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Summary Service Industry q2
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LEARNING OBJECTIVES- All the slides + reading materials BB
1. Describe global trends in industrial development in order explain the
growing importance of the service industry;
2. Describe the specific characteristics of services in order to list the
consequences of these characteristics for the marketing mix;
3. Establish the core product of a service in terms of customer value in order to
recognize the key elements in the design of a service process;
4. List key elements of service quality and their relations in order to explain
potential differences in expected service and experienced service;
5. Recognize recovery interventions and risk mitigation in order to limit the
impact of service failures;
6. Identify the human factors in the service delivery in order to illustrate the
degree in which influence the success of a service;
7. List the elements of the Servicescape in order to assess the impact of the
physical elements on service delivery.
Inhoudsopgave
Week 1 Q2..................................................................................................................................................... 2
Week 2 Q2..................................................................................................................................................... 4
Week 4 (week3) Q2........................................................................................................................................ 7
Week 4 Q2................................................................................................................................................... 15
Week 6 Q2................................................................................................................................................... 24
,Week 1 Q2
1. Describe global trends in industrial development in order explain the growing importance
of the service industry;
The growing importance of the service industry:
• The service sector has been growing at an annual rate of 8% in recent years
• The service sector dominates with the best jobs, best talent and best incomes.
• Driving forces:
– Increasing consumer incomes and sociological & demographic changes led to increase in
demand for services
– Increasing professionalism in companies and technological developments (telecom,
software, apps)
https://smallbusiness.chron.com/causes-rapid-growth-service-industry-16007.html
Defining services:
According to Kotler (pg 675) : A service is an activity, benefit or satisfaction offered for sale
that is essentially intangible and does not result in the ownership of anything.
According to Wirtz (source: Services Marketing Eighth Edition) Services are economic
activities performed by one party to another. Often time-based, these performances bring
about desired results to recipients,objects or other assets. In exchange for money, time and
effort, service customers expect value from access to labor, skills, expertise, goods, facilities,
networks and systems.
Service Management (pag 10): Services: all those economic activities that are intangible an
imply an interaction to be realized between service provider and consumer
Service: A service is an intangible product offered by organizations in order to serve needs or
to satisfy wants, characterized by simultaneous production and consumption.
Resulting in:
• Simultaneity (demand and supply must meet)
• Heterogeneity (quality performance not constant)
• Perishability (stocking is impossible)
Non ownership.
Tangibility: when you can see or touch products (he quality of being perceivable by touch)
Intangibility : is used in marketing to describe the inability to assess the value gained from
engaging in an activity using any tangible evidence. It is often used to describe services
where there is no tangible product that the customer can purchase, that can be seen or
touched.
3 sectors:
1 primary sector: farming, forestry and fishing
2 secondary sector: industrial sector: gas, mining, manufacturing, electricity, water and
construction.
3 tertiary sector: service sector.
,4 categories of services:
Distributive: transportation, communication and trade
Producer: investment banking, insurance engineering, accounting, bookkeeping and legal
services
Social: health care, education, non-profit organizations and government agencies
Personal services: tourism, recreational, domestic services
Products can be GOODS and SERVICES
Characteristics of services:
1 Intangibility
2 heterogeneity
3 simultaneity
4 perishability
Intangibility:
• Services cannot be seen, tasted, felt, heard of smelled before purchase
Try before you buy is usually not possible in services.
Example: hairdresser: you don’t know how it looks or feels like before the service is
purchased and provided. You can not try it first.
A service may or may not be attached with a physical product:
- Can you receive a service from mcdonalds without a burger?
- But are you only buying a burger?
- ‘’pure’’service firms tend to have mainly an intangible offering, think about what the
consumer is mainly buying.
Heterogeneity:
(or variability)
• Related to the potential of variability in the performance of services.
• Possible sources of variability:
1. Service provider
2. The customer
3. The surroundings
- the quality of service depends on who provides them and when, where and how.
Simultaneity:
(or inseparability)
Simultaneity of production and consumption. Services can’t be separated from their
providers. Physical goods are produced, stored and sold, and later consumed. You
as customer take part in service and can affect the outcome to a certain degree. Like
getting a haircut and moving too much.
Perishability:
A service is consumed when the service is purchased AT THE SAME POINT IN
TIMEPerishability is used in marketing to describe the way in which a service
capacity cannot be stored for sale in the future. Services cannot be stored, saved,
, returned, or resold once they have been used. Once rendered to a customer, the
service is completely consumed and cannot be delivered to another customer.
- Cant be stored for later sale or use, services cant be stored saved returned or
restored once delivered to a customer.
- Time is an important dimension for services
- Example: bus rides
- Service is consumed and purchased at the same time. You can’t save a
haircut for later.
- When a hotel room is unoccupied for 10 or more days, the hotelier loses 50k,
which can not be recovered as the service is perishable.
Difference between physical goods and services:
Physical goods: tangible
Services: intangible
Physical goods: homogeneous
Services: heterogeneous
Physical goods: production and distribution are separated from consumption
Services: production, distribution, consumption are simultaneous processes.
Customers participate in production
Physical goods: a physical object
Services: an activity or process
Physical goods: can be kept in stock
Services: cant be kept in stock (perishable)
Product VS service
- Consuming a physical product means making use of the product itself
- Consuming a service means undergoing the process and the final result. That
the inseparability factor
- A service can be added to a physical product (=augmented product)
Theodore levitt:
“There are no such things as service industries. There are only industries whose
service components are greater or less than those of other industries. Everybody is
in service.”
Week 2 Q2
2. Describe the specific characteristics of services in order to list the
consequences of these characteristics for the marketing mix;
The 4 characteristics of services are intangibility, inseparability, variability,
perishability. With additional: they have a lack of ownership and have user
participation.
3 additional P’s for services
- Process: designing and visualizing the process
- Physical evidence
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