Summary Marketing | Real people, real decisions | MAR2 | Chapters 9, 11, 12, 13 & 14

MARKETING
REAL PEOPLE, REAL DECISIONS
MY MARKETING LAB | SECOND EUROPEAN EDITION
Solomon, Marshall, Stuart, Barnes & Mitchell | Pearson




Chapters 9, 11, 12, 13 & 14

, Chapter 9 Services marketing
Meet Karen – Decision maker at KBW Management
- New potentially successful band discovered; Karen should think about best way to promote band
 Option 1: Sign a lucrative deal with a major record company – long-term & multi-album deal
 Large initial cheque in return for record company having all recording rights
 Choose this option – signed an exclusive worldwide recording agreement
 Option 2: Establish a licensing deal with an independent record label
 Greater flexibility to Karen and band, but smaller initial up-front cheque
 Option 3: Sign a production agreement between artist and production company
 Make recordings which can be licensed to a recording company
 No money paid in advance, only funding the recording costs – net profits will be split


Marketing what isn’t there
- Intangibles = services and other experience-based products that cannot be touched
- Services require a different kind of marketing than products – but same principles;
 Develop mission statement, SWOT analysis, develop objectives, consider target markets
- Service = acts/efforts/performances exchanged form producer to user without ownership rights
 Service satisfies needs by providing pleasure, information or convenience
- Services share four characteristics
1) Intangibility = can’t see, touch or smell a service – cannot inspect a service before we buy it
 Makes it harder to evaluate – marketers use logo/furnishing/stationary/etc. as cues
2) Perishability = impossible to store for later sale or consumption – use it or lose it
 Capacity management = adjusting services in attempt to match supply with demand
3) Variability = same service performed by same individual for same customer can vary
 Consumers don’t necessarily want standardization when purchasing a service
 Could implement Total Quality Management (TQM) = program for continuous improvement
4) Inseparability = impossible to separate production of a service from its consumption
 Service encounter = interaction between customer and service provider – very important
 Disintermediation = removing ‘middleman’ : e.g. self-service petrol stations and hotels
- Services can be classified
 They are either tangible (haircut/car repair) or intangible (education/insurance)
 Recipient can customer (personal trainer/TV program) or its possession (house cleaning/banking)
- Most products are a combination of goods and services – continuum shows scale of (in)tangibility
 Good-dominated products = tangible product with 30-day warranty for example
 Equipment- or facility-based services = mixture or tangible and intangible elements: restaurant
 Operational factors = sign/guidelines must show customers how to use a service
 Locational factors = location influences decision of frequently purchased services
 Environmental factors = attractive environment to lure customers
 People-based services = pure people-based; roaming masseur or mobile hairdresser
- Core service = benefit that customer gets from the service
- Augmented services = additional service offerings that differentiate the firm form the competition
- Nowadays services also very popular to order on the internet
 Banking (online transferring money), software, travel (book online) or career-related sites
- Expansion of Traditional Marketing Mix, not only Price, Product, Place, and Promotion, but also:
 People = management and motivation of people help consumer satisfaction and repeat custom
 Process = procedures, mechanisms and routines put in place to deliver value to the customer
 Physical evidence = environment where service is delivered and relating tangible cues
- Service encounter as already mentioned occurs when consumer in contact with employee(s)
 Important because of social contact dimension and physical dimension
 Employee represents organization, there actions/words/appearance reflects organizational value

,  Customer also responsible for ensuring good quality experience: communicate and cooperate
 Servicescape = environment in which service is delivered and where is interacted
 Includes exterior design, parking, shop, colors, equipment, smell, website, etc.
 These are the visual elements of the service encounter which influence consumers


Providing quality service
- Quality service ensures that customers are satisfied with what they have paid for
 Differs per person, therefor marketers must identify customers’ expectations
- Because of inseparability difficult to estimate how good a service will be until you buy it
 Hard to offer a free trial – hard to predict consistency of quality
- Different marketing ways to illustrate the benefits of a service
 Search qualities = product attributes that can be examined before purchase; color/style/price/fit
 Experience qualities = attributes that can be determined during or after purchase - holiday
 Credence qualities = attributes that we find difficult to evaluate, even after – doctor diagnose
- SERVQUAL = scale to measure consumers’ expectations and perceptions of service quality
 5 components: tangibles, reliability (accurately), responsiveness (help), assurance, empathy
- Gap analysis = measurement approach that gauges difference in expectations and reality of service
 Gap between consumer expectations and management perceptions
 Gap between management’s perception and quality standards that the firm sets
 Gap between established quality standards and service delivery by employees
 Gap between service quality standards and consumer expectations
 Gap between expected service and perceived service
- Critical incident technique = company collecting and analyzing very specific customer complains
 Identify critical incidents that lead to dissatisfaction
- Not always possible to deliver quality service: quick action is then very important
- Dominant logic for marketing = redefines services as the core deliverable instead of product
- Important trends that will both provide opportunities and challenges
 Changing demographics = populations age, meeting needs of older population
 Globalization = increasing need for logistics and distribution services to transport products
 Technological advances = opportunities for growth and innovation in global service industries
 Shift to flow of information = importance of obtaining, manipulating, reporting and using info.


Marketing people, places and ideas
- People are products too – different categories of people marketing
 Politicians are marketed by consultant, they compete for ‘market share’ or votes
 Actors, musicians, athletes, supermodels are all competing for a market position
- People can use same marketing strategies, but there are also additional strategies
 Pure selling approach = agent presents a client’s qualifications to ‘buyers’
 Product improvement approach = agent works with client to modify certain characteristics
 Market fulfilment approach = agent scans market to identify unmet needs, then finds a person
- Place marketing = city/country/location as brand, position it so consumers chose it over competitors