SERVICES MARKETING BUSE 3004

Solomon Habtay

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

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Course Outline 2009 Overview of Services Marketing

Why Study Services Marketing? What are Services? The Differences in Marketing Management between the Services and the manufacturing sector

The Expanded Marketing Mix Required for Services

The Objective of the Course

Questions

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

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Why study services? Services Dominate the Economy

Services, 68%

Agriculture, Forestry, Mining, Fishing, 2.3% Manufacturing and Construction, 17.3%

Government, 12.4% (mostly Services)

INSIGHTS Private sector service industries account for over two-thirds of GDP Adding government services, total is almost four-fifths of GDP
Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 3

Why study services? Service Industries

Advertising
Financial services Insurance Telecom Airlines Entertainment Healthcare Security services

Tourism Hotels

Education
Diet and Weight Reducing Centers Management Consulting Services Environmental Consulting Telemarketing

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

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Why study services? Transformation of the Service Economy

Social Changes
Government Business Trends Advances in IT

Policies

Globalization

Product life cycles are getting shorter Strategy life cycles are getting shorter More intense competition

The only way of long term survival is innovation!!!

But innovation is not easy!!!!

Success hinges on: Understanding customers and competitors (Part I 10 Feb) Creation of value for customers and firm (Part III) Viable business model innovation (Part IV)
Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 5

Defining Services
Services
Are economic activities offered by one party to another Most commonly employ time-based performances to bring about desired results in:
recipients themselves objects or other assets for which purchasers have responsibility

In exchange for their money, time, and effort, service customers expect to obtain value from
Access to goods, labor, facilities, environments, professional skills, networks, and systems But they do not normally take ownership of any of the physical elements involved

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

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What Are Services?

The historical view
Goes back over 200 years to Adam Smith and Jean-Baptiste Say Different from goods because they are perishable (Smith 1776) Consumption cannot be separated from production, services are intangible (Say 1803)

A fresh perspective: Services involve a form of rental, offering benefits without transfer of ownership
Include rental of goods Marketing tasks for services differ from those involved in selling goods and transferring ownership

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 1 - 7

Services Pose Distinctive Marketing Challenges

Marketing management tasks in the service sector differ from those in the manufacturing sector
The eight common differences are:
1. 2. 3. 4. 5. 6. 7. 8. Most service products cannot be inventoried Intangible elements usually dominate value creation Services are often difficult to visualize and understand Customers may be involved in co-production People may be part of the service experience Operational inputs and outputs tend to vary more widely The time factor often assumes great importance Distribution may take place through nonphysical channels

What are the marketing challenges for services?

Services Marketing 6/E Chapter 1 - 8

Slide 2007 by Christopher Lovelock and Jochen Wirtz

The 4Ps

Product

Place

The target market

Price Promotion

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Walker, O.C., Mullins, J. W., Boyd, H. W., & Larreche, J.C. (2006). Marketing Strategy, 5 th Ed. New York. McGraw-Hill, pp. 153-169.

Services Marketing 6/E

Chapter 1 - 9

The 8Ps of Services Marketing (Course outline)

Product Elements Service innovation 17 Feb 16 Feb

Promotion and Education Promoting the value proposition Positioning services

23 Feb 24 Feb

Place and Time Service value chain

Process Designing and managing services process

2 March

Productivity and Quality Servqual Balancing demand and productivity Managing relationship

3 March

9 March 10 Mar 16 Mar

Price and Other User Outlays Physical Environment (Chapter 10) People

23 March

Managing people for service advantage

Organizing for change management 24 March

Working in Unison: The 8Ps of Services Marketing

Services Marketing 6/E Chapter 1 - 10

Slide 2007 by Christopher Lovelock and Jochen Wirtz

The Objective of the Course: To develop your analytical skills on how to:
Analyze market opportunities

Pursue services value innovation

Design and manage profitable business models

Implement effective strategies for managing profitable businesses

Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 11

Individual Assignment: Research Paper Format and Marking Criteria

Structure Introduction Study background Problem statement Literature review (relevance) Empirical analysis (application) Findings/conclusions Recommendation Research methodology Academic content (originality, quality, citations, references) Total
Slide 2007 by Christopher Lovelock and Jochen Wirtz

Mark 10%

10% 20% 10% 10% 20% 20% 100%

Services Marketing 6/E Chapter 1 - 12

Performance Evaluation

Component Group of 4 = 7 case studies (Top 5) Submission on each tutorial day Individual assignment: Final submission date 31 March, 2009 25% 15%

Mark

Final exam
Total

60%
100%

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 1 - 13

Text Book

SERVICES MARKETING
PEOPLE, TECHNOLOGY, STRATEGY, 6ed (2007)
CHRISTOPHER LOVELOCK AND JOCHEN WIRTZ

It's important you buy this book because:

It is the best book in services marketing theories and applications Includes relevant readings materials Contains all case studies for your group assignments & tutorial discussions Provides the topic and theoretical framework for your individual research paper Exam questions will come from the book and reading materials 66 books available at the West Campus book store
Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 1 - 14

WebCIT/Blackboard
Reading material and notes are available at:
http://ignite.wits.ac.za

Log in to the Black Board Learning System

Using your student No. BUSE3004 Services Marketing Go to: Student View

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

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BUSE3004 Time Table

Mon 08:00 08:45 09:00 09:45

LB 144
Tues

LB 144
10:1511:00 LB 145 11:1512:00 LB 145 12:30 13:15 Tut CB128

Wed

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

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CONSULTATION TIMES
Monday 14:00 15:00pm

Tuesday 14:00 - 15:00pm

Other times by appointment

NCB, Office No. 208 Office Tel: 011-7178085 Email: Solomon.Habtay@wits.ac.za

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

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Questions

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

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