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36 Cards in this Set
- Front
- Back
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Service |
- Are intangible (performance based products that cannot be touched) - Biggest contributor to New Zealand's GDP - They are acts, performances or experiences' - Economic activities that create experiential value and provide benefit to customers at a specific time and place. |
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Examples of service industries |
- Child care - Air travel - Legal advice - Banking - Repairs - Doctor - Education - Phone services |
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Characteristics of Services |
- The unique characteristics of services are intangibility, inseparability, heterogeneity and perishability, lack of ownership - Intangibility - Services cannot be easily perceived by the five physical senses, increasing customer feelings of uncertainty and risk about the purchase. To reduce things anxiety: > use tangible cues (logos, uniforms) > Use guarantees, testimonials and word-of-mouth |
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Promotional Strategies to Suggest Benefits of Services |
- Visualisation - Association - Physical Representation - Documentation |
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Inseparability |
- The characteristic of being produced and consumed simultaneously. Buyers and sellers of services are frequently 'co-producers' of the service - A service must be co-created - Need to be concerned with their technical skill and customer service delivery; may need to promote via personal selling - Delivering services face-to-face promotes trust - Limits scale of operation |
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Heterogeneity - cannot provide the same exact service every time, difficult to standardise |
- Inevitable, but minimisable, variations in quality in the delivery of a service product - Key strategies to overcome heterogeneity include: > develop service delivery systems (e.g., McDonald's) > manage customer expectations > invest heavily in staff training > quality control |
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Perishability |
- The inability to store services for a use at a later date - Supply and demand can be balanced by: > stimulating demand e.g., cheaper movies tickets on Tuesdays > restricting demand > increasing or decreasing supply capacity > special product offerings > reservation systems
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Ownership |
- No exchange of ownership, no tangible offering results from the exchange - Service customers only have access to the servicescape |
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The Marketing Mix for Services (The 7 P's) |
- Product - Promotion - Price - Process - Physical facilities - Place - People |
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People, process and physical evidence |
- Elements of the extended services marketing mix, focusing upon 'the delivery of the promise' |
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People |
- Create and deliver the service, and affect value for the customer as they are directly involved in the service experience - Staff is the most controllable factor in service delivery. Must choose staff who are: > technically competent > able to deliver high standards of service > able to promote products through personal selling |
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Process |
All the systems and procedures are used to create, communicate, deliver and exchange an offering. The process should result in a performance that exceeds the customer's expectation. Functional expectations: Expectations of the technical delivery of the service transaction Customer service expectations: Relate to the service experience |
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Physical evidence |
- Tangible cues that can be used as a means to evaluate service quality prior to purchase e.g., architectural design, floor layout, furniture, colours, background music and smell. |
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Classification of Services |
Services can be classified on: - Whether the service affects the customer directly OR something that the customer owns - Whether the service is relatively intangible OR mainly intangible |
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Customer Tangible/Intangible services |
Tangible: - haircut - plastic surgery - manicure - fitness training Intangible - university education - spiritual guidance - flower-arranging course |
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Possessions Tangible/Intangible services |
Tangible: - dry-cleaning - car repair - house cleaning - package delivery Intangible - banking - accounting services - insurance |
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The Goods/Services Continuum |
Most products are a really good combination of goods and a service. Products can be plotted on a goods continuum based on their level of intangibility This continuum shows that while products are either tangible or intangible, they will always both include elements of a good and service. |
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Goods-Dominated Products |
Most tangible products are accompanied by supporting services e.g., a consumer helpline, an internet site, or warranty period Marketers of goods often add additional services in order to augment the product and gain a competitive advantage |
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Augment |
Make something greater by adding to it. |
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Equipment or Facility-Based Services |
These are products with around an equal mix of tangible and intangible elements e.g., a restaurant which has tangible aspects of the food and the surroundings, along with the intangible elements of service and atmosphere |
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Operational Factors |
involves making it easy for the customer to use the service |
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Location Factors |
means that service site should be conveniently located |
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Environmental Factors |
means the service environment must be pleasant and attractive |
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People-Based Services |
-highly intangible products e.g., entertainment, medical and education -they are increasing in usage due to the market becoming more time poor -consumers need to be part of the service process -sometimes the amount of benefit the consumer receives depends on their own input, such as input and health/fitness |
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The Service Encounter |
occurs when a customer comes into contact with the organisation, usually with an employee sometime referred to as the 'moment of truth' |
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Dimensions of the Service Encounter |
the two main dimensions of the service encounter are the social contact and its physical dimension |
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Social Contact Dimension |
quality of the service is tied to the company employees, and the customer will often judge overall service quality based on this encounter |
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Physical Dimension |
the physical surroundings can affect consumer's mood, behaviour, and satisfaction referred to as servicescape and includes facilities, decor, colours, signage, parking and so on |
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Providing Service Quality |
the customer's overall judgement about the service's performance this view is established by comparison against the customer's expectations and against competitors' service quality |
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SERVQUAL'S Dimensions |
Reliability, Responsiveness, Tangibles, Empathy & Assurance |
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Reliability |
Dependable service performance |
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Responsiveness |
Prompt and helpful service |
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Tangibles |
The physical facilities associated with providing the service |
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Empathy |
Understanding how the service satisfies customer's needs |
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Asusrance |
Confident and courteous service |
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The FIVE SERVQUAL Gaps |
Gap 1: The gap between consumer expectations and management perceptions Gap 2: The gap between management perceptions and the quality standards set by the company Gap 3: The gap between established quality standards and service delivery Gap 4: The gap between service quality standards and consumer expectations Gap 5: The gap between expected service and perceived service |
