Review Chapter 13: Services: The Intangible Products, then give an answer: Assume you were hired by the local grocery store to help assess its service quality. How would you go about undertaking this project? What mobile apps do you use that help facilitates your transactions with a specific retailer or service provider? Would you rather use the apps or engage in a face-to-face relationship with a person? How, if at all would your parents' answers to these two questions differ? Because learning changes everything.® Chapter 13 Services: The Intangible Product Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. Learning Objectives Learning Objective 13.1 Describe how the marketing of services differs from the marketing of products. Learning Objective 13.2 Discuss the four gaps in the Service Gaps Model. Learning Objective 13.3 Examine the five service quality dimensions. Learning Objective 13.4 Explain the zone of tolerance. Learning Objective 13.5 Identify three service recovery strategies. © McGraw Hill LLC 3 Service Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed. By providing good customer service, firms add value to their products and services. © McGraw Hill LLC Pro Ipad on display at the Apple Store in Bologna, Spain. Shutterstock / PriceM 4 The Service-Product Continuum Doctor Dry cleaner Restaurant These photos illustrate the continuum from a pure service to a pure good. Most offerings lie somewhere in the middle and include some service and some good (i.e., a hybrid of the two). Grocery store © McGraw Hill LLC Left: Viacheslav Iakobchuk/Alamy Stock Photo; Middle: McGraw-Hill Global Education Holdings, LLC; Right: Jacob Lund/Shutterstock; Bottom: Jeff Greenough/Blend Images/Getty Images 5 Economic Importance of Service Access the text alternative for slide images. © McGraw Hill LLC 6 Services Marketing Differs from Product Marketing EXHIBIT 13.2 Core Differences between Services and Goods © McGraw Hill LLC 7 Intangible Services cannot be touched, tasted, or seen. Requires using cues to aid customers. Atmosphere is important to convey value. Images are used to convey benefit of value. © McGraw Hill LLC Because it is difficult to show a service, Amusement park owners evoke images in their advertising of happy families and friends enjoying a ride at one of their parks. Shutterstock / bom 8 Inseparable Production and Consumption Production and consumption are simultaneous. Little opportunity for a consumer to test a service before use. Lower risk by offering guarantees or warranties. © McGraw Hill LLC © McGraw-Hill Education 9 Heterogeneous The more humans are needed to provide a service, the more likely there is to be heterogeneity or variability in the service’s quality. Solutions • Technology. • Training. • Automation. © McGraw Hill LLC sonya etchison/Shutterstock 10 Perishable Services are perishable in that they cannot be stored for use in the future. Ski areas, airlines, cruise ships, movie theaters, and restaurants must find ways to deal with the challenges of perishability. © McGraw Hill LLC spinout/Getty Images 11 PROGRESS CHECK (1 of 3) 1. What are the four marketing elements that distinguish services from products? 2. Why can’t we separate firms into just service or just product sellers? © McGraw Hill LLC 12 Providing Great Service: The Service Gaps Model EXHIBIT 13.3 Service Gaps Model for Improving Retail Service Quality Sources: Valarie Zeithaml, A. Parasuraman, and Leonard Berry, Delivering Quality Customer Service. (New York: Free Press, 1990); Valarie Zeithaml, Leonard Berry, and A. Parasuraman, “Communication and Control Processes in the Delivery of Service Quality,” Journal of Marketing 52, no. 2 (April 1988), 35-48. Access the text alternative for slide images. © McGraw Hill LLC 13 Knowledge Gap: Understanding Customer Expectations Access the text alternative for slide images. © McGraw Hill LLC 14 Understanding Customer Expectations Expectations are based on knowledge and experience. Expectations vary according to type of service. Expectations vary depending on the situation. © McGraw Hill LLC Nikada/Getty Images 15 Evaluating Service Quality Using WellEstablished Marketing Metrics EXHIBIT 13.4 Dimensions of Service Quality Access the text alternative for slide images. © McGraw Hill LLC 16 Marketing Research: Understanding Customers Voice-of-customer (VOC) program: Collects customer inputs and integrates them into managerial decisions. Zone of tolerance: Refers to the area between customers’ expectations regarding their desired service and the minimum level of acceptable service. © McGraw Hill LLC 17 Zone of Tolerance Used to Measure How Well Firms Perform on the Five Service Quality Dimensions Access the text alternative for slide images. © McGraw Hill LLC 18 Exhibit 13.5: Customers’ Evaluation of Service Quality for Lou’s Local Diner EXHIBIT 13.5 Customers’ Evaluation of Service Quality Access the text alternative for slide images. © McGraw Hill LLC 19 The Standards Gap: Setting Service Standards Difference between the firm’s perceptions of customer expectations and the service standards it sets. Need to set standards for quality. Develop systems to ensure the standards are met. © McGraw Hill LLC UpperCut Images/SuperStock 20 The Delivery Gap: Delivering Service Quality © McGraw Hill LLC 21 Empowering Service Providers Allowing employees to make decisions about how service is provided to customers. © McGraw Hill LLC Purestock/SuperStock 22 Support and Incentives for Employees Access the text alternative for slide images. © McGraw Hill LLC 23 Use of Technology EXHIBIT 13.6 How Technology Is Augmenting the Human Effort Access the text alternative for slide images. © McGraw Hill LLC McGraw-Hill Global Education Holdings, LLC 24 Communications Gap Difference between the Actual Service Provided and the Service the Firm Promises Manage customer expectations. Promise only what you can deliver. Communicate service expectations. © McGraw Hill LLC Shutterstock/ALPA PROD 25 Service Quality, Customer Satisfaction, and Loyalty Good service quality leads to satisfied and loyal customers. Postpurchase Evaluation leads to satisfaction, dissonance, or loyalty. © McGraw Hill LLC 26 PROGRESS CHECK (2 of 3) 1. Explain the four service gaps identified by the Service Gaps Model. 2. List at least two ways to overcome each of the four service gaps. © McGraw Hill LLC 27 Service Recovery © McGraw Hill LLC 28 Listening to the Customers and Involving Them in Service Recovery Customers can get emotional over a service failure. Often customers just want someone to listen. © McGraw Hill LLC leaf/123RF 29 Finding a Fair Solution Distributive fairness. Procedural fairness. © McGraw Hill LLC Andriy Popov/123RF 30 Resolving Problems Quickly The longer it takes to resolve service failure, the more irritated the customer will become and the more people the customer will tell. It is in the firm’s best interest to solve problems quickly. © McGraw Hill LLC 31 PROGRESS CHECK (3 of 3) 1. Why is service recovery so important to companies? 2. What can companies do to recover from a service failure? © McGraw Hill LLC 32 Because learning changes everything. ® www.mheducation.com Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. Because learning changes everything.® Chapter 13 Services: The Intangible Product Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. Learning Objectives Learning Objective 13.1 Describe how the marketing of services differs from the marketing of products. Learning Objective 13.2 Discuss the four gaps in the Service Gaps Model. Learning Objective 13.3 Examine the five service quality dimensions. Learning Objective 13.4 Explain the zone of tolerance. Learning Objective 13.5 Identify three service recovery strategies. © McGraw Hill LLC 3 Service Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed. By providing good customer service, firms add value to their products and services. © McGraw Hill LLC Pro Ipad on display at the Apple Store in Bologna, Spain. Shutterstock / PriceM 4 The Service-Product Continuum Doctor Dry cleaner Restaurant These photos illustrate the continuum from a pure service to a pure good. Most offerings lie somewhere in the middle and include some service and some good (i.e., a hybrid of the two). Grocery store © McGraw Hill LLC Left: Viacheslav Iakobchuk/Alamy Stock Photo; Middle: McGraw-Hill Global Education Holdings, LLC; Right: Jacob Lund/Shutterstock; Bottom: Jeff Greenough/Blend Images/Getty Images 5 Economic Importance of Service Access the text alternative for slide images. © McGraw Hill LLC 6 Services Marketing Differs from Product Marketing EXHIBIT 13.2 Core Differences between Services and Goods © McGraw Hill LLC 7 Intangible Services cannot be touched, tasted, or seen. Requires using cues to aid customers. Atmosphere is important to convey value. Images are used to convey benefit of value. © McGraw Hill LLC Because it is difficult to show a service, Amusement park owners evoke images in their advertising of happy families and friends enjoying a ride at one of their parks. Shutterstock / bom 8 Inseparable Production and Consumption Production and consumption are simultaneous. Little opportunity for a consumer to test a service before use. Lower risk by offering guarantees or warranties. © McGraw Hill LLC © McGraw-Hill Education 9 Heterogeneous The more humans are needed to provide a service, the more likely there is to be heterogeneity or variability in the service’s quality. Solutions • Technology. • Training. • Automation. © McGraw Hill LLC sonya etchison/Shutterstock 10 Perishable Services are perishable in that they cannot be stored for use in the future. Ski areas, airlines, cruise ships, movie theaters, and restaurants must find ways to deal with the challenges of perishability. © McGraw Hill LLC spinout/Getty Images 11 PROGRESS CHECK (1 of 3) 1. What are the four marketing elements that distinguish services from products? 2. Why can’t we separate firms into just service or just product sellers? © McGraw Hill LLC 12 Providing Great Service: The Service Gaps Model EXHIBIT 13.3 Service Gaps Model for Improving Retail Service Quality Sources: Valarie Zeithaml, A. Parasuraman, and Leonard Berry, Delivering Quality Customer Service. (New York: Free Press, 1990); Valarie Zeithaml, Leonard Berry, and A. Parasuraman, “Communication and Control Processes in the Delivery of Service Quality,” Journal of Marketing 52, no. 2 (April 1988), 35-48. Access the text alternative for slide images. © McGraw Hill LLC 13 Knowledge Gap: Understanding Customer Expectations Access the text alternative for slide images. © McGraw Hill LLC 14 Understanding Customer Expectations Expectations are based on knowledge and experience. Expectations vary according to type of service. Expectations vary depending on the situation. © McGraw Hill LLC Nikada/Getty Images 15 Evaluating Service Quality Using WellEstablished Marketing Metrics EXHIBIT 13.4 Dimensions of Service Quality Access the text alternative for slide images. © McGraw Hill LLC 16 Marketing Research: Understanding Customers Voice-of-customer (VOC) program: Collects customer inputs and integrates them into managerial decisions. Zone of tolerance: Refers to the area between customers’ expectations regarding their desired service and the minimum level of acceptable service. © McGraw Hill LLC 17 Zone of Tolerance Used to Measure How Well Firms Perform on the Five Service Quality Dimensions Access the text alternative for slide images. © McGraw Hill LLC 18 Exhibit 13.5: Customers’ Evaluation of Service Quality for Lou’s Local Diner EXHIBIT 13.5 Customers’ Evaluation of Service Quality Access the text alternative for slide images. © McGraw Hill LLC 19 The Standards Gap: Setting Service Standards Difference between the firm’s perceptions of customer expectations and the service standards it sets. Need to set standards for quality. Develop systems to ensure the standards are met. © McGraw Hill LLC UpperCut Images/SuperStock 20 The Delivery Gap: Delivering Service Quality © McGraw Hill LLC 21 Empowering Service Providers Allowing employees to make decisions about how service is provided to customers. © McGraw Hill LLC Purestock/SuperStock 22 Support and Incentives for Employees Access the text alternative for slide images. © McGraw Hill LLC 23 Use of Technology EXHIBIT 13.6 How Technology Is Augmenting the Human Effort Access the text alternative for slide images. © McGraw Hill LLC McGraw-Hill Global Education Holdings, LLC 24 Communications Gap Difference between the Actual Service Provided and the Service the Firm Promises Manage customer expectations. Promise only what you can deliver. Communicate service expectations. © McGraw Hill LLC Shutterstock/ALPA PROD 25 Service Quality, Customer Satisfaction, and Loyalty Good service quality leads to satisfied and loyal customers. Postpurchase Evaluation leads to satisfaction, dissonance, or loyalty. © McGraw Hill LLC 26 PROGRESS CHECK (2 of 3) 1. Explain the four service gaps identified by the Service Gaps Model. 2. List at least two ways to overcome each of the four service gaps. © McGraw Hill LLC 27 Service Recovery © McGraw Hill LLC 28 Listening to the Customers and Involving Them in Service Recovery Customers can get emotional over a service failure. Often customers just want someone to listen. © McGraw Hill LLC leaf/123RF 29 Finding a Fair Solution Distributive fairness. Procedural fairness. © McGraw Hill LLC Andriy Popov/123RF 30 Resolving Problems Quickly The longer it takes to resolve service failure, the more irritated the customer will become and the more people the customer will tell. It is in the firm’s best interest to solve problems quickly. © McGraw Hill LLC 31 PROGRESS CHECK (3 of 3) 1. Why is service recovery so important to companies? 2. What can companies do to recover from a service failure? © McGraw Hill LLC 32 Because learning changes everything. ® www.mheducation.com Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
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