Chapter 11 - Designing and Managing Services

11Designing and Managing

Services

Chapter Questions

How are services defined and classified?How are services marketed and how can service quality be improved?How do service marketers create strong brands?How can goods marketers improve customer support services?

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What is a Service?A service is any act of performance that one

party can offer another, that is essentially intangible and does not result in the

ownership of anything; its production may or may not be tied to a physical product.

Services are Everywhere

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GovernmentPrivate non-profitBusinessRetailManufacturing

Categories of Service Mix

Pure tangible goodPure tangible good

Good with accompanying services

Good with accompanying services

HybridHybrid

Service with accompanying goods

Service with accompanying goods

Pure servicePure service

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Service Distinctions

Equipment-based or people-basedService processesClient’s presence required or notPersonal needs or business needsObjectives and ownership

Continuum of Evaluation for Different Types of Products

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Distinctive Characteristics of Services

Intangibility

Inseparability

Variability

Perishability

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Physical Evidence and Presentation

Place

People

Equipment

Communication material

Symbols

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How to Increase Quality Control

Invest in good hiring and training procedures

Monitor customer satisfaction

Standardize the service-performance process

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Increasing Quality Control:An Overnight Hotel Stay

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Matching Demand and Supply

Demand sideDifferential pricingNon-peak demandComplementary servicesReservation systems

Supply sidePart-time employeesPeak-time efficiencyIncreased consumer participationShared services

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Dimensions of Brand Experience

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Root Causes of Customer Failure

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Solutions to Customer Failures

Redesign processes and redefine customer roles to simplify service encountersIncorporate the right technology to aid employees and customersCreate high-performance customers by enhancing their role clarity, motivation, and abilityEncourage customer citizenship where customers help customers

Holistic Marketing for Services

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Factors Leading to Customer Switching BehaviorPricingInconvenienceCore Service FailureService Encounter FailuresResponse to Service FailureCompetitionEthical ProblemsInvoluntary Switching

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New Service Realities

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Gaps that Cause Unsuccessful Service Delivery

Gap between consumer expectation and management perceptionGap between management perception and service-quality specificationsGap between service-quality specifications and service deliveryGap between service delivery and external communicationsGap between perceived service and expected service

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Service-Quality Model

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Best Practices

Strategic ConceptTop-Management CommitmentHigh StandardsSelf-Service TechnologiesMonitoring SystemsSatisfying Customer ComplaintsSatisfying Employees

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Managing Service Brands:Differentiating Services

Offering more than the primary service packageAdd secondary features to the primary service packageLeverage human interaction by training and empowering employees to engage the consumerOffering a very wide assortment of services including cross-selling efforts

Developing Brand Strategies for Services

Choosing Brand Elements

Establishing ImageDimensions

Devising BrandingStrategy

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Determinants of Service Quality

ReliabilityResponsivenessAssuranceEmpathyTangibles

Importance-Performance Analysis

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Improving Service Quality

ListeningReliabilityBasic serviceService designRecovery

Surprising customersFair playTeamworkEmployee researchServant leadership

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Customer Worries

Reliability and Failure frequency

Downtime duration

Out-of-pocket costs

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