Designing and

Managing Services
 What is a Service?
A service is any act of performance that one
party can offer 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.
Distinctive Characteristics
of Services

Intangibility

Inseparability

Variability

Perishability
Physical Evidence and Presentation
Place

People

Equipment

Communication material

Symbols

Price
Disney Relies Upon Tangible Cues
How to Increase Quality Control

Invest in good hiring and

training procedures
Standardize the
service-performance process

Monitor customer satisfaction

Matching Demand and Supply
Demand side Supply side
• Differential pricing • Part-time employees
• Nonpeak demand • Increased consumer
• Complementary participation
services • Shared services
• Reservation systems
Factors Leading to Customer Switching
Behavior
• Pricing
• Inconvenience
• Core Service Failure
• Service Encounter Failures
• Response to Service Failure
• Competition
• Ethical Problems
• Involuntary Switching
 Root Causes
of Customer Failure
 Solutions to Customer Failures
• Redesign processes and redefine customer roles to
simplify service encounters
• Incorporate the right technology to aid employees
and customers
• Create high-performance customers by enhancing
their role clarity, motivation, and ability
• Encourage customer citizenship where customers
help customers
Three Types of Marketing in Service Industries
Service-Quality Model
Gaps That Cause Unsuccessful Service
Delivery
• Gap between consumer expectation and
management perception
• Gap between management perception and service-
quality specifications
• Gap between service-quality specifications and
service delivery
• Gap between service delivery and external
communications
• Gap between perceived service and expected service
Determinants of Service Quality
Reliability

Responsiveness

Assurance

Empathy

Tangibles
Best Practices
• Strategic Concept
• Top-Management
Commitment
• High Standards
• Self-Service
Technologies
• Monitoring Systems
• Satisfying Customer
Complaints
• Satisfying Employees
 A Blueprint for
Overnight Hotel Stay
Developing Brand Strategies
for Services

Choosing
Brand Elements
Establishing Image
Dimensions
Devising Branding
Strategy
 Top Customer
Service Providers
• Lexus
• Four Seasons Hotels • UPS
• Cadillac • Enterprise Rent-A-Car
• Nordstrom • Starbucks
• Wegman Food Markets • Ritz-Carlton
• Edward Jones • Amica Insurance
• Southwest Airlines
 Marketing Debate
 Is service marketing different from
product marketing?
Take a position:
1. Product and service marketing are
fundamentally different.
or
2. Product and service marketing are highly
related.