Chapter 10: Designing and Managing Services

Chapter 10: Designing and Managing Services

The New Service Realities

·         Although service firms once lagged behind manufacturers in their use of marketing, service firms are now some of the most skilled marketers.

A Shifting Customer Relationship

·         Savvy services marketers are recognizing the new services realities, such as the importance of the:

o   Customer Empowerment- customers are becoming more sophisticated about buying product-support services and are pressing for “unbundled service” so they can select the elements they want.

o   Customer Co production- the reality is that customers do not merely purchase and use a service; they play an active role in its delivery

o   Satisfying Employees as Well as Customers-excellent service companies know that positive employee attitudes will strengthen customer loyalty.

§  Employees thrive in customer-contact positions when they have an internal drive to:

1.      Pamper customers

2.      Accurately read their needs

3.      Develop a personal relationship with them

4.      Deliver high-quality service to solve customers’ problems

Achieving excellence in Service Marketing

·         The increased importance of the service industry and the new realities have sharpened the focus on what it takes to excel in the marketing services.

·         In the service sector, excellence must cover broad areas of marketing:

o   External Marketing- the normal work of preparing, pricing, distributing, and promoting the service to customers

o   Internal Marketing- training and motivating employees to serve customers well

o   Interactive Marketing- the employees’ skill in serving the client

·         Clients judge service not only by its technical quality, but also by its functional quality

Strategic Concept

o   Top service companies are “customer obsessed.” They have a clear sense of their target customers and their needs and have developed a distinctive strategy for satisfying them.

o   Top-Management Commitment

o   High Standards

o   Profit Tiers

o   Monitoring Systems

o   Satisfying Customer Complaints

Differentiating Services

o   Marketing excellence requires marketers to continually differentiate their brands so they are not seen as a commodity.

o   Primary service package- what the customer expects

o   Secondary service features- merchandise for sale, free breakfast buffets, and loyalty programs.