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BEM 120 NOTES/SUMMARY
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BEM 120 Chapter 1-9 notes. These notes were made using the following textbook: Grasping Service Marketing, Jordaan, Y & Samuels, J. 2015 - 3rd edition.
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3. Ease of doing businessCHAPTER 1 • amount of effort customer must put in to
service marketing in perspective realise desired outcome must be minimized
4. Experience
SERVICE MARKETING EXCHANGE PROCESS
• customers have experiences when they’re
• complex process where organisation
involved in service encounters
identifies expectations of target market + find
• manage customer experience to ensure
innovative ways to satisfy important needs of
customer satisfaction & loyalty
customers
5. Equilibrium
• consumers will exchange money for service if
they believe it represents value for their • create equilibrium between supply &
money demand, ensure satisfied customers and
profitable business
ORGANISATION ENVIRONMENTS 6. Exception management
• micro-environment: include organisation’s: • keep variability in service delivery to
o mission + vision minimum, manage exceptions successfully
o competencies + capabilities
o objectives SERVICE MARKETING MIX
• market environment: include organisation’s: Product anything offered to potential customers
o customers
Place channels to distribute services
o competitors
o suppliers price to be charged, discount structures
Pricing
o intermediaries and terms of payment
• macro-environment: shifts in economic, marketing strategies to communicate
Promotion
political, legal, social, natural, technological benefits of services
and international environments Physical
expected quality of service provided
evidence
ANALYSIS OF MARKET ENVIRONMENT People staff and customers
• SWOT analysis
how service is provided to satisfy
• Strenghts Process
customer’s needs
Weaknesses
Opportunities
Threats SERVICES
• act/performance that one party can offer
SIX E’S OF SUCCESFUL SERVICE MARKETING another that’s essentially intangible +
doesn’t result in ownership of anything
1. Expectations
• production may/may not be tied to physical
• actively managing customers’ experience
product
• expectations change – organisations need to
align service with what is communicated and
DEGREES OF TANGIBILITY
promised to customers
• pure tangible goods - toothpaste
2. Education
• tangible goods with accompanying services
• companies need to educate customers on
o tangible product + service element
what they need to do
o car sold with maintenance plan
• to achieve optimal outcome, service provider
• hybrid service offers
& customer must know what their roles are
o tangible product+ intangible services
o meal – food & service offered
1
, • core services with accompanying minor 2. Intangibility
goods & services often impossible to taste, smell, feel, see, or hear
o purchase core service + receive
• can’t be stored:
tangibles and intangibles
- supply & demand doesn’t
o airlines – customer purchases
balance
transport but receive meals and
- lead to ques and long
customer service
waiting periods
• pure services
• can’t be patented:
o consist primarily of services
- organisations lose
competitive advantage
DISTINGUISH FEATURES OF SERVICES - competitors can copy their
1. Perishability service
inventory holding proves to be impossible • complicates communication
Problems
• demand > supply process:
Problems • demand < supply - nothing to demonstrate to
customers in
• demand = supply
advertisements
Demand: • no physical good to determine
• differential pricing: cost from:
- shift demand from peak to - labour pricing places
off-peak periods monetary value on time
• non-peak demand can be spent in production of
cultivated: service – difficult to
- offering special promotions evaluate value
during lower demand
• stress tangible cues:
periods
- message you want to send
• complementary services:
to customer
- to provide alternatives for
- sings of quality of service
waiting customers
provided (interior
Solutions Supply: decorating)
• part-time employees during • stimulate positive word-of-
peak demand: mouth:
- increase capacity during - encourage customers to
periods of peak demand tell others about the
• peak-time routines: organisation’s services
- staff perform only essential Solutions • encourage employees to
task during peak periods communicate with customers:
• increased customer - organisation can invite &
participation: stimulate personal
- self-service communication
• shared services - information collected can
• facilities for future expansion be used to increase value of
service offering and build
relationship with customers
• create strong corporate image:
- can reduce risk perceived
by customer
2
,3. Inseparability 4. Heterogeneity
services are often produced, delivered & consumed difficult to completely standardise service delivery
all at once
• service standardisation
Problems
• physical connection to service: • quality control
- service providers are
• customisation:
evaluated on basis of use of
- service is adapted
language, clothing,
according to individual
personal hygiene &
customer’s needs and
interaction skills
instructions
• customer involvement:
• standardisation:
- organisation must design Solutions
- train contact staff to deliver
operations in such way that
consistent, tightly
customer presence can be
prescribed service by
accommodated
Problems standardising service
• customer interaction:
delivery processes and
- different customers have
procedures
different experiences
• mass production:
- individual service provider CLASSIFICATION OF SERVICES
can only produce limited 1. Means of delivery
supply • equipment-based services:
- owing to customer o automated services (ATM)
presence during production, o provided by unskilled (cinemas),
process can be slowed skilled providers (airlines)
down o quality of equipment & ability of staff
• effective selection of contact to use it - crucial in determining
quality of organisation’s service
staff:
- ensure consistent behaviour • people-based services:
amongst service providers o can be performed by unskilled
(garden services), skilled
• effective customer
management: (plumbing), professional
- address different needs and (lawyers)staff
o quality is determined by training,
expectations of different
groups knowledge & motivation of staff
• investigate opportunities for 2. Degree of dependence on customer presence
mass production: • some services depend on presence of
Solutions
- find ways to serve larger customer and others don’t
groups of customers at o required - medical surgery
same time o not required – online banking
- support for frontline staff: 3. Personal versus business use
- erase lines of visibility and • personal needs – service is used for
allow whole service customer’s own benefit & enjoyment
delivery process to occur in
• business needs – bought by business to
same environment produce something else of economic benefit
- Cape Town Fish Market, you
can sit at sushi bar and see
how they make the sushi
3
, EVALUATION QUALITIES
CHAPTER 2 • qualities indicate qualities present in service
value: from customer service to satisfaction that can be evaluated by customer
and loyalty
o search qualities (colour, fit, smell)
§ attributes customer can
BENEFITS OF PROVIDING BETTER SERVICE evaluate prior to purchasing
• increased market share service
o improved service quality can entice § tangible products are high in
competitor’s customers to switch, search qualities
which increases market share § services rarely display
o matching superior service is difficult attributes in respect of core
• improved value proposition service
o adding superior customer service to o experience qualities (gardening)
superior service increases § attributes customers can
customer’s perceived value evaluate during + after
o customers make future purchasing consumption process
decisions based on perceived value § customers rely on expectation
• financial impact of how they want to feel when
o improved financial performance is using services together with
outcome of higher sales income & technical outcome
lower costs due to improved o credence qualities (education)
efficiency § attributes customers find
• to gain marketing benefits difficult to evaluate even after
o quality accreditation or awards are consumption
used by organisations to substantiate § customers will never really
marketing communication claims know whether service was
o being publicly recognised for good/poor quality
delighting customers has potential to
attract new customers 3 LEVELS OF VALUE FROM CUSTOMER’S POV
• perceived quality of service delivered
INCREASING VALUE • expectations about characteristics of service
• difference between customer’s perception of • perceptions of actual service delivered
benefits received from purchasing &
consuming service + customer’s perception ROLE OF CUSTOMER SERVICE IN VALUE CREATION
of costs incurred in exchange for service
• customers will go to places where they feel
• customers will buy service when:
welcome
o benefits of exchange > cost of
• guidelines to develop customer-centred
exchange
culture:
o service offers superior value
o customer service systems
compared to other alternatives in
§ design service delivery
market
systems from customer’s pov
o customer service commandments
VALUE LEVELS § ask customers what they want
• value customer derives from service § have effective systems in
• value customer derives from quality of place
supporting service act § under-promise & over-deliver
§ the answer is always yes
4
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