Professional Documents
Culture Documents
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?
8%
Share
Employmen
of
t
Internal Services
§ Includes:
Ø accounting and payroll administration
Ø recruitment and training
Ø legal services
Ø transportation
Ø catering and food services
Ø cleaning and landscaping
§ Increasingly, these services are being outsourced
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1- 5
Major Trends in Service Sector (Fig. 1.3)
§ Government Policies (e.g., regulations, trade
agreements)
§ Social Changes (e.g., affluence, lack of time, desire for
experiences)
§ Business Trends Ø Manufacturers
offer service Ø Growth of chains
and franchising
Ø Pressures to improve productivity and quality
Ø More strategic alliances
Ø Marketing emphasis by nonprofits
Ø Innovative hiring practices
§ Advances in IT (e.g., speed, digitization, wireless,
Internet)
§ Internationalization (travel, transnational companies)
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1- 6
Marketing Relevant
Differences Between
Goods and Services
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1- 7
Defining the Essence of a Service
§ No ownership
Ø Customers obtain temporary rentals, hiring of personnel, or access
to facilities and systems
Ø Pricing often based on time
Ø Customer choice criteria may differ for renting vs. purchase--may
include convenience, quality of personnel
Ø Can’t own people (no slavery!) but can hire expertise and labor
Hi
Salt
Soft drinks
Tangible Elements
CD Player
Golf clubs
New car
Tailored clothing
Furniture rental
Fast food restaurant
Plumbing repair
Office cleaning
Health club
Airline flight
Retail banking
Insurance
Weather forecast
L o Intangible Elements Hi
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 12
Marketing Implications - 3
ACT
S
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 - 18
Implications of Service Processes:
(3) Evaluating Alternative Delivery Channels
§
§
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 - 22
The Services
Marketing Mix
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 23
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 - 25
The 7Ps:
(2) Place and Time
§ Content
Ø information, advice
Ø persuasive messages
Ø customer education/training
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 27
The 7Ps:
(4) Price and Other User Outlays
Customers
Human Resources
Management
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 1 - 32