies are developed with an eye on the customer,
and all implementations are carried
out with
of their impact on the
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customer.

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