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CHAPTER

SERVICES: THE INTANGIBLE PRODUCT

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L E A R N I N G O B J E C T I V E S

Describe how the marketing of services differs from the marketing of products.

Discuss the four gaps in the Service Gap Model.

Examine the five service quality dimensions.

Explain the zone of tolerance.

Identify three service recovery strategies.

Services: The Intangible Product

LO1

LO2

LO3

LO4

LO5

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Services Marketing Differs from Product Marketing

Factors

differentiating

services

from goods

Inseparable

Heterogeneous

Perishable

Intangible

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Intangible

Requires using cues to aid customers

Atmosphere is important to convey value

Images are used to convey benefit of value

©Mark Richards/PhotoEdit.

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Inseparable Production and Consumption

Production and consumption are simultaneous

Little opportunity to test a service before use

Lower risk by offering guarantees or warranties http://www.youtube.com/watch?v=Set-r53xvBI

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Heterogeneous

Technology

Training

AutomationCourtesy Geek Housecalls, Inc.

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Perishable

How are each of these perishable services?

John Foxx/Getty Images PhotoLink/Getty Images Courtesy Geek Housecalls, Inc.

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CHECK YOURSELF

1. What are the four marketing elements that distinguish services from products?

2. Why can’t we separate firms into just service or just product sellers?

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The Knowledge Gap: Understanding Customer Expectations

Marketing research:

understanding customers

Evaluating service quality

Understanding customer

expectations

The Knowledge Gap

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Understanding Customer Expectations

Expectations are based on knowledge and experience

Expectations vary according to type of service

Expectations vary depending on the situation

versus

Mel Curtis/Getty Images Kim Steele/Getty Images

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Evaluating Service Quality

The appearance of physical facilities, equipment, personnel, and communication materials.

TANGIBLES

The caring, individualized attention provided to customers.

EMPATHY

The knowledge of and courtesy by employees and their ability to convey trust and confidence

ASSURANCE

The willingness to help customers and provide prompt service.

RESPONSIVENESS

The ability to perform the service dependably and accurately.

RELIABILITY

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The Standards Gap: Setting Service Standards

Developing systems to ensure high-quality service

Setting standards for quality

Roy

alty

-Fre

e/C

OR

BIS

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The Delivery Gap: Delivering Service Quality

Reduce delivery

gaps

Empowering employees

Provide support & incentives

Use of technology

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The Communications Gap: Communicating the Service Promise

Manage customer expectations

Promise only what you can deliver

Communicate service expectations

J.D. Power & Associate

Getty Images

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CHECK YOURSELF

1. Explain the four service gaps identified by the Gaps Model.

2. List at least two ways to overcome each of the four service gaps.

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Service Recovery

Increase Service

Recovery

Listen to the customer

Resolve problems quickly

Provide a fair solution

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CHECK YOURSELF

1. Why is service recovery so important to companies?

2. What can companies do to recover from a service failure?