Week 1 Chapter 1-Introduction to Services Marketing

Hi welcome again to bps 370 services marketing. This is the first set of PowerPoint slides.

I am going to try the first week and we ll see how this works posting a subset of PowerPoint, slides and just discussing some of the highlights from the chapters that you should read or how Let S use me of points that you should glean from the Chapters that you read, One of the things that we will be talking about in class is to what extent you want to see narrated PowerPoint slides on our blackboard site.

This is material that you will be responsible for reading.

Okay and you ll be responsible for anything that is in the textbook.

However, I will just be giving some highlights in this PowerPoint.

So let s start with chapter 1 understanding services marketing This chapter is going to be the introductory chapter in the text will help.

You understand the definition of services and how services differ from more tangible or physical goods.

Okay, this chapter will also explain the characteristics of services and classify the various types of services.

You will find in this chapter definition of services, where your text will define a service as a deed.

You re really talking about something that s intangible, meaning that it is something that you can t put your hands on and grab a hold of right. It may or may not be attached to a physical product, so we can think of things such as a meal at a restaurant, whether it s a fine, dining, restaurant or McDonald s, in which case we have the physical product, the food, but a good component of That product, Offering is a service.

The customer service you receive from the waitstaff or in the case of McDonald s from the person who is behind the counter, taking your order, and so those are some of the one of the things.

Actually they make services a bit more challenging than products is the fact that it isn t something oftentimes that you can put your hand and to determine the quality or how good it is because it s intangible, okay, So that s one of the key concepts we Want you to understand from this first chapter in your text provides: This is an interesting figure.

1 2 is a good illustration of the distinctions or the differences between services, marketing and physical goods marketing, and here we show a continuum that shows products that are more dominant with what your tip with your text refers to.

Here is tangible, dominant, such as salt soft drinks detergent.

You ll notice that those are items that you can put in your hand and hold them right versus intangible dominant items, which include teaching consulting investment management.

But these are things where there s really not a tangible component.

So, if you think about teaching there s really nothing that you can put your hands on, if you re trying to judge the quality of your education, it is something that you can t put your hands on.

It is much more subjective right in terms of what are the elements or the things that we need to look at to determine.

What is a good teaching experience a good consulting engagement right So that s one of the things that makes the marketing of services far more challenging than the marketing of physical goods, although, admittedly both are challenging okay and that s one of the key ideas and concepts That I want you to take away from reading chapter one chapter: one Will also define five key characteristics of services. Okay services are intangible, and that is a concept that I ve just discussed or mentioned repeatedly with the previous slides, and that is that these services cannot be touched seen held in the way that a tangible product such as salt, a soft drink, can be held.

Some of the other key concepts we talked about characteristics of service include separate e in for many cases, if you think about service, the production of that service and the consumption of the service occur at the same time so think about.

If you go to a hair salon or a barber shop, the production and consumption of that haircut are simultaneous.

Another key characteristic of services is the variability, So it s really hard when we think about something like services, it s really difficult to standardize the quality of a service performance.

Do you think about when you go into a restaurant, I m going to use again McDonald s as an example to order a meal depending on the kind of day the person on the other side of the counter is having and depending on the kind of day That you Are having that service experience may be very different if you both are having a wonderful day and the weather is sunny, you might be both very pleasant and it might be a very good experience if, on the other hand, it s like it was last Week when we Had the really heavy rainfall and you ve walked in and you re drenched and you re exhausted, even if the person on the other side of the counter is very pleasant, you may not be an experience that you perceive may be very different.

Okay, so one of the things that your text will talk about when we define some of the characteristic services is that, unlike that can of coca cola that you might buy where we can standardize that and ensure that that can of coke is the same, regardless of Where It is sold and who s buying it, We can t necessarily standardize services to the same extent, so they are variable.

Another key concept is idea.

Perishability.

I go back to the example of coca cola.

We know that we can put a can of coke in a warehouse and store it on a shelf. Although it doesn t have an unlimited life, It is something that can be stored after it is produced stored on a shelf before someone consumes it and with services they are perishable and that they only exist at the time of production.

So we think about things like a hair salon, our barber shop, one of their challenges, is trying to figure out.

How do you schedule your staff to be there when you re going to have the most demand? What are most people going to come in to the Sun or the barbershop to get a haircut? Because if you have stylists and barbers who are available that day and you don t have customers that service that you re providing is perishable? It S not something that can be stored for later point in time, okay and then.

Finally, the fifth characteristic of services is this idea of rental access.

They re only temporary possession because you don t own it not in the same way that you would a physical, tangible product, Okay, so the five characteristics of services that you need to be familiar with are one intangibility to inseparability 3 variability for perishability and 5 rental Access Ok.

Now your text is also going to define classifications of services and their variety of ways of classifying services.

One is going to be, as you see, on this chart based on the field, and so I ll Just let you read over these both in your text and on the slide, but this is one way of classifying services.

We can look at the service field, entertainment, professional services, etc.

Another way of classifying services is based on the customers that are served.

We can look at consumer services, people like you and me, or business to business services. If we have companies, they re providing services to other companies or organizations, ok and then finally, we have Lovelock s.

Classification which looks at not only the at will looks at two things right.

If you look at this 2×2 matrix, let s look across the top right now, where we have people and possessions that is who or what is a direct recipient of the service.

Now, if you look down the side where it says what is the nature of the service act, it can be a tangible action or it can be an intangible action.

So Lovelock has basically created a 2×2 matrix.

So, for example, if we look in the first think of the people as the first column on your left, so we can have people who are the recipients of a service and it can be a tangible action such as going to a beauty salon or it can Be an intangible action where there is something, for example, services directed at people, s minds like education, the second column When we look at possessions.

This is the what is the direct recipient of the service, and you can have again tangible actions directed toward possessions such as laundry or dry cleaning.

You have a very tangible action being done to a product or possession like clothing, or we can have an intangible action directed at a possession so, for example, legal services, which is not something you put your hands on directed at an intangible asset or possession okay.

So I hope that makes sense also look at the four bullets on the Left, which, given the same definition but again think of this as a two by two matrix.

If it helps draw a box with four squares in it and if that helps you think about, and at the top of the first box, you would have people top of the second possessions and on the left, you would have the tangible actions and below that intangible Actions, if that helps okay, but if you have any questions about that, we can talk about that when we meet on Wednesday. Another key concept introduced in Chapter one, is this idea of the services marketing triangle, and the idea here is that when we talk about marketing of services, there are three key components, and that is the organization, the providers and the customers.

So one way of thinking about this, if we take Robert Morris as an example, we need a Robert Morris is the organization Robert Morris does internal marketing with providers, and in this case the providers would be employees of the institution.

So, in order to ensure that any promises that Robert Morris is making it has to engage in internal marketing with their employees, so those are some of the things that it does to ensure that they communicate and convey to their employees that this is really a great Place to work in some of the reasons you know the opportunities for professional growth and development, on the benefits having other colleagues who have similar interests and talents, as you et cetera right now, I m going to move to the other side of the triangle.

The right side, Where we look at the external marketing – and this is where an organization and again, if I stay with the Robert Morris example where Robert Morris makes external promises to its customers.

So in this case, say that you and the employers, where we as an institution Robert Morris, If you promising that we will provide an accelerated degree program, give you an opportunity to gain hands on experiential real world experience, So that s the promise, the external marketing that The organization Robert Morris provides to student the customers.

Now, if we look at the bottom part of the triangle, we see providers and customers and that s the interactive marketing component.

If you think about that, to the extent that an organization or an institution keeps its employees happy well trained and well prepared, they are able to deliver on the promise, the external marketing that an institution an organization does or provides or conveys to its customers.

So the providers and the customers at interactive relationship, in this case the staff and the faculty at RM.

You keep the promise that the institution makes to its students as an example.

So let s see if that makes sense, hope it does and again have questions about the concept we can talk about that when we meet face to face okay. So these are just this triangle: just shows how these three components – internal marketing, external marketing and the interactive marketing – are linked and tied together, okay and then finally, one of the other.

I think it would be helpful.

I believe it s at the beginning of your chapter.

They provide an overview of the book, so this will give you a sense of some of the main topics that we ll be covering in the book and, as you see the first three chapters we ll be looking at the foundations of services, Marketing and a lot Of that will be focused on definitions and helping.

You understand some of the key models in the field.

Okay, so make sure to read: chapter 1: The chapters are short, they re very fun to read, and there are some great examples and vignettes that are in the chapters and to help reinforce some of the concepts.

I also encourage you to read some of the review questions and exercises that are at the end of the chapter.

Ok, great look forward to seeing you on on Wednesday and if you have any questions, bring them to class and we will discuss them there again.

Look forward to meeting you thanks.

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