McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc All Rights Rese LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 12, YOU SHOULD BE ABLE TO: LO1 Describe four unique elements of services LO2 Recognize how services differ and how they can be classified LO3 Explain how consumers purchase and evaluate services LO4 Develop a customer contact audit to identify service advantages 12-2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 12, YOU SHOULD BE ABLE TO: LO5 LO6 Discuss the important roles of internal marketing and customer experience management Explain the role of the four Ps in the services marketing mix 12-3 FIGURE 12-1 Services are now a larger part of the U.S gross domestic product (GDP) 12-5 THE UNIQUENESS OF SERVICES Slide 12-6 LO1  THE UNIQENESS OF SERVICES THE FOUR I’S OF SERVICES Four I’s of Services • Intangibility • Inseparability • Inconsistency • Inventory  Idle Production Capacity 12-7 THE UNIQUENESS OF SERVICES • The Four I’s of Services Intangibility • They cannot be held, touched, or seen before the purchase decision • Difficult for consumers to evaluate as they tend to be a performance rather than an object • Marketers need to make services tangible or show their benefits Slide 12-6 THE UNIQUENESS OF SERVICES • The Four I’s of Services Inconsistency • Services depend on the people who provide them – their quality varies with each person's capabilities and day-to-day performance • More of a problem with services than with tangible goods – problems can be reduced through standardization and training Slide 12-6 THE UNIQUENESS OF SERVICES • The Four I’s of Services Inseparability • Consumers cannot (and not) separate the deliverer of the service from the service itself • The amount of interaction between the consumer and the service provider depends on the extent to which the consumer must be present to receive the service • Some services, such as banking, can now be delivered electronically, often requiring no face-to-face consumer interaction and therefore a more consistent experience Slide 12-6 THE UNIQUENESS OF SERVICES • The Four I’s of Services Inventory • Inventory problems exist with goods because many items are perishable and there are costs associated with its handling • With services, inventory costs are more subjective and are related to idle production capacity (the service provider is available but there is no demand) Slide 12-6 MANAGING THE MARKETING OF SERVICES II Price – price is referred to in various ways by different services: – Hospitals – charges – Lawyers – fees – Airlines – fares – Hotels - rates Slide 12-32 MANAGING THE MARKETING OF SERVICES III Place (Distribution) – Historically little attention has been paid to distribution – As competition grows, the value of conventional distribution, or access, is being recognized – Availability of electronic distribution through the internet now provides global coverage for a variety of services Slide 12-32 MANAGING THE MARKETING OF SERVICES IV Promotion – the value of promotion, specifically advertising, is to show the benefits of purchasing the service by stressing availability, quality, location, etc – Publicity has played a major role in the promotional strategy of not-for-profit services and some professional organizations – Many use PSAs Slide 12-32 SERVICES IN THE FUTURE Technology – New e-services will include voice-overInternet (telephone), home videoconferencing, and new forms of security and identification (e.g., fingerprint and retinal scans) – New Internet-based services also make it possible to obtain videos, movies, and textbooks electronically Slide 12-32 SERVICES IN THE FUTURE Global Economy – Increasing attention to the cross-cultural implications for service quality – Shifting from the focus on goods and tangible resources to services and intangible attributes Slide 12-32 Services Services are the intangible activities or benefits that an organization provides to consumers in exchange money or something else of value 12-51 Four I’s of Services The four I’s of services consists of the four unique elements to services: intangibility, inconsistency, inseparability, and inventory 12-52 Idle Production Capacity Idle production capacity occurs when the service provider is available but there is no demand 12-53 Service Continuum The service continuum consists of the range of offerings companies bring to the market, from the tangible to the intangible or good-dominant to servicedominant offerings 12-54 Gap Analysis Gap analysis is a type of analysis that identifies the differences between a consumer’s expectations about and experiences with a service based on dimensions of service quality 12-55 Customer Contact Audit A customer contact audit is a flowchart of the points of interaction between consumers and a service provider 12-56 Internal Marketing Internal marketing is the notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers 12-57 Customer Experience Management (CEM) Customer experience management (CEM) is the process of managing the entire customer experience within the company 12-58 Capacity Management Capacity management integrates the service component of the marketing mix with efforts to influence consumer demand 12-59 Off-Peak Pricing Off-peak pricing involves charging different prices during different times of the day or days of the week to reflect variations in demand for the service 12-60 ... Discuss the important roles of internal marketing and customer experience management Explain the role of the four Ps in the services marketing mix 12-3 FIGURE 12-1 Services are now a larger part of... gross domestic product (GDP) 12-5 THE UNIQUENESS OF SERVICES Slide 12-6 LO1  THE UNIQENESS OF SERVICES THE FOUR I’S OF SERVICES Four I’s of Services • Intangibility • Inseparability • Inconsistency... an object • Marketers need to make services tangible or show their benefits Slide 12-6 THE UNIQUENESS OF SERVICES • The Four I’s of Services Inconsistency • Services depend on the people who provide