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INTRODUCTION

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What are services?

All economic activities whose output is not a physical product, is generally consumed at the time it is produced and provides added value in forms (such as convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns of its first purchaser

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Examples of Service Industries


Health Care
hospital, medical practice, dentistry,

Professional Services Financial Services Hospitality


restaurant, hotel/motel, bed & accounting, legal, architectural banking, investment advising,

eye care

insurance

Travel

breakfast, ski resort, rafting

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Others:

airlines, travel agencies, theme park

Table 1.2

Goods versus Services

Source: A. Parasuraman, V.A. Zeithaml, and L. L. Berry, A Conceptual Model of Service Quality and Its Implications for Future Research, Journal of Marketing 49 (Fall 1985), pp. 4150.

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Characteristics of Services
intangibility: difficult to sample and to evaluate inseparability: difficult to separate services from the service provider; mainly direct sales; staff are essential to the delivery of quality services heterogeneity: virtually every service is different; very difficult to standardize quality perishability: those not sold can not be stored fluctuating demand: demand for some 512 - 5 9/11/12 services fluctuates by season, or even by

Implications of Intangibility Services cannot be inventoried Services cannot be patented Services cannot be readily displayed or communicated Pricing is difficult

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Implications of Heterogeneity
Service delivery and customer satisfaction depend on employee actions Service quality depends on many uncontrollable factors There is no sure knowledge that the service delivered matches what was planned and promoted

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Implications of Perishability
It is difficult to synchronize supply and demand with services Services cannot be returned or resold

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Classification of Services
1) End-user Services can be classified into the following categories: Consumer: leisure, hairdressing, personal finance, package holidays. Business to business: advertising agencies, printing, accountancy, consultancy. . Industrial: plant maintenance and

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2) Service Tangibility The degree of tangibility of a service can be used to classify services: Highly tangible: car rental, vending machines, telecommunications. Service linked to tangible goods: domestic appliance repair, car service.

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3) People-based Services Services can be broken down into labour-intensive (peoplebased) and equipment-based services. This can also be represented by the degree of contact: People-based services - high contact: education, dental care, restaurants, medical services.

4) Expertise The expertise and skills of the service provider can be broken down into the following categories: Professional: medical services, legal services, accountancy, tutoring. Non-professional: babysitting, care taking, casual labour
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5) Profit Orientation The overall business orientation is a recognized means of classification: Not-for-profit: The Scouts Association, charities, public sector leisure facilities. Commercial: banks, airlines, tour operators, hotel and catering services.

Paradigms in Services Marketing


Service Do

as a process

it right the first time Speed!! Speed!!! customers perspective

Speed!

Keeping

always!
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Service Quality
The

customers judgment of overall excellence of the service provided in relation to the quality that was expected. Process and outcome quality are both important.

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The Five Dimensions of Service Quality


Reliabil ity
Ability to perform the promised service dependably and accurately. Assuran Knowledge and courtesy of employees and their ability ce to convey trust and Tangibl confidence. es Physical facilities, Empat equipment, and appearance of personnel. hy Responsiven Caring, individualized ess attention the firm provides its customers. 9/11/12 Willingness to help

Exercise to Identify Service Attributes


In groups of five, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customers point of view.

Reliability:

Assurance: Tangibles: Empathy: Responsivene ss:


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SERVQUAL Attributes
ASSURANCE
n n

RELIABILITY
n n n n n

n n

RESPONSIVENESS
n

Providing service as promised Dependability in handling customers service problems Performing services right the first time Providing services at the promised time Maintaining error-free records

EMPATHY
n n n n n

Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge t answer customer questions

n n n

Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers requests

TANGIBLES
n n n

Giving customers individual attention Employees who deal with customers in a caring fashion Having the customers best interest at heart Employees who understand the needs of their customers Convenient business hours Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing

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DEFINITIONS
Customers

have different expectations re services or expected service Desired service customer hopes to receive Adequate service the level of service the customer may accept
DO

YOUR EXPECTATIONS DIFFER RE SPUR and CAPTAIN DOREGO?

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Figure 3-1

Dual Customer Expectation Levels


Desired Service Zone of Tolera nce Adequate Service

(Two levels of expectations)

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Figure 3-3

Zones of Tolerance VARY for Different Service Dimensions


Desired Service

Level of Expectati on

Zone of Tolera Adequate Service nce

Desired Desired Service Service Zone

of Tolerance

Adequate Adequate Service Service


Most Important Factors Least Important Factors Source: Berry, Parasuraman, and Zeithaml (1993)

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Figure 3-5

Factors that Influence Desired Service


Enduring Service Intensifiers

Personal Needs

Desired Service Zone of Tolerance Adequate Service

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Personal needs include physical, social, psychological categories

service intensifiers are individual, stable factors that lead to heightened sensitivity to service This can further divided into Derived Service Expectations and Personal service Philosophies

Enduring

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Figure 3-6

Factors that Influence Adequate Service


Transitory Service Intensifier s Perceived Service Alternativ es SelfPerceived Service Role Situationa l Factors

Desired Service Zone of Tolerance Adequate Service

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Transitory service intensifiers temporary a computer breakdown will be less tolerated at financial year-ends Perceived service alternatives Perceived service role of customer Situational factors

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Figure 3-7

Factors that Influence Desired and Predicted Service


Explicit Service Promises Implicit Service Promises Word-ofMouth Past Experienc e
Predicted Service

Desired Service Zone of Tolerance Adequate Service

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