Jenny Beth McCullough
Marketing 710
Chapter 11 Designing and Managing Services
Service = any act or performance that one party can offer to another that is essentially intangible and does not result in the
ownership of anything (May or may not be tied to a physical product)
Categories of Service Mix
1. Pure tangible good: no services accompany the product
2. Tangible good with accompanying services: tangible good with 1 or more services
3. Hybrid: equal parts of good and services
4. Major service with minor goods & services: major service with additional services or supporting goods
5. Pure service: offering consists primarily of a service
Characteristics of Services and their Marketing Implications
1. Intangibility
2. Inseparability: typically produced & consumed simultaneously
3. Variability: depend on who provides the service & when & where it is provided
4. Perishability: cannot be stored
Search Qualities=buyer can evaluate before purchase
Experience Qualities=buyer can evaluate after purchase
Credence Qualities=buyer normally finds hard to evaluate even after consumption
Ps of Service Marketing
1. Product
2. Place
3. Promotion
4. Price
5. Physical evidence
6. People
7. Process
Differentiation—Alternative to price competition
1. Offer: innovative features
2. Delivery: superior delivery process
3. Image: symbols and branding
5 Gaps that cause Unsuccessful Service Delivery
1. Between consumer expectation & management perception (mgt. does not always perceive correctly what customers want)
2. Between management perception & service-quality specification (mgt. might perceive what customers want but not set a
specified performance standard)
3. Between service-quality specifications & service delivery (service personnel might be poorly trained or incapable to meet
the standard)
4. Between service delivery & external communications (customer expectations are affected by statements made by co. reps
& ads & if image portrayed is false, customers will be disappointed)
5. Between perceived service & expected service (customer misperceives service quality)
To Fill Gaps
Strategic concept: top service customers are “customer obsessed”
Top-Management Commitment
High Standards
Monitoring Systems
Satisfying Customer Complaints
Satisfying both Employees and Customers
Managing Productivity
1. Have service providers work more skillfully
2. Increase quantity of service by surrendering some quality
3. Industrialize service by adding equipment & standardizing production
4. Reduce or make obsolete the need for a service by inventing a product solution (carpet cleaning services offer stain-
removing products customers can use on their own)
5. Design more effective service
6. Present customers with incentives to substitute own labor for company labor
7. Use technology
What Customers Worry about Most
1. Reliability and failure frequency
2. Downtime duration
3. Out-of-pocket costs of maintenance and r epair
Major Trends in Customer Service
1. Equipment manufacturers are building more reliable and more easily fixable equipment.
2. Customers are becoming more sophisticated about buying.
3. Customers increasingly dislike having to deal with multitude of service providers that handle different types of equipment.
4. Service contracts (extended warranties) in which sellers agree to provide free maintenance for specified time period may
diminish in importance
5. Customer service choices are increasing rapidly, holding down prices and profits on services.
