Services MarketingUnderstanding services, its customers, and its market

The gaps model of service quality

Why services?

YOUR expectations from course, facilitator, and

classmates

Some backgrounds

Services dominate the economy in most nations.

Most new jobs are generated by services.

Offers a personal competitive advantage.

Stimulating factors

Government policiesSocial changesBusiness trends

Advances in information technologyGlobalization

Services are economic activities offered by one party to another. Often time-based, performances bring about desired results to recipients, objects, or other assets for

which purchasers have responsibility.

Services are deeds, processes, and performances.

Four categories of services

People Possessions

Tangible actions People-processing (at people’s bodies)

Possessions-processing(at physical possessions)

Intangible actionsMental stimulus

processing(at people’s mind)

Information processing

(at intangible assets)

Examples of four categories

Eight common featuresDifference Implication

Most services cannot be inventoried Customers may be turned away or have to wait

Intangible elements dominate value creation Harder to evaluate and distinguish service

Difficult to visualize and understand Greater risk and uncertainty

Customers may be involved in co-production Interaction with provider’s equipment, facilities, and system

People may be part of the service experience Service personnel and other customers can shape the experience and affect satisfaction

Operational inputs and outputs tend to vary Harder to maintain consistency, reliability, and service quality

The time factor often assumes great importance Customers spend time wisely

Distribution through non-physical channels Information-based services through electronic channels; but cannot for physical activities/goods

Seven Ps

PRODUCTPRICEPLACE

PROMOTIONPROCESS

PHYSICAL ENVPEOPLE

PRODUCTPRICEPLACE

PROMOTION

Service focus strategies

Wide service offering

Narrowservice offering

Few markets Market focusedFully focused

(service and market focused)

Many markets Unfocused(everything for everyone)

Service focused

Examples Strategies

Market focused

Fully focused

Unfocused

Service focused

Janitorial

Hobby stores

Some malls

Cafe

Attributes for positioning

Important attributes: important to the consumer, but that may not be important for buying decisions.

Determinant attributes: significant differences between competing alternatives.

Break

Service quality dimensionsTangibles - appearance of physical environment

Reliability - dependable and accurate performance

Responsiveness - promptness and helpfulness

Assurance - credibility, security, competence, and courtesy

Empathy - easy access, good communications, and customer understanding

ServQual Dimensions forBankHotel

Hospital

The gaps modelWord of mouth Personal needs Past experience

Expected service

Perceived service

Service delivery

Perception translation into servqual specs

Management perception of

expected service

External communications

to consumers

CONSUMER

SERVICE FIRM

Gap 1

Gap 2

Gap 3

Gap 5

Gap 6

Gap 4

The gaps model

Gap 1: the knowledge - educate management about what customers expect

Gap 2: the policy - establish the right service processes and specify standards

Gap 3: the delivery - ensure that performance meets standards

Gap 4: the communications - ensure the communications promises are realistic and correctly understood by customers

Gap 5: the perception - tangibilize and communicate the service quality delivered

Gap 6: the service quality - close gap 1 to 5 to consistently meet customer expectation

Share your gap experience as service consumers

Gap 1: The knowledge

Sharpen market research procedures

Implement an effective customer feedback system

Increase interactions between consumers and management

Facilitate and encourage communication between front-liner and management

Gap 2: The policy

Get customer service process right

Develop tiered service products that meet customer expectations

Set, communicate, and reinforce measurable customer-oriented service standards for all work units

Gap 3: The delivery

Ensure that customer service teams are motivated and able to meet service standards

Install the right technology, equipment, support processes, and capacity

Manage customers for service quality

Gap 4: The communications

Educate managers responsible for sales and marketing communications about operational capabilities

Ensure that communications content sets realistic customer expectations

Be specific with promises and manage customers’ understanding of communication content

Gap 5: The perceptions

Make service quality tangible and communicate the service quality delivered

Concern with service environment, physical evidence, and information quality.

Gap 6: The service quality

Gap 6 is the accumulated outcome of all the preceding gaps. It will be closed when Gaps 1 to 5 have been addressed.

Class conclusion and questions

Class assignmentscase and final presentation

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