Week 1 Flashcards
Define services
Any act, performance or experience that one party can offer to another.
o Essentially intangible and does not result in the ownership of anything
o Processes (economic activities) that provide time, place, form (e.g. personal – hairdresser), problem solving (e.g. doctor) or experiential value (pleasure related – experiences e.g. holiday) to the receiver o Something that may be bought or sold, but cannot be dropped on your foot
explain value creation
o Customers expect to obtain value from their service purchase in exchange for their money, time and effort
o Value comes from a variety of value-creating elements rather than transfer of ownership
o Firms must create and deliver services that are perceived (by customers) to provide value
o Choose the value è Create the value è Communicate value
o Service-dominant logic (S-D logic): customers of services are co-creators of value
forces transforming the service industry
o The ‘hollowing out’ effect – outsource particular work e.g call centers to India
o Deregulation (removal of rules and restrictions) and privatization, e.g., banking, airline (e.g. Virgin airlines entering Aus’t market) and telecommunications industries (increasing competition)
o Social changes, e.g., aging population (financial services, curses, retirement villages) dual income families (e.g. eating out)
o Professional services and franchises (e.g. Boost)
5 differences between goods and services (povii)
intangibility perishability ownership variability inseparability
explain the 5 major difference between goods and services
Intangibility: Difficult for consumers to evaluate quality because they cannot touch, taste or smell, or even see and hear, a service. Intangibility introduces an element of perceived risk.
Prevented by:
o Free first trial
o Introduce key staff members
o Provide a client list
o Provide examples of work undertaken
o Seek third party support and recommendations
o Ensure suitable surroundings (office, furniture etc.)
Inseparability: The service provider and the consumer co-produce the service (customer must be involved in some stage with service worker).
o Convenient locations
o Staff with high interpersonal skills
o Implement a service recovery programe
Variability: Difficult to maintain a uniform standard of service quality.
o Hire qualified and experienced staff o Ongoing staff training o Excellent product knowledge o Efficient backstage support o Standardise tasks where possible
Perishability: Services are performances or experiences, which means that they cannot be stored after production to be used later to satisfy customer demand. (e.g. Airline seat)
o Bookings and schedules (e.g. marketing consultancy)
Ownership: Service personnel and their performance cannot be ‘owned’ by the customer.
look at table of managerial implications surrounding differences between services and goods
:)
how services differ from one another
o The degree of tangibility/intangibility of service processes
o Who or what is the direct recipient of service processes?
o The place of service delivery
o Customisation versus standardisation (Maccas, Ikea etc)
o Relationships with customers (goods harder to hold relationships, service relationships commonly held through ‘loyalty’ and ‘customer attention’
o Discrete versus continuous services
o High contact versus low contact (quickly dropping off a computer to be fixed)
explain service operations system
can be divided into those involving the actors (or service personnel) and those involving the stage set (or physical facilities, equipment and other tangibles).
define service delivery system
concerned with where, when and how the service product is delivered to the customer.
look at graphs pr low and high contact examples
define service marketing system
all the different ways in which the customer may encounter or learn about the service organisation.
explain ‘managing the evidence’ tangible elements and communication components in service marketing system
- service personnel - contact with customers face to face, over the phone, over computer may include sales staff, customer service, billing and accounts
- service facilities and equipment:
building exteriors, parking areas, landscaping
vehicles
3. non personal communications: letters/proposals advertising single websites
- other people
fellow customers, strangers
word of mouth
extended marketing mix for services
people processes physical evidence product (service) price promotion place (cyberplace and time)
- People: direct, personal interaction between customers and the firm’s personnel or employees for the service to be ‘manufactured’ and delivered.
- Physical evidence (tangible cues): services cape - such as physical layout of the service facility, ambience, furnishings, background music and seating comfort.
- Process of service production: required to manufacture and deliver the service. The actual procedures, mechanisms, and flow of activities through which the service is delivered
what is the ‘service management trinity’
The marketing function: segmentation, targeting, positioning, loyalty programs, etc.
The operations function: creation and delivery of the service product
The human resource function: recruitment, training, developing work systems, rewarding, empowering etc.
Are all inter connected in serving customers
