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1 Chapter11ServicesMarketing 2 Chapter11 SkipPricingStrategies p 297 ManagingServiceQuality p 301 endofchapter Self study ScopeofServices p 293 294 3 DefinitionofServices Servicesareexclusive intangibleactivitiesthatarethemainobjectofthetransactiondesignedtoprovidewant satisfactiontocustomers Twoclassesofservices CoreServices Servicesthatarethemainpurposesorobjectofthetransaction e g movietickets entertainment SupplementaryorSupportServices Servicesthatsupportorfacilitatethesaleofagoodoranotherservice e g reservationcenter creditcardservices 4 CharacteristicsofServices 1 IntangibilityItisimpossibletosampleaservicebeforetheybuyit Promotionalstrategiesmustsuggesttheservicebenefits VisualizationAssociation connectingtheservicewithatangiblegood person object orplace PhysicalrepresentationDocumentation pastperformanceandcapabilityWebsitescanreduceintangibilitybyincreasingtheavailableinformationandtherebyimprovesthecustomer sunderstanding 5 CharacteristicsofServices 2 InseparabilityServicescannotbeseparatedfromthecreator selleroftheservices Servicesarecreated givenout andconsumedsimultaneously Inseparabilitylimitsdistribution Directsaleistheonlypossiblechannel Directcontactisneededtosellservice Someservicesaresoldbytheintermediaries 6 CharacteristicsofServices 3 HeterogeneityItisdifficulttostandardizeoutputofservicesbecausehumanfactorinproductionanddeliverye g Haircut Itisdifficulttoforecastqualityinadvanceofconsumptionorafterservicehasbeenreceived Managementmustensureconsistencyofqualityandtomaintainhighlevelsofqualitycontrol 7 CharacteristicsofServices 4 PerishabilityServicecapacitycannotbestoredorinventoriedforfutureuse Perishabilitycreatespotentialimbalancesinsupplyanddemand Thedemandformanyservicesfluctuatesconsiderablye g movieticket hotelroomFluctuatingdemandposeschallengesonpromotion product planning scheduling andpricing 8 TheServiceCustomer ProviderMarketThecontributorsofmoney labor materials orotherresourcestotheorganization ClientMarketTherecipientsofmoneyorservicesfromtheorganization 9 SelectingTargetMarkets Thepsychological motivation perceptions attitudes personality andthesociologicalfactors socialclassesandreferencegroup aremoresignificantwhenmarketingservicesthangoods Thisisbecausewecannottouch smell tastetheserviceoffered 10 4P sforservices ProductPlanningPricingStructureDistributionSystemPromotionalProgram 11 ProductPlanning ServicesOfferingDifferentiationiskey however differentiatedfeatureshouldnotbeeasilyduplicatedorwillbequicklyneutralized Product MixStrategiesExpandingthelinesContract PruneservicesmixAlteringitsservicesofferingManagingthelifecycle 12 ProductPlanning ProductFeaturesBrandingofservicesisaproblembecauseoftheheterogeneityandintangibilitycharacteristics Tocreateaneffectivebrandimage Useatangibleobjecttocommunicatethebrandimage Developamemorableslogantoaccompanythebrand Useadistinctivecolorschemeonalltangibleaspectsoftheservices 13 PricingStructure PriceDeterminationinFor ProfitFirmsPricesaresetbasedoncostsplusdesiredprofitorwhatcustomersarewillingtopay Thedemandforaserviceinfluencesitsprice PriceDeterminationbyNonprofitsProviderMarketPriceissetbycontributors ClientMarketPriceissetbytheorganization 14 DistributionSystem ChannelsofDistributionThechannelformostservicesisshortandsimpleDirectdistributionoroneagentShortchannelsmeanmorecontrolonthepartofseller Servicemarketerscanreducetheheterogeneityorvarianceintheservice DistributionFacilitiesAconvenientlocationisessentialwhenaservicerequirespersonalinteraction 15 PromotionalProgram PersonalSellingServiceemployeesmustbeskilledatcustomerrelationsaswellascapableofproducingaqualityservice Allemployeeswhocomeintocontactwithacustomerarepartoforganization ssalesforce ServiceEncounter acustomer sinteractionwithanyserviceemployees orwithanytangibleelementsuchasaservice sphysicalsurroundings e g ABAC Thisinfluencesacustomer sevaluationofafirmanditsservice InternalMarketing aviewthatemployeesshouldbetreatedasafirm scustomers 16 PromotionalProgram AdvertisingThroughmassmedia directmail andwebsite aservi
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