Service Marketing
2007/// Filed in: Marketing
In the Triad nations (Ohmae) services account to 60% to 70% of national output. Services are currently the fastest growing part of international trade. In affluent societies, services tend to provide higher marginal utility than goods.
It is sometimes difficult to differentiate products from services, since we typically encounter a product-service continuum. The following characteristics increase the service component of the continuum:
-1. Intangible: physical nature (tangibility) is less important
-2. Perishable: inventories cannot be kept
-3. Heterogeneous: services are "performances" and no two performances are identical.
-4. Inseparable: Production and consumption take place simultaneously.
Lovelock proposed a series of questions to help classify services and gain strategic marketing insight.
-1. What is the nature of the service?
-2. What type of relationship does the service organization have with its clients? (i.e. membership, no formal relationship, etc).
-3. How much room does the service organization has for client customization?
-4. What is the nature of the demand?
-5. How is the service delivered?
The delivery of services poses serious difficulties for managers. Of special importance is managing of personnel/employees, quality control, and productivity. Levitt proposed several solutions in his seminal paper "The Industrialization of Service" (HBR). In this line, Heskett proposed the "The Service Quality Wheel."
References:
[1] Doyle, "Marketing Management & Strategy"
[2] Chong, "International Marketing Study Guide -- U.London (External)"
[3] Drucker, "Innovation and Entrepreneurship"
[4] Levitt, "The Industrialization of Service"
[5] Heskett, "The Service Management Wheel"
It is sometimes difficult to differentiate products from services, since we typically encounter a product-service continuum. The following characteristics increase the service component of the continuum:
-1. Intangible: physical nature (tangibility) is less important
-2. Perishable: inventories cannot be kept
-3. Heterogeneous: services are "performances" and no two performances are identical.
-4. Inseparable: Production and consumption take place simultaneously.
Lovelock proposed a series of questions to help classify services and gain strategic marketing insight.
-1. What is the nature of the service?
-2. What type of relationship does the service organization have with its clients? (i.e. membership, no formal relationship, etc).
-3. How much room does the service organization has for client customization?
-4. What is the nature of the demand?
-5. How is the service delivered?
The delivery of services poses serious difficulties for managers. Of special importance is managing of personnel/employees, quality control, and productivity. Levitt proposed several solutions in his seminal paper "The Industrialization of Service" (HBR). In this line, Heskett proposed the "The Service Quality Wheel."
References:
[1] Doyle, "Marketing Management & Strategy"
[2] Chong, "International Marketing Study Guide -- U.London (External)"
[3] Drucker, "Innovation and Entrepreneurship"
[4] Levitt, "The Industrialization of Service"
[5] Heskett, "The Service Management Wheel"