Service marketing with Gap Model

1. SERVICES MARKETING

2. What is a service?
Definition:
Services are separately identifiable activities
that satisfy customer needs or wants
through essentially intangible benefits, either
in their own right or as a significant element
of a tangible product.

3. Characteristics of services
• The service and the creator–seller of the service are often
inseparable.
• Services are variable (or heterogeneous).
• Services are highly perishable, cannot be stored, and the
demand for services fluctuates.
• Services are intangible. It is impossible for customers to sample
a service, but intangibility is reduced using:
Service
– Visual clues.
– Association.
– Organisation image.
– Documentation.

4. Managing service quality
Measure the current quality of the service:
‘The customer’s requirements’.
Measure the service gap:
‘Difference between customer expectation
of the service and perception of the
service received’.

5. The service gap
The difference between what the customer expects and
what they receive:
The knowledge gap: Customer’s knowledge.
The standards gap: Organisation’s standard.
The delivery gap: The actual delivery experience.
The communications gap: Advertising promise.

7. Marketing Mix for Service
Marketing

9. Pricing services
Cost-plus pricing for services.
Cost of product plus a percentage mark-up.
Demand-based pricing of services.
The price customers are likely to be prepared to pay.
Competition-based pricing of service.
What other suppliers are charging for the same
type of product.

10. Distribution strategies
Location: The primary consideration is that services are
supplied by a person (service provider) and assume the
‘characteristic of inseparability’.
Location is a key marketing decision about where to locate the
service for easy access
to the customer and how to bring the two people together.

11. Promotion of services
To overcome intangibility factors, effective
service promotion should:
Use tangible symbols: real people in service.
Show the service encounter: staff interacting
positively with customers.

12. Promotion of services
Relationship marketing is a major promotional tool:
Avoid over-promising, as it increases the
service gap.
Build word-of-mouth (WoM) promotion:
a positive experience will spread through WoM.

13. The services marketing mix:
People (1 of the other 3Ps)
People: Front-line staff manage the service encounter
by the critical incidents, which determine customer
satisfaction with the overall service encounter.
Boundary spanning: Can create problems for front-line
staff — usually the link between the service and its
customers.

14. Creating customer service-focused management
Customer-
service focused
organisational
structure
Top management
Middle management
Customer-service staff
Customers
Customers
Customer-service staff
Middle management
Top management
Traditional
organisational
structure

15. People
The right contact staff: Recruit those with the right
attitude and ‘service personality’.
Empower contact staff: Front-line staff need the
authority to make decisions.
Reward staff for service delivery: Have reward schemes
that ‘work’ as acknowledgement.

16. The services marketing mix:
Physical evidence (1 of the other 3Ps)
Physical evidence: Aims to offset the intangibility
of the service.
This incorporates tangibles such as:
Location and building exterior.
Interior design and décor.
Stationery, uniforms and promotional material.

17. Servicescapes
The physical evidence used to influence the responses
and behaviour of customers and staff.
In other words, the servicescape refers to the non-
human elements of the environment in which service
encounters occur.
Servicescapes have 3 elements:
Stimuli — the tangible elements.
Customers and staff who receive the stimuli.
Responses — stimuli response or outcome.

18. The services marketing mix:
Process (1 of the other 3Ps)
 Process is the operational system or method
used to ‘actually’ deliver the service.
 Service providers need to:
◦ Commit to one approach or the other.
◦ Separate standardised and customised services.
◦ Create flexibility capacity.
◦ Increase the amount of customer participation.
◦ Smooth the peaks and troughs in demand.

19. Blueprinting
Buleprinting allows for the service process
to be broken down into discrete steps and assessed
against time and cost elements.
Blueprinting is done in the form of
a flowchart of activities.