Marketing serviced and innovation

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Victoria University
BHO 3439
Helen Madden

Chapter 1New perspective on marketing in the service economy pg 6ServicesAny act or experience that one party can offer anotherIts intangible and doesnt result in ownershipEXAMPLES Consumer Services Business Services Airlines Insurance Banking and finance Architecture Transportation Marketing researchService is all about value creation Value from a variety of value creating elements rather than transfer ownership Firms need to give service that will be seen by customers to be adding value for them1 Choose value segmenting positioning how we want customers to perceive our products against competitors of that category 2 Create the value service quality3 Communicate the value advertising selling PRServices intangible elements dominate value creation Customers are interested in the final output however how service is delivered has a significant impact on themServices typically have intangible and tangible elements ie restaurant food is tangible while the service given is intangibleCustomer value might be created by airlines industry time of arrival is earlier place make the availability of the store closer to the target market 1Powerful forces transforming the service economy1 The hollowing out effectshifts in the workforce patterns from manufacturing to services this shift in employment patterns in industrialized economies has been called hollowing out effect ie credit card companies have outsourced call centres to India Previously the industries were as the pie chart now theres a major change in the economy and we are left with the servicing industry move from primary to tertiary2 Deregulation and privatisationchanges in regulations new rules to protect customers employees and the environment3 Social changesrising consumer expectations increased desire for buying experience rather than buying things professionals and dual income family now short of time to do chores and willing to pay for service ie gardener nanny 4 Professional services and franchisesgovernment and legal pressure forced professional architects accountants lawyers to remove or relax bans on advertising and promotional companies So these companies seek how to understand their customers better to create value by creating tangible cues Differences between goods and services2 Most services cant be inventoried dentist time loss cant be inventoriedIntangible elements harder to differentiateevaluate from competitors so firms do physical cues uniform nice waiting areaCustomers involved in production customer interact with equipment providers and providers develop user friendly equipment they train customers to perform effectively like apple create workshops for customers Services are usually hard to visualise and hard to understand firms need to educate customers to make good choices explain what to look forThe time factor often assumes great importance provide service when theres a demandKFC for example is mixture of good and service industry because they make the food and sell the food to customersHow can services differ from each other Degree of tangible and intangibilityWho or what is the direct recipient of services processedPlace of service deliveryCustomisation vs standardisationRelationships with customersDiscrete vs continuos actionsHigh contact vs low contact Service as a system Service operations system Can be divided into actors and people involved in the stage set production set tangible equipmentsService delivery system Includes where when and how the service is delivered to customers Service marketing system All the different ways in which the customer may encounter or learn about the service organisation Expanded marketing mix for services 3
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