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

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Chapter 12: Services and Nonprofit Organization Market
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: 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
Experience quality: a characteristic that can be assessed only after
Credence quality: a characteristic that can be difficult to assess
even after purchase as customers lack necessary knowledge or
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: 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
Perishability: the inability of services to be stored, warehoused, or
Service providers need to find ways to synchronize supply and
Service Quality
Customers evaluate service quality by five components:
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