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Introduction To Services Marketing: Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E
Introduction To Services Marketing: Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E
Introduction to
Services Marketing
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1- 1
How Important is the Service Sector in
Our Economy?
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1- 3
Changing Structure of Employment
as Economic Development Evolves (Fig. 1.2)
Share of
Employment
Agriculture
Services
Industry
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1- 4
Some Service Industries Profiled by NAICS but
Not Identified by SIC Codes
Includes:
accounting and payroll administration
recruitment and training
legal services
transportation
catering and food services
cleaning and landscaping
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1- 6
Major Trends in Service Sector (Fig. 1.3)
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1- 9
Defining the Essence of a Service
physical possessions
intangible assets
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 10
Distinguishing Characteristics of Services
(Table 1.1)
No ownership
Customers obtain temporary rentals, hiring of personnel, or access
to facilities and systems
Pricing often based on time
Customer choice criteria may differ for renting vs. purchase--may
include convenience, quality of personnel
Can’t own people (no slavery!) but can hire expertise and labor
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 12
Marketing Implications - 2
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 13
Value Added by Tangible vs Intangible
Elements in Goods and Services (Fig. 1.4)
Hi
Salt
Soft drinks
CD Player
Golf clubs
New car
Tangible Elements
Tailored clothing
Furniture rental
Fast food restaurant
Plumbing repair
Office cleaning
Health club
Airline flight
Retail banking
Insurance
Weather forecast
Lo Intangible Elements Hi
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 14
Marketing Implications - 3
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 15
Marketing Implications - 4
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 16
Important Differences
Exist among Services
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 17
Four Categories of Services
Employing Different Underlying Processes (Fig. 1.5)
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 18
Implications of Service Processes
(1) Seeking Efficiency May Lower Satisfaction
People-processing services
require customers to visit the
“service factory,” so:
Think of facility as a “stage” for service
performance
Design process around customer
Choose convenient location
Create pleasing appearance, avoid
unwanted noises, smells
Consider customer needs--info,
parking, food, toilets, etc.
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 20
Implications of Service Processes:
(3) Evaluating Alternative Delivery Channels
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 21
Implications of Service Processes:
(4) Balancing Demand and Capacity
Potential solutions:
- Manage demand
- Manage capacity
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 22
Implications of Service Processes:
(5) Applying Information Technology
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 23
Implications of Service Processes:
(6) Including People as Part of the Product
Involvement in service
delivery often entails
contact with other people
Managers should be
concerned about employees’
appearance, social skills,
technical skills
Other customers may enhance
or detract from service
experience--need to manage
customer behavior
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 24
The Services
Marketing Mix
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 25
Elements of The Services Marketing Mix:
“7Ps” vs. the Traditional “4Ps”
Guarantees
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 27
The 7Ps:
(2) Place and Time
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 28
The 7Ps:
(3) Promotion and Education
Content
information, advice
persuasive messages
customer education/training
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 29
The 7Ps:
(4) Price and Other User Outlays
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 31
7Ps:
(6) Process
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 32
The 7Ps:
(7) People
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 33
Managing the 7Ps Requires Collaboration between
Marketing, Operations, and HR Functions (Fig. 1.7)
Operations Marketing
Management Management
Customers
Human Resources
Management
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 34