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Services Marketing: Integrating Customer Focus Across the Firm Valarie A. Zeithaml, Mary Jo Bitner
Any activity or benefit that one party can offer to another that is essentially intangible and des not result in the ownership of any thing
Health Care
hospital, medical practice, dentistry, eye care
Professional Services
accounting, legal, architectural
Financial Services
banking, investment advising, insurance
Hospitality
restaurant, hotel , bed & breakfast,
Travel
airlines, travel agencies, theme park
Others:
hair styling , plumbing, lawn maintenance, counseling services, health club
Figure 1-2
70
60 50 40 30 20 10 0
Figure 1-3
Percent of GDP
Movement to information age Shift to industrialized economy Aging population Longer life expectancies Increase leisure time High per capita income Changing social and cultural values Advances in technology
Defining and improving quality Communicating and testing new services Communicating and maintaining a consistent image
Perishability
Figure 1-1
Tangibility Spectrum
Salt
Intangible Dominant
Tangible Dominant
Teaching
Implications of Intangibility
Implications of Heterogeneity
Implications of Perishability
Table 1-2
Services
Intangible
Resulting Implications
Services cannot be inventoried. Services cannot be patented. Services cannot be readily displayed or communicated. Pricing is difficult.
Standardized
Heterogeneous Service delivery and customer satisfaction depend on employee actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted. Simultaneous production and consumption Customers participate in and affect the transaction. Customers affect each other. Employees affect the service outcome. Decentralization may be essential. Mass production is difficult. It is difficult to synchronize supply and demand with services. Services cannot be returned or resold.
Nonperishable Perishable
Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Problems and Strategies in Services Marketing, Journal of Marketing 49 (Spring 1985): 33-46.
Figure 1-5
External Marketing
setting the promise
Employees
Interactive Marketing
delivering the promise
Customers
Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler
Continue..
Internal marketing: orienting and motivating customer-contact employees and the supporting service people to work as a team to provide customer satisfaction . E.g. Ritz- Carlton orients its employees carefully, instills in them a sense of pride, and motivates them by recognizing and rewarding outstanding service deeds. Interactive marketing: training service employees in the fine art of interacting with customer to satisfy their needs . E.g. Ritz Carlton selects only people who care about people or high touch but also high tech
Focus on a service organization. In the context you are focusing on, who occupies each of the three points of the triangle? How is each type of marketing being carried out currently? Are the three sides of the triangle well aligned? Are there specific challenges or barriers in any of the three areas?
Figure 1-6
Technology
Providers
Source: Adapted from A. Parasuraman
Customers
Successful service companies focus their attention on both their customers and their employees They understand the service profit chain which links from profits with employees & customer satisfaction
This chain consists of five links Internal service quality: superior employee selection and training, a quality work environment, and strong support for those dealing with customers which results in.
satisfied and productive service employees: more satisfied, loyal, and hard working employees, which results in.. greater service value employees; more effective and efficient customer value creation and service delivery which results in..
customers: satisfied customers who remain loyal, repeat purchase, and refer other customers, which results in.. healthy service profits and growth: superior service firm performance
Traditional Marketing Mix Expanded Mix for Services: 7 Ps Building Customer Relationships Through People, Processes, and Physical Evidence Ways to Use the 7 Ps
All elements within the control of the firm that communicate the firms capabilities and image to customers or that influence customer satisfaction with the firms product and services: Product Price
Place
Promotion
People
Process
Physical
Evidence
Table 1-3
PHYSICAL EVIDENCE
Facility design Equipment Signage Employee dress Other tangibles
PROCESS
Flow of activities Number of steps Level of customer involvement
How effective is a firms services marketing mix? Is the mix well-aligned with overall vision and strategy? What are the strengths and weaknesses in terms of the 7 Ps?
Who is the customer? What is the service? How effectively does the services marketing mix for a service communicate its benefits and quality? What changes/improvements are needed?
Characteristics of Services
Intangibility - Lack of tangible assets which can be seen, touched, or smelled prior to purchase. Perishability - Inability of a service to be inventoried or stored. Inseparability - Simultaneous production and consumption of a service. Variability - Unwanted or random levels of service quality customers receive when they patronize a service firm.