Chapter 1 New Perspectives on Marketing in the Service Economy 1.

. The five powerful forces transforming the service landscape and their impact on the service economy: Government Policies Improved customer comfort and health measures in restaurants will encourage people to dine in more often; increased cost of air travel may dampen demand Social Changes More services catering to the needs of elderly, including health care and, construction of retirement communication; new service providers include both local firms and national/regional chains Business Trends Rethink service delivery system, invest in new technologies that replace employees; fund raising for improved facilities in addition to new revenue generating services like restaurants and facilities retail Advances in Information Technology Service delivery processes need to be redesigned; increase in training software engineers to develop packaged services instead of piece meal services Globalization more services provided by airlines, ferries and cruise ships, coach tours, international trains, leading to greater competition 2. The four broad processing categories of service are: People-Processing which services directed at peoples bodies such as passenger transportation and health care Possession-Processing are services directed at physical possessions, the customers involvement usually is limited an example of this is laundry and dry cleaning Mental Stimulus Processing are services that are directed at peoples mind such as education, advertising (PR) as well as psychotherapy Information Processing are services that are directed at intangible assets such as accounting, banking and legal services The 7 Ps of services marketing are price, product, promotion, placement, process, physical environment and people. Five broad categories within the nonownership framework: Rented goods services; time shares Defined space and place rentals; chair Labor and expertise rentals Access to shared physical environments; condos Access to and usage of systems and networks; AOL 1

Service Economic activities offered by one party to another, often time based performances.

Chapter 2 Consumer Behavior in Services Context 1. The three-stage model in service consumption consists of pre-purchased stage where the prospective customers awareness of need need arousal, evoked set the consideration set. Service encounter stage which is a period of time during which a customer interacts directly with a service provider and post-encounter stage when customers evaluate the service performance they have experienced and compare it with their prior expectations. 2. Moments of Truth is a point in service delivery where customers interact with service employees or self-service equipment and the outcome may affect perceptions of service quality A metaphor from bullfighting to show the importance of contact points with customers the life of the relationship is at stake; you want to prevent one misfortunate (mis)encounter from destroying what is already, or has the potential to become, a mutually valued-long term relationship 3. High-contract services are services that involve significant interaction among customers, service personnel, and equipment and facilities where as low-contract services are services that require minimal or no direct contact between customers and the service organization

Chapter 3 Positioning Services in Competitive Markets 1. The four basic four strategies: Fully Focused provides a limited range of services to a narrow and specific market segment; developing recognized expertise in a well-defined niche may provide protection against would-be competitors and allows a firm to charge premium prices Market Focused is a market focused company concentrates on a narrow market segment, but has a wide range of services Service Focused offers a narrow range of services to a fairly broad market; firms need to develop knowledge and skills in serving each segment Unfocused. . . try to serve broad markets and provide a wired range of services Jacks of all trades and masters of none 2

Competitive positioning strategy is based on establishing and maintaining a distinctive place in the market for an organization and/or its individual product offerings . . . The essence of positioning into the following four principles: A company must establish a position in the minds of its targeted customers The position should be singular, providing one simple and consistent message The position must set a company apart from its competitors A company cannot be all things to all people it must focus on its efforts

2. The six questions for developing an effective positioning strategy: What does our firm currently stand for in the minds of current and prospective customers? What customers do we serve now, and which ones would we like to target in the future? What is the value proposition for each of our current service offerings and what market segments is each one targeted at? How does each service products differ from those of our competitors? How well do customers in the chosen target segments perceive our service offerings as meeting their needs? What changes do we need to make to our service offerings in order to strengthen our competitive position within our target segment(s)?

Four things a market segment needs: 1. 2. 3. 4. Similar needs Heterogeneous different from all else but the same Big enough to make a profit Reach customers

Important versus Determinant Attributes Attributes that distinguish competing services from one another are not always the most important; travelers rank safety as their number one consideration in an air travel . . . Determinant attributes often are ways on the list of characteristics important to purchasers, but they are the attributes on which customers see significant differences among competing alternatives 3

The essence of positioning: A company must establish position in the minds of its targeted customers The position should be singular, providing one simple and consistent message The position must set a company apart from its competitors A company cannot be all things to all people it must focus its efforts

Chapter 4 Developing Service Products: Core and Supplementary Elements 1. The core product is the central component that supplies the principal, problem-solving benefits customers seek an example of this is transport services solve the need to move a person or a physical object from one location to another. The delivery of the core product is accompanied by a variety of other service-related activities which is referred to collectively as supplementary services. These services change the core product thus enhancing its value and appeal to the customers overall experience. Core product delivers the principle benefits and solutions customers seek Supplementary services facilitate and enhance the core product 2. The flower of service Payment, information, consultation, order-taking, billing, hospitality, safekeeping and expectations (dont need to have all 8 for every product) 3. A firm can take many approaches in creating a new service development. Some of these approaches are a hierarchy of new service categories..: Style change Service improvement Supplementary service innovations Process line extensions Product line extensions Major process innovations Major service innovations

Chapter 5 Distributing Services through Physical and Electronic Channels 1. Distributing service could mean many things. In service though, there is nothing to move . . . it could mean experiences, performances, and solutions although they are not physically shipped and stored. Distribution of informational and promotion materials this meaning to get the customers interest in buying the service, negotiation flow the objective of this is to sell the right to use a service, and product flow. Product flow, distribution strategy requires development of network of local sites. 4

2. Options for service delivery: Customers visit the service site; convenience of service factory locations and operational schedules assume great importance when a customer has to be physically present (theater, barber shop. . .) Service providers go to their customers; going to the customers is unavoidable whenever the object of the service is some immovable physical item it is more expensive and time consuming for the service firm to send personnel and their equipment to travel to the customer rather than vice versa (house painting, mail delivery . . .) The service transaction is conducted remotely; information being delivered through the internet (credit card company, broadcast network . . . ) 3. The key factors driving place and time decisions of service distribution is based upon: Where the service should be delivered in a brick-and-mortar context? deciding where to locate a service facility for customers involves very different considerations from locating the back-stage elements where cost, productivity, and access to labor often are key determinants When should the service be delivered? Traditional schedule of being available about 40-50 hours a week Delivering services Internet enables researchers to: Collect data on consumer information-seeking and search behaviors Obtain feedback quickly from consumers Create online communities to help market services

4. Franchising is a popular way to expand distribution of an effective service concept because franchisees are highly motivated to ensure customer orientation and high quality service operations. A disadvantage to franchisees is the loss of control over the delivery system and how customers experience the actual service.