13

Designing and Managing Services

Marketing Management, 13th ed

Chapter Questions
How do we define and classify services and how do they differ from goods? How do we market services? How can we improve service quality? How do services marketers create strong brands? How can goods marketers improve customer support services?
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What is a Service?
A service is any act of performance that one party can offer another that is essentially intangible and does not result in the ownership of anything; its production may or may not be tied to a physical product.

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Service Sectors
Government Private nonprofit Business Manufacturing Retail

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Categories of Service Mix

Pure tangible good Good with accompanying services Hybrid Service with accompany goods Pure service

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Service Distinctions
Equipment-based or people-based Service processes Clients presence required or not Personal needs or business needs Objectives and ownership

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Distinctive Characteristics of Services

Intangibility Inseparability Variability Perishability

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Physical Evidence and Presentation

Place People Equipment Communication material Symbols Price

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How to Increase Quality Control

Invest in good hiring and training procedures Standardize the service-performance process Monitor customer satisfaction

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Matching Demand and Supply

Demand side Differential pricing Nonpeak demand Complementary services Reservation systems Supply side Part-time employees Peak-time efficiency Increased consumer participation Shared services Facilities for future expansion
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Improving Service Quality

Listening Reliability Basic service Service design Recovery Surprising customers Fair play Teamwork Employee research Servant leadership

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Solutions to Customer Failures

Redesign processes and redefine customer roles to simplify service encounters Incorporate the right technology to aid employees and customers Create high-performance customers by enhancing their role clarity, motivation, and ability Encourage customer citizenship where customers help customers
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Table 13.1 Factors Leading to Customer Switching Behavior Pricing Inconvenience Core Service Failure Service Encounter Failures Response to Service Failure Competition Ethical Problems Involuntary Switching
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Gaps that Cause Unsuccessful Service Delivery

Gap between consumer expectation and management perception Gap between management perception and service-quality specifications Gap between service-quality specifications and service delivery Gap between service delivery and external communications Gap between perceived service and expected service
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Determinants of Service Quality

Reliability Responsiveness Assurance Empathy Tangibles

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Best Practices
Strategic Concept Top-Management Commitment High Standards Self-Service Technologies Monitoring Systems Satisfying Customer Complaints Satisfying Employees
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Developing Brand Strategies for Services

Choosing brand elements Establishing image dimensions Devising branding strategy

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Customer Worries
Failure frequency Downtime Out-of-pocket costs

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Table 13.4 Top Customer Service Providers

USAA Four Seasons Hotels Cadillac Nordstrom Wegman Food Markets Edward Jones Lexus UPS Enterprise Rent-aCar Starbucks Ritz-Carlton Amica Insurance Southwest Airlines
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