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Lovelock_PPT_Ch01_ServMark5e (1)

Lovelock_PPT_Ch01_ServMark5e (1)

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Published by: Escobar Emilio Pablo on Aug 18, 2011
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12/11/2012

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Chapter 1
New perspectives on marketing in the service economy

I

Objectives

‡ Explain how services are defined. ‡ Describe how services contribute to a country¶s economy. ‡ Identify the powerful forces that are transforming service markets. ‡ Describe the key characteristics that distinguish services from goods. ‡ Explain how services create value for consumers. ‡ Describe ways of categorising services. ‡ Identify the key components of a service operations system. ‡ Describe the expanded µmarketing mix¶ for services.
Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition

I Introduction ‡ Service sector is the engine of economic growth in developed and most developing countries today ‡ Services (rather than manufactured goods) are becoming the mainstream focus of marketing ‡ Every day you use a vast array of services Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

I Figure 1.2 Growth in consumption of services since 1950 Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

I Defining services ‡ Any act. problem solving or experiential value to the receiver ‡ Something that may be bought or sold but cannot be dropped on your foot Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition . performance or experience that one party can offer to another ‡ Essentially intangible and does not result in the ownership of anything ‡ Processes (economic activities) that provide time. place. form.

1 Examples of diversity of services Consumer services Business services ‡ Accountancy ‡ Architecture ‡ Engineering ‡ Legal services ‡ Management consulting ‡ Printing ‡ Insurance ‡ Telecommunications ‡ IT consulting ‡ Logistics consulting ‡ Marketing research ‡ Banking and finance ‡ Insurance ‡ Medical ‡ Telecommunications ‡ Hotel ‡ Restaurant ‡ Opera/theatre ‡ Football match ‡ House cleaning ‡ Transportation Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .I ‡ Airline Table 1.

I It¶s all about value creation ‡ Value comes from a variety of value-creating elements rather than transfer of ownership ‡ Firms must create and deliver services that are perceived (by customers) to provide value ‡ Choose the value Create the value Communicate value Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

market focus. 9. customer service. 12 Create the value Choose the value Segments. channel strategy Chapters 4±7. unique value proposition Chapters 2 and 3 Service quality. positioning. 11. selling. web service encounters Chapters 8.I Figure 1. 13. 14 Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition . website. 10. price.3 Framework for developing and delivering customer value Communicate value The value creation and delivery process Advertising. PR.

I Services: Intangible elements dominate value creation ‡ Services typically have both tangible and intangible elements ‡ How much value is created by the service elements of the total package in a competitive marketplace? ‡ Service products versus customer service and after-sales service Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

I Figure 1.4 Relative value added by physical versus intangible elements Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

I Powerful forces transforming the service economy ‡ The µhollowing out¶ effect ‡ Deregulation and privatisation ‡ Social changes ‡ Professional services and franchises Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

I Differences between goods and services (1) ‡ Most service products cannot be inventoried ‡ Intangible elements usually dominate value creation ‡ Services are often difficult to visualise and evaluate ‡ Customers may be involved in co-production ‡ People are often part of the service experience Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

I Differences between goods and services (2) ‡ Operational inputs and outputs tend to vary more widely ‡ The time factor often assumes great importance ‡ Distribution may take place through nonphysical channels Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

I How do services differ from one another? ‡ The degree of tangibility/intangibility of service processes ‡ Who or what is the direct recipient of service processes? ‡ The place of service delivery ‡ Customisation versus standardisation ‡ Relationships with customers ‡ Discrete versus continuous services ‡ High contact versus low contact Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

I Categorising service processes ‡ Tangible actions to people¶s bodies (people processing) ‡ Tangible actions to goods and other physical possessions (possession processing) ‡ Intangible actions directed at people¶s minds (mental-stimulus processing) ‡ Intangible actions directed at intangible assets (information processing) Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

when and how the service product is delivered to the customer. equipment and other tangibles). Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .I Service as a system ‡ Service operations system: can be divided into those involving the actors (or service personnel) and those involving the stage set (or physical facilities. ‡ Service marketing system: all the different ways in which the customer may encounter or learn about the service organisation. ‡ Service delivery system: concerned with where.

6 The service business as a system Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .I Figure 1.

7 The service marketing system for a high-contact service Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .I Figure 1.

8 The service marketing system for a low-contact service Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .I Figure 1.

personal interaction between customers and the firm¶s personnel or employees for the service to be µmanufactured¶ and delivered. ambience.I An expanded marketing mix for services ‡ People: direct. background music and seating comfort. ‡ Process of service production: required to manufacture and deliver the service. Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition . ‡ Physical evidence (tangible cues): servicescape² such as physical layout of the service facility.

I Figure 1.9 An expanded marketing mix for services Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .

operations and IT and human resources Operations and information Technology management Marketing management Customers Human Resources management Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) ±9781442517011/Lovelock/Services Marketing/5th edition .I The interdependence of marketing.

PowerPoint to accompany Chapter 1 Q&A .

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