Upload
chris-lovett
View
85
Download
0
Embed Size (px)
DESCRIPTION
bmgt 411 marketing management fall 2014 chris lovett
Citation preview
BMGT 411: Chapter 11
Designing and Managing Services
Chapter Questions?
• How do we define and classify services and how do they differ from goods?
• What are the new services realities?
• How can we improve service quality?
• How can goods marketers improve customer support services?
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
• Think of some companies that provide a service
• What do they provide?
• How is success measured?
• Where is the service delivered?
Categories of Service Mix
• Pure tangible good: A tangible good with no accompanying service provided
• Ex: Toothpaste
• Good with accompanying services: A good that is accompanied by one or more service
• Ex. smartphone (good) with data plan (service)
• Hybrid: An offering with equal parts goods and services
• Ex. Restaurant or Grocery Store
Categories of Service Mix
• Major Service with Accompanying minor Goods or Service: A major service with additional services or goods
• Ex. Airline Service with Drink Service during flight
• Pure Service: Primarily an intangible service being provided, with no goods included
• Ex. Dentists, Childcare, etc
Figure 11.1 Continuum of Evaluation for Different Types of Products
Qualities of Goods and Services
• Search Qualities: The buyer can usually evaluate even before purchases and compare
• Ex. Clothing, Food, etc
• Experience Qualities: Characteristics the buyer can evaluate after it is purchased
• Ex. Haircut, Vacations
• Credence Qualities: The buyer can find it hard to evaluate even after consumption
• Ex. Auto Repair, Dental Work, Medical
Distinctive Characteristics of Services
Intangibility
Inseparability
Variability
Perishability
Intangibility
• Services cannot be seen, tasted, felt, heard, or smelled
• Service firms try to demonstrate their service by physical evidence
• Ex. Colleges will publish employment statistics, etc to make the intangible seem tangible
Inseparability
• Services are usually produced and consumed simultaneously vs goods produced elsewhere
• Provider/Client interaction is a special feature of service marketing
• More training may be involved to make customer service outstanding since it is so visible
Variability
• Services are highly variable because the quality depends on who provides them
• Good hiring and training (Starbucks)
• Standardize service performance (Zappos)
• Monitor customer satisfaction (Most retailers)
Perishability
• Services cannot be stored, so perishability can be a problem when demand fluctuates
• Off- Peak Pricing (Sonic Happy Hour)
• Cultivating non-peak demand (McDonald’s Breakfast)
• Offering complimentary services as alternatives (ATM Banking Vs. Tellers)
New Service Realities
• Customer Empowerment: Social Media has enabled customers to broadcast a bad experience to a very wide audience
• Most companies have their customer service departments monitoring social media for negative feedback, and responding almost instantly
• Led by @comcastcares and @frankelliason
Figure 11.2 Root Causes of Customer Failure
• Redesign processes and redefine customer roles to simplify service encounters
• Incorporate the right technology to aid employees and customers
• Create high-performance customers by enhancing their role clarity, motivation, and ability
• Encourage customer citizenship where customers help customers
Solutions to Customer Failures
Best Practices in Service Companies
• Strategic Concept: Customer service is behind everything the company does
• Top-Management Commitment: Management commitment to putting service performance along with financial performance as a quality metric
• High Standards: Setting very high quality standards to avoid the most customer disruptions
• Ex. a 98% errors rate with an electrical supplier would result in no electricity for 8 days
Best Practices in Service Companies
• Self-Service (Better Options) Technologies: Providing customers with different levels of comfort to use technology to increase service (Airline self check in, grocery store self-checkout, ATMs, Online Banking)
• Profit Tiers: Customizing service levels based on profitability of the customers
• Ex. AMEX Black Card, Lincoln Concierge
• Monitoring Systems
• Satisfying Customer Complaints
Figure 11.3: Service Quality Model
• Gap between consumer expectation and management expectation
• The customer may want something entirely different than what is being delivered
• Gap between management perception and service quality specification
• Ex: Being very clear on specifications, speed in minutes, etc
• Gap between service quality specifications and service delivery
• Often a result of poor training
Managing Customer Expectations
• Gap between service delivery and external communications
• Ex. Toys R Us Foursquare Check in Discount
• Gap between perceived service and expected service
• Occurs when the customer misperceives the service quality
Managing Customer Expectations
Determinants of Service Quality
1.Reliability
2.Responsiveness
3.Assurance
4.Empathy
5.Tangibles