MKTG303- Chapter 13

Chapter 13: Services- The Intangible Product Service Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed. By providing good customer service, firms add value to their products and services. Economic Importance of Service Economies of developed countries such as of the United States have become increasingly dependent on services. Services account for nearly 80 percent of the U.S. gross domestic product (GDP), a much higher percentage than was true 50, 20, or even 10 years ago. Remind students about how environments influence marketing. As economic, technological, and sociocultural environments change, so do demands for services. Services Marketing Differs from Product Marketing Intangible Services cannot be touched, tasted, or seen.
Requires using cues to aid customers. Atmosphere is important to convey value. Images are used to convey benefit of value. Inseparable Production and Consumption Production and consumption are simultaneous. Little opportunity for a consumer to test a service before use. Lower risk by offering guarantees or warranties. Heterogeneous The more humans are needed to provide a service, the more likely there is to be heterogeneity or variability in the service's quality. Solutions: Technology. Training. Automation. Perishable Services can't be stockpiled. The perishability of services provides both challenges and opportunities to marketers in terms of the critical task of matching demand and supply. As long as the demand for and supply of the service match closely, there is no problem, but unfortunately this perfect matching rarely occurs. Knowledge Gap Understanding Customer Expectations Expectations are based on knowledge and experience. Expectations vary according to type of service. Expectations vary depending on the situation. Evaluating Service Quality Using Well-Established Marketing Metrics
Understanding Customers Voice-of-customer (VOC) program: Collects customer inputs and integrates them into managerial decisions. Zone of tolerance: Refers to the area between customers' expectations regarding their desired service and the minimum level of acceptable service. Zone of tolerance The standards gap: Setting service standards Difference between the firm's perceptions of customer expectations and the service standards it sets. Need to set standards for quality. Develop systems to ensure the standards are met. The Delivering Gap: Delivering Service Quality
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