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Econ 344 Chapter 12: Managing Services
Terms in this set (13)
Intangible activities, benefits, or satisfactions that an organization provides to its consumers.
Examples: transportation services such as AirCanada, restaurant services, hotels, electricity, internet or phone providers...
Responsible for over 70 % of Canada's total economic output, as well as over 75 percent of its workforce.
seven Ps of services marketing
Managers of goods and services must design the product concept, whether a good or a service, with the features and benefits desired by customers.
---Because services are intangible and, therefore, more difficult to describe, the brand name or identifying logo is particularly important
---Therefore, service organizations rely on branding strategies in order to distinguish themselves in the minds of the consumers.
---Strong brand names are important for services marketers, not only for differentiation purposes but also for conveying an image of quality.
---A service firm with a well-established brand reputation will also find it easier to market new services than firms without such brand reputation
Because of the intangible nature of services, price is often perceived by consumers as a possible indicator of the quality of the service.
For example, would you be willing to risk a $10 dental surgery?
In many cases price becomes very important as a quality indicator.
Place or distribution is a major factor in developing a services-marketing strategy because of the inseparability of services from the producer.
Until recently, customers generally had to go to the service provider's physical location to purchase the service.
---The value of promotion, especially advertising, for many services is to show consumers the benefits of purchasing the service.
---While many service firms are using the Internet as an alternative distribution channel, they are also using it as an advertising or promotional medium.
---Public relations is an important promotional tool for service firms.
Public relations tools, such as event sponsorship or public-service activities, are very popular among service companies.
---Personal selling also plays an important role in services marketing.
When a consumer buys a service, he or she is buying the person selling the service.
---Service firms are also using social media to promote their businesses.
Many services heavily depend on people for the creation and delivery of the customer service experience.
Customers will often judge the quality of the service experience based on the performances of the people providing the service.
This aspect of services marketing has led to internal marketing
based on the notion that in order for a service organization to serve its customers well, it must care for and treat its employees like valued customers.
---It must focus on its employees (or its internal market) before successful marketing efforts can be directed at customers.
---The organization must properly select, train, and motivate all of its employees to work together to provide service quality, excellent customer experiences, and customer satisfaction.
where the firm and customer interact can influence the customer's perception of the service.
---The physical evidence of the service includes all the tangibles surrounding the service: the buildings, landscaping, vehicles, furnishings, signage, brochures, social media, and equipment.
---Service firms need to manage physical evidence carefully and systematically in order to convey the proper impression of the service to the customer.
***REFERRED TO AS IMPRESSION MANAGEMENT
In services marketing, process refers to the actual procedures, mechanisms, and flow of activities by which the service is created and delivered.
---In services marketing, process involves not only "what" gets created but also "how" it gets created.
The customer contact audit
flow chart of the points of interaction between customer and service provider—can serve as a basis for ensuring better service creation and delivery processes.
---Most services have a limited capacity due to the inseparability of the service from the service provider.
For example, a patient must be in the hospital at the same time as the surgeon to receive a treatment and only one patient can be helped at that time.
services marketers have a relatively fixed capacity to produce a service, they must make that capacity as productive as possible without compromising service quality
charging different prices during different times of the day or days of the week to reflect variations in demand for the service.
plays an important role in capacity management.
For example, airlines offer discounts for weekend travel, movie theatres offer matinee pricing, and restaurants offer early-bird pricing in order to maintain the productivity of their service capacity.