Lectures Marketing management: Chapter 13 - ThS. Nguyễn Tiến Dũng

CHAPTER 13
DESIGNING AND MANAGING SERVICES

Nguyen Tien Dung, MBA
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Chapter Questions
1.How do we define and classify

services, and how do they differ
from goods?
2.What are the new services
realities?
3.How can we achieve excellence
in services marketing?
4.How can we improve service
quality?
5.How can goods marketers
improve customer-support
services?


Main Contents
1. The Nature of Services
2. The New Services Realities
3. Achieving Excellence in Services Marketing

© Nguyễn Tiến Dũng

3

1. The Nature of Services
● 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.


Service Sectors
● Government
● Private nonprofit
● Business
● Manufacturing
● Retail


Categories of Service Mix
● Pure tangible good
● Good with accompanying services
● Hybrid
● Service with accompany goods

● Pure service


Service Distinctions
● Equipment-based or people-based
● Service processes
● Client’s presence required or not
● Personal needs or business needs
● Objectives and ownership


Distinctive Characteristics
of Services
● Intangibility
● Inseparability
● Variability
● Perishability


Continuum of Evaluation for Different Types of
Products


Intangibility: Physical Evidence and Presentation
● Place
● People
● Equipment
● Communication

material

● Symbols
● Price



Variability


How to Increase Quality Control
● Invest in good hiring

and training
procedures
● Standardize the
service-performance
process
● Monitor customer
satisfaction


Blueprint for Overnight Hotel Stay

Source: Valarie Zeithaml, Mary Jo Bitner, and Dwayne D. Gremler, Services Marketing: Integrating Customer Focus across the Firm, 4th ed. (New York: McGraw-Hill, 2006).


Matching Demand and Supply
Demand side
● Differential pricing
● Nonpeak demand
● Complementary services

● Reservation systems

Supply side
● Part-time employees
● Peak-time efficiency
● Increased consumer
participation
● Shared services
● Facilities for future
expansion


Demand Side
● Differential pricing will shift some demand from

peak to off-peak periods. Examples include low
matinee movie prices and weekend discounts for car
rentals.
● Nonpeak demand can be cultivated.McDonald’s
pushes breakfast service, and hotels promote
minivacation weekends.
● Complementary services can provide alternatives
to waiting customers, such as cocktail lounges in
restaurants and automated teller machines in banks.
● Reservation systems are a way to manage the
demand level. Airlines, hotels, and physicians employ
them extensively.


2. The New Services Realities

● Customer empowerment
● Customer coproduction
● Satisfying employees as well as customers



Customer Coproduction
● 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” so
customers help customers.


Satisfying Employees As Well As Customers

● Figure 13-1: Root Causes of Customer Failure
● Source: Stephen Tax, Mark Colgate, and David Bowen, MIT Sloan Management

Review (Spring 2006): pp. 30–38. ©2006 by Massachusetts Institute of Technology.
All rights reserved. Distributed by Tribune Media Services.


3. Achieving Excellence in Services Marketing
● Internal marketing

● External marketing
● Interactive marketing


Improving Service Quality
● Listening

● Surprising customers

● Reliability

● Fair play

● Basic service

● Teamwork

● Service design

● Employee research

● Recovery

● Servant leadership


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


Determinants of Service Quality
● SERVQUAL
● SERVPERF


Best Practices
● Strategic Concept
● Top-Management Commitment
● High Standards
● Self-Service Technologies
● Monitoring Systems
● Satisfying Customer Complaints
● Satisfying Employees