SERVICE MARKETING

By Arijit Datta

Aim and Objective

Foundation of Service Marketing Evaluation of Service Alternative Service Marketing Mix Service Product & Process Place & Promotion Pricing Role of People Physical Evidence Service Recovery, Complaint Handling, Service Guarantees Closing the Gaps

Services Marketing

Services are going to move in this decade to being the front edge of the industry.

Services
A Service is the action of doing something for someone or something. A service is an activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product Kotler and Armstrong (1991) A Service as any primary or complimentary activity that does not directly produce a physical product, i.e., the non goods part of transaction between buyer (customer) and seller (provider) Service Industries Journal

NATURE OF SERVICES SERVICES GOODS

Intangible in Nature Inseparability of production and consumption Variability in Specifications and Delivery Tangible in Nature Separability of production and Consumption Uniformity in Specifications and Delivery

Perishable in Nature
Lack of Ownership

Non-perishable in nature
Ownership

GOODS AND SERVICE CONTINUUM

100% 90% 80% 70% 60%

50%
40% Service Based Product Based

30%
20% 10% 0% Tangible Goods Goods with Goods and Some Services Services Equal Service with minor Goods

Pure Service

SERVICE SECTOR TO INDIAN ECONOMY

YEAR PRIMARY SECTOR SECONDARY SECTOR TERTIARY SECTOR GROWTH OVER PERIOD (% in services)

1950-51
1960-61 1970-71 1980-81 1990-91 1999-2000

55.4
50.9 44.5 38.1 30.9 27.5

16.1
20.0 23.6 25.9 30.0 24.6

28.5
29.1 31.9 36.0 39.1 47.9

+2.1 +9.6 +12.9 +8.6 +22.5

CHARACTERISTICS OF SERVICES
Intangibility

Inseparability
Self Services Co-production Isolated production

Inconsistency (Variability) Inventory (Perishability) Ownership

Characteristics Of Services Compared To Goods

Goods Services Resulting Implications

Tangible

Intangible

Services cannot be inventorised Services cannot be readily displayed Services cannot be patented Service quality depends on many uncontrollable factors Customer participate in and affect the transcations Decentralization may be requied Services cannot be resold or returned

Standardized

Heterogeneity

Production seperate from consumption Nonperishable

Simultaneous production and consumption

Perishable

Service Strategy to Counter Problems for Characteristics Of Services

Characteristics
Intangibility

Services
Cannot be easily displayed Cannot be patented

Resulting Implications
Provide tangible clues Stimulate word of mouth Use personnel sources Use post purchase communication Stress on standardisation & performance Focus on employee training Programmes, performance evaluation Licensing & other forms of credential requirements Need strong training programmes, incentives Focus on personal attention Focus on convenience, saving time, faster service Extended hours Focus on competence & expertise Predict fluctuating demand Manage capacity to balance supply & demand

Inconsistency

Standardisation hard to achieve Hard to set up quality control Can only predict quality or determine it after the service is performed Harder to mass produce Less efficient than production goods Customers must be present

Inseparability

Inventory

Examples of Service Industries

Health Care hospital, medical practice, dentistry, eye care

Professional Services accounting, legal, architectural

Financial Services banking, investment advising, insurance

Hospitality restaurant, hotel/motel, bed & breakfast, ski resort, rafting

Travel airlines, travel agencies, theme park Others hair styling, pest control, plumbing, lawn maintenance, counseling services, health club

SERVICE MARKETING TRIANGLE

Ways to Use the

Services Marketing Triangle
Overall Strategic Assessment Specific Service Implementation What is being promoted and by whom? How will it be delivered and by whom?

How is the service organization doing on all three sides of the triangle?
Where are the weaknesses? What are the strengths?

Are the supporting systems in place to deliver the promised service?

Marketing Analysis Framework

3 Cs

Customers
Market Intelligence

Competitors

Company

(Segment)

(Target)

(Position)

Product
Price

4 Ps

Promotion Place

4 Ps OF MARKETING Product

Place

Price

Promotion

7 Ps OF SERVICE MARKETING
Product

Place

Price

Promotion

People

Process

Physical Evidence

Expanded Marketing Mix for Services

People Place, c Place & yberTime space & time

Product (service)

Process
Price Price

Customers Customers Customers

Promotion

Physical evidence

Expanded Marketing Mix for Services

Expanded Marketing Mix for Services

PEOPLE
Employees Customers Communicating culture and values Employee research

PHYSICAL EVIDENCE
Facility design Equipment Signage Employee dress Other tangibles

PROCESS
Flow of activities Number of steps Level of customer involvement

People All human actors who play a part in service delivery and thus influence the buyers perceptions: namely, the firms personnel, the customer, and other customers in the service environment.

customer service employees other customers

Physical Evidence The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.

atmosphere dcor, music etc. equipment facilities uniforms

Process The actual procedures, mechanisms, and flow of activities by which the service is delivered the service delivery and operating systems.

service delivery systems back stage front stage procedures policies

Challenges in Service Marketing

Giving a feel for the product Managing Demand Fluctuations Maintaining Quality Cost Containment Attitudinal block in using proven marketing principles in service marketing

The Customer Gap

Expected Services Customer Gaps Perceived Services

Customer Expectation of Services

Levels of Expectations
Desired Services Adequate Services Zone of Tolerance

Zone Of Tolerance
Desired Service

Zone of Tolerance

Adequate Service

Factors That Influence Customer Expectations of Services

Sources of Desired Service Expectations
Personal Needs. Lasting Service Intensifiers.

Sources of Adequate Service Expectation

Temporary Service Intensifier Percieved Service Alternatives Situational Factors Predicted Services

Learning Objectives (Contd.)

Difficult to provide a single definition of service Concept of service has to be understood either as an exclusive offering from a company that is primarily intangible, or as a part of the service-product mix that a company offers

SERVICE LEVELS
Service is an intangible offering with little or no transfer of physical products to the customer Service is one part of product-service mix being offered to customers

The main offering is the product but the supplier also provides some services
Every product or service or any combination of a mix of the two, ultimately is supposed to provide service for customers

INCREASING IMPORTANCE OF SERVICES

Advances in technology Growth in per capita income

A trend towards outsourcing

Deregulation

Increasing growth in retailing due to increase in propensity to consumer

PRODUCT

Potential Service Augmented Service Expected Service Basic Service Core Benefit

BRANDING
--- Brand helps to create a unique position in the minds
of the customer (e.g. Talwalkars Gym. ,Kaya Skin Clinic)

The role of brand in services marketing

--- Brands help customers distinguish between products from different companies

--- Brand superiority leads to high sales, ability to charge premium price. ---Branding reduces time and effort in DMP

SERVICE DIFFERENTIATION
--- A Companys offer should be distinct from its customers and should fulfill the requirements of the customers of its target markets.

--- Service differentiation results from added features which gives customers benefits, and the company a competitive advantage.

---Building an image and maintaining quality are the ways of creating such differentiation.

PRICE

PRICING STRATEGY
Discount price

Competition based price

Penetration price

Skimming price

PLACE

PLACE
3 ways to render service:
Customer Service provider Customer Service provider e.g.Hospitals Customer e.g. Pizza Hut Service provider e.g. ATM machine

WHAT IS FRANCHISEE??
Granting of certain rights by one party (the franchisor) to another (the franchisee) in return for a sum of money.
Business method that involves licensing of trademarks and methods of doing business

EXAMPLES OF FRANCHISEE IN INDIA

FACTORS AFFECTING LOCATION

Proximty
Population Infrastructure Law & Tax Environmental & Government regulations

Climatic conditions
Convenience

LATEST TRENDS
Call centres

Service delivery timings

Mini stores

PROMOTION

Promotion is the communication of the service to the target customers to make promises as well as to position themselves in their minds Promotion consists of the following major areas of marketing
Personal selling Advertising

Word of mouth

PROMOTION

Public relations

Direct mailing

Sales promotion

Personal Selling - PERSUASION

Sales Promotion

PEOPLE

PEOPLE

 HAPPY EMPLOYEE = HAPPY CUSTOMER Internal customers

Its the human element that creates and sustains the right kind of climate within the organization that extend satisfaction to the customers.

SERVICE TRIANGLE

Strategies to Handle Internal Customers

Training
Include them in companys vision

Empowerment
Position your company as the best employer Employee retention

PROCESS

What is Process?
Processes are a sequence of activities arranged into logical step .

A process invariably is a sequence of value-adding activities.

EXAMPLES OF SOME SERVICE PROCESSES Restaurant Arrive Seat Rec. Order Prep. Food Consume Serve Bill Settle Bill Education Admission Registration Teach Train Examine Evaluate Award Health Care Admission Ambulation Examine Diagnose Emergency Medication Monitor

The service process includes all the traditional Ms

Money

Methods

Men

Material

Machine

Objectives behind managing a service process

1. To ensure that service is carried fast. 2. To create and place benchmarks. 3. To facilitate employee learning. 4. To reduce variance through work force planning.

MANAGING DEMAND
Using reservations & bookings Using appointments Promoting off-peaks using price incentives

Using fixed schedules

Extending product lines

MANAGING SUPPLY
Seeking customer participation

Using work shift scheduling

Gap Model

PHYSICAL EVIDENCE

PHYSICAL EVIDENCE

ELEMENTS OF PHYSICAL EVIDENCE

SERVICE SCAPE

ELEM ENTS

TANGIBLES

Elements of Servicescape

Ambient Conditions

Space & Function Condition

Signs & Symbols & Artifacts

SERVICESCAPE
AMBIENT CONDITIONS
TEMPERATURE

SPACE & FUNCTION CONDITIONS

LAYOUT DESIGN

SIGNS , SYMBOLS & ARTIFACTS

RULES & REGULATIONS PROCESS EXPLAINED

QUALITY OF AIR

EQUIPMENT & FIRM

NOISE

MUSIC

OTHER TANGIBLES
Business cards Stationery Billing statements Reports Employee dress Uniforms Brochures Web pages

SERVICESCAPE & BEHAVIOUR

STIMULUS
AMBIENT CONDITIONS SPATIAL LAYOUT/ FUNCTION SIGNS, SYMBOLS & ARTIFACTS

ORGANISM
CONSUMERS EMPLOYEES

RESPONSE
COGNITIVE RESPONSE EMOTIONAL RESPONSE PHYSIOLOGICAL RESPONSE

ALL PRINCIPLES OF MARKETING APPLY TO SERVICES

All Principles of Marketing Apply to Services (Contd.)

Services impact customers more directly than products do

Marketing of services has to be more deliberate and considered

Service provider has to carefully audit his resources and competencies Positioning must be razor sharp Services more intractable than products

All Principles of Marketing Apply to Services (Contd.)

Service provider must define service very precisely and also design the appropriate service-product mix Promotion more challenging due to intangible nature of services Same basic service can be provided in vastly different service facilities providing different levels of amenities and luxuries

All Principles of Marketing Apply to Services (Contd.)

Same service can be delivered in various ways Marketing mix conveys the positioning of a service

MANAGING SERVICES
Managing service quality
Companies rated higher on service quality perform better in terms of market share growth Big gap exists between the expectations of the customers and the level of the service they get Real barriers while matching expected and perceived service levels of customers

Managing Services (Contd.)

Does not understand customer requirements: Misconception barriers arise when companies misunderstand customer expectations

No resources: A company may understand customer expectations but is unwilling to provide resources to meet them
Bad delivery: The company is not able to deliver the expected service Managements will: A management eager to improve quality is able to do it

Exaggerated expectations: Exaggerated promises may become a problem

 Meeting customer expectations

Important to understand and meet customer expectations Consumers of services value not only the outcome of the service encounter but also the experience of taking part in it Access: Is the service provided at convenient locations and at convenient times, with little waiting period in availing the service? Reliability: Service provider should be able to deliver the promised service each time the customer decides to avail of it

Credibility: Can customers trust the service company and its staff?
Security: Can the services be used without risk?

Meeting Customer Expectations (Contd.)

Understanding customer: If the company understands the expectations and also has the capability to serve them, the customer is satisfied with the service outcome

Responsiveness: How quickly do service staff respond to customer problems, requests and questions?
Behavior of employees: Do service staff act in a friendly and polite manner? Competence: Performance of the primary service will depend on the knowledge and competencies of the service providers Communication: Is the service described clearly and accurately? Physical evidence: The company should provide physical evidence to customers which will assure customers that they will be provided a good service

 Managing service productivity

Measure of relationship between the various types of inputs that are required to produce the service and the service output Conflict between improving service productivity and raising service quality Technology can be used to improve productivity and service quality simultaneously Customer involvement in production can be increased Important to balance supply and demand By smoothing demand or increasing flexibility of supply, both productivity and service quality can be achieved

 Managing service staff

Quality of the service experience is heavily dependent on staffcustomer interpersonal relationship Companies need to treat their employees well if customers have to be served well by their employees Nature of the job needs and appropriate personality characteristics to be defined sharply while selecting service staff Socialization allows the newly recruited service professionals to experience the culture and tasks of the organization Maintaining a motivated workforce
Customer feedback essential to maintain high standards of service quality Employees of service organizations must take pride in their jobs

POSITIONING SERVICES
Differentiate from competition on attributes that target customers highly value Entails two decisions: Choice of target market (where to compete) Creation of differential advantage (how to compete) Determine important choice criteria of customers carefully Most important decision of a service organization is selecting the factors on which it will compete Select a few factors and provide superlative performances in the chosen factors Target marketing Differential advantage

CUSTOMER PERCEPTION OF SERVICE

Customer Perceptions of Service Quality and Customer Satisfaction

Reliability Responsiveness Assurance Empathy
Customer Satisfaction Situational Factors

Service Quality

Tangibles

Product Quality

Price

Personal Factors

Factors Influencing Customer Satisfaction

Product/service quality Product/service attributes or features Consumer Emotions Attributions for product/service success or failure Equity or fairness evaluations

Outcomes of Customer Satisfaction

Increased customer retention Positive word-of-mouth communications Increased revenues

Relationship between Customer Satisfaction and Loyalty in Competitive Industries

100% Loyalty (retention) 80% 60% 40% 20% 0% Very dissatisfied

Dissatisfied

Neither satisfied nor dissatisfied Satisfaction measure

Satisfied

Very satisfied

Service Quality
The customers judgment of overall excellence of the service provided in relation to the quality that was expected. Process and outcome quality are both important.

The Five Dimensions of Service Quality

Reliability Assurance Tangibles Empathy
Ability to perform the promised service dependably and accurately. Knowledge and courtesy of employees and their ability to convey trust and confidence. Physical facilities, equipment, and appearance of personnel. Caring, individualized attention the firm provides its customers. Willingness to help customers and provide prompt service.

Responsiveness

SERVQUAL Attributes
ASSURANCE

RELIABILITY

Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions

Providing service as promised Dependability in handling customers service problems Performing services right the first time Providing services at the promised time Maintaining error-free records

EMPATHY

RESPONSIVENESS

Giving customers individual attention Employees who deal with customers in a caring fashion Having the customers best interest at heart Employees who understand the needs of their customers Convenient business hours

Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers requests

TANGIBLES

Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service

The Service Encounter

is the moment of truth occurs any time the customer interacts with the firm can potentially be critical in determining customer satisfaction and loyalty types of encounters: remote encounters phone encounters face-to-face encounters is an opportunity to: build trust reinforce quality build brand identity increase loyalty

Figure 4-4

A Service Encounter Cascade for a Hotel Visit

Check-In Bellboy Takes to Room Restaurant Meal

Request Wake-Up Call

Checkout

Figure 4-5

A Service Encounter Cascade for an Industrial Purchase

Sales Call

Delivery and Installation

Servicing Ordering Supplies

Billing

Critical Service Encounters Research

GOAL - understanding actual events and behaviors that cause customer dis/satisfaction in service encounters METHOD - Critical Incident Technique DATA - stories from customers and employees OUTPUT - identification of themes underlying satisfaction and dissatisfaction with service encounters

Sample Questions for Critical Incidents Technique Study

Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with an employee of . When did the incident happen? What specific circumstances led up to this situation? Exactly what was said and done? What resulted that made you feel the interaction was satisfying (dissatisfying)?

Common Themes in Critical Service Encounters Research

Recovery:
Employee Response to Service Delivery System Failure

Adaptability:
Employee Response to Customer Needs and Requests

Coping:
Employee Response to Problem Customers

Spontaneity:
Unprompted and Unsolicited Employee Actions and Attitudes

Recovery
DO Acknowledge problem Explain causes Apologize Compensate/upgrade Lay out options Take responsibility DONT Ignore customer Blame customer Leave customer to fend for him/herself Downgrade Act as if nothing is wrong

Adaptability
DO
Recognize the seriousness of the need Acknowledge Anticipate Attempt to accommodate Explain rules/policies Take responsibility Exert effort to accommodate

DONT
Promise, then fail to follow through Ignore Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility

Spontaneity
DO
Take time Be attentive Anticipate needs Listen Provide information (even if not asked) Treat customers fairly Show empathy Acknowledge by name

DONT Exhibit impatience Ignore Yell/laugh/swear Steal from or cheat a customer Discriminate Treat impersonally

Coping
DO Listen Try to accommodate Explain Let go of the customer DONT Take customers dissatisfaction personally Let customers dissatisfaction affect others

Common Research Objectives for Services

To identify dissatisfied customers To discover customer requirements or expectations To monitor and track service performance To assess overall company performance compared to competition To assess gaps between customer expectations and perceptions To gauge effectiveness of changes in service To appraise service performance of individuals and teams for rewards To determine expectations for a new service To monitor changing expectations in an industry To forecast future expectations

Criteria for An Effective Services Research Program

Occurs with Appropriate Frequency

Includes Perceptions and Expectations of Customers

Research Objectives

Measures Priorities or Importance Includes Statistical Validity When Necessary

Includes Measures of Loyalty or Behavioral Intentions

Stages in the Research Process

Stage 1 : Stage 2 : Stage 3 : Stage 4 : Stage 5 : Stage 6 : Define Problem Develop Measurement Strategy Implement Research Program Collect and Tabulate Data Interpret and Analyze Findings Report Findings

BUILDING CUSTOMER RELATIONSHIPS

Relationship Marketing
is a philosophy of doing business that focuses on keeping and improving current customers does not necessarily emphasize acquiring new customers is usually cheaper (for the firm)--to keep a current customer costs less than to attract a new one goal = to build and maintain a base of committed customers who are profitable for the organization thus, the focus is on the attraction, retention, and enhancement of customer relationships

Lifetime Value of a Customer

Assumptions Income Expected Customer Lifetime Average Revenue (month/year) Other Customers convinced via WOM Employee Loyalty?? Expenses Costs of Serving Customer Increase??

A Loyal Customer is One Who...

Shows Behavioral Commitment
buys from only one supplier, even though other options exist increasingly buys more and more from a particular supplier provides constructive feedback/suggestions

Exhibits Psychological Commitment

wouldnt consider terminating the relationship-psychological commitment has a positive attitude about the supplier says good things about the supplier

Benefits to the Organization of Customer Loyalty

loyal customers tend to spend more with the organization over time on average costs of relationship maintenance are lower than new customer costs employee retention is more likely with a stable customer base lifetime value of a customer can be very high

Benefits to the Customer

inherent benefits in getting good value economic, social, and continuity benefits contribution to sense of well-being and quality of life and other psychological benefits avoidance of change simplified decision making social support and friendships special deals

The Customer Isnt Always Right

Not all customers are good relationship customers:
wrong segment

not profitable in the long term

difficult customers

Strategies for Building Relationships

Foundations: Excellent Quality/Value Careful Segmentation Bonding Strategies: Financial Bonds Social & Psychological Bonds Structural Bonds Customization Bonds Relationship Strategies Wheel

Customer Goals of Relationship Marketing

Enhancing

Retaining
Satisfying Getting

Underlying Logic of Customer Retention Benefits to the Organization

Customer Satisfaction

Customer Retention & Increased Profits

Quality Service

Employee Loyalty

SERVICE RECOVERY

Unhappy Customers Repurchase Intentions

Unhappy Customers Who Dont Complain Unhappy Customers Who Do Complain

9% 37% 19% 46% 54% 70% 82% Percent of Customers Who Will Buy Again

Complaints Not Resolved

Complaints Resolved

Complaints Resolved Quickly

95%

Minor complaints ($1-$5 losses)

Major complaints (over $100 losses)

Customer Response Following Service Failure

Service Failure

Take Action

Do Nothing

Switch Providers Complain to Provider

Complain to Family & Friends

Stay with Provider

Complain to Third Party

Switch Providers

Stay with Provider

Service Recovery Strategies

Service Recovery Strategies

Pricing
High Price Price Increases Unfair Pricing Deceptive Pricing

Inconvenience
Location/Hours Wait for Appointment Wait for Service

Causes Behind Service Switching

Core Service Failure

Service Mistakes Billing Errors Service Catastrophe

Service Encounter Failures

Uncaring Impolite Unresponsive Unknowledgeable

Response to Service Failure

Negative Response No Response Reluctant Response

Service Switching Behavior

Competition
Found Better Service

Ethical Problems
Cheat Hard Sell Unsafe Conflict of Interest

Involuntary Switching
Customer Moved Provider Closed

Service Guarantees
guarantee = an assurance of the fulfillment of a condition (Websters Dictionary)
for products, guarantee often done in the form of a warranty services are often not guaranteed cannot return the service service experience is intangible (so what do you guarantee?)

Characteristics of an Effective Service Guarantee

Unconditional
The guarantee should make its promise unconditionally no strings attached.

Meaningful
It should guarantee elements of the service that are important to the customer. The payout should cover fully the customer's dissatisfaction.

Easy to Understand and Communicate

For customers - they need to understand what to expect. For employees - they need to understand what to do.

Easy to Invoke and Collect

There should not be a lot of hoops or red tape in the way of accessing or collecting on the guarantee.

Why a Good Guarantee Works

forces company to focus on customers sets clear standards

generates feedback
forces company to understand why it failed

builds marketing muscle

Service Guarantees
Does everyone need a guarantee? Reasons companies do NOT offer guarantees:
guarantee would be at odds with companys image too many uncontrollable external variables fears of cheating by customers costs of the guarantee are too high

Service Guarantees
service guarantees work for companies who are already customer-focused effective guarantees can be BIG deals - they put the company at risk in the eyes of the customer customers should be involved in the design of service guarantees the guarantee should be so stunning that it comes as a surprise -- a WOW!! factor its the icing on the cake, not the cake

Risks of Relying on Words Alone to Describe Services

Oversimplification Incompleteness Subjectivity Biased Interpretation

New Service Development Process

Business Strategy Development or Review New Service Strategy Development

Front End Planning

Idea Generation Screen ideas against new service strategy

Concept Development and Evaluation

Test concept with customers and employees Business Analysis Test for profitability and feasibility Service Development and Testing Conduct service prototype test

Implementation

Market Testing Test service and other marketing-mix elements Commercialization Postintroduction Evaluation

New Service Strategy Matrix for Identifying Growth Opportunities

Markets

Offerings
Existing Services

Current Customers

New Customers

SHARE BUILDING

MARKET DEVELOPMENT

New Services

SERVICE DEVELOPMENT

DIVERSIFICATION

CUSTOMERDEFINED SERVICE STANDARDS

Process for Setting Customer-Defined Standards

1. Identify Existing or Desired Service Encounter Sequence

2. Translate Customer Expectations Into Behaviors/Actions

3. Select Behaviors/Actions for Standards 4. Set Hard or Soft Standards Measure by Audits or Operating Data Measure by TransactionBased Surveys

Hard

5. Develop Feedback Mechanisms

Soft

6. Establish Measures and Target Levels 7. Track Measures Against Standards 8. Update Target Levels and Measures

PHYSICAL EVIDENCE
AND THE

SERVICESCAPE

Elements of Physical Evidence

Servicescape
Facility exterior
Exterior design Signage Parking Landscape Surrounding environment Facility interior Interior design Equipment Signage Layout Air quality/temperature

Other tangibles
Business cards Stationery Billing statements Reports Employee dress Uniforms Brochures Internet/Web pages

Examples of Physical Evidence from the Customers Point of View

Service
Insurance Not applicable

Physical evidence
Servicescape Other tangibles
Policy itself Billing statements Periodic updates Company brochure Letters/cards Uniforms Reports/stationery Billing statements

Hospital

Airline

Express mail

Building exterior Parking Signs Waiting areas Admissions office Patient care room Medical equipment Recovery room Airline gate area Airplane exterior Airplane interior (dcor, seats, air quality) Not applicable

Tickets Food Uniforms Packaging Trucks Uniforms Computers Signs Tickets Program Uniforms

Sporting event

Parking, Seating, Restrooms Stadium exterior Ticketing area, Concession Areas Entrance, Playiing Field

Typology of Service Organizations Based on Variations in Form and Use of the Servicescape
Complexity of the servicescape evidence
Servicescape usage
Self-service (customer only)

Elaborate
Golf Land Surf 'n' Splash

Lean
ATM Ticketron Post office kiosk Internet services Express mail drop-off Dry cleaner Hot dog stand Hair salon

Interpersonal services (both customer and employeee)

Hotel Restaurants Health clinic Hospital Bank Airline School Telephone company Insurance company Utility Many professional services

Remote service (employee only)

Telephone mail-order desk Automated voice-messagingbased services

A Framework for Understanding Environment-user Relationships in Service Organizations

PHYSICAL ENVIRONMENTAL DIMENSIONS HOLISTIC ENVIRONMENT INTERNAL RESPONSES
Cognitive Emotional Physiological Employee Responses Perceived Servicescape Social Interactions between and among customer and employees Individual Behaviors

BEHAVIOR

Ambient Conditions Space/Function Signs, Symbols, and Artifacts

Customer Responses
Individual Behaviors Cognitive Emotional Physiological

INTEGRATED MARKETING COMMUNICATION

Communications and the Services Marketing Triangle

Company
Internal Marketing

Vertical Communications Horizontal Communications

External Marketing Communication

Advertising Sales Promotion Public Relations Direct Marketing

Employees

Interactive Marketing

Customers

Personal Selling Customer Service Center Service Encounters Servicescapes

Approaches for Integrating Services Marketing Communication

Manage Customer Expectations

Manage Service Promises

Goal: Delivery greater than or equal to promises

Improve Customer Education

Manage Internal Marketing Communication

Approaches for Managing Service Promises

MANAGING SERVICE PROMISES

Create Effective Services Communications Coordinate External Communication Offer Service Guarantees Goal: Delivery greater than or equal to promises

Make Realistic Promises

Approaches for Managing Customer Expectations

Offer Choices

Create Tiered-Value Offerings

Communicate Criteria for Service Effectiveness
Negotiate Unrealistic Expectations
Goal: Delivery greater than or equal to promises

Approaches for Improving Customer Education

Goal: Delivery greater than or equal to promises

Prepare Customers for the Service Process

Confirm Performance to Standards

Clarify Expectations after the Sale

Teach Customers to Avoid Peak Demand Periods and Seek Slow Periods

Approaches for Managing Internal Marketing Communications

Goal: Delivery greater than or equal to promises
Create Effective Vertical Communications

Create Effective Horizontal Communications Align Back Office Personnel w/ External Customers Create Cross-Functional Teams