9fms Pp12

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Published on January 29, 2009

Author: bhagchand

Source: slideshare.net

Chapter 12 Services Marketing and Customer Relationships Sommers  Barnes Ninth Canadian Edition Presentation by Karen A. Blotnicky Mount Saint Vincent University, Halifax, NS Copyright © 200 1 by McGraw-Hill Ryerson Limited

Chapter Goals To gain an understanding of: The nature and importance of services Characteristics of services and their marketing implications Issues related to the planning and marketing of services The four Rs of services marketing The relationship marketing approach The impact of technology in providing services

To gain an understanding of:

The nature and importance of services

Characteristics of services and their marketing implications

Issues related to the planning and marketing of services

The four Rs of services marketing

The relationship marketing approach

The impact of technology in providing services

The Nature of Services regardless of the “product”, there is a services component to the offerings of all firms in some cases, a service is the principal purpose of the transaction, as in the rental of a car, a haircut, or legal services -- we refer to this as the core service in others, service is performed in support of the sale of a tangible product -- these are referred to as supplementary services

regardless of the “product”, there is a services component to the offerings of all firms

in some cases, a service is the principal purpose of the transaction, as in the rental of a car, a haircut, or legal services -- we refer to this as the core service

in others, service is performed in support of the sale of a tangible product -- these are referred to as supplementary services

Goods and Services Continuum There are two classes of services. Services that are the main purpose of a transaction —renting a truck to move. Services that supplement the sale of a tangible good — for example, an information hotline for computer software. The focus here is primarily on identifiable, intangible services that are the main object of a transaction designed to provide want-satisfaction to customers; supplementary services growing in importance, however.

There are two classes of services.

Services that are the main purpose of a transaction —renting a truck to move.

Services that supplement the sale of a tangible good — for example, an information hotline for computer software.

The focus here is primarily on identifiable, intangible services that are the main object of a transaction designed to provide want-satisfaction to customers; supplementary services growing in importance, however.

Canned foods Ready- made clothes Auto- mobiles Draperies, Carpets Rest- aurant meals Repairs: auto, house, landscaping Air travel Insurance, Consulting, Teaching MOSTLY GOODS MOSTLY SERVICES The Goods-Services Continuum

Importance of Services Three-fourths of the Canadian labour force is employed in service industries. Over 70% of the nation’s gross national product is produced by services. From 1986 to 2000, virtually all new jobs will be in the service industries. Huge growth in personal services as well as business services. Copyright © 1998 by The McGraw-Hill Companies, Inc.

Three-fourths of the Canadian labour force is employed in service industries.

Over 70% of the nation’s gross national product is produced by services.

From 1986 to 2000, virtually all new jobs will be in the service industries.

Huge growth in personal services as well as business services.

Characteristics of Services intangibility : difficult to sample and to evaluate inseparability : difficult to separate services from the service provider; mainly direct sales; staff are essential to the delivery of quality services heterogeneity : virtually every service is different; very difficult to standardize quality perishability : those not sold can not be stored fluctuating demand : demand for some services fluctuates by season, or even by time of day

intangibility : difficult to sample and to evaluate

inseparability : difficult to separate services from the service provider; mainly direct sales; staff are essential to the delivery of quality services

heterogeneity : virtually every service is different; very difficult to standardize quality

perishability : those not sold can not be stored

fluctuating demand : demand for some services fluctuates by season, or even by time of day

Strategic Services Management intangibility generally makes the marketing of services a challenge understanding how people buy services and the segments that exist is just as important knowing more about the value of customer segments is important -- some are more valuable than others knowing what they value so that service levels can be tailored is also important

intangibility generally makes the marketing of services a challenge

understanding how people buy services and the segments that exist is just as important

knowing more about the value of customer segments is important -- some are more valuable than others

knowing what they value so that service levels can be tailored is also important

Strategic Product Implications service organizations have to plan the introduction of new services and the management of the life cycle the core service can be enhanced through the addition of supplementary services, thereby creating added value the life cycle of services has to be managed the branding of a service can be difficult as the customer often has nothing tangible to show

service organizations have to plan the introduction of new services and the management of the life cycle

the core service can be enhanced through the addition of supplementary services, thereby creating added value

the life cycle of services has to be managed

the branding of a service can be difficult as the customer often has nothing tangible to show

Managing Service Quality Quality is hard to define, measure, control, and communicate Quality is defined by the consumer It’s important to measure customer satisfaction with an organization’s service quality. Customers see five important components: Core service must measure up. Quality of service , meeting expectations. Technical aspects of delivery. Interaction with people who deliver service. Affective dimensions : How customers feel.

Quality is hard to define, measure, control, and communicate

Quality is defined by the consumer

It’s important to measure customer satisfaction with an organization’s service quality.

Customers see five important components:

Core service must measure up.

Quality of service , meeting expectations.

Technical aspects of delivery.

Interaction with people who deliver service.

Affective dimensions : How customers feel.

Pricing Services The characteristics of perishability, inability to store, and fluctuating demand for services create pricing challenges. Pricing Strategies include: Discount strategies: Cheaper by the week. A variable pricing strategy: Kids eat free, movies cheaper on Tuesdays. Price competition.

The characteristics of perishability, inability to store, and fluctuating demand for services create pricing challenges.

Pricing Strategies include:

Discount strategies: Cheaper by the week.

A variable pricing strategy: Kids eat free, movies cheaper on Tuesdays.

Price competition.

Distribution of Services because most services are tied directly to a specific service provider, most have been distributed directly to customers with advancing technology, many firms are now delivering services through machines channels of distribution are necessarily short; some firms use one agent intermediary, such as insurance, real estate, and travel agents some firms use franchises to distribute services

because most services are tied directly to a specific service provider, most have been distributed directly to customers

with advancing technology, many firms are now delivering services through machines

channels of distribution are necessarily short; some firms use one agent intermediary, such as insurance, real estate, and travel agents

some firms use franchises to distribute services

Promotion of Services customer contact personnel represent the main channel of customer communication service providers must ensure that each service encounter is a positive one if customers are to develop a positive image many professional service firms are now permitted to advertise other elements of the promotional mix are used, including publicity and community affairs

customer contact personnel represent the main channel of customer communication

service providers must ensure that each service encounter is a positive one if customers are to develop a positive image

many professional service firms are now permitted to advertise

other elements of the promotional mix are used, including publicity and community affairs

Four Rs of Service Marketing Retention Referrals Relationships Recovery

Retention

Referrals

Relationships

Recovery

The Changing Environment for Services The boom in the service economy, reduced regulation has created an increase in competition. Major focus on increased productivity, efficiency Work on people aspects of business: Education, training programs Change technology: Computer-based technologies used. Restructure jobs. Bottom line: People are key to success!

The boom in the service economy, reduced regulation has created an increase in competition.

Major focus on increased productivity, efficiency

Work on people aspects of business:

Education, training programs

Change technology:

Computer-based technologies used.

Restructure jobs.

Bottom line: People are key to success!

Other Considerations in Marketing Services Impact of Technology: Remember, not everyone likes impersonal technology Performance Measurement: Larger firms can use market share, etc. Customer perceptions are essential. Prospects for Growth: It is very likely that services will continue to take an increasing share of the consumer dollar. The use of marketing programs in all services is expected to increase considerably.

Impact of Technology:

Remember, not everyone likes impersonal technology

Performance Measurement:

Larger firms can use market share, etc.

Customer perceptions are essential.

Prospects for Growth:

It is very likely that services will continue to take an increasing share of the consumer dollar.

The use of marketing programs in all services is expected to increase considerably.

Future Service Profitability Impacted by: Focusing on the right priorities Increasing service quality Investing in problem solving Being fair to customers Investing in leadership development

Impacted by:

Focusing on the right priorities

Increasing service quality

Investing in problem solving

Being fair to customers

Investing in leadership development

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