MKTG101 Lecture Notes - Lecture 11: Services Marketing, Technological Change, Intangibility
Chapter 11 (Services Marketing)
Services product classification
• Consumer services
Purchased by individual consumers or households for their own private consumption.
Examples include: airline travel, banking, finance, hairdressing, restaurants.
During periods of economic growth, demand for services generally increases, and vice versa.
Technological change = opportunities for service providers
• Business-to-business services
• Puhased idiiduals ad ogaisatios fo use i the podutio of other products or
for use in their daily business operations.
The services marketing mix
• The uiue haateistis of seies ae
➢ Intangibility
Services frequently cannot be easily perceived by the five physical senses, increasing
customer feelings of uncertainty and risk about the purchase.
To reduce this anxiety:
➢ Use tangible cues (logos, uniforms)
➢ Use guarantees, testimonials and word-of-mouth
➢ Inseparability
The characteristic of being produced and consumed simultaneously. Buyers and
selles of seies ae feuetl o-podues of the seie. Need to e oeed ith
their technical skill and customer service delivery; may need to promote via personal selling.
Delivering services face-to-face promotes trust.
➢ Heterogeneity
Inevitable, but minimizable, variations in quality in the delivery of a service product.
Key strategies to overcome heterogeneity include:
➢ deelop seie delie sstes e.g. MDoalds
➢ manage customer expectations
➢ invest heavily in staff training
➢ Perishability
The inability to store services for use at a later date.
Supply and demand can be balanced by:
➢ stimulating demand e.g. cheaper movie tickets on Tuesdays
➢ restricting demand
➢ increasing or decreasing supply capacity
In circumstances where demand fluctuates over time, flexible pricing can be used.
Services marketing challenges
The key issues in the marketing of services are: achieving a sustainable differential
advantage in marketing services, managing profitable customer relationships and delivering
consistently high levels of customer service.
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Document Summary
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