Understanding the Significance and Characteristics of Services in Economies - Prof. Manera, Apuntes de Administración de Empresas

¡Descarga Understanding the Significance and Characteristics of Services in Economies - Prof. Manera y más Apuntes en PDF de Administración de Empresas solo en Docsity! 1 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 Principles of Services Marketing Chapter 1: What is Services Marketing? © McGraw-Hill Education 2014 2 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 IF YOU ARE A MARKETING MANAGER… HOW WOULD THE MARKETING OF THIS … … DIFFER FROM THIS? 5 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 SERVICES NOW DOMINATE DEVELOPED ECONOMIES • USA, UK, Australia about 75% of GDP accounted for by services sector • Growth in services sector linked to growth in GDP • Value of services has not always been recognised (e.g. Adam Smith) 6 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 AS COUNTRIES BECOME RICHER, CONSUMPTION OF SERVICES RISES Services expenditure as a % of selected countries’ GDP 7 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 CONSUMER & B2B SERVICES Distinguish between consumer services and Business- to-Business services • Business-to-Business (B2B) services help to create wealth (improved transport infrastructure, business finance, construction services etc) • Consumer services consumer wealth (more overseas holidays and restaurant meals etc) • Virtuous circle – more B2B services leads to more wealth, leads to more demand for consumer services, leads to more spending on B2B services, leads to more wealth … 10 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 PROBLEMS OF MEASURING THE SERVICES SECTOR • Outsourcing - Externalisation of internal service processes. Manufacturing jobs may now be counted as service jobs – big trend from 1990s • Intangibility makes services more difficult to measure • China – “discovered” $40bn of unrecorded services 11 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 ALL BUSINESSES ARE SERVICE BUSINESSES Is this company in the horticultural business? Or the service business? Will return to this important point later “We deliver it, we plant it, we e-mail advice on it. It’s a wonder we don’t come round to tuck it in at night” 12 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 KEY CHARACTERISTICS OF SERVICES • Intangibility • Inseparability • Variability • Perishability • Cannot be owned 15 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 HOLIDAYS ARE VERY INTANGIBLE On what basis do consumers evaluate the alternative “dreams” available to them? The meaning of services is constricted in consumers’ minds 16 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 INSEPARABILITY • Production of a service cannot be separated from its consumption • Consumers are co- producers of a service • Makes quality control more difficult • Has implications for accessibility to services Dentist and patient must interact if service is to be produced 17 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 INSEPARABILITY 20 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 VARIABILITY 21 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 PERISHABILITY • Services cannot be stored • If capacity is not used, the opportunity to sell it is lost forever • Supply and demand must be carefully matched • Mismatch between supply and demand can impact directly on consumers 22 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 PERISHABILITY 25 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 AN EXTENDED SERVICES MARKETING MIX • Product • Price • Place • Promotion • People • Processes • Physical evidence 26 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 SO, IS THE MARKETING OF SERVICES DIFFERENT FROM GOODS MARKETING? 27 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 THE GOODS-SERVICES CONTINUUM • In reality, most products are a combination of goods and services • Pure good = timber from timber yard • Pure service = management consultancy 30 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 IN DEVELOPING ECONOMIES • Incomes of middle classes rising fast • Purchase of new cars (goods based) rises… • … while use of taxis (service based) falls 31 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 ECONOMIC RECESSION: MANY GOODS/ SERVICES SUBSTITUTIONS E.G. - Restaurants challenged by supermarkets’ “Dine at home” meal deals 32 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 COFFEE MACHINE MAKERS DO WELL… • … while coffee shops suffer • Starbucks closed 900+ stores worldwide following 2008, but sales of do-it-yourself coffee machines boomed 35 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 KEY FOUNDATIONAL PRINCIPLES OF S-D LOGIC FP1*Service is the fundamental basis of exchange. The application of operant resources (knowledge and skills), as defined in S-D logic, is the basis for all exchange. Service is exchanged for service. .FP6* The customer is always a co-creator of value. Interaction by the consumer with the product must take place if the value of the product is to be realised by the consumer. FP9* All social and economic actors are resource integrators. Production of value cannot be confined to just one party (e.g. the manufacturer), but all individuals and organisations in a network integrate resources FP10* Value is always uniquely and phenomenologically determined by the beneficiary There is no objective definition of value – it can only be defined is idiosyncratically by individuals and even the same individual might attribute different values to the same product in different contexts. 36 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 OTHER FOUNDATIONAL PRINCIPLES OF S-D LOGIC FP2 Indirect exchange masks the fundamental basis of exchange. The service basis for exchange is not always apparent, because service is provided through complex combinations of goods, money, and institutions, FP3 Goods are a distribution mechanism for service provision. Goods (durable and non-durable) provide service type benefits and derive their value through use. FP4 Operant resources are the fundamental source of competitive advantage. Competition is essentially driven by differential advantages in a company’s use of knowledge and skills FP5 All economies are service economies Service drives the logic of exchange, therefore all economies could be said to be service based. FP7 The enterprise cannot deliver value, but only offer value propositions. Organisations can offer their resources to customers but cannot create value independently of the buyer who must collaborate in a process of value creation FP8 A service-cantered view is inherently customer oriented and relational. Service can only be defined in terms of customer-determined benefit and is co-created with the customer. . 37 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 SERVICES CREATE VALUE IN USE FOR MOST GOODS • What services help to differentiate this car from its competitors? • To what extent are car manufacturers “service- centric” companies? 40 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 SOME UNEXPECTED CONSEQUENCES OF MARKETISING SERVICES E.G. Blood donation service Study suggested that donations decreased when mediated through market mechanisms rather than appealing to public duty (Titmus 1970) 41 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 CAN SERVICES MARKETING BE SOCIALLY IRRESPONSIBLE? For more discussion, see Page 30 • Is flying harmful for the ecological environment/ • Is it wrong for airlines to be promoting more air travel? • How should airlines react to growing public and government concerns? 42 (C ) M cG ra w -H ill E d u ca ti o n 2 0 1 4 SUMMARY OF KEY POINTS • Services now dominate western developed economies • Distinguish consumer services from B2B services • Key characteristics of services - intangibility, inseparability, perishability and variability • Service dominant logic – services create value in use for all products