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Marketing What Isnt There: Intangibles and Services Slide 2 What is a Service? Services are acts, efforts, or performances exchanged from producer to user without ownership rights Consumer services Business services Slide 3 Importance of services in the U.S. gross domestic product Slide 4 The 4 Is of Services Intangibility Inconsistency Inseparability Inventory Idle capacity Characteristics of Services Slide 5 Classification of Services Services Tangible Intangible Recipient of Service Customer Possessions Hair cut, plastic surgery, manicure College education., TV program, counseling Dry cleaning, auto repair, housecleaning Insurance, home security service Slide 6 Inventory carrying costs of services Slide 7 Service continuum Slide 8 Service classifications Slide 9 Core and Augmented Services Core service is a benefit that a customer gets from the service Augmented services are additional offerings that differentiate the firm Example: Airline transportation Core: travel Augmented services: frequent flier miles, sky caps, in- flight entertainment services and Internet access Slide 10 Evaluative Dimensions of Service Quality Search qualities - characteristics of a product that the consumer can examine prior to purchase Experience qualities - characteristics that customers can determine during or after consumption Credence qualities - attributes we find difficult to evaluate even after weve experienced them Slide 11 How consumers evaluate goods and services Slide 12 Measuring Service Quality Gap Analysis - measurement tool that gauges the difference between a customers expectation of service quality and what actually occurred Critical Incident Technique - company collects and closely analyzes very specific customer complaints to identify critical incidents Slide 13 Gap Analysis Gap between consumer expectations and management perceptions Gap between management perception and quality standards set by the firm Gap between established quality standards and service delivery Gap between service quality standards and consumer expectations Gap between expected service and perceived service Slide 14 Customer contact in car rental (green shaded boxes indicate customer activity Slide 15 Dimensions of service quality Slide 16 Service Failure and Recovery When services do fail, recover fast: Apologize Resolve the problem Do not further inconvenience the customer Analyze what happened to eliminate future failures Slide 17 The notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers. Internal Marketing