Services+f2012
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The document discusses some key differences between goods and services. It notes that services make up around 76% of the economy and 79% of employment. Some differences highlighted include that services are intangible, involve customer participation in their production, are perishable, and are inseparable from their producer. The document provides examples and discusses challenges and potential marketing solutions for each difference.
Services+f2012
- 1. Services • Services increasingly important in economy • Good/service continuum – Pound of salt – Haircut • Several key differences
- 2. Services Services as a percentage of GDP 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 76% Services as a percentage of employment 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 79% 3
- 3. Services • Services increasingly important in economy • Good/service continuum – Pound of salt – Haircut • Several key differences
- 4. Services • Intangibility – Problem • Hard to display, sample, or communicate • Hard for customers to evaluate quality until after the fact • Can be easily copied by competitors, cannot be protected with patents, trade secrets, etc.
- 5. Services • Intangibility – Marketing solutions • Stress tangible cues – Product (tangibility) Continuum – Add tangibility where possible • Seek service excellence • Use personal sources, stimulate word-of-mouth • Use post-purchase communication
- 6. Services • Customer involvement – Problem • Customer involved in “production” – No chance to rectify problems prior to customer contact • Customer visits “factory” • Service performance uses customer time
- 7. Services • Customer involvement – Marketing solutions • Focus on appearance of facility and employees • Stress employee training/courtesy • Use multiple locations • Pay attention to time considerations – Queuing theory
- 8. Services • Perishability – Problem • Capacity is limited • Demand can be unpredictable • Services cannot be inventoried or backordered • Mismatch of supply/demand cannot be recaptured
- 9. Services • Perishability – Marketing solutions • Strive to accurately predict demand • Manage/shift demand – Matinees • Manage/shift supply – Extended hours
- 10. Services • Variability/Inseparability from Producer – Problem • Different service providers • Hard to mass produce • Hard to ensure consistent quality • Hard to communicate quality to consumer
- 11. Services • Variability/Inseparability from Producer – Marketing solutions • Strong training programs, performance rewards • Use tools to aid standardization • Focus on personal attention • Consider licensing, other credentials