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11

Designing and Managing


Services
Chapter Questions
ƒ How are services defined and classified?
ƒ How are services marketed and how can
service quality be improved?
ƒ How do service marketers create strong
brands?
ƒ How can goods marketers improve customer
support services?

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What is a Service?
A service is any act of performance that one
party can offer another, that is essentially
intangible and does not result in the
ownership of anything; its production may or
may not be tied to a physical product.

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Services are Everywhere

ƒ Government
ƒ Private non-profit
ƒ Business
ƒ Retail
ƒ Manufacturing

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Categories of Service Mix

Pure
Pure tangible
tangible good
good
Good
Good with
with accompanying
accompanying
services
services
Hybrid
Hybrid
Service
Service with
with accompanying
accompanying
goods
goods
Pure
Pure service
service
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Service Distinctions

ƒ Equipment-based or people-based
ƒ Service processes
ƒ Client’s presence required or not
ƒ Personal needs or business needs
ƒ Objectives and ownership

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Continuum of Evaluation for
Different Types of Products

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Distinctive Characteristics
of Services
Intangibility

Inseparability

Variability

Perishability

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Physical Evidence and Presentation

Place

People

Equipment

Communication material

Symbols

Price
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How to Increase Quality Control

Invest in good hiring and


training procedures

Standardize the
service-performance process

Monitor customer satisfaction

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Increasing Quality Control:
An Overnight Hotel Stay

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Matching Demand and Supply

Demand side Supply side


ƒ Differential pricing ƒ Part-time employees

ƒ Non-peak demand ƒ Peak-time efficiency

ƒ Complementary ƒ Increased consumer

services participation
ƒ Reservation systems ƒ Shared services

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Dimensions of Brand Experience

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Root Causes of Customer Failure

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Solutions to Customer Failures

ƒ Redesign processes and redefine customer


roles to simplify service encounters
ƒ Incorporate the right technology to aid
employees and customers
ƒ Create high-performance customers by
enhancing their role clarity, motivation, and
ability
ƒ Encourage customer citizenship where
customers help customers

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Holistic Marketing for Services

11-16
Factors Leading to Customer
Switching Behavior
ƒ Pricing
ƒ Inconvenience
ƒ Core Service Failure
ƒ Service Encounter Failures
ƒ Response to Service Failure
ƒ Competition
ƒ Ethical Problems
ƒ Involuntary Switching

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New Service Realities

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Gaps that Cause Unsuccessful
Service Delivery
ƒ Gap between consumer expectation and
management perception
ƒ Gap between management perception and
service-quality specifications
ƒ Gap between service-quality specifications
and service delivery
ƒ Gap between service delivery and external
communications
ƒ Gap between perceived service and
expected service

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Service-Quality Model

11-20
Best Practices
ƒ Strategic Concept
ƒ Top-Management
Commitment
ƒ High Standards
ƒ Self-Service
Technologies
ƒ Monitoring Systems
ƒ Satisfying Customer
Complaints
ƒ Satisfying Employees

11-21
Managing Service Brands:
Differentiating Services
ƒ Offering more than the primary service
package
ƒ Add secondary features to the primary
service package
ƒ Leverage human interaction by training and
empowering employees to engage the
consumer
ƒ Offering a very wide assortment of services
including cross-selling efforts

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Developing Brand Strategies
for Services

Choosing
Brand Elements

Establishing Image
Dimensions

Devising Branding
Strategy

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Determinants of Service Quality

ƒ Reliability
ƒ Responsiveness
ƒ Assurance
ƒ Empathy
ƒ Tangibles

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Importance-Performance Analysis

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Improving Service Quality

ƒ Listening ƒ Surprising customers


ƒ Reliability ƒ Fair play
ƒ Basic service ƒ Teamwork
ƒ Service design ƒ Employee research
ƒ Recovery ƒ Servant leadership

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Customer Worries

Reliability and
Failure frequency

Downtime duration

Out-of-pocket costs

11-27