Chapter ElevenChapter Eleven

Strategies for Services and Strategies for Services and Relationship MarketingRelationship Marketing

ObjectivesObjectives

Define “services”Explain the characteristics of servicesUnderstand service demand managementUnderstand standardization & customizationExplain importance of servicesDiscuss relationship buildingReview Internet’s impact on customer service

Service DefinedService Defined

Instrumental activityFor consumptionConsumer

participationNo ownership

Service Characteristics Service Characteristics & Strategies: & Strategies: IntangibilityIntangibility

Cannot see or feelCannot smell, hear,

or taste

Stress symbolic clues (Mr. Goodwrench)

Associate tangible symbol with service

Tangible cues like membership cards“You’re in good

hands with Allstate.”

Service Characteristics Service Characteristics & Strategies: & Strategies: PerishabilityPerishability

Cannot be storedLost sale = lost

income

Demand managementForecastingSupply management

Pricing adjustments

Service Characteristics Service Characteristics & Strategies: & Strategies: InseparabilityInseparability

Tangible productsTangible products

ProductionProduction SaleSale ConsumptionConsumption

TimeTime

ProductionProductionSaleSale

ConsumptionConsumption

Intangible productsIntangible products Production orientation

Personnel management

Service Characteristics Service Characteristics & Strategies: Variability& Strategies: Variability

Provided by peopleInherent variance

StandardizationPersonnel selectionTrainingAutomation

Customization

Total Service ProductTotal Service Product

Participant demeanorPhysical evidenceDelivery process

•Clean new cars•Airport transportation•Uniformed employees•Special membership cards•Easy check in & check out•Special use vehicles (vans, convertibles, sports cars, sport utility cars, etc.)

Gap AnalysisGap Analysis

Expected service

Management perceptionsof consumer expectations

Mar

kete

rM

arke

ter

Con

sum

erC

onsu

mer

Gap 1Service delivery (including

pre- and post-contacts)

Gap 3Translation of perceptions

to service-quality specificationsGap 2

Gap 5 Perceived service

Externalcommuni-cations to

consumersGap 4

Personal needs Past experienceWord-of-mouth

communications

Determinants of Service Determinants of Service QualityQuality

AccessAccessCommunicationCommunicationCompetenceCompetenceCourtesyCourtesyReliabilityReliabilityCredibilityCredibility

ServiceAward

Relationship MarketingRelationship Marketing

Structural Relations

FinancialRelations

SocialRelations

How the Internet can How the Internet can Improve Customer Improve Customer

ServiceServiceAutomationInteraction

FAQ’se-mail

SpeedCostsPersonalization

Successful Successful RelationshipsRelationships

Relationship commitmentLong-term vs. short-

term orientedPrice not only factor

TrustReliabilityIntegrity

Internal MarketingInternal Marketing

Employee directed P.R.

RecognitionEmpowerment

Employeeof the Month

ReviewReview

Define “services”Explain the characteristics of servicesUnderstand service demand managementUnderstand standardization & customizationExplain importance of servicesDiscuss relationship buildingReview Internet’s impact on customer service