Welcome to Services Marketing

1
Welcome to Services Marketing

• Semester 2, 2002

2
Course leader Janelle McPhail

• Room T422
• Ph 46 31 1275
• Lecture Friday 11-1 T120
• Consultation times
• Tue 8-10
• Fri 8-10

3
Tutor Barbara Sweeting

• Room T 425-3
• Phone [phone]
• Tutorial times
• Tues 10 12 K307
• Wed 4 6 T122
• Consultation times
• Tue 12 1
• Thur 2 -3

4
Study resources

• Text - Lovelock, Patterson Walker (2001)
• Services Marketing An Asia-Pacific Perspective
• Study book
• learning objectives
• key terms
• activities
• review questions
• Selected readings
• Course home page
• http//www.usq.edu.au/course/material/MKT3003/

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What is in the introductory book?

• approach to study (pp. 1-3)
• course home page is
• http//www.usq.edu.au/course/material/MKT3003/
• course specification day (homepage)
• course overview (p. 3)
• study schedule (pp. 9 - 10)
• assessment (pp. 20-1)
• assessment for internal students is different for
  assignment 1 (get handout from home page)
• guidelines for case analysis (pp. 21-32)

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Assessment

• Assignment 1 - internal
• Case brief presentation (20)
• Case briefs (2x 2.5) 5
• Class participation / Discussion question session
  (5)
• 4 Ps of student involvement in tutorials
• Preparation
• Presence
• Promptness
• Participation

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Assessment

• Assignment 2 (20) (pp. 34 - 37)
• Extended service encounter report
• Extended marking guide - homepage
• Exam (50) past exam (p. 41)

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Examination

• weighting 50
• 2 hours
• answer 8 out of 10 questions
• all modules are examinable
• based on learning objectives and review questions
• readings are examinable

9
Assessment for internal students

• Please download a copy of the handout from the
  unit home page and bring it to the first tutorial

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Discussion Board WebCT

• USQConnect Studydesk WebCT
• Discussion areas (4)
• Introduction course leader intro discussion
  group protocols student introduction contact
  area
• General course discussion forum
• Assessment Ass 1 Ass 2 Exam
• Questions to Course Leader 4 topics areas

11
Distinctive Aspects of Services Marketing

• Module 1 Chapter 1
• Text Reading 11 Selected Reading 1.1

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Lecture outline

• What is a service?
• Why study services marketing?
• Growth and change in the services sector
• Categorisations of services
• Services differ from goods
• Four unique characteristics of service
• The expanded services marketing mix
• A framework for analysing services marketing

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What is a service?

• A service is an act or a performance.
• Services are processes or activities.
• A service is an activity or a series of
  activities which take place in interactions with
  a contact person or a physical machine and which
  provides consumer satisfaction (Lehtinen 1983, p.
  21).
• Customers buy an experience or performance must
  be staged,managed and performed

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Services are diverse

• Consumer services
• Airlines
• Banking and finance
• Health services
• Hotels
• Restaurants
• Personal services

• Business to Business
• Accountancy
• Construction
• Legal
• Consulting
• architecture

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Why study services marketing?

• significantly different from goods marketing
• relatively new discipline with a strong
  interdisciplinary base
• importance of services sector
• 70 - 80 GDP in highly dev. economies
• about 80 workforce employment

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Transformation of the service economy
International-isation
Government regulation
Social changes
Business trends
Advances in technology

• Hollowing out effect
• Increased services trade
• Globalcustomers

• Deregulation/ privatisation
• New trade agreements in services

• Increased consumer expectations
• Increased affluence and leisure time
• Working women

• Relaxation of professional assn. standards
• Marketing emphasis by non-profit organisations
• Outsourcing
• Quality movement
• Franchising

• Convergence of computers and telecommuni-cations
• Miniaturisation
• Digitalisation
• Enhanced software

Increased demand and competition
Facilitated by information technology
Growth and focus on service marketing and
management
17
So then what are some major service opportunities?

• New technology
• new or improved services
• self service formats
• centralised customer service systems
• database marketing
• Franchising
• standardised service formats
• greater market impact

18
Service opportunities cont.

• Support services for physical goods
• transport, storage, insurance
• installation, repair, maintenance
• training
• International markets
• Changing lifestyles
• home services and personal services
• health, tourism, recreation

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Categorisations of services

• Degree of tangibility
• pure tangible good
• tangible good with accompanying service
• major service with accompanying minor service
• pure intangible service (Kotler et al. 2001)

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Tangibility of goods and services
21
Three types of services

• Refer to fig 1.1 (SB, p. 1.11)
• product-related services
• guarantees warranties, repairs maintenance
• equipment-based services
• automated, unskilled, skilled
• people-based services
• unskilled, skilled, professional

22

23
Inseparable
Intangible
Services are different from goods
Perishable
Variable
24
Intangible

• cannot be seen
• do not result in ownership
• greater risk
• difficult to evaluate
• search, experience, or credence qualities
• (refer fig 1.7, p. 20)

25
Product qualities affect ease of evaluation
26
Strategies for intangibility

• provide tangible evidence
• symbolic cues (i.e. uniforms, logos)
• tangible cues (i.e. membership cards, ticket,
  certificates)
• reduce risk
• emphasise reputation and qualifications
• service guarantees
• inform and educate customers

27
Variable (Heterogeneity)

• service quality varies across service encounters
• service encounter is the interaction between
  service employee and customer
• moments of truth
• service people are central to service delivery
• service is delivered in real time

28
Strategies for variability

• customer surveys and feedback
• training in interpersonal and technical skills
• provide product knowledge
• ensure back-stage systems support front line
  staff
• use standardisation strategies
• franchising, scripts
• build quality into all processes

29
Inseparable

• simultaneous production and consumption
• short channels
• direct distribution (enter service factory)
• limited use of service intermediaries
• the service provider is the product
• the customer is involved (partial employee)
• other customers may be present

30
Strategies for inseparability

• manage the service encounter
• scripts and roles
• front-line staff need both technical and
  interpersonal skills (recruit train)
• educate the customer (provider marketer)
• manage customer interactions
• manage the physical evidence
• develop customer service policies and service
  recovery procedures

31
Perishable

• services cannot be stored
• need to manage supply and demand

32
How can demand be managed?

• accurate demand forecasting
• develop off-peak and on-peak strategies
• use reservation systems and differential pricing
• employ part-time staff
• extend hours of operation
• Provide self-service options (i.e. ATMs, internet
  banking)

33
An expanded marketing mix for services figure
1.9, p. 24
Product (service)
People
Process
Customers
Place, cyber-space time
Place Time
Customers
Price
Price
Customers
Promotion
Physical evidence
34
People

• customer
• service employees
• other customers

35
Physical evidence

• atmosphere
• décor, music etc.
• equipment
• facilities
• uniforms

36
Process

• service delivery systems
• back stage
• front stage
• procedures
• policies

37
Services marketing requires an integrated approach

• Refer to fig 1.9 (p. 26)
• Aim of the service firm is
• satisfy the customer
• deliver service quality
• establish a loyal customer base
• Requires
• traditional marketing
• relationship management
• internal marketing

38
A framework for analysing services marketing
39

• Strong interdependence between
• Marketing
• Operations
• Human resources

40
Summary

• What is a service?
• Why study services marketing?
• Transformation of the services sector
• Categorisations of services
• Services differ from goods
• Four unique characteristics of service
• The expanded services marketing mix
• A framework for analysing services marketing

41
Tutorial program

• Topic
• discussion on assessment for internal students
• case analysis, case presentation, case briefs,
  discussions questions
• organise case program, case teams, briefing notes
  discussion questions
• Four unique characteristics of services
• challenges and strategies
• Selected reading 1.1
• ethical issues