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SM7 S01 Introduction RK
SM7 S01 Introduction RK
Chapter 1:
New Perspectives On
Marketing in the
Service Economy
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 1
Overview of Chapter 1
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 2
Why Study Services?
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 3
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 4
Services Dominate the Global
Economy
Manufacturing 32%
Services 64%
Agriculture 4%
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 5
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 6
Services Dominate the Global Economy
EGYPT's GDP
Agriculture, 14%
Services, 48%
Industry, 38%
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 7
Agriculture, 32%
Services, 51%
Industry, 17%
Source: The World Factbook 2008, Central Intelligence Agency
https://www.cia.gov/library/publications/the-world-factbook/geos/eg.html
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 8
Why Study Services?
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 12
Agriculture
Services
Employment
Share of
Industry
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 14
Transformation of the
Service Economy
Social Business Advances
Changes Trends In IT
Government Globalization
Policies
New markets and product categories
Increase in demand for services
More intense competition
Government Globalization
Policies
Changes in regulations
Privatization
New rules to protect customers, employees,
and the environment
New agreement on trade in services
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 16
Government Globalization
Policies
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 17
Factors Stimulating Transformation
of the Service Economy
Social Business Advances
Changes Trends In IT
Government Globalization
Policies
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 18
Government Globalization
Policies
Growth of Internet
Greater bandwidth
Compact mobile equipment
Wireless networking
Faster, more powerful software
Digitization of text, graphics, audio, video
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 19
Factors Stimulating Transformation
of the Service Economy
Social Business Advances
Changes Trends In IT
Government Globalization
Policies
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 20
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 21
What Are Services?
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 22
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 23
Definition of Services
Services
are economic activities offered by one party to another
most commonly employ time-based performances to bring about
desired results
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 24
High
Salt
Detergents
CD Player
Wine
Golf Clubs
New Car
Tailored clothing Plumbing Repair
Low High
Intangible Elements
Source; Adapted from Lynn Shostack
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 25
Service Products vs. Customer
Service & After-Sales Service
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 26
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 27
4 Categories of Services
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 28
People Processing
Customers must:
physically enter the service factory
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 29
Possession Processing
Involvement is limited
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 30
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 31
Information Processing
May be transformed:
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 32
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 33
Services Pose Distinctive
Marketing Challenges
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 34
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 35
Differences, Implications, and
Marketing-Related Tasks
6. Operational inputs and Hard to maintain quality, Redesign for simplicity and
outputs tend to vary consistency, reliability failure proofing
more widely Difficult to shield Institute good service
customers from failures recovery procedures
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 36
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 37
Services Require
An Extended Marketing Mix
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 38
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 39
Integration of Marketing with
Other Management Functions
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 40
Operations Marketing
Management Management
Customers
Human Resources
Management
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 41
@RamyKhodeir
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 49