Lecture1
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This document summarizes the key challenges in marketing services discussed in a university course. It outlines the objectives of understanding the unique nature of services and exploring their marketing challenges. It then discusses several defining characteristics of services, including intangibility, heterogeneity, inseparability of production and consumption, perishability, and lack of ownership. These characteristics can create problems for marketing services in areas of process, people, and physical environment. Specifically, services are challenging to display, protect, and justify prices for. Their production also involves customers and can be difficult to standardize or control.
Lecture1
- 1. ECEW 22-23 May 2012 Professor Alan Wilson University of Strathclyde Business School Introduction: The Nature of Services and the Challenges for Marketing 1
- 2. ECEW 22-23 May 2012 • Understand the unique nature of services • Explore the marketing challenges with services Objectives 2
- 3. ECEW 22-23 May 2012 3
- 4. ECEW 22-23 May 2012 • Chapter 1 Textbook Reading 4
- 5. ECEW 22-23 May 2012 • A good is a thing, a service is an act or performance ( Rathmell, 1966) • Benefits are delivered through an interactive experience • Few pure goods or services - goods / service continuum (Rathmell, 1974) Services: A definition 5
- 6. ECEW 22-23 May 2012 Services Continuum Tangible Dominant Intangible Dominant Salt Soft Drinks Detergents Automobiles Cosmetics Advertising agencies Airlines Investment Mgnt Consulting Teaching Fast-food outlets Fast-food outlets 6
- 7. ECEW 22-23 May 2012 Blue Jeans Car Dental Examination Meal at Nice Restaurant Golf Lessons Haircut Dry Cleaning Houseplant Health Club Membership Rental Car Legal Advice Tailored Clothing Vacation Package Fast Food Tax Advice 7 Over to you!!
- 8. ECEW 22-23 May 2012 • Service is the fundamental basis of exchange • Goods are distribution mechanisms for service provision (they derive their value through use) • The customer is a co-creator of value • Value is unique to the beneficiary Service Dominant Logic Vargo and Lusch(2006) 8
- 9. ECEW 22-23 May 2012 Looking at the Whole Customer Experience 9
- 10. ECEW 22-23 May 2012 • Services deliver an experience – a bundle of benefits is delivered which creates an experience for the consumer – this delivery process has been entitled the Servuction System by Langeard and Eiglier Delivery of Services 10
- 11. ECEW 22-23 May 2012 The Servuction Model (Langeard and Eiglier) Invisible Organisation / Processes Inanimate Environment Contact Personnel Other Customers Bundle of Service Benefits - Customer A 11
- 12. ECEW 22-23 May 2012 • A period of time during which a consumer directly interacts with a service (Shostack,1985) • Moment of Truth (Normann,1991) – Perceived quality is realised when the service provider and the customer meets • Interaction impacts on service differentiation and service quality The Service Encounter 12
- 13. ECEW 22-23 May 2012 • Hotel Visit – Check in – Porter takes to room – Restaurant Meal – Wake up Call – Checkout • A failure at one point results in greater risk for dissatisfaction at each ensuing level The Service Encounter Cascade 13
- 14. ECEW 22-23 May 2012 • More likely to have some of the following: – Intangibility – Heterogeneity (non standardisation) – Inseparability of production and consumption – Perishability ( cannot be stored – Lack of ownership So what do services have in common? 14
- 15. ECEW 22-23 May 2012 • Intangibility – difficult to display or communicate – cannot protect through patents – difficult to justify prices • Heterogeneity – difficult to control variables: staff; customers and specific situation Resulting Marketing Problems 15
- 16. ECEW 22-23 May 2012 • Inseparability – consumer involved in production - implications for service and quality control • Perishability – difficult to synchronise supply and demand • Lack of Ownership – difficult to communicate true value Resulting Marketing Problems 16
- 17. ECEW 22-23 May 2012 • Clients pose problems for service organisations…. By disrupting their routines, failing to comply with their procedures and making exaggerated demands etc. Challenges for Process 17
- 18. ECEW 22-23 May 2012 • Those most responsible for customer interactions are often the lowest paid and least respected: – bank tellers – waiters – refuse collectors • They are the linkage between the customer and the company Challenges for People 18
- 19. ECEW 22-23 May 2012 • Customers witness the physical environment with all their senses • They witness it in real time Challenges for the Physical Environment 19
- 20. ECEW 22-23 May 2012 The Challenge – on a large scale 20