Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 1

(hapter 1:
New Perspecti·es on
Marketing in the
Ser·ice Lconomv
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 2
DvervIew of Chapter 1
Why Study ServIces!
What are ServIces!
The harketIng ChaIIenges Posed by ServIces
The Expanded harketIng hIx PequIred for ServIces
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 3
Why Study ServIces!
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 4
Why Study ServIces! (1)
ServIces domInate economy In most natIons
UnderstandIng servIces offers you personaI competItIve
advantages
Importance of servIce sector In economy Is growIng
rapIdIy:
ServIces account for more than 60 percent of C0P worldwIde
Almost all economIes have a substantIal servIce sector
|ost new employment Is provIded by servIces
Strongest growth area for marketIng
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 5
ServIces 0omInate the U.S. Economy
(Ig 1.1)
Services, 68%
AgricuIture, Forestry, Mining,
Fishing, 2.3%
Manufacturing and
Construction,
17.3%
Government, 12.4%
(mostIy Services)
Source: Bureau of Economic Analysis, Survey of Current Business, May 2005, Table 1
INSIGHTS

!rivate sector service industries account for over two-thirds of GD!

Adding government services, totaI is aImost four-fifths of GD!
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 6
EstImated SIze of ServIce Sector In
SeIected CountrIes Ig 1.2-updated 10/06)
Services as Percent of GDP
!oIand (66%), South Africa (65%)
Japan (74%), France (73%), U.K. (73%), Canada (71%)
Saudi Arabia (33%)
China (40%)
India (48%)
Argentina (53%), BraziI (51%)
!anama (80%), USA (79%)
Luxembourg (83%)
Cayman IsIands (95%), Jersey (93%)
Bahamas (90%), Bermuda ( 89%)
Mexico (69%), AustraIia (68%), Germany (68%)
IsraeI (60%), Russia (58%), S. Korea (56%)
30 40 50 60 70
80 90 20 10
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 7
'aIue Added by ServIce Industry
CategorIes to U.S. C0P In 2004
ther (except government) 3.6%
Accommodation and food services 4.0%
Arts, entertainment, and recreation 1.5%
HeaIthcare and sociaI assistance 10.4%
EducationaI services 1.3%
!rofessionaI and business services 17.3%
WhoIesaIe trade 8.9%
RetaiI trade 10.3%
Transportation and warehousing 4.4%
Information 7.1%
Finance and insurance 12.6%
ReaI estate and rentaI and Ieasing 18.7%
Source: Bureau of Economic Analysis,
Survey of Current Business, May 2005, Table 1
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 8
AICS: A ew Way to CIassIfy and
AnaIyze the ServIce Economy # 1.1)
AICS-orth AmerIcan Industry CIassIfIcatIon System-
now used to compIIe and record economIc data by
natIonaI statIstIcaI agencIes of the U.S., Canada, hexIco
ew cIassIfIcatIon system repIaces oId SIC codes In U.S.
Captures huge array of new servIce IndustrIes, each wIth
Its own AICS code
APCS-orth AmerIcan Product CIassIfIcatIon System-
assIgns codes to thousands of servIce products
PartIcularly useful for lookIng at rented goods servIces
U.S. and CanadIan data easIIy accessIbIe on the Web;
InformatIon IncIudes number of estabIIshments and
empIoyment
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 9
Some ewer ServIce IndustrIes
ProfIIed by AICS Codes ßut ot SIC
asIno Hotels
ontInuIng are #etIrement
ommunItIes
0IagnostIc magIng enters
0Iet and WeIght #educIng
enters
EnvIronmental onsultIng
Colf ourses, ountry lubs
Hazardous Waste ollectIon
H|D |edIcal enters
ndustrIal 0esIgn ServIces
nvestment 8ankIng and
SecurItIes 0ealIng
|anagement onsultIng ServIces
SatellIte TelecommunIcatIons
TelemarketIng 8ureaus
Temporary Help ServIces
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 10
Why Study ServIces! (2)
host new jobs are generated by servIces
astest growth expected In knowledge·based IndustrIes
SIgnIfIcant traInIng and educatIonal qualIfIcatIons requIred,
but employees wIll be more hIghly compensated
WIll servIce jobs lost to lower·cost countrIes: Yes, some servIce jobs
can be exported
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 11
ChangIng Structure of EmpIoyment as
EconomIc 0eveIopment EvoIves
Industry
Services
Agriculture
Time, per Capita Income
Source: IMF, 1997
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 12
Why Study ServIces! (3)
PowerfuI forces are transformIng servIce markets
Covernment polIcIes, socIal changes, busIness trends,
advances In T, InternatIonalIzatIon
These forces are reshapIng
0emand
Supply
The competItIve landscape
ustomers choIces, power, and decIsIon makIng
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 13
TransformatIon of the ServIce Economy
Government
!oIicies
Business
Trends
SociaI
Changes
Advances in
IT
GIobaIization
Innovation in service products & deIivery systems, stimuIated by better technoIogy
Customers have more choices and exercise more power
Success hinges on:

Understanding customers and competitors

ViabIe business modeIs

Creation of vaIue for customers and firm

New markets and product categories

Increase in demand for services

More intense competition
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 14
actors StImuIatIng TransformatIon
of the ServIce Economy (1)
Government
!oIicies
Business
Trends
SociaI
Changes
Advances in
IT
GIobaIization

Changes in reguIations

!rivatization

New ruIes to protect customers,
empIoyees, and the environment

New agreement on trade in services
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 15
actors StImuIatIng TransformatIon
of the ServIce Economy (2)
Government
!oIicies
Business
Trends
SociaI
Changes
Advances in
IT
GIobaIization

Rising consumer expectations

More affIuence

More peopIe short of time

Increased desire for buying experiences
versus things

Rising consumer ownership of high tech
equipment

Easier access to information

Immigration

Growing but aging popuIation
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 16
actors StImuIatIng TransformatIon
of the ServIce Economy (3)
Government
!oIicies
Business
Trends
SociaI
Changes
Advances in
IT
GIobaIization

!ush to increase sharehoIder vaIue

Emphasis on productivity and cost savings

Manufacturers add vaIue through service and
seII services

More strategic aIIiances and outsourcing

Focus on quaIity and customer satisfaction

Growth of franchising

Marketing emphasis by nonprofits
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 17
actors StImuIatIng TransformatIon
of the ServIce Economy (4)
Government
!oIicies
Business
Trends
SociaI
Changes
Advances in
IT
GIobaIization

Growth of the Internet

Greater bandwidth

Compact mobiIe equipment

WireIess networking

Faster, more powerfuI software

Digitization of text, graphics, audio, video
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 18
actors StImuIatIng TransformatIon
of the ServIce Economy (5)
Government
!oIicies
Business
Trends
SociaI
Changes
Advances in
IT
GIobaIization

More companies operating on transnationaI
basis

Increased internationaI traveI

InternationaI mergers and aIIiances

ffshoring of customer service

Foreign competitors invade domestic markets
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 19
What Are ServIces!
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 20
What Are ServIces! (1)
The hIstorIcaI vIew
Coes back over 200 years to Adam SmIth and Jean·8aptIste Say
0Ifferent from goods because they are perIshable SmIth 1776)
onsumptIon cannot be separated from productIon, servIces are
IntangIble Say 180J)
A fresh perspectIve: ServIces InvoIve a form of rentaI,
offerIng benefIts wIthout transfer of ownershIp
nclude rental of goods
|arketIng tasks for servIces dIffer from those Involved In sellIng
goods and transferrIng ownershIp
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 21
What Are ServIces! (2)
Ive broad categorIes wIthIn non-ownershIp framework:
1. #ented goods servIces
2. 0efIned space and place rentals
J. Labor and expertIse rentals
4. Access to shared physIcal envIronments
5. Systems and networks: access and usage
ImpIIcatIons of rentIng versus ownIng (ServIce PerspectIves 1.1)
|arkets exIst for rentIng durable goods rather than sellIng them
#entIng portIons of larger physIcal entIty e.g., offIce space, apartment) can
form basIs for servIce
ustomers more closely engaged wIth servIce supplIers
TIme plays central role In most servIces
ustomer choIce crIterIa may dIffer between rentals and outrIght purchases
ServIces offer opportunItIes for resource sharIng
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 22
0efInIng ServIces
ServIces
Are economIc actIvItIes offered by one party to another
|ost commonly employ tIme·based performances to brIng about
desIred results In:
recIpIents themseIves
objects or other assets for whIch purchasers have responsIbIIIty
In exchange for theIr money, tIme, and effort, servIce
customers expect to obtaIn vaIue from
Access to goods, labor, facIlItIes, envIronments, professIonal skIlls,
networks, and systems
8ut they do not normally take ownershIp of any of the physIcal
elements Involved
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 23
ServIce Products versus Customer ServIce
and After-SaIes ServIce
A fIrms market offerIngs are dIvIded Into core product
eIements and suppIementary servIce eIements
Is everyone In servIce! eed to dIstInguIsh between:
|arketIng of servIces
|arketIng goods through added·value servIce
Cood servIce Increases the vaIue of a core physIcaI good
After-saIes servIce Is as Important as pre-saIes servIce
for many physIcaI goods
hanufacturIng fIrms are reformuIatIng and enhancIng
exIstIng added-vaIue servIces to market them as stand-
aIone core products
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 24
ChaIIenges Posed by ServIces
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 25
ServIces Pose 0IstInctIve
harketIng ChaIIenges
harketIng management tasks In the servIce sector
dIffer from those In the manufacturIng sector
The eIght common dIfferences are:
1. |ost servIce products cannot be InventorIed
2. ntangIble elements usually domInate value creatIon
J. ServIces are often dIffIcult to vIsualIze and understand
4. ustomers may be Involved In co·productIon
5. People may be part of the servIce experIence
6. DperatIonal Inputs and outputs tend to vary more wIdely
7. The tIme factor often assumes great Importance
8. 0IstrIbutIon may take place through nonphysIcal channels
What are marketIng ImpIIcatIons!
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 26
0Ifferences, ImpIIcatIons, and
harketIng-PeIated Tasks (1) Table 1.1)
Difference

Most service products
cannot be inventoried

IntangibIe eIements
usuaIIy dominate
vaIue creation

Services are often
difficuIt to visuaIize
and understand

Customers may be
invoIved in co-
production
ImpIications

Customers may be
turned away

Harder to evaIuate
service and distinguish
from competitors

Greater risk and
uncertainty perceived

Interaction between
customer and provider;
but poor task execution
couId affect satisfaction
Marketing-ReIated Tasks

Use pricing, promotion, and
reservations to smooth
demand; work with ops to
manage capacity

Emphasize physicaI cIues,
empIoy metaphors and vivid
images in advertising

Educate customers on
making good choices; offer
guarantees

DeveIop user-friendIy
equipment, faciIities, and
systems; train customers,
provide good support
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 27
ImpIications

Behavior of service
personneI and customers
can affect satisfaction

Hard to maintain quaIity,
consistency, reIiabiIity

DifficuIt to shieId
customers from faiIures

Time is money;
customers want service
at convenient times

EIectronic channeIs or
voice teIecommunications
Difference

!eopIe may be part of
service experience

perationaI inputs and
outputs tend to vary
more wideIy

Time factor often
assumes great
importance

Distribution may take
pIace through
nonphysicaI channeIs
Marketing-ReIated Tasks

Recruit, train empIoyees to
reinforce service concept

Shape customer behavior

Redesign for simpIicity and
faiIure proofing

Institute good service
recovery procedures

Find ways to compete on
speed of deIivery; offer
extended hours

Create user-friendIy,
secure websites and free
access by teIephone
0Ifferences, ImpIIcatIons, and
harketIng-PeIated Tasks (2) Table 1.1)
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 28
'aIue Added by PhysIcaI, IntangIbIe EIements
HeIps 0IstInguIsh Coods and ServIces Ig 1.6)
Physical
Elements
High
Low Intangible Elements High
SaIt
Detergents
CD !Iayer
Wine
GoIf CIubs
New Car
TaiIored cIothing
Fast-Food Restaurant
!Iumbing Repair
HeaIth CIub
AirIine FIight
Landscape Maintenance
ConsuIting
Life Insurance
Internet Banking
Source; Adapted from Lynn Shostack
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 29
ProgressIve and PEI: Two Types of
WebsIte PefIectIng Core Product Ig 1.8)
#EIs camping gear must be delivered
through physical channels to customers
after they have used the website to make
choices, order, and pay
Websites can deliver info-based
services like Progressive's car
insurance but .
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 30
Expanded harketIng hIx
for ServIces
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 31
ServIces PequIre
An Expanded harketIng hIx
harketIng can be vIewed as:
A strategIc and competItIve thrust pursued by top management
A set of functIonal actIvItIes performed by lIne managers
A customer·drIven orIentatIon for the entIre organIzatIon
harketIng Is the onIy functIon to brIng operatIng
revenues Into a busIness; aII other functIons are cost
centers
The Ps of servIces marketIng are needed to create
vIabIe strategIes for meetIng customer needs profItabIy
In a competItIve marketpIace
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 32
The Ps of ServIces harketIng
Product Elements (Chapter 3)
Place and TIme (Chapter 4)
PrIce and Dther User Dutlays (Chapter 5)
PromotIon and EducatIon (Chapter 6)
Process (Chapter 8)
PhysIcal EnvIronment (Chapter 10)
People (Chapter 11)
ProductIvIty and 0ualIty (Chapter 14)
Fig 1.9 Working in
Unison: The 8Ps of
Services Marketing
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 33
The Ps of ServIces harketIng:
(1) Product EIements
Embrace aII aspects of servIce performance that
create vaIue
Core product responds to customers prImary need
Array of suppIementary servIce eIements
Help customer use core product effectIvely
Add value through useful enhancements
PIannIng marketIng mIx begIns wIth creatIng a servIce
concept that:
WIll offer value to target customers
SatIsfy theIr needs better than competIng alternatIves
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 34
The Ps of ServIces harketIng:
(2) PIace and TIme
0eIIvery decIsIons: here, hen, How
CeographIc IocatIons served
ServIce scheduIes
PhysIcaI channeIs
EIectronIc channeIs
Customer controI and convenIence
ChanneI partnerslIntermedIarIes
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 35
The Ps of ServIces harketIng:
(3) PrIce and Dther User DutIays
harketers must recognIze that customer outIays
InvoIve more than prIce paId to seIIer
TradItIonaI prIcIng tasks:
SellIng prIce, dIscounts, premIums
|argIns for IntermedIarIes If any)
redIt terms
IdentIfy and mInImIze other costs Incurred by users:
AddItIonal monetary costs assocIated wIth servIce usage e.g.,
travel to servIce locatIon, parkIng, phone, babysIttIng, etc.)
TIme expendItures, especIally waItIng
Unwanted mental and physIcal effort
NegatIve sensory experIences
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 36
The Ps of ServIces harketIng:
(4) PromotIon and EducatIon
InformIng, educatIng, persuadIng, remIndIng customers
harketIng communIcatIon tooIs
|edIa elements prInt, broadcast, outdoor, retaIl, the nternet, etc.)
Personal sellIng, customer servIce
Sales promotIon
PublIcIty/P#
Imagery and recognItIon
8randIng
orporate desIgn
Content
nformatIon, advIce
PersuasIve messages
ustomer educatIon/traInIng
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 37
The Ps of ServIces harketIng:
(5) Process
How fIrm does thIngs may be as Important as what It does
Customers often actIveIy InvoIved In processes, especIaIIy
when actIng as co-producers of servIce
Process InvoIves choIces of method and sequence In
servIce creatIon and deIIvery
0esIgn of actIvIty flows
Number and sequence of actIons for customers
Nature of customer Involvement
#ole of contact personnel
#ole of technology, degree of automatIon
ßadIy desIgned processes waste tIme, create poor
experIences, and dIsappoInt customers
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 38
The Ps of ServIces harketIng:
(6) PhysIcaI EnvIronment
0esIgn servIcescape and provIde
tangIbIe evIdence of servIce
performances
Create and maIntaIn physIcaI
appearances
8uIldIngs/landscapIng
nterIor desIgn/furnIshIngs
7ehIcles/equIpment
Staff groomIng/clothIng
Sounds and smells
Dther tangIbles
hanage physIcaI cues carefuIIy-
can have profound Impact on
customer ImpressIons
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 39
The Ps of ServIces harketIng:
(7) PeopIe
InteractIons between customers and contact
personneI strongIy InfIuence customer
perceptIons of servIce quaIIty
The rIght customer-contact empIoyees
performIng tasks weII
Job desIgn
#ecruItIng
TraInIng
|otIvatIon
The rIght customers for fIrm's mIssIon
ontrIbute posItIvely to experIence of
other customers
Possessor can be traIned to have
needed skIlls co·productIon)
an shape customer roles and manage
customer behavIor
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 40
The Ps of ServIces harketIng:
() ProductIvIty and DuaIIty
ProductIvIty and quaIIty must work hand In hand
ImprovIng productIvIty key to reducIng costs
ImprovIng and maIntaInIng quaIIty essentIaI for buIIdIng
customer satIsfactIon and IoyaIty
IdeaIIy, strategIes shouId be sought to Improve both
productIvIty and quaIIty sImuItaneousIy-technoIogy
often the key
Technology·based InnovatIons have potentIal to create hIgh payoffs
8ut, must be user frIendly and delIver valued customer benefIts
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 41
harketIng hust ße Integrated wIth
Dther hanagement unctIons
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 42
Three management functions play central and interrelated
roles in meeting needs of service customers
harketIng hust ße Integrated wIth
Dther hanagement unctIons Ig 1.10)
Customers
perations
Management
Marketing
Management
Human Resources
Management
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 43
A ramework for 0eveIopIng
EffectIve ServIce harketIng
StrategIes Ig 1.11)
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 44
A ramework or 0eveIopIng EffectIve
ServIce harketIng StrategIes: DvervIew
Understanding Customer Needs, Decision Making,
and Behavior in Service Encounters
Chapter 2
BuiIding the Service ModeI
Part II: Chapters 3-7
Managing the Customer Interface
Part III: Chapters 8-11
ImpIementing !rofitabIe Service Strategies
Part IV: Chapters 12-15
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 45
ramework for 0eveIopIng EffectIve
ServIce harketIng StrategIes: Part I
I: Understanding Customer Needs, Decision Making,
and Behavior in Service Encounters
Differences among Services Affect
Customer Behavior
Three-Stage ModeI of Service Consumption
!repurchase Stage:
Search, evaIuation of
aIternatives, decision
Service Encounter Stage:
RoIe in high-contact vs.
Iow-contact deIivery
!ost-Encounter Stage:
EvaIuation against
expectations, future
intentions
Chapter 2)
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 46
ramework for 0eveIopIng EffectIve
ServIce harketIng StrategIes: Part II
BuiIding The Service ModeI
Part II: Chapters 3-7
DeveIop service concept: core
& suppIementary eIements
SeIect physicaI & eIectronic
channeIs for service deIivery
Set prices with reference to
costs, competition & vaIue
VaIue Exchange
The Value Proposition
The Business Model
Educate customers &
promote the vaIue proposition
!osition the vaIue proposition
against competing aIternatives
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 47
Design and manage
service processes
BaIance demand against
productivity capacity
!Ian the service
environment
Manage service empIoyees
for competitive advantage
ramework for 0eveIopIng EffectIve
ServIce harketIng StrategIes: Part III
III: Managing the Customer
Interface
Chapters 8-11)
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 48
ramework for 0eveIopIng EffectIve
ServIce harketIng StrategIes: Part I'
IV: ImpIementing !rofitabIe Service
Strategies
Chapters 12-15)
Create customer reIationship
and buiId IoyaIty
!Ian for service recovery and
create customer feedback
systems
ContinuousIy improve service
quaIity and productivity
rganize for change management
and service Ieadership
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 49
Chapter 1 Summary: ew PerspectIves
on harketIng In the ServIce Economy
Peasons for studyIng servIces:
ServIce sector domInates economy In most natIons, many new IndustrIes
|ost new jobs created by servIces
Powerful forcesgovernment polIcIes, socIal changes, busIness trends,
T advances, and globalIzatIonare transformIng servIce markets
UnderstandIng servIces offers personal competItIve advantage
The servIce concept and Its defInItIon:
ServIces create benefIts wIthout transfer of ownershIp
|ost employ tIme·based performances to brIng about desIred results In
recIpIents or In assets for whIch they have responsIbIlIty
ustomers expect value from access to goods, facIlItIes, labor, professIonal
skIlls, envIronments, networks E systems In return for money, tIme, effort
ServIces present dIstInctIve marketIng chaIIenges reIatIve to goods,
requIrIng:
Expanded marketIng mIx comprIsIng 8Ps Instead of tradItIonal 4Ps
ntegratIon of marketIng functIon wIth operatIons and human resources

 

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