MKT 346: Marketing of Services Dr. Houston

MKT 346: Marketing of ServicesDr. Houston

Chapter 1:Introduction toServices Marketing

Why Study Services?

Services Dominate the Economy in Most Nations

Most New Jobs are Generated by Services

Government

Policies

Business

TrendsSocial

Changes

Advances in

IT

Globalization

Transforming the Service Economy

Five Major Forces

Are

Transforming

The Service Economy

Government

Policies

Business

Trends

Social

Changes

Advances in

IT

Globalization

Innovation in service products & delivery systems, stimulated by better technology

Customers have more choices and exercise more power

Success hinges on:● Understanding customers and competitors

● Viable business models

● Creation of value for customers and firm

● New markets and product categories

● Increase in demand for services

● More intense competition

Transforming the Service Economy

What Do Services Involve?

Services involve:

A form of rental Benefits without transfer of ownership

Customers pay for the temporary right to:

Hire the labor and expertise of personnel Obtain access to facilities and networks

Five Broad Categories of Non-Ownership Framework

Rented goods and services

Defined space and place rentals

Labor and expertise rentals

Access to shared physical environments

Systems and networks (access and usage)

Four Categories Of Services (Fig 1.10)

Defining Services

Activities, processes, and performances offered by one party to another

In exchange for money, time, and/or effort

Eight Distinctive Challenges of Marketing Services

Intangibility

Difficult to visualize and understand

Cannot be stored (perishability)

Co-produced with customers

Service personnel and customers play key role

Service experience varies widely

Time factor is very important

Distribution can be through non-physical channels

Services Require An Expanded Marketing Mix

●Marketing can be viewed as: A strategic and competitive direction A set of functional activities A customer-driven orientation

●Marketing is the only function that brings operating revenues into a business

All other functions are cost centers

Expanded Services Marketing Mix:The Seven Ps of Services Marketing

●Product elements (Chapter 4)

●Place and time (Chapter 5)

●Price and other user outlays (Chapter 6)

●Promotion and education (Chapter 7)

●Process (Chapter 8)

●Physical environment (Chapter 10)

●People (Chapter 11)

Framework For Developing Effective Service Marketing Strategies

Managing the Customer Interface

Part III: Chapters 8 - 11

Understanding Service Products, Consumers & Markets

Part I: Chapters 1 - 3

Applying the 4 Ps to Services

Part II: Chapters 4 - 7

Implementing Profitable Service Strategies

Part IV: Chapters 12 - 15

MKT 346 Chapter 1 Key Concepts

Why study services?

Eight common differences/special challenges of services (versus products)

Seven Ps of services marketing

Defining services

Five major forces transforming service economy

What are services?

Five broad categories within service non-ownership framework

Four broad categories of service