Services Marketing

Services are a special kind of product. They may require special understanding and special marketing efforts (Jobber, 2007:894)
Lack of Ownership
Inseparable
Intangible
Heterogeneous
Produced and consumed simultaneously
Defining Services:

Services Marketing Mix

Categories of Service Mix:
Pure tangible good (e.g. toothpaste)
Tangible good with accompanying services
(e.g. cars or computers)
Hybrid (e.g. fast food)
Major service with accompanying minor goods and services (e.g. airlines)
Pure service (e.g. hairdressing or beauty treatment)
The Nature of Services
Kotler and Keller 2005 p403

Physical Products / Services
Greater difficulty maintaining quality
Harder to evaluate
Absence of inventories
Relative importance of time factors
Structure and nature of distribution channels
Source: Lovelock et al. (1999).
Implications? Requires a completely different approach, or is it basically the same as marketing products???

Both the US & UK are moving increasingly towards a service economy and beyond: marketers need to know more about marketing services and services as a key element in the marketing of products
Services:
Account for 74% of U.S. gross domestic product.
Service industries include business organizations, government, and private not-for-profit organizations.
Services Marketing
Kotler, P. & Armstrong, G. (2003) Principles of Marketing, Prentice Hall.
….Every business is a service business (Kotler, 2003:443)

Service Delivery in Action

Service Delivery in Action
Ritz-Charlton
Marriott / Renaissance
Courtyard
Fairfield Inn
Residence Inn/ Townplace Suite: extended stay
Springhill Suites
Execustay
Vacation Club
Commitment to service excellence
Empowerment
Employee Commitment

Differentiated service levels

Differentiated service levels

Barriers
Misconceptions
Inadequate
resources
Inadequate
delivery
Exaggerated
promises
Brassington and Pettit, 2006

How much of your supermarket shopping experience is evaluated by the level of service you get?
How much of your choice of mobile phone is determined by which network it works on and your evaluation of the service?

Woolworth’s: low price, poor service?
How did you define service? Queues at tills, staff that don’t know anything, store layout, store atmospherics?
How important is this compared to the quality of the products that you buy there?

How do we measure service?

Service Quality
Berry et al., 1990 identified the principal dimensions customers use to judge a company's service:
Tangibles. The appearance of physical facilities, equipment, personnel, and communication materials.
Reliability. The ability to perform the promised service dependably and accurately.
Responsiveness. The willingness to help customers and to provide prompt service.
Assurance. The knowledge and courtesy of employees and their ability to convey trust and confidence.
Empathy. The provision of caring, individualized attention to customers
Berry, L. L., Zeitbaml, V. A., Parasuraman, A., ‘Five Imperatives For Improving Service Quality’ , Sloan Management Review, 0019848X, Summer90, Vol. 31, Issue 4.
SERVQUAL

Managing Service Quality
What are the Key Terms for Quality?
Quality is the totality of relationships between service providers (functional aspects) and the features of retailing (technical aspects) which are related to the delivery of satisfaction (Gilbert, 2003 p101)
Total quality management (TQM) is a holistic organisational approach which systematically attempts to improve customer satisfaction by focusing on continuous quality improvements without incurring unacceptable cost increases (Gilbert, 2003 p101).

Managing Service Quality
Five gaps that cause unsuccessful delivery:
Gap between consumer expectation and management perception
Gap between management perception and service-quality specification
Gap between service-quality specification and service delivery
Gap between service delivery and external communications
Gap between perceived service and expected service
(Palmer, 1998)

Service Quality Gaps
The Parasuraman, Zeithaml and Berry model (PZB) (1985):
Gap 1: Ignorance of the customer’s expectations
Gap 2: Requirement for service design standards
Gap 3: Not delivering to service standards
Gap 4: Inconsistency between performance and promises
Gap 5: The service shortfalls
(Palmer, 1998)

Criticisms of SERVQUAL
Ambiguous “expectations”
Low reliability of constructs, especially when measuring “gaps”
Very complex psychological constructs involved but the measure is simplistic
Correlations are merely self-perceptions
Serious validity and measurement problems
Caution should be used when making claims about SERVQUAL
Source: Van Dyke, T., Prybutok, V. & Kappelman, L., (1999) ‘Cautions on the Use of SERVQUAL: Measure to assess the quality of information systems services, Decision Sciences, Vol. 30, No. 3 pp 1-15

References: SERVQUAL
Berry, Leonard L.; Zeithaml, Valarie A. & Parasuraman, A.. (1985). Quality Counts in Services, Too.; Business Horizons, May/Jun85, Vol. 28 Issue 3, p44.
Berry, Leonard L.; Zeithaml, V. A. & Parasuraman, A.. (1990) Five Imperatives for Improving Service Quality. Sloan Management Review, Summer90, Vol. 31 Issue 4, p29.
Carman, James M. (1990) Consumer Perceptions of Service Quality: An Assessment of the SERVQUAL Dimensions.. Journal of Retailing, Spring90, Vol. 66 Issue 1, p33.
Parasuraman, A.; Zeithaml, Valerie A.; Berry, & Leonard L.. (1985) A Conceptual Model of Service Quality and Its Implications for Future Research. Journal of Marketing, Fall85, Vol. 49 Issue 4, 1.
Parasuraman, A.; Zeithaml, Valarie A.; Berry, & Leonard L. (1988) SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality. Journal of Retailing, Spring88, Vol. 64 Issue 1, p5.
Parasuraman, A. Berry, Leonard L. & Zeithaml, Valarie A. (1991) Refinement and Reassessment of the SERVQUAL Scale.. Journal of Retailing, Winter91, Vol. 67 Issue 4, p420.
Parasuraman, A. Berry, Leonard L. & Zeithaml, Valarie A.(1999) Guidelines for Conducting Service Quality Research. Marketing Research, Dec90, Vol. 2 Issue 4, p34.
Saleh, Farouk & Ryan, Chris. (1991) Analysing Service Quality in the Hospitality Industry Using the SERVQUAL Model. Service Industries Journal, Jul91, Vol. 11 Issue 3, p324.
SERVQUAL