IBM 301 Lecture Notes - Lecture 12: Intangibility, Marketing Mix, Relationship Marketing

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Chapter 12: Services and Nonprofit Organization Market
Services
Service: the result of applying human or mechanical efforts to people or objects
Involve a deed, a performance, or an effort that cannot be physically possessed
Service-oriented industries that contribute to the U.S. economy
Technology, financial services, health care, and retail
How Services Differ from Goods
Characteristics of services:
Intangibility
Intangibility: the inability of services to be touched, seen, tasted, heard, or
felt in the same manner that goods can be sensed
Evaluating the quality of services
Search quality: a characteristic that can be easily assessed before
purchase
Experience quality: a characteristic that can be assessed only after
use
Credence quality: a characteristic that can be difficult to assess
even after purchase as customers lack necessary knowledge or
experience
Inseparability
Inseparability: the inability of the production and consumption of a service
to be separated; consumers must be present during the production
Make consumers involved in the production of services they buy
Services cannot be produced in a centralized location and
consumed in a decentralized locations, as goods typically are
Heterogeneity
Heterogeneity: the variability of the inputs and outputs of services, which
causes services to tend to be less standardized and uniform than goods
Standardization and training help increase consistency and
reliability
Perishability
Perishability: the inability of services to be stored, warehoused, or
inventoried
Service providers need to find ways to synchronize supply and
demand
Service Quality
Customers evaluate service quality by five components:
reliability
Responsiveness
Assurance
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