Pride Marketing14e Basic Ch14

Chapter 14Services Marketing

14 | 3Copyright © Houghton Mifflin Company. All rights reserved.

Objectives

• Understand nature and importance of services• Identify characteristics of services that

differentiate them from goods• Describe how the characteristics of services

influence development of marketing mixes for services

• Understand importance of service quality and explain how to deliver exceptional service quality

• Explore nature of nonprofit marketing


The Nature andImportance of Services

• Services as products

• Relationship to economic growth and lifestyle

• Business services

• Theater framework


Characteristics of Services

• Intangibility – not perceived by the senses or physically possessed

• Inseparability – being produced and consumed simultaneously

• Perishability – unused services can’t be used at a future time

AUA Presentation, Hallas, 21 November 2005, p.1


The Tangibility Continuum


Characteristics of Services (cont’d)

• Heterogeneity – variation in quality

• Client-based Relationships – interactions resulting in satisfied customers who use a service repeatedly

• Customer contact – the necessary level of interaction between provider and customer to deliver the service

Customer Contact Association


Developing andManaging Mixes for Services

K. Douglas Hoffman and John E. G. Bateson, Services Marketing: Concepts, Strategies, and Cases, 3rd ed. (Cincinnati: Thomson/South-Western, 2006); Valarie A. Zeithaml, A. Parasuraman, and

Leonard L. Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations (New York: Free Press, 1990); Leonard L. Berry and A. Parasuraman, Marketing Services:

Competing through Quality (New York: Free Press, 1991), p. 5.


Development Of Services

• Core Service- basic

• Supplementary Service- differentiates from bundle of competitors’

• Customization vs. Standardization

• Dilemma– Acceptable quality

– Efficient manner

– Satisfy customer needs


IntangibilityAnd Service Delivery

• Promises raise expectations

• Personnel

• Physical facility

• High-contact employees


Distribution Of Services

• Provider’s facility

• Customer home/business

• “Arm’s length”

• Marketing channel

– Direct

– Short

• Equipment supported


Promotion Of Services

• Intangibility• Tangible cues• Promote

– Price– Guarantees– Performance documentation– Availability– Training/certification

• Personal selling• Word-of-Mouth


Pricing Of Services

• Performance

• Time

• Demand-based

• Indicator of quality- paint and pricing (scroll 3/4 down page)

• Market conditions


Service Quality

Customers’ perception of how well a service provider meets or exceeds their expectations.


Search Qualities

Tangible attributes (of product) such as color, style, size, feel, fit that can be evaluated prior to purchase.


Experience Qualities

Attributes, such as taste, satisfaction, or pleasure, which can be assessed only during purchase and consumption of a service.


Credence Qualities

Attributes that customers may be unable to evaluate even after purchasing and consuming a service.


Dimensions Of Service Quality

Adapted from Leonard L. Berry and A. Parasuraman, Marketing Services: Competing through Quality (New York: Free Press, 1991 ); Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations (New York: Free Press, 1990); A.

Parasuraman, Leonard L. Berry, and Valarie A. Zeithaml, “An Empirical Examination of Relationships in an Extended Service Quality Model,” Marketing Science Institute Working Paper Series, Report no. 90–112 (Cambridge, MA: Marketing Science Institute, 1990), p. 29.


DeliveringExceptional Service Quality

• Analysis of customer expectations

– Zone of tolerance

• Service Quality Specifications

– Goals and commitment

• Employee Performance

– Evaluation and compensation

• Management of Service Expectations

– Realistic expectation; word-of-mouth


Service Quality Model

Adapted from A. Parasuraman, Leonard L. Berry, and Valarie A. Zeithaml, “An Empirical Examination of Relationships in an Extended Service Quality Model,” Marketing Science Institute Working Paper Series, Report no. 90–112, 1990. Reprinted by permission of Marketing Science Institute, and the authors.


Nonprofit Marketing

Activities conducted to achieve some goal other than ordinary business goals such as profit, market share, or return on investment

Muscular Dystrophy Association


How Is NonprofitMarketing Different?

• Not considered a business

• Greater opportunity for creativity

• Difficult to measure performance

• Sometimes controversial

• Provide body of knowledge


Nonprofit Marketing Objectives

• Change values

• Financial contribution

• Donation of services

• Shaped by nature of exchange and goals

United Way


Developing NonprofitMarketing Strategies

• Target Markets– Target– Client– General

• Develop Market Mix– Product = abstract ideas/concepts– Distribution = right media– Promotion = multiple methods– Pricing = fixed and variable costs


Opportunity Cost

The value of the benefit given up by selecting one alternative over another.

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Pride Marketing14e Basic Ch14