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Chapter 10

74-231 Chapter 10 notes.pdf

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University of Windsor
Alex Wellington

Chapter 10: Think Non-Profit Marketing 2013-02-11 8:07 AM 1) Learning Objective 1: discuss the importance of services to the economy • Service: the result of applying human or mechanical efforts to people or objects o Prof says there is no such thing as a tangible product, everything is a service! o He buys a coat because he wants the service of being warm in the cold weather • Impact of service sector on job growth: o Services are where the jobs are! o However, we do need a good productive sector to support the service sector • Review learning outcome: o Services: deed, performance, effort o Service as a percentage of GDP has been rising rapidly. It is now at 81%. This means 81% of the classroom is gonna work in services o Service as a percentage of employment is also 81% 2) Learning Objective 2: discuss the differences between services and goods • There are some fundamental things that we look at • How service differ from goods: o Intangible – you can’t touch a service like you can touch a good. They’re hard to measure. § Intangible qualities: ú Search quality – easily accessed characteristic ú Experience quality – characteristic assessed after use. For example, you don’t know if your dentist is painless until you have him do something to you ú Credence quality – characteristic requiring expertise and experience, i.e. credibility. What should physicians, lawyers, dentists do for us when we go see them? You have to have a certain level of expertise to be able to evaluate these people in their respective jobs. Hence, we often see in medical areas that governments or third parties will provide oversight o Inseparable – services are often inseparable from the provider. For example, you actually have to physically go to the surgeon if you want surgery. You can’t get your oil changed through the internet. o Heterogeneous – lots of variation possible in services. The second time the professor went to a restaurant, he bought the same meal as before, but this time it tasted awful although the service was good. o Perishable – services are not perishable. If you have a hotel with 100 rooms, you can only sell a maximum of 100, not 160 or 300. This is why we try as much as possible to get our services maximized in some fashion 3) Learning Objective 3: • Components of service quality: o Reliability – the ability to perform dependably, accurately and consistently o Responsiveness – the ability to provide prompt service o Assurance – the knowledge and courtesy of employees o Empathy – caring, individualized attention to customers. Ex: being sick in a hospital, you appreciate the empathy of nurses and doctors o Tangibles – the physical evidence of a service. Ex: oil changes, you don’t know for sure that the oil was changed without actually seeing it • See figure à the gap model of service quality o We set expectations amongst our customers about our services, and we have to deliver that o Any time that there is a gap between what we promise to deliver, and what we actually deliver, there is a problem – you want to close this gap! o Must deliver what we promised o Customers must be aware of what is delivered to them 4) Learning Objective 4: • Product strategies for services: o Process – for example, manicures and haircuts. o Core and supplementary – are there supplementary services? o Standardization or customization - whether its standardized or customized o Service mix – putting all of the above together • Service as a process: o People processing – service directed at people à manicure o Possession processing – service directed at possessions à car repair o Mental stimulus processing – service directed at person’s mind à entertainment o Information processing – service directed at person’s assets à banking • See figure à core and supplementary services for a luxury hotel o Core service: I just want a place to sleep! o Supplementary services: pools, casino, sauna, massage, spa • Customization/Standardization: o Mass customization – a strategy that uses technology to deliver customized ser
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