|







|


 


‡ Phenomenal growth of services, with the
resultant shift towards a service economy
attributed to rising affluence, more leisure time
and growing complexity of products that
require servicing.

‡ In major European countries, USA and Japan,

private and public sector services account for
60-75% of gross domestic output.
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‡ Service industries vary greatly from

governmental organisations such as the
National Health Service of the United Kingdom
to private non profit organisations such as
museums and charities.
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‡ A service is defined as any activity or benefit that one
party can offer to another which is essentially
intangible and does not result in the ownership of
anything.

‡ The same general principles of marketing apply to

both products and services, but services have
characteristics that mean that instead of four P's,
there are seven in a services marketing mix.
|


|



‡ A service is any activity or benefit that one
party can offer to another which is essentially
intangible and does not result in the ownership
of anything. Its production may or may not be
tied to a physical product.
 |


|



‡ Most company offerings to customers contain an
element of service and this is illustrated by the
service continuum.



 The tangible±intangible continuum for goods and services
|


 




  

 


‡ O


± toothpaste
‡ 
  

 

± computer and warranty
‡ 

    

  


± restaurants
‡ 


± air travel
‡ O
 

± haircut
|


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 O





  
 
 
   
 O
  
  
 
 
   



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± Cannot be seen, tasted, felt, heard or smelt

before they are bought.
± Service providers need to manage the
evidence by providing evidence of the benefits.
|
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#

± Services produced and consumed

simultaneously.
± Cannot be separated from providers, whether
people or machines.
± Customers are always involved
|


&

"

#
± Quality may vary greatly depending on who
provides the service, when and how.
± Staff need to know how to do something well.
± Staff must be well motivated to maintain high
standards of service.
|


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#

± Services cannot be stored for later sale or use.

|


( ) 

%

± No physical product is exchanged and therefore

nothing owned.
|












‡ The service component and support
processes of product offerings are rapidly
becoming the competitive advantage in
winning customer loyalty.
|




*%



‡ Internal service quality
± Superior selection and training of staff
‡ Satisfied and productive service employees
‡ Greater service value
‡ Satisfied and loyal customers
‡ Healthy service ± profits and growth
|


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%  









Ö
‡ R



‡ 



‡ R




|

 




± Marketing conducted by a service firm to train

and effectively motivate its customer contact
employees and all the supporting service
people to work as a team to provide customer
satisfaction.
|


+,




± Traditional marketing incorporating the 7Ps

‡ Price
‡ Product/service
‡ Place
‡ Promotion
‡ O

‡ O
 
‡ O 


±  
 

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± Marketing that recognises that the perceived

service quality depends heavily on the buyer-
seller interaction.
± Emphasis on relationship marketing.
|
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‡ Service companies are faced with three major

marketing tasks; they need to:
± 
 

± 
  
 

± 
 
 
|


 


 


‡ Intensive price competition has resulted in service
differentiation to increase competitiveness.

‡ The (O 

 
   


 of service marketing and service
delivery
± 




.

‡ Service intangibility and variability means that a

consistent brand is not easily built.
|


 


.
#
‡ The key to success is to exceed customer
service quality expectations.
‡ Customer satisfaction is achieved if the
delivered service quality exceeds the
customer¶s expectation.
‡ However, expectation is a variable component
and depends upon the perception and
expectations of the individual customer.
|

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± Access
± Credibility
± Knowledge
± Reliability
± Security
|

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± Competence
± Communication
± Courtesy
± Responsiveness
± Tangibles
|










 
 
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‡ 
 
 
  
‡  
   



‡  


 

‡ 
 

 






‡ 


 




‡ 







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‡ Training and development of staff.
‡ Service providers can increase the quantity of
service by reducing some quality.
‡ Industrialise the service.
‡ Design more effective service delivery mechanisms.
‡ Customers are given incentives to substitute
company labour.
‡ Introduce new technology to save time and costs
and increase efficiencies.
|


 

 




‡ The global economy is dominated by services!

‡ The World Trade Organisation estimates that commercial±service

trade is now worth over one trillion Euros, approximately 25% of
global trade.

‡ Worldwide growth of services is 16% per annum over the past

decade and double the growth rate of manufacturing.

‡ The trend is towards the outsourcing of skilled professional

services to overseas locations.

‡ The General Agreement on Tariffs and Trade (GATT) has

extended international trade rules to address services as well as
manufactured goods, but these are in their infancy.