“Managers do not control the quality of the product when the product is a service...

The quality of the

service is in a precarious state --- it is in the hands of the service workers who produce and deliver it”

- Karl Albrecht

The Service Culture

• The service culture focuses on serving and satisfying the customer

• Creation of service culture must start from top management and flow down.

Characteristics of Service Marketing

Service-Profit Chain

Service Profit Chain – which link service firm profits with employee and customer satisfaction. It consists
of five links:

 Internal Service Quality

 Satisfied and productive service employees
 Greater service values
 Satisfied and loyal customers
 Healthy service profits and growth
Three Types of Marketing in Service Industries

Internal Marketing - Means that the service firm must effectively train and motivate its customer
contact employees and all the supporting service people to work as a team provide customer
satisfaction.

External Marketing - This is the traditional form of business marketing, showing customers how the
services provided by your business benefit them. External marketing includes advertising, your website
and your company's social media efforts.

Interactive Marketing - Service firm that recognizes perceived service quality depends heavily on the
quality of the buyer-seller interaction.
Management Strategies for Service Business

Managing Differentiation - Solution to price competition is to develop a differentiated offering. The

offer can include innovative features that set one company’s offer apart from that of its competitors.

Managing Service Quality - With hospitality products, quality is measured by how well customers
expectations are met.

Manage Service Productivity - Service firms are under great pressure to increase service productivity

How can you increase productivity with lesser cost?

• Cross-Train current .employees

• Harness the power of technology

Resolving Customer Complaints - Resolving customer complaints is a critical component of customer

retention.

Managing Employees as Part of the Product

- The human resource and marketing department must work closely together.

- The task of internal marketing to employees involves the effective training and motivation of customer-
contact employees and supporting service personnel

Managing Perceived Risk - The high risk that people perceive when purchasing hospitality products
increases loyalty to companies that have provided them with a consistent product in the past,

Managing Capacity and Demand

- First Service must adjust their operating system to enable business to operate at a maximum capacity

- Second their must remember that their goal is to create satisfied customers.