LO1  Describe four unique elements of services.

The four unique elements of services—the four I's—are intangibility, inconsistency, inseparability, and inventory. Intangibility refers to the tendency of services to be a performance that cannot be held or touched, rather than an object. Inconsistency is a characteristic of services because they depend on people to deliver them, and people vary in their capabilities and in their day-to-day performance. Inseparability refers to the difficulty of separating the deliverer of the service (hair stylist) from the service itself (hair salon). Inventory refers to the need to have service production capability when there is service demand.

LO2  Recognize how services differ and how they can be classified.

Services differ in terms of the balance of the part of the offering that is based on goods and the part of the offering that is based on service. Services can be delivered by people or equipment, they can be provided by profit or nonprofit organizations, and they can be government sponsored.

LO3  Explain how consumers purchase and evaluate services.

Because services are intangible, prepurchase evaluation is difficult for consumers. To choose a service consumers use search, experience, and credence qualities to evaluate the good and service elements of an offering. Once a consumer tries a service, it is evaluated by comparing expectations with the actual experience on five dimensions of quality—reliability, tangibles, responsiveness, assurance, and empathy. Differences between expectations and experience are identified through gap analysis.

LO4  Develop a customer contact audit to identify service advantages.

A customer contact audit is a flowchart of the points of interaction between a consumer and a service provider. The interactions identified in a customer contact audit often serve as the basis for developing relationships with customers.

LO5  Discuss the important roles of internal marketing and customer experience management in service organizations.

Because the employee plays a central role in creating the service experience, and in building and maintaining relationships with customers, services have adopted a concept called internal marketing. This concept suggests that services need to ensure that employees (the internal market) have the attitude, skills, and commitment needed to meet customer expectations. Customer experience management is the process of managing the entire customer experience with the company to ensure customer loyalty.

LO6  Explain the role of the four Ps in the services marketing mix.

Each of the four Ps can be applied to services marketing. Important aspects of the product element include exclusivity, the use of services to distinguish an offering; branding, the use of a brand name or logo to help consumer identify the service; and capacity management, the efforts designed to influence the timing of consumer demand. Pricing is reflected in charges, fees, fares, and rates and can be used to influence perceptions of the quality of a service and to manage capacity. Place (or distribution) is used to provide access and convenience. Promotional tools such as advertising and publicity are a means of communicating the benefits of a service.