Page 401 - Marketing Management

378 PART 5 SHAPING THE MARKET OFFERINGS

Over time, manufacturers switch more maintenance and repair service to authorized distributors
and dealers. These intermediaries are closer to customers, operate in more locations, and can offer
quicker service. Still later, independent service firms emerge and offer a lower price or faster service.
A significant percentage of auto-service work is now done outside franchised automobile dealerships
by independent garages and chains such as Midas Muffler, and Sears. Independent service organiza-
tions handle mainframes, telecommunications equipment, and a variety of other equipment lines.
THE CUSTOMER-SERVICE IMPERATIVE Customer-service choices are increasing rapidly,
however, and equipment manufacturers increasingly must figure out how to make money on their
equipment, independent of service contracts. Some new-car warranties now cover 100,000 miles before
servicing. The increase in disposable or never-fail equipment makes customers less inclined to pay
2 percent to 10 percent of the purchase price every year for a service. A company with several hundred
laptops, printers, and related equipment might find it cheaper to have its own service people on-site.

Summary

1. A service is any act or performance that one party can marketing to emphasize the importance of both “high
offer to another that is essentially intangible and does tech” and “high touch.”
not result in the ownership of anything. It may or may 5. Top service companies excel at the following practices: a
not be tied to a physical product. strategic concept, a history of top-management commit-
2. Services are intangible, inseparable, variable, and per- ment to quality, high standards, profit tiers, and systems
ishable. Each characteristic poses challenges and re- for monitoring service performance and customer com-
quires certain strategies. Marketers must find ways to plaints. They also differentiate their brands through primary
give tangibility to intangibles, to increase the productiv- and secondary service features and continual innovation.
ity of service providers, to increase and standardize the 6. Superior service delivery requires managing customer
quality of the service provided, and to match the supply expectations and incorporating self-service technolo-
of services with market demand. gies. Customers’ expectations play a critical role in their
3. Marketing of services faces new realities in the 21st service experiences and evaluations. Companies must
century due to customer empowerment, customer co- manage service quality by understanding the effects of
production, and the need to satisfy employees as well each service encounter.
as customers. 7. Even product-based companies must provide post-
4. In the past, service industries lagged behind manu- purchase service. To offer the best support, a manufac-
facturing firms in adopting and using marketing con- turer must identify the services customers value most
cepts and tools, but this situation has changed. and their relative importance. The service mix includes
Achieving excellence in service marketing calls not both presale services (facilitating and value-augmenting
only for external marketing but also for internal mar- services) and postsale services (customer service
keting to motivate employees, as well as interactive departments, repair and maintenance services).

Applications

Marketing Debate Marketing Discussion
Is Service Marketing Different from Educational Institutions
Product Marketing? Colleges, universities, and other educational institutions can
Some service marketers maintain that service marketing is be classified as service organizations. How can you apply
fundamentally different from product marketing and relies the marketing principles developed in this chapter to your
on different skills. Some traditional product marketers dis- school? Do you have any advice as to how it could become
agree, saying “good marketing is good marketing.” a better service marketer?
Take a position: Product and service marketing are
fundamentally different versus Product and service
marketing are highly related.